<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(d)(1) OR SECTION 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
DPL INC.
(Name of Subject Company (issuer) and Filing Person (offeror))
------------------------
COMMON SHARES, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
233 293 109
(CUSIP Number of Class of Securities)
------------------------
STEPHEN F. KOZIAR, JR.
GROUP VICE PRESIDENT AND GENERAL COUNSEL
DPL INC.
COURTHOUSE PLAZA SOUTHWEST
DAYTON, OH 45402
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of the Filing Person)
FEBRUARY 4, 2000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
<S> <C>
$575,000,000 $115,000
</TABLE>
* For purposes of calculating amount of filing fee only, this amount is based
on the purchase of 25,000,000 common shares at the maximum tender offer
price of $23.00 per share.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
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- --------------------------------------------------------------------------------
/ / Check box if filing relates solely to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
<TABLE>
<S> <C>
/ / third-party tender offer subject to /X/ issuer tender offer subject to
Rule 14d-1. Rule 13e-4.
/ / going-private transaction subject to / / amendment to Schedule 13D under
Rule 13e-3. Rule 13d-2.
</TABLE>
Check the following box if the filing is a final amendment reporting the
results of the tender offer: / /
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<PAGE>
This Tender Offer Statement on Schedule TO relates to the offer by DPL Inc.,
an Ohio corporation, to purchase common shares, par value $0.01 per share. DPL
is offering to purchase up to 25,000,000 shares at a price not in excess of
$23.00 nor less than $20.00 per share, net to the seller in cash, without
interest, as specified by shareholders tendering their shares. DPL's offer is
being made upon the terms and subject to the conditions set forth in the Offer
to Purchase dated February 4, 2000 and in the related Letter of Transmittal,
which, as amended or supplemented from time to time, together constitute the
offer. All shares tendered and purchased will include preferred share purchase
rights issued pursuant to a Shareholder Rights Agreement, dated as of
December 3, 1991, between DPL and The First National Bank of Boston, as rights
agent, and, unless the context otherwise requires, all references to shares
include the associated preferred share purchase rights. This Tender Offer
Statement on Schedule TO is intended to satisfy the reporting requirements of
Section 13(e) of the Securities Exchange Act of 1934, as amended.
The information in the Offer to Purchase and the related Letter of
Transmittal, copies of which are filed with this Schedule TO as Exhibits
(a)(1)(i) and (a)(1)(ii) hereto, respectively, is incorporated herein by
reference in answer to Items 1 through 11 in this Tender Offer Statement on
Schedule TO.
ITEM 12. EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
(a)(1)(i) Offer to Purchase.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Shareholders from Peter H. Forster, Chairman, and
Allen M. Hill, President and CEO of DPL, dated February 4,
2000.
(a)(1)(v) Letter to Participants in the DPL Inc. Employee Stock
Ownership Plan from Peter H. Forster, Chairman, and Allen M.
Hill, President and CEO of DPL, dated February 4, 2000.
(a)(1)(vi) Letter to Participants in The Dayton Power and Light Company
Savings Plans from Peter H. Forster, Chairman, and Allen M.
Hill, President and CEO of DPL, dated February 4, 2000.
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5)(i) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5)(ii) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5)(iii) Letter to Participants in the DPL Inc. Employee Stock
Ownership Plan for use by the trustee of such plan.
(a)(5)(iv) Letter to Participants in The Dayton Power and Light Company
Savings Plans for use by the trustee of such plans.
(a)(5)(v) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(5)(vi) Press Release dated February 2, 2000.**
(a)(5)(vii) Summary Advertisement dated February 4, 2000.
(a)(5)(viii) Pages I-14 and I-15 and Exhibit 13 of DPL's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998
(incorporated by reference to DPL's Annual Report on Form
10-K filed with the Commission on March 30, 1999).*
(a)(5)(ix) Pages 1 through 7, inclusive, of DPL's Quarterly Report on
Form 10-Q for the period ended September 30, 1999
(incorporated by reference to DPL's Quarterly Report on Form
10-Q filed with the Commission on November 15, 1999).*
(b) Securities Purchase Agreement, by and among DPL, DPL Capital
Trust I, Dayton Ventures LLC and Dayton Ventures, Inc.,
dated as of February 1, 2000 and certain exhibits thereto.
(c) Not required.
(d) See exhibit (b) above.
(e) Not required.
(f) Not required.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(g) Not applicable.
(h) Not applicable.
</TABLE>
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* Information incorporated by reference is available to the public at the
website maintained by the Commission at http://www.sec.gov.
** Previously filed
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C>
Dated: February 4, 2000 DPL INC.
By: /s/ STEPHEN F. KOZIAR, JR.
-----------------------------------------
Name: Stephen F. Koziar, Jr.
TITLE: GROUP VICE PRESIDENT AND GENERAL
COUNSEL
</TABLE>
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- -----------
<S> <C>
(a)(1)(i) Offer to Purchase.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter to Shareholders from Peter H. Forster, Chairman, and
Allen M. Hill, President and CEO of DPL, dated February 4,
2000.
(a)(1)(v) Letter to Participants in the DPL Inc. Employee Stock
Ownership Plan from Peter H. Forster, Chairman, and Allen M.
Hill, President and CEO of DPL, dated February 4, 2000.
(a)(1)(vi) Letter to Participants in The Dayton Power and Light Company
Savings Plans from Peter H. Forster, Chairman, and Allen M.
Hill, President and CEO of DPL, dated February 4, 2000.
(a)(2) Not applicable.
(a)(3) Not applicable.
(a)(4) Not applicable.
(a)(5)(i) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5)(ii) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5)(iii) Letter to Participants in the DPL Inc. Employee Stock
Ownership Plan for use by the trustee of such plan.
(a)(5)(iv) Letter to the Participants in The Dayton Power and Light
Company Savings Plans for use by the trustee of such plans.
(a)(5)(v) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(5)(vi) Press Release dated February 2, 2000.**
(a)(5)(vii) Summary Advertisement dated February 4, 2000.
(a)(5)(viii) Pages I-14 and I-15 and Exhibit 13 of DPL's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998
(incorporated by reference to DPL's Annual Report on Form
10-K filed with the Commission on March 30, 1999).*
(a)(5)(ix) Pages 1 through 7, inclusive, of DPL's Quarterly Report on
Form 10-Q for the period ended September 30, 1999
(incorporated by reference to DPL's Quarterly Report on Form
10-Q filed with the Commission on November 15, 1999).*
(b) Securities Purchase Agreement, by and among DPL, DPL Capital
Trust I, Dayton Ventures LLC and Dayton Ventures, Inc.,
dated as of February 1, 2000 and certain exhibits thereto.
(c) Not required.
(d) See exhibit (b) above.
(e) Not required.
(f) Not required.
(g) Not applicable.
(h) Not applicable.
</TABLE>
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* Information incorporated by reference is available to the public at the
website maintained by the Commission at http://www.sec.gov.
** Previously filed
3
<PAGE>
[DPL LOGO]
OFFER TO PURCHASE FOR CASH
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF DPL INC.
AT A PURCHASE PRICE NOT IN EXCESS
OF $23.00 NOR LESS THAN $20.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
DPL Inc., an Ohio corporation, invites its shareholders to tender up to
25,000,000 of its common shares, par value $.01 per share, for purchase by DPL
at a price not in excess of $23.00 nor less than $20.00 per share, net to the
seller in cash, without interest thereon, as specified by shareholders tendering
their shares. DPL will determine a single per share price that it will pay for
shares properly tendered, taking into account the number of shares tendered and
the prices specified by tendering shareholders. All shares acquired in the offer
will be acquired at the same purchase price. DPL will select the lowest purchase
price that will allow it to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered and not
properly withdrawn.
DPL's offer is being made upon the terms and subject to the conditions
described in this Offer to Purchase and in the related Letter of Transmittal
which, as amended or supplemented from time to time, together constitute the
offer. All shares tendered and purchased will include the associated preferred
share purchase rights issued pursuant to a Shareholder Rights Agreement between
DPL and The First National Bank of Boston, as rights agent, and, unless the
context otherwise requires, all references to shares include the associated
preferred share purchase rights.
Only shares properly tendered at prices at or below the purchase price
selected by DPL and not properly withdrawn will be purchased. However, because
of the "odd lot" priority, proration and conditional tender provisions described
in this Offer to Purchase, all of the shares tendered at or below the purchase
price will not be purchased if the offer is oversubscribed. Shares not purchased
in the offer will be returned as promptly as practicable following the
Expiration Date. See Section 3.
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. HOWEVER, THIS OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
DPL HAVING OBTAINED SUFFICIENT FINANCING FOR THE OFFER. SEE SECTIONS 7 AND 9.
The shares are listed and traded on the New York Stock Exchange under the
symbol "DPL." On February 1, 2000, the last full trading day before the
announcement of the offer, the last reported sale price of the shares on the
NYSE Composite Tape was $19 1/16. On February 3, 2000, the last reported sale
price was $21 11/16. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES. SEE SECTION 8.
THE BOARD OF DIRECTORS OF DPL HAS APPROVED THE OFFER. HOWEVER, NEITHER DPL
NOR DPL'S BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE AT
WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. YOU MUST MAKE YOUR OWN DECISION AS
TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH YOU WILL TENDER THEM. IN DOING SO, YOU SHOULD CONSIDER
OUR REASONS FOR MAKING THIS OFFER, INCLUDING OUR INCREASED USE OF FINANCIAL
LEVERAGE AND OUR INCREASED BUSINESS EMPHASIS ON PROVIDING UNREGULATED ENERGY
SERVICES. SEE SECTION 2. OUR DIRECTORS AND EXECUTIVE OFFICERS HAVE ADVISED US
THAT THEY WILL NOT TENDER ANY SHARES IN THE OFFER.
The Dealer Manager for this offer is:
[Credit Suisse First Boston
Corporation Logo]
February 4, 2000
<PAGE>
IMPORTANT
If you wish to tender all or any part of the shares registered in your name,
you should follow the instructions described in Section 3 carefully, including
completing a Letter of Transmittal in accordance with the instructions and
delivering it, along with your share certificates and any other required items,
to EquiServe, the Depositary. If your shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you should
contact the nominee if you desire to tender your shares and request that the
nominee tender them for you. Participants in The Dayton Power and Light Company
Employee Savings Plan and The Dayton Power and Light Company Savings Plan for
Collective Bargaining Employees (collectively, the "DPL Savings Plans") and the
DPL Inc. Employee Stock Ownership Plan (the "ESOP"), who wish to tender any of
their shares held in these plans must follow the separate instructions and
procedures described in Section 3 of this offer to purchase.
Any shareholder who desires to tender shares and whose certificates for the
shares are not immediately available or cannot be delivered to the Depositary or
who cannot comply with the procedure for book-entry transfer or whose other
required documents cannot be delivered to the Depositary by the expiration of
the offer must tender the shares pursuant to the guaranteed delivery procedure
set forth in Section 3.
To properly tender shares, you must validly complete the Letter of
Transmittal, including the section relating to the price at which you are
tendering shares. If you wish to maximize the chance that your shares will be
purchased at the purchase price determined by DPL, you should check the box in
the section on the Letter of Transmittal captioned "Shares Tendered at Price
Determined Pursuant to the Offer." Note that this election could result in your
shares being purchased at the minimum price of $20.00 per share.
You may request additional copies of this Offer to Purchase, the Letter of
Transmittal or the Notice of Guaranteed Delivery from Georgeson Shareholder
Communications Inc., which is acting as the Information Agent, or Credit Suisse
First Boston Corporation ("Credit Suisse First Boston"), which is acting as
Dealer Manager, at their respective addresses and telephone numbers set forth on
the back cover of this Offer to Purchase.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF
AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES IN THIS
OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR
REPRESENTATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR
AUTHORIZATION AS HAVING BEEN AUTHORIZED BY DPL.
<PAGE>
SUMMARY TERM SHEET
THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION FROM THIS OFFER TO PURCHASE. TO
UNDERSTAND THE OFFER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF
THE OFFER, YOU SHOULD READ CAREFULLY THIS ENTIRE OFFER TO PURCHASE AND THE
RELATED LETTER OF TRANSMITTAL. WE HAVE INCLUDED PAGE REFERENCES PARENTHETICALLY
TO DIRECT YOU TO A MORE COMPLETE DESCRIPTION OF THE TOPICS IN THIS SUMMARY.
WHAT SECURITIES IS DPL OFFERING TO PURCHASE? (PAGE 1)
DPL is offering to purchase up to 25,000,000 of its common shares, including
the associated preferred share purchase rights, or any lesser number of shares
that shareholders properly tender in the offer. If more than 25,000,000 shares
are tendered, all shares tendered and not properly withdrawn at or below the
purchase price will be purchased on a pro rata basis, except for "odd lots"
which will be purchased on a priority basis.
HOW MUCH WILL DPL PAY ME FOR MY SHARES AND IN WHAT FORM OF PAYMENT? (PAGE 14)
DPL is conducting the offer through a procedure commonly referred to as a
modified "Dutch Auction."
- This procedure allows you to select the price within a specified price
range at which you are willing to sell your shares. The price range for
this offer is $20.00 to $23.00.
- DPL will determine the lowest single per share price within the price
range that will allow it to purchase 25,000,000 shares, or if fewer shares
are tendered, all shares tendered.
- All shares purchased will be purchased at the same price, even if you have
selected a lower price, but no shares will be purchased above the purchase
price determined by DPL.
- If you wish to maximize the chance that your shares will be purchased in
the offer, you should check the box in the section on the Letter of
Transmittal indicating that you will accept the purchase price determined
by DPL under the terms of the offer. Note that this election could result
in your shares being purchased at the minimum price of $20.00 per share.
- Shareholders whose shares are purchased in the offer will be paid the
purchase price, net in cash, without interest, as soon as practicable
after the expiration of the offer period. Under no circumstances will DPL
pay interest on the purchase price, including but not limited to, by
reason of any delay in making payment.
DOES DPL HAVE THE FINANCIAL RESOURCES TO PAY ME FOR MY SHARES? (PAGE 19)
Assuming DPL purchases 25,000,000 shares pursuant to the offer at the
maximum specified purchase price of $23.00 per share, DPL expects the maximum
aggregate cost, not including all fees and expenses applicable to the offer,
will be approximately $575 million. In addition, DPL expects to incur
approximately $30 million in fees and expenses related to this offer and the
financing of the offer as described below. DPL intends to finance this offer
from the aggregate net proceeds of (i) the sale to affiliates of Kohlberg Kravis
Roberts & Co. ("KKR"), for an aggregate purchase price of approximately
$550 million, of trust preferred securities issued by a trust established by
DPL, voting preferred shares of DPL with voting power equal to 4.9% of the
outstanding voting power of DPL's securities and warrants to purchase DPL common
shares and (ii) the issuance by DPL of additional short- or long-term debt
securities in a public or private offering. In the event such amounts are not
available to DPL by the expiration date of the offer, DPL will extend the offer
period, seek additional financing or terminate the offer. The trust preferred
securities to be sold to KKR will have an aggregate face amount of
$550 million, will be issued at an initial discounted aggregate price of
approximately $500 million, will have a maturity of 30 years (subject to
acceleration to six months after the exercise of the warrants) and will pay
distributions at a rate of 8.5% of the aggregate face amount per year. The
warrants will be for an aggregate of 31,600,000 DPL common shares, will have a
term of 12 years, will have
i
<PAGE>
an exercise price of $21.00 per share and will be sold for an aggregate purchase
price of $50 million. The voting preferred shares will be sold for an aggregate
purchase price of $68,000. The KKR investment is subject to customary closing
conditions, including KKR obtaining $230 million of financing.
WHEN DOES THE TENDER OFFER EXPIRE? CAN DPL EXTEND THE OFFER, AND IF SO, HOW WILL
I BE NOTIFIED? (PAGE 29)
- The offer expires Friday, March 3, 2000, at 5:00 p.m., New York City time,
unless it is extended by DPL.
- Yes, DPL may extend the offer at any time.
- DPL cannot assure you that the offer will be extended or, if extended, for
how long.
- If the offer is extended, DPL will make a public announcement of the
extension no later than 9:00 a.m. on the next business day following the
previously scheduled expiration of the offer period.
WHAT IS THE PURPOSE OF THE OFFER? (PAGE 5)
On February 2, 2000, DPL announced that it had signed a definitive agreement
with affiliates of KKR under which KKR will make a strategic investment of
$550 million in DPL. DPL intends to use the proceeds from this investment,
combined with up to $425 million of new debt capital, to continue its planned
generation strategy, make capital expenditures, retire short-term debt and fund
the repurchase of shares. DPL currently intends to purchase an additional
6,600,000 shares after this offer is completed. The method, timing and financing
of such purchases have not yet been decided.
This offer provides shareholders with an opportunity to sell all or part of
their investment in DPL shares on potentially more favorable terms than would
otherwise be available. However, shareholders who choose not to tender their
shares may also benefit from these transactions. Non-tendering shareholders will
own a greater interest in a company with a potentially stronger earnings per
share growth rate.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? (PAGE 16)
DPL's obligation to accept for payment, purchase or pay for any shares
tendered depends upon a number of conditions, including:
- No significant decrease in the price of DPL's common shares or in the
price of equity securities generally, or any adverse changes in the U.S.
stock markets or credit markets, shall have occurred during this offer.
- DPL must not have concluded that it will be unable to obtain approximately
$605 million of long-term financing on terms and conditions satisfactory
to DPL, in its sole judgment.
- No legal action shall have been threatened, pending or taken, that might
adversely affect the offer.
- No one shall have proposed, announced or made a tender or exchange offer,
other than this offer, merger, business combination or other similar
transaction involving DPL.
- No material change in the business, condition (financial or otherwise),
assets, income, operations, prospects or stock ownership of DPL shall have
occurred during this offer.
HOW DO I TENDER MY SHARES? (PAGE 8)
If you decide to tender your shares, you must either:
- Deliver your shares by mail, physical delivery or book-entry transfer and
deliver a completed and signed Letter of Transmittal or an Agent's Message
to the Depositary before 5:00 p.m., New York City time, on Friday,
March 3, 2000; or
ii
<PAGE>
- If your share certificates are not immediately available for delivery to
the Depositary, comply with the guaranteed delivery procedure before
5:00 p.m., New York City time, on Friday, March 3, 2000.
Contact the Information Agent, the Dealer Manager or your broker for
assistance.
Participants in The Dayton Power and Light Company Employee Savings Plan,
The Dayton Power and Light Company Savings Plan for Collective Bargaining
Employees or the DPL Inc. Employee Stock Ownership Plan who wish to tender any
of their shares held in those plans must instruct the respective plan trustee to
tender their shares at least five business days before the expiration of the
offer by following the separate instructions and procedures described in
Section 3.
On February 1, 2000, DPL's Board of Directors declared a dividend of $0.235
per share payable on March 1, 2000. Participants in DPL's dividend reinvestment
program may tender shares received in respect of such dividend in this offer.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES? (PAGE 14)
You may withdraw your tendered shares at any time before 5:00 p.m., New York
City time, on Friday, March 3, 2000 and, unless already accepted for payment by
DPL, at any time after 12:00 Midnight, New York City time, on Friday, March 31,
2000.
IN WHAT ORDER WILL TENDERED SHARES BE PURCHASED? WILL TENDERED SHARES BE
PRORATED? (PAGE 3)
- First, DPL will purchase shares from all holders of "odd lots" of less
than 100 shares (not including any shares held in either of the DPL
Savings Plans or the ESOP) who properly tender all of their shares at or
below the selected purchase price; and
- Second, after purchasing all shares from the "odd lot holders," DPL will
then purchase shares from all other shareholders who properly tender
shares at or below the selected purchase price, on a pro rata basis,
subject to the conditional tender provisions described in Section 6.
- Consequently, all of the shares that you tender in the offer may not be
purchased even if they are tendered at or below the purchase price.
WHAT DO DPL AND ITS BOARD OF DIRECTORS THINK OF THE OFFER? (PAGE 1)
The Board of Directors of DPL has approved the offer. However, neither DPL
nor DPL's Board of Directors makes any recommendation to you as to whether to
tender or refrain from tendering your shares or as to the purchase price at
which you may choose to tender your shares.
You must decide whether to tender your shares and, if so, how many shares to
tender and the price or prices at which you will tender them.
Our directors and executive officers have advised us that they will not
tender any shares in the offer.
WHAT IS THE RECENT MARKET PRICE OF MY SHARES? (PAGE 18)
On February 1, 2000, the last full trading day before the announcement of
the offer, the last reported sale price of the shares on the NYSE Composite Tape
was $19 1/16. On February 3, 2000, the last reported sale price was $21 11/16.
Shareholders are urged to obtain current market quotations for their shares.
iii
<PAGE>
WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? (PAGE 2)
If you hold your shares in certificate form and tender your shares directly
to the Depositary you will not have to pay any fees or commissions. If you hold
your shares through a broker, bank or other fiduciary you should consult with
them to determine whether you will be charged any transaction cost for tendering
through them.
WHO DO I CONTACT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
For additional information or assistance, you may contact the Information
Agent or the Dealer Manager at the toll free numbers set forth on the back cover
of this Offer to Purchase.
iv
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C> <C>
Summary Term Sheet.................................................................. i
Introduction........................................................................ 1
The Offer........................................................................... 3
1. Number of Shares; Proration................................. 3
2. Purpose of the Offer; Certain Effects of the Offer.......... 5
3. Procedures for Tendering Shares............................. 8
4. Withdrawal Rights........................................... 14
5. Purchase of Shares and Payment of Purchase Price............ 14
6. Conditional Tender of Shares................................ 15
7. Conditions of the Offer..................................... 16
8. Price Range of Shares; Dividends............................ 18
9. Source and Amount of Funds.................................. 19
10. Certain Information Concerning DPL.......................... 19
11. Interests of Directors and Officers; Transactions and 26
Arrangements Concerning Shares..............................
12. Effects of the Offer on the Market for Shares; Registration 27
Under the Exchange Act......................................
13. Certain Legal Matters; Regulatory Approvals................. 27
14. Certain United States Federal Income Tax Consequences....... 27
15. Extension of the Offer; Termination; Amendment.............. 29
16. Fees and Expenses........................................... 30
17. Miscellaneous............................................... 31
</TABLE>
FORWARD LOOKING STATEMENTS
This Offer to Purchase, including the Summary, the Introduction and
Sections 2, 9 and 10, contains statements that are not historical facts and
constitute projections, forecasts or forward-looking statements. When we use
words like "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "may," "should" or similar expressions, or when we discuss our
strategy or plans, we are making projections, forecasts or forward-looking
statements. These statements are not guarantees of performance. They involve
risks, uncertainties and assumptions that could cause our future results and
shareholder value to differ materially from those expressed in these statements.
Many of the factors that will determine these results and value are beyond our
ability to control or predict. These statements are necessarily based upon
various assumptions involving judgments with respect to the future. These risks
and uncertainties include, among others:
- national, international, regional and local economic, competitive and
regulatory conditions and developments;
- capital market conditions, inflation rates and interest rates;
- energy markets, including the timing and extent of changes in commodity
prices;
- weather conditions;
- business, regulatory and legal decisions;
- the pace of deregulation of retail natural gas and electricity delivery;
- technological developments;
- the timing and success of business development efforts; and
- other uncertainties, all of which are difficult to predict and many of
which are beyond our control.
These risks and uncertainties are further discussed in more detail in DPL's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998 and its
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1999, respectively.
v
<PAGE>
To the Holders of Common Shares of DPL Inc.:
INTRODUCTION
DPL Inc., an Ohio corporation, invites its shareholders to tender their DPL
common shares, par value $.01 per share, for purchase by DPL. DPL is offering to
purchase up to 25,000,000 common shares at a price not in excess of $23.00 nor
less than $20.00 per share, net to the seller in cash, without interest, as
specified by shareholders tendering their shares.
DPL will determine a single per share price that it will pay for shares
properly tendered and not properly withdrawn, taking into account the number of
shares tendered and the prices specified by tendering shareholders. All shares
acquired in the offer will be acquired at the same purchase price. DPL will
select the lowest purchase price that will allow it to buy 25,000,000 shares or,
if a lesser number of shares are properly tendered and not properly withdrawn,
all shares that are properly tendered and not properly withdrawn.
DPL's offer is being made upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal which,
as amended or supplemented from time to time, together constitute this offer.
All shares tendered and purchased will include the associated preferred share
purchase rights issued pursuant to a Shareholder Rights Agreement dated as of
December 3, 1991, as amended, between DPL and The First National Bank of Boston,
as rights agent, and, unless the context otherwise requires, all references to
shares include the associated preferred share purchase rights.
Only shares properly tendered at prices at or below the purchase price
selected by DPL and not properly withdrawn will be purchased. However, because
of the "odd lot" priority, proration and conditional tender provisions described
in this Offer to Purchase, all of the shares tendered at or below the purchase
price will not be purchased if the offer is oversubscribed. Shares tendered at
prices in excess of the purchase price that is determined by DPL and shares not
purchased because of proration or conditional tenders will be returned as
promptly as practicable following the Expiration Date. See Section 3.
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
HOWEVER, THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING DPL HAVING
OBTAINED SUFFICIENT FINANCING FOR THE OFFER. SEE SECTIONS 7 AND 9.
THE BOARD OF DIRECTORS OF DPL HAS AUTHORIZED THIS OFFER. HOWEVER, NEITHER
DPL NOR DPL'S BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER
TO TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE AT
WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. YOU MUST MAKE YOUR OWN DECISION
WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE
PRICE OR PRICES AT WHICH YOU WILL TENDER THEM. IN DOING SO, YOU SHOULD CONSIDER
OUR REASONS FOR MAKING THIS OFFER, INCLUDING OUR INCREASED USE OF FINANCIAL
LEVERAGE AND OUR INCREASED BUSINESS EMPHASIS ON PROVIDING UNREGULATED ENERGY
SERVICES. SEE SECTION 2. OUR DIRECTORS AND EXECUTIVE OFFICERS HAVE ADVISED US
THAT THEY WILL NOT TENDER ANY SHARES IN THE OFFER. SEE SECTION 11.
If at the expiration of the offer more than 25,000,000 shares, or a greater
number of shares as DPL may elect to purchase, are properly tendered at or below
the purchase price and not properly withdrawn, DPL will buy shares first from
all Odd Lot Holders, as defined in Section 1, who properly tender all their
shares at or below the purchase price, and second, on a pro rata basis from all
other shareholders who properly tender shares at prices at or below the purchase
price. See Section 1.
If you tender shares in the offer, your tender will include a tender of the
preferred share purchase rights associated with your tendered shares. No
separate consideration will be paid for the rights. See Section 8.
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The purchase price will be paid net to the tendering shareholder in cash,
without interest thereon, for all shares purchased. Tendering shareholders who
hold shares registered in their own name and who tender their shares directly to
the Depositary will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer
taxes on the purchase of shares by DPL in the offer. Shareholders holding shares
through brokers or banks are urged to consult the brokers or banks to determine
whether transaction costs may apply if shareholders tender shares through the
brokers or banks and not directly to the Depositary. HOWEVER, ANY TENDERING
SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO THE
DEPOSITARY THE SUBSTITUTE FORM W-9 THAT IS INCLUDED AS PART OF THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED UNITED STATES FEDERAL INCOME TAX BACKUP
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO THE TENDERING SHAREHOLDER OR
OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3.
DPL will pay all fees and expenses incurred in connection with the offer by
Credit Suisse First Boston, the Dealer Manager for this offer, EquiServe, the
Depositary for this offer, Georgeson Shareholder Communications Inc., the
Information Agent for this offer, T. Rowe Price Trust Company, the trustee of
each of the DPL Savings Plans, and Bank One Dayton, N.A., trustee of the ESOP.
See Section 16.
Participants in The Dayton Power and Light Company Employee Savings Plan and
The Dayton Power and Light Company Savings Plan for Collective Bargaining
Employees may instruct the trustee of those plans, T. Rowe Price Trust Company,
to tender some or all of the shares held for the participant's account by
following the instructions in the separate "Letter to Participants in the DPL
Savings Plans" and returning it to the trustee's agent in accordance with those
instructions. If the trustee has not received a participant's instructions at
least five business days prior to the Expiration Date, the trustee will not
tender any shares held on behalf of the participant in the plan. Proceeds
received from any tender of shares held for the participant's account in one of
the DPL Savings Plans will be initially invested under the terms of the plans
for the participant in a short-term government securities fund, and subsequently
may be transferred by the participant to other investment funds as permitted by
the plan. See Section 3.
Participants in the DPL Inc. Employee Stock Ownership Plan may instruct the
trustee, Bank One Dayton, N.A., to tender some or all of the DPL common shares
allocated to the participant's account in that plan by following the
instructions in the separate "Letter to Participants in the DPL Inc. Employee
Stock Ownership Plan" and returning it to the trustee's agent in accordance with
those instructions. If the trustee has not received a participant's instructions
at least five business days prior to the Expiration Date, the trustee will not
tender any shares held on behalf of the participant in the plan. Proceeds
received from any tender of shares from a participant's account will be
reinvested under the terms of the plan in DPL common shares following the tender
offer. Participants should be aware that the proceeds will be reinvested in DPL
common shares under the terms of the plan at the prevailing market price at the
time of the reinvestment, which price may be higher or lower than the purchase
price paid by DPL for shares in the tender offer.
On February 1, 2000, DPL's Board of Directors declared a dividend of $0.235
per share payable on March 1, 2000. Participants in DPL's dividend reinvestment
program may tender shares received in respect of such dividend in this offer.
As of February 3, 2000, DPL had 158,682,304 issued and outstanding common
shares, 31,600,000 shares reserved for issuance pursuant to the KKR warrants and
6,650,000 shares reserved for issuance upon exercise of outstanding stock
options under DPL's new stock option plan. The 25,000,000 shares that DPL is
offering to purchase pursuant to the offer represent approximately 15.8% of
DPL's shares outstanding on February 3, 2000. The shares are listed and traded
on the New York Stock Exchange under the symbol "DPL." On February 1, 2000, the
last full trading day before the announcement of the offer, the last reported
sale price of the shares as reported on the NYSE Composite Tape was $19 1/16.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See
Section 8.
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THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the offer, DPL will purchase
25,000,000 shares, or the lesser number of shares that are properly tendered and
not properly withdrawn in accordance with Section 4 before the Expiration Date,
as defined below, at prices not in excess of $23.00 nor less than $20.00 per
share, net to the seller in cash, without interest.
The term "Expiration Date" means 5:00 p.m., New York City time, on Friday,
March 3, 2000. DPL may, in its sole discretion, extend the period of time during
which the offer will remain open. In the event of an extension, the term
"Expiration Date" will refer to the latest time and date at which the offer, as
extended by DPL, will expire. See Section 15 for a description of DPL's right to
extend, delay, terminate or amend the offer.
In accordance with Instruction 5 of the Letter of Transmittal, shareholders
desiring to tender shares must either (1) specify that they are willing to sell
their shares to DPL at the price determined in the offer, or (2) specify the
price, not in excess of $23.00 nor less than $20.00 per share, at which they are
willing to sell their shares to DPL in the offer. As promptly as practicable
following the Expiration Date, DPL will, upon the terms and subject to the
conditions of the offer, determine a single per share purchase price that it
will pay for shares properly tendered and not properly withdrawn pursuant to the
offer, taking into account the number of shares tendered and the prices
specified by tendering shareholders. All shares purchased in the offer will be
purchased at the same purchase price. DPL will select the lowest purchase price
that will allow it to buy 25,000,000 shares, or the lesser number of shares that
are properly tendered at prices not in excess of $23.00 nor less than $20.00 per
share.
Only shares properly tendered at prices at or below the purchase price
determined by DPL and not properly withdrawn will be purchased. However, because
of the "odd lot" priority, proration and conditional tender provisions, all of
the shares tendered at or below the purchase price will not be purchased if the
offer is oversubscribed. All shares tendered and not purchased pursuant to the
offer, including shares tendered at prices in excess of the purchase price
determined by DPL and shares not purchased because of proration or conditional
tenders, will be returned to the tendering shareholders at DPL's expense as
promptly as practicable following the Expiration Date.
DPL reserves the right to purchase more than 25,000,000 shares pursuant to
the offer. In accordance with applicable regulations of the Securities and
Exchange Commission, DPL may purchase pursuant to the offer an additional amount
of shares not to exceed 2% of the outstanding shares without amending or
extending the offer. See Section 15.
In the event of an over-subscription of the offer, shares tendered at or
below the purchase price before the Expiration Date will be subject to
proration, except for Odd Lots (as defined below). The proration period also
expires on the Expiration Date.
If DPL (1) increases the price that may be paid for shares above $23.00 per
share or decreases the price that may be paid for shares below $20.00 per share,
(2) materially increases the Dealer Manager fee, (3) increases the number of
shares that it may purchase in the offer by more than 2% of the outstanding
shares, or (4) decreases the number of shares that it may purchase in the offer,
then the offer must remain open for at least ten business days following the
date that notice of the increase or decrease is first published, sent or given
in the manner specified in Section 15.
The offer is not conditioned on any minimum number of shares being tendered.
The offer is, however, subject to other conditions. See Sections 5, 7 and 9.
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PRIORITY OF PURCHASES. If more than 25,000,000 shares (or a greater number
of shares as DPL may elect to purchase) have been properly tendered at prices at
or below the selected purchase price and not properly withdrawn before the
Expiration Date, DPL will purchase properly tendered shares on the basis set
forth below:
First, DPL will purchase all shares tendered by any Odd Lot Holder (as
defined below) who:
(1) tenders all shares owned beneficially or of record by the Odd Lot Holder
at a price at or below the selected purchase price (tenders of less than
all of the shares owned by the Odd Lot Holder will not qualify for this
preference); and
(2) completes the section entitled "Odd Lots" in the Letter of Transmittal
and, if applicable, in the Notice of Guaranteed Delivery.
Second, after the purchase of all of the shares properly tendered and not
properly withdrawn by Odd Lot Holders, subject to the conditional tender
provisions described in Section 6, DPL will purchase all other shares tendered
at prices at or below the purchase price, on a pro rata basis with appropriate
adjustments to avoid purchases of fractional shares, as described below.
Consequently, all of the shares that a shareholder tenders in the offer may
not be purchased even if they are tendered at prices at or below the purchase
price.
ODD LOTS. The term "Odd Lots" means all shares tendered at prices at or
below the selected purchase price by any person (an "Odd Lot Holder") who owned
beneficially or of record as of the close of business on February 3, 2000, and
continues to own beneficially and of record as of the Expiration Date, an
aggregate of fewer than 100 shares (not including any shares held in one of DPL
Savings Plans or the ESOP) and so certified in the appropriate place on the
Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery.
To qualify for this preference, an Odd Lot Holder must tender all shares owned
by the Odd Lot Holder in accordance with the procedures described in Section 3.
Odd Lots will be accepted for payment before any proration of the purchase of
other tendered shares. This preference is not available to partial tenders or to
beneficial or record holders of an aggregate of 100 or more shares, even if
these holders have separate accounts or certificates representing fewer than 100
shares, or with respect to any shares held in one of the DPL Savings Plans or
the ESOP. By tendering in the offer, an Odd Lot Holder who holds shares in its
name and tenders its shares directly to the Depositary would not only avoid the
payment of brokerage commissions, but also would avoid any applicable odd lot
discounts in a sale of the holder's shares. Any Odd Lot Holder wishing to tender
all of the shareholder's shares pursuant to the offer should complete the
section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, in
the Notice of Guaranteed Delivery.
DPL also reserves the right, but will not be obligated, to purchase all
shares properly tendered by any shareholder who tenders any shares owned
beneficially or of record, at or below the selected purchase price and who, as a
result of proration, would then own beneficially or of record, an aggregate of
fewer than 100 shares. If DPL exercises this right, it will increase the number
of shares that it is offering to purchase in the offer by the number of shares
purchased through the exercise of the right.
PRORATION. If proration of tendered shares is required, DPL will determine
the proration factor as promptly as practicable following the Expiration Date.
Proration for each shareholder tendering shares, other than Odd Lot Holders,
will be based on the ratio of the number of shares tendered by the shareholder
to the total number of shares tendered by all shareholders, other than Odd Lot
Holders, at or below the selected purchase price. Because of the difficulty in
determining the number of shares properly tendered and not properly withdrawn,
and because of the Odd Lot procedure described above and the conditional tender
procedure described in Section 6, DPL does not expect that it will be able to
announce the final proration factor or commence payment for any shares purchased
pursuant to the offer until approximately seven business days after the
Expiration Date. The preliminary results of any proration will be announced by
press release as promptly as practicable after the Expiration Date. Shareholders
may obtain preliminary proration information from the Information Agent and also
may be able to obtain the information from their brokers.
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As described in Section 14, the number of shares that DPL will purchase from
a shareholder pursuant to the offer may affect the United States federal income
tax consequences to the shareholder of the purchase and, therefore, may be
relevant to a shareholder's decision whether or not to tender shares. The Letter
of Transmittal affords each tendering shareholder the opportunity to designate
the order of priority in which shares tendered are to be purchased in the event
of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of the shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on DPL's
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of shares.
2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
Diversified utility companies, including DPL, have experienced and will
continue to experience a significant increase in the level of competition in the
utility and energy services markets over time. A steady move away from a
regulated monopoly energy supply structure toward a more competitive structure
has affected the utility industry for nearly two decades. During the past
decade, various state and federal regulatory changes have occurred and a
significant number of states have begun to implement legislative initiatives to
permit retail customers to choose their energy supply provider.
Ohio enacted deregulation legislation in July 1999. As a result, customers
of DPL's utility subsidiary, The Dayton Power and Light Company ("DP&L"), will
be able to purchase power from other sources commencing January 1, 2001. DP&L's
rates for power which it provides to customers within its service territory will
be frozen for a period of time (ending not later than December 31, 2005). During
this period, DP&L has asked the Public Utilities Commission of Ohio to allow it
to recover stranded costs through collection of a transition charge. That case
is pending.
As required by the new legislation, DPL and DP&L are reorganizing their
corporate and business structure to separate non-competitive (i.e., regulated)
and competitive businesses. DP&L will maintain its focus on its core electric
transmission and distribution business and DPL will operate its generation
business through a separate business unit. Reliability, efficiency and cost
control programs continue to contribute to DPL's expected earnings growth. DPL's
generation business unit, an industry leader in efficiency and availability, set
a new peak record in the summer of 1999 increasing its all-time peak high by 4%.
DPL continues its ongoing productivity and efficiency initiatives within its
business units including electric transmission and distribution, electric
generation, electric wholesale sales, gas distribution and retail gas and
electric energy services.
DPL Energy Inc., a DPL subsidiary with Federal Energy Regulatory Commission
permission to sell wholesale electric energy, has announced three phases of its
plans to expand peaking generation capacity. New peak electricity utilization
records were set throughout the Midwest in the summer of 1999. The three phases
represent an investment of $205 million, increasing peaking capacity by 20% or
635 megawatts.
DPL announced in December that it had reached an agreement with Indiana
Energy Inc. to sell its natural gas retail distribution business unit for
$425 million in cash. The sale will allow DPL to focus on growing the electric
business. The sale is expected to be completed by the second quarter of 2000,
subject to regulatory approval, and after-tax proceeds will be used for general
corporate purposes.
DPL maintains a portfolio of financial assets with a book value of
approximately $1.1 billion at December 31, 1999. The portfolio is made up of a
combination of equity and debt investments designed to provide the financial
flexibility, liquidity and stability to continue DPL's strong record of earnings
growth. The portfolio contributed $55 million to income in 1999.
Based upon the above initiatives, DPL will seek to achieve long-term returns
that meet or exceed that of other industry participants. At the same time, DPL's
business environment is expected to change which may increase the volatility in
revenue and income streams.
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As a complement to its business strategy, DPL has employed various financial
initiatives intended to increase DPL's financial and operating flexibility and
to further position DPL for the increasingly competitive utility and energy
market. In 1999, DPL repurchased 3.5 million common shares at a cost of
$61 million.
DPL intends to repurchase up to 25,000,000 common shares in this offer,
representing approximately 15.8% of its outstanding common shares as of
February 3, 2000. DPL currently intends to purchase an additional 6,600,000
shares after this offer is completed. The method, timing and financing of such
purchases have not yet been decided.
DPL is seeking the consent of the participating lenders in its revolving
credit facilities to amend such facilities' financial covenants in a manner
consistent with this offer.
Assuming DPL purchases 25,000,000 shares pursuant to the offer at the
maximum specified purchase price of $23.00 per share, DPL expects the maximum
aggregate cost, not including all fees and expenses applicable to the offer,
will be approximately $575 million. In addition, DPL expects to incur
approximately $30 million in fees and expenses related to this offer and the
financing thereof as described below. DPL intends to finance this offer from the
aggregate net proceeds of (i) the sale to affiliates of KKR, for an aggregate
purchase price of $550 million, of trust preferred securities issued by a trust
established by DPL, voting preferred shares of DPL with voting power equal to
4.9% of the outstanding voting power of DPL's securities and warrants to
purchase DPL common shares and (ii) the issuance by DPL of additional short- or
long-term debt securities in a public or private offering. In the event such
amounts are not available to DPL by the expiration date of this offer, DPL will
extend the offer period, seek alternative financing or terminate the offer. The
trust preferred securities to be sold to KKR will have an aggregate face amount
of $550 million, will be issued at an initial discounted aggregate price of
approximately $500 million, will have a maturity of 30 years (subject to
acceleration to six months after the exercise of the warrants) and will pay
distributions at a rate of 8.5% of the aggregate face amount per year. The
warrants will be for an aggregate of 31,600,000 DPL common shares, will have a
term of 12 years, will have an exercise price of $21.00 per share and will be
sold for an aggregate purchase price of $50 million. The voting preferred shares
will be sold for an aggregate purchase price of $68,000. The KKR investment is
subject to customary closing conditions, including KKR obtaining $230 million in
financing.
DPL intends to use the proceeds from the KKR investment, combined with up to
$425 million of new debt capital, to continue its planned generation strategy,
retire short-term debt and fund the repurchase of shares. These transactions are
designed to increase the financial leverage employed by DPL in its capital
structure. DPL expects to maintain a credit rating of at least BBB on its debt
and preferred securities. However, these ratings are subject to periodic review
by the rating agencies and may change from time to time.
This offer allows shareholders an opportunity to exit, subject to proration
in the offer, their investment in DPL on potentially more favorable terms than
would otherwise be available. The offer provides shareholders who are
considering a sale of all or a portion of their shares with the opportunity to:
- sell a portion of their shares while retaining a continuing equity
interest in DPL;
- determine the price or prices, not in excess of $23.00 nor less than
$20.00 per share, at which they are willing to sell their shares and,
subject to the terms and conditions of the offer (including proration) and
if shares are tendered by their registered owner directly to the
Depositary, to sell shares for cash without the usual transaction costs
associated with open market sales; and
- for Odd Lot Holders who hold shares in their names and tender their shares
directly to the Depositary and whose shares are purchased pursuant to the
offer, avoid the payment of brokerage commissions and any applicable odd
lot discounts payable on a sale of their shares in a New York Stock
Exchange transaction.
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Non-tendering shareholders will own a greater interest in a company with a
potentially stronger earnings per share growth rate. Shareholders who determine
not to accept the offer will realize a proportionate increase in their relative
ownership interest in DPL, and thus in DPL's future earnings and assets, subject
to DPL's right to issue additional shares and other equity securities in the
future. Shareholders may be able to sell non-tendered shares in the future on
the NYSE or otherwise, at a net price higher than the purchase price in the
offer. DPL can give no assurance, however, as to the price at which a
shareholder may be able to sell his or her shares in the future, which may be
higher or lower than the purchase price paid by DPL in the offer.
In considering the offer, DPL's Board of Directors took into account the
expected financial impact of the offer, including the company's increased
long-term obligations as a result of the offer and the resulting increased
interest expense. The DPL Board of Directors believes that DPL's financial
condition and outlook and current market conditions, including recent trading
prices of DPL's common shares, make this an attractive time to repurchase a
portion of its outstanding shares. In the view of DPL's Board of Directors, the
offer is an attractive use of DPL's financial resources and will result in a
more appropriate capital structure for DPL.
Accordingly, the offer is consistent with DPL's long-term corporate goal of
increasing shareholder value. After the offer is completed, DPL believes that
its anticipated cash flow from operations, access to credit facilities and
capital markets, and financial condition will, taken together, be adequate for
its needs for the foreseeable future. However, actual experience may differ
significantly from DPL's expectations. Future events, such as regulatory
developments, adverse effects on operations, or levels of capital or other
expenditures, could have the effect of reducing DPL's available cash or might
reduce or adversely affect the availability or cost of external financial
resources.
Other than as disclosed in this Offer to Purchase, DPL may in the future
purchase additional shares in the open market, in private transactions, through
tender offers or otherwise, subject to the approval of the Board of Directors.
Future purchases may be on the same terms or on terms which are more or less
favorable to shareholders than the terms of the offer. However, Rule 13e-4 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prohibits
DPL and its affiliates from purchasing any shares, other than pursuant to the
offer, until at least ten business days after the Expiration Date. Any future
purchases by DPL will depend on many factors, including:
- the market price of the shares;
- the results of this offer;
- DPL's business and financial position; and
- general economic and market conditions.
Shares that DPL acquires in the offer will be restored to the status of
authorized but unissued shares or held in treasury and will be available for DPL
to issue without further shareholder action (except as required by applicable
law or stock exchange rules) for all purposes including, but not limited to, the
acquisition of other businesses, the raising of additional capital for use in
DPL's business and the satisfaction of obligations under existing or future
employee benefit plans. DPL has no current plans for the issuance of shares
repurchased pursuant to the offer.
Upon the closing of KKR's investment in DPL, George Roberts and Scott
Stuart, partners of KKR, will join DPL's Board of Directors. KKR will have the
right to nominate one person for election to the Board of Directors so long as
it maintains a specified minimum investment in DPL securities.
At its February 1, 2000 meeting, DPL's Board of Directors made several
changes to DPL's executive and director compensation programs. In order to
further motivate its executives, align their interests with those of DPL's
shareholders and encourage them to continue over the longer term with DPL, the
Board adopted, subject to shareholder approval, a new Stock Option Plan which
will replace the Management Stock Incentive Program. The Stock Option Plan will
also replace the Directors' Deferred Stock Compensation Plan. The
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Stock Option Plan permits options covering up to 8,000,000 shares to be granted.
A three-year block grant of options for 6,150,000 shares was made to the
executive group at an exercise price of $21.00 per share (which was above the
February 1 closing price for DPL's shares) with five-year vesting. Each
non-employee director was also granted a three-year block grant for 50,000
options. Stock incentive units earned under the prior stock incentive program
were fixed and the payment was deferred until 2005. The change of control
severance agreements of senior executives were also amended to increase the
trigger threshold for acquisitions approved by the Board from 15% to 50% of
DPL's shares.
Except as disclosed in this Offer to Purchase, DPL currently has no plans,
proposals or negotiations underway that relate to or would result in:
- any extraordinary transaction, such as a merger, reorganization or
liquidation, involving DPL or any of its subsidiaries, which is material
to DPL and its subsidiaries, taken as a whole;
- any purchase, sale or transfer of a material amount of assets of DPL or
any of its subsidiaries, taken as a whole;
- any material change in the dividend rate or policy, or indebtedness or
capitalization of DPL;
- any change in the present board of directors or management of DPL,
including, but not limited to, any plans or proposals to change the number
or the term of directors or to fill any existing vacancies on the board or
to change any material term of the employment contract of any executive
officer;
- any other material change in DPL's corporate structure or business;
- any class of equity securities of DPL being delisted from a national
securities exchange;
- any class of equity securities of DPL becoming eligible for termination of
registration under section 12(g)(4) of the Exchange Act;
- the suspension of DPL's obligation to file reports under Section 15(d) of
the Exchange Act;
- the acquisition by any person of additional securities of DPL, or the
disposition of securities of DPL; or
- any changes in DPL's charter, bylaws or other governing instruments or
other actions that could impede the acquisition of control of DPL.
The Board of Directors of DPL has authorized the offer. However, neither DPL
nor its Board of Directors makes any recommendation to shareholders as to
whether to tender or refrain from tendering their shares or as to the purchase
price at which shareholders should tender their shares, and neither has
authorized any person to make any recommendation. Shareholders are urged to
evaluate carefully all information in the offer, consult with their own
investment and tax advisors and make their own decision whether to tender and,
if so, how many shares to tender and the price or prices at which to tender
them. DPL has been advised that none of its directors or executive officers
intends to tender any shares pursuant to the offer. See Section 11.
3. PROCEDURES FOR TENDERING SHARES.
PROPER TENDER OF SHARES. For shares to be tendered properly pursuant to the
offer:
(1) the certificates for the shares, or confirmation of receipt of the
shares pursuant to the procedure for book-entry transfer set forth
below, together with a properly completed and duly executed Letter of
Transmittal, or a manually signed facsimile of the Letter of
Transmittal, including any required signature guarantees, or an Agent's
Message (as defined below) in the case of a book-entry transfer, and any
other documents required by the Letter of Transmittal, must be received
before 5:00 p.m., New York City time, on the Expiration Date by the
Depositary at its address set forth on the back cover of this Offer to
Purchase; or
(2) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
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In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder desiring to tender shares pursuant to the offer must either
(1) check the box in the section of the Letter of Transmittal captioned "Shares
Tendered at Price Determined Pursuant to the Offer" or (2) check one of the
boxes in the section of the Letter of Transmittal captioned "Price (in dollars)
per Share at Which Shares Are Being Tendered" indicating the price at which
shares are being tendered. A tender of shares will be proper if and only if, one
of these boxes is checked on the Letter of Transmittal.
If you wish to maximize the chance that your shares will be purchased, you
should check the box in the section on the Letter of Transmittal captioned
"Shares Tendered at Price Determined Pursuant to the Offer." Note that this
election could result in your shares being purchased at the minimum price of
$20.00 per share.
If you wish to indicate a specific price (in multiples of $0.125) at which
your shares are being tendered, you must check a box under the section captioned
"Price (in dollars) per Share at Which Shares Are Being Tendered." Note that
this election could result in no shares being purchased if you check a box other
than the box representing the lowest price. A shareholder who wishes to tender
shares at more than one price must complete separate letters of transmittal for
each price at which shares are being tendered. The same shares cannot be
tendered (unless previously properly withdrawn in accordance with the terms of
the offer) at more than one price.
In addition, Odd Lot Holders who tender all shares must complete the section
captioned "Odd Lots" in the Letter of Transmittal and, if applicable, in the
Notice of Guaranteed Delivery, to qualify for the preferential treatment
available to Odd Lot Holders as set forth in Section 1.
Shareholders who hold shares through brokers or banks are urged to consult
the brokers or banks to determine whether transaction costs may apply if
shareholders tender shares through the brokers or banks and not directly to the
Depositary.
Participants in The Dayton Power and Light Company Employee Savings Plan and
The Dayton Power and Light Company Savings Plan for Collective Bargaining
Employees may instruct the trustee of those plans, T. Rowe Price Trust Company,
to tender some or all of the shares held for the participant's account by
following the instructions in the separate "Letter to Participants in the DPL
Savings Plans" and returning it to the trustee's agent in accordance with those
instructions. If the trustee has not received a participant's instructions at
least five business days prior to the Expiration Date, the trustee will not
tender any shares held on behalf of the participant in the plan. Proceeds
received from any tender of shares attributed to one of the DPL Savings Plans
will be initially invested under the terms of the plans for the participant in a
short-term government securities fund, and subsequently may be transferred by
the participant to other investment funds as permitted by the plan.
Participants in the DPL Inc. Employee Stock Ownership Plan who wish to
tender some or all of the shares allocated to their accounts must follow the
instructions in the "Letter to Participants in the DPL Inc. Employee Stock
Ownership Plan" furnished separately and return it to the plan trustee in
accordance with those instructions. The instructions must be received by the
trustee's agent no later than five business days prior to the Expiration Date,
or no shares attributed to the participant's account will be tendered.
On February 1, 2000, DPL's Board of Directors declared a dividend of $0.235
per share payable on March 1, 2000. Participants in DPL's dividend reinvestment
program may tender shares received in respect of such dividend in this offer.
SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is
required if:
(1) the Letter of Transmittal is signed by the registered holder of the
shares (which term, for purposes of this Section 3, will include any
participant in The Depository Trust Company (the "Book-Entry Transfer
Facility") whose name appears on a security position listing as the
owner of the shares) tendered and the holder has not completed either
the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on the Letter of Transmittal; or
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(2) shares are tendered for the account of a bank, broker, dealer, credit
union, savings association or other entity which is a member in good
standing of the Securities Transfer Agents Medallion Program or a bank,
broker, dealer, credit union, savings association or other entity which
is an "eligible guarantor institution," as the term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each
of the foregoing constituting an "Eligible Institution"). See
Instruction 1 of the Letter of Transmittal.
If a certificate for shares is registered in the name of a person other than
the person executing a Letter of Transmittal, or if payment is to be made, or
shares not purchased or tendered are to be issued, to a person other than the
registered holder, then the certificate must be endorsed or accompanied by an
appropriate stock power, in either case, signed exactly as the name of the
registered holder appears on the certificate, with the signature guaranteed by
an Eligible Institution.
In all cases, payment for shares tendered and accepted for payment pursuant
to the offer will be made only after timely receipt by the Depositary of
certificates for the shares (or a timely confirmation of the book-entry transfer
of the shares into the Depositary's account at the Book-Entry Transfer Facility
as described above), a properly completed and duly executed Letter of
Transmittal, or a manually signed facsimile of the Letter of Transmittal, and
any other documents required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
BOOK-ENTRY DELIVERY. The Depositary will establish an account with respect
to the shares for purposes of the offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the shares by causing the
Book-Entry Transfer Facility to transfer shares into the Depositary's account in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
Although delivery of shares may be effected through a book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility, either (1) a
properly completed and duly executed Letter of Transmittal, or a manually signed
facsimile of the Letter of Transmittal, with any required signature guarantees,
or an Agent's Message, and any other required documents must be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase before the Expiration Date, or (2) the
guaranteed delivery procedure described below must be followed. DELIVERY OF THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgement from the participant in the Book-Entry
Transfer Facility tendering shares that such participant has received and agrees
to be bound by the terms of the Letter of Transmittal and that DPL may enforce
such agreement against the participant.
UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING. Under the United
States federal income tax backup withholding rules, unless an exemption applies
under the applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the offer must be withheld and remitted
to the United States Internal Revenue Service ("IRS"), unless the shareholder or
other payee provides his or her taxpayer identification number (employer
identification number or social security number) to the Depositary (as payor)
and certifies under penalties of perjury that the number is correct. Therefore,
each tendering shareholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding unless the shareholder
otherwise establishes to the satisfaction of the Depositary that the shareholder
is not subject to backup
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withholding. If the Depositary is not provided with the correct taxpayer
identification number, the United States Holder (as defined in Section 14) may
be subject to penalties imposed by the IRS. If withholding results in an
overpayment of taxes, a refund may be obtained. Certain "exempt recipients"
(including, among others, all corporations and certain Non-United States Holders
(as defined in Section 14)) are not subject to these backup withholding and
information reporting requirements. In order for a Non-United States Holder to
qualify as an exempt recipient, that shareholder must submit an IRS Form W-8 or
a Substitute Form W- 8, signed under penalties of perjury, attesting to that
shareholder's exempt status. These statements can be obtained from the
Depositary. See Instruction 14 of the Letter of Transmittal.
TO PREVENT UNITED STATES FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31%
OF THE GROSS PAYMENTS MADE TO SHAREHOLDERS FOR SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM THE
BACKUP WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE OTHER INFORMATION BY COMPLETING THE
SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF TRANSMITTAL.
WITHHOLDING FOR NON-UNITED STATES HOLDERS. Even if a Non-United States
Holder has provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of the
gross payments payable to a Non-United States Holder or his agent unless the
Depositary determines that a reduced rate of withholding is available pursuant
to a tax treaty or that an exemption from withholding is applicable because the
gross proceeds are effectively connected with the conduct of a trade or business
within the United States. To obtain a reduced rate of withholding pursuant to a
tax treaty, a Non-United States Holder must deliver to the Depositary before the
payment a properly completed and executed IRS Form W-8BEN (or successor form).
To obtain an exemption from withholding on the grounds that the gross proceeds
paid pursuant to the offer are effectively connected with the conduct of a trade
or business within the United States, a Non-United States Holder must deliver to
the Depositary a properly completed and executed IRS Form W-8ECI (or successor
form). The Depositary will determine a shareholder's status as a Non-United
States Holder and eligibility for a reduced rate of, or exemption from,
withholding by reference to any outstanding certificates or statements
concerning eligibility for a reduced rate of, or exemption from, withholding
(e.g., IRS Form W-8BEN or IRS Form W-8ECI) unless facts and circumstances
indicate that reliance is not warranted. A Non-United States Holder may be
eligible to obtain a refund of all or a portion of any tax withheld if the
Non-United States Holder meets those tests described in Section 14 that would
characterize the exchange as a sale (as opposed to a dividend) or is otherwise
able to establish that no tax or a reduced amount of tax is due.
NON-UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING
THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING
ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND
PROCEDURE.
GUARANTEED DELIVERY. If a shareholder desires to tender shares pursuant to
the offer and the shareholder's share certificates are not immediately available
or cannot be delivered to the Depositary before the Expiration Date (or the
procedure for book-entry transfer cannot be completed on a timely basis), or if
time will not permit all required documents to reach the Depositary before the
Expiration Date, the shares still may be tendered, if all of the following
conditions are satisfied:
(1) the tender is made by or through an Eligible Institution;
(2) the Depositary receives by hand, mail, overnight courier, telegram or
facsimile transmission, on or before the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery substantially
in the form DPL has provided with this Offer to Purchase, including
(where required) a signature guarantee by an Eligible Institution in the
form set forth in the Notice of Guaranteed Delivery; and
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(3) the certificates for all tendered shares, in proper form for transfer
(or confirmation of book-entry transfer of the shares into the
Depositary's account at the Book-Entry Transfer Facility), together with
a properly completed and duly executed Letter of Transmittal, or a
manually signed facsimile of the Letter of Transmittal, or an Agent's
Message in the case of a book-entry transfer, and any required signature
guarantees and other documents required by the Letter of Transmittal,
are received by the Depositary within three NYSE trading days after the
date of receipt by the Depositary of the Notice of Guaranteed Delivery.
RETURN OF UNPURCHASED SHARES. If any tendered shares are not purchased, or
if less than all shares evidenced by a shareholder's certificates are tendered,
certificates for unpurchased shares will be returned as promptly as practicable
after the expiration or termination of the offer or, in the case of shares
tendered by book-entry transfer at the Book-Entry Transfer Facility, the shares
will be credited to the appropriate account maintained by the tendering
shareholder at the Book-Entry Transfer Facility, in each case without expense to
the shareholder.
DETERMINATION OF VALIDITY; REJECTION OF SHARES; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the number of shares
to be accepted, the purchase price to be paid for shares to be accepted and the
validity, form, eligibility (including time of receipt) and acceptance for
payment of any tender of shares will be determined by DPL, in its sole
discretion, and its determination will be final and binding on all parties. DPL
reserves the absolute right to reject any or all tenders of any shares that it
determines are not in proper form or the acceptance for payment of or payment
for which may, in the opinion of DPL's counsel, be unlawful. DPL also reserves
the absolute right to waive any of the conditions of the offer or any defect or
irregularity in any tender with respect to any particular shares or any
particular shareholder, and DPL's interpretation of the terms of the offer will
be final and binding on all parties. No tender of shares will be deemed to have
been properly made until all defects or irregularities have been cured by the
tendering shareholder or waived by DPL. None of DPL, the Dealer Manager, the
Depositary, the Information Agent or any other person will be obligated to give
notice of any defects or irregularities in tenders, nor will any of them incur
any liability for failure to give any notice.
SAVINGS PLANS. Participants in The Dayton Power and Light Company Employee
Savings Plan or The Dayton Power and Light Company Savings Plan for Collective
Bargaining Employees may instruct the trustee of those plans, T. Rowe Price
Trust Company, to tender some or all of the shares held for a participant's
account by following the instructions in the separate "Letter to Participants in
the DPL Savings Plans" furnished separately and returning it to the trustee's
agent in accordance with those instructions. All documents furnished to
shareholders generally in connection with the offer will be made available to
participants whose individual accounts are credited with shares. Participants in
the DPL Savings Plans cannot use the Letter of Transmittal to direct the tender
of shares, but must use the separate instruction letter sent to them. The DPL
Savings Plans are prohibited from selling shares to DPL for a price that is less
than the prevailing market price. Accordingly, if a participant in the DPL
Savings Plans elects to tender shares at a price that is less than the
prevailing market price of DPL's common shares at the expiration of the offer,
the tender price elected by the participant will be deemed to have been
increased to the closest tender price that is not less than the closing price on
the New York Stock Exchange at the Expiration Date.
Delivery of the Letter of Transmittal by a participant does not constitute
proper tender of his or her DPL Savings Plan shares. Proper tender can only be
made by the trustee who is the record owner of the shares. Please note that the
deadline for submitting instruction letters to the trustee's agent is earlier
than the Expiration Date. If the trustee has not received a participant's
instructions at least five business days prior to the Expiration Date, the
trustee will not tender any shares held on behalf of the participant in the
plan.
The proceeds received by the DPL Savings Plan trustee from any shares
tendered by a DPL Savings Plan participant will be invested following the tender
offer initially in a short-term government securities fund. After any
successfully tendered shares are processed and the proceeds are credited to a
participant's DPL Savings Plan account, participants may contact T. Rowe Price
Trust Company by the normal manner of
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communication (e.g., voice response or on-line access) to exchange any proceeds
held in the short-term government securities fund for any other investment
option available under the terms of the DPL Savings Plan. Participants in the
DPL Savings Plans are urged to read the separate instruction letter and related
materials carefully.
DPL INC. EMPLOYEE STOCK OWNERSHIP PLAN. Participants in the DPL Inc.
Employee Stock Ownership Plan may instruct the trustee of that Plan, Bank One
Dayton, N.A., to tender some or all of the shares allocated to a participant's
account by following the instructions in the separate "Letter to Participants in
the DPL Inc., Employee Stock Ownership Plan" furnished separately and returning
it to the trustee's agent in accordance with those instructions. All documents
furnished to shareholders generally in connection with the offer will be made
available to participants whose individual accounts are credited with shares.
Participants in the ESOP cannot use the Letter of Transmittal to direct the
tender of shares, but must use the separate instruction letter sent to them. The
ESOP is prohibited from selling shares to DPL for a price that is less than the
prevailing market price. Accordingly, if a participant in the ESOP elects to
tender shares at a price that is lower than the prevailing market price of DPL's
common shares at the expiration of the offer, the tender price elected by the
participant will be deemed to have been increased to the closest tender price
that is not less than the closing price on the New York Stock Exchange at the
Expiration Date.
Delivery of a Letter of Transmittal by a participant does not constitute
proper tender of his or her ESOP shares. Proper tender can only be made by the
trustee who is the record owner of the shares. Please note that the deadline for
submitting instruction letters to the trustee's agent is earlier than the
Expiration Date. If the trustee has not received a participant's instructions at
least five business days prior to the Expiration Date, the trustee will not
tender any shares held on behalf of the participant in the ESOP.
Under the terms of the ESOP funds contributed by DPL or its subsidiaries and
earnings on those funds must be invested in DPL common shares. Thus, the
proceeds received by the ESOP trustee from DPL common shares tendered by ESOP
participants will be treated differently under the terms of the ESOP than the
proceeds received by the Savings Plans trustee from DPL common shares tendered
by Savings Plan participants. The proceeds received by the ESOP trustee from any
shares tendered by an ESOP participant will be reinvested under the terms of the
ESOP in DPL common shares following the tender offer. Participants should be
aware that the proceeds reinvested under the terms of the ESOP in DPL common
shares will be reinvested at the prevailing market price at the time of
reinvestment, which may be higher or lower than the purchase price paid by DPL
for shares in the tender offer. Participants in the ESOP are urged to read the
separate instruction letter and related materials carefully.
TENDERING SHAREHOLDER'S REPRESENTATION AND WARRANTY; DPL'S ACCEPTANCE
CONSTITUTES AN AGREEMENT. A tender of shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the offer, as well as the tendering shareholder's
representation and warranty to DPL that (1) the shareholder has a "net long
position," within the meaning of Rule 14e-4 promulgated by the SEC under the
Exchange Act, in the shares or equivalent securities at least equal to the
shares being tendered, and (2) the tender of shares complies with Rule 14e-4. It
is a violation of Rule 14e-4 for a person, directly or indirectly, to tender
shares for that person's own account unless, at the time of tender and at the
end of the proration period or period during which shares are accepted by lot
(including any extensions thereof), the person so tendering (1) has a net long
position equal to or greater than the amount of (a) shares tendered or
(b) other securities convertible into or exchangeable or exercisable for the
shares tendered and will acquire the shares for tender by conversion, exchange
or exercise and (2) will deliver or cause to be delivered the shares in
accordance with the terms of the offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. DPL's acceptance for payment of shares tendered pursuant to the
offer will constitute a binding agreement between the tendering shareholder and
DPL upon the terms and conditions of the offer.
LOST OR DESTROYED CERTIFICATES. Shareholders whose certificates for part or
all of their shares have been lost, stolen, misplaced or destroyed may contact
the Depositary at (800) 736-3001 for instructions as to the
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documents which will be required to be submitted together with the Letter of
Transmittal in order to receive certificate(s) representing the shares.
Shareholders are requested to contact the Depositary immediately in order to
permit timely processing of this documentation.
Certificates for shares, together with a properly completed Letter of
Transmittal and any other documents required by the Letter of Transmittal, must
be delivered to the Depositary and not to DPL. Any documents delivered to DPL
will not be forwarded to the Depositary and will not be deemed to be properly
tendered.
4. WITHDRAWAL RIGHTS.
Shares tendered pursuant to the offer may be withdrawn at any time before
the Expiration Date and, unless already accepted for payment by DPL pursuant to
the offer, may also be withdrawn at any time after 12:00 Midnight, New York City
time, on Friday, March 31, 2000. Except as otherwise provided in this
Section 4, tenders of shares pursuant to the offer are irrevocable.
For a withdrawal to be effective, a notice of withdrawal must be in written,
telegraphic, telex or facsimile transmission form and must be received in a
timely manner by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase. Any notice of withdrawal must specify the name
of the tendering shareholder, the number of shares to be withdrawn and the name
of the registered holder of the shares. If the certificates for shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
before the release of the certificates, the tendering shareholder must also
submit the serial numbers shown on the particular certificates for shares to be
withdrawn and the signature(s) on the notice of withdrawal must be guaranteed by
an Eligible Institution (except in the case of shares tendered for the account
of an Eligible Institution). If shares have been tendered pursuant to the
procedure for book-entry transfer described in Section 3, the notice of
withdrawal also must specify the name and the number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn shares and must
otherwise comply with the Book-Entry Transfer Facility's procedures. All
questions as to the form and validity, including the time of receipt, of any
notice of withdrawal will be determined by DPL, in its sole discretion, which
determination will be final and binding on all parties. None of DPL, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
obligated to give notice of any defects or irregularities in any notice of
withdrawal, nor will any of them incur liability for failure to give any notice.
Participants in either of the DPL Savings Plans or the ESOP who wish to
withdraw their shares must follow the instructions found in the separate"Letter
to Participants in the DPL Savings Plans" or the "Letter to Participant's in the
DPL Inc. Employee Stock Ownership Plan" sent to them separately.
Withdrawals may not be rescinded, and any shares properly withdrawn will be
deemed not properly tendered for purposes of the offer. However, withdrawn
shares may be re-tendered before the Expiration Date by again following one of
the procedures described in Section 3.
If DPL extends the offer, is delayed in its purchase of shares or is unable
to purchase shares pursuant to the offer for any reason, then, without prejudice
to DPL's rights under the offer, the Depositary may, subject to applicable law,
retain tendered shares on behalf of DPL, and the shares may not be withdrawn
except to the extent tendering shareholders are entitled to withdrawal rights as
described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
As promptly as practicable following the Expiration Date, DPL (1) will
determine a single per share purchase price it will pay for the shares properly
tendered and not properly withdrawn before the Expiration Date, taking into
account the number of shares tendered and the prices specified by tendering
shareholders, and (2) will accept for payment and pay for (and thereby purchase)
up to 25,000,000 shares properly tendered at prices at or below the purchase
price and not properly withdrawn before the Expiration Date. For purposes of the
offer, DPL will be deemed to have accepted for payment (and therefore
purchased), subject to the "odd lot" priority, proration and conditional tender
provisions of this offer, shares that are properly tendered at or below the
selected purchase price and not properly withdrawn only when, as and if it gives
oral or written notice to the Depositary of its acceptance of the shares for
payment pursuant to the offer.
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DPL will accept for payment and pay the per share purchase price for all of
the shares accepted for payment pursuant to the offer as soon as practicable
after the Expiration Date. In all cases, payment for shares tendered and
accepted for payment pursuant to the offer will be made promptly, subject to
possible delay in the event of proration, but only after timely receipt by the
Depositary of certificates for shares, or of a timely Book-Entry Confirmation of
shares into the Depositary's account at the Book-Entry Transfer Facility, and a
properly completed and duly executed Letter of Transmittal, or manually signed
facsimile of the Letter of Transmittal, and any other required documents.
DPL will pay for shares purchased pursuant to the offer by depositing the
aggregate purchase price for the shares with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from DPL
and transmitting payment to the tendering shareholders.
In the event of proration, DPL will determine the proration factor and pay
for those tendered shares accepted for payment as soon as practicable after the
Expiration Date. However, DPL does not expect to be able to announce the final
results of any proration and commence payment for shares purchased until
approximately seven business days after the Expiration Date. Certificates for
all shares tendered and not purchased, including all shares tendered at prices
in excess of the purchase price and shares not purchased due to proration or
conditional tenders, will be returned or, in the case of shares tendered by
book-entry transfer, will be credited to the account maintained with the
Book-Entry Transfer Facility by the participant who delivered the shares, to the
tendering shareholder at DPL's expense as promptly as practicable after the
Expiration Date or termination of the offer without expense to the tendering
shareholders. Under no circumstances will DPL pay interest on the purchase
price, including but not limited to, by reason of any delay in making payment.
In addition, if certain events occur, DPL may not be obligated to purchase
shares pursuant to the offer. See Section 7.
DPL will pay all stock transfer taxes, if any, payable on the transfer to it
of shares purchased pursuant to the offer. If, however, payment of the purchase
price is to be made to, or (in the circumstances permitted by the offer) if
unpurchased shares are to be registered in the name of, any person other than
the registered holder, or if tendered certificates are registered in the name of
any person other than the person signing the Letter of Transmittal, the amount
of all stock transfer taxes, if any (whether imposed on the registered holder or
the other person), payable on account of the transfer to the person will be
deducted from the purchase price unless satisfactory evidence of the payment of
the stock transfer taxes, or exemption from payment of the stock transfer taxes,
is submitted. See Instruction 7 of the Letter of Transmittal.
Any tendering shareholder or other payee who fails to complete fully, sign
and return to the Depositary the Substitute Form W-9 included with the Letter of
Transmittal may be subject to required United States federal income tax backup
withholding of 31% of the gross proceeds paid to the shareholder or other payee
pursuant to the offer. See Section 3 regarding United States federal income tax
consequences for Non-United States shareholders.
