ALPHA NATURAL RESOURCES, INC. AMENDED AND RESTATED STOCKHOLDER AGREEMENT

 

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                                                                    Exhibit 10.5

 

                          ALPHA NATURAL RESOURCES, INC.

 

                   AMENDED AND RESTATED STOCKHOLDER AGREEMENT

 

     This Amended and Restated Stockholder Agreement (this "Agreement") is made

and entered into effective as of October 26, 2005 (the "Effective Date") by and

among (i) Alpha Natural Resources, Inc., a Delaware corporation (the "Company"),

(ii) ANR Fund IX Holdings, L.P., a Delaware limited partnership, and First

Reserve Fund IX, L.P., a Delaware limited partnership (the "FRC Parties"), (iii)

Vollow Resources LLC, a West Virginia limited liability company, Redbank, Inc.,

a West Virginia corporation, REI, Inc., a West Virginia corporation, Still Run

Coal Company, Inc., a West Virginia corporation, Creekside Energy Development

Company, a West Virginia corporation ("Creekside"), Newhall Pocahontas Energy,

Inc., a West Virginia corporation, SCM, Inc., a West Virginia corporation,

Tanoma Energy, Inc., a Pennsylvania corporation, Madison Mining Company, LLC, a

Pennsylvania limited liability company, Laurel Energy, L.P., a Pennsylvania

limited partnership, Laurel Resources, L.P., a Pennsylvania limited partnership,

I-22 Processing, Inc., a Pennsylvania corporation, Dunamis Resources, Inc., a

Pennsylvania corporation, Beta Resources, LLC, a Colorado limited liability

company, and RRD, Inc., a West Virginia corporation, (collectively, the "AMCI

Parties"), (iv) Madison Capital Funding LLC, a Delaware limited liability

company ("Madison"), (v) the individuals listed on Schedule 1 attached to this

Agreement (the "Nicewonder Parties") and (vi) the employees of the Company or

its subsidiaries listed on Schedule 2 attached to this Agreement (the "Employee

Stockholders"). Together, the FRC Parties, the AMCI Parties and Madison are

collectively referred to as the "Investors." The Employee Stockholders, the

Nicewonder Parties and the Investors are collectively referred to in this

Agreement as the "Stockholders."

 

                                     RECITALS

 

     A. The Company, the FRC Parties, the AMCI Parties, Madison and the Employee

Stockholders entered into that certain Stockholder Agreement dated as of

February 11, 2005, as amended by that certain Amendment to Section 3.1 of

Stockholder Agreement dated August 12, 2005 between Hans J. Mende in his

capacity as the AMCI Representative and First Reserve Fund IX, L.P. in its

capacity as the FRC Representative (as amended, the "Original Agreement"), in

order to set forth certain understandings with respect to their holdings of the

Company's Common Stock, par value $0.01 per share (the "Common Stock").

 

     B. In connection with the Company's acquisition of White Flame Energy, Inc.

(the "Nicewonder Acquisition"), the Company has issued shares of Common Stock to

the Nicewonder Parties on the Effective Date, and the Company has agreed to

cause the Original Agreement to be amended and restated as set forth herein.

 

 

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     C. The number of shares of the Company's capital stock held by each

Stockholder as of the Effective Date, including shares of Common Stock issued to

the Nicewonder Parties at the closing of the Nicewonder Acquisition, are set

forth on Exhibit A. A true and correct copy of the Company's Certificate of

Incorporation and Bylaws, each as amended through the Effective Date, are

attached as Exhibits B and C, respectively.

 

     D. The undersigned parties to the Original Agreement include "Stockholders"

(as defined in the Original Agreement) holding not less than a majority of the

outstanding shares of Common Stock held by all "Stockholders" (as defined in the

Original Agreement), including both the FRC Parties and the AMCI Parties, which

parties have the right to amend and restate the Original Agreement pursuant to

Section 3.3(a) to read as set forth herein.