6. CONDITIONAL TENDER OF SHARES.
Under certain circumstances and subject to the exceptions for Odd Lot
Holders described in Section 1, DPL may prorate the number of shares purchased
pursuant to the offer. As discussed in Section 14, the number of shares to be
purchased from a particular shareholder may affect the tax treatment of the
purchase to the shareholder and the shareholder's decision whether to tender.
Accordingly, a shareholder may tender shares subject to the condition that a
specified minimum number of the shareholder's shares tendered pursuant to a
Letter of Transmittal or Notice of Guaranteed Delivery must be purchased if any
shares tendered are purchased. Any shareholder desiring to make a conditional
tender must so indicate in the box captioned "Conditional Tender" in the Letter
of Transmittal or, if applicable, the Notice of Guaranteed Delivery. Each
shareholder is urged to consult with his or her own tax advisor.
Any tendering shareholder wishing to make a conditional tender must
calculate and appropriately indicate the minimum number of shares that must be
purchased if any are purchased. If the effect of accepting
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tenders on a pro rata basis would be to reduce the number of shares to be
purchased from any shareholder (tendered pursuant to a Letter of Transmittal or
Notice of Guaranteed Delivery) below the minimum number specified, the tender
will automatically be regarded as withdrawn (except as provided in the next
paragraph). All shares tendered by a shareholder subject to a conditional tender
pursuant to the Letter of Transmittal or Notice of Guaranteed Delivery and
regarded as withdrawn as a result of proration will be returned as promptly as
practicable after the Expiration Date.
If conditional tenders would otherwise be regarded as withdrawn and would
cause the total number of shares to be purchased to fall below 25,000,000 then,
to the extent feasible, DPL will select enough of the conditional tenders that
would otherwise have been withdrawn to permit DPL to purchase 25,000,000 shares.
In selecting among the conditional tenders, DPL will select by lot and will
limit its purchase in each case to the designated minimum of shares to be
purchased.
7. CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the offer, DPL will not be required
to accept for payment, purchase or pay for any shares tendered, and may
terminate or amend the offer or may postpone the acceptance for payment of, or
the purchase of and the payment for shares tendered, subject to the rules under
the Exchange Act, if at any time on or after February 4, 2000 and before the
Expiration Date any of the following events have occurred (or have been
determined by DPL to have occurred) that, in DPL's sole judgment and regardless
of the circumstances giving rise to the event or events (including any action or
omission to act by DPL), makes it inadvisable to proceed with the offer or with
acceptance for payment:
- there has been threatened, instituted or pending any action, suit or
proceeding by any government or governmental, regulatory or administrative
agency, authority or tribunal or by any other person, domestic, foreign or
supranational, before any court, authority, agency or other tribunal that
directly or indirectly:
(1) challenges or seeks to make illegal, or to delay or otherwise directly
or indirectly to restrain, prohibit or otherwise affect the making of
the offer, the acquisition of some or all of the shares pursuant to the
offer or otherwise relates in any manner to the offer; or
(2) in DPL's sole judgment, could materially and adversely affect the
business, condition (financial or otherwise), income, operations or
prospects of DPL and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of DPL or any of its subsidiaries or materially impair the
contemplated benefits of the offer to DPL;
- there has been any action threatened, pending or taken, including any
settlement, or any approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, invoked, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the offer or DPL or any of its subsidiaries, including any
settlement, by any court, government or governmental, regulatory or
administrative authority, agency or tribunal domestic, foreign or
supranational, that, in DPL's sole judgment, could directly or indirectly:
(1) make the acceptance for payment of, or payment for, some or all of the
shares illegal or otherwise restrict or prohibit consummation of the
offer;
(2) delay or restrict the ability of DPL, or render DPL unable, to accept
for payment or pay for some or all of the shares;
(3) materially impair the contemplated benefits of the offer to DPL; or
(4) materially and adversely affect the business, condition (financial or
otherwise), income, operations or prospects of DPL and its subsidiaries,
taken as a whole, or otherwise materially impair in any way the
contemplated future conduct of the business of DPL or any of its
subsidiaries;
16
<PAGE>
- there has occurred any of the following:
(1) any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange or in the
over-the-counter market;
(2) the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States, whether or not mandatory;
(3) the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States;
(4) any limitation, whether or not mandatory, by any governmental,
regulatory or administrative agency or authority on, or any event that,
in DPL's sole judgment, could materially affect, the extension of credit
by banks or other lending institutions in the United States;
(5) any significant decrease in the market price of the shares or in the
market prices of equity securities generally in the United States, any
significant increase in the interest rate, distribution rate or other
significant change in the terms for debt securities offerings in the
United States, or any changes in the general political, market, economic
or financial conditions in the United States or abroad that could have,
in the sole judgment of DPL, a material adverse effect on the business,
condition (financial or otherwise), income, operations or prospects of
DPL and its subsidiaries, taken as a whole, or on the trading in DPL
common shares, or on the proposed financing of the offer;
(6) in the case of any of the foregoing existing at the time of the
commencement of the offer, a material acceleration or worsening thereof;
or
(7) any decline in the Dow Jones Industrial Average or the Standard and
Poor's 500 Composite Index by an amount in excess of 10% measured from
the close of business on February 4, 2000;
- DPL concludes in its sole judgment that it is or will be unable prior to
the Expiration Date to obtain approximately $605 million of long-term
financing on terms and conditions satisfactory to DPL;
- a tender or exchange offer for any or all of the shares (other than this
offer), or any merger, acquisition proposal, business combination or other
similar transaction with or involving DPL or any subsidiary, has been
proposed, announced or made by any person or has been publicly disclosed;
- DPL learns that:
(1) any entity, "group" (as that term is used in Section 13(d)(3) of the
Exchange Act) or person has acquired or proposes to acquire beneficial
ownership of more than 5% of the outstanding shares, whether through the
acquisition of stock, the formation of a group, the grant of any option
or right, or otherwise (other than as disclosed in a Schedule 13D or
Schedule 13G filed with the SEC on or before February 3, 2000 and other
than the investment by KKR described herein); or
(2) any entity, group or person who has filed a Schedule 13D or
Schedule 13G with the SEC on or before February 3, 2000 has acquired or
proposes to acquire, whether through the acquisition of stock, the
formation of a group, the grant of any option or right, or otherwise,
beneficial ownership of an additional 2% or more of the outstanding
shares;
- any person, entity or group has filed a Notification and Report Form under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
reflecting an intent to acquire DPL or any of its common shares, or has
made a public announcement reflecting an intent to acquire DPL or any of
its subsidiaries or any of their respective assets or securities other
than in connection with a transaction authorized by the Board of Directors
of DPL (other than KKR in connection with its investment described
herein);
17
<PAGE>
- any change or changes have occurred or are threatened in the business,
condition (financial or otherwise), assets, income, operations, prospects
or share ownership of DPL or its subsidiaries that, in DPL's sole
judgment, is or may be material to DPL or its subsidiaries; or
- DPL determines that the consummation of the offer and the purchase of the
shares may cause its common shares to be delisted from the NYSE or to be
eligible for deregistration under the Exchange Act.
The conditions referred to above are for the sole benefit of DPL and may be
asserted by DPL regardless of the circumstances, including any action or
omission to act by DPL, giving rise to any condition, and may be waived by DPL,
in whole or in part, at any time and from time to time in its sole discretion.
DPL's failure at any time to exercise any of the foregoing rights will not be
deemed a waiver of any right, and each such right will be deemed an ongoing
right that may be asserted at any time and from time to time. In certain
circumstances, if DPL waives any of the conditions described above, it may be
required to extend the Expiration Date. Any determination by DPL concerning the
events described above will be final and binding on all parties.
8. PRICE RANGE OF SHARES; DIVIDENDS.
DPL common shares are listed for trading on the New York Stock Exchange
under the symbol "DPL." The following table sets forth, for the fiscal quarters
indicated, the high and low sales prices per share as reported on the NYSE
Composite Tape and the cash dividends paid per share in each fiscal quarter:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------------- ------------- ---------
<S> <C> <C> <C>
1998
Second quarter.............................................. $ 19 7/16 $ 16 15/16 $0.235
Third quarter............................................... 19 5/8 16 15/16 0.235
Fourth quarter.............................................. 21 5/8 18 11/16 0.235
1999
First quarter............................................... 21 11/16 16 1/2 0.235
Second quarter.............................................. 19 7/8 16 3/8 0.235
Third quarter............................................... 19 5/8 16 15/16 0.235
Fourth quarter.............................................. 20 5/16 16 5/8 0.235
2000
First quarter (through February 3, 2000).................... 21 15/16 16 5/8 0.235
</TABLE>
On February 1, 2000, the last full trading day before the announcement of
the offer, the last reported sale price of the shares as reported on the NYSE
Composite Tape was $19 1/16. On February 3, 2000 the last reported sale price
was $21 11/16. DPL URGES SHAREHOLDERS TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES.
SHAREHOLDER RIGHTS AGREEMENT. Holders of common shares have a contingent
right to purchase four-ninths of one preferred share purchase (a "Right") for
each DPL common share held by them. Each Right, evidenced by and traded with the
common shares, when it becomes exercisable, entitles the registered holder to
purchase from DPL one one-hundredth of a Preferred Share, Series A, no par
value, at an exercise price of $66 per one one-hundredth of a share (the
"Purchase Price").
The Rights will separate from the common shares and become exercisable
following the earlier to occur of (i) ten days following the date of public
disclosure that a person or group (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding common shares or
(ii) ten business days following the commencement of a tender offer or exchange
offer by a person other than DPL to acquire beneficial ownership of 15% or more
of the outstanding common shares (the earlier of such dates being called the
"Distribution Date").
18
<PAGE>
In the event a person becomes an Acquiring Person, the Rights would entitle
each holder of a Right to purchase at the Purchase Price, that number of common
shares having a market value equal to two times the Purchase Price. In the event
that, following the acquisition of 15% of the common shares, DPL is acquired in
a merger or other business combination or more than 50% of its consolidated
assets, earning power or cash flow is sold or otherwise transferred or disposed
of, the Rights would entitle each holder of a Right, except for Rights held by
an Acquiring Person, to purchase, at the Purchase Price, that number of common
shares of the acquiring company having a market value of two times the Purchase
Price. DPL is entitled to redeem or amend the Rights, subject to certain
conditions, prior to the Distribution Date. In connection with KKR's investment
described herein, the Shareholder Rights Agreement was amended to permit such
investment and to allow KKR to increase its investment up to 25% of the
outstanding common shares.
The Rights will expire on December 13, 2001 unless earlier redeemed or
exchanged by DPL.
The foregoing description of the preferred share purchase rights is
qualified in its entirety by reference to the Shareholder Rights Agreement, a
copy of which has been filed as an exhibit to a Form 8-A filed by DPL on
December 4, 1991. This exhibit may be obtained from the SEC in the manner
provided in Section 10.
9. SOURCE AND AMOUNT OF FUNDS.
Assuming DPL purchases 25,000,000 shares pursuant to the offer at the
maximum specified purchase price of $23.00 per share, DPL expects the maximum
aggregate cost, not including all fees and expenses applicable to the offer,
will be approximately $575 million. In addition, DPL expects to incur
approximately $30 million in fees and expenses related to this offer and the
financing thereof as described below. DPL intends to finance this offer from the
aggregate net proceeds of (i) the sale to affiliates of KKR, for an aggregate
purchase price of $550 million, of trust preferred securities issued by a trust
established by DPL, voting preferred shares of DPL with voting power equal to
4.9% of the outstanding voting power of DPL's securities and warrants to
purchase DPL common shares and (ii) the issuance by DPL of additional short-or
long-term securities in a public or private offering. In the event such amounts
are not available to DPL by the expiration date of this offer, DPL will extend
the offer period, seek alternative financing or terminate the offer. The trust
preferred securities to be sold to KKR will have an aggregate face amount of
$550 million, will be issued at an initial discounted aggregate price of
$500 million, will have a maturity of 30 years (subject to acceleration to six
months after the exercise of the warrants) and will pay distributions at a rate
of 8.5% of the aggregate face amount per year. The warrants will be for an
aggregate of 31,600,000 DPL common shares, will have a term of 12 years, will
have an exercise price of $21.00 per share and will be sold for an aggregate
purchase price of $50 million. The voting preferred shares will be sold for an
aggregate purchase price of $68,000. The KKR investment is subject to customary
closing conditions, including KKR obtaining $230 million in financing.
10. CERTAIN INFORMATION CONCERNING DPL.
GENERAL. DPL Inc., based in Dayton, Ohio, is an energy services holding
company with approximately 2,500 employees and annual revenues in 1998 of
$1.38 billion.
DPL Inc.'s principal subsidiary is DP&L. DP&L sells electricity and natural
gas to residential, commercial and governmental customers in a 6,000 square mile
area of West Central Ohio. Other subsidiaries of DPL include Miami Valley
Resources, Inc., a natural gas supply management company; Miami Valley
Leasing, Inc., which leases communications equipment and other miscellaneous
equipment, owns real estate and has, for financial investment purposes, acquired
limited partnership interests in wholesale electric generation; Miami Valley
Lighting, Inc., a street lighting business; Miami Valley CTC, Inc., which
provides transportation services; Miami Valley Insurance Company, an insurance
company for DPL and its subsidiaries; Miami Valley Development Company, which
has acquired real estate for DP&L and is engaged in the business of technology
research and development; MVE Inc., which provides support services to DPL; DPL
Energy, Inc., which has been granted authority to engage in the business of
brokering wholesale electric energy; and Plaza Building Inc., which owns and
leases an office building.
19
<PAGE>
The executive offices of DPL Inc. are located at Courthouse Plaza Southwest,
Dayton, Ohio 45402--telephone (937) 224-6000.
RECENTLY ANNOUNCED RESULTS OF OPERATIONS FOR FISCAL 1999. On January 25,
2000, DPL reported 1999 earnings growth of 9%. Earnings for the fourth quarter
were $0.27 per share, up 12.5% from a year ago. 1999 earnings per share were
$1.35, compared to the $1.24 per share earned in 1998. For the full year 1999
and the fourth quarter, operating revenues were $1.34 billion and
$333.7 million, respectively, net income was $204.2 million and $40.7 million,
respectively, and average number of common shares outstanding was 151.4 million
and 150.5 million.
SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION. The
following table contains summary historical condensed consolidated financial
information of DPL and its subsidiaries. The summary historical condensed
consolidated financial information for the years ended December 31, 1998 and
1997 and as of December 31, 1998 and 1997 has been derived from the audited
consolidated financial statements of DPL. The summary historical condensed
consolidated financial information for the nine months ended September 30, 1999
and 1998 and as of September 30, 1999 and 1998 has been derived from the
unaudited consolidated financial statements of DPL. In the opinion of
management, the interim condensed consolidated financial information reflects
all adjustments necessary for a fair presentation. These adjustments are only of
a normal recurring nature. The summary historical condensed consolidated
financial information should be read in conjunction with and is qualified in its
entirety by reference to the audited and unaudited consolidated financial
statements and the related notes thereto from which it has been derived. More
comprehensive financial information is included in the consolidated financial
statements and related notes contained in DPL's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, which it files with the SEC.
DPL INC.
SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION
BALANCE SHEET
(IN MILLIONS)
<TABLE>
<CAPTION>
AT AT
SEPTEMBER 30, DECEMBER 31,
1999 1998
-------------- -------------
<S> <C> <C>
ASSETS
Net Property................................................ $2,220.1 $2,238.7
Current assets.............................................. 416.6 493.4
Investments and Other Assets................................ 1,335.1 1,123.8
-------- --------
Total Assets................................................ $3,971.8 $3,855.9
======== ========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common Shareholder's Equity................................. $1,375.4 $1,383.7
Preferred Stock............................................. 22.9 22.9
Long-Term Debt.............................................. 1,336.5 1,065.9
-------- --------
Total Capitalization........................................ 2,734.8 2,472.5
Current Liabilities......................................... 406.4 548.8
Deferred Credits and Other.................................. 830.6 834.6
-------- --------
Total Capitalization and Liabilities........................ $3,971.8 $3,855.9
======== ========
</TABLE>
20
<PAGE>
DPL INC.
SUMMARY HISTORICAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION
STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------
1999 1998 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues.......................................... $1,005.2 $1,015.5 $1,352.2 $1,333.6
Expenses.......................................... 684.8 705.9 970.2 978.0
-------- -------- -------- --------
Operating Income.................................. 320.4 309.6 382.0 355.6
-------- -------- -------- --------
Investment Income................................. 35.8 20.2 33.4 27.2
Interest Expense.................................. (82.1) (69.6) (93.8) (87.3)
Other Income (Deductions)......................... (6.5) (8.4) (12.1) (8.7)
-------- -------- -------- --------
Income Before Taxes............................... 267.6 251.8 309.5 286.8
Income Taxes...................................... 104.0 98.8 120.4 105.4
-------- -------- -------- --------
Net Income........................................ $ 163.6 $ 153.0 $ 189.1 $ 181.4
Average Number of Common Shares
Outstanding (millions).......................... 151.7 152.7 152.8 151.4
Earnings Per Share of Common Stock--Basic and
Diluted......................................... $1.08 $1.00 $1.24 $1.20
Dividends Paid Per Share of Common Stock.......... $0.705 $0.705 $0.94 $0.91
Book Value Per Common Share....................... $9.10 $8.67 $9.01 $8.45
Common Shares Outstanding (millions).............. $158.6 $161.0 $161.3 $160.2
Ratio of earnings to fixed charges................ 4.26 4.62 4.33 4.32
</TABLE>
SUMMARY UNAUDITED CONDENSED CONSOLIDATED PRO FORMA FINANCIAL
STATEMENTS. The following summary unaudited condensed consolidated pro forma
financial statements give effect to the purchase of DPL common shares pursuant
to this Offer to Purchase, including the related financing transactions, based
on certain assumptions described below and in the related Notes below.
The Summary Unaudited Condensed Consolidated Pro Forma Balance Sheet as of
September 30, 1999 gives effect to the purchase of common shares pursuant to the
offer, including the related financing transactions, as though such events
occurred as of the date of such balance sheet. The Summary Unaudited Condensed
Consolidated Pro Forma Statements of Income for the nine months ended
September 30, 1999 and for the year ended December 31, 1998 give effect to the
purchase of common shares pursuant to the offer, including the related financing
transactions, as though such events occurred on January 1, 1998.
The summary unaudited condensed consolidated pro forma financial statements
should be read in conjunction with the summary historical condensed consolidated
financial information included in this Offer to Purchase and the historical
consolidated financial information incorporated by reference herein. The summary
unaudited condensed consolidated pro forma financial statements are subject to a
number of uncertainties and assumptions and do not purport to be indicative of
the operating results that would actually have been obtained, or operating
results that may be obtained in the future, or the financial position that would
have resulted had the purchase of the common shares pursuant to this offer,
including the related financing transactions, been completed at the dates
indicated.
21
<PAGE>
DPL INC.
SUMMARY OF UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA BALANCE SHEET
FOR NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Property, plant and equipment......................... $2,220.1 $ -- $2,220.1
Current assets........................................ 416.6 (55.0)(1) 361.6
Financial assets...................................... 931.1 931.1
Other assets.......................................... 404.0 25.0 (4a) 429.0
-------- -------- --------
Total Assets...................................... $3,971.8 $ (30.0) $3,941.8
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Common stock.......................................... $ 1.6 $ (0.3)(2a) $ 1.3
Other Paid in Capital................................. 753.7 (577.2)(2b) 176.5
Warrants.............................................. -- 47.5 (3) 47.5
Earnings reinvested in the business................... 651.3 651.3
Other................................................. (31.2) (31.2)
-------- -------- --------
Total common shareholders' equity................. 1,375.4 (530.0) 845.4
Preferred stock....................................... 22.9 22.9
Preferred stock subject to mandatory redemption....... 0.7 (4c) 0.7
Company obligated mandatorily redeemable trust
preferred securities of subsidiary holding solely
parent debentures................................... 499.3 (4b) 499.3
Long-term debt........................................ 1,336.5 1,336.5
-------- -------- --------
Total capitalization.............................. 2,734.8 (30.0) 2,704.8
LIABILITIES
Current Liabilities................................... 406.4 406.4
Deferred taxes........................................ 457.0 457.0
Other credits......................................... 373.6 373.6
-------- -------- --------
-------- -------- --------
Total liabilities and capitalization.............. $3,971.8 $ (30.0) $3,941.8
======== ======== ========
</TABLE>
22
<PAGE>
DPL INC.
SUMMARY OF UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA STATEMENT OF INCOME
FOR NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Revenues............................................. $1,005.2 $ -- $1,005.2
Expenses............................................. 684.8 684.80
-------- -------- --------
Operating Income..................................... 320.4 -- 320.4
Investment Income.................................... 35.8 35.8
Interest Expense..................................... (82.1) (82.1)
Trust preferred distributions by subsidiary.......... (35.1)(5) (35.1)
Other income and deductions.......................... (6.5) (6.5)
-------- -------- --------
Income before income taxes........................... 267.6 (35.1) 232.5
Income taxes......................................... 104.0 (12.3)(6) 91.7
-------- -------- --------
Net income....................................... $ 163.6 $ (22.8) $ 140.8
Preferred Stock Dividend............................. 0.0 (5) 0.0
-------- -------- --------
Net Income applicable to common stock................ $ 163.6 $ (22.8) $ 140.8
======== ======== ========
Average common shares outstanding (thousands)
Basic.............................................. 151,700 (25,000)(7) 126,700
Diluted............................................ 151,700 (25,000)(7) 126,700
Earnings per common share:
Basic.............................................. $ 1.08 $ 1.11
Diluted............................................ $ 1.08 $ 1.11
Book value per common share.......................... $ 9.10 $ 6.70
Ratio of earnings to fixed charges................... 4.26 2.98
</TABLE>
23
<PAGE>
DPL INC.
SUMMARY OF UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA STATEMENT OF INCOME
FOR TWELVE MONTHS ENDED DECEMBER 31, 1998
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
Revenues............................................ $1,352.2 $ -- $ 1,352.2
Expenses............................................ 970.2 970.20
-------- --------- ---------
Operating Income.................................... 382.0 -- 382.0
Investment Income................................... 33.4 33.4
Interest Expense.................................... (93.8) (93.8)
Trust preferred distributions by subsidiaries....... (122.5 )(5) (122.5)
Other income and deductions......................... (12.1) (12.1)
-------- --------- ---------
Income before income taxes.......................... 309.5 (122.5) 187.0
Income taxes........................................ 120.4 (42.9)(6) 77.5
-------- --------- ---------
Net income...................................... $ 189.1 $ (79.6) $ 109.5
Preferred Stock Dividend............................ 0.1 (5) 0.1
-------- --------- ---------
Net Income applicable to common stock............... $ 189.1 $ (79.7) $ 109.4
======== ========= =========
Average common shares outstanding (thousands)
Basic............................................. 152,800 (25,000)(7) 127,800
Diluted........................................... 152,800 (25,000)(7) 127,800
Earnings per common share:
Basic............................................. $ 1.24 $ 0.86
Diluted........................................... $ 1.24 $ 0.86
Book value per common share......................... $ 9.01 $ 6.64
Ratio of earnings to fixed charges.................. 4.33 1.87
</TABLE>
24
<PAGE>
NOTES TO SUMMARY UNAUDITED
CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
($ IN MILLIONS)
1) Represents reduction to current assets (cash) for the excess of transaction
consideration over sources of funds
<TABLE>
<S> <C>
Transaction consideration
Common stock buyback........................................ $ 575.0
Transaction fees for stock buyback.......................... 2.5
-------
Total transaction consideration............................. 577.5
Sources of funds
Issuance of 8.5% trust preferred securities................. $ 499.3
Issuance of warrants........................................ 50.0
Issuance of 8.5% voting preferred securities................ 0.7
Issuance costs.............................................. (27.5)
-------
Total funds................................................. 522.5
Reduction to current assets (cash).......................... $ 55.0
</TABLE>
2) Represents the reacquisition for cash of 25,000,000 shares of DPL common
stock at the assumed purchase price of $23 per share, the maximum price in
this offer. There can be no assurance that DPL will repurchase 25,000,000
shares or that the shares will be repurchased at a price of $23.
<TABLE>
<S> <C>
25,000,000 common shares redeemed at $23 per share
2a Allocated to reduce par value of common.................. $ (0.3)
2b Allocated to reduce other paid in capital................ (574.7)
2b Represents assumed costs of shares buyback............... (2.5)
</TABLE>
3) Represents the issuance of warrants for $50 million for an aggregate of 31.6
million DPL common shares, expiring on February 1, 2012, and with an
exercise price of $21 per share.
<TABLE>
<S> <C>
Issuance of warrants for 31.6 million common shares......... $ 50.0
Represents assumed costs of issuance of warrants............ (2.5)
-------
$ 47.5
</TABLE>
4) Represents the issuance of mandatorily redeemable trust preferred securities
(aggregate face amount of $550 million) for an initial discounted aggregate
amount of $499.3 million (due in 30 years with an assumed distribution rate
of 8.5%), and 8.5% mandatorily redeemable voting preferred stock for $0.7
million.
<TABLE>
<S> <C>
4a Issuance costs........................................... $ 25.0
4b Issuance of 8.5% trust preferred securities.............. $ 499.3
(net of original issuance discount of $50 million)
4c Issuance of 8.5% voting preferred securities............. $ 0.7
</TABLE>
5) Represents the pro forma distributions on the trust preferred securities
($46.8 million annually and $35.1 million for the nine months ended
September 30, 1999) and the pro forma dividend on the 8.5% voting preferred
($58 thousand annually and $43 thousand for the nine months ended
September 30, 1999).
Also represents for the year ended December 31, 1998, the amortization of
$50.7 million of original issuance discount and $25 million of issuance
costs from issuance of 8.5% trust preferred securities. No amortization is
required for the nine months ended September 30, 1999.
25
<PAGE>
6) Represents the tax benefit of the pro forma distributions on the trust
preferred securities, which are deductible as interest expenses for tax
purposes and the amortization of the original issuance discount and costs of
issuance of the trust preferred securities, based on DPL's statutory income
tax rate of 35%.
7) Represents the pro forma reduction in weighted average common shares
outstanding due to share buyback. Warrants exercisable into 31.6 million DPL
common shares are not included in the average common shares outstanding for
diluted earnings per share because the average market price of DPL common
shares is less than the exercise price of the warrants ($21).
ADDITIONAL INFORMATION. DPL is subject to the informational filing
requirements of the Exchange Act, and, accordingly, is obligated to file
reports, statements and other information with the SEC relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning DPL's directors and officers, their remuneration, the principal
holders of DPL's securities and any material interest of these persons in
transactions with DPL is required to be disclosed in proxy statements
distributed to DPL's shareholders and filed with the SEC. DPL also has filed an
Issuer Tender Offer Statement on Schedule TO with the SEC which includes certain
additional information relating to the offer. These reports, statements and
other information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549; and at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New York,
New York 10048. Copies of this material may also be obtained by mail, upon
payment of the SEC's customary charges, from the Public Reference Section of the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC
also maintains a web site on the Internet at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. These reports, statements and
other information concerning DPL also can be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York, 10005, on which the
shares are listed.
INCORPORATION BY REFERENCE
The rules of the SEC allow us to "incorporate by reference" information into
this document, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. This offer
incorporates by reference the financial statements and the notes related thereto
contained in the documents listed below that have been previously filed with the
SEC. These documents contain important information about DPL Inc.
<TABLE>
<CAPTION>
SEC FILINGS (FILE NO. 1-9052) PERIOD
- ----------------------------- -------------------------------------
<S> <C>
Annual Report on Form 10-K........... Year ended December 31, 1998
Quarterly Report on Form 10-Q........ Quarter ended March 31, 1999
Quarterly Report on Form 10-Q........ Quarter ended June 30, 1999
Quarterly Report on Form 10-Q........ Quarter ended September 30, 1999
</TABLE>
11. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE SHARES.
As of February 3, 2000, DPL had 158,682,304 issued and outstanding common
shares 36,100,000 shares reserved for issuance upon exercise of the KKR warrant
and 6,500,000 shares reserved for issuance upon exercise of outstanding options
under DPL's new stock option plan. The 25,000,000 shares that DPL is offering to
purchase represent approximately 15.8% of the shares outstanding on February 3,
2000.
As of February 1, 2000, DPL's directors and executive officers as a group
(16 persons) beneficially owned less than 1% of the outstanding shares on that
date. This amount does not include shares which may be attributed to
representatives of KKR. Each of DPL's executive officers and directors has
advised DPL that he or she will not tender any shares pursuant to the offer. If
DPL purchases 25,000,000 shares pursuant to the
26
<PAGE>
offer, and none of the executive officers or directors tender shares pursuant to
the offer, then after the purchase of shares pursuant to the offer, DPL's
executive officers and directors as a group would continue to beneficially own
less than 1% of the shares outstanding immediately after the offer.
Based on DPL's records and on information provided to DPL by its directors,
executive officers, affiliates and subsidiaries, neither DPL nor any of its
affiliates or subsidiaries nor, to the best of DPL's knowledge, any of the
directors or executive officers of DPL or any of its subsidiaries, nor any
associates or subsidiaries of any of the foregoing, has effected any
transactions involving the shares during the 60 days prior to February 3, 2000,
other than purchases for the accounts of executive officers under either of the
DPL Savings Plans or the ESOP. DPL expects that the DPL Savings Plans and the
ESOP will, in accordance with the terms of the plans, elections in effect and
present patterns of contribution, continue to purchase shares prior to the
expiration of the offer.
Except as otherwise described in this Offer to Purchase, neither DPL nor, to
the best of DPL's knowledge, any of its affiliates, directors or executive
officers, is a party to any contract, arrangement, understanding or relationship
with any other person relating, directly or indirectly, to the offer or with
respect to any securities of DPL, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of the securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
DPL's purchase of shares pursuant to the offer will reduce the number of
shares that might otherwise trade publicly and is likely to reduce the number of
shareholders. Nonetheless, DPL anticipates that there will be a sufficient
number of shares outstanding and publicly traded following consummation of the
offer to ensure a continued trading market for the shares. Based upon published
guidelines of the NYSE, DPL does not believe that its purchase of shares
pursuant to the offer will cause DPL's remaining shares to be delisted from the
NYSE.
The shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit to their customers using the shares as collateral. DPL believes
that, following the purchase of shares pursuant to the offer, the shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.
The shares are registered under the Exchange Act, which requires, among
other things, that DPL furnish information to its shareholders and to the SEC
and comply with the SEC's proxy rules in connection with meetings of DPL's
shareholders. DPL believes that its purchase of shares pursuant to the offer
will not result in the shares becoming eligible for deregistration under the
Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
DPL is not aware of any license or regulatory permit that appears to be
material to DPL's business that might be adversely affected by DPL's acquisition
of shares as contemplated in this offer or of any approval or other action by
any government or governmental, administrative or regulatory authority or
agency, domestic, foreign or supranational, that would be required for DPL's
acquisition or ownership of shares as contemplated by this offer. Should any
approval or other action be required, DPL presently contemplates that it will
seek that approval or other action. DPL cannot predict whether it will be
required to delay the acceptance for payment of or payment for shares tendered
pursuant to the offer pending the outcome of any such matter. There can be no
assurance that any approval or other action, if needed, would be obtained or
would be obtained without substantial conditions or that the failure to obtain
the approval or other action might not result in adverse consequences to DPL's
business. DPL's obligations under the offer to accept for payment and pay for
shares are subject to conditions. See Section 7.
14. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following summary describes the principal United States federal income
tax consequences to United States Holders (as defined below) of an exchange of
shares for cash pursuant to the offer. Those shareholders
27
<PAGE>
who do not participate in the exchange should not incur any United States
federal income tax liability from the exchange. This summary is based upon the
Internal Revenue Code of 1986, as amended to the date of this offer (the
"Code"), existing and proposed United States Treasury Regulations promulgated
under the Code, published rulings, administrative pronouncements and judicial
decisions, changes to which could affect the tax consequences described in this
offer (possibly on a retroactive basis).
This summary addresses only shares held as capital assets. It does not
address all of the tax consequences that may be relevant to particular
shareholders because of their personal circumstances, or to other types of
shareholders (such as certain financial institutions, dealers or traders in
securities or commodities, insurance companies, "S" corporations, expatriates,
tax-exempt organizations, Non-United States Holders (as defined below), persons
who are subject to alternative minimum tax, or persons who hold shares as a
position in a "straddle" or as part of a "hedging" or "conversion" transaction
or that have a functional currency other than the United States dollar). This
summary may not be applicable with respect to shares acquired as compensation
(including shares acquired upon the exercise of options or which were or are
subject to forfeiture restrictions). This summary also does not address the
state, local or foreign tax consequences of participating in the offer.
You should consult your tax advisor as to the particular consequences to you
of participation in this offer.
A "United States Holder" is a holder of shares that for United States
federal income tax purposes is:
- a citizen or resident of the United States;
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or any State or the District of
Columbia;
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
- a trust (a) the administration over which a United States court can
exercise primary supervision and (b) all of the substantial decisions of
which one or more United States persons have the authority to control and
certain other trusts considered United States Holders for federal income
tax purposes.
A "Non-United States Holder" is a holder of shares other than a United
States Holder.
An exchange of shares for cash pursuant to the offer will be a taxable
event. A United States Holder participating in the exchange will be treated
either as having sold shares or as having received a dividend distribution from
DPL. A United States Holder's exchange of shares for cash pursuant to the offer
will be treated as a dividend to the extent of DPL's current or accumulated
earnings and profits as determined under federal income tax principles, unless
the exchange:
- results in a "complete termination" of the holder's stock interest in DPL
under section 302(b)(3) of the Code;
- is a "substantially disproportionate" redemption with respect to the
holder under section 302(b)(2) of the Code; or
- is "not essentially equivalent to a dividend" with respect to the holder
under section 302(b)(1) of the Code.
In determining whether any of these tests have been met, a United States
Holder must take into account not only shares it actually owns, but also shares
it constructively owns within the meaning of section 318 of the Code.
A distribution to a shareholder is "not essentially equivalent to a
dividend" if it results in a "meaningful reduction" in the shareholder's stock
interest in DPL. If, as a result of an exchange of shares for cash pursuant to
the offer, a United States Holder of shares whose relative stock interest in DPL
is minimal and who exercises no control over corporate affairs suffers a
reduction in its proportionate interest in DPL (including any ownership of
preferred shares and any shares constructively owned), that United States Holder
should generally be regarded as having suffered a meaningful reduction in its
interest in DPL. Satisfaction of the "complete termination" and "substantially
disproportionate" exceptions is dependent upon compliance with
28
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the respective objective tests set forth in section 302(b)(3) and
section 302(b)(2) of the Code. A distribution to a shareholder will result in a
"complete termination" if either (1) all of the shares actually and
constructively owned by the shareholder are exchanged pursuant to the offer or
(2) all of the shares actually owned by the shareholder are exchanged pursuant
to the offer and the shareholder is eligible to waive, and effectively waives,
the attribution of shares constructively owned by the shareholder in accordance
with the procedures described in section 302(c)(2) of the Code. A distribution
to a shareholder will be "substantially disproportionate" if the percentage of
the outstanding shares actually and constructively owned by the shareholder
immediately following the exchange of shares pursuant to the offer (treating
shares exchanged pursuant to the offer as outstanding) is less than 80% of the
percentage of the outstanding shares actually and constructively owned by the
shareholder immediately before the exchange (treating shares exchanged pursuant
to the offer as outstanding).
If an exchange of shares for cash by a United States Holder pursuant to the
offer is not treated as a distribution taxable as a dividend, the holder will
recognize capital gain or loss equal to the difference between the amount of
cash received and the holder's adjusted tax basis in the shares and in the
associated preferred share purchase rights, if any, tendered to DPL, except to
the extent that the amount of cash received includes dividends that have been
declared by the Board of Directors of DPL before the exchange. The gain or loss
would be long-term capital gain or loss if the holding period for the shares
exceeded one year.
If the amount received by a United States Holder in the offer is treated as
a distribution that is taxable as a dividend (as opposed to consideration
received in a sale or exchange), the amount of the distribution will be the
amount of cash received by the holder. The amount will be treated as a dividend,
taxable as ordinary income to the United States Holder, to the extent of DPL's
current or accumulated earnings and profits as determined under Federal income
tax principles. To the extent that the amount of the distribution exceeds DPL's
current and accumulated earnings and profits, the excess first will be treated
as a return of capital that will reduce the holder's tax basis in the shares
exchanged in the offer. Any remaining amount after the United States Holder's
basis has been reduced in the shares exchanged in the offer and in the shares
retained by the United States Holder to zero will be taxable as capital gain.
The United States Holder's unrecovered adjusted tax basis in its shares
exchanged in the offer generally will be transferred to its remaining
shareholdings in DPL, subject to, in the case of corporate shareholders,
reduction or possible gain recognition under section 1059 of the Code in an
amount equal to the non-taxed portion of the dividend. If the United States
Holder does not retain any actual stock ownership in DPL (having a stock
interest only constructively), the holder may lose the benefit of the holder's
adjusted tax basis in its shares. A dividend received by a corporate United
States Holder may be (1) eligible for a dividends-received deduction (subject to
applicable exceptions and limitations) and (2) subject to the "extraordinary
dividend" provisions of section 1059 of the Code. Corporate shareholders should
consult their own tax advisors regarding (1) whether a dividends-received
deduction will be available to them, and (2) the possible application of
section 1059 to the ownership and disposition of their shares.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to Non-United States Holders and the
backup withholding tax requirements.
The trusts under each of the DPL Savings Plans and the ESOP maintained by
DPL and its affiliates are exempt from federal income taxation. Accordingly,
such trusts will not be taxable upon the receipt of any cash proceeds pursuant
to the offer.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO YOU OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF
STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.
DPL expressly reserves the right, in its sole discretion, at any time and
from time to time, and regardless of whether or not any of the events set forth
in Section 7 have occurred or are deemed by DPL to have occurred, to extend the
period of time the offer is open and delay acceptance for payment of, and
payment for, any shares by giving oral or written notice of the extension to the
Depositary and making a public announcement of
29
<PAGE>
the extension. DPL also expressly reserves the right, in its sole discretion, to
terminate the offer and reject for payment and not pay for any shares not
theretofore accepted for payment or paid for or, subject to applicable law, to
postpone payment for shares upon the occurrence of any of the conditions
specified in Section 7 by giving oral or written notice of the termination or
postponement to the Depositary and making a public announcement of the
termination or postponement. DPL's reservation of the right to delay payment for
shares which it has accepted for payment is limited by Rule 13e-4(f)(5) under
the Exchange Act, which requires that DPL must pay the consideration offered or
return the shares tendered promptly after termination or withdrawal of a tender
offer. Subject to compliance with applicable law, DPL further reserves the
right, in its sole discretion, and regardless of whether any of the events set
forth in Section 7 have occurred or are deemed by DPL to have occurred, to amend
the offer in any respect (including, without limitation, by decreasing or
increasing the consideration offered in the offer to holders of shares or by
decreasing or increasing the number of shares being sought in the offer).
Amendments to the offer may be made at any time and from time to time by public
announcement of the amendment. In the case of an extension, the amendment must
be issued no later than 9:00 a.m., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the offer will be disseminated promptly to
shareholders in a manner reasonably designed to inform shareholders of the
change. Without limiting the manner in which DPL may choose to make a public
announcement, except as required by applicable law, DPL will have no obligation
to publish, advertise or otherwise communicate any public announcement other
than by issuing a press release to the Dow Jones News Service.
If DPL materially changes the terms of the offer or the information
concerning the offer, or if it waives a material condition of the offer, DPL
will extend the offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. These rules provide that the
minimum period during which an offer must remain open following material changes
in the terms of the offer or information concerning the offer (other than a
change in price or a change in percentage of securities sought) will depend on
the facts and circumstances, including the relative materiality of the terms or
information. If:
(1) DPL increases or decreases the price to be paid for shares, materially
increases the Dealer Manager fee or increases or decreases the number of
shares being sought in the offer and, in the event of an increase in the
number of shares being sought, the increase exceeds 2% of the
outstanding shares, and
(2) the offer is scheduled to expire at any time earlier than the expiration
of a period ending on the tenth business day from, and including, the
date that notice of an increase or decrease is first published, sent or
given in the manner specified in this Section 15,
then in each case the offer will be extended until the expiration of the period
of ten business days. For purposes of the offer, a "business day" means any day
other than a Saturday, Sunday or Federal holiday and consists of the time period
from 12:01 am through 12:00 Midnight, New York City time.
16. FEES AND EXPENSES.
Credit Suisse First Boston is acting as Dealer Manager in connection with
the offer, for which services Credit Suisse First Boston will receive customary
compensation. DPL also has agreed to reimburse Credit Suisse First Boston for
reasonable out-of-pocket expenses incurred in connection with the offer,
including reasonable fees and expenses of counsel and other advisors, and to
indemnify Credit Suisse First Boston and certain related persons against
liabilities and expenses incurred in connection with its engagement, including
liabilities under the federal securities laws. Credit Suisse First Boston and
its affiliates may actively trade the debt and equity securities of DPL for
their own account and for the accounts of customers and, accordingly, may at any
time hold a long or short position in such securities.
DPL has retained Georgeson Shareholder Communications Inc. to act as
Information Agent and Equiserve to act as Depositary in connection with the
offer. The Information Agent may contact holders of shares by mail, telephone,
telegraph and personal interviews and may request brokers, dealers and other
nominee shareholders to forward materials relating to the offer to beneficial
owners. The Information Agent
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<PAGE>
and the Depositary will each receive reasonable and customary compensation for
their respective services, will be reimbursed by DPL for reasonable
out-of-pocket expenses and will be indemnified against certain liabilities in
connection with the offer, including liabilities under the federal securities
laws.
T. Rowe Price Trust Company acts as directed trustee of each of the DPL
Savings Plans and will carry out the instructions of participants in the plans
as more fully described in Section 3. T. Rowe Price Trust Company will be
reimbursed for certain out-of-pocket costs in connection with the offer. Bank
One Dayton, N.A. acts as trustee of the ESOP and will carry out the instructions
of participants in the plan as more fully described in Section 3. Bank One
Dayton, N.A. will be reimbursed for certain out-of-pocket costs in connection
with the offer.
DPL will not pay any fees or commissions to brokers, dealers or other
persons (other than fees to the Dealer Manager and the Information Agent as
described above) for soliciting tenders of shares pursuant to the offer.
Shareholders holding shares through brokers or banks are urged to consult the
brokers or banks to determine whether transaction costs may apply if
shareholders tender shares through the brokers or banks and not directly to the
Depositary. DPL will, however, upon request, reimburse brokers, dealers and
commercial banks for customary mailing and handling expenses incurred by them in
forwarding the offer and related materials to the beneficial owners of shares
held by them as a nominee or in a fiduciary capacity. No broker, dealer,
commercial bank or trust company has been authorized to act as the agent of DPL,
the Dealer Manager, the Information Agent or the Depositary for purposes of the
offer. DPL will pay or cause to be paid all stock transfer taxes, if any, on its
purchase of shares except as otherwise provided in Instruction 7 in the Letter
of Transmittal.
17. MISCELLANEOUS.
DPL is not aware of any jurisdiction where the making of the offer is not in
compliance with applicable law. If DPL becomes aware of any jurisdiction where
the making of the offer or the acceptance of shares pursuant to the offer is not
in compliance with any valid applicable law, DPL will make a good faith effort
to comply with the applicable law. If, after a good faith effort, DPL cannot
comply with the applicable law, the offer will not be made to, nor will tenders
be accepted from or on behalf of, the holders of shares residing in that
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the offer to be made by a licensed broker or dealer, the offer will be
deemed to be made on DPL's behalf by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of the jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, DPL has filed
with the SEC an Issuer Tender Offer Statement on Schedule TO, which contains
additional information relating to the offer. The Schedule TO, including the
exhibits and any amendments thereto, may be examined, and copies may be
obtained, at the same places and in the same manner set forth in Section 10 with
respect to information concerning DPL.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF DPL IN CONNECTION WITH THIS
OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL. IF GIVEN OR MADE, YOU SHOULD NOT RELY ON THAT INFORMATION
OR REPRESENTATION AS HAVING BEEN AUTHORIZED BY DPL.
DPL Inc.
February 4, 2000
31
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Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates for shares and any other
required documents should be sent or delivered by each shareholder or the
shareholder's broker, dealer, commercial bank, trust company or nominee to the
Depositary at one of its addresses set forth below. To confirm delivery of
shares, shareholders are directed to contact the Depositary.
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE
(800) 736-3001
<TABLE>
<S> <C> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT COURIER: BY FACSIMILE (FOR ELIGIBLE
EquiServe Securities Transfer & EquiServe INSTITUTIONS ONLY):
Attn: Corporate Actions Reporting Sources, Inc. Attn: Corporate Actions (781) 575-4826
P.O.Box 9573 c/o EquiServe 40 Campenelli Drive
Boston, MA 02205-9573 100 Williams Street, Braintree, MA 02184
Galleria
New York, NY 10038
</TABLE>
Confirm by Telephone: (781) 575-4816
You may request additional copies of this offer, the Letter of Transmittal
or the Notice of Guaranteed Delivery and direct questions and requests for
assistance to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
[Georgeson Logo]
17 State Street, 10(th) Floor
New York, NY 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll-Free: (800) 646-4543
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
OF
DPL INC.
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 4, 2000
------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW
YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
EQUISERVE
(800) 736-3001
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT DELIVERY
EquiServe Securities Transfer & Reporting OR EXPRESS MAIL:
Attn: Corporate Actions Services, Inc. EquiServe
P.O. Box 9573 c/o EquiServe Attn: Corporate Actions
Boston, MA 02205-9573 100 Williams Street, Galleria 40 Campanelli Drive
New York, NY 10038 Braintree, MA 02184
</TABLE>
THIS LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
(See instructions 3 and 4)
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDESHARES TENDERED
(PLEASE FILL IN, IF BLANK, EXACTLY AS N(ATTACHAADDITIONAL SIGNED LIST
ON SHARE CERTIFICATE(S)) IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES EVIDENCED
SHARE BY SHARE NUMBER
CERTIFICATE CERTIFICATE(S) OF SHARES
NUMBER(S)* TENDERED**
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TOTAL SHARES
- -------------------------------------------------------------------------------------------------------------
</TABLE>
/ / Check here if any of the certificates representing your DPL common
shares have been lost or destroyed. You must complete an affidavit of
loss and return it with your Letter of Transmittal. Please call
1-800-736-3001 to obtain an affidavit of loss and for further
instructions.
1
<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C>
Indicate in this box the order (by certificate number) in which shares are to be purchased in event of
proration.***
Attach additional signed list if necessary.
See Instruction 9.
1st: 2nd: 3rd: 4th: 5th:
- ----------------------------
</TABLE>
* DOES NOT need to be completed by shareholders tendering shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all shares evidenced by
each certificate delivered to the Depositary are being tendered hereby. See
Instruction 4.
*** If you do not designate an order, in the event less than all shares tendered
are purchased due to proration, shares will be selected for purchase by the
Depositary.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO DPL WILL NOT BE
FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID
DELIVERY TO THE DEPOSITARY.
This Letter of Transmittal is to be completed only if (a) certificates
representing shares are to be forwarded herewith, or (b) unless an Agent's
Message (as defined in the Offer to Purchase) is utilized, a tender of shares is
to be made concurrently by book-entry transfer to the account maintained by the
Depositary at The Depositary Trust Company (the "Book-Entry Transfer Facility")
pursuant to Section 3 of the Offer to Purchase.
Shareholders who desire to tender shares pursuant to the offer, but whose
share certificates are not immediately available or who cannot deliver the
certificates and all other documents required by this Letter of Transmittal to
the Depositary on or before the Expiration Date (as defined in the Offer to
Purchase), or who cannot comply with the procedure for book-entry transfer on a
timely basis, may nevertheless tender their shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
This Letter of Transmittal may NOT be used for shares held in one of DPL's
Savings Plans or in the DPL Inc. Employee Stock Ownership Plan. See
Instruction 17. Participants in these plans must follow the instructions in the
"Letter to Participants in the DPL Savings Plans" or in the "Letter to
Participants in the DPL Inc. Employee Stock Ownership Plan" and related
materials sent to them separately. T. Rowe Price Trust Company, the trustee for
DPL's Savings Plans, or Bank One Dayton, N.A., the trustee of the DPL Inc.
Employee Stock Ownership Plan, will submit one Letter of Transmittal for each
such plan on behalf of all of the tendering participants in each such plan.
If a participant in one of DPL's Savings Plans or in the DPL Inc. Employee
Stock Ownership Plan owns shares apart from those plans that he or she desires
to tender, such holder must both submit this Letter of Transmittal to tender the
non-plan shares, and follow the instructions described in the "Letter to
Participants in the DPL Savings Plans" or in the "Letter to Participants in the
DPL Inc. Employee Stock Ownership Plan" and related materials sent to them
separately to tender shares attributable to his or her plan account.
2
<PAGE>
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER
(See Instruction 5 to the Letter of Transmittal)
By checking ONE of the following boxes below INSTEAD OF THE BOX UNDER
"SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER," the undersigned
hereby tenders shares at the price checked. This action could result in none
of the shares being purchased if the purchase price determined by DPL for the
shares is less than the price checked below. A shareholder who desires to
tender shares at more than one price must complete a separate Letter of
Transmittal for each price at which shares are tendered. The same shares
cannot be tendered at more than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C>
/ / $ 20.000 / / $ 21.125 / / $ 22.125
/ / $ 20.125 / / $ 21.250 / / $ 22.250
/ / $ 20.250 / / $ 21.375 / / $ 22.375
/ / $ 20.375 / / $ 21.500 / / $ 22.500
/ / $ 20.500 / / $ 21.625 / / $ 22.625
/ / $ 20.625 / / $ 21.750 / / $ 22.750
/ / $ 20.750 / / $ 21.875 / / $ 22.875
/ / $ 20.875 / / $ 22.000 / / $ 23.000
/ / $ 21.000
</TABLE>
CHECK ONLY ONE BOX ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, THERE IS NO
VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
(See Instruction 5 to the Letter of Transmittal)
/ / The undersigned wants to maximize the chance of having DPL purchase
all of the shares the undersigned is tendering (subject to the possibility of
proration). Accordingly, by checking THIS BOX INSTEAD OF ONE OF THE PRICE
BOXES ABOVE, the undersigned hereby tenders shares and is willing to accept
the purchase price determined by DPL in accordance with the terms of the
offer. This action could result in receiving a price per share as low as
$20.00.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
ODD LOTS
To be completed ONLY if shares are being tendered by or on behalf of a
person owning beneficially or of record an aggregate of fewer than 100 shares
(not including any shares held in one of DPL's Savings Plans or in the DPL
Inc. Employee Stock Ownership Plan). The undersigned either (check one box):
/ / is the beneficial or record owner of an aggregate of fewer than 100
shares, all of which are being tendered; or
/ / is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) of shares with respect
to which it is the record holder, and (b) believes, based upon
representations made to it by the beneficial owner(s), that each person
was the beneficial or record owner of an aggregate of fewer than 100
shares and is tendering all of those shares.
In addition, the undersigned is tendering shares either (check one box):
/ / at the purchase price determined by DPL in accordance with the terms
of the offer (persons checking this box need not indicate the price per
share above); or
/ / at the price per share indicated above under "Shares Tendered at
Price Determined by Shareholder."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
A tendering shareholder may condition his or her tender of shares upon DPL
purchasing a specified minimum number of the shares tendered, all as described
in the Offer to Purchase, particularly in Section 6. Unless at least the
minimum number of shares you indicate below is purchased by DPL pursuant to
the terms of the offer, none of the shares tendered by you will be purchased.
It is the tendering shareholder's responsibility to calculate the minimum
number of shares that must be purchased if any are purchased, and each
shareholder is urged to consult his or her own tax advisor. Unless this box
has been completed and a minimum specified, the tender will be deemed
unconditional.
/ / Minimum number of shares that must be purchased, if any are
purchased: ______ shares.
- --------------------------------------------------------------------------------
4
<PAGE>
SPECIAL PAYMENT OR DELIVERY INSTRUCTIONS
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, DPL may terminate or amend the offer or may postpone the
acceptance for payment of, or the payment for, shares tendered or may accept for
payment fewer than all of the shares tendered. In any event, the undersigned
understands that certificate(s) for any shares not tendered or not purchased
will be returned to the undersigned at the address indicated above, unless
otherwise indicated under the box entitled "Special Payment Instructions" or the
box entitled "Special Delivery Instructions" below.
The undersigned understands that acceptance of shares by DPL for payment
will constitute a binding agreement between the undersigned and DPL upon the
terms and subject to the conditions of the offer.
The check for the aggregate net purchase price for the shares tendered and
purchased will be issued to the order of the undersigned and mailed to the
address indicated above, unless otherwise indicated under the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" below. The undersigned acknowledges that DPL has no obligation,
pursuant to the "Special Payment Instructions," to transfer any shares from the
name of its registered holder(s), or to order the registration or transfer of
any shares tendered by book-entry transfer, if DPL does not purchase any of the
shares.
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 6, 7 and 10)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than the
undersigned.
Issue check to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
______________________________________________________________________________
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 10)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned or to
the undersigned at an address other than that above.
Mail check to:
Name _________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
______________________________________________________________________________
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
- -----------------------------------------------------
5
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) _____________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution that Guaranteed Delivery _______________________________
If delivered by Book-Entry Transfer:
Name of Tendering Institution ______________________________________________
____________________________________________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
To EquiServe:
The undersigned hereby tenders to DPL Inc., an Ohio corporation, the
above-described common shares, par value $.01 per share, at the price per share
indicated in this Letter of Transmittal, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated February 4, 2000, receipt of which is hereby acknowledged, and in
this Letter of Transmittal which, as amended or supplemented from time to time,
together constitute the offer. All shares tendered and purchased will include
the associated preferred share purchase rights issued pursuant to a Shareholder
Rights Agreement, dated as of December 3, 1991, between DPL and The First
National Bank of Boston, as rights agent, and, unless the context otherwise
requires, all references to shares include the associated preferred share
purchase rights.
Subject to, and effective upon, acceptance for payment of the shares
tendered in accordance with the terms and subject to the conditions of the
offer, including, if the offer is extended or amended, the terms and conditions
of the extension or amendment, the undersigned sells, assigns and transfers to,
or upon the order of, DPL all right, title and interest in and to all shares
tendered and orders the registration of all shares if tendered by book-entry
transfer and irrevocably constitutes and appoints the Depositary as the true and
lawful agent and attorney-in-fact of the undersigned with respect to the shares
with full knowledge that the Depositary also acts as the agent of DPL, with full
power of substitution (the power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificate(s) representing the shares or transfer ownership of
the shares on the account books maintained by the Book-Entry Transfer
Facility, together, in either case, with all accompanying evidences of
transfer and authenticity, to or upon the order of DPL upon receipt by
the Depositary, as the undersigned's agent, of the purchase price with
respect to the shares;
(b) present certificates for the shares for cancellation and transfer on
DPL's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of the shares, subject to the next paragraph, all in accordance
with the terms and subject to the conditions of the offer.
6
<PAGE>
The undersigned covenants, represents and warrants to DPL that:
(1) the undersigned has full power and authority to tender, sell, assign
and transfer the shares tendered hereby and when and to the extent accepted
for payment, DPL will acquire good, marketable and unencumbered title to the
tendered shares, free and clear of all security interests, liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer of the shares, and not subject
to any adverse claims;
(2) the undersigned understands that tenders of shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in
the instructions will constitute the undersigned's acceptance of the terms
and conditions of the offer, including the undersigned's representation and
warranty that (i) the undersigned has a "net long position," within the
meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934,
in the shares or equivalent securities at least equal to the shares being
tendered, and (ii) the tender of shares complies with Rule 14e-4;
(3) the undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or DPL to be necessary or
desirable to complete the sale, assignment and transfer of the shares
tendered; and
(4) the undersigned has read, understands and agrees to all of the terms
of the offer.
The undersigned understands that tenders of shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions to this Letter of Transmittal will constitute a binding agreement
between the undersigned and DPL upon the terms and subject to the conditions of
the offer. The undersigned acknowledges that under no circumstances will DPL pay
interest on the purchase price, including without limitation, by reason of any
delay in making payment.
All authority conferred or agreed to be conferred will survive the death or
incapacity of the undersigned, and any obligation of the undersigned will be
binding on the heirs, personal representatives, executors, administrators,
successors, assigns, trustees in bankruptcy and legal representatives of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The name(s) and address(es) of the registered holder(s) should be printed,
if they are not already printed above, exactly as they appear on the
certificates representing shares tendered. The certificate numbers, the number
of shares represented by the certificates and the number of shares that the
undersigned wishes to tender, should be set forth in the appropriate boxes
above. The price at which the shares are being tendered should be indicated in
the appropriate boxes above.
The undersigned understands that DPL will determine a single per share
price, not in excess of $23.00 nor less than $20.00 that it will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. All shares acquired in the offer
will be acquired at the same purchase price. DPL will select the lowest purchase
price that will allow it to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered. All shares
properly tendered at prices at or below the purchase price and not properly
withdrawn will be purchased, subject to the conditions of the offer and the "odd
lot" priority, proration and conditional tender provisions described in the
Offer to Purchase. Shares tendered at prices in excess of the purchase price
that is determined by DPL and shares not purchased because of proration or
conditional tenders will be returned.
7
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 ON PAGE 9)
- -- >
< --
______________________________________________________________________________
- -- >
< --
______________________________________________________________________________
(SIGNATURE(S) OF SHAREHOLDER(S))
Dated: ____________________________________
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the shares or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 6.)
Name(s): _____________________________________________________________________
(PLEASE PRINT)
______________________________________________________________________________
Capacity (full title): _______________________________________________________
Address: _____________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.: _________________________________________
Employer Identification or
Social Security No.: _________________________________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 6)
______________________________________________________________________________
AUTHORIZED SIGNATURE
______________________________________________________________________________
NAME (PLEASE PRINT)
______________________________________________________________________________
NAME OF FIRM
______________________________________________________________________________
ADDRESS
______________________________________________________________________________
(INCLUDE ZIP CODE)
______________________________________________________________________________
AREA CODE AND TELEPHONE NO.
Dated: ____________________________________
- --------------------------------------------------------------------------------
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER.
1. GUARANTEE OF SIGNATURES. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the
shares (which term, for these purposes, includes any participant in the
Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of the shares) tendered exactly as the name of the
registered holder appears on the certificate(s) for the shares tendered
with this Letter of Transmittal and payment and delivery are to be made
directly to the owner and the owner has not completed either the box
entitled "Special Payment Instructions" or "Special Delivery
Instructions" above; or
(b) the shares are tendered for the account of a bank, broker, dealer,
credit union, savings association or other entity which is a member in
good standing of the Securities Transfer Agents Medallion Program or a
bank, broker, dealer, credit union, savings association or other entity
which is an "eligible guarantor institution," as that term is defined in
Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
amended (each of the foregoing constituting an "Eligible Institution").
In all other cases, an Eligible Institution must guarantee all signatures on
this Letter of Transmittal. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed only if certificates
for shares are delivered with it to the Depositary (or the certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered shares or confirmation of
a book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal (or manually signed
facsimile of the Letter of Transmittal), or an Agent's Message, and any other
documents required by this Letter of Transmittal, should be mailed or delivered
to the Depositary at the appropriate address set forth in this document and must
be delivered to the Depositary on or before the Expiration Date. Delivery of
documents to the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures does not constitute delivery to the Depositary.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their shares and all other required documents to the
Depositary before the Expiration Date, or whose shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
case, tender their shares by or through any Eligible Institution by properly
completing and duly executing and delivering a Notice of Guaranteed Delivery (or
facsimile of the Notice of Guaranteed Delivery) and by otherwise complying with
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase. Pursuant to that procedure, certificates for all physically tendered
shares or book-entry confirmations, as the case may be, as well as this properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
of this Letter of Transmittal), or an Agent's Message, and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three (3) New York Stock Exchange trading days after receipt by the
Depositary of the Notice of Guaranteed Delivery, all as provided in Section 3 of
the Offer to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth therein.
For shares to be tendered validly pursuant to the guaranteed delivery procedure,
the Depositary must receive the Notice of Guaranteed Delivery on or before the
Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
Except as specifically permitted by Section 6 of the Offer to Purchase, DPL
will not accept any alternative, conditional or contingent tenders, nor will it
purchase any fractional shares, except as expressly provided in the Offer to
Purchase. All tendering shareholders, by execution of this Letter of Transmittal
(or a facsimile of this Letter of Transmittal), waive any right to receive any
notice of the acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in the box entitled
"Description of Shares Tendered" above is inadequate, the certificate numbers
and/or the number of shares should be listed on a separate signed schedule and
attached to this Letter of Transmittal.
9
<PAGE>
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to shareholders
who tender by book-entry transfer.) If fewer than all of the shares evidenced by
any certificate are to be tendered, fill in the number of shares that are to be
tendered in the column entitled "Number of Shares Tendered" in the box entitled
"Description of Shares Tendered" above. In that case, if any tendered shares are
purchased, a new certificate for the remainder of the shares (including any
shares not purchased) evidenced by the old certificate(s) will be issued and
sent to the registered holder(s). Unless otherwise indicated, all shares
represented by the certificate(s) set forth above and delivered to the
Depositary will be deemed to have been tendered.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. If a
shareholder is an Odd Lot Holder (as explained in instruction 8 below), for
shares to be properly tendered, the shareholder MUST either (1) check the box in
the section captioned "Odd Lots" indicating that the shareholder wishes to
tender at the price determined by DPL or (2) check the box in the section
captioned "Odd Lots" indicating that the shareholder wishes to tender at the
price indicated in the section captioned "Shares Tendered at Price Determined by
Shareholder" and check a box in that section. If a shareholder is not an Odd Lot
Holder, for shares to be properly tendered, the shareholder MUST either
(1) check the box next to the section captioned "Shares Tendered at Price
Determined Pursuant to the Offer" or (2) check one of the boxes in the section
captioned "Shares Tendered at Price Determined by Shareholder" indicating the
price at which the shareholder is tendering shares. A shareholder wishing to
tender a portion(s) of the holder's shares at different prices must complete a
separate Letter of Transmittal for each price at which the holder wishes to
tender each portion of the holder's shares. The same shares cannot be tendered
(unless previously properly withdrawn as provided in Section 4 of the Offer to
Purchase) at more than one price.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the
shares tendered, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without any change whatsoever.
If the shares tendered are registered in the names of two or more joint
holders, each holder must sign this Letter of Transmittal.
If any tendered shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimile) as there are different registrations of
certificates.
When this Letter of Transmittal is signed by the registered holder(s) of the
shares tendered, no endorsement(s) of certificate(s) representing the shares or
separate stock power(s) are required unless payment is to be made to a person
other than the registered holder(s). Signature(s) on the certificate(s) must be
guaranteed by an Eligible Institution. If this Letter of Transmittal is signed
by a person other than the registered holder(s) of the certificate(s) listed, or
if payment is to be made to a person other than the registered holder(s), the
certificate(s) must be endorsed or accompanied by appropriate stock power(s), in
either case signed exactly as the name(s) of the registered holder(s) appears on
the certificate(s), and the signature(s) on the certificate(s) or stock power(s)
must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate(s) or stock power(s) is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or any other person acting in a fiduciary or
representative capacity, that person should so indicate when signing this Letter
of Transmittal and must submit proper evidence satisfactory to DPL of his or her
authority to so act.
7. STOCK TRANSFER TAXES. Except as provided in this Instruction 7, no
stock transfer tax stamps or funds to cover tax stamps need accompany this
Letter of Transmittal. DPL will pay any stock transfer taxes payable on the
transfer to it of shares purchased pursuant to the offer. If, however, either
(a) payment of the purchase price for shares tendered and accepted for purchase
is to be made to any person other than the registered holder(s); or
(c) certificate(s) representing tendered shares are registered in the name(s) of
any person(s) other than the person(s) signing this Letter of Transmittal, then
the Depositary will deduct from the purchase price the amount of any stock
transfer taxes (whether imposed on the registered holder(s), other person(s) or
otherwise) payable on account of the transfer to that person, unless
satisfactory evidence of the payment of the taxes or any exemption therefrom is
submitted.
8. ODD LOTS. As described in Section 1 of the Offer to Purchase, if DPL is
to purchase fewer than all shares tendered before the Expiration Date and not
properly withdrawn, the shares purchased first will consist of all shares
properly tendered by any shareholder who owned, beneficially or of record, an
aggregate of fewer than 100 shares (not including any shares held in DPL's
Savings Plans or in the DPL Inc. Employee Stock Ownership Plan), and who tenders
all of the holder's shares at or below the purchase price (an "Odd Lot Holder").
This preference will not be available unless the section captioned "Odd Lots" is
completed.
10
<PAGE>
9. ORDER OF PURCHASE IN EVENT OF PRORATION. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
shares are to be purchased in the event of proration. The order of purchase may
have an effect on the federal income tax treatment of the purchase price for the
shares purchased. See Sections 1 and 14 of the Offer to Purchase.
10. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If check(s) are to be
issued in the name of a person other than the signer of this Letter of
Transmittal or if the certificates and/or checks are to be sent to someone other
than the person signing this Letter of Transmittal or to the signer at a
different address, the box entitled "Special Payment Instructions" and/or the
box entitled "Special Delivery Instructions" on this Letter of Transmittal
should be completed as applicable and signatures must be guaranteed as described
in Instruction 1.
11. IRREGULARITIES. All questions as to the number of shares to be
accepted, the price to be paid for the shares and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of shares will be determined by DPL in its sole discretion, which determination
will be final and binding on all parties. DPL reserves the absolute right to
reject any or all tenders of shares it determines not to be in proper form or
the acceptance of which or payment for which may, in the opinion of DPL's
counsel, be unlawful. DPL also reserves the absolute right to waive any of the
conditions of the offer or any defect or irregularity in any tender with respect
to any particular shares or any particular shareholder, and DPL's interpretation
of the terms of the offer (including these Instructions) will be final and
binding on all parties. No tender of shares will be deemed to be properly made
until all defects and irregularities have been cured by the tendering
shareholder or waived by DPL. Unless waived, any defects or irregularities in
connection with tenders must be cured within that time as DPL will determine.
None of DPL, the Dealer Manager (as defined in the Offer to Purchase), the
Depositary, the Information Agent (as defined in the Offer to Purchase) or any
other person is or will be obligated to give notice of any defects or
irregularities in tenders and none of them will incur any liability for failure
to give any notice of defect or irregularity.
12. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
or requests for assistance may be directed to, or additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be obtained from, the Information Agent or the Dealer Manager at
their addresses and telephone numbers set forth below.
13. TAX IDENTIFICATION NUMBER AND BACKUP WITHHOLDING. Federal income tax
law generally requires that a shareholder whose tendered shares are accepted for
purchase, or the shareholder's assignee (in either case, the "Payee"), provide
the Depositary with the Payee's correct Taxpayer Identification Number ("TIN"),
which, in the case of a Payee who is an individual, is the Payee's social
security number. If the Depositary is not provided with the correct TIN or an
adequate basis for an exemption, the Payee may be subject to penalties imposed
by the Internal Revenue Service and backup withholding in an amount equal to 31%
of the gross proceeds received pursuant to the offer. If withholding results in
an overpayment of taxes, a refund may be obtained.
To prevent backup withholding, each Payee must provide the Payee's correct
TIN by completing the Substitute Form W-9 set forth in this document, certifying
that the TIN provided is correct (or that the Payee is awaiting a TIN) and that
(i) the Payee is exempt from backup withholding, (ii) the Payee has not been
notified by the Internal Revenue Service that the Payee is subject to backup
withholding as a result of a failure to report all interest or dividends, or
(iii) the Internal Revenue Service has notified the Payee that the Payee is no
longer subject to backup withholding.
If the Payee lacks a TIN, the Payee should (i) consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 ("W-9 Guidelines") for instructions on applying for a TIN, (ii) write
"Applied For" in the space provided in Part 1 of the Substitute Form W-9, and
(iii) sign and date the Substitute Form W-9 and the Certificate of Awaiting
Taxpayer Identification Number set forth in this document. If the Payee does not
provide the Payee's TIN to the Depositary within sixty (60) days, backup
withholding will begin and continue until the Payee furnishes the Payee's TIN to
the Depositary. Note that writing "Applied For" on the Substitute Form W-9 means
that the Payee has already applied for a TIN or that the Payee intends to apply
for one in the near future.
If shares are held in more than one name or are not in the name of the
actual owner, consult the W-9 Guidelines for information on which TIN to report.
Exempt Payees (including, among others, all corporations and certain foreign
individuals) are not subject to backup withholding and reporting requirements.
To prevent possible erroneous backup withholding, an exempt Payee should write
"Exempt" in Part 2 of the Substitute Form W-9. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on the Substitute Form W-9 for
additional instructions. In order for a nonresident alien or foreign
11
<PAGE>
entity to qualify as exempt, that person must submit a completed IRS Form W-8
Certificate of Foreign Status or a Substitute Form W-8, signed under penalty of
perjury attesting to the exempt status. This form may be obtained from the
Depositary.
14. WITHHOLDING FOR NON-UNITED STATES SHAREHOLDERS. Even if a Non-United
States Shareholder (as defined below) has provided the required certification to
avoid backup withholding, the Depositary will withhold United States federal
income taxes equal to 30% of the gross payments payable to a Non-United States
Shareholder or the holder's agent unless the Depositary determines that a
reduced rate of withholding is available pursuant to a tax treaty or that an
exemption from withholding is applicable because the gross proceeds are
effectively connected with the conduct of a trade or business within the United
States. For this purpose, a "Non-United States Shareholder" is any shareholder
that for United States federal income tax purposes is not (i) a citizen or
resident of the United States, (ii) a corporation or partnership created or
organized in or under the laws of the United States or any State or the District
of Columbia, (iii) an estate the income of which is subject to United States
federal income taxation regardless of the source of that income, or (iv) a trust
(a) the administration over which a United States court can exercise primary
supervision and (b) all of the substantial decisions of which one or more United
States persons have the authority to control. Notwithstanding the foregoing, to
the extent provided in United States Treasury Regulations, certain trusts in
existence on August 20, 1996, and treated as United States persons before that
date, that elect to continue to be treated as United States persons also will
not be Non-United States Shareholders. In order to obtain a reduced rate of
withholding pursuant to a tax treaty, a Non-United States Shareholder must
deliver to the Depositary before the payment a properly completed and executed
IRS Form 1001. In order to obtain an exemption from withholding on the grounds
that the gross proceeds paid pursuant to the offer are effectively connected
with the conduct of a trade or business within the United States, a Non-United
States Shareholder must deliver to the Depositary a properly completed and
executed IRS Form 4224. The Depositary will determine a shareholder's status as
a Non-United States Shareholder and eligibility for a reduced rate of, or an
exemption from, withholding by reference to outstanding certificates or
statements concerning eligibility for a reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that reliance is not warranted. A Non-United States
Shareholder may be eligible to obtain a refund of all or a portion of any tax
withheld if the Non-United States Shareholder meets those tests described in
Section 14 of the Offer to Purchase that would characterize the exchange as a
sale (as opposed to a dividend) or is otherwise able to establish that no tax or
a reduced amount of tax is due.
Non-United States Shareholders are urged to consult their own tax advisors
regarding the application of United States federal income tax withholding,
including eligibility for a withholding tax reduction or exemption, and the
refund procedure.
15. LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES. If any
certificate(s) representing shares has been lost, stolen, destroyed or
mutilated, the shareholder should complete an affidavit of loss and return it
with the shareholder's Letter of Transmittal. Please call 1-800-736-3001 to
obtain an affidavit of loss and for further instructions.
16. CONDITIONAL TENDERS. As described in Sections 1 and 6 of the Offer to
Purchase, shareholders may condition their tenders on all or a minimum number of
their tendered shares being purchased. If DPL is to purchase less than all of
the shares tendered before the Expiration Date and not withdrawn, the Depositary
will perform a preliminary proration, and any shares tendered at or below the
purchase price pursuant to a conditional tender for which the condition was not
satisfied by the preliminary proration will be deemed withdrawn, subject to
reinstatement if such conditional tendered shares are subsequently selected by
random lot for purchase subject to Sections 1 and 6 of the Offer to Purchase.
Conditional tenders will be selected by lot only from shareholders who tender
all of their shares. All tendered shares will be deemed unconditionally tendered
unless the "Conditional Tender" box is completed. The conditional tender
alternative is made available so that a shareholder may assure that the purchase
of shares from the shareholder pursuant to the offer will be treated as a sale
of the shares by the shareholder, rather than the payment of a dividend to the
shareholder, for federal income tax purposes. Odd Lot Shares, which will not be
subject to proration, cannot be conditionally tendered. It is the tendering
shareholder's responsibility to calculate the minimum number of shares that must
be purchased from the shareholder in order for the shareholder to qualify for
sale (rather than dividend) treatment, and each shareholder is urged to consult
his or her own tax advisor.
IN THE EVENT OF PRORATION, ANY SHARES TENDERED PURSUANT TO A CONDITIONAL
TENDER FOR WHICH THE MINIMUM REQUIREMENTS ARE NOT SATISFIED MAY NOT BE ACCEPTED
AND THEREBY WILL BE DEEMED WITHDRAWN.
17. DPL SAVINGS PLANS; DPL INC. EMPLOYEE STOCK OWNERSHIP
PLAN. Participants in any of the DPL Savings Plans or in the DPL Inc. Employee
Stock Ownership Plan may not use this Letter of Transmittal to direct the tender
of shares attributable to their individual accounts, but must comply with the
instructions found in the "Letter to Participants in
12
<PAGE>
the DPL Savings Plans" or the "Letter to Participants in the DPL Inc. Employee
Stock Ownership Plan" sent separately to them. Participants in these plans are
urged to carefully read the "Letter to Participants in the DPL Savings Plans"
and the "Letter to Participants in the DPL Inc. Employee Stock Ownership Plan"
and related materials sent to them.
IMPORTANT: THIS LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY EXECUTED,
OR MANUALLY SIGNED FACSIMILE OF THIS LETTER OF TRANSMITTAL, TOGETHER WITH
CERTIFICATES REPRESENTING SHARES BEING TENDERED OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR A NOTICE OF GUARANTEED DELIVERY,
MUST BE RECEIVED BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE FORM W-9 WITH THIS
LETTER OF TRANSMITTAL.
13
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
[GEORGESON LOGO]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
THE DEALER MANAGER FOR THE OFFER IS:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free: (800) 646-4543
14
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
OF
DPL INC.
This form of Notice of Guaranteed Delivery, or a form substantially
equivalent to this form, must be used to accept the offer if certificates
evidencing common shares, par value $.01 per share, of DPL Inc., an Ohio
corporation, are not immediately available, or if the procedure for book-entry
transfer described in the Offer to Purchase dated February 4, 2000 and the
related Letter of Transmittal which, as amended or supplemented from time to
time, together constitute the offer, cannot be completed on a timely basis or
time will not permit all required documents, including a properly completed and
duly executed Letter of Transmittal or a manually signed facsimile of the Letter
of Transmittal, to reach the Depositary prior to the Expiration Date, as defined
in the Offer to Purchase.
This Notice of Guaranteed Delivery, properly completed and duly executed,
may be delivered by hand, mail or facsimile transmission to the Depositary. See
Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
THE DEPOSITARY:
EQUISERVE
(800) 736-3001
BY MAIL: BY HAND:
EquiServe Securities Transfer & Reporting
Attn: Corporate Actions Services, Inc.
P.O. Box 9573 c/o EquiServe
Boston, MA 02205-9573 100 Williams Street, Galleria
New York, NY 10038
BY OVERNIGHT DELIVERY:
EquiServe
Attn: Corporate Actions
40 Campanelli Drive
Braintree, MA 02184
BY FACSIMILE (FOR ELIGIBLE CONFIRM RECEIPT OF FACSIMILE BY
INSTITUTIONS ONLY): TELEPHONE:
(781) 575-4826 (781) 575-4816
</TABLE>
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO DPL WILL NOT BE FORWARDED TO THE
DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERY TO THE
BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY.
<PAGE>
Ladies and Gentlemen:
The undersigned tenders to DPL at the price per share indicated in this
Notice of Guaranteed Delivery, upon the terms and subject to the conditions
described in the Offer to Purchase and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the number of shares specified below
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. All shares tendered and purchased will include the associated
preferred share purchase rights issued pursuant to a Shareholders Rights
Agreement, dated as of December 3, 1991, between DPL and The First National Bank
of Boston, as rights agent, and, unless the context otherwise requires, all
references to shares include the associated preferred share purchase rights.
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Number and Class of Shares ---------------- Name(s) of Record Holder(s)
----------------
Certificate Nos.
(if available):
- -------------------------------
------------------------------------------
- ------------------------------------------
------------------------------------------
Please Print
Address(es) -------------------------------
- ------------------------------------------
If Shares will be tendered by book-entry
transfer:
------------------------------------------
Name of Tendering Institution
- ----------------
------------------------------------------
Zip Code
Daytime Area Code and Tel. No.:
- ------------------------------------------ -------------
Account Number --------------------------- Signature(s):
-------------------------------
Dated: ------------------------------------
------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------
ODD LOTS
To be completed ONLY if shares are being tendered by or
on behalf of a person owning beneficially or of record an
aggregate of fewer than 100 shares (not including any shares
held in one of DPL's Savings Plans or in the DPL Inc.
Employee Stock Ownership Plan). The undersigned either
(check one box):
/ / is the beneficial or record owner of an aggregate of
fewer than 100 shares, all of which are being tendered;
or
/ / is a broker, dealer, commercial bank, trust company, or
other nominee that (a) is tendering for the beneficial
owner(s) of shares with respect to which it is the
record holder, and (b) believes, based upon
representations made to it by the beneficial owner(s),
that each person was the beneficial or record owner of
an aggregate of fewer than 100 shares and is tendering
all of those shares.
In addition, the undersigned is tendering shares either
(check one box):
/ / at the purchase price determined by DPL in accordance
with the terms of the offer (persons checking this box
need not indicate the price per share below); or
/ / at the price per share indicated below under "Shares
Tendered at Price Determined by Shareholder."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED.
- ----------------------------------------------------------------
- ----------------------------------------------------------------
CONDITIONAL TENDER
A tendering shareholder may condition his or her tender
of shares upon DPL purchasing a specified minimum number of
the shares tendered, all as described in the Offer to
Purchase, particularly in Section 6. Unless at least the
minimum number of shares you indicate below is purchased by
DPL pursuant to the terms of the offer, none of the shares
tendered by you will be purchased. It is the tendering
shareholder's responsibility to calculate the minimum number
of shares that must be purchased if any are purchased, and
each shareholder is urged to consult his or her own tax
advisor. Unless this box has been completed and a minimum
specified, the tender will be deemed unconditional.
/ / Minimum number of shares that must be purchased, if any
are purchased: shares.
- ----------------------------------------------------------------
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER
(See Instruction 5 to the Letter of Transmittal)
By checking ONE of the following boxes below INSTEAD OF THE BOX UNDER
"SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER," the undersigned
hereby tenders shares at the price checked. This action could result in none of
the shares being purchased if the purchase price determined by DPL for the
shares is less than the price checked below. A shareholder who desires to tender
shares at more than one price must complete a separate Letter of Transmittal for
each price at which shares are tendered. The same shares cannot be tendered at
more than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C>
/ / $ 20.000 / / $ 21.125 / / $ 22.125
/ / $ 20.125 / / $ 21.250 / / $ 22.250
/ / $ 20.250 / / $ 21.375 / / $ 22.375
/ / $ 20.375 / / $ 21.500 / / $ 22.500
/ / $ 20.500 / / $ 21.625 / / $ 22.625
/ / $ 20.625 / / $ 21.750 / / $ 22.750
/ / $ 20.750 / / $ 21.875 / / $ 22.875
/ / $ 20.875 / / $ 22.000 / / $ 23.000
/ / $ 21.000
</TABLE>
CHECK ONLY ONE BOX ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, THERE IS NO
VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ----------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
(See Instruction 5 to the Letter of Transmittal)
/ / The undersigned wants to maximize the chance of
having DPL purchase all of the shares the undersigned is
tendering (subject to the possibility of proration).
Accordingly, by checking THIS ONE BOX INSTEAD OF ONE OF THE
PRICE BOXES ABOVE, the undersigned hereby tenders shares and
is willing to accept the purchase price determined by DPL in
accordance with the terms of the offer. This action could
result in receiving a price per share as low as $20.00 .
- ----------------------------------------------------------------
</TABLE>
4
<PAGE>
THE GUARANTEE BELOW MUST BE COMPLETED
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association or other
entity which is a member in good standing of the Securities Transfer Agents Medallion
Program or a bank, broker, dealer, credit union, savings association or other entity which
is an "eligible guarantor institution," as that term is defined in Rule 17Ad-15 promulgated
under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an
"Eligible Institution"), guarantees the delivery to the Depositary of the shares tendered,
in proper form for transfer, or a confirmation that the shares tendered have been delivered
pursuant to the procedure for book-entry transfer described in the Offer to Purchase into
the Depositary's account at the Book- Entry Transfer Facility, together with a properly
completed and duly executed Letter of Transmittal, or a manually signed facsimile of the
Letter of Transmittal, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry transfer, and any other required documents, all within three (3) New
York Stock Exchange trading days of this date.
The Eligible Institution that completes this form must communicate the guarantee to the
Depositary and must deliver the Letter of Transmittal and certificates representing shares
to the Depositary within the time period set forth herein. Failure to do so could result in
a financial loss to the Eligible Institution.
Name of Firm: -------------------------------
--------------------------------------------
Authorized Signature
Address: ------------------------------------ Name: --------------------------------------
Please Print
Title:
- -------------------------------------------- ---------------------------------------
City, State, Zip Code
Area Code and Tel No.: Dated: --------------------------------------
- -----------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR SHARES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- --------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
[DPL LOGO]
February 4, 2000
To Our Shareholders:
We invite you to tender your DPL common shares for purchase by DPL. We are
offering to purchase up to 25,000,000 shares at a price not in excess of $ 23.00
nor less than $20.00 per share, net to the seller in cash, without interest, as
specified by shareholders tendering their shares.
We will determine a single per share price that we will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. We will select the lowest purchase
price that will allow us to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered. All shares
acquired in the offer will be acquired at the same purchase price.
Our offer is being made upon the terms and subject to the conditions set
forth in the enclosed Offer to Purchase and related Letter of Transmittal. We
encourage you to read these materials carefully before making any decision with
respect to the offer. The offer will expire at 5:00 p.m., New York City time, on
Friday, March 3, 2000, unless we extend it.
Any shareholder whose shares are properly tendered directly to EquiServe,
the Depositary for the offer, and purchased in the offer will not incur the
usual transaction costs associated with open market sales. If you own fewer that
100 shares, the offer is an opportunity for you to sell your shares without
having to pay odd lot discounts.
If you want to maximize the chances that your shares will be purchased in
the offer, you should check the box in the section of the Letter of Transmittal
captioned "Shares Tendered at Price Determined Pursuant to the Offer." Note that
this election could result in your shares being purchased at the minimum price
of $20.00 per share.
The Board of Directors of DPL has approved the offer. However, neither DPL
nor our Board of Directors makes any recommendation to you as to whether to
tender or refrain from tendering your shares or as to the purchase price at
which you may choose to tender your shares. You must make your own decision as
to whether to tender your shares and, if so, how many shares to tender and the
price or prices at which you will tender them. In doing so, you should consider
our reasons for making this offer, including our increased use of financial
leverage and our increased business emphasis on providing unregulated energy
services. Our directors and executive officers have advised us that they do not
intend to tender any shares in the offer.
If you do not wish to participate in this offer, you do not need to take any
action. If you do wish to tender your shares, the instructions on how to tender
shares are explained in detail in the enclosed materials.
If you have any questions regarding the offer or need assistance in
tendering your shares, please contact Georgeson Shareholder
Communications Inc., the Information Agent for the tender offer, at
(800) 223-2064 (toll free) or Credit Suisse First Boston Corporation, the Dealer
Manager for the tender offer, at (800) 646-4543 (toll free).
Sincerely,
Peter H. Forster
CHAIRMAN
Allen M. Hill
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE TENDER OFFER FOR THE
COMMON SHARES OF DPL INC.
WHAT IS THIS OFFER TO PURCHASE?
We are inviting you to tender your DPL common shares, par value $.01 per
share, for purchase by DPL at a price not in excess of $23.00 nor less than
$20.00 per share upon the terms and conditions described in the enclosed Offer
to Purchase and the related Letter of Transmittal.
WHAT WILL BE THE FINAL PURCHASE PRICE?
We will determine the lowest single price per share that will allow us to
buy 25,000,000 shares properly tendered, taking into account the number of
shares tendered and the prices specified by tendering shareholders or, if a
lesser number of shares are properly tendered, all shares that are properly
tendered.
All shares acquired in the offer will be acquired at the same purchase
price.
If your shares are purchased in the offer, you will receive the purchase
price in cash for each of your shares that we purchase, without interest, and
you will not incur the usual transaction costs associated with open market
sales.
WHY IS DPL CONDUCTING THE TENDER OFFER?
DPL intends to incur approximately $605 million in additional long-term
obligations to repurchase shares in this offer. This is designed to increase the
financial leverage employed by the company in its capital structure.
This offer allows shareholders an opportunity to exit all or part of their
investment in DPL shares on potentially more favorable terms than would
otherwise be available. However, shareholders who choose not to tender their
shares may also benefit from these transactions. Non-tendering shareholders will
own a greater interest in a company with a potentially stronger earnings per
share growth rate.
HOW IS DPL GOING TO REPAY THE OBLIGATIONS INCURRED TO FUND THE TENDER OFFER?
We expect to repay the long-term obligations in the form of senior notes and
trust preferred securities incurred to finance our purchase of shares in the
offer through funds generated by our operations or through refinancing the
obligations at a later date.
WHAT IS A MODIFIED "DUTCH AUCTION"?
A modified "Dutch Auction" is a process through which we can offer to
purchase your DPL common shares, you can decide whether or not you want to
tender, or sell, your shares, and if so, at what prices you would like to
tender, or sell, the shares within the price range we have established.
WHAT ARE "ODD LOT HOLDERS"?
"Odd Lot Holders" are shareholders who own an aggregate of less than 100
shares, not including shares held in one of our Savings Plans or in the DPL Inc.
Employee Stock Ownership Plan.
The sale of shares held by Odd Lot Holders will avoid any applicable odd lot
fees payable on sales of such odd lots on the securities exchanges.
If more than 25,000,000 shares, or any increased number of shares that we
elect to purchase, are properly tendered and not properly withdrawn in the offer
at prices at or below the purchase price, we will first purchase odd lot shares
and then the remaining shares on a pro rata basis.
There will be no proration of shares tendered by any Odd Lot Holder.
1
<PAGE>
AT WHAT PRICE MAY I TENDER MY SHARES?
You may elect to tender your shares at the price determined according to the
offer or at a specified price, in increments of $0.125, starting at $20.00 per
share up to and including $23.00 per share.
You must indicate your election as to the number of shares you wish to
tender and price at which you want to tender those shares on the enclosed Letter
of Transmittal.
WHAT IF MY DESIGNATED PRICE IS ABOVE THE COMPANY'S PURCHASE PRICE?
Shares that are tendered at a designated price that is above the purchase
price we determine in the offer will not be purchased and will be returned to
you.
WHAT IF MORE THAN 25,000,000 SHARES ARE TENDERED AT OR BELOW THE PURCHASE PRICE?
If more than 25,000,000 shares are properly tendered at or below the
purchase price, a pro rata share of each tender will be accepted for purchase
subject to priority for odd lots.
Shares held by "Odd Lot Holders" who tender all of their shares at or below
the purchase price and who complete the appropriate section of the Letter of
Transmittal will be purchased before proration.
You may tender shares subject to the condition that a specified minimum
number of your shares tendered must be purchased if any shares tendered are
purchased.
HOW DO I TENDER MY SHARES?
If your shares are registered in your own name, you must complete and return
the enclosed Letter of Transmittal and follow the instructions contained
therein.
If your shares are held through a brokerage firm or bank, you must instruct
your broker or bank to complete and return a Letter of Transmittal on your
behalf. The Letter of Transmittal cannot be used to tender shares held by a
nominee directly, even though one may have been delivered for informational
purposes.
If you hold shares in one of our Savings Plans or in the DPL Inc. Employee
Stock Ownership Plan, you must instruct the trustee of the plans to tender the
shares attributable to your plan account.
WHAT FORM DO I NEED TO SIGN AND PROVIDE IF I CAN'T GET MY LETTER OF TRANSMITTAL
AND SHARE CERTIFICATES IN ON TIME?
If you cannot deliver a completed Letter of Transmittal and other required
documents before the offer is scheduled to expire, you must have an Eligible
Institution complete and execute the Notice of Guaranteed Delivery instead.
CAN I TENDER MY SHARES AT DIFFERENT PRICES?
Yes, you can elect to tender some shares at one price and other shares at a
second price, but the same shares cannot be tendered at different prices.
If you wish to tender some shares at one price and other shares at a
different price, a separate Letter of Transmittal MUST be completed and returned
for each price.
CAN I WITHDRAW MY TENDER?
Tendered shares may be withdrawn at any time until 5:00 P.M., New York City
time, on Friday, March 3, 2000, unless we extend the tender offer, or at any
time after 12:00 midnight, New York City time, on Friday, March 31, 2000 if we
have not by then accepted the tendered shares for payment.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission form must be timely provided to EquiServe, at its address set forth
on the back of the Offer to Purchase.
2
<PAGE>
CAN DPL WITHDRAW THE TENDER OFFER?
Under certain circumstances discussed in the Offer to Purchase, we may
withdraw the tender offer at any time before it expires.
WHAT IF THE TERMS OF THE TENDER OFFER CHANGE?
If we extend the Expiration Date of the tender offer or materially change
the terms of the tender offer, we will give notice of the change and, under
certain circumstances, must, in connection with that change, extend the
expiration date of the offer at least ten business days.
During the extension, you will continue to be able to withdraw the tender of
your shares.
ARE THERE ANY BROKERAGE COMMISSIONS?
There will be no brokerage commissions if shares tendered are registered in
a your name and tendered directly to the Depositary.
If shares are held through brokers or banks, you should consult your broker
or bank to determine whether transaction costs apply to the tender of those
shares.
No stock transfer tax will apply if payment is made to the registered holder
of the shares.
DO I HAVE TO SELL MY SHARES TO DPL?
No. No one is required to tender any shares.
If you do not tender your shares, you will continue to own the same number
of shares without any adjustments.
The percentage of the outstanding shares held by non-tendering shareholders
will increase since the number of outstanding shares will be reduced upon
completion of the tender offer.
IF I HAVE LOST OR MISPLACED MY SHARE CERTIFICATES, HOW DO I PARTICIPATE IN THE
TENDER OFFER?
Contact EquiServe at (800) 426-5523 immediately for assistance.
WHAT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
Contact Georgeson Shareholder Communications Inc., the Information Agent for
the tender offer, at (800) 223-2064 (toll free) or Credit Suisse First Boston
Corporation, the Dealer Manager for the tender offer, at (800) 646-4543 (toll
free) with any questions about the terms and conditions of the tender offer or
how to tender your shares.
WHERE DO I OBTAIN ADDITIONAL COPIES OF THE LETTER OF TRANSMITTAL?
Additional copies of the Letter of Transmittal and any of the other tender
offer documents can be obtained from the Information Agent or the Dealer
Manager.
3
<PAGE>
[DPL LOGO]
February 4, 2000
To The Participants In the DPL Inc. Employee Stock Ownership Plan:
DPL invites you, as a holder of DPL common shares through your participation
in DPL Inc.'s Employee Stock Ownership Plan (the "ESOP"), to tender to us some
or all of the shares held in your account. We are offering to purchase up to
25,000,000 shares at a price not in excess of $23.00 nor less than $20.00 per
share, net to the seller in cash, without interest, as specified by shareholders
tendering their shares.
We will determine a single per share price that we will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. We will select the lowest purchase
price that will allow us to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered. All shares
acquired in the offer will be acquired at the same purchase price.
Our offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase and related Letter of Transmittal. The terms and
conditions of the offer are explained in detail in the enclosed Offer to
Purchase and the related Letter of Transmittal. We encourage you to read these
materials carefully before making any decision with respect to the offer.
The offer will expire at 5:00 p.m., New York City time, on Friday, March 3,
2000, unless we extend it, however, if you wish to properly tender some or all
of the shares held in your ESOP account, you must provide your tender
instructions to Bank One Dayton, N.A., through its agent, no later than five
business days before the expiration of the offer.
The Board of Directors of DPL has approved the offer. However, neither DPL
nor our Board of Directors makes any recommendation to you as to whether to
tender or refrain from tendering you shares or as to the purchase price at which
you may choose to tender your shares. You must make your own decision as to
whether to tender your shares and, if so, how many shares to tender and the
price or prices at which you will tender them. In doing so, you should consider
our reasons for making this offer, including our increased use of financial
leverage and our increased business emphasis on providing unregulated energy
services. Our directors and executive officers have advised us that they do not
intend to tender any shares in the offer.
If you do not wish to participate in this offer, you do not need to take any
action. If you do wish to tender some or all of the shares held in your ESOP
account, the instructions on how to tender those shares are explained in detail
in the accompanying materials. You should read and follow the instructions found
in the enclosed "Letter to Participants in the DPL Inc. Employee Stock Ownership
Plan" carefully.
Under the terms of the ESOP, funds contributed by DPL or its subsidiaries
and earnings on those funds must be invested in DPL common shares. The proceeds
received by the trustee from any shares tendered by you from your ESOP account
will be reinvested under the terms of the ESOP in DPL common shares following
the tender offer. You should be aware that the proceeds reinvested under the
terms of the ESOP in common shares will be reinvested at the prevailing market
price at the time of reinvestment, which price may be higher or lower than the
purchase price paid by DPL for shares in the tender offer.
If you have any questions regarding the offer or need assistance in
tendering your shares, please contact Georgeson Shareholder
Communications, Inc., the Information Agent for the tender offer, at
(800) 223-2064 (toll-free) or Credit Suisse First Boston Corporation, the Dealer
Manager for the tender offer, at (800) 646-4543 (toll-free).
Sincerely,
Peter H. Foster
CHAIRMAN
Allen M. Hill
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE TENDER OFFER
FOR THE COMMON SHARES OF DPL INC.
WHAT IS THIS OFFER TO PURCHASE?
We are inviting you to tender DPL common shares, par value $.01 per share,
for purchase by us at a price not in excess of $23.00 nor less than $20.00 per
share, upon the terms and conditions described in the enclosed Offer to Purchase
and the related Letter of Transmittal.
WHAT WILL BE THE FINAL PURCHASE PRICE?
We will determine the lowest single per share price that will allow us to
buy 25,000,000 shares properly tendered, taking into account the number of
shares tendered and the prices specified by tendering shareholders or, if a
lesser number of shares are properly tendered, all shares properly tendered.
All shares acquired in the offer will be acquired at the same purchase
price.
If your shares are purchased in the offer, you will receive the purchase
price in cash for each of your shares that we purchase, without interest, and
you will not incur the usual transaction costs associated with open market
sales.
WHY IS DPL CONDUCTING THE TENDER OFFER?
DPL intends to incur approximately $605 million in additional long-term
obligations to repurchase shares in this offer. This is designed to increase the
financial leverage employed by the company in its capital structure.
This offer allows shareholders an opportunity to exit all or part of their
investment in DPL shares on potentially more favorable terms than would
otherwise be available. However, shareholders who choose not to tender their
shares may also benefit from these transactions. Non-tendering shareholders will
own a greater interest in a company with a potentially stronger earnings per
share growth rate.
WHAT IS A MODIFIED "DUTCH AUCTION"?
A modified "Dutch Auction" is a process through which we can offer to
purchase common shares, and the owners of those shares can decide whether or not
they want to tender, or sell, their shares, and if so, at what prices they would
like to tender, or sell, their shares within the price range we have
established.
AT WHAT PRICE MAY I TENDER MY SHARES?
You may elect to tender your shares at the price determined according to the
offer at a specified price, in increments of $0.125, starting at $20.00 per
share up to and including $23.00 per share.
You must indicate your election as to the percentage of ESOP shares you wish
to tender and the price at which you want to tender those shares on the enclosed
Instruction Form.
The ESOP is prohibited from selling shares to us for a price that is less
than the prevailing market price. Accordingly, if you elect to tender shares at
a price that is lower than the closing market price of our common shares on the
New York Stock Exchange at the expiration of the offer, the tender price you
elect will be deemed to have been increased to the closest tender price that is
not less than the closing price on the New York Stock Exchange at the expiration
of the offer.
HOW DO I TENDER THE SHARES ATTRIBUTABLE TO MY ESOP ACCOUNT?
You may instruct the trustee, through its agent, to tender some or all of
the shares attributed to your ESOP account by following the instructions in the
"Letter to Participants in the DPL Inc. Employee Stock Ownership Plan" furnished
separately.
1
<PAGE>
The Instruction Form provided separately must be completed and sent to the
trustee, through its agent, in the envelope provided with these documents.
To have shares properly tendered in the offer, the trustee, through its
agent, must receive the Instruction Form no later than 5 business days before
5:00 p.m. on Friday, March 3, 2000, the expiration of the offer period.
WHAT IF MY DESIGNATED PRICE IS ABOVE THE COMPANY'S PURCHASE PRICE?
Shares that are tendered at a designated price that is above the purchase
price determined by DPL will not be purchased and will be returned to you.
WHAT IF MORE THAN 25,000,000 SHARES ARE TENDERED AT OR BELOW THE PURCHASE PRICE?
If more than 25,000,000 shares are properly tendered at or below the
purchase price, shares tendered at or below the purchase price may be subject to
proration, under which we will accept for purchase a pro rata share of each
tender.
CAN I TENDER PART OF MY STOCK AT DIFFERENT PRICES?
Yes, you can elect to tender some shares at one price and other shares at a
second price.
The same shares cannot be tendered at different prices.
CAN DPL WITHDRAW THE TENDER OFFER?
Under certain circumstances discussed in the Offer to Purchase, we may
withdraw the tender offer until 5:00 P.M., New York City time, on Friday,
March 3, 2000.
WHAT IF THE TERMS OF THE TENDER OFFER CHANGE?
If we extend the Expiration Date of the tender offer or materially change
the terms of the tender offer, we will give notice of the change and, under
certain circumstances, must, in connection with that change, extend the
expiration date of the offer at least ten (10) business days from such notice.
During the extension, you will continue to be able to withdraw the tender of
your shares.
DO I HAVE TO SELL MY SHARES TO DPL?
No. No one is required to tender any shares.
If you do not tender your shares, you will continue to own the same number
of shares without any adjustments.
The percentage of the outstanding shares held by non-tendering shareholders
will increase since the number of outstanding shares will be reduced upon
completion of the tender offer.
HOW DO I WITHDRAW THE SHARES ATTRIBUTABLE TO MY ESOP ACCOUNT FROM THE TENDER?
Shares attributed to your ESOP account can be withdrawn from the tender by
notifying the trustee, through its agent, at any time before 5 business days
prior to the Expiration Date, or at any time after 12:00 Midnight, New York City
time, on Friday, March 31, 2000 if we have not accepted the tendered shares for
payment pursuant to the offer before that date.
For a withdrawal to be effective, a written and telegraphic transmission
form must be timely provided to the trustee, through its agent, MIS Corporation
at its address at 61 Accord Park Drive, Norwell, MA 02061.
2
<PAGE>
WHO IS THE TRUSTEE OF THE ESOP?
The trustee of the ESOP is Bank One Dayton, N.A.
Bank One Dayton, N.A. has engaged MIS Corporation to act as their agent in
processing instructions from plan participants and tendering a Letter of
Transmittal on behalf of the ESOP.
WHAT IF I HOLD SHARES OUTSIDE THE ESOP?
If you hold shares outside the ESOP you will receive, under separate cover,
tender offer materials which can be used to tender the shares held outside the
ESOP.
Those tender offer materials MAY NOT be used to instruct Bank One Dayton,
N.A. to tender shares attributable to your ESOP account.
HOW WILL THE PROCEEDS OF THE TENDER OF MY ESOP SHARES BE INVESTED?
Under the terms of the ESOP, funds contributed by DPL or its subsidiaries
and earnings on those funds must be invested in DPL common shares. The proceeds
received by the trustee from any shares tendered by you from your ESOP account
will be reinvested under the terms of the ESOP in DPL common shares following
the tender offer. You should be aware that the proceeds reinvested under the
terms of the ESOP in DPL common shares will be reinvested at the prevailing
market price at the time of reinvestment, which price may be higher or lower
than the purchase price paid by DPL for shares in the tender offer.
HOW IS DPL GOING TO REPAY THE OBLIGATIONS INCURRED TO FUND THE TENDER OFFER?
We expect to repay the long-term obligations in the form of senior notes and
trust preferred securities incurred to finance our purchase of shares pursuant
to the offer through funds generated by our operations or through refinancing
the obligations at a later date.
CAN I TAKE ADVANTAGE OF THE "ODD LOT" PRIORITY?
No. Shares held in the ESOP are not eligible to avoid proration by virtue of
the "odd lot" priority.
CAN I MAKE A CONDITIONAL TENDER OF THE SHARES ATTRIBUTABLE TO MY ESOP ACCOUNT?
Yes. Shares held in the ESOP can be conditionally tendered.
WHAT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
Contact Georgeson Shareholder Communications, Inc., the Information Agent
for the tender offer, at (800) 223-2064 (toll free) or Credit Suisse First
Boston Corporation, the Dealer Manager for the tender offer, at (800) 646-4543
(toll free) with any questions about the terms and conditions of the tender
offer or how to tender your shares.
WHERE DO I OBTAIN ADDITIONAL COPIES OF THE LETTER TO PARTICIPANTS IN THE
DPL INC. EMPLOYEE STOCK OWNERSHIP PLAN?
Additional copies of the Letter to Participants in the DPL Inc. Employee
Stock Ownership Plan and any of the other tender offer documents can be obtained
from the Information Agent or the Dealer Manager.
3
<PAGE>
[DPL LOGO]
February 4, 2000
To The Participants In Our Saving Plans:
DPL invites you, as a holder of DPL common shares through your participation
in The Dayton Power and Light Company Employee Savings Plan or The Dayton and
Power Light Company Savings Plan for Collective Bargaining Employees (the
"Savings Plans"), to tender to us some or all of the shares held in your Savings
Plan account. We are offering to purchase up to 25,000,000 shares at a price not
in excess of $23.00 nor less than $20.00 per share, net to the seller in cash,
without interest, as specified by shareholders tendering their shares.
We will determine a single per share price that we will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. We will select the lowest purchase
price that will allow us to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered. All shares
acquired in the offer will be acquired at the same purchase price.
Our offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase and related Letter of Transmittal. The terms and
conditions of the offer are explained in detail in the enclosed Offer to
Purchase and the related Letter of Transmittal. We encourage you to read these
materials carefully before making any decision with respect to the offer.
The offer will expire at 5:00 p.m., New York City time, on Friday, March 3,
2000, unless we extend it, however, if you wish to properly tender some or all
of the shares held in your Savings Plan account, you must provide your tender
instructions to T. Rowe Price Trust Company, through its agent, no later than
five business days before the expiration of the offer.
The Board of Directors of DPL has approved the offer. However, neither DPL
nor our Board of Directors makes any recommendation to you as to whether to
tender or refrain from tendering you shares or as to the purchase price at which
you may choose to tender your shares. You must make your own decision as to
whether to tender your shares and, if so, how many shares to tender and the
price or prices at which you will tender them. In doing so, you should consider
our reasons for making this offer, including our increased use of financial
leverage and our increased business emphasis on providing unregulated energy
services. Our directors and executive officers have advised us that they do not
intend to tender any shares in the offer.
If you do not wish to participate in this offer, you do not need to take any
action. If you do wish to tender some or all of the shares held in your Savings
Plan account, the instructions on how to tender those shares are explained in
detail in the accompanying materials. You should read and follow the
instructions found in the enclosed "Letter to Participants in The Dayton Power
and Light Company Savings Plans" carefully.
Under the terms of the Savings Plans, the proceeds received by the Savings
Plan trustee from any shares tendered by a Savings Plan participant will be
invested following the tender offer initially in a short-term government
securities fund. After any successfully tendered shares are processed and the
proceeds are credited to a participant's Savings Plan account, participants may
contact the trustee by the normal manner of communication (e.g. voice response
or on-line access) to exchange any proceeds held in the short-term government
securities fund for any other investment option available under the terms of the
Savings Plan.
If you have any questions regarding the offer or need assistance in
tendering your shares, please contact Georgeson Shareholder
Communications, Inc., the Information Agent for the tender offer, at (800)
223-2064 (toll-free) or Credit Suisse First Boston Corporation, the Dealer
Manager for the tender offer, at (800) 646-4543 (toll free).
Sincerely,
Peter H. Forster
CHAIRMAN
Allen M. Hill
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE TENDER OFFER
FOR THE COMMON SHARES OF DPL INC.
WHAT IS THIS OFFER TO PURCHASE?
We are inviting you to tender DPL common shares, par value $.01 per share,
for purchase by us at a price not in excess of $23.00 nor less than $20.00 per
share, upon the terms and conditions described in the enclosed Offer to Purchase
and the related Letter of Transmittal.
WHAT ARE THE DPL SAVINGS PLANS?
Our Savings Plans include The Dayton Power and Light Company Employee
Savings Plan and The Dayton Power and Light Company Savings Plan for Collective
Bargaining Employees.
WHAT WILL BE THE FINAL PURCHASE PRICE?
We will determine the lowest single per share price that will allow us to
buy 25,000,000 shares properly tendered, taking into account the number of
shares tendered and the prices specified by tendering shareholders or, if a
lesser number of shares are properly tendered, all shares properly tendered.
All shares acquired in the offer will be acquired at the same purchase
price.
If your shares are purchased in the offer, you will receive the purchase
price in cash for each of your shares that we purchase, without interest, and
you will not incur the usual transaction costs associated with open market
sales.
WHY IS DPL CONDUCTING THE TENDER OFFER?
DPL intends to incur approximately $605 million in additional long-term
obligations to repurchase shares in this offer. This is designed to increase the
financial leverage employed by the company in its capital structure.
This offer allows shareholders an opportunity to exit all or part of their
investment in DPL shares on potentially more favorable terms than would
otherwise be available. However, shareholders who choose not to tender their
shares may also benefit from these transactions. Non-tendering shareholders will
own a greater interest in a company with a potentially stronger earnings per
share growth rate.
WHAT IS A MODIFIED "DUTCH AUCTION"?
A modified "Dutch Auction" is a process through which we can offer to
purchase common shares and the owners of those shares can decide whether or not
they want to tender, or sell, their shares, and if so, at what prices they would
like to tender, or sell, their shares within the price range we have
established.
AT WHAT PRICE MAY I TENDER MY SHARES?
You may elect to tender your shares at the price determined according to the
offer at a specified price, in increments of $0.125, starting at $20.00 per
share up to and including $23.00 per share.
You must indicate your election as to the percentage of Savings Plan shares
you wish to tender and the price at which you want to tender those shares on the
enclosed Instruction Form.
Our Savings Plans are prohibited from selling shares to us for a price that
is less than the prevailing market price. Accordingly, if you elect to tender
shares at a price that is lower than the closing market price of our common
shares on the New York Stock Exchange at the expiration of the offer, the tender
price you elect will be deemed to have been increased to the closest tender
price that is not less than the closing price on the New York Stock Exchange at
the expiration of the offer.
1
<PAGE>
HOW DO I TENDER THE SHARES ATTRIBUTABLE TO MY DPL SAVINGS PLAN ACCOUNT?
You may instruct the trustee, through its agent, to tender some or all of
the shares attributed to your Savings Plan account by following the instructions
in the "Letter to Participants in The Dayton Power and Light Company Savings
Plans" furnished separately.
The Instruction Form provided separately must be completed and sent to the
trustee, through its agent, in the envelope provided with these documents.
To have shares properly tendered in the offer, the trustee, through its
agent, must receive the Instruction Form no later than 5 business days before
5:00 p.m., New York City time, on Friday, March 3, 2000, the expiration of the
offer period.
WHAT IF MY DESIGNATED PRICE IS ABOVE THE COMPANY'S PURCHASE PRICE?
Shares that are tendered at a designated price that is above the purchase
price determined by DPL will not be purchased and will be returned to you.
WHAT IF MORE THAN 25,000,000 SHARES ARE TENDERED AT OR BELOW THE PURCHASE PRICE?
If more than 25,000,000 shares are properly tendered at or below the
purchase price, shares tendered at or below the purchase price may be subject to
proration, under which we will accept for purchase a pro rata share of each
tender.
CAN I TENDER PART OF MY STOCK AT DIFFERENT PRICES?
Yes, you can elect to tender some shares at one price and other shares at a
second price.
The same shares cannot be tendered at different prices.
CAN DPL WITHDRAW THE TENDER OFFER?
Under certain circumstances discussed in the Offer to Purchase, we may
withdraw the tender offer until 5:00 p.m., New York City time, on Friday,
March 3, 2000.
WHAT IF THE TERMS OF THE TENDER OFFER CHANGE?
If we extend the Expiration Date of the tender offer or materially change
the terms of the tender offer, we will give notice of the change and, under
certain circumstances, must, in connection with that change, extend the
expiration date of the offer at least ten (10) business days from such notice.
During the extension, you will continue to be able to withdraw the tender of
your shares.
DO I HAVE TO SELL MY SHARES TO DPL?
No. No one is required to tender any shares.
If you do not tender your shares, you will continue to own the same number
of shares without any adjustments.
The percentage of the outstanding shares held by non-tendering shareholders
will increase since the number of outstanding shares will be reduced upon
completion of the tender offer.
2
<PAGE>
HOW DO I WITHDRAW THE SHARES ATTRIBUTABLE TO MY DPL SAVINGS PLAN ACCOUNT FROM
THE TENDER?
Shares attributed to one of our Savings Plan accounts can be withdrawn from
the tender by notifying the trustee, through its agent, at any time before 5
business days prior to the Expiration Date, or at any time after
12:00 Midnight, New York City time, on Friday, March 31, 2000 if we have not
accepted the tendered shares for payment pursuant to the offer before that date.
For a withdrawal to be effective, a written and telegraphic transmission
form must be timely provided to the trustee, through its agent, MIS Corporation
at its address at 61 Accord Park Drive, Norwell, MA 02061.
WHO IS THE TRUSTEE OF THE DPL SAVINGS PLANS?
The trustee of our Savings Plans is T. Rowe Price Trust Company.
T. Rowe Price Trust Company has engaged MIS Corporation to act as their
agent in processing instructions from plan participants and tendering a Letter
of Transmittal on behalf of the Savings Plans.
WHAT IF I HOLD SHARES OUTSIDE THE DPL SAVINGS PLANS?
If you hold shares outside our Savings Plans, you will receive, under
separate cover, tender offer materials which can be used to tender the shares
held outside our Savings Plans.
Those tender offer materials MAY NOT be used to instruct T. Rowe Price Trust
Company to tender shares attributable to your Savings Plan account.
HOW WILL THE PROCEEDS OF THE TENDER OF MY SAVINGS PLAN SHARES BE INVESTED?
Under the terms of the Savings Plans, the proceeds received by the Savings
Plan trustee from any shares tendered by a Savings Plan participant will be
invested following the tender offer initially in a short-term government
securities fund. After any successfully tendered shares are processed and the
proceeds are credited to a participant's Savings Plan account, participants may
contact the trustee by the normal manner of communication (e.g. voice response
or on-line access) to exchange any proceeds held in the short-term government
securities fund for any other investment option available under the terms of the
Savings Plan. Participants in the Savings Plans are urged to read the separate
instruction letter and related materials carefully.
HOW IS DPL GOING TO REPAY THE OBLIGATIONS INCURRED TO FUND THE TENDER OFFER?
We expect to repay the long-term obligations in the form of senior notes and
trust preferred securities incurred to finance our purchase of shares pursuant
to the offer through funds generated by our operations or through refinancing
the obligations at a later date.
CAN I TAKE ADVANTAGE OF THE "ODD LOT" PRIORITY?
No. Shares held in one of our Savings Plans are not eligible to avoid
proration by virtue of the "odd lot" priority.
CAN I MAKE A CONDITIONAL TENDER OF THE SHARES ATTRIBUTABLE TO MY SAVINGS PLAN
ACCOUNT?
Yes. Shares held in one of our Savings Plans can be conditionally tendered.
3
<PAGE>
WHAT IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
Contact Georgeson Shareholder Communications, Inc., the Information Agent
for the tender offer, at (800) 223-2064 (toll free) or Credit Suisse First
Boston Corporation, the Dealer Manager for the tender offer, at (800) 646-4543
(toll free) with any questions about the terms and conditions of the tender
offer or how to tender your shares.
WHERE DO I OBTAIN ADDITIONAL COPIES OF THE LETTER TO PARTICIPANTS IN DPL SAVINGS
PLANS?
Additional copies of the Letter to Participants in DPL Savings Plans and any
of the other tender offer documents can be obtained from the Information Agent
or the Dealer Manager.
4
<PAGE>
[CSFB Letterhead]
OFFER TO PURCHASE FOR CASH
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
DPL INC.
AT
A PURCHASE PRICE NOT IN EXCESS
OF $23.00 NOR LESS THAN $20.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
February 4, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
DPL Inc., an Ohio corporation, has engaged us to act as Dealer Manager in
connection with its offer to purchase up to 25,000,000 of its common shares, par
value $.01 per share, for a purchase price not in excess of $23.00 nor less than
$20.00 per share, net to the seller in cash, without interest, as specified by
shareholders tendering their shares.
DPL will, upon the terms and subject to the conditions of the offer,
determine a single per share price that it will pay for shares properly
tendered, taking into account the number of shares tendered and the prices
specified by tendering shareholders. All shares acquired in the offer will be
acquired at the same purchase price. DPL will select the lowest purchase price
that will allow it to buy 25,000,000 shares or, if a lesser number of shares are
properly tendered, all shares that are properly tendered and not properly
withdrawn.
DPL's offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase dated February 4, 2000 and in the related Letter
of Transmittal which, as amended or supplemented from time to time, together
constitute the offer. All shares tendered and purchased will include the
associated preferred share purchase rights issued pursuant to a Shareholder
Rights Agreement, dated as of December 3, 1991, between DPL and The First
National Bank of Boston, as rights agent, and, unless the context otherwise
requires, all references to shares include the associated preferred share
purchase rights.
Only shares properly tendered at prices at or below the purchase price and
not properly withdrawn will be purchased. However, because of the "odd lot"
priority, proration and conditional tender provisions described in the Offer to
Purchase, all of the shares tendered at or below the purchase price will not be
purchased if the offer is oversubscribed. Shares tendered at prices in excess of
the purchase price that is determined by DPL and shares not purchased because of
proration or conditional tenders will be returned as promptly as practicable
following the Expiration Date.
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
1
<PAGE>
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
HOWEVER, THE OFFER IS SUBJECT TO OTHER CONDITIONS. SEE SECTION 7 OF THE OFFER TO
PURCHASE.
If at the expiration of the offer more than 25,000,000 shares, or any
greater number of shares as DPL may elect to purchase, are properly tendered at
or below the purchase price and not properly withdrawn, DPL will buy shares
validly tendered and not properly withdrawn first from any person, an "Odd Lot
Holder", who owned beneficially or of record an aggregate of fewer than 100
shares not including any shares held in The Dayton Power and Light Company
Employee Savings Plan, The Dayton Power and Light Company Savings Plan for
Collective Bargaining Employees or the DPL Inc. Employee Stock Ownership Plan,
and so certified in the appropriate place on the Letter of Transmittal and, if
applicable, on a Notice of Guaranteed Delivery, who properly tender all their
shares at or below the purchase price, and then on a pro rata basis from all
other shareholders who properly tender shares at prices at or below the purchase
price, subject to the conditional tender provisions.
For your information and for forwarding to those of your clients for whom
you hold shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Offer to Purchase dated February 4, 2000;
2. The Letter of Transmittal for your use and for the information of your
clients, together with the accompanying Substitute Form W-9. Facsimile
copies of the Letter of Transmittal, with manual signatures, may be used
to tender shares;
3. A letter to the shareholders of DPL dated February 4, 2000 from Peter H.
Forster, Chairman, and Allen M. Hill, President and Chief Executive
Officer of DPL;
4. The Notice of Guaranteed Delivery to be used to accept the offer and
tender shares pursuant to the offer if the procedures for tendering
shares described in the Offer to Purchase cannot be completed on a timely
basis;
5. A printed form of letter which you may send to your clients for whose
accounts you hold shares registered in your name or in the name of your
nominee, with an instruction form provided for obtaining the clients'
instructions with regard to the offer;
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to United States federal income tax backup withholding; and
7. A return envelope addressed to EquiServe, as Depositary for the offer.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY,
MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
In order to tender shares in the offer, a duly executed and properly
completed Letter of Transmittal, or a manually signed facsimile of the Letter of
Transmittal, including any required signature guarantees, or an Agent's Message,
as defined in the Offer to Purchase, in the case of a book-entry transfer, and
any other required documents should be sent to the Depositary together with
either certificate(s) representing tendered shares or timely confirmation of
their book-entry transfer, all in accordance with the instructions described in
the Offer to Purchase and the related Letter of Transmittal.
Holders of shares whose certificate(s) for the shares are not immediately
available or who cannot deliver the certificate(s) and all other required
documents to the Depositary, or complete the procedures for book-entry transfer,
before the Expiration Date must tender their shares according to the procedure
for guaranteed delivery described in Section 3 of the Offer to Purchase.
2
<PAGE>
Neither DPL nor any officer, director, shareholder, agent or other
representative of DPL will pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of shares pursuant to the offer, other than
fees paid to Credit Suisse First Boston Corporation, as Dealer Manager, as
described in the Offer to Purchase. DPL will, however, upon request, reimburse
you for customary mailing and handling expenses incurred by you in forwarding
any of the enclosed materials to your clients whose shares are held by you as a
nominee or in a fiduciary capacity. DPL will pay or cause to be paid any stock
transfer taxes applicable to its purchase of shares, except as otherwise
provided in the Letter of Transmittal.
Requests for additional copies of the enclosed materials and any inquiries
you may have with respect to the offer should be directed to the Information
Agent or to the Dealer Manager at their addresses and telephone numbers set
forth on the back cover of the enclosed Offer to Purchase.
<TABLE>
<S> <C>
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
</TABLE>
NOTHING CONTAINED IN THIS DOCUMENT OR IN THE ENCLOSED DOCUMENTS WILL MAKE
YOU OR ANY OTHER PERSON AN AGENT OF DPL, THE DEALER MANAGER, THE INFORMATION
AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND
THE STATEMENTS CONTAINED IN THOSE DOCUMENTS.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
DPL INC.
AT
A PURCHASE PRICE NOT IN EXCESS
OF $23.00 NOR LESS THAN $20.00 PER SHARE
------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 4, 2000
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated February 4,
2000 and the related Letter of Transmittal in connection with the offer by DPL
Inc., an Ohio corporation, to purchase up to 25,000,000 of its common shares,
par value $.01 per share, for a purchase price not in excess of $23.00 nor less
than $20.00 per share, net to the seller in cash, without interest, as specified
by shareholders tendering their shares.
DPL will determine a single per share price that it will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. All shares acquired in the offer
will be acquired at the same purchase price. DPL will select the lowest purchase
price that will allow it to buy 25,000,000 shares or, if a lesser number of
shares are properly tendered, all shares that are properly tendered and not
properly withdrawn.
DPL's offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal which,
as amended or supplemented from time to time, together constitute the offer. All
shares tendered and purchased will include the preferred share purchase rights
issued pursuant to a Shareholder Rights Agreement, dated as of December 3, 1991,
between DPL and The First National Bank of Boston, as rights agent, and, unless
the context otherwise requires, all references to shares include the associated
preferred share purchase rights.
Only shares properly tendered at prices at or below the purchase price and
not properly withdrawn will be purchased. However, because of the "odd lot"
priority, proration and conditional tender provisions described in the Offer to
Purchase, all of the shares tendered at or below the purchase price will not be
purchased if the offer is oversubscribed. Shares tendered at prices in excess of
the purchase price that is determined by DPL and shares not purchased because of
proration or conditional tenders will be returned as promptly as practicable
following the expiration date of the offer.
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
If at the expiration of the offer more than 25,000,000 shares, or any
greater number of shares as DPL may elect to purchase, are properly tendered at
or below the purchase price and not properly withdrawn before the Expiration
Date, DPL will purchase shares first from any person (an "Odd Lot Holder") who
owned beneficially or of record an aggregate of fewer than 100 shares (not
including any shares held in The Dayton Power and Light Company Employee Savings
Plan, The Dayton Power and Light Company Savings Plan for Collective Bargaining
Employee or the DPL Inc. Employee Stock Ownership Plan) and so certified in the
appropriate place on the Letter of Transmittal and, if applicable, on a notice
of guaranteed delivery, and properly tendered all those shares at or below the
purchase price and then, subject to the conditional tender provisions, on a pro
rata basis from all other shareholders who properly tender shares at prices at
or below the purchase price.
<PAGE>
A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER YOUR SHARES HELD BY US
FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any or
all of the shares held by us for your account, upon the terms and subject to the
conditions of the offer.
Please note the following:
1. Shares may be tendered at prices not in excess of $23.00 nor less
than $20.00 per share, as indicated in the attached Instruction Form, net to
the seller in cash, without interest.
2. The priority in which certificates will be purchased in the event of
proration may be designated.
3. The offer is not conditioned on any minimum number of shares being
tendered. However, the offer is subject to other conditions described in the
Offer to Purchase.
4. The offer, proration period and withdrawal rights will expire at
5:00 P.M., New York City time, on Friday, March 3, 2000, unless the offer is
extended.
5. The offer is for 25,000,000 shares, constituting approximately 15.8%
of the shares outstanding as of February 3, 2000.
6. DPL's Board of Directors has authorized the making of the offer.
However, neither DPL nor its Board of Directors makes any recommendation to
you as to whether to tender or refrain from tendering your shares or as to
the purchase price at which you may choose to tender your shares. You must
make the decision whether to tender your shares and, if so, how many shares
to tender and the price or prices at which you will tender them.
7. Tendering shareholders who hold shares registered in their own name
and who tender their shares directly to the Depositary will not be obligated
to pay brokerage commissions, solicitation fees or, subject to Instruction 7
of the Letter of Transmittal, stock transfer taxes on the purchase of shares
by DPL in the offer.
8. DPL will, upon the terms and subject to the conditions of the offer,
accept all your shares for purchase if:
(i) you owned beneficially or of record an aggregate of fewer than
100 shares (not including any shares held in one of DPL's
Savings Plans or in the DPL Inc. Employee Stock Ownership
Plan);
(ii) you instruct us to tender on your behalf all your shares at or
below the purchase price before the Expiration Date; and
(iii) you complete the section entitled "Odd Lots" in the attached
Instruction Form.
9. If you wish to tender portions of your shares at different prices,
you must complete a separate Instruction Form for each price at which you
wish to tender each portion of your shares. We must submit separate Letters
of Transmittal on your behalf for each price you will accept for each
portion tendered.
If you wish to have us tender any or all of your shares, please instruct us
by completing, executing, detaching and returning the attached Instruction Form.
An envelope to return your Instruction Form to us is enclosed. If you authorize
us to tender your shares, all your shares will be tendered unless otherwise
indicated on the attached Instruction Form.
PLEASE FORWARD YOUR INSTRUCTION FORM TO US AS SOON AS POSSIBLE TO ALLOW US
AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
2
<PAGE>
As described in the Offer to Purchase, if more than 25,000,000 shares, or
any greater number of shares as DPL may elect to purchase, have been properly
tendered at or below the purchase price and not properly withdrawn before the
Expiration Date, DPL will purchase tendered shares on the basis described below:
1. First, all shares tendered and not withdrawn before the Expiration
Date by any Odd Lot Holder who:
(i) tenders all shares owned beneficially or of record by the Odd
Lot Holder at a price at or below the purchase price (tenders
of less than all shares owned by the Odd Lot Holder will not
qualify for this preference); and
(ii) completes the section captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and
2. Second, after purchase of all of the foregoing shares, subject to
the conditional tender provisions described in Section 6 of the Offer to
Purchase, all other shares properly tendered at prices at or below the
purchase price and not properly withdrawn before the Expiration Date, on a
pro rata basis (with appropriate adjustments to avoid purchases of
fractional shares) as described in the Offer to Purchase.
The offer is being made solely pursuant to the Offer to Purchase and the
related Letter of Transmittal and is being made to all record holders of common
shares of DPL. The offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of common shares of DPL residing in any jurisdiction in
which the making of the offer or acceptance thereof would not be in compliance
with the securities laws of that jurisdiction.
3
<PAGE>
INSTRUCTIONS FOR TENDER OF SHARES OF DPL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated February 4, 2000 and the related Letter of Transmittal in
connection with the offer by DPL Inc., an Ohio corporation, to purchase up to
25,000,000 of its common shares, par value $.01 per share, for a purchase price
not in excess of $23.00 nor less than $20.00 per share, net to the seller in
cash, without interest, as specified by shareholders tendering their shares.
DPL's offer is being made upon the terms and subject to the conditions set forth
in the Offer to Purchase and in the related Letter of Transmittal which, as
amended or supplemented from time to time, together constitute the offer. All
shares tendered and purchased will include the associated preferred share
purchase rights, and, unless the context otherwise requires, all references to
shares include the associated preferred share purchase rights.
This will instruct you to tender to DPL, on (our) (my) behalf, the number of
shares indicated below (or if no number is indicated below, all shares) which
are beneficially owned by (us) (me) and registered in your name, upon the terms
and subject to the conditions of offer.
- --------------------------------------------------------------------------------
SHARES TENDERED
/ / By checking this box, the undersigned hereby instructs us to tender the
following number of shares: _________ shares*
*Unless otherwise indicated, it will be assumed that all your shares are to be
tendered.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned
owns, beneficially or of record, an aggregate of fewer than 100 shares
(not including any shares held in one of DPL's Savings Plans or in the
DPL Inc. Employee Stock Ownership Plan), all of which are being
tendered.
In addition, the undersigned is tendering shares either (check one box):
/ / at the purchase price determined by DPL in accordance with the terms
of the offer (persons checking this box need not indicate the price per
share below); or
/ / at the price per share indicated below under Shares Tendered at Price
Determined by Shareholder.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
A tendering shareholder may condition his or her tender of shares upon DPL
purchasing a specified minimum number of the shares tendered, all as described
in the Offer to Purchase, particularly in Section 6. Unless at least the
minimum number of shares you indicate below is purchased by DPL pursuant to
the terms of the offer, none of the shares tendered by you will be purchased.
It is the tendering shareholder's responsibility to calculate the minimum
number of shares that must be purchased if any are purchased, and each
shareholder is urged to consult his or her own tax advisor. Unless this box
has been completed and a minimum specified, the tender will be deemed
unconditional.
/ / Minimum number of shares that must be purchased, if any are
purchased: _________ shares.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER
(See Instruction 5 to the Letter of Transmittal)
By checking ONE of the following boxes below INSTEAD OF THE BOX UNDER
"SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER," the undersigned
hereby tenders shares at the price checked. This action could result in none
of the shares being purchased if the purchase price determined by DPL for the
shares is less than the price checked below. A shareholder who desires to
tender shares at more than one price must complete a separate Letter of
Transmittal for each price at which shares are tendered. The same shares
cannot be tendered at more than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C>
/ / $ 20.000 / / $ 21.125 / / $ 22.125
/ / $ 20.125 / / $ 21.250 / / $ 22.250
/ / $ 20.250 / / $ 21.375 / / $ 22.375
/ / $ 20.375 / / $ 21.500 / / $ 22.500
/ / $ 20.500 / / $ 21.625 / / $ 22.625
/ / $ 20.625 / / $ 21.750 / / $ 22.750
/ / $ 20.750 / / $ 21.875 / / $ 22.875
/ / $ 20.875 / / $ 22.000 / / $ 23.000
/ / $ 21.000
</TABLE>
CHECK ONLY ONE BOX ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, THERE IS NO
VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
(See Instruction 5 to the Letter of Transmittal)
/ / The undersigned wants to maximize the chance of having DPL purchase
all of the shares the undersigned is tendering (subject to the possibility of
proration). Accordingly, by checking THIS BOX INSTEAD OF ONE OF THE PRICE
BOXES ABOVE, the undersigned hereby tenders shares and is willing to accept
the purchase price determined by DPL in accordance with the terms of the
offer. This action could result in receiving a price per share as low as
$20.00.
- --------------------------------------------------------------------------------
5
<PAGE>
The method of delivery of this document is at the option and risk of the
tendering shareholder. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed to assure delivery.
- --------------------------------------------------------------------------------
Name(s) of Record Holder(s) __________________________________________________
______________________________________________________________________________
______________________________________________________________________________
PLEASE PRINT
Address(es) __________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
CITY, STATE, ZIP CODE
Daytime Area Code and Tel. No.: ______________________________________________
Taxpayer Identification or Social Security Number: ___________________________
Signature(s): ________________________________________________________________
______________________________________________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
DPL INC.
AT
A PURCHASE PRICE NOT IN EXCESS
OF $23.00 NOR LESS THAN $20.00 PER SHARE
- ----------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 4, 2000
To Participants in the DPL Inc. Employee Stock Ownership Plan:
Enclosed for your consideration are the Offer to Purchase dated February 4,
2000 and the related Letter of Transmittal in connection with the offer by DPL
Inc., an Ohio corporation, to purchase up to 25,000,00 of its common shares, par
value $.01 per share, at a purchase price not in excess of $23.00 nor less than
$20.00 per share, net to the seller in cash, without interest, as specified by
shareholders tendering their shares. As a participant in the DPL Inc. Employee
Stock Ownership Plan (the "ESOP"), you may tender shares that you hold in the
ESOP. If you wish to do so, you must direct us to do so on your behalf by
following the instructions in this letter.
DPL will determine a single per share price that it will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. DPL will pay the same price for all
shares purchased in the offer. DPL will select the lowest purchase price that
will allow it to buy 25,000,000 shares or, if a lesser number of shares are
properly tendered, all shares that are properly tendered. All shares properly
tendered at prices at or below the purchase price and not properly withdrawn
will be purchased, subject to the conditions of the offer and the "odd lot"
priority, proration and conditional tender provisions described in the Offer to
Purchase. Shares tendered at prices in excess of the purchase price that is
determined by DPL and shares not purchased because of proration or conditional
tenders will be returned.
DPL's offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal which,
as amended or supplemented from time to time, together constitute the offer. All
shares tendered and purchased will include the associated preferred share
purchase rights issued pursuant to a Shareholder Rights Agreement, dated as of
December 3, 1991, between DPL and The First National Bank of Boston, as rights
agent, and, unless the context otherwise requires, all references to shares
include the associated preferred share purchase rights.
Only shares properly tendered at prices at or below the purchase price and
not properly withdrawn will be purchased. DPL will not purchase all of the
shares tendered at or below the purchase price if the offer is oversubscribed.
The number of shares DPL actually acquires will be determined by taking into
consideration the "odd lot" priority, proration and conditional tender
provisions described in the Offer to Purchase. Shares tendered at prices in
excess of the purchase price and shares not purchased because of proration or
conditional tenders will be returned as promptly as practicable following the
expiration of the offer.
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
<PAGE>
Under the terms of the ESOP, funds contributed by DPL or its subsidiaries
and earnings on those funds must be invested in DPL common shares. The proceeds
received by the trustee from any shares tendered by an ESOP participant from an
ESOP account will be reinvested under the terms of the ESOP in DPL common shares
following the tender offer. Participants should be aware that the proceeds
reinvested under the terms of the ESOP in DPL common shares will be reinvested
at the prevailing market price at the time of reinvestment, which price may be
higher or lower than the purchase price paid by DPL for shares in the tender
offer.
A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES IN YOUR ESOP
ACCOUNT. ACCORDINGLY, WE REQUEST INSTRUCTIONS AS TO WHETHER YOU WISH TO TENDER
ANY OR ALL OF THE SHARES HELD IN YOUR ESOP ACCOUNT, UPON THE TERMS AND SUBJECT
TO THE CONDITIONS OF THE OFFER.
If you do not wish to direct the sale of any portion of the shares in your
ESOP account, you do not need to take any action.
Please note the following:
1. Shares held in your ESOP account may be tendered at prices not in excess
of $23.00 nor less than $20.00 per share, as indicated in the attached
Instruction Form.
2. The offer is not conditioned on any minimum number of shares being
tendered. However, the offer is subject to other conditions described in the
Offer to Purchase.
3. If we have not received your instructions at least five business days
before the expiration of the offer, we will not tender any shares held in your
ESOP account. The offer is scheduled to expire at 5:00 p.m., New York City time,
on Friday, March 3, 2000, unless the offer is extended.
4. The offer, proration period and withdrawal rights will also expire at
5:00 p.m., New York City time, on Friday, March 3, 2000, unless the offer is
extended.
5. The offer is for up to 25,000,000 shares, constituting approximately
15.8% of the shares outstanding as of February 3, 2000.
6. DPL's Board of Directors has authorized the making of the offer.
However, neither DPL nor DPL's Board of Directors makes any recommendation to
you as to whether to tender or refrain from tendering your shares or as to the
purchase price at which you may choose to tender your shares. You must make your
own decision as to whether to tender your shares and, if so, how many shares to
tender and the price or prices at which you will tender them.
7. Tendering shareholders will not be obligated to pay any brokerage fees
or commissions or solicitation fees to the Dealer Manager, Depositary,
Information Agent or DPL or, except as described in the Letter of Transmittal,
stock transfer taxes on the transfer of shares pursuant to the offer.
8. The ESOP is prohibited from selling shares to DPL for a price that is
less than the prevailing market price. Accordingly, if you elect to tender
shares at a price that is lower than the prevailing price of DPL's common shares
on the New York Stock Exchange at the expiration of the offer, the tender price
you elect will be deemed to have been increased to the closest tender price that
is not less than that closing price.
If you wish to direct the tender of any or all of the shares held in your
ESOP account, please instruct us by completing, executing and detaching and
returning the attached Instruction Form. An envelope to return your Instruction
Form is enclosed. If you authorize us to tender your shares, all your shares
will be tendered unless otherwise indicated on the attached Instruction Form.
2
<PAGE>
The offer is being made solely pursuant to the Offer to Purchase and the
related Letter of Transmittal and is being made to all record holders of DPL
common shares. The offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of DPL common shares residing in any jurisdiction in
which the making of the offer or acceptance thereof would not be in compliance
with the securities laws of that jurisdiction.
Please forward your Instruction Form to us as soon as possible to allow
ample time to tender your shares on your behalf prior to the expiration of the
offer. IF WE HAVE NOT RECEIVED YOUR INSTRUCTIONS AT LEAST FIVE BUSINESS DAYS
BEFORE THE EXPIRATION OF THE OFFER, UNLESS THE OFFER IS EXTENDED, WE WILL NOT
TENDER ANY SHARES HELD ON YOUR BEHALF IN THE PLAN. THE OFFER IS SCHEDULED TO
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE
OFFER IS EXTENDED.
As more fully described in the Offer to Purchase, tenders will be deemed
irrevocable unless withdrawn by the dates specified therein. If you instruct us
to tender the shares held in your ESOP account, and you subsequently decide to
change your instructions, you may do so by submitting a written notice of change
of instruction to us. THE NOTICE OF CHANGE OF INSTRUCTION WILL BE EFFECTIVE ONLY
IF IT IS RECEIVED BY US, AT OR BEFORE FIVE BUSINESS DAYS BEFORE THE EXPIRATION
OF THE OFFER. THE OFFER IS SCHEDULED TO EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, MARCH 3, 2000. Upon receipt of a timely notice of change of
instruction, your previous instructions to tender the shares will be deemed
canceled. If you later wish to re-tender shares, you may call us and submit a
new Instruction Form. If you have any questions about the offer or any of the
other matters discussed above, please call Georgeson Shareholder Communications,
Inc., the Information Agent, at (800) 223-2064 (toll free) or Credit Suisse
First Boston Corporation, the Dealer Manager, at (800) 646-4543 (toll free).
3
<PAGE>
INSTRUCTIONS FOR TENDER OF SHARES OF DPL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated February 4, 2000 and the related Letter of Transmittal in
connection with the offer by DPL Inc., an Ohio corporation, to purchase up to
25,000,000 common shares, par value $.01 per share, for a purchase price not in
excess of $23.00 nor less than $20.00 per share, net to the seller in cash,
without interest, as specified by shareholders tendering their shares. DPL's
offer is being made upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal which, as amended
or supplemented from time to time, together constitute the offer. All shares
tendered and purchased will include the associated preferred share purchase
rights, and, unless the context otherwise requires, all references to shares
include the associated preferred share purchase rights.
This will instruct you to tender to DPL, on (our) (my) behalf, the number of
shares indicated below (or if no number is indicated below, all shares) which
are beneficially owned by (us) (me) and registered in your name, upon the terms
and subject to the conditions of offer.
IF YOU ARE A PARTICIPANT IN THE DPL INC. EMPLOYEE STOCK OWNERSHIP PLAN, THE
NUMBER OF SHARES ON THE LABEL AFFIXED TO THIS LETTER OF TRANSMITTAL INCLUDES
SHARES HELD BY YOU IN THE PLAN, IF ANY, AT FEBRUARY 2, 2000. ADDITIONAL SHARES
MAY HAVE BEEN CREDITED AFTER THIS DATE. IN ORDER TO TENDER ALL OR PART OF THE
SHARES YOU HOLD IN THE DPL INC. EMPLOYEE STOCK OWNERSHIP PLAN, YOU MUST CHECK
ONE OF THE BOXES BELOW.
- --------------------------------------------------------------------------------
/ / Check here to instruct us to tender on your behalf ALL of the shares
credited to your DPL Inc. Employee Stock Ownership Plan account (including
any shares purchased after February 2, 2000 and credited to such account,
which are not reflected on the Pre-Addressed Label).
/ / Check here to instruct us to tender on your behalf the following number of
shares credited to your DPL Inc. Employee Stock Ownership Plan account:
___________ shares.
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED OR IF
NO BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
A tendering shareholder may condition his or her tender of shares upon DPL
purchasing a specified minimum number of the shares tendered, all as described
in the Offer to Purchase, particularly in Section 6. Unless at least the minimum
number of shares you indicate below is purchased by DPL pursuant to the terms of
the offer, none of the shares tendered by you will be purchased. It is the
tendering shareholder's responsibility to calculate the minimum number of shares
that must be purchased if any are purchased, and each shareholder is urged to
consult his or her own tax advisor. Unless this box has been completed and a
minimum specified, the tender will be deemed unconditional.
/ / Minimum number of shares that must be purchased, if any are purchased:
___________ shares.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER
(See Instruction 5 to the Letter of Transmittal)
By checking ONE of the following boxes below INSTEAD OF THE BOX UNDER SHARES
TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER, the undersigned hereby
tenders shares at the price checked. This action could result in none of the
shares being purchased if the purchase price determined by DPL for the shares is
less than the price checked below. A shareholder who desires to tender shares at
more than one price must complete a separate Letter of Transmittal for each
price at which shares are tendered. The same shares cannot be tendered at more
than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C>
/ / $ 20.000 / / $ 21.125 / / $ 22.125
/ / $ 20.125 / / $ 21.250 / / $ 22.250
/ / $ 20.250 / / $ 21.375 / / $ 22.375
/ / $ 20.375 / / $ 21.500 / / $ 22.500
/ / $ 20.500 / / $ 21.625 / / $ 22.625
/ / $ 20.625 / / $ 21.750 / / $ 22.750
/ / $ 20.750 / / $ 21.875 / / $ 22.875
/ / $ 20.875 / / $ 22.000 / / $ 23.000
/ / $ 21.000
</TABLE>
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS
CHECKED, THERE IS NO VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
(See Instruction 5 to the Letter of Transmittal)
/ / The undersigned wants to maximize the chance of having DPL purchase all
of the shares the undersigned is tendering (subject to the possibility of
proration). Accordingly, by checking THIS ONE BOX INSTEAD OF ONE OF THE PRICE
BOXES ABOVE, the undersigned hereby tenders shares and is willing to accept the
purchase price determined by DPL in accordance with the terms of the offer. This
action could result in receiving a price per share as low as $20.00.
- --------------------------------------------------------------------------------
5
<PAGE>
The method of delivery of this document is at the option and risk of the
tendering participant. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed to assure delivery.
- --------------------------------------------------------------------------------
Name of Participant ____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
PLEASE PRINT
Address(es) ____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
CITY, STATE, ZIP CODE
Daytime Area Code and Tel. No.: ________________________________________________
Taxpayer Identification or Social Security Number: _____________________________
Signature: _____________________________________________________________________
________________________________________________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
DPL INC.
AT
A PURCHASE PRICE NOT IN EXCESS
OF $23.00 NOR LESS THAN $20.00 PER SHARE
- ----------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 4, 2000
To the Participants in The Dayton Power
and Light Company Savings Plans:
Enclosed for your consideration are the Offer to Purchase dated February 4,
2000 and the related Letter of Transmittal in connection with the offer by DPL
Inc., an Ohio corporation, to purchase up to 25,000,000 of its common shares,
par value $.01 per share, at a purchase price not in excess of $23.00 nor less
than $20.00 per share, net to the seller in cash, without interest, as specified
by shareholders tendering their shares. As a participant in The Dayton Power and
Light Company Employee Savings Plan or The Dayton Power and Light Company
Savings Plan for Collective Bargaining Employees (the "Savings Plans"), you may
tender shares that you hold in the Savings Plans. If you wish to do so, you must
direct us to do so on your behalf by following the instructions in this letter.
DPL will determine a single per share price that it will pay for shares
properly tendered, taking into account the number of shares tendered and the
prices specified by tendering shareholders. DPL will pay the same price for all
shares purchased in the offer. DPL will select the lowest purchase price that
will allow it to buy 25,000,000 shares or, if a lesser number of shares are
properly tendered, all shares that are properly tendered. All shares properly
tendered at prices at or below the purchase price and not properly withdrawn
will be purchased, subject to the conditions of the offer and the "odd lot"
priority, proration and conditional tender provisions described in the Offer to
Purchase. Shares tendered at prices in excess of the purchase price that is
determined by DPL and shares not purchased because of proration or conditional
tenders will be returned.