 

     NOW, THEREFORE, in consideration of the foregoing recitals, the mutual

promises hereinafter set forth, and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties hereto

agree as follows:

 

1.    ELECTION OF DIRECTORS AND RESTRICTED ACTIONS.

 

     1.1   Election of Directors.

 

          (a) Board Composition. The AMCI Parties, the FRC Parties and the

Company to the fullest extent permitted by law, agree to take all necessary

action, including the voting of shares or the taking of action by written

consent, to implement the following composition of the Board of Directors of the

Company (the "Board"). The Board shall be comprised initially of eight

individuals who shall be natural persons. One such individual shall be the

Company's Chief Executive Officer, who shall initially be Michael J. Quillen.

Subject to Section 1.1(b), the FRC Parties shall be entitled to nominate two

individuals to serve on the Board, who shall initially be William E. Macaulay

and Alex T. Krueger. Subject to Section 1.1(b), the AMCI Parties shall be

entitled to nominate two individuals to serve on the Board, who shall initially

be Fritz R. Kundrun and Hans J. Mende. Three individuals, who shall be

"independent" as such term is defined in Section 303A of the NYSE Listed Company

Manual, and reasonably acceptable to the FRC Parties and the AMCI Parties, shall

be appointed to the Board, who shall initially be E. Linn Draper, Jr., Glenn A.

Eisenberg and John W. Fox, Jr. The FRC Parties, on the one hand, and the AMCI

Parties, on the other hand, shall, when acting in this capacity, each be

referred to as a "Board Group." The Board may adjust from time to time by

resolution the number of directors comprising the Board.

 

          (b) Qualifying Board Group. At such time as either the FRC Parties and

their Affiliates (as defined below), on the one hand, or the AMCI Parties and

their Affiliates, on the other hand, no longer own at least 15% of the

outstanding shares of Common Stock, such Board Group shall be entitled to

designate only one individual to serve on the Board, and such Board Group shall

upon the Company's request on behalf of the Board use its best efforts to cause

one of its designated directors to resign or to be removed from the Board. At

such time as either the FRC Parties and their Affiliates (as defined below), on

the one hand, or the AMCI Parties and their Affiliates, on the other hand, no

longer own at least 7.5% of the outstanding shares of Common Stock, such Board

Group shall no longer be entitled to designate any individuals to serve on the

Board, and such Board Group shall upon the Company's request on behalf of the

 

 

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Board use its best efforts to cause its designated director to resign or to be

removed from the Board. For purposes of this Agreement, an "Affiliate" is any

Person that directly or indirectly through one or more intermediaries controls

or is controlled by or is under common control with the specified Person. As

used in this definition of "Affiliate," the term "control" means the possession,

directly or indirectly, of the power to direct or cause the direction of the

management and policies of a Person, whether through the ownership of voting

securities, by contract, or otherwise, and as used in this Agreement the term

"Person" means any individual, corporation, association, partnership, limited

liability company, joint venture, trust, estate or other entity or organization.

 

          (c) Reduction of Board. To the extent that either Board Group loses

the right to designate Directors pursuant to the provisions of Section 1.1(b),

the Board will take such action as may be required so as to reduce the size of

the Board.

 

          (d) Expanded Board. From time to time as may be required by applicable

federal and state securities laws, the Board shall be expanded to include such

additional "independent" directors as may be required by the rules of any

exchange on which the shares of the Company's capital stock are traded. Such

independent directors shall be selected by the Board and shall be reasonably

acceptable to both the FRC Parties' Board Group (so long as such Board Group is

entitled to designate any individuals to serve on the Board pursuant to Section

1.1(b) above (a "Qualifying Board Group")) and the AMCI Parties' Board Group (so

long as it is a Qualifying Board Group).

 

          (e) Chairman. A Chairman of the Board (the "Chairman") may, from time

to time, be appointed by the Directors from among themselves. The Chairman of

the initial Board shall be Hans J. Mende. The Chairman, if appointed, will

preside over meetings of the Board.

 

          (f) Voting. Each Director, including the Chairman, shall have a single

vote. Any vote, consent or other action of the Board may be undertaken with the

unanimous written consent (in lieu of meeting) of the Directors, in each case

who have been appointed and who are then in office.