DPL's offer is being made upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal which,
as amended or supplemented from time to time, together constitute the offer. All
shares tendered and purchased will include the associated preferred share
purchase rights issued pursuant to a Shareholder Rights Agreement, dated as of
December 3, 1991, between DPL and The First National Bank of Boston, as rights
agent, and, unless the context otherwise requires, all references to shares
include the associated preferred share purchase rights.
Only shares properly tendered at prices at or below the purchase price and
not properly withdrawn will be purchased. DPL will not purchase all of the
shares tendered at or below the purchase price if the offer is oversubscribed.
The number of shares DPL actually acquires will be determined by taking into
consideration the "odd lot" priority, proration and conditional tender
provisions described in the Offer to Purchase. Shares tendered at prices in
excess of the purchase price and shares not purchased because of proration or
conditional tenders will be returned as promptly as practicable following the
expiration of the offer.
1
<PAGE>
DPL reserves the right, in its sole discretion, to purchase more than
25,000,000 shares pursuant to the offer.
Under the terms of the Savings Plans, the proceeds received by the Savings
Plan trustee from any shares tendered by a Savings Plan participant will be
invested following the tender offer initially in a short-term government
securities fund. After any successfully tendered shares are processed and the
proceeds are credited to a participant's Savings Plan account, participants may
contact the trustee by the normal manner of communication (e.g. voice response
or on-line access) to exchange any proceeds held in the short-term government
securities fund for any other investment option available under the terms of the
Savings Plan.
A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES IN YOUR SAVINGS
PLAN ACCOUNT. ACCORDINGLY, WE REQUEST INSTRUCTIONS AS TO WHETHER YOU WISH TO
TENDER ANY OR ALL OF THE SHARES HELD IN YOUR SAVINGS PLAN ACCOUNT, UPON THE
TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.
If you do not wish to direct the sale of any portion of the shares in your
Savings Plan account, you do not need to take any action.
Please note the following:
1. Shares held in your Savings Plan account may be tendered at prices not
in excess of $23.00 nor less than $20.00 per share, as indicated in the attached
Instruction Form.
2. The offer is not conditioned on any minimum number of shares being
tendered. However, the offer is subject to other conditions described in the
Offer to Purchase.
3. If we have not received your instructions at least five business days
before the expiration of the offer, we will not tender any shares held in your
Savings Plan account. The offer is scheduled to expire at 5:00 p.m., New York
City time, on Friday, March 3, 2000, unless the offer is extended.
4. The offer, proration period and withdrawal rights will also expire at
5:00 p.m., New York City time, on Friday, March 3, 2000, unless the offer is
extended.
5. The offer is for up to 25,000,000 shares, constituting approximately
15.8% of the shares outstanding as of February 3, 2000.
6. DPL's Board of Directors has authorized the making of the offer.
However, neither DPL nor DPL's Board of Directors makes any recommendation to
you as to whether to tender or refrain from tendering your shares or as to the
purchase price at which you may choose to tender your shares. You must make your
own decision as to whether to tender your shares and, if so, how many shares to
tender and the price or prices at which you will tender them.
7. Tendering shareholders will not be obligated to pay any brokerage fees
or commissions or solicitation fees to the Dealer Manager, Depositary,
Information Agent or DPL or, except as described in the Letter of Transmittal,
stock transfer taxes on the transfer of shares pursuant to the offer.
8. The Savings Plans are prohibited from selling shares to DPL for a price
that is less than the prevailing market price. Accordingly, if you elect to
tender shares at a price that is lower than the prevailing price of DPL's common
shares on the New York Stock Exchange at the expiration of the offer, the tender
price you elect will be deemed to have been increased to the closest tender
price that is not less than that closing price.
If you wish to direct the tender of any or all of the shares held in your
Savings Plan account, please instruct us by completing, executing and detaching
and returning the attached Instruction Form. An envelope to return your
Instruction Form is enclosed. If you authorize us to tender your shares, all
your shares will be tendered unless otherwise indicated on the attached
Instruction Form.
2
<PAGE>
The offer is being made solely pursuant to the Offer to Purchase and the
related Letter of Transmittal and is being made to all record holders of DPL
common shares. The offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of DPL common shares residing in any jurisdiction in
which the making of the offer or acceptance thereof would not be in compliance
with the securities laws of that jurisdiction.
Please forward your Instruction Form to us as soon as possible to allow
ample time to tender your shares on your behalf prior to the expiration of the
offer. IF WE HAVE NOT RECEIVED YOUR INSTRUCTIONS AT LEAST FIVE BUSINESS DAYS
BEFORE THE EXPIRATION OF THE OFFER, UNLESS THE OFFER IS EXTENDED, WE WILL NOT
TENDER ANY SHARES HELD ON YOUR BEHALF IN THE PLAN. THE OFFER IS SCHEDULED TO
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE
OFFER IS EXTENDED.
As more fully described in the Offer to Purchase, tenders will be deemed
irrevocable unless withdrawn by the dates specified therein. If you instruct us
to tender the shares held in your Savings Plan account, and you subsequently
decide to change your instructions, you may do so by submitting a written notice
of change of instruction to us. THE NOTICE OF CHANGE OF INSTRUCTION WILL BE
EFFECTIVE ONLY IF IT IS RECEIVED BY US, AT OR BEFORE FIVE BUSINESS DAYS BEFORE
THE EXPIRATION OF THE OFFER. THE OFFER IS SCHEDULED TO EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, MARCH 3, 2000. Upon receipt of a timely notice of
change of instruction, your previous instructions to tender the shares will be
deemed canceled. If you later wish to re-tender shares, you may call us and
submit a new Instruction Form. If you have any questions about the offer or any
of the other matters discussed above, please call Georgeson Shareholder
Communications, Inc., the Information Agent, at (800) 223-2064 (toll free) or
Credit Suisse First Boston Corporation, the Dealer Manager, at (800) 646-4543
(toll free).
3
<PAGE>
INSTRUCTIONS FOR TENDER OF SHARES OF DPL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated February 4, 2000 and the related Letter of Transmittal in
connection with the offer by DPL Inc., an Ohio corporation, to purchase up to
25,000,000 common shares, par value $.01 per share, for a purchase price not in
excess of $23.00 nor less than $20.00 per share, net to the seller in cash,
without interest, as specified by shareholders tendering their shares. DPL's
offer is being made upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal which, as amended
or supplemented from time to time, together constitute the offer. All shares
tendered and purchased will include the associated preferred share purchase
rights, and, unless the context otherwise requires, all references to shares
include the associated preferred share purchase rights.
This will instruct you to tender to DPL, on (our) (my) behalf, the number of
shares indicated below (or if no number is indicated below, all shares) which
are beneficially owned by (us) (me) and registered in your name, upon the terms
and subject to the conditions of offer.
IF YOU ARE A PARTICIPANT IN ONE OF THE DPL SAVINGS PLANS, THE NUMBER OF
SHARES ON THE LABEL AFFIXED TO THIS LETTER OF TRANSMITTAL INCLUDES SHARES HELD
BY YOU IN THE PLAN, IF ANY, AT FEBRUARY 2, 2000. ADDITIONAL SHARES MAY HAVE BEEN
CREDITED AFTER THIS DATE. IN ORDER TO TENDER ALL OR PART OF THE SHARES YOU HOLD
IN THE DPL SAVINGS PLANS, YOU MUST CHECK ONE OF THE BOXES BELOW.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
/ / Check here to instruct us to tender on your behalf ALL of
the shares credited to your DPL Savings Plan account
(including any shares purchased after February 2, 2000 and
credited to such account, which are not reflected on the
Pre-Addressed Label).
/ / Check here to instruct us to tender on your behalf the
following number of shares credited to your DPL Savings Plan
account: shares.
</TABLE>
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED OR IF
NO BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
A tendering shareholder may condition his or her tender of shares upon
DPL purchasing a specified minimum number of the shares tendered, all as
described in the Offer to Purchase, particularly in Section 6. Unless at
least the minimum number of shares you indicate below is purchased by DPL
pursuant to the terms of the offer, none of the shares tendered by you will
be purchased. It is the tendering shareholder's responsibility to calculate
the minimum number of shares that must be purchased if any are purchased,
and each shareholder is urged to consult his or her own tax advisor. Unless
this box has been completed and a minimum specified, the tender will be
deemed unconditional.
/ / Minimum number of shares that must be purchased, if any are purchased:
______ shares.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED BY SHAREHOLDER
(See Instruction 5 to the Letter of Transmittal)
By checking ONE of the following boxes below INSTEAD OF THE BOX UNDER
"SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER," the undersigned
hereby tenders shares at the price checked. This action could result in none
of the shares being purchased if the purchase price determined by DPL for the
shares is less than the price checked below. A shareholder who desires to
tender shares at more than one price must complete a separate Letter of
Transmittal for each price at which shares are tendered. The same shares
cannot be tendered at more than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
<TABLE>
<S> <C> <C>
/ / $ 20.000 / / $ 21.125 / / $ 22.125
/ / $ 20.125 / / $ 21.250 / / $ 22.250
/ / $ 20.250 / / $ 21.375 / / $ 22.375
/ / $ 20.375 / / $ 21.500 / / $ 22.500
/ / $ 20.500 / / $ 21.625 / / $ 22.625
/ / $ 20.625 / / $ 21.750 / / $ 22.750
/ / $ 20.750 / / $ 21.875 / / $ 22.875
/ / $ 20.875 / / $ 22.000 / / $ 23.000
/ / $ 21.000
</TABLE>
CHECK ONLY ONE BOX ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, THERE IS NO
VALID TENDER OF SHARES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER
(See Instruction 5 to the Letter of Transmittal)
/ / The undersigned wants to maximize the chance of having DPL purchase
all of the shares the undersigned is tendering (subject to the possibility of
proration). Accordingly, by checking THIS ONE BOX INSTEAD OF ONE OF THE PRICE
BOXES ABOVE, the undersigned hereby tenders shares and is willing to accept
the purchase price determined by DPL in accordance with the terms of the
offer. This action could result in receiving a price per share as low as
$20.00.
- --------------------------------------------------------------------------------
5
<PAGE>
The method of delivery of this document is at the option and risk of the
tendering participant. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed to assure delivery.
- --------------------------------------------------------------------------------
Name of Participant ________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
PLEASE PRINT
Address(es) ________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
CITY, STATE, ZIP CODE
Daytime Area Code and Tel. No.: ____________________________________________
Taxpayer Identification or Social Security Number: _________________________
Signature: _________________________________________________________________
____________________________________________________________________________
- --------------------------------------------------------------------------------
6
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payor.
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF --
- ------------------------------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, the first individual on the account(1)
3. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
4a. The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
b. So-called trust account that is not a legal or The actual owner(1)
valid trust under State Law
5. Sole proprietorship account The owner(3)
- ------------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------------------------------------------------
6. A valid trust, estate, or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the legal
entity itself is not designated in the account
title)(4)
7. Corporate account The corporation
8. Association, club, religious, charitable, The organization
educational or other tax-exempt organization
9. Partnership account The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State or
local government, school district or prison)
that receives agricultural program payments
</TABLE>
- ------------------------------------------------
- ------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the valid trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER (TIN) ON SUBSTITUTE FORM W-9
(SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE)
Page 2
NAME
If you are an individual, generally provide the name shown on your social
security card. However, if you have changed your last name, for instance, due to
marriage, without informing the Social Security Administration of the name
change, please enter your first name and both the last name shown on your social
security card and your new last name.
OBTAINING A NUMBER
If you don't have a taxpayer identification number ("TIN"), apply for one
immediately. To apply, obtain Form SS-5, Application for a Social Security
Number Card, or Form SS-4, Application for Employer Identification Number, at
the local office of the Social Security Administration or the Internal Revenue
Service (the "IRS").
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for
which no information reporting is required. For interest and dividends, all
listed payees are exempt except item (9). For broker transactions, payees listed
in (1) through (13), and a person registered under the Investment Advisors Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under section 403(b)(7).
(3) The United States or any agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc. Nominee List.
(15) An trust exempt from tax under Section 664 or described in section 4947.
Payments of dividends generally not subject to backup withholding also
include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments made by certain foreign organizations.
Payments of interest generally not subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: YOU MAY BE SUBJECT TO BACKUP WITHHOLDING IF THIS INTEREST IS $600 OR
MORE AND IS PAID IN THE COURSE OF THE PAYOR'S TRADE OR BUSINESS AND YOU HAVE NOT
PROVIDED YOUR CORRECT TIN TO THE PAYOR.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N, and the regulations under those sections.
PRIVACY ACT NOTICE. -- Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, or contributions you made to an
IRA. The IRS uses the numbers for identification purposes and to help verify the
accuracy of your tax return. You must provide your TIN whether or not you are
qualified to file a tax return. Payors must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
TIN to a payor. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TIN. -- If you fail to furnish your correct TIN to a
payor, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION
CONTACT YOUR TAX CONSULTANT OR THE IRS
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares. The offer is made solely by the Offer to Purchase dated February
4, 2000 and the related Letter of Transmittal, and any amendments or supplements
to the Offer to Purchase or Letter of Transmittal, which are being mailed to all
holders of shares. Capitalized terms not defined in this announcement have the
meanings ascribed to such terms in the Offer to Purchase. DPL is not aware of
any jurisdiction where the making of the offer or its acceptance would not be in
compliance with the laws of such jurisdiction. If DPL becomes aware of any
jurisdiction where the making of the offer or the acceptance of shares in the
offer is not in compliance with the laws of such jurisdiction, DPL will make a
good faith effort to comply with the applicable law. If, after a good faith
effort, DPL cannot comply with the applicable law, the offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of shares in
that jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the offer to be made by a licensed broker or dealer, the offer will
be deemed to be made on behalf of DPL by Credit Suisse First Boston Corporation
("Credit Suisse First Boston"), the Dealer Manager of this offer, or one or more
registered brokers or dealers licensed under the laws of that jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
DPL INC.
UP TO 25,000,000 COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
AT A PURCHASE PRICE NOT IN EXCESS OF
$23.00 NOR LESS THAN $20.00 PER SHARE IN CASH
DPL Inc., an Ohio corporation, invites its shareholders to tender DPL
common shares, par value $0.01 per share, for purchase by DPL. DPL is offering
to purchase up to 25,000,000 shares at a price not in excess of $23.00 nor less
than $20.00 per share, net to the seller in cash, without interest thereon, as
specified by shareholders tendering their shares. DPL's offer is being made upon
the terms and subject to the conditions described in the Offer to Purchase dated
February 4, 2000 and in the related Letter of Transmittal which, as amended or
supplemented from time to time, together constitute the offer. All shares
tendered and purchased will include the associated preferred share purchase
rights issued pursuant to a Shareholder Rights Agreement, dated as of December
3, 1991, between DPL and The First National Bank of Boston, as rights agent,
and, unless the context otherwise requires, all references to shares include the
associated preferred share purchase rights.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON FRIDAY, MARCH 3, 2000, UNLESS THE OFFER IS EXTENDED.
<PAGE>
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. HOWEVER, THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS DESCRIBED IN
THE OFFER TO PURCHASE, INCLUDNG DPL HAVING OBTAINED SUFFICIENT FINANCING FOR THE
OFFER.
DPL'S BOARD OF DIRECTORS HAS AUTHORIZED THE OFFER. HOWEVER, NEITHER DPL NOR
DPL'S BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER
TO TENDER OR REFRAIN FROM TENDERING SHARES OR AS TO THE PURCHASE PRICE AT WHICH
SHAREHOLDERS MAY CHOOSE TO TENDER THEIR SHARES. SHAREHOLDERS MUST MAKE THEIR OWN
DECISION AS TO WHETHER TO TENDER THEIR SHARES AND, IF SO, HOW MANY SHARES TO
TENDER AND THE PRICE OR PRICES AT WHICH THEY WILL TENDER THEM. IN DOING SO,
SHAREHOLDERS SHOULD CONSIDER DPL'S REASONS FOR MAKING THE OFFER, INCLUDING DPL'S
INCREASED USE OF FINANCIAL LEVERAGE AND DPL'S INCREASED BUSINESS EMPHASIS ON
PROVIDING UNREGULATED ENERGY SERVICES. DPL'S DIRECTORS AND EXECUTIVE OFFICERS
HAVE ADVISED DPL THAT THEY WILL NOT TENDER ANY SHARES IN THE OFFER.
DPL will determine a single per share price that it will pay for all shares
that it purchases in the offer, taking into account the number of shares
tendered and the prices specified by tendering shareholders. DPL will select the
lowest purchase price that will allow it to purchase 25,000,000 shares or, if a
lesser number of shares are properly tendered, all shares that are properly
tendered. Only shares properly tendered at prices at or below the purchase price
and not properly withdrawn will be purchased. However, because of the "odd lot"
priority, proration and conditional tender provisions described in the Offer to
Purchase, all of the shares tendered at or below the purchase price will not be
purchased if the offer is oversubscribed. Under no circumstances will DPL pay
interest on the purchase price, including but not limited to, by reason of any
delay in making payment.
The term "Expiration Date" means 5:00 p.m., New York City time, on Friday,
March 3, 2000. DPL may, in its sole discretion, extend the period of time during
which the offer will remain open. In the event of an extension, the term
"Expiration Date" will mean the latest time and date at which the offer, as
extended by DPL, will expire. DPL reserves the right, in its sole discretion, to
purchase more than 25,000,000 shares pursuant to the offer. For purposes of the
offer, DPL will be deemed to have accepted for payment, and therefore purchased,
subject to the "odd lot" priority, proration and conditional tender provisions
of the offer, shares properly tendered at or below the selected purchase price
and not properly withdrawn only when, as and if DPL gives oral or written notice
to EquiServe, the Depositary for the offer, of its acceptance of shares for
payment pursuant to the offer. Payment for shares tendered and accepted for
payment pursuant to the offer will be made only after timely receipt by the
Depositary of certificates for the shares, or a timely confirmation of a
book-entry transfer of the shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase), a properly
completed and duly executed Letter of Transmittal, or a manually signed
facsimile of the Letter of Transmittal, or an Agent's Message (as defined in the
Offer to Purchase) in the case of a book-entry transfer, and any other required
documents.
Upon the terms and subject to the conditions of the offer, if at the
expiration of the offer more than 25,000,000 shares, or a greater number of
shares as DPL may elect to purchase, have been validly tendered at prices at or
below the purchase price and not properly withdrawn, DPL will purchase shares
validly tendered and not properly withdrawn on the following basis:
(a) First, DPL will purchase all shares tendered and not properly withdrawn
prior to the Expiration Date by any Odd Lot Holder (as defined in the Offer to
Purchase) who:
(1) tenders all shares owned beneficially or of record by the Odd Lot
Holder at a price at or below the purchase price (tenders of less than all of
the shares owned by the Odd Lot Holder will not qualify for this preference);
and
(2) completes the sections entitled "Odd Lots" in the Letter of
Transmittal and, if applicable, in the Notice of Guaranteed Delivery; and
(b) Second, after the purchase of all of the shares properly tendered by
Odd Lot Holders, subject to the conditional tender provisions described in
Section 6 of the Offer to Purchase, DPL will purchase all other shares
properly tendered at prices at or below the purchase price and not properly
withdrawn before the Expiration Date, on a pro rata basis, with appropriate
adjustments to avoid purchases of fractional shares as described in the Offer
to Purchase.
DPL expressly reserves the right, in its sole discretion, at any time and
from time to time, and regardless of whether or not any of the events described
in Section 7 of the Offer to Purchase have occurred or are deemed by DPL to have
occurred, to extend the period of time during which the offer is open and delay
acceptance for payment of, and payment for, any shares by giving oral or written
notice of the extension to the Depositary and making a public announcement of
the extension. During any extension, all shares previously tendered and not
properly withdrawn will remain subject to the offer and to the rights of a
tendering shareholder to withdraw the shareholder's shares.
DPL also expressly reserves the right, in its sole discretion, to terminate
the offer and reject for payment and not pay for any shares not theretofore
accepted for payment or paid for or, subject to applicable law, to postpone
payment for shares upon the occurrence of any of the conditions specified in
Section 7 of the Offer to Purchase by giving oral or written notice of the
termination or postponement to the Depositary and making a public announcement
of the termination or postponement.
<PAGE>
Tenders of shares may be withdrawn at any time before the Expiration Date
and, unless previously accepted for payment by DPL pursuant to the offer, may
also be withdrawn at any time after 12:00 Midnight, New York City time, on
Wednesday, March 22, 2000. For the withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be received in a
timely manner by the Depositary at one of its addresses described on the back
cover of the Offer to Purchase. Any notice of withdrawal must specify the name
of the tendering shareholder, the number of shares to be withdrawn and the name
of the registered holder of the shares. If the certificates for shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
before the release of the certificates, the serial numbers shown on the
certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution (as defined
in the Offer to Purchase), unless the shares have been tendered for the account
of an Eligible Institution. If shares have been tendered pursuant to the
procedure for book-entry transfer described in the Offer to Purchase, any notice
of withdrawal also must specify the name and the number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn shares and must
otherwise comply with the Book-Entry Transfer Facility's procedures. All
questions as to the form and validity, including the time of receipt, of any
notice of withdrawal will be determined by DPL, in its sole discretion, which
determination will be final and binding on all parties. None of DPL, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notice of any defects or irregularities in any tender
or notice of withdrawal, nor will any of them incur liability for failure to
give any notice.
The information required to be disclosed by Rule 13e-4(d)(1) promulgated
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal are being
mailed to record holders of shares whose names appear on DPL's shareholder list
and will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. SHAREHOLDERS SHOULD READ THEM CAREFULLY BEFORE DECIDING
WHETHER TO ACCEPT OR REJECT THE OFFER AND, IF ACCEPTED, AT WHICH PRICE OR PRICES
TO TENDER THEIR SHARES.
Questions and requests for assistance may be directed to, and shareholders
may request additional copies of the Offer to Purchase, the Letter of
Transmittal or the Notice of Guaranteed Delivery from, the Information Agent or
the Dealer Manager at their addresses and telephone numbers below.
The Information Agent for the Offer is:
[GEORGESON--LOGO]
17 State Street, 10th Floor
New York, NY 10004
Banks and Brokers Call Collect (212) 440-9800
All Others Call Toll Free (800) 223-2064
The Dealer Manager for the Offer is:
[CREDIT SUISSE/FIRST BOSTON--LOGO]
Eleven Madison Avenue
New York, NY 10010-3629
Call Toll Free (800) 646-4543
February 4, 2000
<PAGE>
===============================================================================
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
DPL INC.,
DPL CAPITAL TRUST I
DAYTON VENTURES LLC
AND
DAYTON VENTURES, INC.
DATED AS OF FEBRUARY 1, 2000
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I AGREEMENT TO SELL AND PURCHASE VOTING PREFERRED
STOCK AND WARRANTS............................................................2
SECTION 1.1 Authorization......................................................2
SECTION 1.2 Sale and Purchase..................................................2
ARTICLE II AGREEMENT TO SELL AND PURCHASE TRUST
PREFERRED SECURITIES..........................................................2
SECTION 2.1 Authorization......................................................2
SECTION 2.2 Sale and Purchase..................................................2
ARTICLE III CLOSING, DELIVERY AND PAYMENT.................................................3
SECTION 3.1 Closing............................................................3
SECTION 3.2 Closing Deliveries for Voting Preferred
Shares and Warrants................................................3
SECTION 3.4 Adjustments........................................................4
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................4
SECTION 4.1 Organization, Good Standing and
Qualification of the Company.......................................4
SECTION 4.2 Organization, Good Standing and
Qualification of the Trust.........................................5
SECTION 4.3 Subsidiaries.......................................................6
SECTION 4.4 Capitalization; Voting Rights......................................6
SECTION 4.5 Authorization and Sale of Securities...............................8
SECTION 4.6 Authorization; Binding Obligations of
the Company........................................................8
SECTION 4.7 Authorization; Binding Obligations of
the Trust..........................................................9
SECTION 4.9 Agreements........................................................10
SECTION 4.10 Absence of Certain Changes........................................10
SECTION 4.11 Title to Properties and Assets; Liens;
Condition.........................................................10
SECTION 4.12 Compliance with Law; Other Instruments............................11
SECTION 4.13 Litigation........................................................13
SECTION 4.14 Tax Matters.......................................................13
SECTION 4.15 Environmental and Safety Laws.....................................13
SECTION 4.16 Offering Valid for Voting Preferred
Shares and Warrants...............................................14
SECTION 4.17 Offering Valid for Trust Preferred
Securities. ........................................14
SECTION 4.18 Employee Benefit Plans............................................15
SECTION 4.19 No Broker.........................................................15
SECTION 4.20 Disclosure........................................................15
SECTION 4.21 Regulation as a Utility...........................................16
SECTION 4.22 Rights Agreement..................................................16
SECTION 4.23 Financial Assets..................................................16
SECTION 4.24 Investment Company and Investment
Adviser...........................................................17
SECTION 4.25 Limitation on Liability...........................................17
i
<PAGE>
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE EQUITY
PURCHASER..................................................................17
SECTION 5.1 Requisite Power and Authority.....................................17
SECTION 5.2 Investment Representations........................................18
SECTION 5.3 Litigation........................................................18
SECTION 5.4 No Broker.........................................................18
SECTION 5.5 Regulation under PUHCA............................................18
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE TRUST
PREFERRED PURCHASER........................................................18
SECTION 6.1 Requisite Power and Authority.....................................19
SECTION 6.2 Investment Representations........................................19
SECTION 6.3 Litigation........................................................19
SECTION 6.4 No Broker.........................................................19
SECTION 6.5 Regulation under PUHCA............................................19
ARTICLE VII COVENANTS..................................................................20
SECTION 7.1 Ordinary Course of Business.......................................20
SECTION 7.2 Access............................................................21
SECTION 7.3 Use of Proceeds...................................................22
SECTION 7.4 Efforts...........................................................22
SECTION 7.5 Notification of Certain Matters...................................22
SECTION 7.6 Reservation of Shares.............................................22
SECTION 7.7 Regulatory and Other Authorizations;
Notices and Consents..............................................23
SECTION 7.8 Transaction Fee...................................................23
SECTION 7.9 Appointment of Directors..........................................23
SECTION 7.10 Confidentiality...................................................24
SECTION 7.11 Concurrent Transaction............................................24
SECTION 7.12 Public Announcements..............................................24
ARTICLE VIII CONDITIONS TO CLOSING......................................................25
SECTION 8.1 Conditions to the Obligations of the
Purchasers........................................................25
SECTION 8.2 Conditions to Obligations of the Company
and Trust.........................................................27
ARTICLE IX INDEMNIFICATION............................................................28
SECTION 9.1 Survival of Representations and
Warranties........................................................28
SECTION 9.2 Indemnification...................................................29
SECTION 9.3 Indemnification Amounts...........................................30
SECTION 9.4 Remedies Exclusive................................................30
SECTION 9.5 Certain Limitations...............................................30
ARTICLE X MISCELLANEOUS..............................................................31
SECTION 10.1 Other Definitions.................................................31
SECTION 10.2 Governing Law; Jurisdiction; Waiver of
Jury Trial........................................................32
SECTION 10.3 Successors and Assigns; Assignment................................32
ii
<PAGE>
SECTION 10.4 Entire Agreement..................................................32
SECTION 10.5 Severability......................................................32
SECTION 10.6 Amendment and Waiver..............................................32
SECTION 10.7 Delays or Omissions...............................................32
SECTION 10.8 Notices...........................................................33
SECTION 10.9 Expenses..........................................................34
SECTION 10.10 Titles and Subtitles..............................................34
SECTION 10.11 Termination.......................................................34
SECTION 10.12 No Recourse.......................................................34
SECTION 10.13 Counterparts; Execution by Facsimile
Signature.........................................................35
Exhibits
Exhibit A -- Form of Certificate of Amendment of the Articles
Exhibit B -- Form of Warrant
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Junior Subordinated Debenture
Exhibit E -- Form of Indenture
Exhibit F -- Form of Amended and Restated Trust Agreement
Exhibit G -- Form of Securityholders and Registration Rights Agreement
Exhibit H -- Form of Advisory Agreement
Exhibit I -- Legal Opinion Subjects
</TABLE>
iii
<PAGE>
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT") is
entered into as of February 1, 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
company, 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, subject to the terms and conditions set forth in this
Agreement, the Company has agreed to sell to the Equity Purchaser and the Equity
Purchaser has agreed to purchase from the Company (i) up to 6,800,000 of its
Series B Preferred Shares, no par value, liquidation preference of $0.01 per
share (the "VOTING PREFERRED STOCK"), having the rights, preferences, privileges
and restrictions set forth in the Certificate of Amendment in the form attached
hereto as Exhibit A (the "CERTIFICATE OF AMENDMENT") and (ii) 31,600,000
warrants to purchase 31,600,000 of its common shares, par value $0.01 per share
(the "COMMON STOCK"), at an exercise price of $21.00 per share, as provided
herein and in the form of warrant attached hereto as Exhibit B (the "WARRANTS");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, 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 amount 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 (the "GUARANTEE") to be substantially in the form attached hereto as
Exhibit C 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) (the "TRUST COMMON
SECURITIES") by the Trust are to be invested in Junior Subordinated Debentures
(the "SUBORDINATED DEBENTURES") of the Company to be in substantially the form
attached hereto as Exhibit D, to be issued pursuant to an Indenture (the
"INDENTURE") to be in substantially the form attached hereto as Exhibit E to be
entered into between the Company and The Bank of New York, as trustee; and
WHEREAS, the parties hereto are entering into this Agreement
to provide for the purchase and sale of the Voting Preferred Stock, the Warrants
and the Trust Preferred Securities.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual promises hereinafter set forth, the parties hereto agree as follows:
<PAGE>
2
ARTICLE I
AGREEMENT TO SELL AND PURCHASE VOTING PREFERRED STOCK AND
WARRANTS
SECTION 1.1 AUTHORIZATION. The Company has authorized (i) the
sale and issuance to the Equity Purchaser of up to 6,800,000 shares of Voting
Preferred Stock, (ii) the sale and issuance to the Equity Purchaser of
31,600,000 Warrants and (iii) the issuance of 31,600,000 shares of Common Stock
to be issued upon exercise of the Warrants (the "WARRANT SHARES" and, together
with the Voting Preferred Shares and the Warrants, the "SECURITIES"). The
Warrant Shares shall have the rights, preferences, privileges and restrictions
set forth in the Amended Articles of Incorporation of the Company, as amended
through the date hereof (the "ARTICLES").
SECTION 1.2 SALE AND PURCHASE. Subject to the terms and
conditions hereof, the Company hereby agrees to issue and sell to the Equity
Purchaser, and the Equity Purchaser agrees to purchase from the Company, at the
Closing (as defined below), (i) 6,800,000 shares of Voting Preferred Stock or
such lesser number of shares of Voting Preferred Stock as shall equal 4.9% of
the Company's total voting rights at the time of the Closing (the "VOTING
PREFERRED SHARES") for a purchase price of $0.01 per share (the "VOTING
PREFERRED PURCHASE PRICE") and (ii) the Warrants for an aggregate purchase price
of $50 million (the "WARRANTS PURCHASE PRICE" and, together with the Voting
Preferred Purchase Price, the "EQUITY PURCHASE PRICE").
ARTICLE II
AGREEMENT TO SELL AND PURCHASE TRUST PREFERRED SECURITIES
SECTION 2.1 AUTHORIZATION. The Company and the Trust have
authorized the sale and issuance to the Trust Preferred Purchaser of the Trust
Preferred Securities.
SECTION 2.2 SALE AND PURCHASE. Subject to the terms and
conditions hereof, the Company hereby agrees to cause the Trust, and the Trust
hereby agrees, to issue and sell to the Trust Preferred Purchaser, and the
Trust Preferred Purchaser agrees to purchase from the Trust, at the Closing,
the Trust Preferred Securities for an aggregate purchase price of $500 million
(the "TRUST PREFERRED PURCHASE PRICE").
<PAGE>
3
ARTICLE III
CLOSING, DELIVERY AND PAYMENT
SECTION 3.1 CLOSING. The closing of (i) the sale and purchase
of the Voting Preferred Shares and the Warrants under this Agreement and (ii)
the sale and purchase of the Trust Preferred Securities under this Agreement
(the "CLOSING") shall take place on the second business day after the
satisfaction or waiver of the conditions set forth in Article VIII, at the
offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York
10017, or at such other time or place as the Company and the Purchasers may
mutually agree (such date, the "CLOSING DATE").
SECTION 3.2 CLOSING DELIVERIES FOR VOTING PREFERRED
SHARES AND WARRANTS. (a) At the Closing, subject to the terms
and conditions hereof, the Company will deliver to the Equity
Purchaser:
(i) stock certificates evidencing the Voting Preferred Shares,
free and clear of any Encumbrances (as defined below) (other than those
created by the Purchasers or under the Transaction Agreements),
registered in the name of the Equity Purchaser or one or more of its
nominees, in form satisfactory to the Equity Purchaser;
(ii) the Warrants, duly executed and free and clear of any
Encumbrances (other than those created by the Purchasers or under the
Transaction Agreements (as defined below));
(iii) a receipt for the Equity Purchase Price; and
(iv) the certificates and other documents required to be
delivered pursuant to Section 8.1.
(b) At the Closing, subject to the terms and conditions
hereof, the Equity Purchaser shall deliver to the Company:
(i) the Equity Purchase Price by wire transfer of immediately
available funds to an account designated by the Company at least two
business days prior to the Closing Date;
(ii) a receipt for the Voting Preferred Shares and the
Warrants; and
(iii) the certificates and other documents required to be
delivered pursuant to Section 8.2.
SECTION 3.3 Closing Deliveries for Trust Preferred
Securities.(a) At the Closing; subject to the terms and conditions
hereof, the Trust will deliver to the Trust Preferred Purchaser:
<PAGE>
4
(i) certificates evidencing the Trust Preferred Securities,
free and clear of any Encumbrances (other than those created by the
Purchasers or under the Transaction Agreements), registered in the name
of the Trust Preferred Purchaser or one or more of its nominees, in
form satisfactory to the Trust Preferred Purchaser; and
(ii) a receipt for the Trust Preferred Purchase Price; and
(iii) the certificates and other documents required to be
delivered pursuant to Section 8.1.
(b) At the Closing, subject to the terms and conditions
hereof, the Trust Preferred Purchaser shall deliver to the Trust:
(i) the Trust Preferred Purchase Price by wire transfer of
immediately available funds to an account designated by the Trust at
least two business days prior to the Closing Date; and
(ii) a receipt for the Trust Preferred Securities.
(iii) the certificates and other documents required to be
delivered pursuant to Section 8.2.
SECTION 3.4 ADJUSTMENTS. To the extent not reflected in the
adjustment provisions in the Warrants, the exercise price of the Warrants and
the number of Warrant Shares into which the Warrants are exercisable shall be
adjusted to reflect any stock splits, cash (other than ordinary quarterly cash
dividends) or noncash dividends (including any dividend or other distribution
of the capital stock of any Subsidiary (as defined in Section 10.1) of the
Company to the shareholders of the Company), recapitalizations, mergers,
combinations, distributions, issuances, reclassifications, exchanges,
substitutions or other similar adjustments with respect to the capital stock of
the Company, or sales of shares of Common Stock below fair market value of such
capital stock, which occur after the date hereto, in each case consistent with
the adjustment provisions relating to the Warrants as set forth in the form of
Warrant attached hereto as Exhibit B.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and Trust, jointly and severally, hereby represent
and warrant to the Purchasers as follows:
SECTION 4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION OF
THE COMPANY. The Company and each of DP&L (as defined below), Miami Valley
Insurance Company, a Vermont corporation ("MIAMI VALLEY"), MVE, Inc., an Ohio
corporation ("MVE"), and any Significant Subsidiary (as defined in Rule 405
under the Securities Act of 1933, as amended (the "SECURITIES
<PAGE>
5
ACT")) of the Company (collectively, the "MATERIAL SUBSIDIARIES") is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
as the case may be, and has all requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its business as
currently conducted. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, the Warrants, the Guarantee,
the Subordinated Debentures, the Indenture, the Amended and Restated Trust
Agreement to be substantially in the form of Exhibit F attached hereto (the
"Trust Agreement"), the Securityholders and Registration Rights Agreement in
the form of Exhibit G attached hereto (the "SECURITYHOLDERS AGREEMENT") and the
advisory agreement in the form of Exhibit H attached hereto (collectively, the
"TRANSACTION AGREEMENTS"), to consummate the transactions contemplated hereby
and thereby and to perform its obligations hereunder and thereunder. The
Company and each of the Material Subsidiaries is duly qualified and is
authorized to do business and is in good standing as a foreign corporation or
other entity in all jurisdictions in which the character or location of its
activities and of the properties owned or operated by it makes such
qualification necessary, except for any such failures to be so qualified,
authorized or in good standing, individually or in the aggregate, as would not
reasonably be expected to have a Material Adverse Effect (as defined below).
The Company has delivered to the Purchasers complete and correct copies of its
Articles and Regulations (the "REGULATIONS") and the articles of incorporation
and regulations (or other equivalent organizational documents) of each of the
Material Subsidiaries, in each case as amended to the date of this Agreement.
For purposes of this Agreement, "MATERIAL ADVERSE EFFECT"
shall mean a material adverse effect on the business, operations, properties,
assets, liabilities, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, or on the ability of the
Company to perform its obligations under this Agreement and the other
Transaction Agreements and to consummate the transactions contemplated hereby
and thereby other than any effect resulting from (i) changes in the electricity
or gas markets generally, (ii) the public announcement of this Agreement and
the transactions contemplated hereby and (iii) changes in economic conditions
or securities markets generally.
SECTION 4.2 ORGANIZATION, GOOD STANDING AND QUALIFICATION OF
THE TRUST. The Trust has been duly created and is validly existing as a
business trust in good standing under the laws of the State of Delaware, with
power and authority to own, lease and operate its properties and conduct its
business, and the Trust has conducted no business to date other than as
contemplated by this Agreement, and it will conduct no business in the future
that would be inconsistent with the Trust Agreement and the transactions
contemplated by the Transaction Agreements; the Trust is not a party to or
bound by any agreement or instrument other than this Agreement and the Original
Trust Agreement (as defined in the Trust Agreement); as of the Closing, the
Trust will not be a party to or bound by any agreement or instrument other than
this Agreement and the Trust Agreement and the agreements and instruments
contemplated by the Trust Agreement and this Agreement; the Trust has no
material liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement, the Original Trust Agreement and
the Trust Agreement; based on expected operations and current law, the Trust is
not and will not be classified as an association taxable as a corporation for
United States federal income tax purposes; and the Trust is not a party to or
subject to any action, suit or proceeding of any nature. The Trust has all
requisite power and authority to
<PAGE>
6
execute and deliver this Agreement and the other Transaction Agreements to
which it is a party, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. The Trust has
provided to the Purchasers a complete and correct copy of its organizational
documents.
SECTION 4.3 SUBSIDIARIES. (a) The only direct or indirect
Subsidiaries of the Company are those listed on Schedule 4.3(a). All the
outstanding shares of capital stock of each Material Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable and (other
than the DP&L Preferred Stock (as defined in Section 4.4(b))) are owned (of
record and beneficially) by the Company, by another Subsidiary (wholly owned)
of the Company or by the Company and another such Subsidiary (wholly owned), in
each case as identified on Schedule 4.3(a), free and clear of all Encumbrances.
For purposes of this Agreement, "ENCUMBRANCE" means any security interest,
pledge, mortgage, lien (statutory or other), charge, option to purchase, lease,
claim, restriction, covenant, title defect, hypothecation, assignment, deposit
arrangement or other encumbrance of any kind or any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement).
(b) Except for the ownership interests listed on Schedules
4.3(a) and the Financial Assets referred to in Section 4.23, the Company does
not own directly or indirectly any material amount of capital stock, membership
interests, security or other interest in any other Person, and except pursuant
to existing agreements entered into with respect to the Financial Assets
referred to in Section 4.23, neither the Company nor any of its Subsidiaries
has any written or, to the knowledge of the Company, oral understanding or
agreement to provide any material funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any other Person.
SECTION 4.4 CAPITALIZATION; VOTING RIGHTS. (a) The authorized
capital stock of the Company consists of (i) 250,000,000 shares of Common
Stock, (ii) 8,000,000 shares of preferred stock, no par value per share, of
which no shares are outstanding but of which 1,200,000 shares have been
designated as Series A Preferred Shares and reserved for issuance upon exercise
of the Rights (as defined in the Rights Agreement (as defined below))
distributed to the holders of Common Stock pursuant to the Rights Agreement
dated as of December 3, 1991 (the "RIGHTS AGREEMENT") between the Company and
The First National Bank of Boston, as Rights Agent). There are (i) 158,682,304
shares of Common Stock issued and outstanding (not including 5,922,807 shares
held in the treasury of the Company, but including 7,059,825 shares held in the
Company's Employee Stock Ownership Plan (the "ESOP") and 2,303,844 shares held
in a grantor trust(s) in connection with The Dayton Power and Light Company
Management Stock Incentive Plan (the "MSIP"), The Dayton Power and Light
Company Key Employees Deferred Compensation Plan, The Dayton Power and Light
Company Supplemental Executive Retirement Plan, The Dayton Power and Light
Company 1991 Amended Directors' Deferred Compensation Plan and The Dayton Power
and Light Company Directors' Deferred Stock Compensation Plan (collectively,
the "DEFERRED STOCK PLANS")), (ii) 902,490 authorized but unissued shares
reserved for issuance pursuant to the Company's Dividend Reinvestment Plan (the
"DRIP") and (iii) options representing in the aggregate the right to purchase
up to 6,650,000 shares of Common Stock (collectively, the "COMPANY STOCK
OPTIONS") under the Company's Stock Option Plan (the "STOCK OPTION PLAN") and,
together with the ESOP, DRIP and
<PAGE>
7
the Deferred Stock Plans, the "COMPANY STOCK PLANS") (other than any issuance
of Common Stock after the date hereof (A) upon the exercise of Company Stock
Options, (B) in connection with the DRIP and (C) pursuant to the Deferred Stock
Plans in the ordinary course of business consistent with past practice). All
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable and not subject to any preemptive or
similar rights.
(b) The authorized capital stock of The Dayton Light & Power
Company, an Ohio corporation ("DP&L"), consists of (i) 50,000,000 common
shares, par value $.01 per share (the "DP&L COMMON STOCK"), (ii) 4,000,000
preferred shares, par value $100 per share (the "PREFERRED STOCK ($100 PAR
VALUE)"), of which 93,280 shares have been designated as Preferred Stock, 3.75%
Series A, Cumulative (the "SERIES A STOCK"), 69,398 shares have been designated
as Preferred Stock, 3.75% Series B, Cumulative (the "SERIES B STOCK"), and
65,830 shares have been designated as Preferred Stock, 3.90% Series C,
Cumulative (the "SERIES C STOCK"), and (iii) 4,000,000 preferred shares, par
value $25 per share (the "PREFERRED STOCK ($25 PAR VALUE)"). There are (i)
41,172,173 shares of DP&L Common Stock issued and outstanding, all of which are
owned beneficially and of record by the Company, free and clear of all
Encumbrances, (ii) 228,508 shares of Preferred Stock ($100 par value) issued
and outstanding, of which 93,280 shares are Series A Stock, 69,398 shares are
Series B Stock and 65,830 shares are Series C Stock (collectively, the "DP&L
PREFERRED STOCK") and (iii) no shares of Preferred Stock ($25 par value) issued
and outstanding. All outstanding shares of capital stock of DP&L are duly
authorized, validly issued, fully paid and nonassessable and not subject to any
preemptive or similar rights. None of the Company, DP&L or any other Subsidiary
of the Company has redeemed, purchased or otherwise acquired any Preferred
Stock ($100 par value) or Preferred Stock ($25 par value) since January 1, 1995.
(c) There are no outstanding bonds, debentures, notes or
other Indebtedness (as defined below) or debt securities of the Company or any
of its Subsidiaries having the right to vote (or convertible into or
exchangeable for securities having the right to vote) on any matters on which
the shareholders of the Company or any of its Subsidiaries may vote.
(d) Except as set forth in paragraphs (a) and (b) above,
there are no issued, outstanding or authorized securities (including securities
convertible into or exchangeable for shares of capital stock or other equity or
voting securities) of the Company or DP&L or the Trust (other than, at the
Closing, the Trust Preferred Securities and Trust Common Securities) and there
are no options, warrants, calls, rights (including "phantom" stock or stock
appreciation rights), commitments, agreements, arrangements or undertakings of
any kind to which the Company or any of the Material Subsidiaries is a party or
by which any of them is bound obligating the Company or any of the Material
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other equity or voting securities
of the Company or of any of the Material Subsidiaries or obligating the Company
or any of the Material Subsidiaries to issue, grant, extend or enter into any
such option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Other than pursuant to the Company Stock Plans and the DP&L
Preferred Stock pursuant to the Articles of Incorporation of DP&L, there are no
outstanding contractual obligations, commitments, understandings or
arrangements of the Company or any of the Material Subsidiaries to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares of
capital stock of the Company or any of the Material Subsidiaries or other
agreements or arrangements with
<PAGE>
8
or among any securityholders of the Company or any of the Material Subsidiaries
with respect to securities of the Company or any of the Material Subsidiaries.
Except as set forth above, there are no agreements or arrangements pursuant to
which the Company is or could be required to register shares of Common Stock or
other securities of the Company or any of the Material Subsidiaries under the
Securities Act.
SECTION 4.5 AUTHORIZATION AND SALE OF SECURITIES. (a) The
issuance and sale pursuant to the Transaction Agreements of the Voting
Preferred Shares, Warrants (including the Warrant Shares) and Trust Preferred
Securities is not and will not be subject to any preemptive rights, rights of
first refusal, subscription or similar rights that have not been properly
waived. Subject to obtaining any approvals set forth on Schedule 4.5(a), if
necessary, the Warrants will be exercisable for Warrant Shares in accordance
with the terms of the Form of Warrant attached hereto as Exhibit B, the Warrant
Shares have been duly and validly authorized and reserved for issuance and when
the Warrant Shares are issued in accordance with the provisions of this
Agreement, the Articles, the Regulations and the Warrants, such Warrant Shares
will be duly authorized, validly issued, fully paid and nonassessable, will be
delivered to the Equity Purchaser free and clear of all Encumbrances (other
than those created by the Purchasers or under the Transaction Agreements) and
will have the rights, preferences, privileges and restrictions set forth in the
Articles. Upon the filing of the Certificate of Amendment, the Voting Preferred
Shares will be, and, at the Closing, the Trust Preferred Securities will be,
duly and validly authorized and when the Voting Preferred Shares and the Trust
Preferred Securities are issued in accordance with the provisions of this
Agreement, the Certificate of Amendment, the Trust Agreement, the Articles or
the Regulations, as the case may be, such Voting Preferred Shares or Trust
Preferred Securities will be duly authorized, validly issued, fully paid and
nonassessable, will be delivered to the applicable Purchaser free and clear of
all Encumbrances (other than those created by the Purchasers or under the
Transaction Agreements) and will have the rights, preferences, privileges and
restrictions set forth in the Certificate of Amendment, the Trust Agreement or
the Articles, as the case may be.
(b) The Trust Common Securities have been duly authorized by
the Trust, and upon delivery by the Trust to the Company against payment
therefor as set forth in the Trust Agreement will be duly and validly issued
undivided beneficial interests in the assets of the Trust; the issuance of the
Trust Common Securities is not subject to preemptive or other similar rights
and, at the Closing, all of the issued and outstanding Trust Common Securities
will be directly owned by the Company free and clear of all Encumbrances.
(c) The Subordinated Debentures, when issued, authenticated
and delivered as provided in the Indenture and this Agreement, will be entitled
to the benefits of the Indenture.
(d) The Certificate of Amendment has been duly authorized by
all necessary corporate and any necessary stockholder action and, on the
Closing Date, will have been duly executed by the Company and filed with the
Secretary of State of the State of Ohio.
SECTION 4.6 AUTHORIZATION; BINDING OBLIGATIONS OF THE
COMPANY. The Company has the requisite corporate and other power and authority
to execute and deliver the Transaction Agreements, to perform its obligations
thereunder and to consummate the transactions contemplated
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9
thereby. The execution and delivery of the Transaction Agreements by the
Company and the consummation by the Company of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Company. This Agreement has been, and each of the other Transaction
Agreements when executed as of the Closing will be, duly and validly executed
and delivered by the Company and this Agreement constitutes, and each of the
other Transaction Agreements when executed as of the Closing will constitute, a
legal, valid and binding obligation of the Company, in each case, enforceable
against the Company in accordance with its respective terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing and
except as the enforceability thereof may be limited by considerations of public
policy.
SECTION 4.7 AUTHORIZATION; BINDING OBLIGATIONS OF THE TRUST.
The Trust has the requisite power and authority to execute and deliver the
Transaction Agreements to which it is a party, to perform its obligations
thereunder and to consummate the transactions contemplated thereby. The
execution and delivery of the Transaction Agreements to which it is party by
the Trust and the consummation by the Trust of the transactions contemplated
thereby have been duly authorized by all necessary action on the part of the
Trust. This Agreement has been, and the other Transaction Agreements to which
the Trust is a party when executed as of the Closing will be, duly and validly
executed and delivered by the Trust and this Agreement constitutes, and the
other Transaction Agreements to which the Trust is a party when executed as of
the Closing will constitute, a legal, valid and binding obligation of the
Trust, in each case, enforceable against the Trust in accordance with its
respective terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing and except as the enforceability thereof may be limited
by considerations of public policy.
SECTION 4.8 SEC REPORTS; FINANCIAL STATEMENTS; OTHER FILINGS.
(a) Each of the Company and DP&L has each filed with the U.S. Securities and
Exchange Commission (the "SEC") all material forms, reports, schedules,
statements and other documents (collectively, and in each case including all
exhibits and schedules thereto and documents incorporated by reference therein,
the "SEC REPORTS") required to be filed by the Company and DP&L with the SEC
since January 1, 1998 (other than pursuant to PUHCA (as defined below)). As of
its date of filing, each SEC Report complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and the Securities Act, and the rules and regulations promulgated
thereunder and none of such SEC Reports (including any and all financial
statements included therein) contained when filed or (except to the extent
revised or superceded by a subsequent filing with the SEC publicly available
prior to the date hereof) contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
(b) Each of the consolidated financial statements (including
the notes thereto) included in the SEC Reports (the "SEC FINANCIAL STATEMENTS")
complied as to form, as of its date
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10
of filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, has been prepared in accordance with U.S. generally accepted
accounting principles as applied on a consistent basis by the Company ("GAAP")
during the periods involved (except as may be indicated in the notes thereto)
and fairly presents the consolidated financial position of Company or DP&L, as
the case may be, and its consolidated Subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods
then ended.
(c) All material filings, required to be made by the Company
or any of its Subsidiaries since January 1, 1997, under the Federal Power Act,
as amended (the "POWER ACT"), the Public Utility Holding Company Act of 1935,
as amended ("PUHCA"), and the Public Utility Regulatory Policies Act of 1978,
as amended ("PURPA"), have been filed with the Federal Energy Regulatory
Commission (the "FERC"), the SEC, the Department of Energy (the "DOE") or the
appropriate governmental authority (including the Public Utility Commission of
Ohio (" PUCO")), as the case may be, including all material written forms,
statements, reports, agreements and all material documents, exhibits,
amendments and supplements pertaining thereto, as well as all material rates,
tariffs, franchises, service agreements and related documents, and all such
filings complied, as of their respective dates, in all material respects with
all applicable requirements of the relevant statute and the rules and
regulations thereunder and none of such filings as of their respective dates
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
SECTION 4.9 AGREEMENTS. There are no contracts directly
restricting the payment of dividends or other distributions upon, or the
redemption or repayment of, the Voting Preferred Shares, the Subordinated
Debentures or the Trust Preferred Securities or the exercise of the Warrants.
SECTION 4.10 ABSENCE OF CERTAIN CHANGES. (a) Except as
disclosed on Schedule 4.10(a) or as set forth in the SEC Reports filed and
publicly available prior to the date hereof, since December 31, 1998, no event,
change or circumstance has occurred which, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed on Schedule 4.10(b) or as set forth
in the SEC Reports filed and publicly available prior to the date hereof, since
December 31, 1998, the Company and its Subsidiaries have carried on their
respective businesses only in the ordinary and usual course consistent with
their past practices (other than any such failures to so carry on that are not,
individually or in the aggregate, material to the Company and its Subsidiaries
taken as a whole and other than any actions taken to comply with the
electricity deregulation laws of the State of Ohio).
SECTION 4.11 TITLE TO PROPERTIES AND ASSETS; LIENS;
CONDITION. Except as set forth on Schedule 4.11, the Company and each of its
Subsidiaries have good and marketable title to their respective material
properties and assets, including those properties and assets (the "TENANCIES IN
COMMON") indicated on Schedule 4.11 which constitute all of the material
tenancy in common interests of the Company and its Subsidiaries, and good title
to their respective material leasehold
<PAGE>
11
estates, in each case free and clear of any Encumbrance, other than Permitted
Encumbrances. The Company and each of its Subsidiaries are in compliance with
all material terms of each lease and each agreement with respect to the
Tenancies in Common to which they are a party or are otherwise bound, all such
leases and other agreements are valid, binding and in full force and effect and
all material properties, equipment and systems of the Company and its
Subsidiaries are in good repair, working order and condition and are in
material compliance with all applicable standards and rules imposed (i) by any
governmental agency or authority in which such properties, equipment and
systems are located and (ii) under any agreements with customers, except for
any such failures to be in compliance, valid, binding or in force and effect or
to be in good repair, working order or condition which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
For purposes of this Agreement, "PERMITTED ENCUMBRANCES"
means (i) any statutory liens for current taxes or assessments not yet due or
delinquent or the validity or amount of which is being contested in good faith
by appropriate proceedings, none of which contested matters is material, (ii)
mechanics', carriers', workers', repairers' and other similar liens arising or
incurred in the ordinary course of business relating to obligations as to which
there is no default on the part of the Company or its Subsidiaries or the
validity or amount of which are being contested in good faith by appropriate
proceedings, none of which contested matters is material, or pledges, deposits
or other liens securing the performance of bids, trade contracts, leases or
statutory obligations (including workers' compensation, unemployment insurance
or other social security legislation), (iii) zoning, entitlement, conservation
restriction and other land use and environmental regulations by governmental
authorities which do not materially interfere with the present use of the
assets and properties of the Company and its Subsidiaries, (iv) all exceptions,
restrictions, easements, charges, rights of way and other Encumbrances set
forth in any State, local or municipal franchise under which the business of
the Company and its Subsidiaries is conducted which do not materially interfere
with the present use of the assets and properties of the Company and its
Subsidiaries and (v) such other liens, imperfections in or failure of title,
charges, easements, rights-of-way, encroachments, exceptions, restrictions and
encumbrances which do not materially interfere with the present use of the
assets and properties of the Company and its Subsidiaries and, individually or
in the aggregate, would not reasonably be expected to create a Material Adverse
Effect.
SECTION 4.12 COMPLIANCE WITH LAW; OTHER INSTRUMENTS. (a)
Except as disclosed on Schedule 4.12, neither the Company nor any of its
Subsidiaries (i) is in violation of or in default under (A) the Articles or
Regulations or the organizational documents of any Subsidiary of the Company or
(B) any judicial or administrative judgment, decision, decree, order,
settlement, injunction, writ, stipulation, determination or award (each, an
"ORDER") or any statute, law, ordinance, rule or regulation (each, a "LAW") and
(ii) has received any notice of a pending investigation or review and, to the
knowledge of the Company, no investigation or review is in process or
threatened by any governmental authority with respect to any violation or
alleged violation of any Order or Law, except, in the case of the foregoing
clauses (i) (B) and (ii), where such violation, default, investigation or
review would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
<PAGE>
12
(b) Subject to obtaining any approvals set forth on
Schedule 4.5(a), if necessary, and except as noted on Schedule 4.12(b), the
execution, delivery and performance of this Agreement and the other Transaction
Agreements, and the consummation of the transactions contemplated hereby and
thereby (including the Stock Repurchase (as defined herein)), will not result in
(i) (A) any violation of, or be in conflict with or constitute a default (with
or without notice or lapse of time or otherwise) under, the Articles or
Regulations or the organizational documents of any Subsidiary of the Company,
(B) any violation of, or be in conflict with or constitute a default (with or
without notice or lapse of time or otherwise) under, any term or provision of,
or any right of termination, cancellation or acceleration arising under, any
indenture, mortgage, deed of trust, loan agreement credit agreement, note, note
purchase agreement, bond, security agreement, rate, rate schedule, tariff,
utility service agreement, lease or other agreement, instrument or obligation
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, or cause any liabilities or additional fees to be due
thereunder, (C) any violation under any Order or Law applicable to the Company
or any of its Subsidiaries, their respective businesses or operations or any of
their respective assets or properties or (D) result in the imposition of any
Encumbrance on the business or properties or assets of the Company or any of its
Subsidiaries, except, in the case of clauses (B), (C) and (D), where such
violation, conflict, default, termination, cancellation, acceleration,
liabilities, fees or imposition would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(c) Subject to obtaining any approvals set forth on Schedule
4.5(a), if necessary, none of the execution and delivery of this Agreement and
the other Transaction Agreements, the consummation of the transactions
contemplated hereby and thereby or the performance of the obligations of the
Company hereunder and thereunder will result in the suspension, revocation,
impairment, forfeiture or nonrenewal of any Permit (as defined below) applicable
to the Company or any of its Subsidiaries, their respective businesses or
operations or any of their respective assets or properties, except where such
suspension, revocation, impairment, forfeiture or nonrenewal would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, "PERMITS" means all licenses,
permits, orders, consents, approvals, registrations, authorizations,
qualifications and filings with and under all federal, state, local or foreign
laws and governmental authorities and all industry or other non-governmental
self-regulatory organizations.
(d) Assuming the accuracy of the representations and
warranties of the Purchasers contained in Sections 5.5 and 6.5 and subject to
obtaining any approvals set forth on Schedule 4.5(a), if necessary, no
declaration, filing or registration with, or notice to or authorization,
consent or approval (collectively "GOVERNMENTAL APPROVALS") of any
governmental authority is necessary for the execution and delivery of this
Agreement or any of the other Transaction Agreements by the Company or the
Trust or the consummation by the Company or the Trust of the transactions
contemplated hereby or thereby, except as may be required pursuant to the HSR
Act (as defined below) and except for any such failures to obtain any such
Governmental Approvals which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect (it being understood
that references in this Agreement to "obtaining" the foregoing declarations,
filings, notices, authorizations, consents or approvals shall mean making
such declarations, filings
<PAGE>
13
or registrations; giving such notices; obtaining such authorizations,
consents or approvals; and having such waiting periods expire as are
necessary to avoid a violation of law).
SECTION 4.13 LITIGATION. Except as set forth on Schedule 4.13,
there is no claim, action, suit, audit, assessment, arbitration or inquiry, or
any proceeding or, to the knowledge of the Company, investigation, by or before
any governmental authority (an "ACTION") pending or, to the knowledge of the
Company, threatened against the Company, any of the its Subsidiaries or any of
its properties or assets (including with respect to any Company Plan (as defined
below)) which, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect. Neither the Company nor any of the Company's
Subsidiaries is a party or subject to the provisions of any Order of any court
or governmental authority which, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect.
SECTION 4.14 TAX MATTERS. (a) (i) All material Tax Returns
that are required to be filed by or with respect to the Company and its
Subsidiaries have been duly filed, (ii) all material Taxes of the Company and
its Subsidiaries due and payable, whether or not shown on the Tax Returns
referred to in clause (i), have been paid in full, and (iii) there are no liens
for material Taxes on any asset of the Company or any of its Subsidiaries other
than, in each case, for current Taxes not yet due and payable or, if due, (A)
not delinquent or (B) being contested in good faith by appropriate proceedings.
(b) For purposes of this Agreement, (i) "TAXES" means all
taxes, charges, fees, levies, penalties or other assessments imposed by any
United States federal, state, local or foreign taxing authority, including
income, excise, property, sales and use, transfer, franchise, payroll,
withholding, social security or other taxes, including any interest, penalties
or additions attributable thereto, and (ii) "TAX RETURN" means any return,
report, information return or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
with respect to Taxes, including, where permitted or required, combined or
consolidated returns for any group of entities that includes the Company or any
of its Subsidiaries.
SECTION 4.15 ENVIRONMENTAL AND SAFETY LAWS. Except as
would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) Except as set forth on Schedule 4.15(a), neither the
Company nor any Subsidiary of the Company nor any of the Company's properties,
assets or operations has failed to comply in any material respect with any
Environmental Laws (as defined below).
(b) Except as set forth on Schedule 4.15(b), neither the
Company nor any Subsidiary of the Company has Released (as defined below),
generated or disposed of any Hazardous Substance (as defined below) in a manner
which could reasonably be expected to give rise to a material liability under or
relating to any Environmental Laws.
(c)Except as set forth on Schedule 4.15(c), there is no claim
under or relating to Environmental Laws pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries or any of its
respective properties or assets or against any other Person
<PAGE>
14
whose liability for any environmental claim the Company or any of their
Subsidiaries has retained or assumed either contractually or by operation of
law. Except as would not reasonably be expected to give rise to a material
liability under or relating to any Environmental Laws, no real property
currently or formerly owned, operated or leased by the Company or any of its
Subsidiaries has been impacted by any Release or threatened Release of any
Hazardous Substance.
(d) To the knowledge of the Company, the Company has disclosed
to the Purchasers all material facts which the Company reasonably believes form
the basis of a material cost to or liability of the Company or any of its
Subsidiaries arising from (i) the costs of pollution control equipment currently
required or known to be required in the future, (ii) current remediation costs
or remediation costs known to be required in the future or (iii) any other
environmental matter affecting the Company, any of its Subsidiaries or its
properties or assets which would have, or which the Company reasonably believes
would have, a material cost to or liability of the Company or any of its
Subsidiaries.
(e) For purposes of this Agreement, (i) "ENVIRONMENTAL
LAWS" means all applicable federal, foreign, state, local or municipal Laws
or Orders or other legally binding requirements relating to pollution or the
protection of human health or the environment, including the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C., Section
9601, et seq., as amended, the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., as amended, the Clean Air Act, 42 U.S.C.
Section 7401 et seq., as amended, the Clean Water Act, 33 U.S.C. Section 1251
et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601 et seq., and
the Occupational Safety and Health Act, 29 U.S.C. Section 651, et seq., (ii)
"HAZARDOUS SUBSTANCES" means any pollutant, contaminant, toxic substance,
hazardous waste, hazardous material, or hazardous substance, or any oil,
petroleum or petroleum product, each as defined or listed in, or classified
pursuant to, any Environmental Laws, or any other substance that could result
in liability under any Environmental Laws, and (iii) "RELEASE" means any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing (including the
abandonment or discarding of barrels, containers and other receptacles).
SECTION 4.16 OFFERING VALID FOR VOTING PREFERRED SHARES AND
WARRANTS. Assuming the accuracy of the representations and warranties of the
Equity Purchaser contained in Section 5.2 hereof, the offer, sale and issuance
of the Voting Preferred Shares and the Warrants will be exempt from the
registration requirements of the Securities Act and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws.
SECTION 4.17 OFFERING VALID FOR TRUST PREFERRED SECURITIES.
Assuming the accuracy of the representations and warranties of the Trust
Preferred Purchaser contained in Section 6.2 hereof, the offer, sale and
issuance of the Trust Preferred Securities will be exempt from the registration
requirements of the Securities Act and will have been registered or qualified
(or are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities laws.
<PAGE>
15
SECTION 4.18 EMPLOYEE BENEFIT PLANS. (a) Except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, each Company Plan (as defined below) has been
established and administered in accordance with its terms and in compliance
with the applicable provisions of ERISA (as defined below), the Code and
other applicable laws, rules and regulations and neither the Company nor any
of its Subsidiaries has incurred or is reasonably likely to incur, directly
or by reason of its affiliation with any member of its "Controlled Group"
(within the meaning of Code sections 414(b), (c), (m) or (o)), any tax, fine,
lien, penalty or other liability imposed by ERISA, the Code or other
applicable law, rule and regulations. For the purposes of this Agreement,
"COMPANY PLANS" shall mean any "employee benefit plan" (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), and all stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, bonus, incentive, deferred
compensation and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA, under which
any present or former director or employee of the Company or its Subsidiaries
has any present or future right to benefits and under which the Company or
its Subsidiaries has any present of future liability.
(b) As of the Closing Date, no Company Plan will exist that
could result in the payment to any present or former director or employee of the
Company or its Subsidiaries of any money or other property or the acceleration
or provision of any other rights or benefits to any present or former director
or employee of the Company or its Subsidiaries as a result of the transactions
contemplated by the Transaction Agreements, whether or not such payment would
constitute a parachute payment within the meaning of Code section 280G;
PROVIDED, HOWEVER, that in no event will the transactions contemplated by the
Transaction Agreements constitute a "change of control" for purposes of any
outstanding Company Stock Options or shares of Common Stock granted pursuant to
the Company Stock Plans.
(c) The Company, the Board of Directors of the Company and the
Compensation Committee of the Company have taken all actions required for the
approval and the adoption of the Stock Option Plan and the making of the option
grants listed on Schedule 4.18(c) and the revision of the MSIP to provide that,
for each management recipient of an option grant listed on Schedule 4.18(c), the
recipient will not receive payments under the MSIP with respect to such number
of stock incentive units thereunder equal to one third (1/3) of the number of
option grants listed on Schedule 4.18(c) prior to January 1, 2005 (except in
certain change of control circumstances), and the Board of Directors of the
Company has recommended that the shareholders of the Company approve the Stock
Option Plan at the next regular meeting of the shareholders of the Company.
SECTION 4.19 NO BROKER. Except for Credit Suisse First Boston
Corporation, the fees and expenses of which will be paid by the Company, neither
the Company nor any of its Subsidiaries has employed any broker or finder or
incurred any liability for any brokerage or finders' fees or any similar fees or
commissions in connection with the transactions contemplated by the Transaction
Agreement.
SECTION 4.20 DISCLOSURE. This Agreement (including all
Exhibits and Schedules hereto), and the other Transaction Agreements and the
other agreements and instruments
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16
contemplated to be executed and delivered by the Company or the Trust in
connection with this Agreement or any of the other Transaction Agreements,
taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the representations,
warranties or other statements or information contained therein not
misleading.
SECTION 4.21 REGULATION AS A UTILITY. The Company is a
"holding company" (as defined in PUHCA) that is exempt from all provisions
(other than Section 9(a)(2)) of the requirements of PUHCA, pursuant to the
provisions of Section 3(a)(1) thereunder and in accordance with Rule 2. The
Company's primary Subsidiary, DP&L, is a "public-utility company" (as defined
in PUHCA) and is regulated as a public utility by the FERC under the Power
Act and as a public utility by the PUCO under Ohio laws. The Company also has
a Subsidiary, DPL Energy, Inc., an Ohio corporation, that holds a power
marketing certificate and is regulated as a public utility by the FERC under
the Power Act. Except as stated in the preceding three sentences or solely
with respect to their relationship to the Company or DP&L, (i) the Company is
not 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 in PUHCA), and (ii) neither the Company nor any "subsidiary
company" or "affiliate" (as such terms are defined in PUHCA) of the Company
is subject to regulation as (A) a "public utility" under the Power Act, (B) a
"natural gas company" under the Natural Gas Act, as amended or (C) a public
utility or public service company (or similar designation) by any state in
the United States or in any foreign country.
SECTION 4.22 RIGHTS AGREEMENT. The Company has amended the
Rights Agreement (the "RIGHTS AMENDMENT") to ensure that neither a "Distribution
Date" nor a "Share Acquisition Date" (in each case as defined in the Rights
Agreement) will occur, and none of Purchasers or any of their respective
"Affiliates" or "Associates" will be deemed to be an "Acquiring Person" (in each
case as defined in the Rights Agreement), by reason of the execution and
delivery of this Agreement and the other Transaction Agreements or the
consummation of the transactions contemplated hereby and thereby, including any
additional purchases of securities of the Company by the Purchasers or their
respective Affiliates to the extent permitted by Article VII of the
Securityholder's Agreement. The Rights Amendment is sufficient to render the
Rights inoperative with respect to the purchase and sale of the Voting Preferred
Shares and the Warrants pursuant to this Agreement, the exercise of the Warrants
or any additional purchases of securities of the Company by the Purchasers or
their respective Affiliates to the extent permitted by Article VII of the
Securityholders Agreement. True and correct copies of the Rights Agreement and
the Rights Amendment have been delivered to the Purchasers.
SECTION 4.23 FINANCIAL ASSETS. The Company has provided the
Purchasers with a true and complete list of each Financial Asset owned by the
Company or any of its Subsidiaries on the date hereof, the name of the record
and beneficial owner thereof, the amount paid therefor or invested therein
and the maturity date, if any. Substantially all of such Financial Assets are
owned by the Company, Miami Valley or MVE and are so owned, except as
disclosed in writing to the Purchasers, free and clear of all Encumbrances
(other than rights of first refusal and similar encumbrances), neither the
Company nor any of its Subsidiaries has any obligation or commitment to pay
for, or make any investment or other contribution with respect to, any such
Financial Assets
<PAGE>
17
or to pay for or acquire, or make any investment or other contribution with
respect to, any other investments, securities or assets of a similar nature.
"FINANCIAL ASSETS" means all investments, securities or assets
which would be included within the line item "Financial Assets" on the Company's
consolidated balance sheets included in the SEC Financial Statements as if such
balance sheet was prepared as of the date hereof, including private equity
investments, debentures, notes and other evidences of indebtedness, stocks,
securities (including rights to purchase and securities convertible into or
exchangeable for other securities), interests in joint ventures and general and
limited partnerships, mortgage loans and other investment or portfolio assets
owned of record or beneficially by the Company or any of its Subsidiaries and
issued by any Person other than the Company or any of its Subsidiaries.
SECTION 4.24 INVESTMENT COMPANY AND INVESTMENT ADVISER.
Neither the Company nor any of the Company's Subsidiaries is an "investment
company" or "investment adviser" as defined in the Investment Company Act of
1940, as amended.
SECTION 4.25 LIMITATION ON LIABILITY. The holders of the Trust
Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 4.26 TAKEOVER STATUTES. Except as set forth on
Schedule 4.5(a), no "fair price", "moratorium", "control share acquisition"
(including Section 1701.831 of the General Corporation Law of the State of Ohio
(the "OGCL") or other similar antitakeover statute or regulation enacted under
state or federal laws in the United States (with the exception of Chapter 1704
of the OGCL) applicable to the Company is applicable to the transactions
contemplated by the Transaction Agreements. The action of the Board of Directors
of the Company in approving the Transaction Agreements and the transactions
contemplated thereby is sufficient to render inapplicable to the Transaction
Agreements and the transactions contemplated thereby the restrictions on
"Chapter 1704 transactions" (as defined in Chapter 1704 of the OGCL) set forth
in Chapter 1704 of the OGCL.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE EQUITY PURCHASER
The Equity Purchaser hereby represents and warrants to the
Company as follows:
SECTION 5.1 REQUISITE POWER AND AUTHORITY. The Equity
Purchaser has all requisite power and authority to execute and deliver this
Agreement and the Securityholders Agreement, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the
Securityholders Agreement by the Equity Purchaser and the consummation by the
Equity Purchaser of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Equity
Purchaser. This Agreement has been, and the Securityholders Agreement
<PAGE>
18
when executed as of the Closing will be, duly and validly executed and
delivered by the Equity Purchaser and this Agreement constitutes, and the
Securityholders Agreement when executed as of the Closing will constitute, a
legal, valid and binding obligation of the Equity Purchaser, in each case,
enforceable against it in accordance with its respective terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing
and except as enforceability thereof may be limited by considerations of
public policy.
SECTION 5.2 INVESTMENT REPRESENTATIONS. The Equity Purchaser
acknowledges that the Voting Preferred Shares, the Warrants and the Warrant
Shares have not been registered under the Securities Act or under any state
securities laws. The Equity Purchaser (i) is acquiring the Voting Preferred
Shares, the Warrants and the Warrant Shares for investment for its own account,
not as a nominee or agent, and not with the view to, or for resale in connection
with, any distribution thereof, (ii) is an "accredited investor" within the
meaning of Regulation D, Rule 501(a), promulgated by the SEC and (iii)
acknowledges that the Voting Preferred Shares, the Warrants and the Warrant
Shares must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from the registration requirements of the
Securities Act is available.
SECTION 5.3 LITIGATION. There is no Action pending or, to the
Equity Purchaser's knowledge, currently threatened against the Equity Purchaser
which, if adversely determined, would, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of the
Equity Purchaser to perform its obligations under this Agreement and the
Securityholders Agreement and to consummate the transactions contemplated hereby
and thereby.
SECTION 5.4 NO BROKER. Except for Goldman Sachs & Co. and
CIBC World Markets Corp., the fees and expenses of which will be paid by the
Equity Purchaser and/or its Affiliates, the Equity Purchaser has not employed
any broker or finder, or incurred any liability for any brokerage or finders'
fees or any similar fees or commissions in connection with the transactions
contemplated by the Transaction Agreements.
SECTION 5.5 REGULATION UNDER PUHCA. The Equity Purchaser is
not, and, immediately upon consummation of the Closing, will not be, a "holding
company" or a "subsidiary company" or an "affiliate" of a "holding company" or a
"public- utility company" (as such terms are defined in PUHCA).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE TRUST PREFERRED PURCHASER
The Trust Preferred Purchaser hereby represents and warrants
to the Company and the Trust as follows:
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19
SECTION 6.1 REQUISITE POWER AND AUTHORITY. The Trust
Preferred Purchaser has all requisite power and authority to execute and
deliver this Agreement and the Securityholders Agreement, to consummate the
transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and
the Securityholders Agreement by the Trust Preferred Purchaser and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Trust Preferred
Purchaser. This Agreement has been, and the Securityholders Agreement when
executed as of the Closing will be, duly and validly executed and delivered
by the Trust Preferred Purchaser and this Agreement constitutes, and the
Securityholders Agreement when executed as of the Closing will constitute, a
legal, valid and binding obligation of the Trust Preferred Purchaser, in each
case enforceable against it in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair dealing
and except as enforceability thereof may be limited by considerations of
public policy.
SECTION 6.2 INVESTMENT REPRESENTATIONS. The Trust Preferred
Purchaser acknowledges that the Trust Preferred Securities have not been
registered under the Securities Act or under any state securities laws. The
Trust Preferred Purchaser (i) is acquiring the Trust Preferred Securities for
investment for its own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution thereof, (ii) is
an "accredited investor" within the meaning of Regulation D, Rule 501(a),
promulgated by the SEC and (iii) acknowledges that the Trust Preferred
Securities must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from the registration requirements of
the Securities Act is available.
SECTION 6.3 LITIGATION. There is no Action pending, or to
the Trust Preferred Purchaser's knowledge, currently threatened against the
Trust Preferred Purchaser which, if adversely determined, would, individually
or in the aggregate, reasonably be expected to have a material adverse effect
on the ability of the Trust Preferred Purchaser to perform its obligations
under this Agreement and the Securityholders Agreement and to consummate the
transactions contemplated hereby and thereby.
SECTION 6.4 NO BROKER. Except for Goldman Sachs & Co, and
CIBC World Markets Corp., the fees and expenses of which will be paid by the
Trust Preferred Purchaser and/or its Affiliates, the Trust Preferred
Purchaser has not employed any broker or finder, or incurred any liability
for any brokerage or finders' fees or any similar fees or commissions in
connection with the transactions contemplated by the Transaction Agreements.
SECTION 6.5 REGULATION UNDER PUHCA. The Trust Preferred
Purchaser is not, and, immediately upon consummation of the Closing, will not
be, a "holding company" or a "subsidiary company" or an "affiliate" of a
"holding company" or a "public- utility company" (as such terms are defined
in PUHCA).
<PAGE>
20
ARTICLE VII
COVENANTS
SECTION 7.1 ORDINARY COURSE OF BUSINESS.
(a) Except as otherwise contemplated by the terms of this
Agreement, during the period from the date of this Agreement to the Closing
Date (the "PRE-CLOSING PERIOD"), the Company shall (i) conduct its business
in the ordinary course consistent with past practice, (ii) use commercially
reasonable efforts to preserve intact its and its Subsidiaries' current
business organizations, keep available the services of their current officers
and employees and preserve their relationships with customers, suppliers,
licensors, licensees, advertisers, distributors, governmental authorities and
others having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired and (iii) not take any action that
could cause any representation and warranty contained in Article IV to be
untrue in any material respect or cause a covenant to fail to be satisfied in
any material respect.
(b) Without limiting the generality of the foregoing,
during the Pre-Closing Period, each of the Company and its Subsidiaries shall
not, without the prior written consent of the Purchasers (not to be
unreasonably withheld):
(i) other than in accordance with the provisions of the
Transaction Agreements, change the authorized number of members of the
Board of Directors of the Company or DP&L or the composition of the
Board of Directors of the Company or DP&L;
(ii) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock payable
in cash, stock, property or otherwise, other than (I) dividends and
distributions by a direct or indirect wholly owned Subsidiary of the
Company to its parent, (II) dividends required to be paid on the DP&L
Preferred Stock in accordance with the terms of the DP&L Preferred
Stock or (III) regular quarterly dividends of the Company with respect
to the Company Common Stock in an amount not to exceed the amount of
the most recent regular quarterly dividend as of the date hereof, per
share per quarter, or (B) effect any reorganization or recapitalization
or split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock;
(iii) other than as required by the fiduciary duties of the
Board of Directors of the Company under Ohio law or to comply with the
electricity deregulation laws of the State of Ohio, (A) solicit or
discuss with or provide information to any other Person, or enter into
any agreement with respect to or consummate, any material acquisition,
sale, lease, merger, consolidation, dissolution, restructuring,
recapitalization or other business combination or reorganization
transaction (other than in accordance with the Asset Purchase Agreement
by and between DP&L, Indiana Energy, Inc. and Number-3CHK, Inc. dated
December 14, 1999) or (B) enter into any proposed transaction or series
of related transactions involving a Change of Control (as defined
below) of the Company;
<PAGE>
21
(iv) other than in accordance with the provisions of this
Agreement or as required by Company Plans existing as of the date
hereof, redeem, acquire or otherwise purchase any shares of capital
stock of the Company or DP&L;
(v) other than pursuant to the sole action of the Company's
shareholders or in accordance with the provisions of this Agreement,
amend, repeal or alter the Company's Articles or Regulations;
(vi) take any other action specified under Section 2.4 of the
Securityholders Agreement which would require the consent of the Equity
Purchaser if such action were taken immediately following the Closing
Date; or
(vii) enter into any arrangement or contract or otherwise
agree or commit to take any of the foregoing actions.
For the purposes of this Agreement, "CHANGE OF CONTROL"
means (i) any merger or consolidation with or into any other entity or any
other similar transaction, whether in a single transaction or series of
related transactions where (A) the shareholders of the Company immediately
prior to such transaction in the aggregate cease to own at least 90% of the
voting securities of the entity surviving or resulting from such transaction
(or the ultimate parent thereof) or (B) any Person becomes the beneficial
owner of more than 15% of the voting securities of the entity surviving or
resulting from such transaction (or the ultimate parent thereof) other than
any mutual fund reporting its acquisition or holding of voting power pursuant
to Section 13(f) or 13(g) of the Exchange Act and whose acquisition or
holding has been approved by the Board of Directors of the Company, (ii) any
transaction or series of related transactions in which in excess of 15% of
the Company's voting power is transferred to any Person or Group, (iii) the
sale, transfer, lease, assignment, conveyance, exchange, mortgage or other
disposition of all or a material portion of the assets of the Company and its
Subsidiaries, or (iv) any liquidation, dissolution or winding-up of the
Company.
(c) Except as otherwise contemplated by the terms of this
Agreement, during the Pre-Closing Period, the Purchasers shall not take any
action that could cause any representation and warranty in Articles V or VI
to be untrue in any material respect or cause a covenant to fail to be
satisfied in any material respect.
SECTION 7.2 ACCESS. During the Pre-Closing Period, the
Company shall, and shall cause its Subsidiaries, officers, directors,
employees, auditors and other agents and representatives (collectively, the
"COMPANY REPRESENTATIVES") to (i) afford the officers, employees, auditors
and other agents and representatives of the Purchasers (including KKR (as
defined below)) (collectively, the "PURCHASER REPRESENTATIVES"), during
normal business hours 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
with all financial, operating and other data and information as either of the
Purchasers, through the Purchaser Representatives, may from time to time
reasonably request, and (iii) afford the Purchasers the opportunity to
discuss the Company's affairs, finances and accounts with the Company's
officers on a regular basis. Notwithstanding the
<PAGE>
22
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 7.3 USE OF PROCEEDS. (a) The Company shall use $550
million, from the proceeds of the issuance and sale of the Voting Preferred
Shares, the Warrants and the Subordinated Debentures (the "PROCEEDS") and/or
from other sources of funds available to the Company for the repurchase of
shares of Common Stock (the "STOCK REPURCHASE"); provided that the Stock
Repurchase, together with any other repurchases of shares of Common Stock in
connection or contemporaneous with the transactions contemplated hereby,
shall be effected so as not to cause at any time the Warrants on an
as-converted basis, together with the Voting Preferred Shares, to constitute
in excess of 19.9% of the voting securities of the Company.
(b) The Trust shall use the proceeds from the issuance and
sale of the Trust Preferred Securities and the Trust Common Securities for
the purchase of Subordinated Debentures.
SECTION 7.4 EFFORTS. (a) Each party hereto agrees to use
commercially reasonable efforts to take any and all actions required in order
to consummate the transactions contemplated in this Agreement and the other
Transaction Agreements.
(b) The Company agrees to take, and will cause its
Subsidiaries and the Company Representatives to take, all reasonably
necessary actions and provide all reasonably necessary cooperation as the
Purchasers may reasonably request in connection with the arrangement of any
financing to be consummated contemporaneous with or at or after the Closing
in respect of the transactions contemplated by this Agreement, including
participation in meetings, due diligence sessions, the preparation of
offering memoranda, private placement memoranda, prospectuses and similar
documents.
SECTION 7.5 NOTIFICATION OF CERTAIN MATTERS. (a) During the
Pre-Closing Period, the Company shall give prompt notice to the Purchasers of
the occurrence or non-occurrence of any event known to the Company the
occurrence or non-occurrence of which would reasonably be expected to (i)
cause any representation or warranty contained in Article IV to be untrue in
any material respect, (ii) cause the Company to fail to comply with or
satisfy in any material respect any covenant or agreement under this
Agreement or (iii) have a Material Adverse Effect.
(b) During the Pre-Closing Period, the Purchasers shall
give prompt notice to the Company of the occurrence or non-occurrence of any
event known to the Purchasers the occurrence or non-occurrence of which would
reasonably be expected to (i) cause any representation or warranty contained
in Articles V or VI to be untrue in any material respect, (ii) cause the
Purchasers to fail to comply with or satisfy in any material respect any
covenant or agreement under this Agreement or (iii) cause the condition set
forth in Section 8.1(xvi) to fail to be satisfied.
SECTION 7.6 RESERVATION OF SHARES. From and after the
Closing, the Company shall at all times reserve and keep available for
issuance the Warrant Shares.
<PAGE>
23
SECTION 7.7 REGULATORY AND OTHER AUTHORIZATIONS; NOTICES
AND CONSENTS. (a) Each of the parties hereto shall promptly make any and
all filings which they are required to make under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), for the sale
of the Securities and Debentures and agrees to furnish the other parties
hereto with such necessary information and reasonable assistance as the
Purchasers may reasonably request in connection with the preparation of any
necessary filings or submissions to the Federal Trade Commission ("FTC") or
the Antitrust Division of the U.S. Department of Justice (the "ANTITRUST
DIVISION"), including any filings or notices necessary under the HSR Act. Any
such actions with respect to the exercise of the Warrants shall be taken by
the Company at such times as the Equity Purchaser reasonably shall so
request. Each of the parties hereto shall, at its own expense, use all
reasonable efforts to respond to any request for additional information, or
other formal or informal request for information, witnesses or documents
which may be made by any governmental authority pertaining to it with respect
to the sale of the Securities and Debentures and shall keep the other parties
hereto fully apprised of its actions with respect thereto.
(b) Each of the parties hereto shall use their commercially
reasonable efforts to give such notices and obtain all other authorizations,
consents, orders and approvals of all governmental authorities and other
third parties that may be or become necessary for its execution and delivery
of, and the performance of its obligations pursuant to, this Agreement and
the other Transaction Agreements to which it is a party and will cooperate
fully with the other parties hereto in promptly seeking to obtain all such
authorizations, consents, orders and approvals.
SECTION 7.8 TRANSACTION FEE. At the Closing, the Company
shall pay to or at the direction of Kohlberg Kravis Roberts & Co., L.P.
("KKR") an amount of $16.5 million, reflecting, as KKR shall determine in its
sole discretion, a transaction fee and expenses payable to consultants,
investment bankers, accountants and counsel incurred for the benefit of the
Company in connection with the issuance of the Securities and the Trust
Preferred Securities. The Company shall not otherwise be responsible for any
such expenses of KKR, the Purchasers or their financing sources. The fee due
KKR shall be paid, at the option of KKR, (i) in cash by wire transfer of
immediately available funds to an account designated by KKR at least two
business days prior to the Closing Date or (ii) by the Purchasers on behalf
of the Company by netting by the Purchasers of the amount due KKR from the
Company against the amount due the Company from the Purchasers at the Closing.
SECTION 7.9 APPOINTMENT OF DIRECTORS. Prior to the Closing,
the Company shall take all necessary action (i) to increase the size of the
Boards of Directors of the Company and DP&L to eleven directors and to elect
one designee of the senior member of the Equity Purchaser to the Boards of
Directors of the Company and DP&L (the "KKR REPRESENTATIVE") effective as of
the Closing and (ii) to authorize one designee of the shareholder of the
Trust Preferred Purchaser to attend the meetings of the Boards of Directors
of the Company and DP&L as a non-voting observer (the "KKR Observer") and to
receive all materials and information that voting members of such Boards
receive. Either George Roberts or Scott M. Stuart shall be the original
designee of the senior member of the Equity Purchaser and the shareholder of
the Trust Preferred Purchaser for the positions of either the KKR
Representative or KKR Observer, respectively.
<PAGE>
24
SECTION 7.10 CONFIDENTIALITY. (a) (i) The Purchasers shall,
and shall cause the Purchaser Representatives (including KKR) to, keep
confidential all information of any type, including the information received
pursuant to Section 7.2 hereof, concerning the Company and its Subsidiaries and
their respective businesses, assets and operations (the "CONFIDENTIAL
INFORMATION", (ii) except as required by any Law or Order, the Purchasers will
hold, and will cause the Purchaser Representatives (including KKR) to hold, the
Confidential Information in confidence and, without the Company's prior written
consent, the Purchasers will not disclose, and will cause the Purchaser
Representatives not to disclose, such Confidential Information, in whole or in
part, to any other Person (other than such of the Purchaser Representatives who
need to know such information for the purposes of the transactions contemplated
by the Transaction Agreements or monitoring and evaluating the business of the
Company) and (iii) Purchasers will not use, and will cause the Purchaser
Representatives not to use, the Confidential Information in any way directly or
indirectly detrimental to the Company or its Subsidiaries; provided that the
Purchasers shall not be responsible for any breach of any of the provisions of
this Section 7.10 by any of the Purchaser Representatives who has agreed in a
writing addressed to the Company to be bound by the confidentiality provisions
of this Section 7.10 for a period of two years.
(b) Notwithstanding the foregoing, (i) the term "Confidential
Information" does not include any information which (A) is or becomes generally
available to the public other than as a result of an unauthorized disclosure by
the Purchasers or any Purchaser Representatives, or (B) is or becomes available
to the Purchasers or any Purchaser Representative on a non-confidential basis
from a source other than the Company or any of its Subsidiaries; provided that
such source is not known by the Purchasers to be bound by a confidentiality
obligation to the Company and (ii) the Purchasers and the Purchaser
Representatives may, without the prior consent of the Company, disclose the
Confidential Information to any Person as is required by any Order, Law or legal
or judicial process.
(c) Effective as of the Closing, that certain letter
agreement, dated October 6, 1999, between the Company and KKR is superseded
by this Section 7.10 and the confidentiality obligations contained in the
Securityholders Agreement, and is of no further force or effect.
SECTION 7.11 CONCURRENT TRANSACTION. (a) The Trust
will issue and sell the Trust Preferred Securities concurrently
with the issue and sale of the Subordinated Debentures.
(b) The Company will purchase the Trust Common Securities
concurrently with the issue and sale of the Subordinated Debentures and the
issue and sale of the Trust Preferred Securities.
SECTION 7.12 PUBLIC ANNOUNCEMENTS. Neither the Purchasers, on
the one hand, nor the Company, on the other hand, will issue any press release
or public statement with respect to the transactions contemplated by this
Agreement and the other Transaction Agreements, without the other party's prior
consent, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with The New York Stock Exchange.
In addition to the foregoing, the Purchasers and the Company will consult to the
extent reasonably practicable with each other before issuing, and provide each
other the opportunity to review and comment upon, any
<PAGE>
25
such press release or other public statement. The parties agree that the
initial press release or releases to be issued with respect to the
transactions contemplated by this Agreement shall be mutually agreed upon
prior to the issuance thereof.
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS.
The Equity Purchaser's obligation to purchase the Voting Preferred Shares and
the Warrants at the Closing and the Trust Preferred Purchaser's obligation to
purchase the Trust Preferred Securities at the Closing is subject to the
satisfaction (or waiver by the Purchasers), on or prior to the Closing, of the
following conditions:
(i) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. Each of the representations and warranties of the Company
and the Trust contained in this Agreement which are qualified as to
materiality shall be true and correct, and each of the representations
and warranties of the Company and the Trust contained in this Agreement
which are not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except for
those representations and warranties which address matters only as of a
particular date, which shall be true and correct, or true and correct
in all material respects, as the case may be, as of such date). Each of
the Company and the Trust shall have performed in all material respects
all of their respective agreements, obligations, covenants and
conditions herein required to be performed or observed by it on or
prior to the Closing Date.
(ii) LEGAL INVESTMENT. On the Closing Date, there shall
not be in effect any Law or Order directing that the purchase and sale
of the Securities or the Trust Preferred Securities or any of the other
transactions contemplated by this Agreement and the other Transaction
Agreements not be consummated or which has the effect of rendering it
unlawful to consummate such transactions (other than solely as a result
of any actions of the Purchasers taken other than in accordance with
the provisions of the Transaction Documents).
(iii) PROCEEDINGS AND LITIGATION. No Action shall have
been commenced by any governmental authority against any party hereto
seeking to restrain or delay the purchase and sale of the Securities or
the Trust Preferred Securities or any of the other transactions
contemplated by this Agreement or the other Transaction Agreements.
(iv) HSR COMPLIANCE; OTHER GOVERNMENTAL APPROVALS. All
waiting periods applicable to the transactions contemplated by the
Transaction Agreements under the HSR Act shall have been terminated or
expired. All other Governmental Approvals necessary for consummation of
the transactions contemplated by this Agreement and the other
Transaction
<PAGE>
26
Agreements shall have been obtained, and no such Governmental Approvals
shall contain any term or condition that the Purchasers in their
reasonable discretion determine to be unduly burdensome.
(v) OTHER AGREEMENTS. Each of the other Transaction
Agreements (including the Warrants, the Subordinated Debentures and the
Trust Preferred Securities) shall have been executed and delivered by
the applicable parties thereto. The Company shall have purchased the
Trust Common Securities from the Trust and, simultaneously with the
Closing, the Company shall have issued Subordinated Debentures in a
principal amount of $567,010,325 in exchange for $517,010,325 from the
Trust.
(vi) BOARD OF DIRECTORS. The Company shall have taken
all actions required by Section 7.9 hereof.
(vii) TRANSACTION FEE. The Company shall have paid to KKR
the transaction fee provided for in Section 7.8.
(viii) CHANGE OF CONTROL. No Change of Control of the
Company shall have occurred after the date hereof.
(ix) CERTIFICATES. The Company shall have delivered to
the Purchasers a compliance certificate, executed on behalf of the
Company by the Chairman of the Board of Directors of the Company and
the Chief Executive Officer of the Company, dated the Closing Date, to
the effect that the conditions specified in clause (i) have been
satisfied. The Company shall have delivered to the Purchasers a
certificate executed by the Secretary of the Company, dated the Closing
Date, certifying as to (A) the resolutions of the Board of Directors of
the Company and the actions of the trustee of the Trust evidencing, as
applicable, approval of the transactions contemplated by this Agreement
and the other Transaction Agreements and the authorization of the named
persons to execute and deliver this Agreement and the other Transaction
Agreements and (B) certain of the officers of the Company and the
trustee of the Trust, their titles and examples of their signatures.
The Company shall have delivered to the Purchasers copies of all
certificates, consents and approvals required in connection with the
issuance of the Subordinated Debentures.
(x) LEGAL OPINION. The Purchasers shall have received
from legal counsel to the Company an opinion addressed to them, dated
as of the Closing Date, in form and substance reasonably satisfactory
to the Purchasers as to the matters set forth on Exhibit I.
(xi) CERTIFICATE OF AMENDMENT. The Certificate of
Amendment shall have been filed with and certified by the Secretary of
State of the State of Ohio.
(xii) "HOLDING COMPANY" UNDER PUHCA. The Purchasers shall
be reasonably satisfied that neither of them nor any of their
respective affiliates (as defined in PUHCA) as a result of the
consummation of the transactions contemplated by this Agreement and the
other Transaction Agreements will be a "holding company" as defined in
Section 2(a)(7) of
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27
PUHCA owing to (A) any action taken or omitted to be taken by the
Company or its Subsidiaries after the date hereof, (B) any change
in Law enacted, or any Order issued, or any change in the
interpretation of any Law or Order by the SEC arising after the date
hereof or (C) any action taken by the SEC after the date hereof other
than as a result of any action of the Purchasers or their Affiliates
(other than in accordance with the terms of this Agreement and the
transactions contemplated hereby).
(xiii) LISTING OF WARRANT SHARES. The Warrant Shares shall
have been approved for listing on The New York Stock Exchange, subject
to official notice of issuance.
(xiv) EXEMPTION FROM OGCL. The transactions contemplated
by the Transaction Agreements shall have been exempted from Section
1704 (the interested stockholder provision) of the OGCL pursuant to
Section 1704.02(A).
(xv) ADEQUACY OF FUNDS. The Trust Preferred Purchaser
shall have received the proceeds of $230 million of financing on terms
reasonably satisfactory to it in connection with the purchase of the
Trust Preferred Securities.
(xvi) TRUST PREFERRED SECURITIES RATING. Effective as of
the Closing, the Trust Preferred Securities shall have received ratings
of at least Baa3 from Moody's Investors Service and BBB- from Standard
& Poor's Rating Service.
(xvii) EMPLOYEE AGREEMENTS. Those persons specifically
listed on Schedule 4.18(c) shall have agreed and consented in form and
substance reasonably satisfactory to the Purchasers to the revisions to
the MSIP with respect to their respective stock incentive units and to
the grant of options, in each case as contemplated by Section 4.18(c)
and Schedule 4.18(c).
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND
TRUST. The Company's obligation to issue and sell the Voting Preferred Shares,
and the Warrants at the Closing and the Company's obligation to cause the Trust,
and the Trust's obligation, to issue and sell the Trust Preferred Securities at
the Closing is subject to the satisfaction (or waiver by the Company), on or
prior to the Closing, of the following conditions:
(i) REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of each of the Purchasers contained in
this Agreement shall be true and correct in all material respects as of
the Closing Date. Each of the Purchasers shall have performed in all
material respects all of its agreements, obligations, covenants and
conditions herein required to be performed or observed by it on or
prior to the Closing Date.
(ii) LEGAL INVESTMENT. On the Closing Date, there shall
not be in effect any Law or Order directing that the purchase and sale
of the Securities or the Trust Preferred Securities or any of the other
transactions contemplated by this Agreement or the other Transaction
Agreements not be consummated or which has the effect of rendering it
unlawful
<PAGE>
28
to consummate such transactions (other than solely as a result of any
actions of the Company taken other than in accordance with the
provisions of the Transaction Agreements).
(iii) PROCEEDINGS AND LITIGATION. No Action shall have
been commenced by any governmental authority against any party hereto
seeking to restrain or delay the purchase and sale of the Securities or
the Trust Preferred Securities or other transactions contemplated by
this Agreement or the other Transaction Agreements.
(iv) HSR COMPLIANCE; OTHER GOVERNMENTAL APPROVALS. All
waiting periods applicable to the transactions contemplated by the
Transaction Agreements under the HSR Act shall have been terminated or
expired. All other Governmental Approvals necessary for consummation of
the transactions contemplated by this Agreement and other Transaction
Agreements shall have been obtained and no such Governmental Approval
shall contain any term or condition that the Company in its reasonable
discretion determines to be unduly burdensome.
(v) CERTIFICATES. The Purchasers shall have delivered
to the Company a compliance certificate, executed on behalf of the
Purchasers by an executive officer or director of each of the
Purchasers, dated the Closing Date, to the effect that the conditions
specified in clause (i) have been satisfied. The Purchasers shall have
delivered to the Company a certificate executed by an executive officer
or director of each of the Purchasers, dated the Closing Date,
certifying as to (A) the resolutions of the Board of Directors or
equivalent body of the Purchasers evidencing approval of the
transactions contemplated by this Agreement and the Securityholders
Agreements and the authorization of the named persons to execute and
deliver this Agreement and the Securityholders Agreements and (B)
certain of the officers or directors of the Purchasers, their titles
and examples of their signatures.
(vi) OTHER AGREEMENTS. The Securityholders
Agreement shall have been executed and delivered by each of
the Purchasers.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. (a)
All of the representations and warranties contained in Article IV of this
Agreement shall survive until the later of (i) the first anniversary of the
Closing Date and (ii) 30 days after the Company publicly files with the SEC its
Annual Report on Form 10-K for the year ended December 31, 2000, with the
exceptions of the representations and warranties contained in Sections 4.1, 4.2,
4.4, 4.5 and 4.6 of this Agreement, which shall survive indefinitely.
(b) The representations and warranties contained in Articles V
and VI of this Agreement shall survive until the later of (i) the first
anniversary of the Closing Date and (ii) 30 days
<PAGE>
29
after the Company publicly files with the SEC its Annual Report on Form 10-K
for the year ended December 31, 2000, with the exceptions of the
representations and warranties contained in Sections 5.1 and 6.1 of this
Agreement, which shall survive indefinitely.
SECTION 9.2 INDEMNIFICATION. (a) From and after the Closing
Date and subject to Sections 9.1, 9.3 and 9.4, the Company and the Trust (the
"PURCHASER INDEMNITORS") jointly and severally shall defend, indemnify and hold
harmless the Purchasers and their respective Affiliates (including KKR and its
Affiliates) and each director, officer, member, partner, employee and agent of
such Persons (the "PURCHASER INDEMNITEES") against any loss, damage, claim,
liability, judgment or settlement of any nature or kind, including all costs and
expenses relating thereto, including interest, penalties and reasonable
attorneys' fees and disbursements (collectively "DAMAGES"), arising out of,
resulting from or relating to:
(i) the breach of any representation or warranty
contained in Article IV or any certificate delivered by the
Company or the Trust pursuant hereto; and
(ii) the breach by the Company or the Trust of any
covenant or agreement (whether to be performed prior to or after the
Closing) contained in this Agreement or any other Transaction
Agreement, or any certificate delivered by the Company or the Trust
pursuant hereto or thereto.
(b) From and after the Closing Date and subject to Sections
9.1, 9.3 and 9.4, the Equity Purchaser and the Trust Preferred Purchaser (the
"COMPANY INDEMNITORS" and, together with the Purchaser Indemnitors, the
"INDEMNITORS") jointly and severally shall defend, indemnify and hold harmless
the Company and the Trust and their respective Affiliates and each director,
officer, member, partner, employee and agent of such Persons (the "COMPANY
INDEMNITEES" and, together with the Purchaser Indemnitees, the "INDEMNITEES")
against any Damages arising out of, resulting from or relating to:
(i) the breach of any representation or warranty
contained in Articles V or VI; and
(ii) the breach by the Equity Purchaser or the Trust
Preferred Purchaser of any covenant or agreement (whether to be
performed prior to or after the Closing) contained in this Agreement or
the Securityholders Agreement, or any certificate delivered by the
Purchasers pursuant hereto or thereto.
(c) The parties acknowledge that the Purchasers shall not
be entitled to make a claim for Damages based on the comparison of the
Purchasers' investments in the Company or the Trust to any other investments
or investment opportunities of the Purchasers (it being understood that this
provision shall not in any way limit any claim hereunder based on any
diminution in the value of the Purchasers' investments in the Company or the
Trust, including any reduction in the market price of any securities of the
Company or the Trust).
<PAGE>
30
(d) The term "Damages" as used in this Article IX is not
limited to matters asserted by third parties against any Person entitled to be
indemnified under this Article IX, but includes Damages incurred or sustained by
any such Person in the absence of third party claims, and shall take into
account such Person's ownership or investment in the Company or the Trust.
SECTION 9.3 INDEMNIFICATION AMOUNTS. (a) An Indemnitor shall
not have liability under Section 9.2 until the aggregate amount of Damages
theretofore incurred by the Purchaser Indemnitees or the Company Indemnitees, as
applicable, exceeds an amount equal to $5,000,000, (the "DEDUCTIBLE"), in which
case the Purchaser Indemnitees or the Company Indemnitees, as applicable, shall
be entitled to recover all Damages, including the Damages constituting the
Deductible.
(b) The limitations on the indemnification obligations set
forth in this Section 9.3 shall not apply to any covenants or agreements of the
parties in this Agreement or the other Transaction Agreements. In addition,
notwithstanding the provisions of paragraph (a) above, the limitations on the
indemnification obligations of the parties set forth therein shall not apply to
breaches of the representations and warranties made in Sections 4.1, 4.2, 4.4,
4.5, 4.6, 5.1 and 6.1.
SECTION 9.4 REMEDIES EXCLUSIVE. (a) Excluding an action or
proceeding for the remedy of specific performance, the remedies set forth in
this Article IX and any other provision hereof providing for payments by any
party shall be exclusive and in lieu of any other remedies that may be available
to the Indemnitees pursuant to any statutory or common law with respect to any
Damages of any kind or nature arising out of, resulting from or relating to any
breach specified in Sections 9.2(a) or 9.2(b).
(b) Notwithstanding any other provision of this Agreement
to the contrary, no Indemnitor shall have any indemnification obligation
under this Article IX for any breach of its representations or warranties
(i) if (A) the action or event causing such breach arose after the date of
this Agreement and prior to the Closing Date and (B) such breach does not
pertain to an action, event or condition which occurred or existed prior to
the date of this Agreement and which comes to the knowledge of the Indemnitor
after the date of this Agreement and prior to the Closing, (ii) with respect
to such breach, such Indemnitor shall have satisfied its obligations under
Section 7.4(a) and (A) in the case of the Purchaser Indemnitor, its
obligations under Section 7.1(a)(iii), or (B) in the case of any Company
Indemnitor, its obligations under Section 7.1(c), (iii) such Indemnitor has
specifically disclosed such breach in reasonable detail to the Indemnified
Party at least three business days prior to the Closing Date and (iv) solely
to the extent the applicable Damages result from matters so specifically
disclosed.
SECTION 9.5 CERTAIN LIMITATIONS. The indemnification
obligations of the parties hereto for any breach of a representation and
warranty described in Articles IV, V and VI of this Agreement shall survive for
only the period applicable to such representations and warranties as set forth
in Section 9.1 of this Agreement, and thereafter all such representations and
warranties under this Agreement shall be extinguished; PROVIDED, HOWEVER, that
such indemnification obligation shall not be extinguished in the event of
Damages incurred as a result of an Action that was instituted or begun prior to
the expiration of the survival period set forth in Section 9.1 if notified in
writing to
<PAGE>
31
the applicable Indemnitor by the applicable Indemnitee within 30 days of such
Indemnitee receiving notice thereof or with respect to any other Damages if
notified in writing to the applicable Indemnitor by the applicable Indemnitee
prior to the expiration of the applicable survival period set forth in
Section 9.1. Subject to the proviso at the end of the immediately preceding
sentence, no claim for the recovery of such Damages may be asserted by an
Indemnitee after such period.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 OTHER DEFINITIONS. The following terms
as used in this Agreement shall have the following meanings:
(a) "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.
(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.
(c) "GROUP" shall have the meaning assigned to it in Section
13(d)(3) of the Exchange Act.
(d) "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.
(e) "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 shall include,
with respect to the Company, the Trust.
(f) "TO THE KNOWLEDGE OF THE COMPANY" or similar expressions
mean the actual knowledge of the executive officers of the Company and its
Subsidiaries and, without duplication, those executive officers or other
employees in charge of environmental, tax, labor, employee benefits or real
estate matters, in each case after reasonable investigation and inquiry.
<PAGE>
32
SECTION 10.2 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, 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, as any party hereto may elect, and each of the Company and the Trust
hereby submits 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 unconditionally waives trial by jury in any legal action or
proceeding in relation to this Agreement or the other Transaction Agreements and
for any counterclaim therein.
SECTION 10.3 SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as
otherwise expressly provided herein, the provisions hereof shall inure to the
benefit of, and be binding upon, the successors, permitted assigns, heirs,
executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each Person who shall be a holder of the
Securities or the Trust Preferred Securities from time to time. This Agreement
may not be assigned without the prior written consent of the other party, except
that either of the Purchasers may assign its rights and obligations hereunder to
any Affiliate or Affiliates.
SECTION 10.4 ENTIRE AGREEMENT. This Agreement and the Exhibits
and Schedules hereto, the other Transaction Agreements and the other documents
delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
SECTION 10.5 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 10.6 AMENDMENT AND WAIVER. This Agreement may be
amended or modified, and the rights of the parties hereunder may only be waived,
upon the written consent of each of the parties hereunder.
SECTION 10.7 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 or
the other Transaction Agreements 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. It is further agreed that any
waiver, permit, consent or approval of any kind or character on the part of the
Purchasers of any breach, default or noncompliance under this Agreement or the
other Transaction Agreements or any waiver on the part of the Purchasers of any
provisions or conditions of this Agreement or the other Transaction Agreements,
must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or the other
Transaction Agreements, by law, or otherwise afforded to any party, shall be
cumulative and not alternative.
<PAGE>
33
SECTION 10.8 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, 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 (1) business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the addresses set forth below:
If to the Company or the Trust:
DPL Inc.
P.O. Box 8815
Dayton, Ohio 45401
Telephone: (937) 259-7214
Fax: (937) 259-7386
Attn: Stephen F. Koziar
with copies to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Telephone: (312) 861-2000
Fax: (312) 861-2200
Attn: Carter W. Emerson, P.C.
with copies to:
Chernesky, Heyman & Kress P.L.L.
10 Courthouse Plaza SW, Suite 1100
Dayton, OH 45402
Telephone: (937) 449-2800
Fax: (937) 449-2821
Attn: Richard A. Broock
If to the Purchasers:
c/o Kohlberg Kravis Roberts & Co. L.P.
9 W. 57th Street
New York, NY 10019
Telephone: (212) 750-8300
Fax: (212) 750-0333
Attn: Scott M. Stuart
<PAGE>
34
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, N.Y. 10017
Telephone: (212) 455-2000
Fax: (212) 455-2502
Attn: David J. Sorkin, Esq.
SECTION 10.9 EXPENSES. In addition to any other amounts to be
paid to KKR in accordance with Section 7.8, and in addition to any other
remedies available to the Purchasers, the Company shall promptly after the
termination of this Agreement (in the event the Company is in material breach of
this Agreement at the time of termination), reimburse the Purchasers and their
respective Affiliates for all out-of-pocket expenses and fees (including fees
payable to all banks and other financial institutions and all fees and expenses
of their respective counsels, accountants, experts, consultants and other
agents), whether incurred prior to, on or after the date hereof, in connection
with the consummation of the transactions contemplated by this Agreement and the
other Transaction Agreements.
SECTION 10.10 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 10.11 TERMINATION. This Agreement may be terminated by
(i) mutual agreement of the parties hereto or (ii) by the Purchasers or the
Company in the event the Closing has not occurred by May 1, 2000; PROVIDED, that
this termination right may not be exercised by a party whose nonperformance has
delayed the Closing past such date. Upon termination of this Agreement pursuant
to this Section 10.11, this Agreement shall be void and of no further force and
effect and no party shall have any liability to any other party under this
Agreement, except that nothing herein shall relieve any party from any liability
for the breach of any of the representations, warranties, covenants and
agreements set forth in this Agreement and except as contemplated by Sections
7.12, 10.9 or 10.12.
SECTION 10.12 NO RECOURSE. Notwithstanding any other provision
of this Agreement or any rights of the Company at law or in equity, in the event
of any default by the Purchasers under this Agreement or in the event of any
claim by any Company Indemnitee for indemnification by any Company Indemnitor,
the Company's and the Trust's remedies and any Company Indemnitee's remedies
pursuant to Article IX shall be restricted to enforcement of their respective
rights against the property and assets of the Purchasers (including the
Securities 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).
<PAGE>
35
SECTION 10.13 COUNTERPARTS; EXECUTION BY FACSIMILE
SIGNATURE. 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).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed the
SECURITIES PURCHASE AGREEMENT as of the date set forth in the first paragraph
hereof.
DPL INC.
By: /s/ Allen M. Hill
--------------------------------------
Name: Allen M. Hill
Title: President and CEO
DPL CAPITAL TRUST I
By: /s/ Stephen F. Koziar, Jr.
--------------------------------------
Name: Stephen F. Koziar, Jr.
Title: Administrative Trustee
DAYTON VENTURES LLC
By: KKR 1996 Fund L.P.
By: KKR ASSOCIATES 1996 L.P., its
General Partner
By: KKR 1996 GP LLC, its General Partner
By: /s/ Scott M. Stuart
--------------------------------------
Name: Scott M. Stuart
Title: CEO
DAYTON VENTURES, INC.
By: /s/ Scott M. Stuart
--------------------------------------
Name: Scott M. Stuart
Title: President
<PAGE>
EXHIBIT I
LEGAL OPINION SUBJECTS
1. Due incorporation of the Company and DP&L and authorization to do business
as currently conducted
2. Due authorization, execution and filing of amendment to articles (preferred
shares)
3. Due creation and existence of the Trust and power and authority to conduct
its business
4. Due authorization for issuance of voting preferred shares and debentures
being issued in transaction and that, once issued, they will be validly
issued and fully paid (in the case of the preferred shares) and legally
binding obligations (in the case of the debentures)
5. Due authorization for issuance of common shares which may be issuable upon
exercise of warrants and that, once issued, they will be validly issued,
fully paid, etc.
6. Due authorization for issuance of trust preferred securities and trust
common securities and that, once issued, they will be validly issued and
fully paid
7. Due authorization, execution and delivery and enforceability of warrants
and that warrants will be exercisable for warrant shares in accordance with
their terms
8. Neither the Company nor any subsidiary is an investment company
9. Due authorization by the Company and the Trust of transaction and due
authorization, execution and delivery and enforceability of transaction
documents
10. Non-contravention of transactions with organizational documents or laws or
regulations
11. Declaration of trust is binding and enforceable obligation of the Company
and the Trustee
12. Issuance and sale of trust preferred securities and purchase by the Trust
of the Subordinated Debentures is not in violation of Certificate of Trust
or Declaration of Trust or any Delaware law or regulation
<PAGE>
EXHIBIT A
FORM OF
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
DPL INC.
[NAME], [TITLE], and [NAME], [TITLE], of DPL INC., a for profit
corporation organized and existing under the General Corporation Law of the
State of Ohio, with its principal office located in Dayton, Montgomery
County, Ohio, do hereby certify that a meeting of the Board of Directors of
said Corporation was duly called and held on the ___ day of __________, 2000,
at which a quorum of the directors was present, and that at such meeting the
following resolution amending the Articles of Incorporation of the
Corporation was duly adopted as permitted by Section 1701.70(B)(1) of the
Ohio Revised Code:
RESOLVED, that Section 1 of ARTICLE FOURTH of the Articles of
Incorporation is hereby amended to add the following Subsection X:
X. There shall be a series of the Preferred Shares consisting of
6,800,000 shares and designated as "Series B Voting Preferred Shares" (the
"Series B Preferred Shares") which shall have, in addition to the terms set
forth elsewhere in these Articles of Incorporation, the following
preferences, limitations and relative rights:
(a) The Series B Preferred Shares shall, with respect to dividends
and rights upon liquidation, dissolution or winding up, whether voluntary or
involuntary, rank (i) senior to the Common Shares, and, subject to clause (d)
of this Subsection X, to each other class of capital shares or series of
Preferred Shares or other equity-linked security established after the date
on which the first share of Series B Preferred Shares is issued by the
Corporation (the "Original Issue Date"), the terms of which do not expressly
provide that it ranks senior to or on a parity with the Series B Preferred
Shares as to dividends and rights upon liquidation, dissolution or winding
up, whether voluntary or involuntary (collectively referred to with the
Common Stock as "Junior Securities"), and (ii) on parity only with any shares
of Series A Preferred Shares ("Parity Securities") issued by the Corporation
in the future.
(b)(1) The holders of outstanding shares of Series B Preferred
Shares shall be entitled to receive, when, as and if declared by the Board of
Directors, out of the assets of the Corporation which are, by law, available
for such payment, cumulative dividends, payable in cash, at a rate per annum,
for each Series B Preferred Share, equal to 8.5% of the sum of (i) $0.01 per
share (the "Original Issue Price") and (ii) all compounded accumulated and
unpaid dividends on such Series B
<PAGE>
2
Preferred Share from the Original Issue Date, in each case, as adjusted for
any stock dividends, combinations or splits or similar events with respect to
such share. Such dividends shall be paid and compounded quarterly on the
first day of March, June, September and December in each year commencing with
a payment on ________ __, 2000 of dividends accrued from the Original Issue
Date. Each such dividend shall be payable to the holders of record of Series
B Preferred Shares as they appear on the share register of the Corporation on
the corresponding Record Date. As used herein, the term "Record Date" means,
with respect to the dividend payable on March 1, June 1, September 1 and
December 1, respectively of each year, the preceding February 15, May 15,
August 15 and November 15, or such other record date, not more than 60 days
or less than 10 days preceding the payment dates thereof, as shall be fixed
by the Board of Directors.
(2) The amount of dividends payable for each full dividend period
for the Series B Preferred Shares shall be computed by dividing the annual
8.5% dividend rate by four. The amount of dividends payable for the initial
dividend period, or any other period shorter or longer than a full dividend
period, on the Series B Preferred Shares shall be computed on the basis of
twelve 30-day months and a 360-day year.
(3) Dividends on the Series B Preferred Shares shall accumulate and
compound quarterly whether or not the Corporation has earnings or profits,
whether or not there are funds legally available for payment of such
dividends and whether or not dividends are declared. Dividends will
accumulate and compound quarterly to the extent they are not paid. The
Corporation shall take all actions required or permitted under the General
Corporation Law of Ohio to permit the payment of dividends on the Series B
Preferred Shares and shall declare and pay such dividends to the extent there
are funds legally available therefor.
(4) Except as described in the next succeeding sentence, unless full
cumulative dividends on all outstanding Series B Preferred Shares for all
past dividends have contemporaneously been declared and paid in full or
declared and consideration sufficient for the payment thereof set apart for
such payment on the Series B Preferred Shares, then: (A) no dividend shall be
declared or paid upon, or any sum set apart for the payment of dividends
upon, any shares of Parity Securities; (B) no other distribution shall be
declared or made upon, or any sum set apart for the payment of any
distribution upon, any shares of Parity Securities; (C) no shares of Parity
Securities shall be purchased, redeemed or otherwise acquired or retired for
value (except by conversion into or an exchange for shares of Junior
Securities) by the Corporation or any entity as to which the Corporation
owns, directly or indirectly, more than 50% of such entity=s stock (or
similar voting interests) entitled to vote generally in the election of
directors (or other governing body) (a "Subsidiary"); and (D) no monies shall
be paid into or set apart or made available for a sinking or other like fund
for the purchase, redemption or other acquisition or retirement for value of
any shares of Parity Securities by the Corporation or any of its
Subsidiaries. If at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Series B Preferred Shares, such
payment shall be distributed ratably among the holders of Series B Preferred
Shares based upon the aggregate accrued but unpaid dividends on the Series B
Preferred Shares held by each holder. When dividends are not paid in full or
consideration sufficient for such payment is not set apart, as aforesaid, all
dividends declared upon any other class or series of Parity Securities shall
be declared
<PAGE>
3
ratably in proportion to the respective amounts of dividends accumulated and
unpaid on the Series B Preferred Shares and accumulated and unpaid on such
Parity Securities.
(5) Unless full cumulative dividends on all outstanding shares of
Series B Preferred Shares for all past dividends have been declared and paid
in full or declared and consideration sufficient for the payment thereof set
apart for such payment on the Series B Preferred Shares, then: (A) no
dividend (other than a dividend payable solely in shares of any Junior
Securities) shall be declared or paid upon, or any sum set apart for the
payment of dividends upon, any shares of Junior Securities; (B) no other
distribution shall be declared or made upon, or any sum set apart for the
payment of any distribution upon, any shares of Junior Securities; (C) no
shares of Junior Securities shall be purchased, redeemed or otherwise
acquired or retired for value (excluding an exchange for shares of other
Junior Securities) by the Corporation or any of its Subsidiaries; and (D) no
monies shall be paid into or set apart or made available for a sinking or
other like fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities by the Corporation or
any of its Subsidiaries.
(c)(1) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any distribution or
payment shall be made to the holders of any Junior Securities, the holders of
Series B Preferred Shares shall be entitled to be paid out of the remaining
assets of the Corporation legally available for distribution with respect to
each Series B Preferred Share an amount in cash equal to (A) $0.01 plus (B)
any accumulated but unpaid dividends thereon (whether or not declared and
whether or not funds of the Corporation are legally available for the payment
of dividends), in each case as adjusted for any stock dividends, combinations
or splits or similar events with respect to such share (the "Liquidation
Preference").
(2) If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation shall be
insufficient to pay the full Liquidation Preference with respect to the
Series B Preferred Shares and the full liquidation preference plus
accumulated and unpaid dividends with respect to all other Parity Securities,
the holders of the Series B Preferred Shares and the Parity Securities shall
share equally and ratably in any distribution of assets of the Corporation in
proportion to the full Liquidation Preference in the case of the Series B
Preferred Shares and the full liquidation preference plus accumulated and
unpaid dividends in the case of any Parity Securities to which each is
entitled.
(d) The Corporation shall not, without the prior approval of the
holders of a majority of the outstanding Voting Preferred Shares, issue any
other preferred shares of the Corporation (other than the Series A Preferred
Shares authorized as of the date hereof) (i) of the same class as the Series
B Preferred Shares, or (ii) ranking senior to the Voting Preferred Shares.
(e)(1) Except as set forth below in this clause (e), the Series B
Preferred Shares shall not be redeemable.
(2) The Corporation shall, from time to time, at the option of the
Equity Purchaser (as defined in the Securities Purchase Agreement dated as of
February 1, 2000 by and among the Corporation, DPL Capital Trust I, Dayton
Ventures LLC and Dayton Ventures, Inc. (the "Securities
<PAGE>
4
Purchase Agreement"), redeem such number of Series B Preferred Shares so that
at no time shall the Equity Purchaser, together with its Affiliates (as
defined in the Securities Purchase Agreement), own Common Shares and Series B
Preferred Shares representing in excess of 4.9% of the voting power of the
Corporation in the election of directors. The redemption price shall be $0.01
per share plus accumulated and unpaid dividends up to the date of redemption
(the "Redemption Price."). The Corporation shall pay the Redemption Price
promptly, and in any event within two (2) business days, upon receipt of a
notice from the Equity Purchaser exercising the above option (the "Redemption
Notice"). The Redemption Price may be paid: (i) in cash; (ii) by certified
check made out to the Equity Purchaser or its designee; or (iii) by wire
transfer of immediately available funds to an account designated by the
Equity Purchaser in the Redemption Notice.
(3) In the event a holder of a Warrant (as defined in the Securities
Purchase Agreement) (the "Exercising Holder") wishes to exercise any Warrants
that are not Excess Warrants (as defined in the Securityholders and
Registration Rights Agreement, dated as of _________ __, 2000, by and among
the Corporation, DPL Capital Trust I, Dayton Ventures LLC and Dayton
Ventures, Inc. (the "Securityholders Agreement")), the Corporation shall
redeem simultaneously with the exercise of such Warrants an equal number of
the Exercising Holders' Series B Preferred Shares for the Redemption Price.
The Redemption Price may be paid: (i) in cash; (ii) by certified check made
out to the Exercising Holder or its designee; or (iii) by wire transfer of
immediately available funds to an account designated by the Exercising Holder.
(4) If upon any redemption as set forth in this clause (e) above,
the assets of the Corporation available for redemption are insufficient to
pay the holders of the shares subject to redemption the full amounts to which
they are entitled, all Series B Preferred Shares will be redeemable for cash
upon demand. The Series B Preferred Shares not so redeemed shall remain
outstanding and be entitled to all the powers, preferences and rights
provided herein. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of Series B Preferred
Shares, such funds will immediately be used to redeem the balance of the
shares which the Corporation has become obligated to redeem in accordance
with this clause (e) which it has not redeemed.
(5) The Corporation will not enter into any contract or agreement
(whether verbal or written) restricting or impairing its ability to redeem
Series B Preferred Shares in accordance with this clause (e).
(f) ISSUANCES OF ADDITIONAL SECURITIES. Prior to the declaration,
issuance or consummation of any dividend, spin-off or other distribution or
similar transaction by the Corporation of the capital stock of any of its
Subsidiaries to the shareholders of the Corporation, the Corporation shall
cause (i) additional shares of voting preferred stock of such Subsidiary with
substantially similar terms as the Series B Preferred Shares to be issued to
each holder of Series B Preferred Shares so that after giving effect to such
transaction each such holder shall have the same percentage voting interest
in the Series B Preferred Shares and in such shares of voting preferred stock
in such Subsidiary as it had in the Corporation immediately prior to such
transaction and (ii) any such Subsidiary to enter into with each such holder
a securityholders and registration rights agreement with substantially
<PAGE>
5
similar terms, conditions, covenants and governance provisions as are
provided for in the Securityholders Agreement.
<PAGE>
6
IN WITNESS WHEREOF, said [NAME], [TITLE], and [NAME], [TITLE], of
DPL Inc., acting for and on behalf of said Corporation, have hereunto
subscribed their names on this ______ day of __________ 2000.
DPL INC.
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
<PAGE>
EXHIBIT B
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM OF WARRANT
TO PURCHASE COMMON SHARES OF
DPL INC.
ISSUANCE DATE: ______ __, 2000
NO. OF SHARES OF COMMON SHARES: ______________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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: ____________________
FORM OF 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.
<PAGE>
2
"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 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
<PAGE>
3
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 __________ __, 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 such exercise and contemporaneous sale by the
Holder of the applicable shares of Common Stock issued upon
<PAGE>
4
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 Warrants or other securities or property to which it
is entitled, registered or otherwise to the Person or Persons entitled to
receive
<PAGE>
5
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, if 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.
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
<PAGE>
6
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 upon the
exercise of this Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock
<PAGE>
7
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, shares 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 the record date for the determination of
stockholders entitled to receive such rights, options, warrants or securities.
<PAGE>
8
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.
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
<PAGE>
9
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 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
<PAGE>
10
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 3.1 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 the
Company only if challenge is successful, otherwise such expenses shall be borne
by the Holder.
<PAGE>
11
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
Warrant or 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 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)
<PAGE>
12
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 6, 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, may be 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 may be 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
Securityholders Agreement and, in any case, with respect to Section 3.3, the
Holder, by acceptance of this Warrant, agrees to be
<PAGE>
13
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.
<PAGE>
14
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
<PAGE>
15
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.
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.
<PAGE>
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.
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.
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:
Title:
Attest:
- -----------------------------------
Name:
Title:
<PAGE>
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.
<PAGE>
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:
<TABLE>
<CAPTION>
No. of
Name and Address of Assignee Common Shares
- ---------------------------- -------------
<S> <C>
</TABLE>
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.
<PAGE>
EXHIBIT C
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
DPL INC.,
AS GUARANTOR
and
THE BANK OF NEW YORK
AS GUARANTEE TRUSTEE
RELATING TO
DPL CAPITAL TRUST I
----------------------
Dated as of _______________ __, 2000
----------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I Definitions................................................................1
Section 1.1 Definitions............................................................1
ARTICLE II Trust Indenture Act........................................................5
Section 2.1 Trust Indenture Act; Application.....................................5
Section 2.2 List of Holders......................................................5
Section 2.3 Reports by the Guarantee Trustee.....................................6
Section 2.4 Periodic Reports to the Guarantee Trustee............................6
Section 2.5 Evidence of Compliance with Conditions Precedent.....................6
Section 2.6 Events of Default; Waiver............................................6
Section 2.7 Event of Default; Notice.............................................6
Section 2.8 Conflicting Interests................................................7
ARTICLE III Powers, Duties and Rights of the Guarantee Trustee.........................7
Section 3.1 Powers and Duties of the Guarantee Trustee...........................7
Section 3.2 Certain Rights of Guarantee Trustee..................................9
Section 3.3 Compensation; Indemnity; Fees.......................................11
ARTICLE IV Guarantee Trustee.........................................................12
Section 4.1 Guarantee Trustee; Eligibility......................................12
Section 4.2 Appointment, Removal and Resignation of the Guarantee Trustee.......12
ARTICLE V Guarantee.................................................................13
Section 5.1 Guarantee...........................................................13
Section 5.2 Waiver of Notice and Demand.........................................13
Section 5.3 Obligations Not Affected............................................14
Section 5.4 Rights and Obligations of Holders...................................15
Section 5.5 Guarantee of Payment................................................15
Section 5.6 Subrogation.........................................................15
Section 5.7 Independent Obligations.............................................15
ARTICLE VI Covenants and Subordination...............................................16
Section 6.1 Subordination.......................................................16
Section 6.2 Pari Passu Guarantees...............................................16
ARTICLE VII Termination...............................................................16
Section 7.1 Termination.........................................................16
i--
<PAGE>
ARTICLE VIII Miscellaneous.............................................................17
Section 8.1 Successors and Assigns..............................................17
Section 8.2 Amendments..........................................................17
Section 8.3 Notices.............................................................17
Section 8.4. Benefit..............................................................18
Section 8.5. Governing Law........................................................18
Section 8.6. Counterparts.........................................................18
</TABLE>
ii--
<PAGE>
GUARANTEE AGREEMENT, dated as of _______ __, 2000, between DPL INC., an
Ohio corporation (the "GUARANTOR"), having its principal office at Courthouse
Plaza Southwest, Dayton, Ohio, 45402 and The Bank of New York, a national
banking association, as trustee (the "GUARANTEE TRUSTEE"), for the benefit of
the Holders (as defined herein) from time to time of the Trust Securities (as
defined herein) of DPL Capital Trust I, a Delaware statutory business trust (the
"ISSUER TRUST").
RECITALS OF THE CORPORATION
Whereas, pursuant to an Amended and Restated Trust Agreement, dated as
of __________ __, 2000, among DPL, Inc., as Depositor, The Bank of New York, as
Property Trustee, The Bank of New York as Delaware Trustee, and the
Administrative Trustees named therein, the Issuer Trust is issuing $550,000,000
aggregate Liquidation Amount (as defined in the Trust Agreement) of its 8.5%
Capital Securities (liquidation amount $25.00 per capital security) (the
"CAPITAL SECURITIES"), representing undivided beneficial interests in the assets
of the Issuer Trust and having the terms set forth in the Trust Agreement; and
Whereas, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with The Bank of New York, as Property Trustee
under the Trust Agreement, as trust assets; and
Whereas, as an incentive for the Holders to purchase Trust Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Trust Securities the Guarantee
Payments (as defined herein) on the terms and conditions set forth herein.
Now, Therefore, in consideration of the purchase of Trust Securities by
each Holder, which purchase the Guarantor hereby acknowledges will benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.
For all purposes of this Guarantee Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
2
(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(d) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Guarantee Agreement; and
(e) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"BOARD OF DIRECTORS" means the board of directors of the Guarantor or
the Executive Committee of the board of directors of the Guarantor (or any other
committee of the board of directors of the Guarantor performing similar
functions) or a committee designated by the board of directors of the Guarantor
(or such committee), comprised of two or more members of the board of directors
of the Guarantor or officers of the Guarantor, or both.
"CAPITAL SECURITIES" has the meaning specified in the recitals to this
Guarantee Agreement.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"EVENT OF DEFAULT" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"GUARANTEE AGREEMENT" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Trust Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement)
<PAGE>
3
required to be paid on the Trust Securities, to the extent the Issuer Trust
shall have funds on hand available therefor at such time; (ii) the Redemption
Price (as defined in the Trust Agreement) with respect to any Trust Securities
called for redemption by the Issuer Trust, to the extent the Issuer Trust shall
have funds on hand available therefor at such time; and (iii) upon a voluntary
or involuntary dissolution, winding-up or liquidation of the Issuer Trust,
unless Debentures are distributed to the Holders, the lesser of (a) the
Liquidation Distribution (as defined in the Trust Agreement) with respect to the
Trust Securities, and (b) the amount of assets of the Issuer Trust remaining
available for distribution to Holders on liquidation of the Issuer Trust after
satisfaction of liabilities to creditors of the Issuer Trust as required by
applicable law.
"GUARANTEE TRUSTEE" means The Bank of New York, solely in its capacity
as Guarantee Trustee and not in its individual capacity, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"GUARANTOR" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"HOLDER" means any Holder (as defined in the Trust Agreement) of any
Trust Securities; PROVIDED, HOWEVER, that in determining whether the holders of
the requisite percentage of Trust Securities have given any request, notice,
consent or waiver hereunder, "HOLDER" shall not include the Guarantor, the
Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee Trustee;
and PROVIDED FURTHER, that in determining whether the Holders of the requisite
liquidation amount of Trust Securities have voted on any matter provided for in
this Guarantee, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Trust Securities remain in the form of one or
more Global Certificates (as defined in the Trust Agreement), the term "Holders"
shall mean the holder of the Global Certificate acting at the direction of the
beneficial holders of the Trust Securities.
"INDENTURE" means the Junior Subordinated Indenture, dated as of
________ , 2000, between DPL Inc. and The Bank of New York, as trustee, as the
same may be modified, amended or supplemented from time to time pursuant to
which the Debentures are to be issued to the Property Trustee (as defined in the
Trust Agreement) of the Issuer Trust.
"ISSUER TRUST" has the meaning specified in the first paragraph of this
Guarantee Agreement.
"LIST OF HOLDERS" has the meaning specified in Section 2.2(a).
"MAJORITY IN LIQUIDATION AMOUNT OF THE TRUST SECURITIES" means, except
as provided by the Trust Indenture Act, Trust Securities representing more than
50% of the aggregate Liquidation Amount (as defined in
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4
the Trust Agreement) of all Trust Securities then Outstanding (as defined in the
Trust Agreement).
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman or a
Vice Chairman of the Board of Directors of the Guarantor, the President, one of
the Vice Presidents, or the Treasurer, an Assistant Treasurer, the Secretary or
an Assistant Secretary of the Guarantor, and delivered to the Guarantee Trustee.
Any Officer's Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee Agreement shall include:
(a) a statement by each officer signing the Officer's Certificate that
such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"RESPONSIBLE OFFICER" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Office of the Guarantee Trustee and also means, with respect to a
particular matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this Guarantee Agreement was executed; PROVIDED,
HOWEVER, that if the Trust Indenture
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5
Act of 1939 is amended after such date, "TRUST INDENTURE ACT" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"TRUST SECURITIES" means the Capital Securities and the Common
Securities.
"VICE PRESIDENT," when used with respect to the Guarantor, means any
duly appointed Vice President, whether or not designated by a number or a word
or words added before or after the title "Vice President."
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.
Except as otherwise expressly provided herein, the Trust Indenture Act
shall apply as a matter of contract to this Guarantee Agreement for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Guarantee Agreement, the Guarantor and the Guarantee Trustee shall be
deemed for all purposes hereof to be subject to and governed by the Trust
Indenture Act to the same extent as would be the case if this Guarantee
Agreement were qualified under that Act on the date hereof. Except as otherwise
expressly provided herein, if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
Section 2.2 LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders (a "LIST OF HOLDERS") as
of a date not more than 15 days prior to the delivery thereof, and (b) at
such other times as the Guarantee Trustee may request in writing, within 30
days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list is
furnished, in each case to the extent such information is in the possession
or control of the Guarantor and has not otherwise been received by the
Guarantee Trustee in its capacity as such. The Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Guarantee Trustee shall comply with the requirements of
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
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6
Section 2.3 REPORTS BY THE GUARANTEE TRUSTEE.
Not later than 60 days following May 15 of each year, commencing May
15, 2000, the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. If this Guarantee
Agreement shall have been qualified under the Trust Indenture Act, the Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4 PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee and the Holders
such documents, reports and information, if any, as required by Section 314 of
the Trust Indenture Act and the compliance certificate required by Section 314
of the Trust Indenture Act, in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act, PROVIDED that such documents, reports
and information shall not be required to be provided to the Securities and
Exchange Commission unless this Guarantee Agreement shall have been qualified
under the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officer's Certificate.
Section 2.6 EVENTS OF DEFAULT; WAIVER.
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders of all the Capital Securities,
waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
Section 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default actually known to a Responsible Officer of the
Guarantee Trustee, transmit by mail, first class postage prepaid, to the
Holders, notice of any such Event of Default, unless such Event of Default
has been cured before the giving of such notice, PROVIDED that, except
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7
in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee
in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
Section 2.8 CONFLICTING INTERESTS.
The Trust Agreement and the Indenture shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee hereunder. The right, title and
interest of the Guarantee Trustee, as such, hereunder shall automatically
vest in any Successor Guarantee Trustee, upon acceptance by such Successor
Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Guarantee Agreement (including pursuant to Section 2.1),
and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. If an Event of Default has occurred (that
has not been cured
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8
or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee Agreement, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his
or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act or its own wilful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of
this Guarantee Agreement (including pursuant to Section
2.1), and the Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Guarantee Agreement (including pursuant to Section 2.1);
and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or
not they conform to the requirements of this Guarantee
Agreement.
(ii) The Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the
Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made.
(iii) The Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than
a Majority in Liquidation
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9
Amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust
or power conferred upon the Guarantee Trustee, under this
Guarantee Agreement.
(iv) Subject to Section 3.1(b), no provision of this Guarantee
Agreement shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured
to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably
assured to it.
Section 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officer's Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to
take any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an
Officer's Certificate which, upon receipt of such request from
the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect
to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted
to be taken by it
<PAGE>
10
hereunder in good faith and in accordance with such advice or
opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may be one of its or
their employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder unless
such Holder shall have provided to the Guarantee Trustee such
adequate security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee against the
costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances
as may be requested by the Guarantee Trustee; PROVIDED that
nothing contained in this Section 3.2(a)(v) shall be taken to
relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and
powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Guarantee Trustee (A)
may request instructions from the Holders, (B) may refrain
from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
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11
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts or to exercise any such right, power,
duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty to act in accordance with
such power and authority.
Section 3.3 COMPENSATION; INDEMNITY; FEES.
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such reasonable
compensation for all services rendered by it hereunder as may be agreed by
the Guarantor and the Guarantee Trustee from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by the Guarantee Trustee in accordance with
any provision of this Guarantee Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(c) to indemnify the Guarantee Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, wilful
misconduct or bad faith on the part of the Guarantee Trustee, arising out
of or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
The provisions of this Section 3.3 shall survive the termination of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
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12
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is a national or state chartered bank and
eligible pursuant to the Trust Indenture Act to act as such,
and that has at the time of such appointment securities
rated in one of the three highest rating categories by a
nationally recognized statistical rating organization and a
combined capital and surplus of at least $50,000,000, and
shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act and subject to supervision
or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority,
then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
Section 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(c), the Guarantee Trustee may be appointed
or removed at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by giving written
notice thereof to the
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Holders and the Guarantor and the appointment of a successor Guarantee
Trustee by the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed and shall have
accepted such appointment. No removal or resignation of a Guarantee Trustee
shall be effective until a Successor Guarantee Trustee has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and, in the case
of any resignation, the resigning Guarantee Trustee.
(d) If the Guarantee Trustee shall resign, be removed or become
incapable of acting as Guarantee Trustee and a replacement shall not be
appointed prior to such resignation or removal, or if a vacancy shall occur
in the office of Guarantee Trustee for any reason, and no Successor
Guarantee Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery to the Holders
and the Guarantor of a notice of resignation, the resigning Guarantee
Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may
deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
Section 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.
Section 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands. Notwithstanding anything to the
contrary herein, the Guarantor retains all of its rights under the Indenture to
(i) extend the interest payment period on the
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14
Debentures and the Guarantor shall not be obligated hereunder to make any
Guarantee Payments during any Extended Interest Payment Period (as defined in
the Indenture) with respect to the Distributions (as defined in the Trust
Agreement) on the Trust Securities, and (ii) change the maturity date of the
Debentures to the extent permitted by the Indenture.
Section 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise (other
than by Act (as defined in the Trust Agreement) of the Holders), of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities
to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures as provided in the Indenture), Redemption
Price (as defined in the Indenture), Liquidation Distribution or any other
sums payable under the terms of the Capital Securities or the extension of
time for the performance of any other obligation under, arising out of, or
in connection with, the Capital Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer Trust granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer Trust or any of the
assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it being the intent of this Section
5.3 that the obligations of the Guarantor
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15
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4 RIGHTS AND OBLIGATIONS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Trust Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) in the event that the Guarantor has failed to make a Guarantee Payment,
any Holder may, subject to Section 6.2, institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee Agreement
without first instituting a legal proceeding against the Guarantee Trustee, the
Issuer Trust or any other Person.
Section 5.5 GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
Section 5.6 SUBROGATION.
The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
Section 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this
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Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
Section 6.1 SUBORDINATION.
The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Guarantor to the extent and in the manner set forth in the
Indenture with respect to the Debentures, and the provisions of Article XIII of
the Indenture will apply, MUTATIS MUTANDIS, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Indebtedness (as defined in the Indenture) of the Guarantor.
Section 6.2 PARI PASSU GUARANTEES.
The obligations of the Guarantor under this Guarantee Agreement shall
rank PARI PASSU with the obligations of the Guarantor under (i) any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any Issuer Trust (as defined in the
Indenture); (ii) the Indenture and the Securities (as defined therein) issued
thereunder; and (iii) any other security, guarantee or other agreement or
obligation that is expressly stated to rank PARI PASSU with the obligations of
the Guarantor under this Guarantee Agreement or with any obligation that ranks
PARI PASSU with the obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VII
TERMINATION
Section 7.1 TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all Capital Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Capital Securities, or (iii) full payment of
the amounts payable in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any
<PAGE>
17
Holder is required to repay any sums paid with respect to Capital Securities
or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.
Section 8.2 AMENDMENTS.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings, and actions taken by written consent of the Holders shall
apply to the giving of such approval.
Section 8.3 NOTICES.
(a) Any notice, request or other communication required or permitted
to be given hereunder shall be in writing, duly signed by the party giving
such notice, and delivered, by facsimile or first class mail as follows:
(i) if given to the Guarantor, to the address or facsimile
number set forth below or such other address or facsimile
number as the Guarantor may give notice to the Guarantee
Trustee and the Holders:
DPL Inc.
Courthouse Plaza Southwest
Dayton, Ohio 45402
Attention:
Facsimile:
<PAGE>
18
(ii) if given to the Guarantee Trustee, at the address or
facsimile number set forth below or such other address or
facsimile number as the Guarantee Trustee may give notice to
the Guarantor and the Holders:
[Name]
[Address]
Attention:
Facsimile:
(iii) if given to any Holder, in the manner set forth in Section
10.8 of the Trust Agreement.
(b) All notices hereunder shall be deemed to have been given when
received in person, by facsimile with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver,
PROVIDED that any notice given as provided in Section 8.3(a)(iii) shall be
deemed to have been given at the time specified in Section 10.8 of the
Trust Agreement.
Section 8.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Trust Securities.
Section 8.5. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 8.6. COUNTERPARTS.
This Guarantee Agreement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
19
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed all as of the day and year first above written.
DPL INC.,
as Guarantor
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Guarantee Trustee
By:
------------------------------------
Name:
Title:
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
- ------------------- -------------------
<S> <C>
310(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
310(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.5, 3.2
314(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1, 3.2
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
315(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.6, 5.4
316(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
316(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2
317(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
318(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
</TABLE>
- --------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
EXHIBIT D
[FORM OF DEBENTURE]
"THIS SECURITY (OR ANY PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A,
REGULATION S OR ANOTHER EXEMPTION THEREUNDER. THE HOLDER OF THIS SECURITY, BY
ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF
THE CORPORATION AND THE ISSUER TRUST THAT: (I) IT HAS ACQUIRED A "RESTRICTED"
SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL
NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
CORPORATION, (B) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER APPLICABLE JURISDICTIONS; AND (III) IT WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY
OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE. ANY OFFER, SALE, PLEDGE OR
OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSES (II)(C) AND (D) IS SUBJECT
TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE PROPERTY TRUSTEE FOR SUCH
SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR
OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE. SECURITIES OWNED
BY AN INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE
HELD IN BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW. THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE
TERMS OF A SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT, DATED OF EVEN
DATE HEREWITH, AMONG THE ISSUER TRUST, THE DEPOSITOR AND THE PURCHASERS NAMED
THEREIN."
<PAGE>
2
THE HOLDER OF THIS SECURITY IS DEEMED, BY SUCH HOLDER'S ACCEPTANCE OF
THIS SECURITY, TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF THE
SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT, DATED OF EVEN DATE HEREWITH,
AMONG THE ISSUER TRUST, THE DEPOSITOR AND THE PURCHASERS NAMED THEREIN.