 

           (g) Removal and Replacement. Each Board Group shall be entitled at any

time (with or without cause) to cause any or all of the Directors designated by

such Board Group pursuant to Section 1.1(a) to be removed from the Board. Except

as otherwise provided by applicable law, a Director may be removed only by a

Board Group that designated such Director to the Board. In the event that a

vacancy is created at any time by the death, disability, retirement, resignation

or removal (with or without cause) of any Director, or, if prior to his or her

appointment to the Board, any Director-designee of a Board Group indicates that

he or she is unwilling or unable to serve as a Director, then (i) the Board

Group that had appointed such Director (or designee) shall cause the vacancy

created thereby to be filled by an appropriate individual as soon as reasonably

practicable and (ii) the Board shall not take any material action over the

objection of such Board Group with a pending vacancy on the Board without such

Board Group's consent until a replacement Director has been appointed by the

appropriate Board Group pursuant to clause (i) of this sentence and elected to

the Board.

 

 

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          (h) Board Committees. The Board of Directors may, by resolution passed

by a majority of the whole Board of Directors, designate one or more committees,

including but not limited to an audit committee, a compensation committee, and a

nominating and governance committee, each such committee to consist of one or

more of the directors of the Company.

 

     1.2 VCOC. In the event that the Company ceases to qualify as an "operating

company" (as defined in the first sentence of 29 C.F.R. Section 2510.3-101(c)),

then the Company will cooperate in good faith to take all reasonable action

necessary to provide that the investment (or at least 51% of the investment

valued at cost) of each Stockholder that qualifies as a "venture capital

operating company" (as defined in 29 C.F.R. Section 2510.3-101(d)) (a "VCOC

Stockholder") shall continue to qualify as a "venture capital investment" (as

defined in 29 C.F.R. Section 2510.3-101(d)).

 

     1.3 Stockholder Action. For as long as either the FRC Parties' Board Group

or the AMCI Parties' Board Group constitutes a Qualifying Board Group, then

except as required by law, the AMCI Parties shall be obligated to vote all of

the Common Stock held by such Persons in favor of any individual designated to

serve as Director pursuant to Section 1.1(a). For so long as the AMCI Parties'

Board Group constitutes a Qualifying Board Group, then except as required by

law, the FRC Parties shall be obligated to vote all of the Common Stock held by

such Person in favor of any individual designated to serve as Director pursuant

to Section 1.1(a).

 

2.    REGISTRATION RIGHTS.

 

     2.1 Definitions. For purposes of this Section 2:

 

          (a) Demand Right Holder. The term "Demand Right Holder" means the FRC

Parties as a group and the AMCI Parties as a group; provided that a Demand Right

Holder shall cease to be a Demand Right Holder at such time as it holds in the

aggregate less than 10% of the Registrable Securities Then Outstanding.

 

          (b) Holder. The term "Holder" means any Stockholder owning of record

Registrable Securities or any permitted assignee of record of such Registrable

Securities to whom rights under this Section 2 have been duly assigned in

accordance with this Agreement.

 

          (c) Initial Public Offering. The term "Initial Public Offering" means

the Company's first underwritten public offering of Common Stock pursuant to the

Company's registration statement under the Securities Act of 1933, as amended,

on Form S-1 (file no. 333-121002).

 

          (d) Majority Holder(s). The term "Majority Holder(s)" means Holders

holding a majority of Registrable Securities held by all Holders requesting

inclusion in a registration.

 

          (e) Registration. The terms "register," "registered," and

"registration" refer to a registration effected by preparing and filing a

registration statement in compliance with the Securities Act of 1933, as amended

(the "Securities Act"), and the declaration or ordering of effectiveness of such

registration statement.

 

 

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          (f) Registrable Securities. The term "Registrable Securities" means

all shares of Common Stock now owned or hereinafter acquired by a Stockholder

and any equity of the Company or other entity acquired in exchange for shares of

Common Stock. Notwithstanding the foregoing, "Registrable Securities" shall

exclude any Registrable Securities sold by a Person in a transaction in which

rights under this Section 2 are not assigned in accordance with this Agreement

and any Registrable Securities sold in a public offering, whether sold pursuant

to Rule 144 promulgated under the Securities Act, or in a registered offering,

or otherwise.

 

          (g) Registrable Securities Then Outstanding. The "Registrable

Securities Then Outstanding" shall mean the shares of Common Stock that are

Registrable Securities and (i) are then issued and outstanding or (ii) are then

issuable pursuant to an exercise or conversion of securities exercisable for, or

convertible into, Common Stock.