DPL INC.
8.5% Junior Subordinated Deferrable Interest Debentures
No. R-1 $__________
DPL INC., an Ohio corporation (hereinafter called the "CORPORATION",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to DPL, CAPITAL TRUST
I, or registered assigns, the principal sum of __________ Dollars on _________,
____. The Corporation further promises to pay interest on said principal sum
from ___________, ____ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on ___________, ___________, ___________ and
___________ of each year, commencing ____ at the rate of 8.5% per annum until
the principal hereof is paid or duly provided for or made available for
payment; PROVIDED that any overdue principal, premium and any overdue
installment of interest shall bear Additional Interest at the rate of 8.5% per
annum (to the extent that the payment of such interest shall be legally
enforceable), compounded quarterly, from the dates such amounts are due until
they are paid or made available for payment, and such interest shall be payable
on demand. The amount of interest payable for any period less than a full
interest period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period.
The amount of interest payable for any full interest period shall be computed
by dividing the applicable rate per annum by four. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
__________, ___________, ___________ or ____________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange or automated
quotation system on which the Securities of this series may be listed or
traded, and upon such notice as may be required by such exchange or self
regulatory organization, all as more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time during the term of this Security,
from time to time to defer the payment of interest on this Security for up to
20 consecutive quarterly interest payment periods with respect
<PAGE>
3
to each deferral period (each an "EXTENSION PERIOD") at the end of which the
Corporation shall pay all interest then accrued and unpaid (including any
Additional Interest, as provided below); PROVIDED, HOWEVER, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security and no such Extension Period may end on a date other than an Interest
Payment Date; and PROVIDED FURTHER, HOWEVER, that during any such Extension
Period, the Corporation shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock, or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Corporation that rank PARI PASSU in all
respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation or satisfaction of obligations under any contract or security
in connection with any employment contract, stock option plan, benefit plan or
other similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, or in connection with a dividend
reinvestment or stockholder stock purchase plan, (b) as a result of an exchange
or conversion of any class or series of the Corporation's capital stock (or any
capital stock of a Subsidiary of the Corporation) for any class or series of
the Corporation's capital stock or of any class or series of the Corporation's
debt for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged or any agreements relating thereto, (d)
any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks PARI PASSU
with or junior to such stock). Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Corporation may
elect to begin a new Extension Period, subject to the above conditions. No
interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest (to the
extent that the payment of such interest shall be legally enforceable) at the
rate of ____% per annum, compounded quarterly and calculated as set forth in
the first paragraph of this Security, from the dates on which amounts would
otherwise have been due and payable until paid or made available for payment.
The Corporation shall give the Property Trustee of this Security notice of its
election of such Extension Period at least one Business Day prior to the next
succeeding Interest Payment Date on which interest on this Security would be
payable but for such deferral or so long as such Securities are held by the
Issuer Trust (as defined on the reverse hereof), at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on
the Capital Securities of such Issuer Trust would be payable but for such
deferral, and (ii) the date on which the Property Trustee of such Issuer Trust
is required to give notice to holders of such Capital Securities of the record
date or the date such Distributions are payable. The Property Trustee will
give notice of the Corporation's election to begin a new Extension Period to
the Holders of the Capital Securities.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Corporation maintained for
that purpose in [INSERT PLACE OF
<PAGE>
4
PAYMENT], in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
The debt evidenced by this Security is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such actions as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by such
Holder's acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed.
DPL INC.
By:_________________________________
Name:
Title:
<PAGE>
5
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "SECURITIES"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of _________ __,
2000 (herein called the "INDENTURE"), between the Corporation and ____________,
as Trustee (herein called the "TRUSTEE", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Corporation, the Trustee, the Holders of Senior Indebtedness and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $ ___________.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement dated as of ___________, 2000 (as
modified, amended or supplemented from time to time, the "Trust Agreement")
relating to DPL Capital Trust I (the "Issuer Trust") among the Corporation, as
Depositor, the Trustees named therein and the Holders from time to time of the
Trust Securities issued pursuant thereto shall have the meanings assigned to
them in the Indenture or the Trust Agreement, as the case may be.
The Corporation may at any time, at its option, on or after _______,
__ and subject to the terms and conditions of Article XI of the Indenture,
redeem this Security in whole at any time or in part from time to time, at the
following Redemption Prices (expressed as percentages of the principal amount
hereof): If redeemed during the 12-month period beginning __________,
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2010 [100% + half of
coupon]
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest
(including any Additional Interest) to but excluding the date fixed for
redemption.
In addition, upon the occurrence and during the continuation of a Tax
Event or Investment Company Event in respect of the Issuer Trust, the
Corporation may, at its option, at any time within 90 days of the occurrence
and during the continuation of such Tax Event or Investment Company Event, as
the case may be, redeem this Security, in whole but not in part, subject to the
terms and conditions of Article XI of the Indenture, at a Redemption Price
equal to the greater of (1) 100% of the principal amount of such Security or (2)
as determined by a Quotation Agent (as defined below), the sum of the present
values of the principal amount and premium payable as part of the Redemption
Price with respect to an optional redemption of such Securities on _________,
2010, together with the present values of the scheduled payments of interest
from the Redemption Date to _________, 2010 (the "REMAINING LIFE"), in each
case discounted to the Redemption Date on a quarterly basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below).
<PAGE>
6
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) [new issue spread - .25]% if such
Redemption Date occurs on or before _______, 2001 or (ii) 0.50% if such
prepayment date occurs after _________, 2001.
"Quotation Agent" means Goldman Sachs & Co. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Corporation shall substitute therefor another Primary Treasury Dealer.
"Treasury Rate" means, with respect to any redemption date, (i) the
yield, under the heading which represents the average for the week immediately
prior to the calculation date, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Remaining Life (if no maturity is within
three months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
redemption date. The calculation date shall be the third Business Day
preceding the redemption date.
"Comparable Treasury Issue" means, with respect to any redemption
date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Security has a maturity which is within a
period from three months before to three months after _________, 20__, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of five Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii)
any other Primary Treasury Dealer selected by the Trustee after consultation
with the Corporation.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Trustee, of the bid and
<PAGE>
7
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.
The Indenture contains provisions for satisfaction and discharge of
the entire debt of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the Corporation and the Trustee at any time to enter into a supplemental
indenture or indentures for the purpose of modifying in any manner the rights
and obligations of the Corporation and of the Holders of the Securities, with
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with provisions of the Indenture
and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Outstanding Securities of this series to be due and payable immediately, by
a notice in writing to the Corporation (and to the Trustee if given by
Holders), PROVIDED that, if upon an Event of Default, the Trustee or such
Holders fail to declare the principal of all the Outstanding Securities of this
series to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount of the Capital Securities then Outstanding shall
have the right to make such declaration by a notice in writing to the
Corporation and the Trustee; and upon any such declaration the principal of and
the accrued interest (including any Additional Interest) on all the Securities
of this series shall become immediately due and payable, PROVIDED that the
payment of such principal and interest (including any Additional Interest) on
such Securities shall remain subordinated to the extent provided in Article
XIII of the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Corporation maintained under Section
10.2 of the Indenture for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Corporation and the
Securities Registrar duly executed by, the Holder
<PAGE>
8
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Securities of this series, of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple of $25 in
excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
It is intended that this Security constitute debt of the Corporation
for all United States tax purposes and the Corporation and, by its acceptance
of this Security or a beneficial interest therein, the Holder of, and any
Person that acquires a beneficial interest in, this Security agree to treat the
Security as debt of the Corporation for all United States federal, state and
local tax purposes.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
EXHIBIT E
================================================================================
DPL INC.
to
THE BANK OF NEW YORK,
AS TRUSTEE
______________________
JUNIOR SUBORDINATED INDENTURE
Dated as of _______________ ___, 2000
______________________
================================================================================
<PAGE>
DPL INC.
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including
317 which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as
amended by the Trust Reform Act of 1990, are a part of and govern the
Indenture whether or not physically contained therein) and the Junior
Subordinated Indenture, dated as of __________ ___, 2000.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C>
Section 310 (a) (1), (2) and (5). . . . . . . . . . . . . 6.9
(a) (3). . . . . . . . . . . . . . . . . . . Not Applicable
(a) (4). . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . 6.8
. . . . . . . . . . . . . . . . . . . . . . . 6.10
(c). . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 311 (a). . . . . . . . . . . . . . . . . . . . . 6.13
(b). . . . . . . . . . . . . . . . . . . . . 6.13
(b) (2). . . . . . . . . . . . . . . . . . . 6.13
. . . . . . . . . . . . . . . . . . . . . . . 6.13
Section 312 (a). . . . . . . . . . . . . . . . . . . . . 7.1
. . . . . . . . . . . . . . . . . . . . . . . 7.2(a)
(b). . . . . . . . . . . . . . . . . . . . . 7.2(b)
(c). . . . . . . . . . . . . . . . . . . . . 7.2(c)
Section 313 (a). . . . . . . . . . . . . . . . . . . . . 7.3(a)
(b). . . . . . . . . . . . . . . . . . . . . 7.3(b)
(c). . . . . . . . . . . . . . . . . . . . . 7.3(a), 7.3(b)
(d). . . . . . . . . . . . . . . . . . . . . 7.3(c)
Section 314 (a) (1), (2) and (3). . . . . . . . . . . . . 7.4
(a) (4). . . . . . . . . . . . . . . . . . . 10.5
(b). . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) (1). . . . . . . . . . . . . . . . . . . 1.2
(c) (2). . . . . . . . . . . . . . . . . . . 1.2
(c) (3). . . . . . . . . . . . . . . . . . . Not Applicable
(d). . . . . . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . 1.2
(f). . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 315 (a). . . . . . . . . . . . . . . . . . . . . 6.1(a)
(b). . . . . . . . . . . . . . . . . . . . . 6.2
. . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(c). . . . . . . . . . . . . . . . . . . . . 6.1(b)
<PAGE>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C>
(d). . . . . . . . . . . . . . . . . . . . . 6.1(c)
(d) (1). . . . . . . . . . . . . . . . . . . 6.1(d) (1)
(d) (2). . . . . . . . . . . . . . . . . . . 6.1(d) (2)
(d) (3). . . . . . . . . . . . . . . . . . . 6.1(d) (3)
(e). . . . . . . . . . . . . . . . . . . . . 5.14
Section 316 (a). . . . . . . . . . . . . . . . . . . . . 1.1
(a) (1) (A). . . . . . . . . . . . . . . . . 5.12
(a) (1) (B). . . . . . . . . . . . . . . . . 5.13
(a) (2). . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . 5.8
(c). . . . . . . . . . . . . . . . . . . . . 1.4(f)
Section 317 (a) (1). . . . . . . . . . . . . . . . . . . 5.3
(a) (2). . . . . . . . . . . . . . . . . . . 5.4
(b). . . . . . . . . . . . . . . . . . . . . 10.3
Section 318 (a). . . . . . . . . . . . . . . . . . . . . 1.7
</TABLE>
- -------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION. . . . . . . 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Compliance Certificate and Opinions. . . . . . . . . . . . . . 10
SECTION 1.3. Forms of Documents Delivered to Trustee. . . . . . . . . . . . 11
SECTION 1.4. Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 1.5. Notices, Etc. to Trustee and Corporation . . . . . . . . . . . 14
SECTION 1.6. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . 14
SECTION 1.7. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . 15
SECTION 1.8. Effect of Headings and Table of Contents . . . . . . . . . . . 15
SECTION 1.9. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.10. Separability Clause. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.11. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.13. Non-Business Days. . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II SECURITY FORMS. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.1. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.2. Form of Face of Security . . . . . . . . . . . . . . . . . . . 17
SECTION 2.3. Form of Reverse of Security. . . . . . . . . . . . . . . . . . 20
SECTION 2.4. Additional Provisions Required in Global Security. . . . . . . 25
SECTION 2.5. Form of Trustee's Certificate of Authentication. . . . . . . . 25
ARTICLE III THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.1. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.2. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.3. Execution, Authentication, Delivery and Dating . . . . . . . . 29
SECTION 3.4. Temporary Securities . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.5. Global Securities. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.6. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Securities Act Legends; Exchange
Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . 35
SECTION 3.8. Payment of Interest and Additional Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.9. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.10. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.11. Computation of Interest. . . . . . . . . . . . . . . . . . . . 38
SECTION 3.12. Deferrals of Interest Payment Dates. . . . . . . . . . . . . . 38
<PAGE>
SECTION 3.13. Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.14. Agreed Tax Treatment . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3.15. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.1. Satisfaction and Discharge of Indenture. . . . . . . . . . . . 40
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . 41
ARTICLE V REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 5.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . . . . 43
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 45
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities . . 46
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . 46
SECTION 5.7. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest; Direct Action by Holders of Capital Securities. .47
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . 47
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 48
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . 48
SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 48
SECTION 5.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.15. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . 49
ARTICLE VI THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.1. Certain Duties and Responsibilities. . . . . . . . . . . . . . 50
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.3. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . 51
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities . . . . 52
SECTION 6.5. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.6. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . 53
SECTION 6.8. Disqualification; Conflicting Interests. . . . . . . . . . . . 53
SECTION 6.9. Corporate Trustee Required; Eligibility. . . . . . . . . . . . 54
SECTION 6.10. Resignation and Removal; Appointment of Successor. . . . . . . 54
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . 56
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business. . 57
SECTION 6.13. Preferential Collection of Claims Against Corporation. . . . . 57
SECTION 6.14. Appointment of Authenticating Agent. . . . . . . . . . . . . . 57
<PAGE>
ARTICLE VII HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.2. Preservation of Information, Communications to Holders . . . . 59
SECTION 7.3. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.4. Reports by Corporation . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE. . . . . . . . 60
SECTION 8.1. Corporation May Consolidate, Etc., Only on Certain Terms . . . 60
SECTION 8.2. Successor Corporation Substituted. . . . . . . . . . . . . . . 61
ARTICLE IX SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.1. Supplemental Indentures Without Consent of Holders . . . . . . 62
SECTION 9.2. Supplemental Indentures with Consent of Holders. . . . . . . . 63
SECTION 9.3. Execution of Supplemental Indentures . . . . . . . . . . . . . 64
SECTION 9.4. Effect of Supplemental Indentures. . . . . . . . . . . . . . . 64
SECTION 9.5. Conformity with Trust Indenture Act. . . . . . . . . . . . . . 65
SECTION 9.6. Reference in Securities to Supplemental Indentures . . . . . . 65
ARTICLE X COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 10.1. Payment of Principal, Premium and Interest . . . . . . . . . . 65
SECTION 10.2. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 65
SECTION 10.3. Money for Security Payments to be Held in Trust. . . . . . . . 66
SECTION 10.4. Statement as to Compliance . . . . . . . . . . . . . . . . . . 67
SECTION 10.5. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . 67
SECTION 10.6. Payment of Trust's Costs and Expenses. . . . . . . . . . . . . 68
SECTION 10.7. Additional Covenants . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.8. Original Issue Discount. . . . . . . . . . . . . . . . . . . . 69
SECTION 10.9. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . 69
SECTION 10.10. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XI REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.1. Applicability of This Article. . . . . . . . . . . . . . . . . 70
SECTION 11.2. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . 70
SECTION 11.3. Selection of Securities to be Redeemed . . . . . . . . . . . . 71
SECTION 11.4. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.5. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 72
<PAGE>
SECTION 11.6. Payment of Securities Called for Redemption. . . . . . . . . . 72
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE XII SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 12.1. Applicability of Article . . . . . . . . . . . . . . . . . . . 73
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities. . . . . 74
SECTION 12.3. Redemption of Securities for Sinking Fund. . . . . . . . . . . 74
ARTICLE XIII SUBORDINATION OF SECURITIES . . . . . . . . . . . . . . . . . . . . 76
SECTION 13.1. Securities Subordinate to Senior Indebtedness. . . . . . . . . 76
SECTION 13.2. No Payment When Senior Indebtedness in Default; Payment Over
of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . 76
SECTION 13.3. Payment Permitted If No Default. . . . . . . . . . . . . . . . 78
SECTION 13.4. Subrogation to Rights of Holders of Senior Indebtedness. . . . 78
SECTION 13.5. Provisions Solely to Define Relative Rights. . . . . . . . . . 79
SECTION 13.6. Trustee to Effectuate Subordination. . . . . . . . . . . . . . 79
SECTION 13.7. No Waiver of Subordination Provisions. . . . . . . . . . . . . 79
SECTION 13.8. Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . 81
SECTION 13.11. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights . . . . . . . . . . . . . . . 81
SECTION 13.12. Article Applicable to Paying Agents . . . . . . . . . . . . . 81
</TABLE>
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of ________ __, 2000,
between DPL INC., an Ohio corporation (the "CORPORATION"), having its principal
office at Courthouse Plaza Southwest, Dayton, Ohio 45402, and The Bank of New
York, a national banking association, as Trustee (the "TRUSTEE").
RECITALS OF THE CORPORATION
WHEREAS, the Corporation has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured junior subordinated debt securities in series (the "SECURITIES") of
substantially the tenor hereinafter provided, including Securities issued to
evidence loans made to the Corporation with the proceeds from the issuance from
time to time by one or more business trusts (each an "ISSUER TRUST") of
preferred undivided beneficial interests in the assets of such Issuer Trusts
(the "CAPITAL SECURITIES") and common undivided interests in the assets of such
Issuer Trusts (the "COMMON SECURITIES"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued and delivered; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Corporation, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;
(b) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(d) Whenever the context may require, any gender shall be deemed
to include the others;
<PAGE>
2
(e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
"ACT" when used with respect to any Holder has the meaning
specified in Section 1.4.
"ADDITIONAL INTEREST" means the interest, if any, that shall
accrue on any interest on the Securities of any series the payment of which has
not been made on the applicable Interest Payment Date or that has been deferred
during an Extension Period, and that shall accrue at the rate per annum
specified or determined as specified in such Security.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AGENT MEMBER" means any member of, or participant in, the
Depositary.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"BANKRUPTCY CODE" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.
"BOARD OF DIRECTORS" means the board of directors of the
Corporation or the Executive Committee of the board of directors of the
Corporation (or any other committee of the board of directors of the Corporation
performing similar functions) or a committee designated by the board of
directors of the Corporation (or such committee), comprised of two or more
members of the board of directors of the Corporation or officers of the
Corporation, or both.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation to have been duly adopted
by the Board of Directors, or officers of the Corporation to which authority to
act on behalf of the Board of Directors has been delegated, and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
<PAGE>
3
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday,
(ii) a day on which banking institutions in The City of New York or Dayton, Ohio
are authorized or required by law or executive order to remain closed, or
(iii) a day on which the Corporate Trust Office of the Trustee, or, with respect
to Securities of a series initially issued to an Issuer Trust for so long as
such Securities are held by such Issuer Trust, the Corporate Trust Office (as
defined in the related Trust Agreement) of the Property Trustee or the Delaware
Trustee under the related Trust Agreement, is closed for business.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is, or is required to be, accounted for as a capital lease
on the balance sheet of that Person.
"CAPITAL SECURITIES" has the meaning specified in the first
recital of this Indenture.
"CAPITALIZED LEASE LIABILITIES" means all obligations under
Capital Leases of the Corporation or any of its Subsidiaries, in each case taken
at the amount thereof accounted for as liabilities in accordance with GAAP.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this instrument such Securities and Exchange Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"COMMON SECURITIES" has the meaning specified in the first recital
of this Indenture.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or without
recourse, guaranteeing or intended to guarantee any Indebtedness (the "PRIMARY
OBLIGATIONS") of another Person (the "PRIMARY OBLIGOR") in any manner, including
any obligation of that Person (a) to purchase, repurchase or otherwise acquire
such primary obligations or any security therefor, (b) to advance or provide
funds for the payment or discharge of any such primary obligation or to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof. The amount of any
Contingent Obligation shall be deemed equal to the stated or determinable amount
of the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered.
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4
"CORPORATION" includes a corporation, association, company,
limited liability company, joint-stock company or business trust.
"CORPORATION" means the Person named as the "CORPORATION" in the
first paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "CORPORATION" shall mean such successor corporation.
"CORPORATION REQUEST" and "CORPORATION ORDER" mean, respectively,
a written request or order signed in the name of the Corporation by its Chairman
of the Board of Directors, its Vice Chairman of the Board of Directors, its
President, one of its Vice Presidents, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"DEFAULTED INTEREST" has the meaning specified in Section 3.8.
"DELAWARE TRUSTEE" means, with respect to any Issuer Trust, the
Person identified as the "DELAWARE TRUSTEE" in the related Trust Agreement,
solely in its capacity as Delaware Trustee of such Issuer Trust under such Trust
Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware trustee appointed as therein provided.
"DEPOSITARY" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Corporation pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"DISCOUNT SECURITY" means any security that provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.2.
"DISTRIBUTIONS" means, with respect to the Trust Securities issued
by an Issuer Trust, amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions".
"DOLLAR" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
"EVENT OF DEFAULT", unless otherwise specified with respect to a
series of Securities as contemplated by Section 3.1, has the meaning specified
in Article V.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 or any
successor statute thereto, in each case as amended from time to time.
"EXPIRATION DATE" has the meaning specified in Section 1.4.
"EXTENSION PERIOD" has the meaning specified in Section 3.12.
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5
"GLOBAL SECURITY" means a Security in the form prescribed in
Section 2.4 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or its nominee.
"GUARANTEE AGREEMENT" means, with respect to any Issuer Trust, the
Guarantee Agreement executed by the Corporation for the benefit of the Holders
of the Capital Securities issued by such Issuer Trust, as modified, amended or
supplemented from time to time.
"HOLDER" means a Person in whose name a Security is registered in
the Securities Register.
"HYBRID PREFERRED SECURITIES" means any securities issued directly
or indirectly by the Corporation or any Subsidiary or any trust or other entity
formed by them and reflected on the consolidated balance sheet of the
Corporation in accordance with GAAP as other than a liability (including any
loans or notes issued in connection therewith) and not reflected on such balance
sheet as shareholders' equity.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services that in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person; (c) all obligations incurred in connection with bankers'
acceptances and the face amount of all letters of credit issued for the account
of such Person and, without duplication, all drafts drawn thereunder; (d) all
Capitalized Lease Liabilities; (e) all Indebtedness referred to in CLAUSES (A)
through (D) above secured by any Lien upon or in property owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness; (f) all obligations of such Person under Swap Contracts; and
(g) without duplication, all Contingent Obligations of such Person; PROVIDED
that Indebtedness shall not include (i) trade payables (including reinsurance
payables) and accrued expenses, in each case arising in the ordinary course of
business or (ii) any Hybrid Preferred Securities.
"INDENTURE" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"INSTITUTIONAL ACCREDITED INVESTOR" means an accredited investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
"INTEREST PAYMENT DATE" means, as to each series of Securities,
the Stated Maturity of an installment of interest on such Securities.
"INVESTMENT COMPANY EVENT" means the receipt by an Issuer Trust of
an Opinion of Counsel, experienced in such matters, to the effect that as a
result of the occurrence of a change in law or regulation, or a written change
in interpretation or application of law or regulation, by any legislative body,
court, governmental agency or regulatory authority effective on or after the
date of
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6
issuance of the Capital Securities of such Issuer Trust, there is more than
an insubstantial risk that such Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended.
"LIEN" means any mortgage, deed of trust, pledge, security
interest, hypothecation, charge, lien (statutory or other) or similar
encumbrance of any kind, or any other type of similar preferential arrangement.
"MATURITY" when used with respect to any Security means the date
on which the principal of such Security or any installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise.
"NOTICE OF DEFAULT" means a written notice of the kind specified
in Section 5.1(3).
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President or a Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary, of the Corporation and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may
be counsel for or an employee of the Corporation or any Affiliate of the
Corporation.
"ORIGINAL ISSUE DATE" means the date of issuance specified as such
in each Security.
"OUTSTANDING" means, when used in reference to any Securities, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which
other Securities have been authenticated and delivered or that have been
paid pursuant to Section 3.7, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Corporation;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Corporation or any other obligor upon the Securities or any Affiliate of
the Corporation or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the
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7
Trustee knows to be so owned shall be so disregarded. Securities so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the
Corporation or any other obligor upon the Securities or any Affiliate of the
Corporation or such other obligor. Upon the written request of the Trustee,
the Corporation shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the
Corporation to be owned or held by or for the account of the Corporation or
any other obligor on the Securities, or any Affiliate of the Corporation or
such obligor, and subject to the provisions of Section 6.1, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of
the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
Notwithstanding anything herein to the contrary, Securities of any series
initially issued to an Issuer Trust that are owned by such Issuer Trust shall
be deemed to be Outstanding notwithstanding the ownership by the Corporation
or an Affiliate of any beneficial interest in such Issuer Trust.
"PAYING AGENT" means the Trustee or any Person authorized by the
Corporation to pay the principal of (or premium, if any) or interest on, or
other amounts in respect of, any Securities on behalf of the Corporation.
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, trust, unincorporated
association, or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
"PLACE OF PAYMENT" means, with respect to the Securities of any
series, the place or places where the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities of such series
are payable pursuant to Section 3.1.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"PROCEEDING" has the meaning specified in Section 13.2.
"PROPERTY TRUSTEE" means, with respect to any Issuer Trust, the
Person identified as the "PROPERTY TRUSTEE" in the related Trust Agreement,
solely in its capacity as Property Trustee of such Issuer Trust under such Trust
Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as therein provided.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture or the terms of such Security.
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8
"REGULAR RECORD DATE", for the interest payable on any Interest
Payment Date with respect to the Securities of a series means, unless otherwise
provided pursuant to Section 3.1 with respect to Securities of such series, the
day that is fifteen days next preceding such Interest Payment Date (whether or
not a Business Day).
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"RESTRICTED SECURITIES CERTIFICATE" means a certificate
substantially in the form of Exhibit A.
"RESTRICTED SECURITIES LEGEND" means a legend substantially in the
form of the legend required in the form of Security set forth in Section 2.2 to
be placed upon a Restricted Security.
"RESTRICTED SECURITY" means each Security required pursuant to
Section 3.6(c) to bear the Restricted Securities Legend.
"RIGHTS PLAN" means a plan of the Corporation providing for the
issuance by the Corporation to all holders of its common shares of rights
entitling the holders thereof to subscribe for or purchase shares of any class
or series of capital stock of the Corporation, which rights are (i) deemed to be
transferred with such common shares and (ii) also issued in respect of future
issuances of such common shares, in each case until the occurrence of a
specified event or events.
"RULE 144A INFORMATION" shall be such information with respect to
the Corporation as is specified pursuant to Rule 144A(d)(4) under the Securities
Act or any successor provision thereto, in each case as amended from time to
time.
"SECURITY" means any debt security authenticated and delivered
under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the
respective meanings specified in Section 3.6.
"SENIOR INDEBTEDNESS" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is
<PAGE>
9
allowed in such proceeding), on Indebtedness of the Corporation, whether
incurred on or prior to the date of this Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Securities or to other Indebtedness that
is PARI PASSU with, or subordinated to, the Securities, PROVIDED, HOWEVER,
that Senior Indebtedness shall not be deemed to include (a) any Indebtedness
of the Corporation that, when incurred and without respect to any election
under Section 1111(b) of the Bankruptcy Reform Act of 1978, was without
recourse to the Corporation, (b) any Indebtedness of the Corporation to any
of its Subsidiaries, (c) any Indebtedness of the Corporation to any Person
who is an employee of the Corporation in such Person's capacity as such,
(d) any Securities, (e) trade accounts payable of the Corporation,
(f) accrued liabilities arising in the ordinary course of business of the
Corporation or (g) any Indebtedness which by its terms is subordinated to
trade accounts payable or accrued liabilities arising in the ordinary course
of business to the extent that payments made to the holders of such
Indebtedness by the holders of the Securities as a result of the
subordination provisions of this Indenture would be greater than such
payments otherwise would have been (absent giving effect to this clause (g))
as a result of any obligation of such holders of such Indebtedness to pay any
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of the
subordination provisions to which such Indebtedness is subject.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.8.
"STATED MATURITY", when used with respect to any Security or any
installment of principal thereof (or premium, if any) or interest (including any
Additional Interest) thereon, means the date specified pursuant to the terms of
such Security as the fixed date on which the principal of such Security or such
installment of principal (or premium, if any) or interest (including any
Additional Interest) is due and payable, subject to the deferral of any such
date during any Extension Period, in the case of any installment of interest.
"SUBSIDIARY" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Corporation or by
one or more other Subsidiaries, or by the Corporation and one or more other
Subsidiaries. For purposes of this definition, "VOTING STOCK" means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"SUCCESSOR SECURITY" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as that
evidenced by, such particular Security. For the purposes of this definition,
any Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"SWAP CONTRACT" means a swap agreement (as such term is defined in
Section 101 of the United States Bankruptcy Code) and any other agreement or
arrangement designed to provide protection against fluctuations in interest or
currency exchange rates or commodity prices.
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10
"TAX EVENT" means the receipt by an Issuer Trust of an Opinion
of Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced proposed change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the Capital Securities of such Issuer Trust, there is
more than an insubstantial risk that (i) such Issuer Trust is or will be
within 90 days of the delivery of such Opinion of Counsel subject to United
States federal income tax with respect to income received or accrued on the
corresponding series of Securities issued by the Corporation to such Issuer
Trust, (ii) interest payable by the Corporation on such corresponding series
of Securities is not, or within 90 days of the delivery of such Opinion of
Counsel will not be, deductible by the Corporation, in whole or in part, for
United States federal income tax purposes, or (iii) such Issuer Trust is, or
within 90 days of the delivery of such Opinion of Counsel will be, subject to
more than a DE MINIMIS amount of other taxes, duties or other governmental
charges.
"TRUST AGREEMENT" means, with respect to any Issuer Trust, the
trust agreement or other governing instrument of such Issuer Trust.
"TRUSTEE" means the Person named as the "TRUSTEE" in the first
paragraph of this instrument, solely in its capacity as such Trustee and not
in its individual capacity, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"TRUSTEE" shall mean or include each Person who is then a Trustee hereunder
and, if at any time there is more than one such Person, "TRUSTEE" as used
with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that if the Trust Indenture Act of 1939 is amended after such date,
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as so amended.
"TRUST SECURITIES" means the Common Securities and the Capital
Securities.
"VICE PRESIDENT," when used with respect to the Corporation,
means any duly appointed vice president, whether or not designated by a
number or a word or words added before or after the title "VICE PRESIDENT."
SECTION 1.2. COMPLIANCE CERTIFICATE AND OPINIONS.
Upon any application or request by the Corporation to the
Trustee to take any action under any provision of this Indenture, the
Corporation shall furnish to the Trustee an Officers' Certificate stating
that all conditions precedent (including covenants compliance with which
constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent (including covenants compliance with which constitutes a
<PAGE>
11
condition precedent), if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
(1) a statement by each individual signing such certificate or
opinion that such individual has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions of
such individual contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.
SECTION 1.3. FORMS OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons may certify or give an opinion as
to other matters, and any of such Persons may certify or give an opinion as
to such matters contained in one or several documents.
Any certificate or opinion of an officer of the Corporation may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate, opinion or
representations with respect to matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, one or more officers of the Corporation
stating that the information with respect to such factual matters is in the
possession of the Corporation, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate, opinion or
representations with respect to matters upon which his or her certificate or
opinion is based are erroneous.
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12
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions, or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 1.4. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given to or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments is or are delivered to the Trustee, and, where it is hereby
expressly required, to the Corporation. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "ACT" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Corporation, if made in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such notary the
execution thereof. Where such execution is by a Person acting in other than
such Persons's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such Person's authority.
(c) The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that the Trustee deems
sufficient and in accordance with such reasonable rules as the Trustee may
determine.
(d) The ownership of Securities shall be proved by the
Securities Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every Security
issued upon the transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or suffered to be done by the Trustee or the
Corporation in reliance thereon, whether or not notation of such action is
made upon such Security.
(f) The Corporation may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities of any series
entitled to give, make or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series,
PROVIDED that the Corporation may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the
next succeeding paragraph. If any record date is set pursuant to this
paragraph, the Holders of
<PAGE>
13
Outstanding Securities of the relevant series on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date, PROVIDED that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Corporation from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Corporation, at
its own expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(2), or (iv) any direction
referred to in Section 5.12, in each case with respect to Securities of such
series. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of such series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date,
PROVIDED that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing
in this paragraph shall be construed to prevent the Trustee from setting a
new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Corporation's expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Corporation in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section
1.4, the party hereto that sets such record date may designate any day as the
"EXPIRATION DATE" and from time to time may change the Expiration Date to any
earlier or later day, PROVIDED that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto
in writing, and to each Holder of Securities of the relevant series in the
manner set forth in Section 1.6, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section 1.4, the party hereto that set such record date
shall be deemed to have initially designated the 180th day after such record
date as the Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph.
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14
Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder
to take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
SECTION 1.5. NOTICES, ETC. TO TRUSTEE AND CORPORATION.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities
or the Corporation shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust office, or
(2) the Corporation by the Trustee or any Holder or any holder of
Capital Securities shall be sufficient for every purpose (except as
otherwise provided in Section 5.1) hereunder if in writing and mailed,
first-class postage prepaid, to the Corporation addressed to it at the
address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the
Trustee by the Corporation.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder as it
appears in the Securities Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice.
If, by reason of the suspension of or irregularities in regular mail service
or for any other reason, it shall be impossible or impracticable to mail
notice of any event to Holders when said notice is required to be given
pursuant to any provision of this Indenture or of the relevant Securities,
then any manner of giving such notice as shall be satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
<PAGE>
15
SECTION 1.7. CONFLICT WITH TRUST INDENTURE ACT.
Except as otherwise expressly provided herein, the Trust
Indenture Act shall apply as a matter of contract to this Indenture for
purposes of interpretation, construction and defining the rights and
obligations hereunder, and this Indenture, the Corporation and the Trustee
shall be deemed for all purposes hereof to be subject to and governed by the
Trust Indenture Act to the same extent as would be the case if this Indenture
were qualified under that Act on the date hereof. Except as otherwise
expressly provided herein, if and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the Trust Indenture Act through operation
of Section 318(c) thereof, such imposed duties shall control.
SECTION 1.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 1.9. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Corporation shall bind its successors and assigns, whether so expressed or
not.
SECTION 1.10. SEPARABILITY CLAUSE.
If any provision in this Indenture or in the Securities 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 1.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors and assigns, the holders of Senior Indebtedness and the Holders of
the Securities and, to the extent expressly provided in Sections 5.2, 5.8,
5.9, 5.11, 5.13, 9.1 and 9.2 the holders of Capital Securities, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
16
SECTION 1.13. NON-BUSINESS DAYS.
If any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or the Securities) payment of principal
of (and premium, if any) or interest (including any Additional Interest) or
other amounts in respect of such Security need not be made on such date, but
may be made on the next succeeding Business Day (and no interest shall accrue
in respect of the amounts whose payment is so delayed for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, until such next succeeding Business Day) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day (in each case with the same
force and effect as if made on the Interest Payment Date or Redemption Date
or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. FORMS GENERALLY.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article,
or in such other form or forms as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or automated quotation system on
which the Securities may be listed or traded or as may, consistently
herewith, be determined by the officers executing such Securities, as
evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Corporation and delivered to the
Trustee at or prior to the delivery of the Corporation Order contemplated by
Section 3.3 with respect to the authentication and delivery of such
Securities.
The definitive Securities shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods, if
required by any securities exchange or automated quotation system on which
the Securities may be listed or traded, on a steel engraved border or steel
engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange or automated quotation system on which the
Securities may be listed or traded, all as determined by the officers
executing such Securities, as evidenced by their execution of such securities.
<PAGE>
17
SECTION 2.2. FORM OF FACE OF SECURITY.
DPL INC.
[Title of Security]
[IF THE SECURITY IS A RESTRICTED SECURITY, INSERT -- "THIS
SECURITY (OR ANY PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A, REGULATION S OR ANOTHER
EXEMPTION THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF THE ISSUER TRUST THAT:
(I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE CORPORATION, (B) FOR SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES AND OTHER APPLICABLE JURISDICTIONS; AND
(III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN (II) ABOVE.
ANY OFFER, SALE, PLEDGE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSES
(II)(C) AND (D) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS SECURITY AND THE
PROPERTY TRUSTEE FOR SUCH SECURITIES TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN FORM AND
SUBSTANCE. SECURITIES OWNED BY AN INITIAL INVESTOR THAT IS NOT A QUALIFIED
INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM AND MAY NOT BE
TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS, AS PROVIDED IN THE TRUST AGREEMENT REFERRED TO BELOW. THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF A SECURITYHOLDERS AND
REGISTRATION RIGHTS AGREEMENT, DATED OF EVEN DATE HEREWITH, AMONG THE ISSUER
TRUST, THE DEPOSITOR, AND THE PURCHASERS NAMED THEREIN."]
<PAGE>
18
[IF THE SECURITY IS SUBJECT TO AN AGREEMENT PROVIDING FOR THE
REGISTRATION OF THE SECURITY PURSUANT TO THE SECURITIES ACT, INSERT -- THE
HOLDER OF THIS SECURITY IS DEEMED, BY SUCH HOLDER'S ACCEPTANCE OF THIS SECURITY,
TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF THE SECURITYHOLDERS AND
REGISTRATION RIGHTS AGREEMENT, DATED OF EVEN DATE HEREWITH, AMONG THE ISSUER
TRUST, THE DEPOSITOR AND THE PURCHASERS NAMED THEREIN.]
No. _____________ $__________
DPL INC., an Ohio corporation (hereinafter called the
"CORPORATION", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_______________, or registered assigns, the principal sum of __________ Dollars
on _________, ____ [IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT, IF
APPLICABLE--, or such other principal amount represented hereby as may be set
forth in the records of the Securities Registrar hereinafter referred to in
accordance with the Indenture]. The Corporation further promises to pay
interest on said principal sum from ___________, ____ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
[monthly][quarterly][semi-annually] [IF APPLICABLE, INSERT-(subject to deferral
as set forth herein)] in arrears on [INSERT APPLICABLE INTEREST PAYMENT DATES]
of each year, commencing __, __ at the rate of __% per annum until the principal
hereof is paid or duly provided for or made available for payment [IF
APPLICABLE, INSERT-- ; PROVIDED that any overdue principal, premium and any
overdue installment of interest shall bear Additional Interest at the rate of
___% per annum (to the extent that the payment of such interest shall be legally
enforceable), compounded [monthly][quarterly][semi-annually], from the dates
such amounts are due until they are paid or made available for payment, and
such interest shall be payable on demand]. The amount of interest payable for
any period less than a full interest period shall be computed on the basis of a
360-day year of twelve 30-day months and the actual days elapsed in a partial
month in such period. The amount of interest payable for any full interest
period shall be computed by dividing the applicable rate per annum by
[twelve/four/two]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment [IF APPLICABLE INSERT--, which shall be the
[____________ or ____________] (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date]. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange or automated
quotation system on which the Securities of this series may be listed or
traded, and upon such notice as may be required by such exchange or self
regulatory organization, all as more fully provided in said Indenture.
[IF APPLICABLE, INSERT--So long as no Event of Default has
occurred and is continuing, the Corporation shall have the right, at any time
during the term of this Security, from time to time
<PAGE>
19
to defer the payment of interest on this Security for up to ____ consecutive
[monthly][quarterly][semi-annual] interest payment periods with respect to each
deferral period (each an "EXTENSION PERIOD") at the end of which the
Corporation shall pay all interest then accrued and unpaid (including any
Additional Interest, as provided below); PROVIDED, HOWEVER, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Security and no such Extension Period may end on a date other than an Interest
Payment Date; and PROVIDED FURTHER, HOWEVER, that during any such Extension
Period, the Corporation shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Corporation's capital stock, or (ii) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Corporation that rank PARI PASSU in all
respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Corporation, or satisfaction of obligations under any contract or security,
in connection with any employment contract, stock option plan, benefit plan or
other similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, or in connection with a dividend
reinvestment or stockholder stock purchase plan, (b) as a result of an exchange
or conversion of any class or series of the Corporation's capital stock (or any
capital stock of a Subsidiary of the Corporation) for any class or series of
the Corporation's capital stock or of any class or series of the Corporation's
debt for any class or series of the Corporation's capital stock, (c) the
purchase of fractional interests in shares of the Corporation's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged or any agreements related thereto, (d)
any declaration of a dividend in connection with any Rights Plan, or the
issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks PARI PASSU
with or junior to such stock). Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Corporation may
elect to begin a new Extension Period, subject to the above conditions. No
interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest (to the
extent that the payment of such interest shall be legally enforceable) at the
rate of ____% per annum, compounded [monthly][quarterly][semi-annually] and
calculated as set forth in the first paragraph of this Security, from the dates
on which amounts would otherwise have been due and payable until paid or made
available for payment. The Corporation shall give the Property Trustee of this
Security notice of its election of such Extension Period at least one Business
Day prior to the next succeeding Interest Payment Date on which interest on
this Security would be payable but for such deferral [IF APPLICABLE, INSERT--or
so long as such Securities are held by [INSERT NAME OF APPLICABLE ISSUER TRUST],
at least one Business Day prior to the earlier of (i) the next succeeding
date on which Distributions on the Capital Securities of such Issuer Trust
would be payable but for such deferral, and (ii) the date on which the Property
Trustee of such Issuer Trust is required to give notice to holders of such
Capital Securities of the record date or the date such Distributions are
payable. The Property Trustee will give notice of the Corporation's election to
begin a new Extension Period to the Holders of the Capital Securities.]
<PAGE>
20
Payment of the principal of (and premium, if any) and interest on
this Security will be made at the office or agency of the Corporation
maintained for that purpose in [INSERT PLACE OF PAYMENT], in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [IF APPLICABLE, INSERT--;
PROVIDED, HOWEVER, that at the option of the Corporation payment of interest may
be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register, or (ii) by wire transfer
in immediately available funds at such place and to such account as may be
designated in writing at least 15 days before the relevant Interest Payment Date
by the Person entitled thereto as specified in the Securities Register].
The debt evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such actions as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by such
Holder's acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to
be duly executed.
DPL INC.
By:_________________________________-
Name:
Title:
SECTION 2.3. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of
the Corporation (herein called the "SECURITIES"), issued and to be issued in
one or more series under the Junior Subordinated Indenture, dated as of
_________ __, 2000 (herein called the "INDENTURE"), between the Corporation and
____________, as Trustee (herein called the "TRUSTEE", which term includes any
successor
<PAGE>
21
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Corporation, the Trustee, the Holders of Senior Indebtedness and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [IF APPLICABLE, INSERT--, limited in aggregate principal amount
to $ ___________].
All terms used in this Security that are defined in the Indenture
[IF APPLICABLE, INSERT--or in the Amended and Restated Trust Agreement, dated as
of _____________ (as modified, amended or supplemented from time to time, the
"TRUST AGREEMENT"), relating to DPL Capital Trust I (the "ISSUER TRUST") among
the Corporation, as Depositor, the Trustees named therein and the Holders from
time to time of the Trust Securities issued pursuant thereto,] shall have the
meanings assigned to them in the Indenture [if applicable, insert or the Trust
Agreement as the case may be].
[IF APPLICABLE, INSERT--The Corporation may at any time, at its
option, on or after _______, __ and subject to the terms and conditions of
Article XI of the Indenture, redeem this Security in whole at any time or in
part from time to time, at the following Redemption Prices (expressed as
percentages of the principal amount hereof): If redeemed during the 12-month
period beginning __________,
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest
[IF APPLICABLE, INSERT-- (including any Additional Interest)] to but excluding
the date fixed for redemption.]
[IF APPLICABLE, INSERT--In addition, upon the occurrence and
during the continuation of a Tax Event or Investment Company Event in respect of
the Issuer Trust, the Corporation may, at its option, at any time within 90 days
of the occurrence and during the continuation of such Tax Event or Investment
Company Event, as the case may be, redeem this Security, in whole but not in
part, subject to the terms and conditions of Article XI of the Indenture, at a
Redemption Price equal to the greater of (i) 100% of the principal amount of
such Security or (ii) as determined by a Quotation Agent (as defined below), the
sum of the present values of the principal amount and premium payable as part of
the Redemption Price with respect to an optional redemption of such Security on
_________, 20__, together with the present values of the scheduled payments of
interest from the Redemption Date to _________, 20__ (the "Remaining Life"), in
each case discounted to the Redemption Date on a quarterly basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
(as defined below).
<PAGE>
22
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate (as defined below) plus (i)
[new issue spread-minus 0.25]% if such Redemption Date occurs on or before
_______, 20__ or (ii) 0.50% if such prepayment date occurs after _________,
20__.
"QUOTATION AGENT" means Goldman, Sachs & Co. and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
the Corporation shall substitute therefor another Primary Treasury Dealer.
"TREASURY RATE" means, with respect to any redemption date, (i)
the yield, under the heading which represents the average for the week
immediately prior to the calculation date, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The calculation date shall be the
third Business Day preceding the redemption date.
"COMPARABLE TREASURY ISSUE" means, with respect to any redemption
date, the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Security has a maturity which is within a
period from three months before to three months after _________, 20__, the two
most closely corresponding United States Treasury securities shall be used as
the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"COMPARABLE TREASURY PRICE" means, with respect to any redemption
date, (i) the average of five Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the Trustee obtains fewer than five such
Reference Treasury Dealer Quotations, the average of all such quotations.
"REFERENCE TREASURY DEALER" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Trustee after
consultation with the Corporation.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and
<PAGE>
23
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.]
The Indenture contains provisions for satisfaction and discharge
of the entire debt of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the Corporation and the Trustee at any time to enter into a
supplemental indenture or indentures for the purpose of modifying in any manner
the rights and obligations of the Corporation and of the Holders of the
Securities, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series to be affected by
such supplemental indenture. The Indenture also contains provisions permitting
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Corporation with provisions of the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[IF THE SECURITY IS NOT A DISCOUNT SECURITY, INSERT--As provided
in and subject to the provisions of the Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Outstanding Securities of
this series to be due and payable immediately, by a notice in writing to the
Corporation (and to the Trustee if given by Holders); PROVIDED that, if upon an
Event of Default, the Trustee or such Holders fail to declare the principal of
all the Outstanding Securities of this series to be immediately due and payable,
the holders of at least 25% in aggregate Liquidation Amount of the Capital
Securities then Outstanding shall have the right to make such declaration by a
notice in writing to the Corporation and the Trustee; and upon any such
declaration the principal of and the accrued interest (including any Additional
Interest) on all the Securities of this series shall become immediately due and
payable, PROVIDED that the payment of such principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII of the Indenture.]
[IF THE SECURITY IS A DISCOUNT SECURITY, INSERT--As provided in
and subject to the provisions of the Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Outstanding Securities of this
series to be due and payable immediately, by a notice in writing to the
Corporation (and to the Trustee if given by Holders); PROVIDED that if upon an
Event of Default, the Trustee or such Holders fail to declare such principal
amount of the Outstanding Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Corporation and the Trustee.
<PAGE>
24
The principal amount payable upon such acceleration shall be equal to
[INSERT FORMULA FOR DETERMINING THE AMOUNT]. Upon any such declaration, such
amount of the principal of and the accrued interest (including any Additional
Interest) on such Securities shall become immediately due and payable,
PROVIDED that the payment of such principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the
extent provided in Article XIII of the Indenture. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal, premium and interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the
Corporation's obligations in respect of the payment of the principal of and
premium and interest, if any, on this Security shall terminate.]
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Corporation maintained under Section
10.2 of the Indenture for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Corporation and
the Securities Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $_______ and any integral multiple of $_____
in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
It is intended that this Security constitute debt of the
Corporation for all United States tax purposes and the Corporation and, by its
acceptance of this Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, this Security agree to treat
the Security as debt of the Corporation for all United States federal, state and
local tax purposes.
<PAGE>
25
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 2.4. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Unless otherwise specified as contemplated by Section 3.1, any
Global Security issued hereunder shall, in addition to the provisions contained
in Sections 2.2 and 2.3, bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or
a nominee of a Depositary. This Security is exchangeable for Securities
registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture and
may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary, except in the limited circumstances
described in the Indenture.
SECTION 2.5. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
-----------------------------------
[NAME], AS TRUSTEE
By:
--------------------------------
AUTHORIZED OFFICER
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 3.3, set forth or determined in the manner
<PAGE>
26
provided in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of a
series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 3.4, 3.5, 3.6, 3.7, 9.6 or
11.6 and except for any Securities that, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered hereunder);
PROVIDED, HOWEVER, that the authorized aggregate principal amount of such
series may be increased above such amount by a Board Resolution to such
effect;
(c) the Person to whom any interest (including any Additional
Interest) on a Security of the series shall be payable, if other than the
Person in whose name that security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record
Date for such interest;
(d) the Stated Maturity or Maturities on which the principal of
the Securities of such series is payable or the method of determination
thereof, and any dates on which or circumstances under which, the
Corporation shall have the right to shorten such Stated Maturity or
Maturities;
(e) the rate or rates, if any, at which the Securities of such
series shall bear interest, if any, the rate or rates at which and extent
to which Additional Interest, if any, shall be payable in respect of any
Securities of such series, the date or dates from which any such interest
or Additional Interest shall accrue, the Interest Payment Dates on which
such interest shall be payable, the right, pursuant to Section 3.12 or as
otherwise set forth therein, of the Corporation to defer or extend an
Interest Payment Date, and the Regular Record Date for the interest
payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(f) the place or places where the principal of (and premium, if
any) and interest (including any Additional Interest) on the Securities
of such series shall be payable, the place or places where the Securities
of such series may be presented for registration of transfer or exchange,
any restrictions that may be applicable to any such transfer or exchange
in addition to or in lieu of those set forth herein, and the place or
places where notices and demands to or upon the Corporation in respect of
the Securities of such series may be made;
(g) the period or periods within or the date or dates on which,
the price or prices at which and the terms and conditions upon which, if
any, the Securities of such series may be redeemed, in whole or in part,
at the option of the Corporation, and if other than by a Board
Resolution, the manner in which any election by the Corporation to redeem
such Securities shall be evidenced;
<PAGE>
27
(h) the obligation or the right, if any, of the Corporation to
redeem, repay or purchase the Securities of such series pursuant to any
sinking fund, amortization or analogous provisions, or at the option of a
Holder thereof, and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or
units) in which and the other terms and conditions upon which Securities
of the series shall be redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation;
(i) the denominations in which any Securities of such series shall
be issuable;
(j) if other than Dollars, the currency or currencies (including
any currency unit or units) in which the principal of (and premium, if
any) and interest (including any Additional Interest) on the Securities
of the series shall be payable, or in which the Securities of the series
shall be denominated and the manner of determining the equivalent thereof
in Dollars for purposes of the definition of Outstanding;
(k) the additions, modifications or deletions, if any, in the
covenants of the Corporation set forth herein with respect to the
Securities of such series;
(l) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(m) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount that shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
that shall be due and payable upon any Maturity other than the Stated
Maturity or that shall be deemed to be Outstanding as of any date prior
to the Stated Maturity (or, in any such case, the manner in which such
amount deemed to be the principal amount shall be determined);
(n) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to permit
or facilitate the issuance of the Securities of such series in bearer
form, registrable or not registrable as to principal, and with or without
interest coupons;
(o) any index or indices used to determine the amount of payments
of principal of and premium, if any, on the Securities of such series or
the manner in which such amounts will be determined;
(p) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositories for such Global
Securities, the form of any legend or legends that shall be borne by any
such Global Security in addition to or in lieu of that set forth in
Section 2.4 and any circumstances in addition to or in lieu of those set
forth in Section 3.5 in which any such Global Security may be exchanged
in whole or in part for Securities registered, and any transfer of such
<PAGE>
28
Global Security in whole or in part may be registered, in the name or
names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(q) the appointment of any Paying Agent or Agents for the
Securities of such series;
(r) the terms of any right to convert or exchange Securities of
such series into any other securities or property of the Corporation, and
the additions or changes, if any, to this Indenture with respect to the
Securities of such series to permit or facilitate such conversion or
exchange;
(s) if such Securities are to be issued to an Issuer Trust, the
form or forms of the Trust Agreement and Guarantee Agreement relating
thereto;
(t) if other than as set forth herein, the relative degree, if
any, to which the Securities of the series shall be senior to or be
subordinated to other series of Securities in right of payment, whether
such other series of Securities are Outstanding or not;
(u) the additions, modifications or deletions, if any, in the
Events of Default that apply to any Securities of the series and any
change in the right of the Trustee or the requisite Holders of such
Securities to declare the principal amount thereof due and payable
pursuant to Section 5.2 and
(v) any other terms of the Securities of such series (which terms
shall not be inconsistent with the provisions of this Indenture, except
as permitted by Section 9.1(6)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Corporation
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XIII.
SECTION 3.2. DENOMINATIONS.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $25 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 3.1.
<PAGE>
29
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Corporation by
its Chairman of the Board, one of its Vice Chairmen of the Board, its President
or one of its Vice Presidents. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Corporation shall
bind the Corporation, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities. At any
time and from time to time after the execution and delivery of this Indenture,
the Corporation may deliver Securities of any series executed by the Corporation
to the Trustee for authentication, together with a Corporation Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Corporation Order shall authenticate and deliver such Securities. If
the form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 3.1, that such terms
have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Corporation in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issuance of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Corporation Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
<PAGE>
30
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Corporation, and the Corporation shall deliver such Security to the Trustee for
cancellation as provided in Section 3.10, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.4. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series,
the Corporation may execute, and upon Corporation Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Corporation
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Corporation
designated for that purpose without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Corporation shall
execute and the Trustee shall authenticate and deliver in exchange therefor one
or more definitive Securities of the same series of any authorized
denominations, of like tenor and aggregate principal amount, bearing such
restrictive legends as may be required by this Indenture and bearing a number
not contemporaneously outstanding. Until so exchanged, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 3.5. GLOBAL SECURITIES.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Corporation for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such
<PAGE>
31
Global Security or a nominee thereof unless (i) such Depositary advises the
Trustee in writing that such Depositary is no longer willing or able to
properly discharge its responsibilities as Depositary with respect to such
Global Security, and the Corporation is unable to locate a qualified
successor, (ii) the Corporation executes and delivers to the Trustee a
Corporation Order stating that the Corporation elects to terminate the
book-entry system through such Depositary or (iii) an Event of Default occurs
and is continuing. Upon the occurrence of any event specified in clause (i),
(ii) or (iii) above, the Securities Registrar shall notify the applicable
Depositary and instruct such Depositary to notify all beneficial owners of
Global Securities of the occurrence of such event and of the availability of
the definitive Securities to beneficial owners of such Securities requesting
the same; PROVIDED, HOWEVER, that no Securities shall be issued in any
denomination less than the minimum authorized denomination therefor.
(c) If any Global Security is to be exchanged in whole for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
applicable Depositary or its nominee to the Securities Registrar for exchange or
cancellation as provided in this Article III. If any Global Security is to be
exchanged for other Securities or canceled in part, or if another Security is to
be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Article III or (ii) the principal
amount thereof shall be reduced, subject to Section 3.6(b)(v), or increased by
an amount equal to the portion thereof to be so exchanged or canceled, or equal
to the principal amount of such other Security to be so exchanged for a
beneficial interest therein, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar with notice to the
Trustee, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct such Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Trustee shall, subject to Section 3.5(b) and as otherwise
provided in this Article III, authenticate and deliver any Securities issuable
in exchange for such Global Security (or any portion thereof) in accordance with
the instructions of the Depositary; PROVIDED, HOWEVER, that no Securities shall
be issued in any denomination less than the minimum authorized denomination
therefor. Neither the Securities Registrar nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of Book-Entry Capital
Securities (as defined in the applicable Trust Agreement) upon the dissolution
of an Issuer Trust shall be distributed in the form of one or more Global
Securities registered in the name of a Depositary or its nominee, and deposited
with the Securities Registrar, as custodian for such Depositary, or with such
Depositary, for credit by the Depositary to the respective accounts of the
beneficial owners of the Securities
<PAGE>
32
represented thereby (or such other accounts as they may direct). Securities
distributed to holders of Capital Securities other than Book-Entry Capital
Securities upon the dissolution of an Issuer Trust shall not be issued in the
form of a Global Security or any other form intended to facilitate book-entry
trading in beneficial interests in such Securities.
(f) As provided in Section 3.9, the Depositary for a Global
Security or its nominee, as the registered owner of a Global Security, shall be
the Holder of such Global Security for all purposes under this Indenture and the
Securities, and owners of beneficial interests in a Global Security shall hold
such interests pursuant to the Applicable Procedures. The Securities Registrar
and the Trustee shall be entitled to deal with the Depositary for such Global
Security for all purposes of this Indenture relating to the Global Security
(including the payment of the principal amount of (and premium, if any) and
interest (including Additional Interest) on such Global Security and the giving
of instructions or directions by or to beneficial owners of the Securities
represented thereby) as the sole Holder of the Securities represented thereby
and shall have no obligation to such beneficial owners. Neither the
Corporation, the Trustee nor the Securities Registrar shall have any liability
in respect of any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global
Security shall be exercised only through the Depositary for such Global Security
and shall be limited to those established by law, the Applicable Procedures and
agreements between such beneficial owners and the Depositary and/or its Agent
Members.
SECTION 3.6. REGISTRATION, TRANSFER AND EXCHANGE GENERALLY;
CERTAIN TRANSFERS AND EXCHANGES; SECURITIES ACT LEGENDS; EXCHANGE OFFER.
(a) The Corporation shall cause to be kept at the Corporate Trust
Office of the Trustee a register or registers (the "SECURITIES REGISTER") in
which the registrar and transfer agent with respect to the Securities (the
"SECURITIES REGISTRAR"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Securities and of transfers and
exchanges of Securities as herein provided. The Trustee is hereby appointed
Securities Registrar for the purpose of registering Securities and transfers and
exchanges of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Corporation designated for that purpose, the Corporation
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of like tenor and aggregate principal
amount, bearing such restrictive legends as may be required by this Indenture
and bearing a number not contemporaneously outstanding.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of like tenor and
aggregate principal amount, bearing such restrictive legends as may be required
by this Indenture and bearing a number not contemporaneously outstanding, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Corporation shall execute,
<PAGE>
33
and the Trustee shall authenticate and deliver, the Securities that the Holder
making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Corporation, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Neither the Corporation, the Trustee nor the Securities Registrar
shall be required, pursuant to the provisions of this Section 3.6, (i) to issue,
register the transfer of or exchange any Security of any series during a period
beginning at the opening of business 15 days before the day of selection for
redemption of Securities of that series pursuant to Article XI and ending at the
close of business on the day of mailing of the notice of redemption, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except, in the case of any such Security to be redeemed in
part, any portion thereof not to be redeemed.
Every Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Corporation or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation and the Securities Registrar, duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration
of transfer or exchange of Securities, but the Corporation may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Securities.
(b) Notwithstanding any other provision of this Indenture,
transfers and exchanges of Securities and beneficial interests in a Global
Security shall be made only in accordance with this Section 3.6(b).
(i) NON-GLOBAL SECURITY TO GLOBAL SECURITY. If the
Holder of a Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a Person who wishes to
take delivery thereof in the form of a beneficial interest in a Global
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Securities Registrar of (A) such
Security as provided in Section 3.6(a) and instructions satisfactory to
the Securities Registrar directing that a beneficial interest in the
Global Security in a specified principal amount not greater than the
principal amount of such Security be credited to a specified Agent
Member's account and (B) if the Security to be transferred in whole or in
part is a Restricted Security, a Restricted Securities Certificate duly
executed by such Holder or such Holder's attorney duly authorized in
writing, then the Securities Registrar shall cancel such Security (and
issue a new Security in respect of any untransferred portion thereof) as
provided in Section 3.6(a) and increase the aggregate principal amount of
the Global Security by the specified principal amount so transferred as
provided in Section 3.5(c).
<PAGE>
34
(ii) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A
Security that is not a Global Security may be transferred, in whole or in
part, to a Person who takes delivery in the form of another Security that
is not a Global Security as provided in Section 3.6(a), PROVIDED that if
the Security to be transferred in whole or in part is a Restricted
Security, the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing.
(iii) GLOBAL SECURITY TO NON-GLOBAL SECURITY. A
beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 3.5.
(iv) CERTAIN INITIAL TRANSFERS OF NON-GLOBAL SECURITIES.
In the case of Securities initially issued other than in global form, an
initial transfer or exchange of such Securities that does not involve any
change in beneficial ownership may be made to an Institutional Accredited
Investor or Investors as if such transfer or exchange were not an initial
transfer or exchange; PROVIDED that written certification shall be
provided by the transferee and transferor of such Securities to the
Securities Registrar that such transfer or exchange does not involve a
change in beneficial ownership.
(v) LIMITATIONS RELATING TO PRINCIPAL AMOUNT.
Notwithstanding any other provision of this Indenture, Securities or
portions thereof may be transferred or exchanged only in principal
amounts of not less than the minimum authorized denomination therefor,
and only if, following such transfer or exchange, each Holder would hold
Securities with a principal amount of not less than such minimum
authorized denomination. Any transfer, exchange or other disposition of
Securities in contravention of this Section 3.6(b)(v) shall be deemed to
be void and of no legal effect whatsoever, any such transferee shall be
deemed not to be the Holder or owner of any beneficial interest in such
Securities for any purpose, including but not limited to the receipt of
interest (including any Additional Interest) payable on such Securities,
and such transferee shall be deemed to have no interest whatsoever in
such Securities.
(c) Except as set forth below, all Securities shall bear a
Restricted Securities Legend:
(i) any Securities that are sold or otherwise disposed
of pursuant to an effective registration statement under the Securities
Act such that such Securities are freely transferable by the holders
thereof shall not bear a Restricted Securities Legend;
(ii) a Successor Security of a Security that does not
bear a Restricted Securities Legend shall not bear such form of legend
unless, in the Corporation's sole judgement such Successor Security is a
"RESTRICTED SECURITY" within the meaning of Rule 144 under the Securities
Act, in which case the Trustee, at the written direction of the
Corporation in the form of an Officers' Certificate, shall authenticate
and deliver a new Security bearing a Restricted Securities Legend in
exchange for such Successor Security as provided in this Article III; and
<PAGE>
35
(iii) a new Security that does not bear a Restricted
Securities Legend may be issued in exchange for or in lieu of a
Restricted Security or any portion thereof that bears such a legend if,
in the Corporation's sole judgment, placing such a legend upon such new
Security is not and will not be necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
written direction of the Corporation in the form of an Officers'
Certificate, shall authenticate and deliver such a new Security as
provided in this Article III.
(d) The exchange or registration pursuant to the Securities Act of
Securities of any series as permitted or required by any form of Security issued
pursuant to this Indenture shall be made in accordance with this Indenture and
any agreement specifying the terms and conditions of such exchange. All holders
of an interest in such securities will be deemed to be bound by the provisions
of such security and the related agreement providing for exchange and
registration.
The Corporation shall inform the Trustee in writing of the
effective date of any registration statement registering any Securities under
the Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
registration statement.
SECTION 3.7. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee together
with such security or indemnity as may be required by the Corporation or the
Trustee to save each of them harmless, the Corporation shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of
the same series, of like tenor and aggregate principal amount, bearing the same
legends, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Corporation and to the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Corporation or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Corporation shall execute and upon its request the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series, of like tenor and aggregate principal amount,
bearing the same legends as such destroyed, lost or stolen Security, and bearing
a number not contemporaneously outstanding.
If any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Corporation in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 3.7, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
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36
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Corporation, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to the same benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section 3.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. PAYMENT OF INTEREST AND ADDITIONAL INTEREST;
INTEREST RIGHTS PRESERVED.
Interest (including any Additional Interest) on any Security of
any series that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date, shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest in respect of Securities of such
series, except that, unless otherwise provided in the Securities of such series,
interest (including any Additional Interest) payable on the Stated Maturity of
the principal of a Security shall be paid to the Person to whom principal is
paid. The initial payment of interest on any Security of any series that is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities. At the option of
the Corporation, interest on any series of Securities may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Securities Register of such series or (ii) by wire transfer in immediately
available funds at such place and to such account as designated by the Person
entitled thereto as specified in the Securities Register of such series.
Any interest on any Security that is due and payable, but is not
timely paid or duly provided for, on any Interest Payment Date for Securities of
such series (herein called "DEFAULTED INTEREST"), shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Corporation, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Corporation may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in
respect of which interest is in default (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Corporation shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Corporation shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as provided in this Clause (1). Thereupon, the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest, which shall be
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37
not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Corporation of such Special Record Date and, in
the name and at the expense of the Corporation, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder of a Security of such series at the address of such Holder as
it appears in the Securities Register not less than 10 days prior to
such Special Record Date. The Trustee may, in its discretion, in the
name and at the expense of the Corporation, cause a similar notice to
be published at least once in a newspaper, customarily published in
the English language on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Corporation may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities
of the series in respect of which interest is in default may be listed
and, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by the
Corporation to the Trustee of the proposed payment pursuant to this
Clause (2), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.8, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, that were carried by such other Security.
SECTION 3.9. PERSONS DEEMED OWNERS.
The Corporation, the Trustee and any agent of the Corporation or
the Trustee shall treat the Person in whose name any Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
and (subject to Section 3.8) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Corporation, the Trustee nor any agent of the Corporation or the Trustee shall
be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held
on its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Corporation, the Trustee and any agent of the Corporation or the Trustee as the
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Corporation, the Trustee or any
agent of the Corporation or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by a Depositary or impair,
as between a Depositary and such holders of beneficial interests, the
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38
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominee) as Holder of any Security.
SECTION 3.10. CANCELLATION.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Corporation may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Corporation
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section 3.10, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Corporation a certificate of such destruction.
SECTION 3.11. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in any partial month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing the rate per annum by the number of interest periods that
together constitute a full twelve months.
SECTION 3.12. DEFERRALS OF INTEREST PAYMENT DATES.
If specified as contemplated by Section 2.2 or Section 3.1 with
respect to the Securities of a particular series, so long as no Event of Default
has occurred and is continuing, the Corporation shall have the right, at any
time during the term of such series, from time to time to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "EXTENSION PERIOD"), during which
Extension Periods the Corporation shall, if so specified as contemplated by
Section 3.1, have the right to make partial payments of interest (including any
Additional Interest) on any Interest Payment Date. No Extension Period shall
end on a date other than an Interest Payment Date. At the end of any such
Extension Period the Corporation shall pay all interest then accrued and unpaid
on the Securities (together with Additional Interest thereon, if any, at the
rate specified for the Securities of such series, to the extent permitted by
applicable law); PROVIDED, HOWEVER, that no Extension Period shall extend beyond
the Stated Maturity of the principal of the Securities of such series; and
PROVIDED FURTHER, HOWEVER that during any such Extension Period, the Corporation
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock, or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation that rank PARI PASSU in all respects with or
junior in interest to the Securities of such series (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
or satisfaction of
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39
obligations under any contract or security, in connection with any employment
contract, stock option plans, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants, or in connection with a dividend reinvestment or stockholder
stock purchase plan, (b) as a result of an exchange or conversion of any
class or series of the Corporation's capital stock (or any capital stock of a
Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's debt for any
class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged or any agreements relating thereto, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance
of rights, stock or other property under any Rights Plan, or the redemption
or repurchase of rights pursuant thereto, or (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks PARI PASSU
with or junior to such stock). Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest (including any
Additional Interest) then due on any Interest Payment Date, the Corporation
may elect to begin a new Extension Period, subject to the above conditions.
No interest (including any Additional Interest) shall be due and payable
during an Extension Period, except at the end thereof, but each installment
of interest that would otherwise have been due and payable during such
Extension Period shall bear Additional Interest as and to the extent as may
be specified as contemplated by Section 3.1. The Corporation shall give the
Property Trustee of the Securities of such series and the Trustee notice of
its election to begin any such Extension Period at least one Business Day
prior to the next succeeding Interest Payment Date on which interest on
Securities of such series would be payable but for such deferral or, with
respect to any Securities of a series issued to an Issuer Trust, so long as
any such Securities are held by such Issuer Trust, at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions
on the Capital Securities of such Issuer Trust would be payable but for such
deferral, and (ii) the date on which the Property Trustee of such Issuer
Trust is required to give notice to holders of such Capital Securities of the
record date or the date such Distributions are payable. The Property Trustee
will give notice of the Corporation's election to begin a new Extension
Period to the holders of the Capital Securities.
The Trustee shall promptly give notice of the Corporation's
election to begin any such Extension Period to the Holders of the Outstanding
Securities of such series.
SECTION 3.13. RIGHT OF SET-OFF.
With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Corporation
shall have the right to set off any payment it is otherwise required to make in
respect of any such Security to the extent the Corporation has theretofore made,
or is concurrently on the date of such payment making, a payment under the
Guarantee Agreement relating to such Security or to a holder of Capital
Securities pursuant to an action undertaken under Section 5.8 of this Indenture.
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SECTION 3.14. AGREED TAX TREATMENT.
It is intended that each Security issued hereunder shall
constitute debt of the Corporation and, consequently, each such Security
provide that the Corporation and, by its acceptance of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Security agree to treat such Security as debt of
the Corporation for all United States federal, state and local tax purposes.
SECTION 3.15. CUSIP NUMBERS.