 

          (h) SEC. The term "SEC" means the U.S. Securities and Exchange

Commission.

 

     2.2 Demand Registration.

 

          (a) Request by Demand Right Holder. If the Company has previously

effected the registration of a class of its equity securities under the

Securities Act and shall receive a written request (a "Demand Notice") from a

Demand Right Holder that the Company file a registration statement under the

Securities Act covering the registration of Registrable Securities pursuant to

this Section 2.2(a), then the Company shall, within ten (10) business days of

the receipt of a Demand Notice, give written notice of such request (the

"Request Notice") to all Holders and, in addition to complying with its

obligations under Section 2.3, shall use its best efforts to effect, as soon as

practicable, the registration under the Securities Act of all Registrable

Securities that the Demand Right Holder requests to be registered in the Demand

Notice, subject only to the limitations of this Section 2.2 and the rights of

other Holders pursuant to Section 2.3; provided that the Company shall not be

obligated to effect any such registration if the Company has, within the six (6)

month period preceding the date of such request, already effected a registration

under the Securities Act pursuant to (i) this Section 2.2(a) or (ii) Section 2.3

in which the Demand Right Holder participated, other than a registration from

which all or a portion of the Registrable Securities of the Demand Right Holder

were excluded pursuant to the provisions of Section 2.3(b).

 

          (b) Underwriting. If a Demand Right Holder intends to distribute the

Registrable Securities covered by its request by means of an underwritten

offering, then it shall so advise the Company as a part of the Demand Notice,

and the Company shall include such information in the Request Notice. In such

event, the right of any Holder to include his, her or its Registrable Securities

in such registration pursuant to the rights set forth in Section 2.3 shall be

conditioned upon such Holder's participation in such underwriting and the

inclusion of such Holder's Registrable Securities in the underwriting as

provided in this Agreement (unless otherwise mutually agreed by such Holder and

the Majority Holder(s)). The Company and all Holders proposing to distribute

their securities through such underwriting shall enter into an underwriting

agreement in customary form with the managing underwriter or underwriters

selected for such underwriting by the Majority Holder(s). All Holders, whether

or not they are participating in such offering, and the Company agree not to

effect any sale, transfer, assignment,

 

 

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pledge or conveyance of (including, without limitation, taking any short

position in) Registrable Securities (or any securities of the Company

exchangeable or convertible into Registrable Securities) during the 180-day

period beginning on the effective date of a registration statement filed by the

Company pursuant to this Section 2.2, except as part of that Registration, (or

for such (i) shorter period as the sole or lead managing underwriter shall

request or (ii) longer period as the sole underwriter or lead managing

underwriter(s) may request in connection with New York Stock Exchange ("NYSE")

or National Association of Securities Dealers, Inc. ("NASD") rules restricting

the timing of the underwriters publishing or distributing research reports on

the Company) (the "Lock-up Period"); provided, however, that, with respect to

offerings other than the Company's Initial Public Offering, Holders who

beneficially own less than 1% of the Registrable Securities Then Outstanding

shall not be subject to the Lock-up Period unless so required by the managing

underwriter and, in such case, the Lock-up Period shall be reduced to a 90-day

period beginning on the effective date of such registration statement (or such

longer period as the sole underwriter or lead managing underwriter(s) may

request in connection with the requirements of applicable NYSE or NASD rules).