The Corporation in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption and other similar or related materials as a
convenience to Holders; PROVIDED that any such notice or other materials may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of
redemption or other materials and that reliance may be placed only on the
other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Corporation Request, cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for and as otherwise
provided in this Section 4.1) and the Trustee, on demand of and at the
expense of the Corporation, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities that have been
destroyed, lost or stolen and that have been replaced or
paid as provided in Section 3.7 and (ii) Securities for
whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Corporation and
thereafter repaid to the Corporation or discharged from
such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their
Stated Maturity within one year of the date of deposit, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Corporation,
and the Corporation, in the case of subclause (B)(i), (ii) or
(iii) above, has deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in the
currency or currencies in which the Securities of such series are
payable sufficient to pay and discharge the entire debt on such
Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit
(in the case of Securities that have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Corporation has paid or caused to be paid all other sums
payable hereunder by the Corporation; and
(3) the Corporation has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Corporation to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section 6.14
and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section 4.1, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
SECTION 4.2. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be
held in trust and applied by the Trustee, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Corporation acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest (including any Additional
Interest) for the payment of which such money or obligations have been
deposited with or received by the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein with respect to the
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), except as may be specified pursuant to
Section 3.1:
(1) default in the payment of any interest (including any
Additional Interest) upon any Security of that series when it becomes due
and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in respect of any interest
(including Additional Interest) in the case of an Extension Period); or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) failure on the part of the Corporation duly to observe or
perform in any material respect any other of the covenants or agreements
on the part of the Corporation in the Securities of that series or in
this Indenture for a period of 90 days after the date on which written
notice of such failure, requiring the Corporation to remedy the same,
shall have been given to the Corporation by the Trustee by registered or
certified mail or to the Corporation and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding Securities of
that series; or
(4) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Corporation a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the
Corporation under the Bankruptcy Code or any other similar applicable
Federal or State law, which decree or order shall have continued
undischarged and unstayed for a period of 90 days; or the entry of a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Corporation or of its property, or for
the winding up or liquidation of its affairs, which decree or order shall
have continued undischarged and unstayed for a period of 90 days; or
(5) the commencement by the Corporation of voluntary proceedings
to be adjudicated a bankrupt, or the consent by the Corporation to the
filing of a bankruptcy proceeding against it, or the filing by the
Corporation of a petition or answer or consent seeking reorganization
under the Bankruptcy Code or any other similar Federal or State law, or
the consent by the Corporation to the filing of any such petition, or the
consent by the Corporation to the appointment of a receiver or liquidator
or trustee or assignee in
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bankruptcy or insolvency of it or of its property, or the making by the
Corporation of an assignment for the benefit of creditors, or the
admission by the Corporation in writing of its inability to pay its
debts generally as they become due; or
(6) any other Event of Default provided with respect to Securities
of that series.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 5.1(4) or 5.1(5)) with respect to Securities of any
series at the time Outstanding occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities of that series may declare the
principal amount (or, if the Securities of that series are Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of that series to be due and
payable immediately, by a notice in writing to the Corporation (and to the
Trustee if given by Holders), provided that, in the case of the Securities of
a series issued to an Issuer Trust, if, upon an Event of Default, the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of such series fail to declare the principal of all the
Outstanding Securities of such series (or specified portion thereof) to be
immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount (as defined in the related Trust Agreement) of the related
series of Capital Securities issued by such Issuer Trust then outstanding
shall have the right to make such declaration by a notice in writing to the
Corporation and the Trustee; and upon any such declaration such principal
amount (or specified portion thereof) of and the accrued interest (including
any Additional Interest) on all the Securities of such series shall become
immediately due and payable. If an Event of Default specified in Section
5.1(4) or 5.1(5) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of such series
(or, if the Securities of such series are Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
of that series) and the accrued interest (including any Additional Interest)
on all the Securities of such series shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable. Payment of principal (and premium, if any) and
interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article XIII notwithstanding that such
amount shall become immediately due and payable as herein provided.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article V provided, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series, by
written notice to the Corporation and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Corporation has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on all Securities
of such series,
(B) any accrued Additional Interest on all Securities of
such series,
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(C) the principal of (and premium, if any, on) any
Securities of such series that have become due otherwise than by
such declaration of acceleration, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that
series that has become due solely by such acceleration, have been cured
or waived as provided in Section 5.13.
In the case of Securities of a series initially issued to an
Issuer Trust, if the Holders of such Securities fail to annul such
declaration and waive such default, the holders of a Majority in Liquidation
Amount of the Capital Securities (as defined in the related Trust Agreement)
issued by such Issuer Trust shall also have the right to rescind and annul
such declaration and its consequences by written notice to the Corporation
and the Trustee, subject to the satisfaction of the conditions set forth in
Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
The Corporation covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security of any series when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Corporation will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium, if any), including any
sinking fund payment or analogous obligations, and interest (including any
Additional Interest), and, in addition thereto, all amounts owing to the
Trustee under Section 6.7.
If the Corporation fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Corporation or any other obligor upon such
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Corporation or any other
obligor upon the Securities, wherever situated.
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If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Corporation or any other obligor upon the
Securities or the property of the Corporation or of such other obligor or
their creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Corporation for the payment of
overdue principal (or premium, if any) or interest (including any
Additional Interest)) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any
Additional Interest) owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable and to take any and all actions as are authorized under
the Trust Indenture Act in order to have the claims of the Holders
and the Trustee and any predecessor to the Trustee under
Section 6.7 allowed in any such judicial proceedings; and
(2) in particular, the Trustee shall be authorized to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee
for distribution in accordance with Section 5.6, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
PROVIDED, HOWEVER, that the Trustee may, on behalf of the Holders, vote for
the election of a trustee in bankruptcy or similar official and be a member
of a creditors' or other similar committee.
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SECTION 5.5. TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
subject to Article XIII and after provision for the payment of all the amounts
owing the Trustee and any predecessor Trustee under Section 6.7, its agents and
counsel, be for the ratable benefit of the Holders of the Securities in respect
of which such judgment has been recovered.
SECTION 5.6. APPLICATION OF MONEY COLLECTED.
Any money or property collected or to be applied by the Trustee
with respect to a series of Securities pursuant to this Article V shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money or property on account of principal
(or premium, if any) or interest (including any Additional Interest), upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts
then due and unpaid upon Securities of such series for principal (and
premium, if any) and interest (including any Additional Interest) in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such series of Securities for principal
(and premium, if any) and interest (including any Additional Interest),
respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.7. LIMITATION ON SUITS.
Subject to Section 5.8, no Holder of any Securities of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture or for the appointment of a receiver, assignee,
trustee, liquidator or sequestrator (or other similar official) or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST; DIRECT ACTION BY HOLDERS OF CAPITAL SECURITIES.
Notwithstanding any other provision in this Indenture, the Holder
of any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series
issued to an Issuer Trust, any registered holder of the series of Capital
Securities issued by such Issuer Trust shall have the right, upon the occurrence
of an Event of Default described in Section 5.1(1) or 5.1(2), to institute a
suit directly against the Corporation for enforcement of payment to such holder
of principal of (premium, if any) and (subject to Sections 3.8 and 3.12)
interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount (as defined in the
related Trust Agreement) of such Capital Securities held by such holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, any Holder or any holder of Capital Securities
issued by any Issuer Trust has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
such Holder or such holder of Capital Securities, then and in every such case
the Corporation, the Trustee and such Holders and such holder of Capital
Securities shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and such Holder and such holder of
Capital Securities shall continue as though no such proceeding had been
instituted.
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SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 3.7,
no right or remedy herein conferred upon or reserved to the Trustee or the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or any Holder of any Security
or any holder of any Capital Security to exercise any right or remedy accruing
upon any Event of Default with respect to the Securities of the related series
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the
Trustee or to the Holders and the right and remedy given to the holders of
Capital Securities by Section 5.8 may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee, the Holders, or the holders of
Capital Securities, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series, PROVIDED that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall
have the right to decline to follow such direction if a Responsible
Officer or Officers of the Trustee shall, in good faith, determine that
the proceeding so directed would be unjustly prejudicial to the Holders
not joining in any such direction or would involve the Trustee in
personal liability.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series affected thereby and, in the
case of any Securities of a series initially issued to an Issuer Trust, the
holders of a Majority in Liquidation Amount of the Capital Securities (as
defined in the related Trust Agreement) issued by such Issuer Trust may waive
any
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past default or Event of Default hereunder and its consequences with respect
to such series except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such
series (unless such default has been cured and the Corporation has paid
to or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including any Additional Interest) and all
principal of (and premium, if any, on) all Securities of that series due
otherwise than by acceleration), or
(2) in respect of a covenant or provision hereof that under
Article IX cannot be modified or amended without the consent of each
Holder of any Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of
all the Securities of such series or, in the case of a waiver by holders of
Capital Securities issued by such Issuer Trust, by the holders of all the
Capital Securities issued by such Issuer Trust.
Upon any such waiver, such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Security, by its acceptance thereof, shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.
SECTION 5.15. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Corporation covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Corporation
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and
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covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions that by
any provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section 6.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
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to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of a series.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.1.
SECTION 6.2. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of
the Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; PROVIDED, HOWEVER, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and PROVIDED FURTHER,
HOWEVER, that, in the case of any default of the character specified in
Section 5.1(3), no such notice to Holders of Securities of such series shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section 6.2, the term "DEFAULT" means any event that is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.3. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
Security or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Corporation mentioned herein
shall be sufficiently evidenced by a Corporation Request or Corporation Order
and any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action
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hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in complying with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, Security or other paper or document, but the Trustee in its
discretion may make such inquiry or investigation into such facts or matters as
it may see fit; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
SECTION 6.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Corporation, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Corporation of the Securities or the proceeds thereof.
SECTION 6.5. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Securities Registrar or any other agent of the Corporation, in its individual or
any other capacity, may become the owner or pledgee of Securities and, subject
to Sections 6.8 and 6.13, may otherwise deal with the Corporation with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
SECTION 6.6. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law (including the
Trust Indenture Act). The Trustee shall be under
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53
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Corporation.
SECTION 6.7. COMPENSATION AND REIMBURSEMENT.
The Corporation, in its capacity as the issuer of the Securities,
agrees
(1) to pay to the Trustee from time to time such
reasonable compensation for all services rendered by it hereunder
in such amounts as the Corporation and the Trustee shall agree
from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence,
wilful misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel) incurred without negligence, wilful misconduct or bad
faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. This
indemnification shall survive the termination of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code.
SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.
(a) The Trustee for the Securities of any series issued
hereunder shall be subject to the provisions of Section 310(b) of the Trust
Indenture Act. Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
said Section 310(b).
(b) The Trust Agreement and the Guarantee Agreement with respect
to each Issuer Trust shall be deemed to be specifically described in this
Indenture for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
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SECTION 6.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be:
(a) a corporation organized and doing business under the laws of
the United States of America or of any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent to
supervision or examination applicable to United States institutional
trustees,
in either case having at the time of appointment securities rated in one of the
three highest rating categories by a nationally recognized statistical rating
organization and a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then, for the purposes of this Section 6.9 and to the extent permitted by the
Trust Indenture Act, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 6.9, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article VI. Neither the Corporation nor any Person directly
or indirectly controlling, controlled by or under common control with the
Corporation shall serve as Trustee for the Securities of any series issued
hereunder.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article VI shall become effective until
the acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Corporation. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Corporation.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Corporation or by any Holder who has been
a BONA FIDE Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
shall fail to resign after written request therefor by the Corporation or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Corporation, acting pursuant to the authority
of a Board Resolution, may remove the Trustee with respect to the Securities of
all series issued hereunder, or (ii) subject to Section 5.14, any Holder who
has been a BONA FIDE Holder of a Security for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to the
Securities of all series issued hereunder and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause
with respect to the Securities of one or more series, the Corporation, by a
Board Resolution, shall promptly appoint a successor Trustee with respect to
the Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of such series delivered to the Corporation and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and supersede the successor Trustee appointed by
the Corporation. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Corporation or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who has
been a BONA FIDE Holder of a Security of such series for at least six months
may, subject to Section 5.14, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(f) The Corporation shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Securities of such series as their names and
addresses appear in the Securities Register. Each notice shall include the
name of the successor Trustee with respect to the Securities of such series and
the address of its Corporate Trust Office.
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SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Corporation and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Corporation or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Corporation, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Corporation or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Corporation
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all rights, powers and trusts referred
to in paragraph (a) or (b) of this Section 6.11, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VI.
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SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article
VI, without the execution or filing of any paper or any further act on the part
of any of the parties hereto. If any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and if any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or
in the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
CORPORATION.
If and when the Trustee shall be or become a creditor of the
Corporation (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Corporation (or any such other obligor).
SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities, which shall be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.7, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or to the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent or the Authenticating Agent's
certificate of authentication set forth in this Section 6.14. Each
Authenticating Agent shall be acceptable to the Corporation and shall at all
times be a corporation organized and doing business under the laws of the
United States of America or of any State or Territory thereof or the District
of Columbia, authorized under such laws to act as Authenticating Agent, having
a combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.14 and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.14.
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Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent, shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
qualified and eligible under this Section 6.14, without the execution or filing
of any paper or any further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Corporation. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Corporation. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent, which shall be acceptable to the Corporation and shall
give notice of such appointment in the manner provided in Section 1.6 to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section 6.14.
The Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section 6.14, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 6.7.
If an appointment with respect to one or more series is made
pursuant to this Section 6.14, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
Dated: ___________________
[NAME], AS TRUSTEE
By:___________________________
AS AUTHENTICATING AGENT
By:___________________________
AUTHORIZED OFFICER
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ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. CORPORATION TO FURNISH TRUSTEE NAMES AND ADDRESSES
OF HOLDERS.
The Corporation will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, on or before June 30 and December 31 of each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days
prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Corporation of any such request,
a list in similar form and content as of a date not more than 15 days
prior to the time such list is furnished,
in each case to the extent such information is in the possession or control of
the Corporation and has not otherwise been received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.2. PRESERVATION OF INFORMATION, COMMUNICATIONS TO
HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Securities Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by its acceptance thereof, agrees
with the Corporation and the Trustee that neither the Corporation nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act, at the times and in the manner provided pursuant
thereto.
(b) Reports so required to be transmitted at stated intervals of
not more than 12 months shall be transmitted no later than 60 days following
December 31 in each calendar year, commencing December 31, 2000 after the first
issuance of Securities under this Indenture.
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(c) If this Indenture shall have been qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities exchange
upon which any Securities are listed and also with the Commission. The
Corporation will notify the Trustee when any Securities are listed on any
securities exchange.
SECTION 7.4. REPORTS BY CORPORATION.
If this Indenture shall have been qualified under the Trust
Indenture Act, the Corporation shall file with the Trustee and with the
Commission, and transmit to the Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided in the Trust Indenture
Act; PROVIDED that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is
required to be filed with the Commission. At any time when the Corporation is
not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or beneficial owner of a Security, the Corporation shall promptly
furnish Rule 144A Information, or cause such information to be furnished, to
such Holder or beneficial owner or to a prospective purchaser of such Security
designated by such Holder or beneficial owner in order to permit compliance by
such Holder or beneficial owner with Rule 144A under the Securities Act in
connection with the resale of such Security by such Holder or beneficial owner;
PROVIDED, HOWEVER, that the Corporation shall not be required to furnish such
information at any time to a prospective purchaser located outside the United
States who is not a "U.S. PERSON" within the meaning of Regulation S under the
Securities Act. The Corporation also shall comply with the other provisions of
Trust Indenture Act Section 314(a), PROVIDED, HOWEVER, that the Corporation
shall be required, pursuant to this Section 7.4, to provide any document,
report or other information to the Commission only if this Indenture shall have
been qualified under the Trust Indenture Act.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. CORPORATION MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS.
The Corporation shall not consolidate with or merge into any
other Person or convey, transfer or lease all or substantially all its
properties and assets to any Person, and no Person (other than a Subsidiary)
shall consolidate with or merge into the Corporation or convey, transfer or
lease all or substantially all its properties and assets to the Corporation,
unless:
(1) if the Corporation shall consolidate with or merge into
another Person or convey, transfer or lease all or substantially all its
properties and assets to any Person, the corporation formed by such
consolidation or into which the Corporation is merged or the Person that
acquires by conveyance or transfer, or that leases, all or substantially
all the properties and assets of the Corporation shall be a corporation,
partnership or trust organized and existing under the laws of the United
States of America or any State thereof or the District of
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61
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including any
Additional Interest) on all the Securities of every series and the
performance of every covenant of this Indenture on the part of the
Corporation to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event that, after notice or lapse of time, or both,
would constitute an Event of Default, shall have occurred and be
continuing; and
(3) the Corporation has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture comply with this Article VIII and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.1, may
rely upon such Officers' Certificate and Opinion of Counsel as conclusive
evidence that such transaction complies with this Section 8.1.
SECTION 8.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger by the Corporation with or into
any other Person, or any conveyance, transfer or lease by the Corporation of
all or substantially all its properties and assets to any Person in accordance
with Section 8.1, the successor corporation formed by such consolidation or
into which the Corporation is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Corporation under this Indenture with the same effect
as if such successor Person had been named as the Corporation herein; and in
the event of any such conveyance, transfer or lease, the Corporation shall be
discharged from all obligations and covenants under this Indenture and the
Securities.
Such successor Person may cause to be executed, and may issue
either in its own name or in the name of the Corporation, any or all of the
Securities issuable hereunder that theretofore shall not have been signed by
the Corporation and delivered to the Trustee; and, upon the order of such
successor Person instead of the Corporation and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities that previously shall have been
signed and delivered by the officers of the Corporation to the Trustee for
authentication pursuant to such provisions and any Securities that such
successor Person thereafter shall cause to be executed and delivered to the
Trustee on its behalf for the purpose pursuant to such provisions. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture.
In case of any such consolidation, merger, conveyance, transfer
or lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Corporation, when
authorized by a Board Resolution, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Corporation, and the assumption by any such successor of the covenants of
the Corporation contained herein and in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee or to surrender any right or power herein
conferred upon the Corporation; or
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Corporation for the benefit of
the Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of the
series specified); or
(5) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are expressly
being included solely for the benefit of the series specified); or
(6) to change or eliminate any of the provisions of this
Indenture, PROVIDED that any such change or elimination shall (a) become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture that is
entitled to the benefit of such provision or (b) not apply to any
Outstanding Securities; or
(7) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, PROVIDED that such action
pursuant to this clause (7) shall not adversely affect the interest of
the Holders of Securities of any series in any material respect or, in
the case of the Securities of a series issued to an Issuer Trust and for
so long as any of the corresponding series of Capital Securities issued
by such Issuer Trust shall remain outstanding, the holders of such
Capital Securities; or
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(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series
affected by such supplemental indenture, by Act of said Holders delivered to
the Corporation and the Trustee, the Corporation, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security of each series affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or reduce the
amount of principal of a Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2, or change the place of payment where, or the coin or
currency in which, any Security or interest (including any Additional
Interest) thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provision of this Section 9.2, Section 5.13
or Section 10.5, except to increase any such percentage or to provide
that certain other provisions of this indenture cannot be modified or
waived without the consent of the Holder of each Security affected
thereby:
PROVIDED FURTHER, HOWEVER, that in the case of Securities of a
series issued to an Issuer Trust, so long as any of the
corresponding series of Capital Securities issued by such Issuer
Trust remains outstanding, (i) no such amendment shall be made
that adversely affects the holders of such Capital Securities in
any material respect, and no
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termination of this Indenture shall occur, and no waiver of any
Event of Default or compliance with any covenant under this
Indenture shall be effective, without the prior consent of the
holders of at least a Majority in Liquidation Amount of such
Capital Securities (as defined in the related Trust Agreement)
unless and until the principal of (and premium, if any, on) the
Securities of such series and all accrued and (subject to Section
3.12) unpaid interest (including, subject to Section 3.12, any
Additional Interest) thereon have been paid in full, and (ii) no
amendment shall be made to Section 5.8 of this Indenture that
would impair the rights of the holders of Capital Securities
issued by any Issuer Trust provided therein without the prior
consent of the holders of each such Capital Security then
outstanding unless and until the principal of (and premium, if
any, on) the Securities of such series and all accrued and
(subject to Section 3.12) unpaid interest (including, subject to
Section 3.12, any Additional Interest) thereon have been paid in
full.
A supplemental indenture that changes or eliminates any covenant
or other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, that modifies the rights of the Holders of Securities of such series or
holders of such Capital Securities of such corresponding series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series or holders of
Capital Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent herein provided for relating to such action have
been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article IX, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX may, and shall if
required by the Corporation, bear a notation in form approved by the
Corporation as to any matter provided for in such supplemental indenture. If
the Corporation shall so determine, new Securities of any series so modified
as to conform, in the opinion of the Corporation, to any such supplemental
indenture may be prepared and executed by the Corporation and authenticated
and delivered by the Trustee in exchange for Outstanding Securities of such
series.
ARTICLE X
COVENANTS
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Corporation covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of
(and premium, if any) and interest (including any Additional Interest) on the
Securities of that series in accordance with the terms of such Securities and
this Indenture.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Corporation will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may
be presented or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Corporation in respect of the Securities of that
series and this Indenture may be served. The Corporation initially appoints
the Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Corporation will give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
Corporation shall fail to maintain such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of
the Trustee, and the Corporation hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.
The Corporation may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all of such purposes, and may from time to time
rescind such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Corporation of its obligation to
maintain an office or
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agency in each Place of Payment for Securities of any series for such
purposes. The Corporation will give prompt written notice to the Trustee of
any such designation and any change in the location of any such office or
agency.
SECTION 10.3. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Corporation shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each
due date of the principal of (or premium, if any) or interest (including any
Additional Interest) on any of the Securities of such series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (or premium, if any) or interest (including
any Additional Interest) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee of its failure so to act.
Whenever the Corporation shall have one or more Paying Agents,
it will, prior to 10:00 a.m., New York City time, on each due date of the
principal of (or premium, if any) or interest (including any Additional
Interest) on any Securities, deposit with a Paying Agent a sum sufficient to
pay the amount so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such amount, and (unless such Paying Agent is the
Trustee) the Corporation will promptly notify the Trustee of its failure so
to act.
The Corporation will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.3, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) and interest (including any Additional Interest) on
the Securities of a series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Corporation (or
any other obligor upon such Securities) in the making of any payment of
principal (or premium, if any) or interest (including any Additional
Interest) in respect of any Security of any series;
(3) at any time during the continuance of any default with respect
to a series of Securities, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying
Agent with respect to such series; and
(4) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Corporation may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Corporation Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Corporation or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums
were held by
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the Corporation or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Corporation in trust for the payment of the principal of (or
premium, if any) or interest (including any Additional Interest) on any
Security and remaining unclaimed for two years after such principal (or
premium, if any) or interest (including any Additional Interest) has become
due and payable shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be paid on
Corporation Request to the Corporation, or (if then held by the Corporation)
shall (unless otherwise required by mandatory provision of applicable escheat
or abandoned or unclaimed property law) be discharged from such trust; and
the Holder of such Security shall thereafter, as a general unsecured
creditor, look only to the Corporation for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Corporation as trustee thereof, shall thereupon cease;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Corporation
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Corporation.
SECTION 10.4. STATEMENT AS TO COMPLIANCE.
The Corporation shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Corporation ending after the date
hereof, an Officers' Certificate covering the preceding calendar year,
stating whether or not to the best knowledge of the signers thereof the
Corporation is in default in the performance, observance or fulfillment of or
compliance with any of the terms, provisions, covenants and conditions of
this Indenture, and if the Corporation shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be
determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
SECTION 10.5. WAIVER OF CERTAIN COVENANTS.
Subject to the rights of holders of Capital Securities
specified in Section 9.2, if any, the Corporation may omit in any particular
instance to comply with any covenant or condition provided pursuant to
Section 3.1, 9.1(3) or 9.1(4) with respect to the Securities of any series,
if before or after the time for such compliance the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but
no such waiver shall extend to or affect such covenant or condition except to
the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Corporation in respect of any such covenant
or condition shall remain in full force and effect.
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SECTION 10.6. PAYMENT OF TRUST'S COSTS AND EXPENSES.
Since the Issuer Trust is being formed solely to facilitate an investment in
the Securities, the Corporation, as borrower, hereby covenants to pay all
debts and obligations (other than with respect to the Capital Securities and
Common Securities) and all costs and expenses of the Issuer Trust (including,
but not limited to, all costs and expenses relating to the organization of
the Issuer Trust, the fees and expenses of the Trustees of the Issuer Trust
and all costs and expenses relating to the operation of the Issuer Trust) and
to pay any and all taxes, duties, assessments or governmental charges of
whatever nature (other than United States federal withholding taxes) imposed
on the Issuer Trust by the United States, or any other taxing authority, so
that the net amounts received and retained by the Issuer Trust and the
Property Trustee after paying such expenses will be equal to the amounts the
Issuer Trust and the Property Trustee would have received had no such costs
or expenses been incurred by or imposed on the Issuer Trust. The obligations
of the Corporation to pay all debts, obligations, costs and expenses of the
Issuer Trust (other than with respect to the Capital Securities and the
Common Securities) shall constitute additional debt hereunder and shall
survive the satisfaction and discharge of the Indenture.
SECTION 10.7. ADDITIONAL COVENANTS.
The Corporation covenants and agrees with each Holder of
Securities of each series that it shall not, and it shall not permit any
Subsidiary of the Corporation to, (x) declare or pay any dividends or
distributions on, or redeem purchase, acquire or make a liquidation payment
with respect to, any shares of the Corporation's capital stock, or (y) make
any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Corporation that rank PARI
PASSU in all respects with or junior in interest to the Securities of such
series (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Corporation or satisfaction of obligations
under any contract or security, in connection with any employment contract,
stock option plan, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, or
in connection with a dividend reinvestment or stockholder stock purchase
plan, (b) as a result of an exchange or conversion of any class or series of
the Corporation's capital stock (or any capital stock of a Subsidiary of the
Corporation) for any class or series of the Corporation's capital stock or of
any class or series of the Corporation's debt for any class or series of the
Corporation's capital stock, (c) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged or any agreements relating thereto, (d) any declaration of a
dividend in connection with the adoption of any Rights Plan, or the issuance
of rights, stock or other property under any Rights Plan, or the redemption
or repurchase of rights pursuant thereto, or (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks PARI PASSU
with or junior to such stock) if at such time (i) there shall have occurred
any event (A) of which the Corporation has actual knowledge that with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default with respect to the Securities of such series, and (B) which the
Corporation shall not have taken reasonable steps to cure, (ii) if the
Securities of such series are held by an Issuer Trust, the Corporation shall
be in default with respect to its payment of
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any obligations under the Guarantee Agreement relating to the Capital
Securities issued by such Issuer Trust, or (iii) or the Corporation shall
have given notice of its election to begin an Extension Period with respect
to the Securities of such series as provided herein and shall not have
rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing.
The Corporation also covenants with each Holder of Securities
of a series issued to an Issuer Trust (i) to hold, directly or indirectly,
100% of the Common Securities of such Issuer Trust, PROVIDED that any
permitted successor of the Corporation hereunder may succeed to the
Corporation's ownership of such Common Securities, (ii) as holder of such
Common Securities, not to voluntarily terminate, wind-up or liquidate such
Issuer Trust, other than (a) in connection with a distribution of the
Securities of such series to the holders of the related Capital Securities in
liquidation of such Issuer Trust, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement, and
(iii) to use its reasonable efforts, consistent with the terms and provisions
of such Trust Agreement, to cause such Issuer Trust to continue to be
classified as a grantor trust and not to be taxable as a corporation for
United States federal income tax purposes.
SECTION 10.8. ORIGINAL ISSUE DISCOUNT.
For each year during which any Securities are considered to
have been issued with "original issue discount" (within the meaning of
Section 1273(a) of the Internal Revenue Code of 1986, as amended), the
Corporation shall furnish to each Paying Agent in a timely fashion such
information as may be reasonably requested by each Paying Agent in order that
such Paying Agent may prepare the information that it is required to report
for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to
Section 6049 of the Internal Revenue Code of 1986, as amended. Such
information shall include the amount of original issue discount includable in
income for each $25 of principal amount at Stated Maturity of Securities
Outstanding during such year.
SECTION 10.9. LIMITATION ON INDEBTEDNESS.
The Corporation shall not, and shall not suffer or permit any
of its Subsidiaries to, create, incur, assume or otherwise become directly or
indirectly liable with respect to, any Indebtedness, which (a) would result
in any downgrade of the rating of any Indebtedness of the Corporation or any
of its Subsidiaries, including the Capital Securities, below an investment
grade rating of Baa3 by Moody's Investors Service or of BBB- by Standard &
Poor's Rating Service or (b) would be given an initial rating below Baa3 by
Moody's Investors Service or BBB- by Standard and Poor's Rating Service.
For purposes of complying with this covenant, the Corporation
agrees that, prior to creating, incurring, assuming, or otherwise becoming
liable with respect to, or permitting any of its Subsidiaries to create,
incur, assume, or otherwise become liable with respect to, any Indebtedness,
it will apply for and receive a confirmation of the rating of any of its then
existing Indebtedness (including the Capital Securities or any Indebtedness
issued hereunder) and/or, as applicable, an initial rating of any new
Indebtedness to be so created, incurred, assumed or for which the
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Corporation or any of its Subsidiaries is to become so liable from each of
Moody's Investors Service and Standard & Poor's Rating Service or the
successors thereof.
SECTION 10.10. LIMITATION ON LIENS.
The Corporation shall not directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property or assets, securing Indebtedness, other than Senior
Indebtedness, unless contemporaneously therewith effective provision is made
to secure the Securities equally and ratably with (or prior to in the case of
Liens with respect to Indebtedness which is subordinated to the Securities)
the Indebtedness secured by such Lien for so long as such Indebtedness is so
secured.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. APPLICABILITY OF THIS ARTICLE.
Redemption of Securities of any series (whether by operation of
a sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form
of Security and this Article XI; PROVIDED, HOWEVER, that if any provision of
any such form of Security shall conflict with any provision of this Article
XI, the provision of such form of Security shall govern. Except as otherwise
set forth in the form of Security for such series, each Security of a series
shall be subject to partial redemption only in integral multiples of $25.
SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Corporation to redeem any Securities shall
be evidenced by or pursuant to a Board Resolution. In case of any redemption
at the election of the Corporation, the Corporation shall, not less than 45
nor more than 60 days prior to the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee, and, in the case
of Securities of a series held by an Issuer Trust, the Property Trustee under
the related Trust Agreement, such date and of the principal amount of
Securities of the applicable series to be redeemed and provide the additional
information required to be included in the notice or notices contemplated by
Section 11.4; provided that in the case of any series of Securities initially
issued to an Issuer Trust, for so long as such Securities are held by such
Issuer Trust, such notice shall be given not less than 45 nor more than 75
days prior to such Redemption Date (unless a shorter notice shall be
satisfactory to the Property Trustee under the related Trust Agreement). In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities, the
Corporation shall furnish the Trustee with an Officers' Certificate and an
Opinion of Counsel evidencing compliance with such restriction.
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SECTION 11.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of a portion of the principal amount of any Security
of such series, PROVIDED that the unredeemed portion of the principal amount of
any Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.
The Trustee shall promptly notify the Corporation in writing of
the Securities selected for partial redemption and the principal amount thereof
to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security that has been or
is to be redeemed. If the Corporation shall so direct, Securities registered
in the name of the Corporation, any Affiliate or any Subsidiary thereof shall
not be included in the Securities selected for redemption.
SECTION 11.4. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at the address of such
Holder as it appears in the Securities Register, provided that in the case of
any series of Securities initially issued to an Issuer Trust, for so long as
such Securities are held by such Issuer Trust, such notice shall be given not
less than 45 nor more than 75 days prior to such Redemption Date (unless a
shorter notice shall be satisfactory to the Property Trustee under the related
Trust Agreement).
With respect to Securities of each series to be redeemed, each
notice of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, an
estimate of the Redemption Price together with a statement that it is an
estimate and that the actual Redemption Price will be calculated on the
third Business Day prior to the Redemption Date (and, if such an estimate
of the Redemption Price is given, a subsequent notice shall be given as
set forth above on the date that such Redemption Price is calculated
setting forth the actual Redemption Price);
(c) if less than all Outstanding Securities of such particular
series are to be redeemed, the identification (and, in the case of
partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
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(d) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Security or portion thereof, and that
interest (including any Additional Interest) thereon, if any, shall cease
to accrue on and after said date;
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the
case;
(g) such other provisions as may be required in respect of the
terms of a particular series of Securities.
Notice of redemption of Securities to be redeemed at the election
of the Corporation shall be given by the Corporation or, at the Corporation's
request, by the Trustee in the name and at the expense of the Corporation and
shall be irrevocable. The notice if mailed in the manner provided above shall
be conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or
any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
SECTION 11.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Corporation will deposit with the Trustee or with one or more Paying Agents
(or, if the Corporation is acting as its own Paying Agent, the Corporation will
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of, and any accrued interest (including
any Additional Interest) on, all the Securities (or portions thereof) that are
to be redeemed on that date.
SECTION 11.6. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section
11.4, the Securities or portion of Securities with respect to which such notice
has been given shall become due and payable on the date and at the place or
places stated in such notice at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.
On presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall
be paid and redeemed by the Corporation at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest (including any Additional
Interest) whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 3.8.
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Upon presentation of any Security redeemed in part only, the
Corporation shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Corporation, a new Security or Securities
of the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the
same Original Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of (and premium, if any, on)
such Security shall, until paid, bear interest from the Redemption Date at the
rate prescribed therefor in such Security.
SECTION 11.7. RIGHT OF REDEMPTION OF SECURITIES INITIALLY ISSUED
TO AN ISSUER TRUST.
In the case of Securities of a series initially issued to an
Issuer Trust, except as otherwise specified as contemplated by Section 3.1, the
Corporation, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event or an
Investment Company Event, in whole (but not in part) at any time within 90 days
following the occurrence and during the continuation of such Tax Event or
Investment Company Event, in each case at a Redemption Price specified in such
Security, together with accrued interest (including any Additional Interest) to
but excluding the Redemption Date.
If less than all the Securities of any such series are to be
redeemed, the aggregate principal amount of such Securities remaining
Outstanding after giving effect to such redemption shall be sufficient to
satisfy any provisions of the Trust Agreement related to the Issuer Trust to
which such Securities were issued, including any requirement in such Trust
Agreement as to the minimum Liquidation Amount (as defined in such Trust
Agreement) of Capital Securities that may be held by a holder of Capital
Securities thereunder.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by
the terms of any Securities of any series is herein referred to as a "MANDATORY
SINKING FUND PAYMENT", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "OPTIONAL SINKING FUND PAYMENT". If
provided for by the terms of any Securities of any series, the cash amount of
any sinking fund payment may be
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subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of such Securities.
SECTION 12.2. SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES.
In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Securities of a series in cash, the Corporation may
at its option, at any time no more than 16 months and no less than 45 days
prior to the date on which such sinking fund payment is due, deliver to the
Trustee Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Corporation, except Securities of such series that have been theretofore
redeemed through the application of mandatory or optional sinking fund payments
pursuant to the terms of the Securities of such series, accompanied by a
Corporation Order instructing the Trustee to credit such obligations and
stating that the Securities of such series were originally issued by the
Corporation by way of bona fide sale or other negotiation for value; PROVIDED
that the Securities to be so credited have not been previously so credited.
The Securities to be so credited shall be received and credited for such
purpose by the Trustee at the Redemption Price for such Securities, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be
reduced accordingly.
SECTION 12.3. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for
any series of Securities, the Corporation will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms of such Securities, the
portion thereof, if any, that is to be satisfied by payment of cash in the
currency in which the Securities of such series are payable (except as provided
pursuant to Section 3.1) and the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities pursuant to Section 12.2, and
will also deliver to the Trustee any Securities to be so delivered. Such
Officers' Certificate shall be irrevocable and upon its delivery the
Corporation shall be obligated to make any cash payment or payments referred to
therein, on or before the succeeding sinking fund payment date. If the
Corporation fails to deliver such Officers' Certificate (or, as required by
this Indenture, the Securities and coupons, if any, specified in such Officers'
Certificate) by the due date therefor, the sinking fund payment due on the
succeeding sinking fund payment date for such series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of the Securities
of such series subject to a mandatory sinking fund payment without the right to
deliver or credit securities as provided in Section 12.2 and without the right
to make the optional sinking fund payment with respect to such series at such
time.
Any sinking fund payment or payments (mandatory or optional) made
in cash plus any unused balance of any preceding sinking fund payments made
with respect to the Securities of any particular series shall be applied by the
Trustee (or by the Corporation, if the Corporation is acting as its own Paying
Agent) on the sinking fund payment date on which such payment is made (or, if
such payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Securities of such series at
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the Redemption Price specified in such Securities with respect to the sinking
fund. Any and all sinking fund moneys with respect to the Securities of any
particular series held by the Trustee (or, if the Corporation is acting as its
own Paying Agent, segregated and held in trust as provided in Section 10.3) on
the last sinking fund payment date with respect to Securities of such series
and not held for the payment or redemption of particular Securities of such
series shall be applied by the Trustee (or, by the Corporation, if the
Corporation is acting as its own Paying Agent), together with other moneys, if
necessary, to be deposited (or segregated) sufficient for the purpose, to the
payment of the principal of the Securities of such series at Maturity. The
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the
Corporation in the manner provided in Section 11.4. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Corporation shall pay to the Trustee (or, if the Corporation is
acting as its own Paying Agent, the Corporation shall segregate and hold in
trust as provided in Section 10.3) in cash a sum in the currency in which
Securities of such series are payable (except as provided pursuant to Section
3.1) equal to the principal (and premium, if any) and any interest (including
any Additional Interest) accrued to the Redemption Date for the Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
Neither the Trustee nor the Corporation shall redeem any
Securities of a series with sinking fund monies or mail any notice of
redemption of Securities of such series by operation of the sinking fund for
such series during the continuance of a default in payment of interest
(including any Additional Interest), if any, on any Securities of such series
or of any Event of Default (other than an Event of Default occurring as a
consequence of this paragraph) with respect to the Securities of such series,
except that if the notice of redemption shall have been provided in accordance
with the provisions hereof, the Trustee (or the Corporation, if the Corporation
is acting as its own Paying Agent) shall redeem such Securities if cash
sufficient for that purpose shall be deposited with the Trustee (or segregated
by the Corporation) for that purpose in accordance with the terms of this
Article XII. Except as aforesaid, any monies in the sinking fund for such
series at the time when any such default or Event of Default shall occur and
any monies thereafter paid into such sinking fund shall, during the continuance
of such default or Event of Default, be held as security for the payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Securities of such series; PROVIDED, HOWEVER, that if such
default or Event of Default shall have been cured or waived as provided herein,
such monies shall thereafter be applied on the next sinking fund payment date
for the Securities of such series on which such monies may be applied pursuant
to the provisions of this Section 12.3.
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ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Corporation covenants and agrees, and each Holder of a
Security, by its acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article XIII, the payment
of the principal of (and premium, if any) and interest (including any Additional
Interest) on each and all of the Securities of each and every series are hereby
expressly made subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness.
SECTION 13.2. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT;
PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
If the Corporation shall default in the payment of any principal
of (or premium, if any) or interest, if any, or any other amount payable on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, then, upon written notice of such default to the Corporation by the
holders of Senior Indebtedness or any trustee therefor, unless and until such
default shall have been cured or waived or shall have ceased to exist, or all
such Senior Indebtedness has been paid, no direct or indirect payment (in cash,
property or securities, by set-off or otherwise) shall be made or agreed to be
made on account of the principal of (or premium, if any) or interest (including
any Additional Interest) on any of the Securities, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Securities.
In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceedings relating to the Corporation, its creditors or its property, (b) any
proceeding for the liquidation, dissolution or other winding up of the
Corporation, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) any assignment by the Corporation for the benefit
of creditors or (d) any other marshaling of the assets of the Corporation (each
such event, if any, herein sometimes referred to as a "PROCEEDING"), all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to
any Holder of any of the Securities on account thereof; PROVIDED, HOWEVER, that
holders of any Senior Indebtedness shall not be entitled to receive payment of
any such amounts to the extent that holders of such Senior Indebtedness would
be required by the subordination provisions of such Senior Indebtedness to pay
such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Corporation's business. Any
payment or distribution, whether in cash, securities or other property (other
than securities of the Corporation or any other corporation provided for by a
plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in these subordination provisions with respect to
the indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any
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securities issued in respect thereof under any such plan of reorganization or
readjustment), that would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series shall be paid
or delivered directly to the holders of Senior Indebtedness in accordance with
the priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any
Proceeding) shall have been paid in full; PROVIDED, HOWEVER, that holders of
any Senior Indebtedness shall not be entitled to receive payment of any such
amounts to the extent that holders of such Senior Indebtedness would be
required by the subordination provisions of such Senior Indebtedness to pay
such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Corporation's business.
In the event of any Proceeding, after payment of all sums owing
with respect to Senior Indebtedness to the extent provided herein, the Holders
of the Securities to the extent provided herein, together with the holders of
any obligations of the Corporation ranking on a parity with the Securities,
shall be entitled to be paid from the remaining assets of the Corporation the
amounts at the time due and owing on account of unpaid principal of (and
premium, if any) and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock ranking junior to the Securities and such other obligations.
If, notwithstanding the foregoing, any payment or distribution of
any character or any security, whether in cash, securities or other property
(other than securities of the Corporation or any other corporation provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the debt evidenced by the Securities, to the payment of all
Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), shall
be received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Indebtedness (including any interest thereon
accruing after the commencement of any Proceeding) shall have been paid to the
extent provided herein, such payment or distribution or security shall be
received in trust for the benefit of, and shall be paid over or delivered and
transferred to, the holders of the Senior Indebtedness to the extent provided
herein at the time outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all such Senior Indebtedness
(including any interest thereon accruing after the commencement of any
Proceeding) to the extent provided herein. If the Trustee or any Holder fails
to endorse or assign any such payment, distribution or security, each holder of
Senior Indebtedness is hereby irrevocably authorized to endorse or assign the
same.
The Trustee and the Holders shall take such action (including the
delivery of this Indenture to an agent for the holders of Senior Indebtedness
or consent to the filing of a financing statement with respect hereto) as may,
in the opinion of counsel designated by the holders of a majority in principal
amount of the Senior Indebtedness at the time outstanding, be necessary or
appropriate to assure the effectiveness of the subordination effected by these
provisions.
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The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Corporation in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Corporation, otherwise
ranking on a parity with the Securities or ranking junior to the Securities,
shall not be deemed to prevent such obligations from constituting, respectively,
obligations ranking on a parity with the Securities or ranking junior to the
Securities.
SECTION 13.3. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article XIII or elsewhere in this
Indenture or in any of the Securities shall prevent (a) the Corporation, at any
time, except during the pendency of the conditions described in the first
paragraph of Section 13.2 or of any Proceeding referred to in Section 13.2, from
making payments at any time of principal of (and premium, if any) or interest
(including any Additional Interest) on the Securities, or (b) the application by
the Trustee of any moneys deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest (including any
Additional Interest) on the Securities or the retention of such payment by the
Holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article XIII.
SECTION 13.4. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS.
Subject to the payment to the extent provided herein of all
amounts due or to become due on all Senior Indebtedness, or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, the Holders of the Securities shall be
subrogated to the extent of the payments or distributions made to the holders
of such Senior Indebtedness pursuant to the provisions of this Article XIII
(equally and ratably with the holders of all indebtedness of the Corporation
that by its express terms is subordinated to Senior Indebtedness of the
Corporation to substantially the same extent as the Securities are subordinated
to the Senior Indebtedness and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior
Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XIII, and no payments over pursuant to the
provisions of this Article XIII to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as among the Corporation, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Corporation to or
on account of such Senior Indebtedness.
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SECTION 13.5. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article XIII are and are intended solely
for the purpose of defining the relative rights of the Holders of the Securities
on the one hand and the holders of Senior Indebtedness on the other hand.
Nothing contained in this Article XIII or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as between the Corporation and
the Holders of the Securities, the obligations of the Corporation, which are
absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Securities as and when the same shall become due and payable in
accordance with their terms; (b) affect the relative rights against the
Corporation of the Holders of the Securities and creditors of the Corporation
other than their rights in relation to the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security (or to the extent
expressly provided herein, the holder of any Capital Security) from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, including filing and voting claims in any Proceeding, subject to the
rights, if any, under this Article XIII of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 13.6. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security, by its acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article XIII and appoints the Trustee such Holder's attorney-in-fact for
any and all such purposes.
SECTION 13.7. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Corporation or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Corporation with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or be otherwise charged with.
Without in any way limiting the generality of the immediately
preceding paragraph, the holders of Senior Indebtedness may, at any time and
from to time, without the consent of or notice to the Trustee or the Holders of
the Securities of any series, without incurring responsibility to such Holders
and without impairing or releasing the subordination as provided in this Article
XIII or the obligations hereunder of such Holders to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any Person liable in any manner
<PAGE>
80
for the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Corporation and any other Person.
SECTION 13.8. NOTICE TO TRUSTEE.
The Corporation shall give prompt written notice to the Trustee of
any fact known to the Corporation that would prohibit the making of any payment
to or by the Trustee in respect of the Securities. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from the Corporation or a holder of Senior Indebtedness or from any
trustee, agent or representative therefor; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section 13.8 at
least two Business Days prior to the date upon which by the terms hereof any
monies may become payable for any purpose (including the payment of the
principal of (and premium, if any, on) or interest (including any Additional
Interest) on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself or herself to be a holder of Senior Indebtedness (or a
trustee or attorney-in-fact therefor) to establish that such notice has been
given by a holder of Senior Indebtedness (or a trustee or attorney-in-fact
therefor). If the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article XIII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XIII, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 13.9. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Corporation
referred to in this Article XIII, the Trustee, subject to the provisions of
Section 6.1, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which any
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Corporation, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XIII.
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81
SECTION 13.10. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS.
The Trustee, in its capacity as trustee under this Indenture,
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of Securities or to the
Corporation or to any other Person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article XIII
or otherwise.
SECTION 13.11. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR
INDEBTEDNESS; PRESERVATION OF TRUSTEE'S
RIGHTS.
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article XIII with respect to any Senior
Indebtedness that may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
SECTION 13.12. ARTICLE APPLICABLE TO PAYING AGENTS.
If at any time any Paying Agent other than the Trustee shall have
been appointed by the Corporation and be then acting hereunder, the term
"TRUSTEE" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee.
* * * *
<PAGE>
82
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the day and year first above written.
DPL INC.
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sections 3.5(b) and 3.6(b) of
the Indenture referred to below)
[_________________________],
as Securities Registrar
[address]
Re: [TITLE OF SECURITIES] of DPL Inc. (the "SECURITIES")
Reference is made to the Junior Subordinated Indenture, dated as
of ________ __, 2000 (the "INDENTURE"), between DPL Inc., an Ohio corporation,
and ____________, as Trustee. Terms used herein and defined in the Indenture or
in Regulation S, Rule 144A or Rule 144 under the U.S. Securities Act of 1933
(the "SECURITIES ACT") are used herein as so defined.
This certificate relates to $__________ aggregate principal amount
of Securities, which are evidenced by the following certificate(s) (the
"SPECIFIED SECURITIES"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
CURRENTLY IN BOOK-ENTRY FORM: Yes ___ No ___ (check one)
The person in whose name this certificate is executed below (the
"UNDERSIGNED") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"OWNER". If the Specified Securities are represented by a Global Security, they
are held through a Depositary or an Agent Member in the name of the Undersigned,
as or on behalf of the Owner. If the Specified Securities are not represented
by a Global Security, they are registered in the name of the Undersigned, as or
on behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to another person (the "TRANSFEREE") who will take delivery in the
form of a Restricted Security. In connection with such transfer, the Owner
hereby certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 144A, Rule 904 of Regulation S or Rule 144 under the
Securities Act and all applicable securities laws of the states of the United
States and other jurisdictions. Accordingly, the Owner hereby further certifies
as follows:
A-1
<PAGE>
(1) RULE 144A TRANSFERS. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a
person that the Owner and any person acting on its behalf
reasonably believe is a "QUALIFIED INSTITUTIONAL BUYER" within the
meaning of Rule 144A, acquiring for its own account or for the
account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have
taken reasonable steps to ensure that the Transferee is aware that
the Owner may be relying on Rule 144A in connection with the
transfer; and
(2) RULE 904 TRANSFERS. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Corporation or any such distributor or a person
acting in behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being
executed in, on or through the facilities of the
Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated
offshore securities market and neither the Owner nor
any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the
United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof; and
(E) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
(3) RULE 144 TRANSFERS. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule
144) has elapsed since the date the Specified Securities were
acquired from the Corporation or from an affiliate (as
A-2
<PAGE>
such term is defined in Rule 144) of the Corporation, whichever is
later, and is being effected in accordance with the applicable
amount, manner of sale and notice requirements of paragraphs (e),
(f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding period by the
Owner of at least three years has elapsed since the date the
Specified Securities were acquired from the Corporation or from an
affiliate (as such term is defined in Rule 144) of the
Corporation, whichever is later, and the Owner is not, and during
the preceding three months has not been, an affiliate of the
Corporation.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Corporation and the Purchasers (as defined in the
Trust Agreement relating to the Issuer Trust to which the Securities were
initially issued).
Dated: -----------------------------------------
(Print the name of the Undersigned, as
such term is defined in the second
paragraph of this certificate.)
By:
--------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of
the person signing on behalf of the
Undersigned must be stated.)
A-3
<PAGE>
EXHIBIT F
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
AMONG
DPL INC.,
AS DEPOSITOR
THE BANK OF NEW YORK
AS PROPERTY TRUSTEE
THE BANK OF NEW YORK
AS DELAWARE TRUSTEE
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
---------------------
Dated as of ________ __, 2000
-------------------
DPL CAPITAL TRUST I
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINED TERMS...............................................................................1
Section 1.1 Definitions...................................................................1
ARTICLE II
CONTINUATION OF THE ISSUER TRUST...........................................................11
Section 2.1 Name.........................................................................11
Section 2.2 Office of the Delaware Trustee; Principal Place of Business..................12
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses..............12
Section 2.4 Issuance of the Capital Securities...........................................12
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of Debentures...12
Section 2.6 Continuation of Trust........................................................13
Section 2.7 Authorization to Enter into Certain Transactions.............................13
Section 2.8 Assets of Trust..............................................................17
Section 2.9 Title to Trust Property......................................................17
ARTICLE III
PAYMENT ACCOUNT............................................................................17
Section 3.1 Payment Account..............................................................17
ARTICLE IV
DISTRIBUTIONS; REDEMPTION..................................................................18
Section 4.1 Distributions................................................................18
Section 4.2 Redemption...................................................................19
Section 4.3 Subordination of Common Securities...........................................21
Section 4.4 Payment Procedures...........................................................21
Section 4.5 Tax Returns and Reports......................................................21
Section 4.6 Payments under Indenture or Pursuant to Direct Actions.......................22
ARTICLE V
TRUST SECURITIES CERTIFICATES..............................................................22
Section 5.1 Initial Ownership............................................................22
Section 5.2 The Trust Securities Certificates............................................22
Section 5.3 Execution and Delivery of Trust Securities Certificates......................23
Section 5.4 Book-Entry Capital Securities................................................23
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<PAGE>
Section 5.5 Registration, Transfer and Exchange Generally; Certain Transfers and
Exchanges; Securities Act Legends............................................25
Section 5.6 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates...........28
Section 5.7 Persons Deemed Holders.......................................................28
Section 5.8 Access to List of Holders' Names and Addresses...............................28
Section 5.9 Maintenance of Office or Agency..............................................29
Section 5.10 Appointment of Paying Agents.................................................29
Section 5.11 Ownership of Common Securities by Depositor..................................29
Section 5.12 Notices to Clearing Agency...................................................30
Section 5.13 Rights of Holders; Waivers of Past Defaults..................................30
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING..........................................................32
Section 6.1 Limitations on Voting Rights.................................................32
Section 6.2 Notice of Meetings...........................................................33
Section 6.3 Meetings of Holders of the Capital Securities................................33
Section 6.4 Voting Rights................................................................34
Section 6.5 Proxies, etc.................................................................34
Section 6.6 Holder Action by Written Consent.............................................34
Section 6.7 Record Date for Voting and Other Purposes....................................34
Section 6.8 Acts of Holders..............................................................35
Section 6.9 Inspection of Records........................................................36
ARTICLE VII
REPRESENTATIONS AND WARRANTIES.............................................................36
Section 7.1 Representations and Warranties of the Property Trustee and the Delaware
Trustee......................................................................36
Section 7.2 Representations and Warranties of Depositor..................................37
ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS.........................................................38
Section 8.1 Certain Duties and Responsibilities..........................................38
Section 8.2 Certain Notices..............................................................40
Section 8.3 Certain Rights of Property Trustee...........................................41
Section 8.4 Not Responsible for Recitals or Issuance of Securities.......................42
Section 8.5 May Hold Securities..........................................................43
Section 8.6 Compensation; Indemnity; Fees................................................43
Section 8.7 Corporate Property Trustee Required; Eligibility of Issuer Trustees..........45
Section 8.8 Conflicting Interests........................................................45
Section 8.9 Co-Trustees and Separate Trustee.............................................46
Section 8.10 Resignation and Removal; Appointment of Successor............................47
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<PAGE>
Section 8.11 Acceptance of Appointment by Successor.......................................48
Section 8.12 Merger, Conversion, Consolidation or Succession to Business..................49
Section 8.13 Preferential Collection of Claims Against Depositor or Issuer Trust..........49
Section 8.14 Property Trustee May File Proofs of Claim....................................49
Section 8.15 Reports by Property Trustee..................................................50
Section 8.16 Reports to the Property Trustee..............................................51
Section 8.17 Evidence of Compliance with Conditions Precedent.............................51
Section 8.18 Number of Issuer Trustees....................................................51
Section 8.19 Delegation of Power..........................................................51
Section 8.20 Appointment of Administrative Trustees.......................................52
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER........................................................52
Section 9.1 Dissolution Upon Expiration Date.............................................52
Section 9.2 Early Dissolution............................................................53
Section 9.3 Termination..................................................................53
Section 9.4 Liquidation..................................................................53
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of Issuer Trust.......55
ARTICLE X
MISCELLANEOUS PROVISIONS...................................................................56
Section 10.1 Limitation of Rights of Holders..............................................56
Section 10.2 Amendment....................................................................56
Section 10.3 Separability.................................................................57
Section 10.4 Governing Law................................................................57
Section 10.5 Payments Due on Non-Business Day.............................................58
Section 10.6 Successors...................................................................58
Section 10.7 Headings.....................................................................58
Section 10.8 Reports, Notices and Demands.................................................58
Section 10.9 Agreement Not to Petition....................................................59
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act.......................59
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee Agreement and Indenture....60
</TABLE>
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ________ __, 2000,
among (i) DPL Inc., an Ohio corporation (including any successors or assigns,
the "DEPOSITOR"), (ii) The Bank of New York, a national banking association, as
property trustee (in such capacity, the "PROPERTY TRUSTEE" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "BANK"),
(iii) The Bank of New York, a Delaware corporation, as Delaware trustee (in such
capacity, the "DELAWARE TRUSTEE"), (iv) [Name], an individual, and [Name], an
individual, each of whose address is c/o [-] Inc., Courthouse Plaza Southwest,
Dayton, Ohio 45402 (each an "ADMINISTRATIVE TRUSTEE") (the Property Trustee, the
Delaware Trustee and the Administrative Trustees being referred to collectively
as the "ISSUER TRUSTEES") and (v) the holders, from time to time, of undivided
beneficial ownership interests in the assets of the Issuer Trust.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee
have heretofore duly declared and created a business trust pursuant to the
Delaware Business Trust Act by entering into the Declaration of Trust, dated as
of February 1, 2000 (the "ORIGINAL TRUST AGREEMENT"), and by the execution and
filing by the Property Trustee and the Delaware Trustee with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on February 1,
2000, attached as EXHIBIT A; and
WHEREAS, the Depositor and the Issuer Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Purchase Agreement, (iii) the
acquisition by the Issuer Trust from the Depositor of all of the right, title
and interest in the Debentures, and (iv) the appointment of the Administrative
Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
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<PAGE>
2
(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(d) Unless the context otherwise requires, any reference to an
"Article", a "Section" or an "Exhibit" refers to an Article, a Section or an
Exhibit, as the case may be, of or to this Trust Agreement;
(e) All references to "the Trust Agreement" or "this Trust Agreement"
are to this Trust Agreement as modified, supplemented or amended from time to
time; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"ACT" has the meaning specified in Section 6.8.
"ADDITIONAL DISTRIBUTIONS" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.
"ADMINISTRATIVE TRUSTEE" means each Person appointed in accordance with
Section 8.20 solely in such Person's capacity as Administrative Trustee of the
Issuer Trust heretofore created and continued hereunder and not in such Person's
individual capacity, or any successor Administrative Trustee appointed as herein
provided.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Book- Entry Capital Security, the rules and procedures
of the Clearing Agency for such Book-Entry Capital Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"BANK" has the meaning specified in the preamble to this Trust
Agreement.
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<PAGE>
3
"BANKRUPTCY EVENT" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"BANKRUPTCY LAWS" has the meaning specified in Section 10.9.
"BOARD OF DIRECTORS" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.
"BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE" means a Capital Securities
Certificate evidencing ownership of Book-Entry Capital Securities.
"BOOK-ENTRY CAPITAL SECURITY" means a Capital Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 5.4.
"BUSINESS DAY" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York or Dayton, Ohio are
authorized or required by law or executive order to remain closed, or (c) a day
on which the Property Trustee's Corporate Trust Office or the Corporate Trust
Office of the Debenture Trustee is closed for business.
"CAPITAL SECURITY" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution to the extent
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<PAGE>
4
provided herein, and designated as ____% Capital Securities, or any additional
series issued pursuant to the Registration Rights Agreement, as the case may be.
"CAPITAL SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as EXHIBIT
D.
"CERTIFICATE DEPOSITORY AGREEMENT" means the agreement among the Issuer
Trust, the Depositor and DTC, as the initial Clearing Agency, dated as of the
Closing Date, substantially in the form attached as EXHIBIT B, as the same may
be amended and supplemented from time to time.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. DTC will be the initial Clearing Agency.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means the Time of Delivery, which date is also the date
of execution and delivery of this Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission or any
successor entity.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as EXHIBIT C.
"COMMON SECURITIES HOLDER" means [-] Inc. in its capacity as purchaser
and holder of all of the Common Securities issued or to be issued by the Issuer
Trust.
"COMMON SECURITY" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution to the extent provided herein.
"CORPORATE TRUST OFFICE" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in [City]
[State] and (ii) when used with respect to the Debenture Trustee, the principal
office of the Debenture Trustee located in [City] [State].
"DEBENTURE EVENT OF DEFAULT" means any "EVENT OF DEFAULT" specified in
Section 5.1 of the Indenture.
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<PAGE>
5
"DEBENTURE REDEMPTION DATE" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption of such Debentures
under the Indenture.
"DEBENTURE TRUSTEE" means the Person identified as the "TRUSTEE" in the
Indenture, solely in its capacity as Trustee pursuant to the Indenture and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Trustee appointed as provided in the Indenture.
"DEBENTURES" means the Depositor's ____% Junior Subordinated Deferrable
Interest Debentures, issued pursuant to the Indenture.
"DEFINITIVE CAPITAL SECURITIES CERTIFICATES" means either or both (as
the context requires) of (i) Capital Securities Certificates issued as
Book-Entry Capital Securities Certificates as provided in Section 5.2 or 5.4,
and (ii) Capital Securities Certificates issued in certificated, fully
registered form as provided in Section 5.2, 5.4 or 5.5.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 ET SEQ., or any successor statute
thereto, in each case as amended from time to time.
"DELAWARE TRUSTEE" means the Person identified as the "DELAWARE
TRUSTEE" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the trust heretofore created and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Delaware trustee appointed as herein provided.
"DEPOSITOR" has the meaning specified in the preamble to this Trust
Agreement.
"DISTRIBUTION DATE" has the meaning specified in Section 4.1(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company.
"EARLY TERMINATION EVENT" has the meaning specified in Section 9.2.
"EVENT OF DEFAULT" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
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<PAGE>
6
(c) default by the Issuer Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in this Trust Agreement
(other than those specified in clause (b) or (c) above) and continuation of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Issuer Trustees and to the
Depositor by the Holders of at least 25% in aggregate Liquidation Amount of
the Outstanding Capital Securities a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"NOTICE OF DEFAULT" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee if a successor Property Trustee has not been appointed within 90
days thereof.
"EXPIRATION DATE" has the meaning specified in Section 9.1.
"GUARANTEE AGREEMENT" means the Guarantee Agreement executed and
delivered by the Depositor and The Bank of New York, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Trust Securities, as amended from time to
time.
"HOLDER" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be a
beneficial owner within the meaning of the Delaware Business Trust Act;
provided, however, that in determining whether the Holders of the requisite
liquidation amount of Capital Securities have voted on any matter provided for
in this Trust Agreement, then for the purpose of such determination only (and
not for any other purpose hereunder), if the Capital Securities remain in global
form, the term "Holders" shall mean the holder of the global security acting at
the direction of the beneficial owners of the Capital Securities.
"INDEMNIFIED PERSON" has the meaning specified in Section 8.6(c).
"INDENTURE" means the Junior Subordinated Indenture, dated as of
________ __, 2000, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
"INITIAL PURCHASER" means Dayton Ventures, Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"ISSUER TRUST" means the Delaware business trust known as "DPL Capital
I", which was created on February 1, 2000, under the Delaware Business Trust Act
pursuant to the Original Trust Agreement and is continued pursuant to this Trust
Agreement.
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"ISSUER TRUSTEES" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"LIEN" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"LIKE AMOUNT" means (a) with respect to a redemption of any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Issuer Trust, Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Debentures are
distributed, and (c) with respect to any distribution of Additional
Distributions to Holders of Trust Securities, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities in respect of
which such distribution is made.
"LIQUIDATION AMOUNT" means the stated amount of $25 per Trust Security.
"LIQUIDATION DATE" means the date of the dissolution, winding-up or
termination of the Issuer Trust pursuant to Section 9.4.
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section 9.4(d).
"MAJORITY IN LIQUIDATION AMOUNT OF THE CAPITAL SECURITIES" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then Outstanding
Capital Securities.
"NEW CAPITAL SECURITIES" has the meaning specified in Section 2.4.
"NEW CAPITAL SECURITY CERTIFICATE" means a certificate evidencing
ownership of Capital Securities, substantially in the form of Exhibit D;
provided, however, that such security shall not contain the Restricted Capital
Securities Legend.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or one of the Vice
Presidents, by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the Issuer Trustees. Any
Officer's Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement by each officer signing the Officer's Certificate that
such officer has read the covenant or condition and the definitions
relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officer's
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"ORIGINAL CAPITAL SECURITIES" has the meaning specified in Section 2.4.
"ORIGINAL TRUST AGREEMENT" has the meaning specified in the recitals to
this Trust Agreement.
"OUTSTANDING", when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, EXCEPT:
(a) Trust Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent; provided that, if such Trust Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or in lieu
of which other Capital Securities have been executed and delivered pursuant
to Sections 5.4, 5.5, 5.6 and 5.11;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee or any Affiliate of the
Depositor or any Issuer Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Capital Securities that such Issuer Trustee
knows to be so owned shall be so disregarded, and (b) the foregoing clause (a)
shall not apply at any time when all of the Outstanding Capital Securities are
owned by the Depositor, one or more of the Issuer Trustees and/or any such
Affiliate. Capital Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with
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respect to such Capital Securities and that the pledgee is not the Depositor or
any Affiliate of the Depositor.
"OWNER" means each Person who is the beneficial owner of Capital
Securities or Book-Entry Capital Securities as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"PAYING AGENT" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Bank.
"PAYMENT ACCOUNT" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Holders in which all amounts paid in respect
of the Debentures will be held and from which the Property Trustee, through the
Paying Agent, shall make payments to the Holders in accordance with Sections 4.1
and 4.2.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"PORTAL" means the Private Offering, Resales and Trading through
Automatic Linkages (PORTAL) Market, and any successor market thereto.
"PLAN" means an employee benefit or other plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended, or Section 4975
of the Code.
"PLAN ASSET ENTITY" means any Person whose underlying assets include
"plan assets" by reason of any Plan's investment in such Person.
"PROPERTY TRUSTEE" means the Person identified as the "PROPERTY
TRUSTEE" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the trust heretofore created and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor property trustee appointed as herein provided.
"PTCE" means a U.S. Department of Labor Prohibited Transaction Class
Exemption.
"REDEMPTION DATE" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
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"REDEMPTION PRICE" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures.
"REGISTRATION DEFAULT" means if either the Depositor or the Issuer
Trust fails to comply with the terms of the Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Securityholders and
Registration Rights Agreement dated the date hereof between the Depositor, the
Issuer Trust and the Purchasers named therein for the benefit of themselves and
the Holders of the Capital Securities issued by the Issuer Trust as of the date
hereof, as the same may be amended from time to time in accordance with the
terms thereof.
"REGULATION D" means Regulation D under the Securities Act (or any
successor provision), as it may be amended from time to time.
"RELEVANT TRUSTEE" has the meaning specified in Section 8.10.
"RESTRICTED" means all Capital Securities which are required pursuant
to Section 5.5(c) to bear a Restricted Capital Securities Legend.
"RESTRICTED CAPITAL SECURITIES LEGEND" means a legend substantially in
the form of the legend required in the form of Capital Securities Certificate
set forth in EXHIBIT D to be placed upon a Restricted Securities Certificate.
"RESTRICTED SECURITIES CERTIFICATE" means a certificate substantially
in the form set forth in EXHIBIT E.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SECURITIES ACT" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings specified in Section 5.5.
"SUCCESSOR CAPITAL SECURITIES" of any particular Capital Securities
Certificate means every Capital Securities Certificate issued after, and
evidencing all or a portion of the same beneficial interest in the Issuer Trust
as that evidenced by, such particular Capital Securities Certificate; and, for
the purposes of this definition, any Capital Securities Certificate executed and
delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
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"TIME OF DELIVERY" means ________ __, 2000.
"TRUST AGREEMENT" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (i) all Exhibits, and (ii) for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that if
the Trust Indenture Act of 1939 is amended after such date, "TRUST INDENTURE
ACT" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939 as so amended.
"TRUST PROPERTY" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account, and (c) all proceeds and rights in respect of
the foregoing.
"TRUST SECURITY" means any one of the Common Securities or the Capital
Securities.
"TRUST SECURITIES CERTIFICATE" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"VICE PRESIDENT" when used with respect to the Corporation, means any
duly appointed vice president, whether or not designated by a number or word or
words added before or after the title "vice president."
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
Section 2.1 NAME.
The trust continued hereby shall be known as "DPL Capital Trust I", as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other Issuer
Trustees, in which name the Issuer Trustees (other than the Delaware Trustee)
may conduct the business of the Issuer Trust, make and execute contracts and
other instruments on behalf of the Issuer Trust and sue and be sued.
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Section 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
[Address], Wilmington, Delaware 19801, Attention: ________________ or such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Holders, the Depositor, the Property Trustee and the
Administrative Trustees. The principal executive office of the Issuer Trust is
c/o DPL Inc., MacGregor Park, 1065 Woodman Drive, Dayton, Ohio 45432, Attention:
General Counsel.
Section 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.
The Issuer Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. Pursuant to Section 10.6 of the
Indenture, the Depositor, in its capacity as the issuer of the Debentures, shall
pay all of the organizational expenses of the Issuer Trust as they arise or
shall, upon request of any Issuer Trustees, promptly reimburse such Issuer
Trustee for any such expenses paid by such Issuer Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
Section 2.4 ISSUANCE OF THE CAPITAL SECURITIES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
manually or by facsimile execute in accordance with Section 5.2 and 5.3 and the
Property Trustee shall deliver to the Purchaser, Capital Securities
Certificates, registered in the names requested by the Purchaser, evidencing an
aggregate of _______ Capital Securities having an aggregate Liquidation Amount
of $___________ (the "Original Capital Securities"), against receipt of the
aggregate purchase price of such Capital Securities of $___________ (plus
accrued Distributions, if any) by the Property Trustee.
In addition, an Administrative Trustee, on behalf of the Issuer Trust,
may execute Capital Securities Certificates in accordance with Section 5.2
representing an additional class of Capital Securities to be issued as
contemplated by the Registration Rights Agreement ("NEW CAPITAL SECURITIES");
provided, that the aggregate number of issued and outstanding Capital Securities
shall not at any time exceed _______, less the number of Capital Securities
redeemed pursuant to Section 4.2.
Section 2.5 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Section 5.2 and 5.3 and the Property Trustee shall
deliver to the Depositor Common Securities Certificates, registered in the name
of the Depositor, evidencing an aggregate of _____ Common Securities having an
aggregate Liquidation Amount of $17,010,325, against receipt of the aggregate
purchase price of such Common Securities of $_________ (plus accrued
Distributions, if any), by the Property
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Trustee. Contemporaneously therewith, the Depositor shall issue and sell to the
Issuer Trust, and the Issuer Trust shall purchase from the Depositor, Debentures
having an aggregate principal amount equal to $567,010,325 registered in the
name of the Property Trustee on behalf of the Issuer Trust and, in satisfaction
of the purchase price for such Debentures, the Property Trustee, on behalf of
the Issuer Trust, shall deliver to the Depositor the sum of $517,010,325 (plus
accrued Distributions, if any) (being the sum of the amounts delivered to the
Property Trustee pursuant to (i) the second sentence of Section 2.4, and (ii)
the first sentence of this Section 2.5).
Section 2.6 CONTINUATION OF TRUST.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures, (b) to make Distributions to holders, and (c) to engage in only
those activities necessary or incidental thereto. The Depositor hereby appoints
the Issuer Trustees as trustees of the Issuer Trust, to have all the rights,
powers and duties to the extent set forth herein, and the respective Issuer
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Issuer Trust and the Holders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Issuer Trustees set forth herein, except as
required by the Delaware Business Trust Act. The Delaware Trustee shall be one
of the trustees of the Issuer Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act
and for taking such actions as are required to be taken by a Delaware trustee
under the Delaware Business Trust Act.
Section 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section 2.7, and in accordance with the
following provisions (i) and (ii), the Property Trustee and the Administrative
Trustees shall have the authority to enter into all transactions and agreements
determined by the Property Trustee and Administrative Trustees to be appropriate
in exercising the authority, express or implied, otherwise granted to such
Issuer Trustees, as the case may be, under this Trust Agreement, and to perform
all acts in furtherance thereof, including the following:
(i) As among the Issuer Trustees, each Administrative Trustee, acting
individually or jointly, shall have the power and authority to act on
behalf of the Issuer Trust with respect to the following matters:
(A) establishing the terms and form of the Trust Securities in
the manner specified in Section 5.2 and the issuance and sale of the
Trust Securities in accordance with this Trust Agreement;
(B) causing the Issuer Trust to enter into, and to execute,
deliver and perform on behalf of the Issuer Trust the Certificate
Depository Agreement and such other
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agreements as may be necessary or incidental in connection with the
purposes and function of the Issuer Trust;
(C) assisting in compliance with the duties and obligations of
the Issuer Trust under and the Securities Act and under applicable
state securities or blue sky laws (including by means of registration
of the Capital Securities thereunder from time to time) and the Trust
Indenture Act;
(D) assisting in obtaining the designation of the Capital
Securities for trading in PORTAL and if and at such time determined by
the Depositor, to The New York Stock Exchange, Inc. or any other
national stock exchange or automated quotation system for listing upon
notice of issuance of any Capital Securities;
(E) assisting in the sending of notices (other than notices of
default) and other information regarding the Trust Securities and the
Debentures to the Holders in accordance with this Trust Agreement;
(F) consenting to the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance with this
Trust Agreement (which consent shall not be unreasonably withheld);
(G) executing the Trust Securities on behalf of the Issuer Trust
in accordance with this Trust Agreement;
(H) executing and delivering closing certificates, if any,
pursuant to the Purchase Agreement and application for a taxpayer
identification number for the Issuer Trust;
(I) unless otherwise determined by the Property Trustee or
Holders of at least a Majority in Liquidation Amount of the Capital
Securities or as otherwise required by the Delaware Business Trust Act
or the Trust Indenture Act, executing on behalf of the Issuer Trust
(either acting alone or together with any other Administrative
Trustee) any documents that the Administrative Trustees have the power
to execute pursuant to this Trust Agreement;
(J) executing and entering into the Registration Rights Agreement
and assisting in compliance with the Registration Rights Agreement and
the transactions contemplated thereby including filings under the
Securities Act;
(K) taking any action incidental to the foregoing as the Issuer
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement; and
(L) delegating, by power of attorney consistent with applicable
law to any other natural person over the age of 21 his or her power
for the purposes of signing
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any documents which the Administrative Trustees have power and
authority to cause the Issuer Trust to execute pursuant to this
Section 2.7.