Each Holder agrees to enter into customary lock-up agreements with an

underwriter consistent with the terms of the preceding sentence. Notwithstanding

any other provision of this Section 2.2 or Section 2.3, if the managing

underwriter(s) determine in good faith that marketing factors require a

limitation of the number of securities to be underwritten, the Company shall so

advise all Holders of Registrable Securities that would otherwise be registered

and underwritten pursuant hereto, and the managing underwriter(s) may exclude

shares of the Registrable Securities as necessary from the registration and the

underwriting, with the number of shares to be included in the registration and

the underwriting allocated in the following manner: first, to the Investors

requesting inclusion of their Registrable Securities in such registration

statement (whether pursuant to Sections 2.2(a), 2.2(b) or 2.3), on a pro rata

basis, based on the total number of Registrable Securities then held by each

such Investor; second, to the Company; and third, to each of the Employee

Stockholders and Nicewonder Parties requesting inclusion of Registrable

Securities in such registration statement pursuant to Section 2.3, on a pro rata

basis, based on the total number of Registrable Securities then held by each

such Employee Stockholder and Nicewonder Party. No other Registrable Securities

may be included (other than by the Company or by the Holders pursuant to Section

2.3) without the consent of the Majority Holder(s). If, as a result of any

reduction or limitation at the request of an underwriter, a registration

effected pursuant to this Section 2.2 does not include at least 80% of the

Registrable Securities that the Holders requested to be registered in the Demand

Notice, such registration shall not constitute a demand for purposes of Section

2.2(d). For any Holder that is a partnership, the Holder and the partners and

retired partners of such Holder, or the estates and family members of any such

partners and retired partners and any trusts for the benefit of any of the

foregoing Persons, and for any Holder that is a corporation, the Holder and all

corporations that are Affiliates of such Holder, shall be deemed to be a single

"Holder," and any pro rata reduction with respect to such "Holder" shall be

based upon the aggregate amount of Registrable Securities owned by all entities

and individuals included in such "Holder," as defined in this sentence.

 

          (c) Shelf Registration. If the Company is eligible to register the

resale of Registrable Securities by Holders on Form S-3, then any registration

under Section 2.2(a) shall, if requested in the Demand Notice, be effected on

Form S-3 pursuant to Rule 415 under the Act (or its successor) on a continuous

basis for the period requested (a "Shelf Registration"). In the event of such a

Shelf Registration, the Company shall be entitled to require that a Holder or

 

 

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Holders refrain from effecting any public sales or distributions of Registrable

Securities pursuant to a registration statement, if the Board reasonably

determines that such public sales or distributions would interfere in any

material respect with any transaction involving the Company that the Board

reasonably determines to be material to the Company. The Board shall, as

promptly as practicable, give the Holders written notice of any such

development. In the event of a request by the Board that Holders refrain from

effecting any public sales or distributions of Registrable Securities, the

Company shall be required to lift such restrictions regarding effecting public

sales or distributions of Registrable Securities as soon as reasonably

practicable after the Board shall reasonably determine public sales or

distributions by Holders shall not interfere with such transaction, provided,

that in no event shall any requirement that Holders refrain from effecting

public sales or distributions of Registrable Securities extend for more than 90

days in any twelve month period.

 

          (d) Maximum Number of Demand Registrations. The Company shall be

obligated to effect only two (2) such registrations pursuant to Section 2.2(a)

on behalf of each Demand Right Holder, both of which may be a Shelf

Registration; provided that each of such registrations shall involve the offer

and sale of Registrable Securities in an amount estimated by the Demand Right

Holder in good faith to result in net proceeds to such Demand Right Holder of

not less than $75,000,000. A Registration shall be effected for purposes of this

Section 2.2(d) when and if a registration statement is declared effective by the

SEC and the distribution of securities thereunder has been completed without the

occurrence of any stop order or proceeding relating thereto suspending the

effectiveness of the Registration.

 

          (e) Deferral. Notwithstanding the foregoing, if the Company shall

furnish to the requesting Holders a certificate signed by the President or Chief

Executive Officer of the Company stating that, in the good faith judgment of the

Board, it would be materially detrimental to the Company and its stockholders

for such registration statement to be filed, then the Company shall have the

right to defer such filing for a period of not more than ninety (90) days after

receipt of the request of the Holders pursuant to Section 2.2(a) or 2.2(b), as

the case may be; provided, however, that the Company may not utilize this right

more than once in any twelve (12) month period.

 

          (f) Expenses. All expenses incurred in connection with any

registration pursuant to this Section 2.2, including without limitation all

federal and "blue sky" registration, filing and qualification fees, printer's

and accounting fees, fees and disbursements of counsel for the Company, and fees

and expenses of one counsel for the Holders (selected by the Majority Holder(s))

shall be borne by the Company. Each Holder participating in a registration

pursuant to this Section 2.2 shall bear such Holder's proportionate share (based

on the total number of Registrable Securities sold in such registration other

than for the account of the Company) of all discounts, commissions or other

amounts payable to underwriters or brokers in connection with such offering by

the Holders. Notwithstanding the foregoing, the Company shall not be required to

pay for any expenses of any registration proceeding begun pursuant to this

Section 2.2 if the registration request is subsequently withdrawn at the request

of the Majority Holder(s), unless the Majority Holder(s) agrees that such

registration constitutes the use by it of one (1) demand registration pursuant

to this Section 2.2(a) or Section 2.2(b), respectively; provided, however, that

if at the time of such withdrawal, such Majority Holder(s) has learned of a

material adverse change in the condition, business, or prospects of the Company

not known to such Majority

 

 

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Holder(s) at the time of its request for such registration and has withdrawn its

request for registration with reasonable promptness after learning of such

material adverse change, then the Company shall be required to pay all such

expenses and such registration shall not constitute the use of a demand

registration pursuant to this Section 2.2.

 

     2.3   Piggyback Registrations.

 

          (a) The Company shall promptly notify all Holders in writing (a

"Piggyback Notice") prior to filing any registration statement under the

Securities Act for purposes of effecting an offering of securities of the

Company (including, but not limited to, registration statements relating to the

initial or secondary public offerings of securities of the Company, whether

pursuant to Section 2.2 or otherwise, but excluding registration statements

relating to any employee benefit plan or a corporate reorganization) and subject

to Section 2.3(b), the Company will afford each such Holder an opportunity to

include in such registration statement all or any part of the Registrable

Securities then held by such Holder. Each Holder desiring to include in any such

registration statement all or any part of the Registrable Securities held by

such Holder shall within ten (10) days after receipt of the Piggyback Notice so

notify the Company in writing, and in such notice shall inform the Company of

the number of Registrable Securities such Holder wishes to include in such

registration statement. If a Holder decides not to include all of its

Registrable Securities in any such registration statement, such Holder shall

nevertheless continue to have the right to include any Registrable Securities in

any subsequent registration statement or registration statements as may be filed

by the Company with respect to offerings of its securities, all upon the terms

and conditions set forth in this Agreement.

 

          (b) Underwriting. If a registration statement referred to in the

Piggyback Notice is for an underwritten offering, then the Company shall so

advise the Holders. In such event, the right of any such Holder to include

Registrable Securities in such a Registration shall be conditioned upon such

Holder's participation in such underwriting and the inclusion of such Holder's

Registrable Securities in the underwriting as provided in this Agreement. All

Holders proposing to distribute their Registrable Securities through such

underwriting shall enter into an underwriting agreement in customary form with

the managing underwriter or underwriters selected by the Company for such

underwriting. With respect to the Company's Initial Public Offering or any other

offering in which the Company, the AMCI Parties, and/or the FRC Parties are

selling securities pursuant to a registration statement requiring notice to

Holders of Registrable Securities under this Section 2.3, all Holders, whether

or not they are participating in such offering, hereby agree not to effect any

sale, transfer, assignment, pledge or conveyance of (including, without

limitation, taking any short position in) Registrable Securities (or any

securities of the Company exchangeable or convertible into Registrable

Securities) during the Lock-up Period beginning on the effective date of such

registration statement filed by the Company, except as part of that

registration; provided, however, that, with respect to offerings other than the

Company's Initial Public Offering, Holders who beneficially own less than 1% of

the Registrable Securities Then Outstanding shall not be subject to the Lock-up

Period unless so required by the managing underwriter and, in such case, the

Lock-up Period shall be reduced to a 90-day period beginning on the effective

date of such registration statement (or such longer period as the sole

underwriter or lead managing underwriter(s) may request in connection with the

requirements of applicable NYSE or NASD rules). Each Holder agrees to enter into

customary lock-up agreements with an underwriter consistent with the terms of

the preceding

 

 

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sentence. Notwithstanding any other provision of this Agreement, if the managing

underwriter(s) determine(s) in good faith that marketing factors require a

limitation of the number of shares to be underwritten, then the Company shall so

advise all Holders of Registrable Securities that would otherwise be registered

and underwritten pursuant hereto, and the managing underwriter(s) may exclude

shares of the Registrable Securities from the registration and the underwriting,

and the number of shares that will be included in the registration and the

underwriting shall be allocated as set forth in Section 2.2, or, if the

underwriting is not pursuant to Section 2.2, first to the Company, and second,

to each of the Holders requesting inclusion of their Registrable Securities in

such registration statement on a pro rata basis based on the total number of

Registrable Securities then held by each such Holder. If any Holder disapproves

of the terms of any such underwriting, such Holder may elect to withdraw

therefrom by written notice to the Company and the underwriter(s), delivered at

least ten (10) business days prior to the effective date of the registration

statement. Any Registrable Securities excluded or withdrawn from such

underwriting shall be excluded and withdrawn from the registration. The defined

term "Holder" shall be construed for purposes of this Section 2.3(b) in the same

manner as set forth in the last sentence of Section 2.2(b).

 

          (c) Expenses. All expenses incurred in connection with a registration

pursuant to this Section 2.3 (excluding underwriters' and brokers' discounts and

commissions relating to shares sold by the Holders), including, without

limitation all federal and "blue sky" registration, filing and qualification

fees, printers' and accounting fees, fees and disbursements of counsel for

Holders (selected by the Majority Holder(s)), and fees and disbursements of

counsel for the Company, shall be borne by the Company. Each Holder

participating in a registration pursuant to this Section 2.3 shall bear such

Holder's proportionate share (based on the total number of shares sold in such

registration other than for the account of the Company) of all discounts,

commissions or other amounts payable to underwriters or brokers in connection

with such offering by the Holders.

 

          (d) Not Demand Registration. Registration pursuant to this Section 2.3

shall not be deemed to be a demand registration as described in Section 2.2,

unless the participating Holders holding a majority of Registrable Securities

being registered specifically elect otherwise in writing. Except as otherwise

provided in this Agreement, there shall be no limit on the number of times the

Holders may request registration of Registrable Securities under this Section

2.3.

 

          (e) Withdrawal Right. Notwithstanding any provision contained in this

Section 2.3 to the contrary, the Company shall have the right to terminate or

withdraw any registration statement initiated by it (other than in response to a

Demand Notice under Section 2.2) prior to the effectiveness of such registration

statement whether or not any Holder has elected to include his, her or its

Registrable Securities in such registration statement.

 

          (f) Shelf Registrations. In the event the registration pursuant to

this Section 2.3 is a Shelf Registration, the Holders requesting inclusion in

such registration pursuant to Section 2.3(a) shall comply with the provisions of

Section 2.2(c).

 

 

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     2.4 Obligations of the Company. Whenever required to effect the

registration of any Registrable Securities under this Agreement the Company

shall, as expeditiously as reasonably possible:

 

          (a) Registration Statement. Subject to the requirements of Section

2.2(e), prepare and file with the SEC a registration statement with respect to

such Registrable Securities and use its best efforts to cause such registration

statement to become effective and to keep any such registration statement

effective for so long as required by the Securities Act to complete the

distribution.

 

          (b) Amendments and Supplements. Prepare and file with the SEC such

amendments and supplements to such registration statement and the prospectus

used in connection with such registration statement as may be necessary to

comply with the provisions of the Securities Act with respect to the disposition

of all securities covered by such registration statement.

 

          (c) Prospectuses. Furnish to the Holders such number of copies of a

prospectus, including a preliminary prospectus, in conformity with the

requirements of the Securities Act, and such other documents as they may

reasonably request in order to facilitate the disposition of the Registrable

Securities owned by them that are included in such registration.

 

          (d) Blue Sky. Use its best efforts to register and qualify the

securities covered by such registration statement under such other securities or

Blue Sky laws of such jurisdictions as shall be reasonably requested by the

Majority Holder(s); provided that the Company shall not be required in

connection therewith or as a condition thereto to qualify to do business or to

file a general consent to service of process in any such states or

jurisdictions.

 

          (e) Underwriting. In the event of any underwritten public offering,

enter into and perform its obligations under an underwriting agreement in usual

and customary form (including indemnification provisions), with the managing

underwriter(s) of such offering. Each Holder participating in such underwriting

shall also enter into and perform its obligations under such an agreement.

 

          (f) Notification. Notify each Holder of 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 the happening of any event

as a result of which the prospectus included in such registration statement, as

then in effect, includes an untrue statement of a material fact o