(ii) The Property Trustee shall have the power, duty and authority to
act on behalf of the Issuer Trust with respect to the following matters:
(A) establishing the Payment Account;
(B) receiving the Debentures;
(C) collecting interest, principal and any other payments made in
respect of the Debentures and the holding of such amounts in the
Payment Account;
(D) distributing through any Paying Agent of amounts
distributable to the Holders in respect of the Trust Securities;
(E) exercising all of the rights, powers and privileges of a
holder of the Debentures;
(F) sending notices of default and other information regarding
the Trust Securities and the Debentures to the Holders in accordance
with this Trust Agreement;
(G) distributing the Trust Property in accordance with the terms
of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, winding up
the affairs of and liquidating the Issuer Trust and preparing,
executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware; and
(I) after an Event of Default (other than under paragraph (b),
(c), (d) or (e) of the definition of such term if such Event of
Default is by or with respect to the Property Trustee) taking of any
action incidental to the foregoing as the Property Trustee may from
time to time determine is necessary or advisable to give effect to the
terms of this Trust Agreement and to protect and conserve the Trust
Property for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder).
(b) So long as this Trust Agreement remains in effect, the Issuer Trust
(or the Issuer Trustees acting on behalf of the Issuer Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Issuer Trustees, acting in
their capacity as such, shall not (i) acquire any investments other than the
Debentures or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to Holders,
except as expressly provided herein, (iii) possess any power
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or otherwise act in such a way as to vary the Trust Property, (iv) take any
action that would reasonably be expected to cause the Issuer Trust to become
taxable as a corporation or classified as other than a grantor trust for United
States federal income tax purposes, (v) incur any indebtedness for borrowed
money or issue any other debt, or (vi) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. Subject to
Section 8.1(a), the Administrative Trustees shall defend all claims and demands
of all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Issuer Trust or the Holders in their capacity as
Holders.
(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer Trust
with respect to, or effect on behalf of the Issuer Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) any action necessary or desirable to sell the Capital
Securities in a transaction or a series of transactions exempt from
the registration requirements of the Securities Act;
(ii) the determination of the States, or other jurisdictions, if
any, in which to take appropriate action to qualify or register for
sale all or part of the Capital Securities and the determination of
any and all such acts, other than actions that must be taken by or on
behalf of the Issuer Trust, and the advice to the Issuer Trustees of
actions they must take on behalf of the Issuer Trust, and the
preparation for execution and filing of any documents to be executed
and filed by the Issuer Trust or on behalf of the Issuer Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the
Capital Securities;
(iii) the preparation of filing by the Issuer Trust with the
Commission one or more registration statements on the applicable
forms, including any amendments thereto, pertaining to the Capital
Securities, the Guarantee Agreement and the Debentures;
(iv) the preparation of filing by the Issuer Trust with the
Commission of a registration statement on Form 8-A, including any
amendments thereto, if such filing is determined to be necessary or
desirable by the Depositor;
(v) the compliance by the Depositor with the Registration Rights
Agreement and the transactions contemplated thereby including
preparation and filing of necessary filings under the Securities Act;
and
(vi) the taking of any other actions necessary or incidental to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Issuer Trust
and to operate the Issuer Trust so that the Issuer Trust will not be deemed to
be an "investment company" required to be registered under the Investment
Company Act, and will not be taxable as a corporation or classified as other
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than a grantor trust for United States federal income tax purposes and so that
the Debentures will be treated as indebtedness of the Depositor for United
States federal income tax purposes. In this connection, each Administrative
Trustee and the Holder of the Common Securities are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that such Administrative Trustee or Holder of the Common
Securities determines in its discretion to be necessary for such purposes, as
long as such action does not adversely affect in any material respect the
interests of the Holders of the Outstanding Capital Securities. In no event
shall the Issuer Trustees be liable to the Issuer Trust or the Holders for any
failure to comply with this section that results from a change in law or
regulation or in the interpretation thereof.
Section 2.8 ASSETS OF TRUST.
The assets of the Issuer Trust shall consist of the Trust Property.
Section 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents shall have
exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
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ARTICLE IV
DISTRIBUTIONS; REDEMPTION
Section 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including any Additional Distributions)
will be made on the Trust Securities at the rate and on the dates that payments
of interest (including any Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and shall accumulate whether or not there are funds of the Issuer
Trust available for the payment of Distributions. Distributions shall
accumulate from ________ __, 2000, and, except in the event (and to
the extent) that the issuer of the Debentures exercises its right to
defer the payment of interest on the Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on ________,
________, ________ and ________ of each year, commencing on _________
__, 2000. If any date on which a Distribution is otherwise payable on
the Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of
any such delay), except that, if such next succeeding Business Day
falls within the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case, with the same force
and effect as if made on the date on which such payment was originally
payable (each date on which distributions are payable in accordance
with this Section 4.1(a), a "Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions
payable at a rate, not including Additional Distributions, of ____%
per annum of the Liquidation Amount of the Trust Securities. The
amount of Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a 360-day year
of twelve 30-day months and the actual number of days elapsed in a
partial month in a period. Distributions payable for each full
Distribution period will be computed by dividing the rate per annum by
four. The amount of Distributions payable for any period shall include
any Additional Distributions in respect of such period.
(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Issuer Trust has funds
then on hand and available in the Payment Account for the payment of
such Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) next preceding the relevant Distribution
Date.
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Section 4.2 REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Issuer Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to (and as defined
in) the Indenture together with a statement that it is an estimate and
that the actual Redemption Price will be calculated on the third
Business Day prior to the Redemption Date (and, if an estimate is
provided, that a further notice shall be sent of the actual Redemption
Price on the date on which such Redemption Price is calculated);
(iii) the CUSIP number or CUSIP numbers of the Capital Securities
affected;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of
the particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after such date,
except as provided in Section 4.2(d) below; and
(vi) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Issuer Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
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(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities. With respect to Capital
Securities that are not Book-Entry Capital Securities, the Property Trustee,
subject to Section 4.2(c), will irrevocably deposit with the Paying Agent or
Paying Agents, to the extent available therefor, funds sufficient to pay the
applicable Redemption Price and will give the Paying Agent or Paying Agents
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Capital Securities upon surrender of their Capital Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Holders holding Trust Securities so
called for redemption will cease, except the right of such Holders to receive
the Redemption Price and any Distribution payable in respect of the Trust
Securities on or prior to the Redemption Date, but without interest, and such
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such date. In the event that
payment of the Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by the Issuer
Trust or by the Depositor pursuant to the Guarantee Agreement, Distributions on
such Trust Securities will continue to accumulate, as set forth in Section 4.1,
from the Redemption Date originally established by the Issuer Trust for such
Trust Securities to the date the Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated PRO RATA to the Common Securities
and the Capital Securities based upon the relative Liquidation Amounts of such
classes. The particular Capital Securities to be redeemed shall be selected on a
PRO RATA basis based upon their respective Liquidation Amounts not more than 60
days prior to the Redemption Date by the Property Trustee from the Outstanding
Capital Securities not previously called for redemption. The Property Trustee
shall promptly notify the Securities Registrar in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Capital Securities shall relate, in
the case of any Capital Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Capital Securities that has
been or is to be redeemed.
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Section 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including any Additional Distributions)
on, the Redemption Price of, and the Liquidation Distribution in respect of the
Trust Securities, as applicable, shall be made PRO RATA among the Common
Securities and the Capital Securities based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution Date,
Redemption Date or Liquidation Date any Event of Default resulting from a
Debenture Event of Default specified in Section 5.1(1) or 5.1(2) of the
Indenture shall have occurred and be continuing, no payment of any Distribution
(including any Additional Distributions) on, Redemption Price of, or Liquidation
Distribution in respect of any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including any Additional Distributions) on all Outstanding
Capital Securities for all Distribution periods terminating on or prior thereto,
or in the case of payment of the Redemption Price the full amount of such
Redemption Price on all Outstanding Capital Securities then called for
redemption, or in the case of payment of the Liquidation Distribution the full
amount of such Liquidation Distribution on all Outstanding Capital Securities,
shall have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Distributions) on, the Redemption Price
of or the Liquidation Distribution in respect of the Capital Securities then due
and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of the Common Securities shall
have no right to act with respect to any such Event of Default under this Trust
Agreement until the effects of all such Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until all
such Events of Default under this Trust Agreement with respect to the Capital
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
not on behalf of the Holder of the Common Securities, and only the Holders of
the Capital Securities will have the right to direct the Property Trustee to act
on their behalf.
Section 4.4 PAYMENT PROCEDURES.
Payments of Distributions (including any Additional Distributions) or
of the Redemption Price, Liquidation Amount or any other amounts in respect of
the Capital Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register
or, if the Capital Securities are held by a Clearing Agency, such Distributions
shall be made to the Clearing Agency in immediately available funds. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of all the Common
Securities.
Section 4.5 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the expense of the issuer of the Debentures, and file all United States Federal,
state and local tax and information
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returns and reports required to be filed by or in respect of the Issuer Trust.
In this regard, the Administrative Trustees shall (a) prepare and file (or cause
to be prepared and filed) all Internal Revenue Service forms required to be
filed in respect of the Issuer Trust in each taxable year of the Issuer Trust,
and (b) prepare and furnish (or cause to be prepared and furnished) to each
Holder all Internal Revenue Service forms required to be provided by the Issuer
Trust. The Administrative Trustees shall provide the Depositor and the Property
Trustee with a copy of all such returns and reports promptly after such filing
or furnishing. Subject to Section 8.1(a), the Issuer Trustees shall comply with
United States federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to Holders under
the Trust Securities.
Section 4.6 PAYMENTS UNDER INDENTURE OR PURSUANT TO DIRECT ACTIONS.
Any amount payable hereunder to any Holder of Capital Securities shall
be reduced by the amount of any corresponding payment such Holder has directly
received pursuant to Section 5.8 of the Indenture or Section 5.13 of this Trust
Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.1 INITIAL OWNERSHIP.
Upon the creation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
Section 5.2 THE TRUST SECURITIES CERTIFICATES.
(a) The Administrative Trustees shall on behalf of the Issuer Trust
issue, in one or more issuances, Restricted Capital Securities representing
undivided beneficial ownership interests in the assets of the Trust, and one
class of Common Securities; PROVIDED, HOWEVER, that the Administrative Trustees
may issue an additional class of Capital Securities in accordance with Section
2.4. The Capital Securities Certificates shall be issued in fully registered
form in minimum denominations of $25 Liquidation Amount and integral multiples
of $25 in excess thereof, and the Common Securities Certificates shall be issued
in denominations of $25 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Issuer Trust by
manual or facsimile signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Issuer Trust, shall be validly issued and
entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Holder, and shall be
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entitled to the rights and subject to the obligations of a Holder hereunder,
upon due registration of such Trust Securities Certificate in such transferee's
name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities shall be issued to
_______ in the form of one or more definitive Capital Securities Certificates;
provided, however, that the Administrative Trustees shall promptly, at the
request of ________, register such definitive Capital Securities in the name of
DTC, as Clearing Agency, or its nominee.
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
At the Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon the written order of the Depositor, executed by an authorized officer
thereof, without further corporate action by the Depositor, in authorized
denominations.
Section 5.4 BOOK-ENTRY CAPITAL SECURITIES.
(a) Each Book-Entry Capital Securities Certificate issued under this
Trust Agreement shall be registered in the name of the Clearing Agency or a
nominee thereof and delivered to such Clearing Agency or a nominee thereof or
custodian therefor, and each such Book-Entry Capital Securities Certificate
shall constitute a single Capital Securities Certificate for all purposes of
this Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, no
Book-Entry Capital Securities Certificate may be exchanged in whole or in part
for Capital Securities Certificates registered, and no transfer of a Book-Entry
Capital Securities Certificate in whole or in part may be registered, in the
name of any Person other than the Clearing Agency or a nominee thereof unless
(i) the Clearing Agency advises the Property Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Capital Securities Certificates,
and the Property Trustee is unable to locate a qualified successor, (ii)
________ is not a Holder of any Capital Securities and the Issuer Trust at its
option advises the Clearing Agency in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (iii) a Debenture Event of
Default has occurred and is continuing. Upon the occurrence of any event
specified in clause (i), (ii) or (iii) above, the Property Trustee shall notify
the Clearing Agency and instruct the Clearing Agency to notify all Owners of
Book-Entry Capital Securities and the Administrative Trustees of the occurrence
of such event and of the availability of the Definitive Capital Securities
Certificates to Owners of the Capital Securities requesting the same.
(c) If any Book-Entry Capital Securities Certificate is to be exchanged
for other Capital Securities Certificates or canceled in whole, it shall be
surrendered by or on behalf of the Clearing Agency or its nominee for exchange
or cancellation as provided in this Article V. If any
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Book-Entry Capital Securities Certificate is to be exchanged for other Capital
Securities Certificates or canceled in part, or if any other Capital Securities
Certificate is to be exchanged in whole or in part for Book-Entry Capital
Securities represented by a Book-Entry Capital Securities Certificate, then
either (i) such Book-Entry Capital Securities Certificate shall be so
surrendered for exchange or cancellation as provided in this Article V or (ii)
the aggregate Liquidation Amount represented by such Book-Entry Capital
Securities Certificate shall be reduced, subject to Section 5.2, or increased by
an amount equal to that portion of the Liquidation Amount represented by the
Book-Entry Capital Securities Certificate to be so exchanged or canceled, or
equal to that portion of the Liquidation Amount represented by such other
Capital Securities Certificates to be so exchanged for Book-Entry Capital
Securities represented thereby, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar with notice to the
Property Trustee, whereupon the Property Trustee, in accordance with the
Applicable Procedures, shall instruct the Clearing Agency or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Book-Entry Capital Securities Certificate by the
Clearing Agency, accompanied by registration instructions, the Administrative
Trustees, or any one of them, shall, subject to Section 5.5(b) and as otherwise
provided in this Article V, execute the Definitive Capital Securities
Certificates issuable in exchange for such Book-Entry Capital Securities
Certificate (or any portion thereof) in accordance with the instructions of the
Clearing Agency. None of the Securities Registrar or the Property Trustee or the
Administrative Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. The Definitive Capital Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
(d) Every Capital Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Capital Securities Certificate or any portion thereof, whether pursuant to this
Article V or Section 4.2 or otherwise, shall be executed and delivered in the
form of, and shall be, a Book-Entry Capital Securities Certificate, unless such
Capital Securities Certificate is registered in the name of a Person other than
the Clearing Agency or a nominee thereof.
(e) The Clearing Agency or its nominee, as registered owner of a
Book-Entry Capital Securities Certificate, shall be the Holder of such
Book-Entry Capital Securities Certificate for all purposes under this Trust
Agreement and the Capital Securities, and Owners with respect to a Book-Entry
Capital Securities Certificate shall hold such interests pursuant to the
Applicable Procedures. The Securities Registrar and the Property Trustee or the
Administrative Trustees shall be entitled to deal with the Clearing Agency for
all purposes of this Trust Agreement relating to the Book-Entry Capital
Securities Certificates (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Capital Securities represented thereby and the
giving of instructions or directions by or to Owners of Book-Entry Capital
Securities represented thereby) as the sole Holder of the Book-Entry Capital
Securities represented thereby and shall have no obligations to the Owners
thereof. None of the Depositor, the Issuer Trustees nor the Securities Registrar
shall have any liability in respect of any transfers effected by the Clearing
Agency.
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(f) The rights of the Owners of the Book-Entry Capital Securities shall
be exercised only through the Clearing Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Solely for the
purposes of determining whether the Holders of the requisite amount of Capital
Securities have voted on any matter provided for in this Trust Agreement, so
long as Definitive Capital Securities Certificates are not outstanding, the
Property Trustee and the Administrative Trustees may conclusively rely on, and
shall be protected in relying on, any written instrument (including a proxy)
delivered to such Issuer Trustees by the Clearing Agency setting forth the
Holders' votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.
Section 5.5 REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES; SECURITIES ACT LEGENDS.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.9, a register or registers (the
"SECURITIES REGISTER") in which the registrar and transfer agent with respect to
the Trust Securities (the "SECURITIES REGISTRAR"), subject to such reasonable
regulations as it may prescribe, shall provide for the registration of Capital
Securities Certificates and (subject to Section 5.11) Common Securities
Certificates and of transfers and exchanges of Capital Securities Certificates
as herein provided. The Property Trustee is hereby appointed Securities
Registrar for the purpose of registering Capital Securities Certificates and
(subject to Section 5.11) Common Securities and transfers and exchanges thereof
as provided herein.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
and bearing such restrictive legends as may be required by this Trust Agreement,
dated the date of execution by such Administrative Trustee or Trustees.
At the option of the Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates of the same series of any
authorized denominations, of like tenor and aggregate Liquidation Amount,
bearing such restrictive legends as may be required by this Trust Agreement and
bearing a number not contemporaneously Outstanding, upon surrender of the
Capital Securities Certificates to be exchanged at such office or agency.
Whenever any Capital Securities Certificates are so surrendered for exchange,
the Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, the Capital Securities
Certificates that the Holder making the exchange is entitled to receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall evidence the same undivided beneficial interest in the assets
of the Issuer Trust, and be entitled to the same benefits under this Trust
Agreement, as the Capital Securities surrendered upon such transfer or exchange.
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The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Capital Security during a period beginning at
the opening of business 15 days before the day of selection for redemption of
such Capital Securities pursuant to Article IV and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Capital Security so selected for redemption in
whole or in part, except, in the case of any such Capital Security to be
redeemed in part, any portion thereof not to be redeemed.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to an Administrative
Trustee and the Securities Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Capital Securities
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Property Trustee in accordance with
its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Issuer Trust may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Capital Securities
Certificates.
(b) Notwithstanding any other provision of this Trust Agreement,
transfers and exchanges of Capital Securities Certificates and Book-Entry
Capital Securities shall be made only in accordance with this Section 5.5(b).
(i) NON-BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE TO BOOK-ENTRY
CAPITAL SECURITIES CERTIFICATE. If the Holder of a Capital Securities
Certificate (other than a Book-Entry Capital Securities Certificate)
wishes at any time to transfer all or any portion of such Capital
Securities Certificate to a Person who wishes to take delivery thereof
in the form of a beneficial interest in a Book-Entry Capital
Securities Certificate, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) and subject to
the Applicable Procedures. Upon receipt by the Securities Registrar of
(A) such Capital Securities Certificate as provided in Section 5.5(a)
and instructions satisfactory to the Securities Registrar directing
that a specified number of Book-Entry Capital Securities to be
represented by such Book-Entry Capital Securities Certificate not
greater than the number of Capital Securities represented by such
Capital Securities Certificate be credited to a specified Clearing
Agency Participant's account and (B) if the Capital Securities
Certificate to be transferred evidences Restricted Capital Securities,
a Restricted Securities Certificate duly executed by such Holder or
such Holder's attorney duly authorized in writing, then the Securities
Registrar shall cancel such Capital Securities Certificate (and issue
a new Capital Securities Certificate in respect of any untransferred
portion thereof) as provided in Section 5.5(a) and increase the
aggregate Liquidation Amount of the Book-Entry Capital Securities
Certificate by the Liquidation Amount of such Capital Securities so
transferred as provided in Section 5.4(c).
(ii) NON-BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE TO
NON-BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE. A Capital Securities
Certificate that is not a Book-Entry Capital
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27
Securities Certificate may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Capital Securities
Certificate that is not a Book-Entry Capital Securities Certificate as
provided in Section 5.5(a), PROVIDED that if the Capital Securities
Certificate to be transferred evidences Restricted Capital Securities,
then the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing.
(iii) BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE TO NON-BOOK-ENTRY
CAPITAL SECURITIES CERTIFICATE. A beneficial interest in a Book-Entry
Capital Securities Certificate may be exchanged for a Capital
Securities Certificate that is not a Book-Entry Capital Securities
Certificate as provided in Section 5.4.
(iv) CERTAIN INITIAL TRANSFERS OF NON-BOOK-ENTRY CAPITAL
SECURITIES CERTIFICATES. In the case of Capital Securities
Certificates initially issued other than in global form, an initial
transfer or exchange of such Capital Securities Certificates that does
not involve any change in beneficial ownership may be made to an
Institutional Accredited Investor or Investors as if such transfer or
exchange were not an initial transfer or exchange, PROVIDED that
written certification shall be provided by the transferor and
transferee of such Capital Securities to the Securities Registrar that
such transfer or exchange does not involve a change in beneficial
ownership.
(c) Except as set forth below, all Capital Securities Certificates
shall bear a Restricted Capital Securities Legend:
(i) New Capital Securities shall not bear a Restricted Legend;
(ii) at any time after the Original Capital Securities may be
freely transferred without registration under the Securities Act or
without being subject to transfer restrictions imposed thereon by the
Securities Act, a new Capital Securities Certificate which does not
bear a Restricted Securities legend may be issued in exchange for or
in lieu of a Capital Securities Certificate (other than a Global
Capital Securities Certificate) or any portion thereof which bears
such a legend if the Securities Registrar has received a Restricted
Securities Certificate, satisfactory to the Securities Registrar and
duly executed by the Holder of such legended Capital Securities
Certificate or his attorney duly authorized in writing; and
(iii) a new Capital Securities Certificate that does not bear a
Restricted Capital Securities Legend may be issued in exchange for or
in lieu of a Capital Securities Certificate or any portion thereof
that bears such a legend if, in the Depositor's sole judgment, placing
such a legend upon such new Capital Securities Certificate is not and
will not be necessary to ensure compliance with the registration
requirements of the Securities Act, and the Administrative Trustees,
at the direction of the Depositor, shall execute and deliver such a
new Capital Securities Certificate as provided in this Article V.
(d) Any purchaser or Holder of any Capital Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (i) is not a Plan or a
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28
Plan Asset Entity and is not purchasing such Capital Securities on behalf of or
with "plan assets" of any Plan, or (ii) is eligible for the exemptive relief
available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable
exemption with respect to such purchase or holding. The Securities Registrar
may, and if the Depositor shall so request, the Securities Registrar shall,
before registering for transfer or exchange any Capital Securities Certificates
as provided in Sections 5.2, 5.4 or 5.5 of this Trust Agreement, (A) require the
purchaser or Holder of such Capital Securities Certificates to confirm that it
either (x) is not a Plan, a Plan Asset Entity or a Person investing "plan
assets" of any Plan or (y) is eligible for the exemptive relief available under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, and (B) if such purchaser or Holder
does not provide such confirmation, require an Opinion of Counsel or other
evidence satisfactory to the Depositor of the availability to such purchaser or
Holder of another applicable exemption with respect to such purchase or holding.
Section 5.6 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute and make available for delivery, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section 5.6, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section 5.6
shall constitute conclusive evidence of an undivided beneficial interest in the
assets of the Issuer Trust corresponding to that evidenced by the lost, stolen
or destroyed Trust Securities Certificate, as if originally issued, whether or
not the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
Section 5.7 PERSONS DEEMED HOLDERS.
The Issuer Trustees and the Securities Registrar shall each treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
none of the Issuer Trustees and the Securities Registrar shall be bound by any
notice to the contrary.
Section 5.8 ACCESS TO LIST OF HOLDERS' NAMES AND ADDRESSES.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor or the Issuer Trustees accountable by reason of the disclosure of
its name and address, regardless of the source from which such information was
derived.
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Section 5.9 MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Capital Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate the Corporate Trust
Office of the Property Trustee as its office and agency for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor, the
Property Trustee and to the Holders of any change in the location of the
Securities Register or any such office or agency.
Section 5.10 APPOINTMENT OF PAYING AGENTS.
The Paying Agent or Agents shall make Distributions to Holders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying Agent shall initially be the Bank and any co-paying agent
chosen by the Property Trustee and acceptable to the Administrative Trustees and
the Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees and the
Property Trustee. If the Bank shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Administrative
Trustees shall appoint a successor (which shall be a bank or trust company) that
is reasonably acceptable to the Depositor to act as Paying Agent. Such successor
Paying Agent or any additional Paying Agent shall execute and deliver to the
Issuer Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Issuer Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Holders in trust for the benefit of the Holders
entitled thereto until such sums shall be paid to such Holders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall
apply to the Bank also in its role as Paying Agent, for so long as the Bank
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
Section 5.11 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
At the Time of Delivery, the Depositor shall acquire, and thereafter
shall retain, beneficial and record ownership of the Common Securities. Neither
the Depositor nor any successor Holder of the Common Securities may transfer
less than all the Common Securities (except in connection with a redemption
thereof), and the Depositor or any such successor Holder may transfer the Common
Securities only (i) in connection with a consolidation or merger of the
Depositor into another corporation, or any conveyance, transfer or lease by the
Depositor of all or substantially all of its properties and assets to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to the Depositor or an
Affiliate of the Depositor in compliance with applicable law (including the
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Securities Act and applicable state securities and blue sky laws). To the
fullest extent permitted by law, any attempted transfer of the Common Securities
other than as set forth in the next proceeding sentence shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS NOT
TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN
COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
Section 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as all Capital Securities are
represented by a Book-Entry Capital Securities Certificate, the Issuer Trustees
shall give all such notices and communications specified herein to be given to
the Clearing Agency, and shall have no obligations to the Owners.
Section 5.13 RIGHTS OF HOLDERS; WAIVERS OF PAST DEFAULTS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer Trust conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Issuer Trust except as described below. The
Trust Securities shall be personal property giving only the rights specifically
set forth therein and in this Trust Agreement. The Trust Securities shall have
no preemptive or similar rights and when issued and delivered to Holders against
payment of the purchase price therefor will be fully paid and nonassessable by
the Issuer Trust. The Holders of the Trust Securities, in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have the right to make such declaration by a notice in writing
to the Property Trustee, the Depositor and the Debenture Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, by written notice to the Property Trustee, the Depositor and
the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
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(A) all overdue installments of interest on all of the
Debentures,
(B) any accrued Additional Interest (as defined in the
Indenture) on all of the Debentures,
(C) the principal of (and premium, if any, on) any
Debentures that have become due otherwise than by such
declaration of acceleration and interest and Additional Interest
thereon at the rate borne by the Debentures, and
(D) all sums paid or advanced by the Debenture Trustee under
the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Debenture Trustee and the
Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of the Debentures that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Trust Securities, waive any
past default or Event of Default under the Indenture, except a default or Event
of Default in the payment of principal or interest (unless such default or Event
of Default has been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default or Event of Default in respect of a
covenant or provision that under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Debenture. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Capital Securities, a record date shall be established for determining
Holders of Outstanding Capital Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day that is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a
written notice that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.13(b).
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(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of such
Holder (a "DIRECT ACTION"). Except as set forth in Section 5.13(b) and this
Section 5.13(c), the Holders of Capital Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.
(d) Except as otherwise provided in paragraphs (a), (b) and (c) of this
Section 5.13, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Trust Securities,
waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
Section 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or execute any trust or power conferred on the Property
Trustee with respect to the Debentures, (ii) waive any past default that may be
waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities, PROVIDED, HOWEVER, that where a
consent under the Indenture would require the consent of each Holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Capital Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities, except by a
subsequent vote of the
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Holders of the Capital Securities. The Property Trustee shall notify all Holders
of the Capital Securities of any notice of default received with respect to the
Debentures. In addition to obtaining the foregoing approvals of the Holders of
the Capital Securities, prior to taking any of the foregoing actions, the Issuer
Trustees shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that such action shall not cause the
Issuer Trust to be taxable as a corporation or classified as other than a
grantor trust for United States Federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then
the Holders of Outstanding Capital Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes.
Section 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Holders of the Capital Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Capital Securities,
at such Holder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
Section 6.3 MEETINGS OF HOLDERS OF THE CAPITAL SECURITIES.
No annual meeting of Holders is required to be held. The Administrative
Trustees, however, shall call a meeting of the Holders of the Capital Securities
to vote on any matter upon the written request of the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital Securities and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of the Holders of the Capital Securities to vote on
any matters as to which such Holders are entitled to vote.
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or by proxy, shall constitute a quorum at any
meeting of the Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
present, in person or by proxy, holding Capital Securities representing at least
a majority of the aggregate Liquidation Amount of the Capital Securities held by
the Holders present, either in person or by
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proxy, at such meeting shall constitute the action of the Holders of the Capital
Securities, unless this Trust Agreement requires a greater number of affirmative
votes.
Section 6.4 VOTING RIGHTS.
Holders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
Section 6.5 PROXIES, ETC.
At any meeting of Holders, any Holder entitled to vote thereat may vote
by proxy, PROVIDED that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Administrative Trustees, or with such other
officer or agent of the Issuer Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
Section 6.6 HOLDER ACTION BY WRITTEN CONSENT.
Any action that may be taken by Holders of Capital Securities at a
meeting may be taken without a meeting if Holders holding at least a Majority in
Liquidation Amount of the Capital Securities entitled to vote in respect of such
action (or such larger proportion thereof as shall be required by any other
provision of this Trust Agreement) shall consent to the action in writing. Any
action that may be taken by the Holder of all the Common Securities may be taken
if such Holder shall consent to the action in writing.
Section 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Holders who are entitled to notice
of and to vote at any meeting or by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrative Trustees may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Holders or the payment of a
distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.
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Section 6.8 ACTS OF HOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "ACT" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided
in this Section 6.8.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner that any Issuer Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Issuer
Trustees, the Depositor or the Issuer Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders or the Issuer Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Holder, a
decision with respect to such matter by the Property Trustee shall be conclusive
with respect to such matter.
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Section 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
(and other Issuer Trustees) during normal business hours for any purpose
reasonably related to such Holder's interest as a Holder (or such Issuer
Trustee's service as a Trustee hereunder).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1 REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and satisfies for the Issuer Trust the requirements of Section 3807(a) of the
Delaware Business Trust Act;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement
have been duly authorized by all necessary corporate or other action on the part
of the Property Trustee and the Delaware Trustee and do not require any approval
of stockholders of the Property Trustee and the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Charter or By-laws
of the Property Trustee or the Delaware Trustee, (ii) violate any provision of,
or constitute,
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with or without notice or lapse of time, a default under, or result in the
creation or imposition of, any Lien on any properties included in the Trust
Property pursuant to the provisions of, any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(g) none of the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee, as the
case may be, contemplated herein requires the consent or approval of, the giving
of notice to, the registration with or the taking of any other action with
respect to any governmental authority or agency under any existing law of the
United States or the State of Delaware governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee, as appropriate in
context; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal that,
individually or in the aggregate, would materially and adversely affect the
Issuer Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.
Section 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Time of Delivery on
behalf of the Issuer Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Issuer Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this Trust
Agreement and the Holders will be, as of such date, entitled to the benefits of
this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by either Issuer Trustee
of this Trust Agreement.
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ARTICLE VIII
THE ISSUER TRUSTEES; PAYING AGENTS
Section 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Issuer Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, but subject to Section
8.1(c), no provision of this Trust Agreement shall require any of the Issuer
Trustees to expend or risk its or their own funds or otherwise incur any
financial liability in the performance of any of its or their duties hereunder,
or in the exercise of any of its or their rights or powers, if it or they shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it or
them. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Issuer Trustees shall be subject to the provisions
of this Section 8.1. Nothing in this Trust Agreement shall be construed to
release an Administrative Trustee from liability for his or her own gross
negligent action, his or her own gross negligent failure to act, or his or her
own wilful misconduct; PROVIDED, HOWEVER, that notwithstanding the foregoing
clause, nothing contained in this Trust Agreement shall limit or diminish in any
way any right to indemnification or defense that any Administrative Trustee may
have by virtue of his or her status as an employee or officer of Depositor or
any subsidiary of Depositor. To the extent that, at law or in equity, an Issuer
Trustee has duties and liabilities relating to the Issuer Trust or to the
Holders, such Issuer Trustee shall not be liable to the Issuer Trust or to any
Holder for such Issuer Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Issuer Trustees otherwise existing at
law or in equity, are agreed by the Depositor and the Holders to replace such
other duties and liabilities of the Issuer Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Issuer Trustees are not
personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) If an Event of Default has occurred and is continuing, the Property
Trustee shall enforce this Trust Agreement for the benefit of the Holders.
(d) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Trust Agreement (including pursuant to Section 10.10), and no
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implied covenants shall be read into this Trust Agreement against the Property
Trustee. If an Event of Default has occurred (that has not been cured or waived
pursuant to Section 5.13), the Property Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and use the same degree
of care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(e) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
(including pursuant to Section 10.10), and the Property Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Trust Agreement
(including pursuant to Section 10.10); and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Trust Agreement;
but in the case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of at least a Majority in Liquidation Amount
of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment
Account shall be to deal with such Property in a similar manner as the
Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property
Trustee under this Trust Agreement and the Trust Indenture Act;
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(v) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor;
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law;
(vi) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of any other Issuer Trustee
or the Depositor; and
(vii) No provision of this Trust Agreement shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Property Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
(f) The Administrative Trustees shall not be responsible for monitoring
the compliance by the other Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrative
Trustee be liable for the default or misconduct of any other Issuer Trustee or
the Depositor. The Delaware Trustee shall not be responsible for monitoring
compliance by the Property Trustee, the Administrative Trustees or the Depositor
with their respective duties under this Trust Agreement, nor shall the Delaware
Trustee be liable for the default or misconduct of any other Issuer Trustee or
the Depositor.
Section 8.2 CERTAIN NOTICES.
Within ninety days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders, the Administrative Trustee and the Depositor, unless
such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of written notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
The Property Trustee shall not be deemed to have knowledge of any Event
of Default unless the Property Trustee shall have received written notice, or a
Responsible Officer charged with the administration of this Trust Agreement
shall have obtained actual knowledge, of such Event of Default.
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Section 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein, or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Holders of the Capital Securities are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting the Depositor's opinion as to the course of action to be
taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Holders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or wilful misconduct;
(c) any direction or act of the Depositor contemplated by this Trust
Agreement shall be sufficiently evidenced by an Officer's Certificate;
(d) any direction or act of an Administrative Trustee contemplated by
this Trust Agreement shall be sufficiently evidenced by a certificate executed
by such Administrative Trustee and setting forth such direction or act;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
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(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction; provided that, nothing
contained in this Section 8.3(g) shall be taken to relieve the Property Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Trust Agreement;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, PROVIDED that the Property Trustee shall be responsible for
its own negligence, bad faith or wilful misconduct with respect to selection of
any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on any Issuer Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which it shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to any Issuer Trustee shall be construed to be a duty.
Section 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor and the Issuer Trust, and the
Issuer Trustees do not assume any responsibility for their correctness. The
Issuer Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Debentures.
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The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trust Office shall have received written notice from
the Depositor, any Holder or any other Issuer Trustee that such funds are not
legally available.
Section 8.5 MAY HOLD SECURITIES.
Any Issuer Trustee or any agent of any Issuer Trustee or the Issuer
Trust, in its individual or any other capacity, may become the owner or pledgee
of Trust Securities and, subject to Sections 8.8 and 8.13 and, except as
provided in the definition of the term "OUTSTANDING" in Article I, may otherwise
deal with the Issuer Trust with the same rights it would have if it were not an
Issuer Trustee or such agent.
Section 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor, in its capacity as the issuer of the Debentures, agrees:
(a) to pay to each Issuer Trustee and Paying Agent from time to time
such reasonable compensation for all services rendered by them hereunder as may
be agreed by the Depositor and such Issuer Trustee or Paying Agent, as the case
may be, from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse each
Issuer Trustee and Paying Agent upon request for all reasonable expenses,
disbursements and advances incurred or made by each Issuer Trustee and Paying
Agent in accordance with any provision of this Trust Agreement (including the
reasonable compensation and the expenses and disbursements of their agents and
counsel), except any such expense, disbursement or advance as may be
attributable to their negligence, bad faith or wilful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Issuer Trustee, (ii) each Paying Agent, (iii) any
Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder,
employee, representative or agent of any Issuer Trustee, and (v) any employee or
agent of the Issuer Trust (referred to herein as an "INDEMNIFIED PERSON") from
and against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Issuer Trust or any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Issuer Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this Trust
Agreement, except that no Indemnified Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence, bad faith or wilful misconduct with respect to such acts
or omissions; PROVIDED, HOWEVER, that notwithstanding the foregoing clause,
nothing contained in this Trust Agreement shall limit or diminish in any way any
right to indemnification or defense that any Administrative Trustee may have by
virtue or his or her status as an employee or officer of Depositor or any
subsidiary of Depositor; and
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(d) to the fullest extent permitted by applicable law, the parties
intend that Section 3561 of Title 12 of the Delaware Code shall not apply to the
Issuer Trust and that compensation payable to any Issuer Trustee pursuant to
this Section 8.6 not be subject to review by any court under Section 3560 of
Title 12 of the Delaware Code or otherwise.
The Common Securities Holder shall be liable to each person or entity
to which the Issuer Trust is now or hereafter becomes indebted or liable (each a
Beneficiary) for all of the debts, obligations, costs, expenses, and taxes of
the Issuer Trust (other than obligations of the Issuer Trust to pay to holders
of any Trust Securities the amount due such holders pursuant to the terms of the
Trust Securities) to the extent not satisfied out of the Issuer Trust's assets.
Such liabilities and obligations shall constitute unsecured obligations of the
Common Securities Holder and shall rank subordinate and junior in right of
payment to all Senior Indebtedness (as defined in the Indenture) of the Common
Securities Holder to the extent and in the manner set forth in the Indenture
with respect to the Debentures, and the provisions of Article XIII of the
Indenture will apply, MUTATIS MUTANDIS, to the obligations of the Common
Securities Holder hereunder. The obligations of the Common Securities Holder
hereunder do not constitute Senior Indebtedness (as defined in the Indenture) of
the Common Securities Holder. Any such Beneficiary may enforce such obligations
of the Common Securities Holder directly against the Common Securities Holder,
and the Common Securities Holder irrevocably waives any right or remedy to
require that any such Beneficiary take any action against the Issuer Trust or
any other Person before proceeding against the Common Securities Holder. The
Common Securities Holder shall execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing. The Common
Securities Holder shall be subrogated to all rights (if any) of any Beneficiary
against the Issuer Trust in respect of any amounts paid to the Beneficiaries by
the Common Securities Holder; provided, however, that the Common Securities
Holder shall not (except to the extent required by mandatory provisions of law)
be entitled to enforce or exercise any rights that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment hereunder, if, at the time of any such payment, any amounts
are due to the Beneficiaries and unpaid hereunder.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement and the resignation or removal of any Issuer Trustee.
No Issuer Trustee or Paying Agent may claim any Lien on any Trust
Property as a result of any amount due pursuant to this Section 8.6.
The Depositor, any Issuer Trustee (subject to Section 8.8(a)) and any
Paying Agent may engage in or possess an interest in other business ventures of
any nature or description, independently or with others, similar or dissimilar
to the business of the Issuer Trust, and the Issuer Trust and the Holders of
Trust Securities shall have no rights by virtue of this Trust Agreement in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Issuer
Trust, shall not be deemed wrongful or improper. Neither the Depositor, any
Paying Agent nor any Issuer Trustee shall be obligated to present any particular
investment or other opportunity to the Issuer Trust even if such opportunity is
of a character that, if presented to the Issuer Trust, could be taken by the
Issuer Trust, and the Depositor, any Issuer Trustee or any Paying Agent shall
have the right to take for its own account
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(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Issuer Trustee or Paying Agent
may engage or be interested in any financial or other transaction with the
Depositor or any Affiliate of the Depositor, or may act as depository for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Depositor or its Affiliates.
Section 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF ISSUER
TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such, and that has at the time of such appointment securities
rated in one of the three highest rating categories by a nationally recognized
statistical rating organization and a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section 8.7 and to the extent permitted
by the Trust Indenture Act, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Property Trustee
with respect to the Trust Securities shall cease to be eligible in accordance
with the provisions of this Section 8.7, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article. At the time of
appointment, the Property Trustee must have securities rated in one of the three
highest rating categories by a nationally recognized statistical rating
organization.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee hereunder with
respect to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State of
Delaware, or (ii) a legal entity with its principal place of business in the
State of Delaware and that otherwise meets the requirements of applicable
Delaware law and that shall act through one or more persons authorized to bind
such entity.
Section 8.8 CONFLICTING INTERESTS.
(a) If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
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Section 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, Depositor and the Administrative Trustees,
by agreed action of the majority of them shall have power to appoint, and upon
the written request of the Administrative Trustee and the Depositor shall for
such purpose join with the Administrative Trustees in the execution, delivery,
and performance of all instruments and agreements necessary or proper to
appoint, one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 8.9. Any co-trustee or separate
trustee appointed pursuant to this Section 8.9 shall either be (i) a natural
person who is at least 21 years of age and a resident of the United States, or
(ii) a legal entity with its principal place of business in the United States
that shall act through one or more persons authorized to bind such entity. If an
Event of Default under the Indenture shall have occurred and be continuing, the
Property Trustee alone shall have the power to make such appointment.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or
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separate trustee appointed under this Section 8.9, and, in case a Debenture
Event of Default has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Depositor. Upon the written request of
the Property Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigning or removed may be appointed in the
manner provided in this Section 8.9.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Issuer Trustee (the "RELEVANT
TRUSTEE") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. If the
instrument of acceptance by the successor Issuer Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 60 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Depositor, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by Act of the Holder
of the Common Securities. If a Debenture Event of Default shall have occurred
and be continuing, the Property Trustee or the Delaware Trustee, or both of
them, may be removed at such time by Act of the Holders of a Majority in
Liquidation Amount of the Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and, in the case of the Property Trustee, on behalf
of the Issuer Trust). An Administrative Trustee may only be removed by the
Holder of the Common Securities and may be so removed at any time.
If any Issuer Trustee shall resign, be removed or become incapable of
acting as Issuer Trustee, or if a vacancy shall occur in the office of any
Issuer Trustee for any cause, at a time when no Debenture Event of Default shall
have occurred and be continuing, the Holder of the Common Securities, by Act
delivered to the retiring Issuer Trustee, shall promptly appoint a successor
Issuer Trustee or Issuer Trustees, and such successor Issuer Trustee shall
comply with the applicable
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requirements of Section 8.11. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, the Holders of
Capital Securities, by Act of the Holders of a Majority in Liquidation Amount of
the Capital Securities delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Issuer Trustee shall comply with the applicable requirements of Section 8.11. If
an Administrative Trustee shall resign, be removed or become incapable of acting
as Administrative Trustee, at a time when a Debenture Event of Default shall
have occurred and be continuing, the Holder of the Common Securities by Act
delivered to the Administrative Trustee shall promptly appoint a successor
Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Holder of the Common Securities or the Holders of a Majority in
Liquidation Amount of the Capital Securities, as the case may be, and accepted
appointment in the manner required by Section 8.11, any Holder who has been a
Holder of Trust Securities for at least six months may, on behalf of such Holder
and all others similarly situated, or any other Issuer Trustee, may petition any
court of competent jurisdiction for the appointment of a successor Relevant
Trustee.
The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Delaware Trustee who is a natural person dies or becomes, in
the opinion of the Depositor, incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (a) the unanimous act
of the remaining Administrative Trustees if there are at least two of them or
(b) otherwise by the Depositor (with the successor in either case being a Person
who satisfies the eligibility requirement for the Delaware Trustee set forth in
Section 8.7).
Section 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with
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all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Issuer Trust or any successor Relevant Trustee such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Issuer Trust.
Upon request of any Issuer Trustee or any such successor Relevant
Trustee, the retiring Relevant Trustee or the Issuer Trust, as the case may be,
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case may
be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person, succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, PROVIDED that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
Section 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
ISSUER TRUST.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).
Section 8.14 PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable and irrespective of whether
the Property Trustee shall have made any demand on the Issuer Trust for the
payment of any past due Distributions) shall be entitled and empowered, to the
fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for
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the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Property Trustee and, in the
event the Property Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Property Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel, and any other amounts due the
Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 8.15 REPORTS BY PROPERTY TRUSTEE.
(a) Not later than 60 days following May 15 of each year commencing
with May 15, 2000, the Property Trustee shall transmit to all Holders in
accordance with Section 10.8, and to the Depositor, a brief report dated as of
the immediately preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to the
best of its knowledge it has continued to be eligible under said Section, a
written statement to such effect;
(ii) a statement that the Property Trustee has complied with all of
its obligations under this Trust Agreement during the twelve-month period
(or, in the case of the initial report, the period since the Closing Date)
ending with such December 31 or, if the Property Trustee has not complied
in any material respect with such obligations, a description of such
noncompliance; and
(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it
has not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
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(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor.
Section 8.16 REPORTS TO THE PROPERTY TRUSTEE.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314(a) of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Delivery of such reports, information and documents to the
Property Trustee is for informational purposes only and the Property Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuer Trust's compliance with any of its covenants hereunder (as to which
the property Trustee is entitled to rely exclusively on an Officer's
Certificate).
Section 8.17 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Issuer Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officer's Certificate.
Section 8.18 NUMBER OF ISSUER TRUSTEES.
(a) The number of Issuer Trustees shall be four, PROVIDED that the
Holder of all of the Common Securities by written instrument may increase or
decrease the number of Administrative Trustees, provided further that the
Property Trustee and the Delaware Trustee may be the same Person if the Property
Trustee meets the requirements set forth in Section 8.7(c).
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul, dissolve or terminate the Issuer Trust.
Section 8.19 DELEGATION OF POWER.
(a) Any Administrative Trustee, by power of attorney consistent with
applicable law, may delegate to any other natural person over the age of 21 such
Administrative Trustee's power for the purpose of executing any documents
contemplated in Section 2.7(a), including any registration
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statement or amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Issuer Trust or the
names of the Administrative Trustees or otherwise as the Administrative Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of this Trust Agreement.
Section 8.20 APPOINTMENT OF ADMINISTRATIVE TRUSTEES.
(a) The Administrative Trustee shall initially be [Name] and [Name],
and their successors shall be appointed by the Holder of all the Common
Securities. The Administrative Trustees may resign or be removed by the Holder
of all the Common Securities at any time. Upon any resignation or removal of an
Administrative Trustee, the Depositor shall appoint a successor Administrative
Trustee. If at any time there is no Administrative Trustee, the Property Trustee
or any Holder who has been a Holder of Trust Securities for at least six months
may petition any court of competent jurisdiction for the appointment of one or
more Administrative Trustees.
(b) Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with this Section 8.20, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
(c) Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee who is a natural person dies or
becomes, in the opinion of the Holder of all the Common Securities, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by the unanimous act of the remaining Administrative Trustees, if
there were at least two of them prior to such vacancy, and by the Depositor, if
there were not two such Administrative Trustees immediately prior to such
vacancy (with the successor being a Person who satisfies the eligibility
requirement for Administrative Trustees set forth in Section 8.7).
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
Section 9.1 DISSOLUTION UPON EXPIRATION DATE.
Unless earlier dissolved, the Issuer Trust shall automatically dissolve
on ________ __, 2050 (the "EXPIRATION DATE"), and shall thereafter be terminated
by filing a Certificate of
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Cancellation with the Secretary of State of the State of Delaware, following the
distribution of the Trust Property in accordance with Section 9.4.
Section 9.2 EARLY DISSOLUTION.
The first to occur of any of the following events is an "EARLY
TERMINATION EVENT" upon the occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of all the Common Securities or the
Depositor;
(b) the written direction to the Property Trustee from the Holder of
all the Common Securities at any time to dissolve the Issuer Trust and to
distribute the Debentures to Holders in exchange for the Capital Securities
(which direction is optional and wholly within the discretion of the Holder of
all the Common Securities);
(c) the redemption of all of the Capital Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
Section 9.3 TERMINATION.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Holders of all amounts required to be distributed hereunder upon the
liquidation of the Issuer Trust pursuant to Section 9.4, or upon the redemption
of all of the Trust Securities pursuant to Section 4.2; (b) the payment of any
expenses owed by the Issuer Trust; and (c) the discharge of all administrative
duties of the Administrative Trustees, including the performance of any tax
reporting obligations with respect to the Issuer Trust or the Holders.
Section 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by Section 3808(e) of the Delaware
Business Trust Act and any other applicable law, to each Holder a Like Amount of
Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not less than
30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust
Securities at such Holder's address appearing in the Securities Register. All
such notices of liquidation shall:
(i) state the Liquidation Date;
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(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Property Trustee and the Administrative Trustees
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Issuer Trust and distribution of the Debentures to
Holders, the Property Trustee, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish a record date for
such distribution (which shall be not more than 45 days prior to the Liquidation
Date) and establish such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such Trust
Securities Certificates to the exchange agent for exchange, (iii) any Trust
Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Debentures bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Trust
Securities Certificates until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal will
be made to Holders of Trust Securities Certificates with respect to such
Debentures), and (iv) all rights of Holders holding Trust Securities will cease,
except the right of such Holders to receive Debentures upon surrender of Trust
Securities Certificates.
(d) If, upon dissolution of the Trust, notwithstanding the other
provisions of this Section 9.4, whether because of an order for dissolution
entered by a court of competent jurisdiction or otherwise, distribution of the
Debentures in the manner provided herein is determined by the Property Trustee
not to be practical, or if an Early Termination Event specified in clause (c) of
Section 9.2 occurs, the Trust Property shall be liquidated by the Property
Trustee in such manner as the Property Trustee determines. In such event, in
connection with the winding-up of the Issuer Trust, Holders will be entitled to
receive out of the assets of the Issuer Trust available for distribution to
Holders, after satisfaction of liabilities to creditors of the Issuer Trust as
provided by Section 3808(e) of the Delaware Business Trust Act and other
applicable law, an amount equal to the Liquidation Amount per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "LIQUIDATION DISTRIBUTION"). If, upon any such winding up, the
Liquidation Distribution can be paid only in part because the Issuer Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Issuer Trust on the Trust Securities shall be paid on a PRO RATA basis
(based upon Liquidation Amounts). The Holder of all the Common Securities will
be entitled to receive Liquidation Distributions upon any such winding-up PRO
RATA (determined as aforesaid) with Holders of Capital Securities, except that,
if a Debenture Event of Default specified in
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Section 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the
Capital Securities shall have a priority over the Common Securities as provided
in Section 4.3.
Section 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
ISSUER TRUST.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to Section 9.4 or this Section 9.5. At the request of the Holder of all the
Common Securities, with the consent of the Administrative Trustees, but without
the consent of the Holders of the Outstanding Capital Securities, the Property
Trustee and the Delaware Trustee, the Issuer Trust may merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer Trust with respect to the
Capital Securities, or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities have the same
priority as the Capital Securities with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) a trustee of such successor
entity possessing the same powers and duties as the Property Trustee is
appointed to hold the Debentures, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization that then assigns a rating
to the Capital Securities, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect, (v) such successor entity has
a purpose substantially identical to that of the Issuer Trust, (vi) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Issuer Trust has received an Opinion of Counsel to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
Holders of the Capital Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Issuer Trust nor such
successor entity will be required to register as an "investment company" under
the Investment Company Act, and (vii) the Depositor or its permitted transferee
owns all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee Agreement. Notwithstanding the foregoing,
the Issuer Trust shall not, except with the consent of holders of all of the
Capital Securities, consolidate, amalgamate, merge with or into, or be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Issuer Trust or the successor entity to be taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes.
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ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 LIMITATION OF RIGHTS OF HOLDERS.
Except as set forth in Section 9.2, the death, incapacity, dissolution,
termination or bankruptcy of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to annul, dissolve or terminate
this Trust Agreement, nor entitle the legal representatives, successors or heirs
of such Person or any Holder for such person, to claim an accounting, take any
action or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
Section 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees, the Delaware Trustee and the
Holder of the Common Securities, without the consent of the Holders of the
Capital Securities, (i) to cure any ambiguity, correct or supplement any
provision herein that may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Issuer Trust will not be taxable as a corporation or will be classified as a
grantor trust for United States federal income tax purposes at all times that
any Trust Securities are Outstanding or to ensure that the Issuer Trust will not
be required to register as an "investment company" under the Investment Company
Act; provided, however, that in either case (i) or (ii) such action shall not
adversely affect in any material respect the interests of any Holder.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Property Trustee, the Administrative
Trustees and the Holder of the Common Securities, without the consent of the
Delaware Trustee, and with (i) the consent of Holders of at least a Majority in
Liquidation Amount of the Capital Securities, and (ii) receipt by the Issuer
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not cause the Issuer Trust to be taxable as a corporation or as
other than a grantor trust for United States federal income tax purposes or
affect the Issuer Trust's exemption from status as an "INVESTMENT COMPANY" under
the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on
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or after such date; and notwithstanding any other provision herein, without the
unanimous consent of the Holders, this paragraph (c) of this Section 10.2 may
not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or to be taxable as a corporation or to be classified as other than a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
(i) without the consent of the Depositor and the Administrative Trustees, this
Trust Agreement may not be amended in a manner that imposes any additional
obligation on the Depositor or the Administrative Trustees, and (ii) without the
consent of the Delaware Trustee, this Trust Agreement may not be amended in a
manner that imposes any additional obligation on the Delaware Trustee.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees or the Property Trustee shall promptly provide to
the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement that affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officer's
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates 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 10.4 GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR AND THE ISSUER TRUSTEES WITH RESPECT TO
THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS.
To the fullest extent permitted by Delaware law, there shall not be
applicable to the Issuer Trust, the Issuer Trustees or this Trust Agreement any
provisions of law (whether statutory or common) of the State of Delaware
pertaining to trusts (other than the Delaware Business Trust Act) that relate to
or regulate in a manner inconsistent with the terms hereof (a) the filing with
any court or governmental body or agent of trustee accounts or schedules of
trustee fees and charges, (b)
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affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the acquisition, holding or disposition of any
property, (d) the allocation of receipts and expenditures between income and
principal, (e) restrictions or limitation on the permissible nature, amount or
concentration of trust investment or requirements relating to the titling,
storage or other manner of holding or investing trust assets, or (f) the
establishment of fiduciary or other standards of responsibility or limitations
on the acts or powers of trustees that are inconsistent (whether more or less
restrictive) with this provision.
Section 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
Section 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
Section 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 10.8 REPORTS, NOTICES AND DEMANDS.
(a) Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of the
Common Securities or the Depositor, to DPL Inc., MacGregor Park, 1065 Woodman
Drive, Dayton, Ohio 45432, Attention: General Counsel, facsimile no.: (937)
259-7385, or to such other address as may be specified in a written notice by
the Holder of the Common Securities or the Depositor, as the case may be, to the
Property Trustee. Such notice, demand or other communication to or upon a Holder
shall be deemed to have been sufficiently given or made, for all purposes, upon
hand delivery, mailing or transmission. Such notice, demand or other
communication to or upon the Depositor shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Depositor.
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(b) Any notice, demand or other communication that by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Issuer Trust or any Issuer Trustee may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
the Property Trustee to [Name] [Address], Attention: _________
__________________; (b) with respect to the Delaware Trustee, to [Name]
[Address], Attention: ____________________; (c) in the case of the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of [-] Capital I"; and (d)
in the case of the Issuer Trust, to its principal executive office specified in
Section 2.2, with a copy to each of the Property Trustee, the Delaware Trustee
and the Administrative Trustees, or, in each such case, to such other address as
may be specified in a written notice by the applicable Person to the Property
Trustee, the Depositor and the Holders. Such notice, demand or other
communication to or upon the Property Trustee, the Delaware Trustee, the
Administrative Trustees or the Issuer Trust shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the
Property Trustee, the Delaware Trustee, such Administrative Trustees or the
Issuer Trust, as the case may be.
Section 10.9 AGREEMENT NOT TO PETITION.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Issuer Trust under any bankruptcy,
insolvency, reorganization or other similar law (including the United States
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Issuer Trust under any Bankruptcy
Law. The Property Trustee and the Depositor agree, for the benefit of Holders,
that if the Depositor or any Issuer Trustee takes action in violation of this
Section 10.9, then at the expense of the Depositor, the Property Trustee or
Depositor, as the case may be, shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Issuer Trust or the commencement of such action and raise the defense that
the Depositor has agreed in writing not to take such action and should be
estopped and precluded therefrom and such other defenses, if any, as counsel for
the Issuer Trustees or the Issuer Trust may assert.
Section 10.10 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) Except as otherwise expressly provided herein, the Trust Indenture
Act shall apply as a matter of contract to this Trust Agreement for purposes of
interpretation, construction and defining the rights and obligations hereunder,
and this Trust Agreement, the Depositor and the Property Trustee shall be deemed
for all purposes hereof to be subject to and governed by the Trust Indenture Act
to the same extent as would be the case if this Trust Agreement were qualified
under that Act on the date hereof. Except as otherwise expressly provided
herein, if and to the extent that any provision of this Trust Agreement limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(b) The Property Trustee shall be the only Issuer Trustee that is a
trustee for the purposes of the Trust Indenture Act.
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(c) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer Trust.
Section 10.11 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE
AGREEMENT AND INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE
AGREEMENT, IF APPLICABLE, THE INDENTURE, REGISTRATION RIGHTS AGREEMENT, DATED OF
EVEN DATE HEREWITH, AMONG THE ISSUER TRUST, THE DEPOSITOR AND THE PURCHASER
NAMED THEREIN AND AN AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS
OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS
OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE
ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
This Trust Agreement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
DPL INC.,
as Depositor
By:
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Property Trustee
By:
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Delaware Trustee
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
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EXHIBIT A
[CERTIFICATE OF TRUST]
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EXHIBIT B
[CERTIFICATE DEPOSITORY AGREEMENT]
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EXHIBIT C
[Form of Common Securities Certificate]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN
AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT.
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
C-__ $________
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
[-] CAPITAL I
___% COMMON SECURITIES
(LIQUIDATION AMOUNT $25 PER COMMON SECURITY)
[-] Capital I, a statutory business trust created under the laws of the
State of Delaware (the "Issuer Trust"), hereby certifies that [NAME OF HOLDER]
(the "Holder") is the registered owner of __________ (____) common securities
(aggregate Liquidation Amount ______________________ ($__________) of the Issuer
Trust representing common undivided beneficial interests in the assets of the
Issuer Trust and designated the ___% Common Securities (liquidation amount $25
per Common Security) (the "Common Securities"). Except in accordance with
Section 5.11 of the Trust Agreement (as defined below) the Common Securities are
not transferable and any attempted transfer hereof other than in accordance
therewith shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Issuer Trust, dated as of February
__, 2000, as the same may be amended from time to time (the "Trust Agreement"),
among [-] Inc., an Ohio corporation, as Depositor, [Name], as Property Trustee,
[Name], as Delaware Trustee, the Administrative Trustees named therein and the
holders, from time to time, of undivided beneficial interests in the assets of
the Issuer Trust, including the designation of the terms of the Common
Securities as set forth therein. The Issuer Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Issuer
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this _____ day of __________, ____.
DPL Capital Trust I
By:
--------------------------------
Name:
Title: ADMINISTRATIVE TRUSTEE
C-2
<PAGE>
EXHIBIT D
[Form of Capital Securities Certificate]
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A BOOK-ENTRY CAPITAL
SECURITIES CERTIFICATE, INSERT--This Capital Securities Certificate is a
Book-Entry Capital Securities Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of a Clearing
Agency or a nominee of a Clearing Agency. This Capital Securities Certificate is
exchangeable for Capital Securities Certificates registered in the name of a
person other than the Clearing Agency or its nominee only in the limited
circumstances described in the Trust Agreement and may not be transferred except
as a whole by the Clearing Agency to a nominee of the Clearing Agency or by a
nominee of the Clearing Agency to the Clearing Agency or another nominee of the
Clearing Agency, except in the limited circumstances described in the Trust
Agreement.
Unless this Capital Security Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to[-] Capital I or its agent for registration of transfer, exchange or payment,
and any Capital Security Certificate issued is registered in the name of Cede &
Co. or such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO EVIDENCE A RESTRICTED
CAPITAL SECURITY, INSERT -- THIS CAPITAL SECURITY (OR ANY PREDECESSOR) AND ANY
JUNIOR SUBORDINATED DEBENTURES ISSUABLE IN CONNECTION THEREWITH HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER THIS CAPITAL SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS CAPITAL SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A, REGULATION S OR ANOTHER EXEMPTION THEREUNDER. THE HOLDER
OF THIS CAPITAL SECURITY, BY ITS ACCEPTANCE HEREOF, REPRESENTS, ACKNOWLEDGES AND
AGREES FOR THE BENEFIT OF THE ISSUER TRUST THAT: (I) IT HAS ACQUIRED A
"RESTRICTED" SECURITY WHICH HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT;
(II) IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS CAPITAL SECURITY
EXCEPT (A) TO THE CORPORATION, (B) FOR SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (D) PURSUANT TO AN
<PAGE>
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER APPLICABLE
JURISDICTIONS; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THIS CAPITAL SECURITY OF THE RESALE RESTRICTIONS
SET FORTH IN (II) ABOVE. ANY OFFER, SALE, PLEDGE OR OTHER DISPOSITION PURSUANT
TO THE FOREGOING CLAUSE (II)(C) AND (D) IS SUBJECT TO THE RIGHT OF THE ISSUER OF
THIS CAPITAL SECURITY AND THE PROPERTY TRUSTEE FOR SUCH CAPITAL SECURITIES TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER
INFORMATION ACCEPTABLE TO THEM IN FORM AND SUBSTANCE. SECURITIES OWNED BY AN
INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN
BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO BELOW.]
[IF THE SECURITY IS SUBJECT TO AN AGREEMENT PROVIDING FOR THE EXCHANGE
ON REGISTRATION PURSUANT TO THE SECURITIES ACT, INSERT --- THE HOLDER OF THIS
CAPITAL SECURITY AND ANY JUNIOR SUBORDINATED DEBENTURES ISSUABLE IN CONNECTION
THEREWITH, IS DEEMED, BY SUCH HOLDER'S ACCEPTANCE OF THIS SECURITY, TO HAVE
AGREED TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, DATED
OF EVEN DATE HEREWITH, AMONG THE ISSUER TRUST, THE DEPOSITOR AND THE PURCHASER
NAMED THEREIN.]
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH PLAN ("PLAN
ASSETS") BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET
ENTITY"), AND NO PERSON INVESTING PLAN ASSETS OF ANY PLAN, MAY ACQUIRE OR HOLD
THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS THE EXEMPTIVE
RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE
EXEMPTION APPLIES TO SUCH PURCHASE AND HOLDING AND HAS COMPLIED WITH ANY REQUEST
BY THE CORPORATION OR THE ISSUER TRUST FOR CONFIRMATION OF THE APPLICABILITY OF
PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 OR, ABSENT SUCH CONFIRMATION, AN OPINION
OF COUNSEL OR OTHER EVIDENCE WITH RESPECT TO THE APPLICABILITY OF ANOTHER
EXEMPTION. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY
INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
HEREOF THAT EITHER (A) IT IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT
PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR
(B) THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14
OR ANOTHER APPLICABLE EXEMPTION APPLIES TO SUCH PURCHASE AND HOLDING.
D-2
<PAGE>
CERTIFICATE NUMBER AGGREGATE LIQUIDATION AMOUNT
P-__ $________
CUSIP NO.__________
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
DPL CAPITAL TRUST I
_____% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)
DPL Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "ISSUER TRUST"), hereby certifies that
_____________________________ (the "HOLDER") is the registered owner of
_________________ (____) capital securities (aggregate Liquidation Amount
____________________ ($________)) of the Issuer Trust representing an undivided
beneficial interest in the assets of the Issuer Trust and designated the _____%
Capital Securities (liquidation amount $25 per Capital Security) (the "CAPITAL
SECURITIES"). The Capital Securities are transferable on the books and records
of the Issuer Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
Section 5.5 of the Trust Agreement (as defined below). The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Issuer Trust, dated as of ________ __, 2000, as the same may be amended from
time to time (the "TRUST AGREEMENT"), among [-] Inc. (the "Corporation"), an
Ohio corporation, as Depositor, [Name], as Property Trustee, [Name], as Delaware
Trustee, and the Administrative Trustees named therein and the holders, from
time to time, of undivided beneficial interests in the assets of the Issuer
Trust, including the designation of the terms of the Capital Securities as set
forth therein. The Holder is entitled to the benefits of the Guarantee
Agreement, dated as of ________ __, 2000 (the "GUARANTEE AGREEMENT"), entered
into by DPL Inc. and [Name], as guarantee trustee, to the extent provided
therein. The Issuer Trust will furnish a copy of the Trust Agreement and the
Guarantee Agreement to the Holder without charge upon written request to the
Issuer Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
D-3
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this _____ day of __________, ____.
DPL Capital Trust I
By:
--------------------------------
Name:
Title: ADMINISTRATIVE TRUSTEE
D-4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to:
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Capital Securities Certificate on the books of the Issuer
Trust. The agent may substitute another to act for him or her.
Date: ________________
Signature:
-------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
D-5
<PAGE>
Exhibit E
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 5.5(b) of the Trust Agreement)
[________________________],
as Security Registrar
[address]
Re: _____% Capital Securities of DPL Capital Trust I
(The "ISSUER TRUST") (The "CAPITAL SECURITIES")
------------------------------------------------------
Reference is made to the Amended and Restated Trust Agreement, dated as
of ________ __, 2000 (the "TRUST AGREEMENT"), among DPL Inc., an Ohio
corporation, as Depositor, [Name], as Property Trustee, [Name], as Delaware
Trustee, and the Administrative Trustees named therein. Terms used herein and
defined in the Trust Agreement or in Regulation S, Rule 144A or Rule 144 under
the U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), are used
herein as so defined.
This certificate relates to $_____________ aggregate Liquidation Amount
of Capital Securities, which are evidenced by the following certificate(s) (the
"SPECIFIED SECURITIES"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
CURRENTLY IN BOOK-ENTRY FORM: _____ Yes _____ No (check one)
The person in whose name this certificate is executed below (the "UNDERSIGNED")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "OWNER".
If the Specified Securities are represented by a Book-Entry Capital` Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Book-Entry Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred to
another person (the "TRANSFEREE"). In connection with such transfer, the Owner
hereby certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected
in accordance with Rule 144A, Rule 904, Rule 144 or another available exemption
<PAGE>
from registration under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as:
(1) RULE 144A TRANSFERS. If the transfer is being effected in accordance with
Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer.
(2) RULE 904 TRANSFERS. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Depositor or the Issuer Trust or any such distributor
or a person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either;
(i) at the time the buy order was originated, the Transferee
was outside the United States or the Owner and any person acting
on its behalf reasonably believed that the Transferee was outside
the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another designated
offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof; and
(E) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(3) RULE 144 TRANSFERS. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
two years (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the date the Specified Securities were acquired from the
Depositor or the Issuer Trust or from
E-2
<PAGE>
an affiliate (as such term is defined in Rule 144) of the Depositor or
the Issuer Trust, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of paragraphs (e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding period of at least
three years has elapsed since the date the Specified Securities were
acquired from the Depositor or the Issuer Trust or from an affiliate
(as such term is defined in Rule 144) of the Depositor or the Issuer
Trust, whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the Depositor or
the Issuer Trust.
(4) OTHER EXEMPTION FROM REGISTRATION. If the transfer is being
effected pursuant to an available exemption from registration under the
Securities Act other than (1), (2) and (3) above:
(A) either (i) the Owner is a "qualified institutional buyer"
within the meaning of Rule 144A or (ii) the Owner did not acquire the
Specified Securities from the Purchaser when such Capital Securities
were initially issued; and
(B) State basis for such other available exemption:______________
______________________________________________________________________
____________________________.
E-3
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Issuer Trust and the Purchaser.
Dated:
----------------------------------------------------------
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
--------------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
E-4
<PAGE>
DPL CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------
<S> <C>
(Section) 310 (a)(1)............................................ 8.7
(a)(2)............................................ 8.7
(a)(3)............................................ 8.9
(a)(4)............................................ 2.7(a)(ii)
(b)............................................... 8.8
(Section) 311 (a................................................ 8.13
(b)............................................... 8.14
(Section) 312 (a)............................................... 5.8
(b)............................................... 5.8
(c)............................................... 5.8
(Section) 313 (a)............................................... 8.15(a)
(a)(4)............................................ 8.15(b)
(b)............................................... 8.15(b)
(c)............................................... 10.8
(d)............................................... 8.15(c)
(Section) 314 (a)............................................... 8.16
(b)............................................... Not Applicable
(c)(1)............................................ 8.17
(c)(2)............................................ 8.17
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 1.1, 8.17
(Section) 315 (a)............................................... 8.1(a), 8.3(a)
(b)............................................... 8.2, 10.9
(c)............................................... 8.1(a)
(d)............................................... 8.1, 8.3
(e)............................................... Not Applicable
(Section) 316 (a)............................................... Not Applicable
(a)(1)(A)......................................... Not Applicable
(a)(1)(B)......................................... Not Applicable
(a)(2)............................................ Not Applicable
(b)............................................... 5.13
(c)............................................... 6.7
<PAGE>
(Section) 317 (a)(1)............................................ Not Applicable
(a)(2)............................................ Not Applicable
(b)............................................... 5.10
(Section) 318 (a)............................................... 10.10
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
<PAGE>
EXHIBIT G
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
DPL INC.,
DPL CAPITAL TRUST I,
DAYTON VENTURES LLC
AND
DAYTON VENTURES, INC.,
DATED AS OF __________ ___, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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..............................................24
ARTICLE VI REGISTRATION PROCEDURES.....................................................24
SECTION 6.1 Registration Procedures...............................................24
SECTION 6.2 Information Supplied..................................................27
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.............................................31
- i -
<PAGE>
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...........................................................34
SECTION 8.3 Amendments and Waivers................................................35
SECTION 8.4 Successors, Assigns, Transferees and Third Party Beneficiaries........35
SECTION 8.5 Notices...............................................................35
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.....................36
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....................................37
</TABLE>
- ii -
<PAGE>
SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT
THIS SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT") is entered into as of __________ ___, 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 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:
<PAGE>
2
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).
"ADVERSE 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 OWNER" 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.
"CLAIMS" has the meaning assigned to such term in Section 6.4(a).
<PAGE>
3
"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.
"DP&L BOARD" means the Board of Directors of DP&L.
<PAGE>
4
"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).
"KKR REPRESENTATIVE" means any Director designated by the senior
member of the Equity Purchaser pursuant to Section 2.1 of this Agreement.
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5
"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 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
<PAGE>
6
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).
"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,
<PAGE>
7
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.
<PAGE>
8
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 any one 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. 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
<PAGE>
9
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.
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.
<PAGE>
10
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 or 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 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,
<PAGE>
11
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 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. 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) 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
<PAGE>
12
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.
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.
<PAGE>
13
(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.
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
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14
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
Pruchaser 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.
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 66 2/3% 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.
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15
(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 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.
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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
<PAGE>
17
intended method thereof as aforesaid) of the Company Registrable
Securities so to be registered.
(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
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18
Holders, such registration requested pursuant to this Section 4.2 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 Demand Party or other Holders.
(f) 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
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19
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 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
<PAGE>
20
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.
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
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21
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 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.
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(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 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
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23
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 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
<PAGE>
24
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.
(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 5.1(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.
<PAGE>
25
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:
(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;
<PAGE>
26
(e) use its commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such 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
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
<PAGE>
27
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 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
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28
(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 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
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29
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 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
<PAGE>
30
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
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 30-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 fact or 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
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31
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 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
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32
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 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
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33
(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:
(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
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34
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
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 indemnify 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 incurred 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
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35
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;
(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
<PAGE>
36
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 (1)
Business Day after deposit 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. It 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.
<PAGE>
37
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 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).
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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.
By:
------------------------------------
Name:
Title:
DPL CAPITAL TRUST I
By:
------------------------------------
Name:
Title:
DAYTON VENTURES LLC
By:
------------------------------------
Name:
Title:
DAYTON VENTURES, INC.
By:
------------------------------------
Name:
Title:
