EXHIBIT 10.8
--------------------------------------------------------------------------------
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
by and among
National Coal Corp., as Issuer and Seller
and
the parties named herein, as Purchasers
with respect to Seller's
Series A Cumulative Convertible Preferred Stock
and Warrants to Purchase Common Stock
August 31, 2004
--------------------------------------------------------------------------------
TABLE OF EXHIBITS AND SCHEDULES
Exhibit A Form of Articles of Amendment of the Articles of Incorportion
Exhibit B Form of Common Stock Purchase Warrant
Exhibit C Form of Investor Rights Agreement
Exhibit D Form of Opinion of Seller's Counsel
Exhibit E Form of Closing Escrow Agreement
Exhibit F Form of Management Lock-Up Agreement
Exhibit G Form of Subscription Notice
Exhibit H Form of Transfer Notice
Schedule 1 Purchasers and Shares of Preferred Stock Purchased
Schedule 2 Purchasers and Restricted Stock to be Purchased
Schedule 3 Disclosure Schedules
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (the "AGREEMENT") dated
as of August 31, 2004, by and among National Coal Corp., a Florida corporation
(the "SELLER"), and each of the persons listed on SCHEDULE 1 hereto (each is
individually referred to as a "PURCHASER" and collectively, the "PURCHASERS").
RECITALS:
WHEREAS, each of the Purchasers is willing to purchase from the Seller,
and the Seller desires to sell to the Purchasers, up to an aggregate of 1,611
shares of its Series A Cumulative Convertible Preferred Stock, $15,000
liquidation preference per share, par value $0.0001 per share (the "PREFERRED
STOCK") convertible into the Seller's common stock, $0.0001 par value (the
"COMMON STOCK") and Common Stock Purchase Warrants (the "WARRANTS") entitling
the holders thereof to purchase shares of Common Stock, in each case, as more
fully set forth herein.
NOW THEREFORE, in consideration of the mutual promises and
representations, warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I - PURCHASE AND SALE
1.1 PURCHASE AND SALE.
(a) On the terms and subject to the conditions set forth in this
Agreement, at the Closing (as defined in Section 2.2), the Seller will sell and
each of the Purchasers will purchase the Preferred Stock in the amounts set
forth on SCHEDULE 1 hereto at a price of $15,000 per share of Preferred Stock.
In addition, the Seller will sell and each Purchaser will purchase at the
Closing Warrants to purchase the number of shares of Common Stock set forth on
SCHEDULE 1 hereto.
(b) The shares of Common Stock issuable upon conversion of the
Preferred Stock are referred to herein as the "CONVERSION SHARES" and the shares
of Common Stock issuable upon exercise of the Warrants are referred to herein as
the "WARRANT SHARES".
1.2 TERMS OF THE PREFERRED STOCK AND WARRANTS. The terms and
provisions of the Preferred Stock are set forth in the form of Articles of
Amendment to the Articles of Incorporation providing for the designation,
powers, rights and preferences of Series A Cumulative Convertible Preferred
Stock, attached hereto as EXHIBIT A (the "ARTICLES OF AMENDMENT"). The terms and
provisions of the Warrants are more fully set forth in the form of Common Stock
Purchase Warrant, attached hereto as EXHIBIT B.
1.3 TRANSFERS; LEGENDS.
(a) (i) Except as required by federal securities laws and the
securities law of any state or other jurisdictions, the Preferred Stock,
Conversion Shares, Warrants and Warrant Shares (collectively, the "Securities")
may be transferred, in whole or in part, by any of the Purchasers at any time.
In the case of Preferred Stock, such transfer may be effected by delivering
written transfer instructions to the Seller, and the Seller shall reflect such
transfer on its books and records and reissue certificates evidencing the
Preferred Stock upon surrender of certificates
1
evidencing the Preferred Stock being transferred. Any such transfer
shall be made by a Purchaser in accordance with applicable law. Any transferee
shall agree to be bound by the terms of the Investor Rights Agreement and this
Agreement. The Seller shall reissue certificates evidencing the Securities upon
surrender of certificates evidencing the Securities being transferred in
accordance with this Section 1.3(a).
(ii) In connection with any transfer of Securities other than
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "SECURITIES ACT"), or to the Seller, the Seller may
require the transferor thereof to furnish to the Seller an opinion of counsel
selected by the transferor, such counsel and the form and substance of which
opinion shall be reasonably satisfactory to the Seller and Seller's counsel, to
the effect that such transfer does not require registration under the Securities
Act; PROVIDED, HOWEVER, that in the case of a transfer pursuant to Rule 144
under the Securities Act, no opinion shall be required if the transferor
provides the Seller with a customary seller's representation letter, and if such
sale is not pursuant to subsection (k) of Rule 144, a customary broker's
representation letter and Form 144.
Notwithstanding the foregoing, the Seller hereby consents to and agrees to
register on the books of the Seller and with any transfer agent for the
securities of the Seller, without any such legal opinion, any transfer of
Securities by a Purchaser to an Affiliate of such Purchaser, provided that the
transferee certifies to the Seller that it is an "ACCREDITED INVESTOR" as
defined in Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes (subject to the qualifications hereof)
and not with a view to, or for, resale, distribution or fractionalization
thereof in whole or in part in violation of the Securities Act.
(iii) An "AFFILIATE" means any Person (as such term is defined
below) that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Purchaser will be
deemed to be an Affiliate of such Purchaser. A "PERSON" means any individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision of any thereof) or other entity of any kind.
(b) The certificates representing the Preferred Stock shall bear the
following legend:
"THE SHARES REPRESENTED BY, OR ISSUABLE UPON CONVERSION OR EXERCISE OF
SECURITIES EVIDENCED BY, THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT UNLESS, IN THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS
NOT REQUIRED."
ARTICLE II - PURCHASE PRICE AND CLOSING
2.1 PURCHASE PRICE. The aggregate purchase price (the "PURCHASE
PRICE") to be paid by the Purchasers to the Seller to acquire the Preferred
Stock and the Warrants at the Closing shall be the total of the amounts payable
by each Purchaser, respectively, set forth beside the
2
name of each Purchaser on SCHEDULE 1 hereto. The Purchase Price paid by each
Purchaser shall be placed in escrow pending the Closing as provided in Article
6.1(b) hereof. The portion of the Purchase Price payable by certain Purchasers
shall be payable by the surrender and cancellation of the promissory notes
representing $4.725 million of secured debt of the Seller and described next to
such Purchaser's name in SCHEDULE 1 hereto (the "PROMISSORY NOTES"), with the
value of such secured debt toward such Purchaser's portion of the Purchase Price
also described in SCHEDULE 1 hereto. Each Purchaser surrendering Promissory
Notes for cancellation in payment of any portion of the Purchase Price payable
by such Purchaser hereunder hereby agrees that the applicable portion of such
Promissory Note shall be cancelled as of the Closing Date (as defined below).
2.2 THE CLOSING. The closing of the transactions contemplated
under this Agreement (the "CLOSING") will take place as promptly as practicable,
but no later than five (5) business days following satisfaction or waiver of the
conditions set forth in Article 6.1(a) and (b) and 6.2(a) (other than those
conditions which by their terms are not to be satisfied or waived until the
Closing), at the offices of ▇▇▇▇▇▇ and ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The date on which the Closing occurs is the "CLOSING DATE."
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchasers as follows:
3.1 CORPORATE EXISTENCE AND POWER; SUBSIDIARIES. The Seller and
its Subsidiaries are corporations duly incorporated, validly existing and in
good standing under the laws of the state in which they are incorporated, and
have all corporate powers required to carry on their business as now conducted.
The Seller and its Subsidiaries are duly qualified to do business as a foreign
corporation and are in good standing in each jurisdiction where the character of
the property owned or leased by them or the nature of their activities makes
such qualification necessary, except for those jurisdictions where the failure
to be so qualified would not have a Material Adverse Effect on the Seller or any
of its Subsidiaries. For purposes of this Agreement, the term "MATERIAL ADVERSE
EFFECT" means, with respect to any person or entity, a material adverse effect
on its and its Subsidiaries' condition (financial or otherwise), business,
properties, assets, liabilities (including contingent liabilities), results of
operations or current prospects, taken as a whole. True and complete copies of
the Seller's Articles of Incorporation, as amended (the "ARTICLES"), and Bylaws,
as amended (the "BYLAWS"), as currently in effect and as will be in effect on
the Closing Date (collectively, the "ARTICLES AND BYLAWS"), have previously been
provided to the Purchasers. For purposes of this Agreement, the term
"SUBSIDIARY" or "Subsidiaries" means, with respect to any entity, any
corporation or other organization of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by such entity or of which such entity is a partner or is,
directly or indirectly, the beneficial owner of 50% or more of any class of
equity securities or equivalent profit participation interests. The Seller has
no Subsidiaries other than National Coal Corporation, a Tennessee corporation
which is wholly-owned by the Seller.
3.2 CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Seller of this Agreement, the Escrow Agreement (as defined
below), the Articles of Amendment, the
3
Investor Rights Agreement, and each of the other documents executed
pursuant to and in connection with this Agreement (collectively, the "RELATED
DOCUMENTS"), and the consummation of the transactions contemplated hereby and
thereby (including, but not limited to, the sale and delivery of the Preferred
Stock and Warrants, and the subsequent issuance of the Conversion Shares upon
conversion of the Preferred Stock and the Warrant Shares upon exercise of the
Warrants) have been duly authorized, and no additional corporate or stockholder
action is required for the approval thereof. The Conversion Shares and the
Warrant Shares have been duly reserved for issuance by the Seller. This
Agreement and the Related Documents have been or, to the extent contemplated
hereby or by the Related Documents, will be duly executed and delivered and
constitute the legal, valid and binding agreement of the Seller, enforceable
against the Seller in accordance with their terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium and similar laws of general
application relating to or affecting the enforcement of rights of creditors, and
except as enforceability of its obligations hereunder are subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.3 CHARTER, BYLAWS AND CORPORATE RECORDS. The minute books of the
Seller and its Subsidiaries contain complete and accurate records of all
meetings and other corporate actions of the board of directors, committees of
the board of directors, incorporators and stockholders of the Seller and its
Subsidiaries to the date hereof. All material corporate decisions and actions
have been validly made or taken. All corporate books, including without
limitation the share transfer register, comply with applicable laws and
regulations and have been regularly updated. Such books fully and correctly
reflect all the decisions of the stockholders.
3.4 GOVERNMENTAL AUTHORIZATION. Except as otherwise specifically
contemplated in this Agreement and the Related Documents, and except for: (i)
the filings referenced in Section 5.11; (ii) the filing of the Articles of
Amendment; (iii) the filing of a Form D with respect to the Preferred Stock and
Warrants under Regulation D under the Securities Act; (iv) the filing of the
Registration Statement with the Commission; (v) the application(s) to each
trading market for the listing of the Conversion Shares and the Warrant Shares
for trading thereon; and (vi) any filings required under state securities laws
that are permitted to be made after the date hereof, the execution, delivery and
performance by the Seller of this Agreement and the Related Documents, and the
consummation of the transactions contemplated hereby and thereby (including, but
not limited to, the sale and delivery of the Preferred Stock and Warrants and
the subsequent issuance of the Conversion Shares and Warrant Shares upon
conversion of the Preferred Stock or otherwise or exercise of the Warrants, as
applicable) by the Seller require no action (including, without limitation,
stockholder approval) by or in respect of, or filing with, any governmental or
regulatory body, agency, official or authority (including, without limitation,
Nasdaq).
3.5 NON-CONTRAVENTION. The execution, delivery and performance by
the Seller of this Agreement and the Related Documents, and the consummation by
the Seller of the transactions contemplated hereby and thereby (including the
issuance of the Conversion Shares and Warrant Shares) do not and will not (a)
contravene or conflict with the Articles (as amended by the Articles of
Amendment) and Bylaws of the Seller and its Subsidiaries or any material
agreement to which the Seller is a party or by which it is bound; (b) contravene
or conflict with or constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree binding upon or applicable to
the Seller or its Subsidiaries; (c) constitute a default (or
4
would constitute a default with notice or lapse of time or both) under or give
rise to a right of termination, cancellation or acceleration or loss of any
benefit under any material agreement, contract or other instrument binding upon
the Seller or its Subsidiaries or under any material license, franchise, permit
or other similar authorization held by the Seller or its Subsidiaries; or (d)
result in the creation or imposition of any Lien (as defined below) on any asset
of the Seller or its Subsidiaries. For purposes of this Agreement, the term
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, claim or encumbrance of any kind in respect of such asset.
3.6 SEC DOCUMENTS. The Seller is obligated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") to file reports pursuant
to Sections 13 or 15(d) thereof (all such reports filed or required to be filed
by the Seller, including all exhibits thereto or incorporated therein by
reference, and all documents filed by the Seller under the Securities Act
hereinafter called the "SEC DOCUMENTS"). The Seller has filed all reports or
other documents required to be filed under the Exchange Act. All SEC Documents
filed by the Seller (i) were prepared in all material respects in accordance
with the requirements of the Exchange Act and (ii) did not at the time they were
filed (or, if amended or superseded by a filing prior to the date hereof, then
on the date of such filing) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Seller has previously delivered to the
Purchaser a correct and complete copy of each report which the Seller filed with
the Securities and Exchange Commission (the "SEC" or the "COMMISSION") under the
Exchange Act for any period ending on or after December 31, 2003 (the "Recent
REPORTS"). None of the information about the Seller or any of its Subsidiaries
which has been disclosed to the Purchasers herein or in the course of
discussions and negotiations with respect hereto which is not disclosed in the
Recent Reports is or was required to be so disclosed, and no material non-public
information has been disclosed to the Purchasers.
3.7 FINANCIAL STATEMENTS. Each of the Seller's (i) audited
consolidated balance sheet as of December 31, 2003, and the related consolidated
statements of operations, cash flows and changes in stockholders' deficiency
(including the related notes) for the period from its inception (January
30,2003) to December 31, 2003 and (ii) the Seller's unaudited consolidated
balance sheet and related consolidated statements of operations and cash flows
as of and for the three months ended March 31, 2004, as contained in the Recent
Reports (both of (i) and (ii), collectively, the "SELLER'S FINANCIAL STATEMENTS"
or the "FINANCIAL STATEMENTS") (x) present fairly in all material respects the
financial position of the Seller and its Subsidiaries on a consolidated basis as
of the dates thereof and the results of operations, cash flows and stockholders'
deficiency as of and for each of the periods then ended, except that the
unaudited financial statements are subject to normal year-end adjustments, and
(y) were prepared in accordance with United States generally accepted accounting
principals ("GAAP") applied on a consistent basis throughout the periods
involved, in each case, except as otherwise indicated in the notes thereto.
3.8 COMPLIANCE WITH LAW. The Seller and its Subsidiaries are in
compliance and have conducted their business so as to comply with all laws,
rules and regulations, judgments, decrees or orders of any court, administrative
agency, commission, regulatory authority or other governmental authority or
instrumentality, domestic or foreign, applicable to their operations, the
violation of which would cause a Material Adverse Affect. There are no judgments
or orders,
5
injunctions, decrees, stipulations or awards (whether rendered by a court or
administrative agency or by arbitration), including any such actions relating to
affirmative action claims or claims of discrimination, against the Seller or its
Subsidiaries or against any of their properties or businesses.
3.9 NO DEFAULTS. The Seller and its Subsidiaries are not, nor have
they received notice that they would be with the passage of time, giving of
notice, or both, (i) in violation of any provision of their Articles and Bylaws
or (ii) in default or violation of any term, condition or provision of (A) any
judgment, decree, order, injunction or stipulation applicable to the Seller or
its Subsidiaries or (B) any material agreement, note, mortgage, indenture,
contract, lease or instrument, permit, concession, franchise or license to which
the Seller or its Subsidiaries are a party or by which the Seller or its
Subsidiaries or their properties or assets may be bound, and no circumstances
exist which would entitle any party to any material agreement, note, mortgage,
indenture, contract, lease or instrument to which such Seller or its
Subsidiaries are a party, to terminate such as a result of such Seller or its
Subsidiaries, having failed to meet any material provision thereof including,
but not limited to, meeting any applicable milestone under any material
agreement or contract; except in the case of clause (ii) as would not have a
Material Adverse Effect on the Seller or any of its Subsidiaries or any material
adverse effect on the transactions contemplated by this Agreement or by any of
the Related Documents.
3.10 LITIGATION. Except as disclosed in the Recent Reports or on
SCHEDULE 3.10, there is no action, suit, proceeding, judgment, claim or
investigation pending or, to the best knowledge of the Seller, threatened
against the Seller and its Subsidiaries which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Seller or its Subsidiaries or which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay any of the transactions contemplated
hereby, and there is no basis for the assertion of any of the foregoing.
3.11 ABSENCE OF CERTAIN CHANGES. Since December 31, 2003, the
Seller has conducted its business only in the ordinary course and there has not
occurred, except as set forth in the Recent Reports or any exhibit thereto or
incorporated by reference therein:
(a) Any event that could reasonably be expected to have a Material
Adverse Effect on the Seller or any of its Subsidiaries;
(b) Any amendments or changes in the Articles or Bylaws of the
Seller and its Subsidiaries, other than on account of the filing of the Articles
of Amendment;
(c) Any damage, destruction or loss, whether or not covered by
insurance, that would, individually or in the aggregate, have or would be
reasonably likely to have, a Material Adverse Effect on the Seller and its
Subsidiaries;
(d) Except as set forth on SCHEDULE 3.11(D), any
(i) incurrence, assumption or guarantee by the Seller or its
Subsidiaries of any debt for borrowed money other than for equipment
leases;
(ii) issuance or sale of any securities convertible into or
exchangeable for
6
securities of the Seller other than to directors, employees and
consultants pursuant to existing equity compensation or stock purchase
plans of the Seller;
(iii) issuance or sale of options or other rights to acquire
from the Seller or its Subsidiaries, directly or indirectly, securities
of the Seller or any securities convertible into or exchangeable for
any such securities, other than options issued to directors, employees
and consultants in the ordinary course of business in accordance with
past practice;
(iv) issuance or sale of any stock, bond or other corporate
security;
(v) discharge or satisfaction of any material Lien, other than
current liabilities incurred since December 31, 2003 in the ordinary
course of business;
(vi) declaration or making any payment or distribution to
stockholders or purchase or redemption of any share of its capital
stock or other security;
(vii) sale, assignment or transfer of any of its intangible
assets except in the ordinary course of business, or cancellation of
any debt or claim except in the ordinary course of business;
(viii) waiver of any right of substantial value whether or not
in the ordinary course of business;
(ix) material change in officer compensation except in the
ordinary course of business and consistent with past practices; or
(x) other commitment (contingent or otherwise) to do any of
the foregoing.
(e) Except as set forth on Schedule 3.11(e), any creation,
sufferance or assumption by the Seller or any of its Subsidiaries of any Lien on
any asset (other than Liens in connection with equipment leases) or any making
of any loan, advance or capital contribution to or investment in any Person in
an aggregate amount which exceeds $25,000 outstanding at any time;
(f) Any entry into, amendment of, relinquishment, termination or
non-renewal by the Seller or its Subsidiaries of any material contract, license,
lease, transaction, commitment or other right or obligation, other than in the
ordinary course of business; or
(g) Any transfer or grant of a right with respect to the
trademarks, trade names, service marks, trade secrets, copyrights or other
intellectual property rights owned or licensed by the Seller or its
Subsidiaries, except as among the Seller and its Subsidiaries.
3.12 NO UNDISCLOSED LIABILITIES. Except as set forth in the Recent
Reports, and except for liabilities and obligations incurred in the ordinary
course of business since December 31, 2003, as of the date hereof, (i) the
Seller and its Subsidiaries do not have any material liabilities or obligations
(absolute, accrued, contingent or otherwise) which, and (ii) there has not been
any aspect of the prior or current conduct of the business of the Seller or its
Subsidiaries which may form the basis for any material claim by any third party
which if asserted could result in any such
7
material liabilities or obligations which, are not fully reflected,
reserved against or disclosed in the balance sheet of the Seller as at December
31, 2003.
3.13 TAXES. All tax returns and tax reports required to be filed
with respect to the income, operations, business or assets of the Seller and its
Subsidiaries have been timely filed (or appropriate extensions have been
obtained) with the appropriate governmental agencies in all jurisdictions in
which such returns and reports are required to be filed, and all of the
foregoing as filed are correct and complete and, in all material respects,
reflect accurately all liability for taxes of the Seller and its Subsidiaries
for the periods to which such returns relate, and all amounts shown as owing
thereon have been paid. All income, profits, franchise, sales, use, value added,
occupancy, property, excise, payroll, withholding, FICA, FUTA and other taxes
(including interest and penalties), if any, collectible or payable by the Seller
and its Subsidiaries or relating to or chargeable against any of its material
assets, revenues or income or relating to any employee, independent contractor,
creditor, stockholder or other third party through the Closing Date, were fully
collected and paid by such date if due by such date or provided for by adequate
reserves in the Financial Statements as of and for the periods ended December
31, 2003 (other than taxes accruing after such date) and all similar items due
through the Closing Date will have been fully paid by that date or provided for
by adequate reserves, whether or not any such taxes were reported or reflected
in any tax returns or filings. No taxation authority has sought to audit the
records of the Seller or any of its Subsidiaries for the purpose of verifying or
disputing any tax returns, reports or related information and disclosures
provided to such taxation authority, or for the Seller's or any of its
Subsidiaries' alleged failure to provide any such tax returns, reports or
related information and disclosure. No material claims or deficiencies have been
asserted against or inquiries raised with the Seller or any of its Subsidiaries
with respect to any taxes or other governmental charges or levies which have not
been paid or otherwise satisfied, including claims that, or inquiries whether,
the Seller or any of its Subsidiaries has not filed a tax return that it was
required to file, and, to the best of the Seller's knowledge, there exists no
reasonable basis for the making of any such claims or inquiries. Neither the
Seller nor any of its Subsidiaries has waived any restrictions on assessment or
collection of taxes or consented to the extension of any statute of limitations
relating to taxation.
3.14 INTERESTS OF OFFICERS, DIRECTORS AND OTHER AFFILIATES. The
description of any interest held, directly or indirectly, by any officer,
director or other Affiliate of the Seller or its Subsidiaries (other than the
interests of the Seller and its Subsidiaries in such assets) in any property,
real or personal, tangible or intangible, used in or pertaining to Seller's
business, including any interest in the Intellectual Property (as defined in
Section 3.15 hereof), as set forth in the Recent Reports, is true and complete,
and no officer, director or other Affiliate of the Seller or its Subsidiaries
has any interest in any property, real or personal, tangible or intangible, used
in or pertaining to the Seller's business, including the Seller's Intellectual
Property, other than as set forth in the Recent Reports.
3.15 INTELLECTUAL PROPERTY. Other than as set forth in the Recent
Reports:
(a) the Seller or a Subsidiary thereof has the right to use or is
the sole and exclusive owner of all right, title and interest in and to all
foreign and domestic patents, patent rights, trademarks, service marks, trade
names, brands and copyrights (whether or not registered and, if applicable,
including pending applications for registration) owned, used or controlled by
the
8
Seller and its Subsidiaries (collectively, the "RIGHTS") and in and to each
material invention, software, trade secret, technology, product, composition,
formula, method of process used by the Seller or its Subsidiaries (the Rights
and such other items, the "INTELLECTUAL PROPERTY"), and, to the Seller's
knowledge, has the right to use the same, free and clear of any claim or
conflict with the rights of others;
(b) no royalties or fees (license or otherwise) are payable by the
Seller or its Subsidiaries to any Person by reason of the ownership or use of
any of the Intellectual Property except as set forth on SCHEDULE 3.15;
(c) there have been no claims made against the Seller or its
Subsidiaries asserting the invalidity, abuse, misuse, or unenforceability of any
of the Intellectual Property, and, to its knowledge, there are no reasonable
grounds for any such claims;
(d) neither the Seller nor its Subsidiaries have made any claim of
any violation or infringement by others of its rights in the Intellectual
Property, and to the best of the Seller's knowledge, no reasonable grounds for
such claims exist; and
(e) neither the Seller nor its Subsidiaries have received notice
that it is in conflict with or infringing upon the asserted rights of others in
connection with the Intellectual Property.
3.16 RESTRICTIONS ON BUSINESS ACTIVITIES. Other than as set forth
in the Recent Reports, there is no agreement, judgment, injunction, order or
decree binding upon the Seller or its Subsidiaries which has or could reasonably
be expected to have the effect of prohibiting or materially impairing any
business practice of the Seller or its Subsidiaries, any acquisition of property
by the Seller or its Subsidiaries or the conduct of business by the Seller or
its Subsidiaries as currently conducted or as currently proposed to be conducted
by the Seller.
3.17 PREEMPTIVE RIGHTS. Except as set forth in SCHEDULE 3.17, none
of the stockholders of the Seller possess any preemptive rights in respect of
the Preferred Stock or the Conversion Shares or Warrant Shares to be issued to
the Purchasers upon conversion of the Preferred Stock or exercise of the
Warrants, as applicable.
3.18 INSURANCE. The insurance policies providing insurance coverage
to the Seller or its Subsidiaries are adequate for the business conducted by the
Seller and its Subsidiaries and are sufficient for compliance by the Seller and
its Subsidiaries with all requirements of law and all material agreements to
which the Seller or its Subsidiaries are a party or by which any of their assets
are bound. All of such policies are in full force and effect and are valid and
enforceable in accordance with their terms, and the Seller and its Subsidiaries
have complied with all material terms and conditions of such policies, including
premium payments. None of the insurance carriers has indicated to the Seller or
its Subsidiaries an intention to cancel any such policy.
3.19 SUBSIDIARIES AND INVESTMENTS. Except as set forth in the
Recent Reports or on SCHEDULE 3.19, the Seller has no Subsidiaries or
Investments. For purposes of this Agreement, the term "INVESTMENTS" shall mean,
with respect to any Person, all advances, loans or extensions of credit to any
other Person, all purchases or commitments to purchase any stock, bonds, notes,
debentures or other securities of any other Person, and any other investment in
any other Person, including partnerships or joint ventures (whether by capital
contribution or otherwise) or other
9
similar arrangement (whether written or oral) with any Person, including but not
limited to arrangements in which (i) the Person shares profits and losses, (ii)
any such other Person has the right to obligate or bind the Person to any third
party, or (iii) the Person may be wholly or partially liable for the debts or
obligations of such partnership, joint venture or other arrangement.
3.20 CAPITALIZATION. (a) The authorized capital stock of the Seller
consists of 80,000,000 shares of common stock, $0.0001 par value per share, of
which 44,290,216 shares are issued and outstanding as of the date hereof, and
10,000,000 shares of preferred stock, $0.0001 par value per share, issuable in
one or more classes or series, with such relative rights and preferences as the
Board of Directors may determine, none of which has been authorized for issuance
other than 1611 shares that have been designated Series A Cumulative Convertible
Preferred Stock, of which no shares are outstanding immediately prior to the
execution of this Agreement.
(b) All shares of the Seller's issued and outstanding capital
stock have been duly authorized, are validly issued and outstanding, and are
fully paid and nonassessable. No securities issued by the Seller from the date
of its incorporation to the date hereof were issued in violation of any
statutory or common law preemptive rights. There are no dividends which have
accrued or been declared but are unpaid on the capital stock of the Seller. All
taxes required to be paid by Seller in connection with the issuance and any
transfers of the Seller's capital stock have been paid. All permits or
authorizations required to be obtained from or registrations required to be
effected with any Person in connection with any and all issuances of securities
of the Seller from the date of the Seller's incorporation to the date hereof
have been obtained or effected, and all securities of the Seller have been
issued and are held in accordance with the provisions of all applicable
securities or other laws.
3.21 OPTIONS, WARRANTS, RIGHTS. Except as set forth on SCHEDULE
3.21, there are no outstanding (a) securities, notes or instruments convertible
into or exercisable for any of the capital stock or other equity interests of
the Seller or its Subsidiaries; (b) options, warrants, subscriptions or other
rights to acquire capital stock or other equity interests of the Seller or its
Subsidiaries; or (c) commitments, agreements or understandings of any kind,
including employee benefit arrangements, relating to the issuance or repurchase
by the Seller or its Subsidiaries of any capital stock or other equity interests
of the Seller or its Subsidiaries, any such securities or instruments
convertible or exercisable for securities or any such options, warrants or
rights. Other than the rights of the Purchasers under the Preferred Stock and
the Warrants, and except as set forth on SCHEDULE 3.21, neither the Seller nor
the Subsidiaries have granted anti-dilution rights to any person or entity in
connection with any outstanding option, warrant, subscription or any other
instrument convertible or exercisable for the securities of the Seller or any of
its Subsidiaries. Other than the rights granted to the Purchasers under the
Investor Rights Agreement, there are no outstanding rights which permit the
holder thereof to cause the Seller or the Subsidiaries to file a registration
statement under the Securities Act or which permit the holder thereof to include
securities of the Seller or any of its Subsidiaries in a registration statement
filed by the Seller or any of its Subsidiaries under the Securities Act, and
there are no outstanding agreements or other commitments which otherwise relate
to the registration of any securities of the Seller or any of its Subsidiaries
for sale or distribution in any jurisdiction, except as set forth on SCHEDULE
3.21.
10
3.22 EMPLOYEES, EMPLOYMENT AGREEMENTS AND EMPLOYEE BENEFIT PLANS.
Except as set forth in the Recent Reports or on SCHEDULE 3.22, there are no
employment, consulting, severance or indemnification arrangements, agreements,
or understandings between the Seller and any officer, director, consultant or
employee of the Seller or its Subsidiaries (the "EMPLOYMENT AGREEMENTS"). No
Employment Agreement provides for the acceleration or change in the award,
grant, vesting or determination of options, warrants, rights, severance
payments, or other contingent obligations of any nature whatsoever of the Seller
or its Subsidiaries in favor of any such parties in connection with the
transactions contemplated by this Agreement. Except as disclosed in the Recent
Reports or on SCHEDULE 3.22, the terms of employment or engagement of all
directors, officers, employees, agents, consultants and professional advisors of
the Seller and its Subsidiaries are such that their employment or engagement may
be terminated upon not more than two weeks' notice given at any time without
liability for payment of compensation or damages and the Seller and its
Subsidiaries have not entered into any agreement or arrangement for the
management of their business or any part thereof other than with their directors
or employees.
3.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Seller, nor
any Affiliate of the Seller, nor to the knowledge of the Seller, any agent or
employee of the Seller, any other Person acting on behalf of or associated with
the Seller, or any individual related to any of the foregoing Persons, acting
alone or together, has: (a) received, directly or indirectly, any rebates,
payments, commissions, promotional allowances or any other economic benefits,
regardless of their nature or type, from any customer, supplier, trading
company, shipping company, governmental employee or other Person with whom the
Seller has done business directly or indirectly; or (b) directly or indirectly,
given or agreed to give any gift or similar benefit to any customer, supplier,
trading company, shipping company, governmental employee or other Person who is
or may be in a position to help or hinder the business of the Seller (or assist
the Seller in connection with any actual or proposed transaction) which (i) may
subject the Seller to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not given in the past, may have
had an adverse effect on the Seller or (iii) if not continued in the future, may
adversely affect the assets, business, operations or prospects of the Seller or
subject the Seller to suit or penalty in any private or governmental litigation
or proceeding.
3.24 ENVIRONMENTAL MATTERS. Except as described in the Recent
Reports or on Schedule 3.24, none of the premises or any properties owned,
occupied or leased by the Seller or its Subsidiaries (the "PREMISES") has been
used by the Seller or the Subsidiaries or, to the Seller's knowledge, by any
other Person, to manufacture, treat, store, or dispose of any substance that has
been designated to be a "HAZARDOUS SUBSTANCE" under applicable Environmental
Laws (hereinafter defined) ("HAZARDOUS SUBSTANCES") in violation of any
applicable Environmental Laws. To its knowledge, the Seller and its Subsidiaries
have not disposed of, discharged, emitted or released any Hazardous Substances
which would require, under applicable Environmental Laws, remediation,
investigation or similar response activity. No Hazardous Substances are present
as a result of the actions of the Seller or its Subsidiaries or, to the Seller's
knowledge, any other Person, in, on or under the Premises which would give rise
to any liability or clean-up obligations of the Seller or its Subsidiaries under
applicable Environmental Laws. The Seller and, to the Seller's knowledge, any
other Person for whose conduct it may be responsible pursuant to an agreement or
by operation of law, are in compliance with all laws, regulations and other
federal, state or local governmental requirements, and all applicable judgments,
orders,
11
writs, notices, decrees, permits, licenses, approvals, consents or injunctions
in effect on the date of this Agreement relating to the generation, management,
handling, transportation, treatment, disposal, storage, delivery, discharge,
release or emission of any Hazardous Substance (the "ENVIRONMENTAL LAWS").
Neither the Seller nor, to the Seller's knowledge, any other Person for whose
conduct it may be responsible pursuant to an agreement or by operation of law
has received any written complaint, notice, order, or citation of any actual,
threatened or alleged noncompliance with any of the Environmental Laws, and
there is no proceeding, suit or investigation pending or, to the Seller's
knowledge, threatened against the Seller or, to the Seller's knowledge, any such
Person with respect to any violation or alleged violation of the Environmental
Laws, and, to the knowledge of the Seller, there is no basis for the institution
of any such proceeding, suit or investigation.
3.25 LICENSES; COMPLIANCE WITH REGULATORY REQUIREMENTS. Except as
disclosed in the Recent Reports, the Seller holds all material authorizations,
consents, approvals, franchises, licenses and permits required under applicable
law or regulation for the operation of the business of the Seller and its
Subsidiaries as presently operated (the "GOVERNMENTAL AUTHORIZATIONS"). All the
Governmental Authorizations have been duly issued or obtained and are in full
force and effect, and the Seller and its Subsidiaries are in material compliance
with the terms of all the Governmental Authorizations. The Seller and its
Subsidiaries have not engaged in any activity that, to their knowledge, would
cause revocation or suspension of any such Governmental Authorizations. The
Seller has no knowledge of any facts which would cause the Seller to believe
that the Governmental Authorizations will not be renewed by the appropriate
governmental authorities in the ordinary course. Neither the execution, delivery
nor performance of this Agreement shall adversely affect the status of any of
the Governmental Authorizations.
3.26 BROKERS. Except as set forth on SCHEDULE 3.26, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this
Agreement, based upon any arrangement made by or on behalf of the Seller, which
would make any Purchaser liable for any fees or commissions.
3.27 SECURITIES LAWS. Neither the Seller nor its Subsidiaries nor
any agent acting on behalf of the Seller or its Subsidiaries has taken or will
take any action which might cause this Agreement or the Preferred Stock to
violate the Securities Act or the Exchange Act or any rules or regulations
promulgated thereunder, as in effect on the Closing Date. Assuming that all of
the representations and warranties of the Purchasers set forth in Article IV are
true, all offers and sales of capital stock, securities and notes of the Seller
were conducted and completed in compliance with the Securities Act. All shares
of capital stock and other securities issued by the Seller and its Subsidiaries
prior to the date hereof have been issued in transactions that were either
registered offerings or were exempt from the registration requirements under the
Securities Act and all applicable state securities or "BLUE SKY" laws and in
compliance with all applicable corporate laws.
3.28 DISCLOSURE. No representation or warranty made by the Seller
in this Agreement, nor in any document, written information, financial
statement, certificate, schedule or exhibit prepared and furnished by the Seller
or the representatives of the Seller pursuant hereto or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits to state a material fact necessary to make the
statements or
12
facts contained herein or therein not misleading in light of the circumstances
under which they were furnished.
3.29 POISON PILL. The Seller and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Seller's
Articles of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Seller fulfilling their obligations or
exercising their rights under this Agreement and the Related Documents,
including without limitation the Seller's issuance of the Securities and the
Purchasers' ownership of the Securities.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, for itself only, hereby severally and not jointly,
represents and warrants to the Seller as follows:
4.1 EXISTENCE AND POWER. The Purchaser, if not a natural person,
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of such Purchaser's organization. Such Purchaser has all powers
required to bind it to the representations, warranties and covenants set forth
herein.
4.2 AUTHORIZATION. The execution, delivery and performance by the
Purchaser of this Agreement, the Related Documents to which such Purchaser is a
party, and the consummation by the Purchaser of the transactions contemplated
hereby and thereby have been duly authorized, and no additional action is
required for the approval of this Agreement or the Related Documents. This
Agreement and the Related Documents to which the Purchaser is a party have been
or, to the extent contemplated hereby, will be duly executed and delivered and
constitute valid and binding agreements of the Purchaser, enforceable against
such Purchaser in accordance with their terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium and similar laws of general
application relating to or affecting the enforcement of rights of creditors and
except that enforceability of their obligations thereunder are subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.3 INVESTMENT. The Purchaser is acquiring the securities
described herein for its own account and not with a view to, or for sale in
connection with, any distribution thereof, nor with the intention of
distributing or reselling the same, provided, however, that by making the
representation herein, the Purchaser does not agree to hold any of the
securities for any minimum or other specific term and reserves the right to
dispose of the securities at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The Purchaser
is aware that none of the securities has been registered under the Securities
Act or under applicable state securities or blue sky laws. The Purchaser is an
"ACCREDITED INVESTOR" as such term is defined in Rule 501 of Regulation D, as
promulgated under the Securities Act. The Purchaser is not, and is not required
to be, registered as a broker-dealer under Section 15 of the Exchange Act.
13
4.4 RELIANCE ON EXEMPTIONS. The Purchaser understands that the
Preferred Stock and Warrants are being offered and sold to such Purchaser in
reliance upon specific exemptions from the registration requirements of United
States federal and state securities laws and that the Seller is relying upon the
truth and accuracy of, and such Purchaser's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of such Purchaser to acquire the securities.
4.5 EXPERIENCE OF THE PURCHASER. The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. The Purchaser is able to bear
the economic risk of an investment in the securities and, at the present time,
is able to afford a complete loss of such investment.
4.6 GENERAL SOLICITATION. The Purchaser is not purchasing the
securities as a result of any advertisement, article, notice or other
communication regarding the securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
ARTICLE V - COVENANTS OF THE SELLER AND PURCHASERS
5.1 INSURANCE. The Seller and its Subsidiaries shall, from time to
time upon the written request of the Purchasers, promptly furnish or cause to be
furnished to the Purchasers evidence, in form and substance reasonably
satisfactory to the Purchasers, of the maintenance of all insurance maintained
by it for loss or damage by fire and other hazards, damage or injury to persons
and property and under workmen's compensation laws.
5.2 REPORTING OBLIGATIONS. So long as any of the Preferred Stock
is outstanding, and so long as any Warrant has not been exercised and has not
expired by its terms, the Seller shall furnish to the Purchasers, or any other
persons who hold any of the Preferred Stock or Warrants (provided that such
subsequent holders give notice to the Seller that they hold Preferred Stock or
Warrants and furnish their addresses) promptly upon their becoming available one
copy of (A) each report, notice or proxy statement sent by the Seller to its
stockholders generally, and of each regular or periodic report (pursuant to the
Exchange Act) and (B) any registration statement, prospectus or written
communication pursuant to the Securities Act relating to the issuance or
registration of Conversion Shares and the Warrant Shares and filed by the Seller
with the Commission or any securities market or exchange on which shares of
Common Stock are listed; provided, however, that the Seller shall have no
obligation to deliver periodic reports (pursuant to the Exchange Act) under this
Section 5.2 to the extent such reports are publicly available.
The Purchasers are hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of the Seller which may have been furnished to the
Purchasers hereunder, to any regulatory body or agency having jurisdiction over
the Purchasers or to any Person which shall, or shall have right or obligation
to succeed to all or any part of the Purchasers' interest in the Seller or this
Agreement.
14
5.3 INVESTIGATION. The representations, warranties, covenants and
agreements set forth in this Agreement shall not be affected or diminished in
any way by any investigation (or failure to investigate) at any time by or on
behalf of the party for whose benefit such representations, warranties,
covenants and agreements were made. Without limiting the generality of the
foregoing, the inability or failure of the Purchasers to discover any breach,
default or misrepresentation by the Seller under this Agreement or the Related
Documents (including under any certificate furnished pursuant to this
Agreement), notwithstanding the exercise by the Purchasers or other holders of
the Preferred Stock of their rights hereunder to conduct an investigation shall
not in any way diminish any liability hereunder.
5.4 FURTHER ASSURANCES. (a) The Seller shall, at its cost and
expense, upon written request of the Purchasers, duly execute and deliver, or
cause to be duly executed and delivered, to the Purchasers such further
instruments and do and cause to be done such further acts as may be necessary,
advisable or proper, in the absolute discretion of the Purchasers, to carry out
more effectually the provisions and purposes of this Agreement. The parties
shall use their best efforts to timely satisfy each of the conditions described
in Article VI of this Agreement.
(b) Each Purchaser surrendering Promissory Notes for cancellation
in payment of any portion of the Purchase Price payable by such Purchaser hereby
covenants to deliver such Promissory Notes to Seller as soon as practicable
following to the Closing Date.
5.5 USE OF PROCEEDS. The Seller covenants and agrees that the
proceeds of the Purchase Price shall be used by the Seller for (i) the immediate
repayment of $2.775 million principal amount plus accrued interest of
outstanding senior secured promissory notes due in April 2005 and May 2005, (ii)
the immediate repayment of up to an additional $500,000 of indebtedness
(exclusive of trade debt), and (iii) the balance for working capital and general
corporate purposes; under no circumstances shall any portion of the proceeds be
applied to:
(i) accelerated repayment of debt existing on the date hereof
(except as provided above);
(ii) the payment of dividends or other distributions on any
capital stock of the Seller other than the Preferred Stock;
(iii) increased executive compensation or loans to officers,
employees, stockholders or directors, unless approved by a
disinterested majority of the Board of Directors;
(iv) the purchase of debt or equity securities of any person,
including the Seller and its Subsidiaries, except in connection with
investment of excess cash in high quality (A1/P1 or better) money
market instruments having maturities of one year or less; or
(v) any expenditure not directly related to the business of
the Seller.
5.6 CORPORATE EXISTENCE. So long as a Purchaser owns Preferred
Stock, Warrants, Conversion Shares or Warrant Shares, the Seller shall preserve
and maintain and cause its Subsidiaries to preserve and maintain their corporate
existence and good standing in the jurisdiction of their incorporation and the
rights, privileges and franchises of the Seller and its
15
Subsidiaries (except, in each case, in the event of a merger or consolidation in
which the Seller or its Subsidiaries, as applicable, is not the surviving
entity) in each case where failure to so preserve or maintain could have a
Material Adverse Effect on the financial condition, business or operations of
the Seller and its Subsidiaries taken as a whole.
5.7 LICENSES. So long as a Purchaser owns Preferred Stock,
Warrants, Conversion Shares or Warrant Shares, the Seller shall, and shall cause
its Subsidiaries to, maintain at all times all material licenses or permits
necessary to the conduct of its business and as required by any governmental
agency or instrumentality thereof.
5.8 LIKE TREATMENT OF PURCHASERS AND HOLDERS. Neither the Seller
nor any of its affiliates shall, directly or indirectly, pay or cause to be paid
any consideration (immediate or contingent), whether by way of interest, fee,
payment for redemption, conversion or exercise of the Preferred Stock or
Warrants, or otherwise, to any Purchaser or holder of Preferred Stock or
Warrants, for or as an inducement to, or in connection with the solicitation of,
any consent, waiver or amendment to any terms or provisions of this Agreement or
the Related Documents, unless such consideration is required to be paid to all
Purchasers or holders of Preferred Stock or Warrants bound by such consent,
waiver or amendment. The Seller shall not, directly or indirectly, redeem any
Preferred Stock or Warrants unless such offer of redemption is made pro rata to
all Purchasers or holders of Preferred Stock or Warrants, as the case may be, on
identical terms.
5.9 TAXES AND CLAIMS. The Seller and its Subsidiaries shall duly
pay and discharge (a) all material taxes, assessments and governmental charges
upon or against the Seller or its properties or assets prior to the date on
which penalties attach thereto, unless and to the extent that such taxes are
being diligently contested in good faith and by appropriate proceedings, and
appropriate reserves therefor have been established, and (b) all material lawful
claims, whether for labor, materials, supplies, services or anything else which
might or could, if unpaid, become a lien or charge upon the properties or assets
of the Seller or its Subsidiaries unless and to the extent only that the same
are being diligently contested in good faith and by appropriate proceedings and
appropriate reserves therefor have been established.
5.10 PERFORM COVENANTS. The Seller shall (a) make full and timely
payment of any and all payments on the Preferred Stock, and all other
obligations of the Seller to the Purchasers in connection therewith, whether now
existing or hereafter arising, and (b) duly comply with all the terms and
covenants contained herein and in each of the instruments and documents given to
the Purchasers in connection with or pursuant to this Agreement, all at the
times and places and in the manner set forth herein or therein.
5.11 ADDITIONAL COVENANTS.
(a) Except for transactions approved by a majority of the
disinterested directors of the Board of Directors, neither the Seller nor any of
its Subsidiaries shall enter into any transaction with any director, officer,
employee or holder of more than 5% of the outstanding capital stock of any class
or series of capital stock of the Seller or any of its Subsidiaries, member of
the family of any such person, or any corporation, partnership, trust or other
entity in which any such person, or member of the family of any such person, is
a director, officer, trustee, partner or
16
holder of more than 5% of the outstanding capital stock thereof, with the
exception of transactions which are consummated upon terms that are no less
favorable than would be available if such transaction had been effected at
arms-length, in the reasonable judgment of the Board of Directors.
(b) The Seller shall timely prepare and file with the Securities
and Exchange Commission the form of notice of the sale of securities pursuant to
the requirements of Regulation D regarding the sale of the Preferred Stock and
Warrants under this Agreement.
(c) The Seller shall timely prepare and file such applications,
consents to service of process (but not including a general consent to service
of process) and similar documents and take such other steps and perform such
further acts as shall be required by the state securities law requirements of
each jurisdiction where a Purchaser resides as indicated on SCHEDULE 1 with
respect to the sale of the Preferred Stock and Warrants under this Agreement.
(d) State Securities Law Compliance --Resale. Beginning no later
than 60 days following the date of this Agreement and continuing until either
(i) the purchasers have sold all of their Registrable Securities under a
registration statement pursuant to the Investor Rights Agreement or (ii) the
Common Stock becomes a "covered security" under Section 18(b)(1)(A) of the
Securities Act, the Seller shall maintain within either Moody's Industrial
Manual or Standard and Poor's Standard Corporation Descriptions (or any
successors to these manuals which are similarly qualified as "recognized
securities manuals" under state Blue Sky laws) an updated listing containing (i)
the names of the officers and directors of the Seller, (ii) a balance sheet of
the Seller as of a date that is at no time older than eighteen months and (iii)
a profit and loss statement of the Seller for either the preceding fiscal year
or the most recent year of operations.
5.12 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Seller shall (i) on
or promptly after the Closing Date, issue a press release acceptable to North
Sound Capital LLC. disclosing the transactions contemplated hereby, and (ii)
after the Closing Date, file with the Commission a Report on Form 8-K disclosing
the transactions contemplated hereby. Except as provided in the preceding
sentence, neither the Seller nor the Purchasers shall make any press release or
other publicity about the terms of this Agreement or the transactions
contemplated hereby without the prior approval of the other unless otherwise
required by law or the rules of the Commission or Nasdaq.
5.13 PRODUCTION PURCHASE COMMITMENTS. Beginning no later than
October 1, 2004, and as long as any Preferred Stock, Notes or Note Conversion
Shares remain outstanding, the Seller shall maintain long term purchase
commitments of three years or longer from third parties for at least 70% of the
Seller's monthly tonnage. Within 45 days following the commencement of coal
extraction from any New Mine and as long as at least 25% of the shares of
Preferred Stock originally issued pursuant to this Agreement remain outstanding,
the Seller shall have secured, and thereafter shall maintain, long term purchase
commitments of three years or longer from third parties for at least 75% of the
monthly tonnage for such Permitted Mine. "New Mine" shall mean any surface mine
or deep mine at which the Seller first commences coal extraction following the
Closing Date. The terms "NOTE CONVERSION SHARES" and "NOTES" shall have the
meaning assigned in the Note Purchase Agreement (as defined below).
17
5.14 BOOKED PURCHASE COMMITMENTS. No later than March 31, 2005, and
as long as at least 25% of (x) the Note Conversion Shares (or Note Conversion
Shares issuable upon conversion of Notes then outstanding) plus (y) the total
amount of Preferred Stock issued pursuant to this Agreement remain outstanding,
the Seller shall have secured purchase commitments from third parties either (a)
for the purchase of no less than 2 million tons of coal or (b) for the purchase
of an amount of coal with a total purchase price not less than $100 million, in
either case, such purchases committed to be completed (delivery made and paid in
full) no later than March 31, 2008.
5.15 CORPORATE GOVERNANCE. No later than the 90th day following the
Closing Date, the Seller shall be in full compliance with the corporate
governance requirements applicable to companies listed on either the Nasdaq
Small Cap Market, the Nasdaq National Market or the American Stock Exchange
(each, a "QUALIFIED Exchange"), including, without limitation, the requirements
that the Board of Directors have at least three independent members (the
"INDEPENDENT DIRECTORS"), a compliant audit committee and a compliant
compensation committee.
5.16 LISTING OF COMMON STOCK. The Seller shall use its best efforts
to list its Common Stock on a Qualified Exchange within one year of the Closing
Date.
5.17 REPAYMENT OF BRIDGE DEBT. Immediately following the Closing,
the Seller shall pay in full $2.775 million principal amount and accrued
interest on its outstanding senior secured promissory notes due in April 2005
and May 2005 and shall as soon as practicable thereafter deliver to the Escrow
Agent for further delivery to the Purchasers written confirmation from the
lenders that such principal and interest has been repaid in full.
5.18 OPTION EXERCISE. In connection with (a) the exercise by the
Purchasers of the Options (as defined below) and (b) the transfer pursuant to
the Options of the shares of Common Stock to the Purchasers and issuance of
certificates representing such shares to the Purchasers, and to the extent
required by the Seller's transfer agent for the Common Stock (the "Transfer
Agent"), the Seller shall use its best efforts, at the Seller's cost and
expense, to cause a written opinion of counsel to be delivered to the Transfer
Agent, which opinion and counsel shall be reasonably acceptable to the Transfer
Agent to the effect that such transfer may be made without registration under
the Securities Act and covering such other matters as the Transfer Agent may
require. In addition, the Seller shall, at the Seller's cost and expense, upon
written request of the Purchasers, duly execute and deliver, or cause to be duly
executed and delivered, to the Purchasers or the Transfer Agent such further
instruments and do and cause to be done such further acts as may be necessary,
advisable or proper, in the sole discretion of the Purchasers, to effect the
transfer of the shares of Common Stock to the Purchasers upon exercise of the
Options and to ensure that such transfer complies with all applicable state and
federal securities laws.
ARTICLE VI - CONDITIONS TO CLOSING
6.1 CONDITIONS TO OBLIGATIONS OF PURCHASERS TO EFFECT THE CLOSING.
The obligations of a Purchaser to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing, of each of the following conditions, any of which may be waived,
in writing, by a Purchaser:
18
(a) The Seller shall deliver or cause to be delivered to the
Escrow Agent, for further delivery to each of the Purchasers at the Closing
pursuant to the terms of the Escrow Agreement, the following:
1. (i) One or more certificates evidencing the aggregate
number of shares of the Preferred Stock, duly authorized,
issued, fully paid and non-assessable, as is indicated on
SCHEDULE 1 to be purchased at the Closing by such Purchaser,
registered in the name of such Purchaser, in such
denominations as is indicated on SCHEDULE 1 for such
Purchaser; and
(ii) One or more certificates evidencing the
Warrants, registered in the name of such Purchaser, in such
denominations as is indicated on SCHEDULE 1 for such
Purchaser, pursuant to which such Purchaser shall be initially
entitled to purchase that number of shares of Common Stock as
is indicated on SCHEDULE 1.
2. The Investor Rights Agreement, in the form attached
hereto as EXHIBIT C (the "INVESTOR RIGHTS AGREEMENT"), duly executed by
the Seller.
3. A legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Markiles, LLP
("SELLER'S COUNSEL"), counsel to the Seller, in the form attached
hereto as EXHIBIT D.
4. A certificate of the Secretary of the Seller (the
"SECRETARY'S CERTIFICATE"), in form and substance satisfactory to the
Purchasers, certifying as follows:
(i) that the Articles of Amendment authorizing the
Preferred Stock has been duly filed in the office of the
Secretary of State of the State of Florida, and that attached
to the Secretary's Certificate is true and complete copy of
the Articles of Incorporation of the Seller, as amended, and
the Articles of Amendment;
(ii) that a true copy of the Bylaws of the Seller, as
amended to the Closing Date, is attached to the Secretary's
Certificate;
(iii) that attached thereto are true and complete
copies of the resolutions of the Board of Directors of the
Seller authorizing the execution, delivery and performance of
this Agreement and the Related Documents, instruments and
certificates required to be executed by it in connection
herewith and approving the consummation of the transactions in
the manner contemplated hereby including, but not limited to,
the authorization and issuance of the Preferred Stock and
Warrants;
(iv) the names and true signatures of the officers of
the Seller signing this Agreement and all other documents to
be delivered in connection with this Agreement;
(v) such other matters as required by this Agreement;
and
(vi) such other matters as the Purchasers may
reasonably request.
19
5. A wire transfer representing the Purchasers'
reasonable legal fees and other expenses as described in Section 9.2
hereof; such fee may, at the election of the Purchasers, be paid out of
the funds due from the Purchasers at the Closing.
6. Proof of due filing with the Secretary of State of
the State of Florida of the Articles of Amendment authorizing the
Preferred Stock.
7. Such other documents as the Purchasers shall
reasonably request.
(b) The Seller shall have entered into a Closing Escrow Agreement
with ▇▇▇▇▇▇ and ▇▇▇▇ LLP (the "ESCROW AGENT") in the form attached hereto as
EXHIBIT E (the "ESCROW AGREEMENT").
(c) ▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have each entered into a nine
month Management Lock-Up Agreement in the form attached hereto as EXHIBIT F, and
copies thereof shall have been delivered to the Escrow Agent for further
delivery to each of the Purchasers at the Closing pursuant to the terms of the
Escrow Agreement.
(d) Seller shall have applied to each U.S. securities exchange,
interdealer quotation system and other trading market where its Common Stock is
currently listed or qualified for trading or quotation for the listing or
qualification of the Conversion Shares and the Warrant Shares for trading or
quotation thereon in the time and manner required thereby.
(e) Each of the Purchasers listed on SCHEDULE 2 shall have been
assigned, pursuant to an assignment dated as of the Closing Date (the
"ASSIGNMENT"), the right to purchase, at a purchase price of $0.65 per share
(the "OPTIONS"), the number of shares (5,000,000 shares in the aggregate) of
restricted Common Stock pursuant to that certain Stock Option Agreement, dated
as of June 30, 2004, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, as
optionors, and ▇▇▇ ▇▇▇, as optionee, as amended, (the "STOCK OPTION AGREEMENT")
as is indicated next to such Purchaser's name on SCHEDULE 2 hereto. A duly
executed copy of the Assignment shall have been delivered to the Escrow Agent
for further delivery to such Purchasers and for further delivery to the escrow
agent for the Stock Option Agreement (the "OPTION ESCROW AGENT"). Each such
Purchaser shall have delivered to the Escrow Agent, for further delivery to the
Option Escrow Agent, a duly executed exercise notice (the "EXERCISE NOTICE")
exercising all of the Options assigned to such Purchaser pursuant to the
Assignment along with a wire transfer, in immediately available funds, of the
exercise price for such Options.
(f) The issuance of up to $3 million of 8% Convertible Promissory
Notes of the Seller pursuant to that certain Note Purchase Agreement, dated as
of the date hereof, among the Seller and each of the persons described therein
(the "Note Purchase Agreement") shall have been consummated.
(g) Each of the persons that are purchasing the notes pursuant to
the Note Purchase Agreement shall have been assigned, pursuant to an assignment
dated as of the Closing Date, the right to purchase at a purchase price of $0.55
per share, the number of shares (300,000 shares in the aggregate) of restricted
Common Stock pursuant to that certain Stock Option Agreement, dated as of June
30, 2004, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, as optionors, and ▇▇▇
▇▇▇, as optionee, as is indicated next to such person's name on SCHEDULE 1 to
the Note
20
Purchase Agreement. The Escrow Agent shall have received copies of such
documentation of the assignment along with a wire transfer for the exercise of
the rights so assigned, in each case, as is required by the Note Purchase
Agreement.
6.2 CONDITIONS TO OBLIGATIONS OF THE SELLER TO EFFECT THE CLOSING.
The obligations of the Seller to effect the Closing and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, by the Seller:
(a) Each of the Purchasers shall deliver or cause to be delivered
to the Escrow Agent, for further delivery to the Seller at the Closing pursuant
to the terms of the escrow Agreement, (i) payment of the portion of the Purchase
Price set forth opposite each Purchaser's name on SCHEDULE 1, in cash by either
(x) wire transfer of immediately available funds to an account designated in
writing by the Escrow Agent prior to the date hereof, or (y) in the case of
Purchasers paying their portion of the Purchase Price by the cancellation of a
portion of the Promissory Notes held by them, by the cancellation of such
portion of Promissory Notes pursuant to Section 2.1 hereof (as evidenced by the
execution of this Agreement by such Purchaser); (ii) an executed copy of this
Agreement; (iii) an executed copy of the Investor Rights Agreement; and (iv)
such other documents as the Seller shall reasonably request. The Purchaser shall
deliver the original Promissory Notes to be cancelled in whole or part to the
Seller following the Closing pursuant to Section 5.4(b) or, prior to the
Closing, to the Escrow Agent for further delivery to the Seller.
ARTICLE VII - INDEMNIFICATION, TERMINATION AND DAMAGES
7.1 SURVIVAL OF REPRESENTATIONS. Except as otherwise provided
herein, the representations and warranties of the Seller and the Purchasers
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing Date and shall continue in full force
and effect for a period of three (3) years from the Closing Date; provided,
however, that the Seller's warranties and representations under Sections 3.13
(Taxes), 3.19 (Subsidiaries and Investments), 3.20 (Capitalization), and 3.21
(Options, Warrants, Rights), shall survive the Closing Date and continue in full
force and effect until the expiration of all applicable statutes of limitation;
and further provided that the Seller's warranties and representations under
Section 3.24 (Environmental Matters) shall survive the Closing Date and continue
in full force and effect for a period of six (6) years from the Closing Date.
The Seller's and the Purchasers' warranties and representations shall in no way
be affected or diminished in any way by any investigation of the subject matter
thereof made by or on behalf of the Seller or the Purchasers.
7.2 INDEMNIFICATION.
(a) The Seller agrees to indemnify and hold harmless the
Purchasers, their Affiliates, each of their officers, directors, partners,
employees and agents and their respective successors and assigns, from and
against any losses, damages, or expenses which are caused by or arise out of (i)
any breach or default in the performance by the Seller of any covenant or
agreement made by the Seller in this Agreement or in any of the Related
Documents; (ii) any breach of warranty or representation made by the Seller in
this Agreement or in any of the Related Documents; or
21
(iii) any and all third party actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal fees and expenses)
incident to any of the foregoing.
(b) The Purchasers, severally and not jointly, agree to indemnify
and hold harmless the Seller, its Affiliates, each of their officers, directors,
partners, employees and agents and their respective successors and assigns, from
and against any losses, damages, or expenses which are caused by or arise out of
(i) any breach or default in the performance by the Purchasers of any covenant
or agreement made by the Purchasers in this Agreement or in any of the Related
Documents; (ii) any breach of warranty or representation made by the Purchasers
in this Agreement or in any of the Related Documents; and (iii) any and all
third party actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal fees and expenses) incident to any of the
foregoing; provided, however, that a Purchaser's liability under this Section
7.2(b) shall not exceed the Purchase Price paid by such Purchaser hereunder.
7.3 INDEMNITY PROCEDURE. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "INDEMNIFYING PARTY" and the other party or parties
claiming indemnity is referred to as the "INDEMNIFIED PARTY". An Indemnified
Party under this Agreement shall, with respect to claims asserted against such
party by any third party, give written notice to the Indemnifying Party of any
liability which might give rise to a claim for indemnity under this Agreement
within sixty (60) business days of the receipt of any written claim from any
such third party, but not later than twenty (20) days prior to the date any
answer or responsive pleading is due, and with respect to other matters for
which the Indemnified Party may seek indemnification, give prompt written notice
to the Indemnifying Party of any liability which might give rise to a claim for
indemnity; provided, however, that any failure to give such notice will not
waive any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are materially prejudiced.
The Indemnifying Party shall have the right, at its election, to take
over the defense or settlement of such claim by giving written notice to the
Indemnified Party at least fifteen (15) days prior to the time when an answer or
other responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, it may conduct the defense of such claim
through counsel of its choosing (subject to the Indemnified Party's approval of
such counsel, which approval shall not be unreasonably withheld), shall be
solely responsible for the expenses of such defense and shall be bound by the
results of its defense or settlement of the claim. The Indemnifying Party shall
not settle any such claim without prior notice to and consultation with the
Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). So long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not be
responsible for the fees of separate legal counsel to the Indemnified Party,
unless the named parties to any proceeding include both parties or
representation of both parties by the same counsel would be inappropriate due to
conflicts of interest or otherwise. If the Indemnifying Party does not make such
election, or having made such election does not, in the reasonable opinion of
the Indemnified Party proceed diligently to defend such claim, then the
Indemnified Party may (after written notice to the Indemnifying Party), at the
expense of the
22
Indemnifying Party, elect to take over the defense of and proceed to handle such
claim in its discretion and the Indemnifying Party shall be bound by any defense
or settlement that the Indemnified Party may make in good faith with respect to
such claim. In connection therewith, the Indemnifying Party will fully cooperate
with the Indemnified Party should the Indemnified Party elect to take over the
defense of any such claim. The parties agree to cooperate in defending such
third party claims and the Indemnified Party shall provide such cooperation and
such access to its books, records and properties as the Indemnifying Party shall
reasonably request with respect to any matter for which indemnification is
sought hereunder; and the parties hereto agree to cooperate with each other in
order to ensure the proper and adequate defense thereof.
With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five (5) days prior to the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim. Notwithstanding the foregoing, the reasonable expenses of counsel to
the Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party. With regard to other claims for which indemnification is payable
hereunder, such indemnification shall be paid promptly by the Indemnifying Party
upon demand by the Indemnified Party.
ARTICLE VIII - ADDITIONAL PURCHASE RIGHT
8.1 ADDITIONAL PURCHASE RIGHT. Each Purchaser or its assigns shall
have the right (the "ADDITIONAL PURCHASE RIGHT"), during the Additional Purchase
Period (as defined below), to purchase from the Seller, up to the number of
shares of additional Preferred Stock as indicated next to such Purchaser's name
on SCHEDULE 1 hereto under the heading "Number of Shares of Preferred Stock
Subject to Additional Purchase Right", in whole or in part, at a purchase price
of $15,000 per share, all on and subject to the terms and conditions set forth
in this Article VIII. Upon the purchase of any shares of Preferred Stock
pursuant to the Additional Purchase Right, the Purchaser or its assigns shall
receive additional Warrants to purchase that number of shares of Common Stock as
is equal to 20% of the number of shares of Common Stock into which such
additional shares of Preferred Stock are convertible.
8.2 EXERCISE OF ADDITIONAL PURCHASE RIGHT.
(a) From and after the Closing Date, and until 5:00 P.M., New
York time, on the date that is 90 days after the Effective Date, as
such term is defined in the Investor Rights Agreement (the "EXPIRATION
DATE" and such period, the "ADDITIONAL PURCHASE PERIOD"), the Purchaser
or its assigns may elect to purchase all or any part of the number of
additional shares of Preferred Stock as indicated next to such
Purchaser's name on SCHEDULE 1 hereto under the heading "Number of
Shares of Preferred Stock Subject to Additional Purchase Right"
(together with the applicable number of Warrants).
23
(b) In order to exercise the Additional Purchase Right, in
whole or in part, the Purchaser shall deliver to the Seller at the
address indicated in Section 9.3, (i) a written notice of the
Purchaser's election to exercise its Additional Purchase Right, which
notice shall specify the number of additional shares of Preferred Stock
to be purchased and (ii) payment of the purchase price. Such notice
shall be substantially in the form of the subscription form attached as
EXHIBIT G hereto, duly executed by the Purchaser or its agent or
attorney. Upon receipt thereof, the Seller shall, as promptly as
practicable, and in any event within three Business Days thereafter,
execute or cause to be executed and deliver or cause to be delivered to
the Purchaser a certificate or certificates representing the aggregate
number of shares of additional Preferred Stock purchased pursuant to
the Additional Purchase Right along with a certificate or certificates
representing the Warrants to be received together with such Preferred
Stock. The stock and Warrant certificate or certificates so delivered
shall be, to the extent possible, in such denomination or denominations
as the Purchaser shall request in the notice and shall be registered in
the name of the Purchaser or such other name as shall be designated in
the notice. The Additional Purchase Right shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have
been issued, and the Purchaser or any other person so designated to be
named therein shall be deemed to have become a holder of record of such
shares and Warrants for all purposes, as of the date when the notice,
together with the payment of the purchase price, is received by the
Seller as described above. If the Additional Purchase Right shall have
been exercised in part, the Purchaser shall retain the right to
purchase that number of shares of additional Preferred Stock as
indicated next to such Purchaser's name on SCHEDULE 1 hereto under the
heading "Number of Shares of Preferred Stock Subject to Additional
Purchase Right" less the number of shares of additional Preferred Stock
previously purchased pursuant to this Article VIII (together with the
applicable number of Warrants).
(c) If the Seller intentionally and willfully fails to deliver
to the holder such certificate or certificates pursuant to this Section
8.2 in accordance herewith, prior to the seventh trading day after the
receipt by the Seller of (i) a written notice of Purchaser's election
to exercise its Additional Purchase Right pursuant to Section 8.2(b)
(such date of receipt, the "DATE OF RECEIPT"), the Seller shall pay to
such Purchaser, in cash, on a per diem basis, an amount equal to 2% of
the purchase price of the undelivered Preferred Stock and Warrants per
month (or portion thereof) until such delivery takes place.
(d) Payment of the purchase price for the additional Preferred
Stock may be made at the option of the Purchaser by: (i) certified or
official bank check payable to the order of the Seller or (ii) wire
transfer to the account of the Seller. All shares of Preferred Stock
and all Warrants issuable upon the exercise of the Additional Purchase
Right pursuant to the terms hereof shall be validly issued and, upon
payment of the purchase price therefor, shall be fully paid and
nonassessable and not subject to any preemptive rights, and any
purchaser of shares of Preferred Stock and Warrants pursuant to this
Article VIII shall have all of the rights of a Purchaser and holder of
Preferred Stock and Warrants under this Agreement, the Investor Rights
Agreement and the Articles of Incorporation as amended by the Articles
of Amendment, in each case, with respect to such additional shares of
Preferred Stock and such additional Warrants.
24
8.3 ADJUSTMENTS. For avoidance of doubt, any and all adjustments
to the Conversion Value (as defined in the Articles of Incorporation as Amended
by the Articles of Amendment) of the Preferred Stock or the Current Warrant
Price (as defined in the Warrant) or number of Warrant Shares issuable upon
exercise of the Warrants, in each case, originally issued pursuant to this
Agreement that may have been made prior to the issuance of additional shares of
Preferred Stock and Warrants issued pursuant to this Article VIII shall be
deemed to apply to any such additional shares of Preferred Stock and Warrants.
In addition, the amounts set forth in this Article VIII shall be subject to
adjustment for any stock splits, dividends, distributions and the like.
8.4 TRANSFER. The Additional Purchase Right pursuant to this
Article VIII shall be freely transferable, subject to compliance with all
applicable laws, including, but not limited to the Securities Act. The Seller
may require, as a condition of allowing such transfer (i) that the Purchaser or
transferee of the Additional Purchase Right as the case may be, furnish to the
Seller a written opinion of counsel that is reasonably acceptable to the Seller
to the effect that such transfer may be made without registration under the
Securities Act, (ii) that the Purchaser or transferee execute and deliver to the
Seller a customary investor representation letter, (iii) that the transferee be
an "accredited investor" as defined in Rule 501(a) promulgated under the
Securities Act and (iv) that the Purchaser deliver to the Seller a written
assignment of the Additional Purchase Right substantially in the form of EXHIBIT
H hereto duly executed by the Purchaser or its agent or attorney.
Notwithstanding the foregoing, without the prior written consent of the Seller,
no transfer of Additional Purchase Rights shall be made where the number of
shares of Preferred Stock purchasable pursuant to such Additional Purchase
Rights is less than 5% of the total number of shares of Preferred Stock
purchasable by all Purchasers pursuant to their Additional Purchase Rights as of
the Closing Date unless the amount of Additional Purchase Rights proposed to be
transferred are all of the Additional Purchase Rights then owned by the
transferring Purchaser.
ARTICLE IX - MISCELLANEOUS
9.1 FURTHER ASSURANCES. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby and to carry into effect the intents
and purposes of this Agreement, and further agrees to take promptly, or cause to
be taken, all actions, and to do promptly, or cause to be done, all things
necessary, proper or advisable under applicable law to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals, to effect all necessary registrations and filings, and
to remove any injunctions or other impediments or delays, legal or otherwise, in
order to consummate and make effective the transactions contemplated by this
Agreement for the purpose of securing to the parties hereto the benefits
contemplated by this Agreement.
9.2 FEES AND EXPENSES. The Seller shall be responsible for the
payment of up to an aggregate of $45,000 of the reasonable legal fees and other
third-party expenses of North Sound Capital Group LLC relating to the
preparation and negotiation of this Agreement and the Related Documents and the
consummation of the transactions contemplated herein and therein, unless
otherwise agreed by the Seller in writing. This Section 9.2 shall not apply to
registration expenses
25
under the Investor Rights Agreement, which shall be payable as provided therein.
9.3 NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 5:00 p.m. (New York City
time) on a business day, (b) the next business day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a business day
or later than 5:00 p.m. (New York City time) on any business day, or (c) the
business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service such as Federal Express. The address for
such notices and communications shall be as follows:
If to the Purchasers at each Purchaser's address set forth under its
name on SCHEDULE 1 attached hereto, or with respect to the Seller, addressed to:
National Coal Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Seller shall be sent to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& Markiles, LLP, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇. Copies of notices to any Purchaser shall be sent
to the addresses, if any, listed on SCHEDULE 1 attached hereto.
Unless otherwise stated above, such communications shall be effective
when they are received by the addressee thereof in conformity with this Section.
Any party may change its address for such communications by giving notice
thereof to the other parties in conformity with this Section.
9.4 GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and enforced in accordance with the laws of the State of New York without
reference to the conflicts of laws principles thereof.
9.5 JURISDICTION AND VENUE. This Agreement shall be subject to the
exclusive jurisdiction of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of New
York and if such court does not have proper jurisdiction, the State Courts of
New York County, New York. The parties to this Agreement agree that any breach
of any term or condition of this Agreement shall be deemed to be a breach
occurring in the State of New York by virtue of a failure to perform an act
required to be performed in the State of New York and irrevocably and expressly
agree to submit to the jurisdiction of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of New York and if such court does not have proper jurisdiction, the
State Courts of New York County, New York for the purpose of resolving any
disputes among the parties relating to this Agreement or the
26
transactions contemplated hereby. The parties irrevocably waive, to the fullest
extent permitted by law, any objection which they may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement, or any judgment entered by any court in respect hereof
brought in New York County, New York, and further irrevocably waive any claim
that any suit, action or proceeding brought in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ of New York and if such court does not have proper jurisdiction, the
State Courts of New York County, New York has been brought in an inconvenient
forum. Each of the parties hereto consents to process being served in any such
suit, action or proceeding, by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 9.5 shall affect or limit any right to serve
process in any other manner permitted by law.
9.6 SUCCESSORS AND ASSIGNS. This Agreement is personal to each of
the parties and may not be assigned without the written consent of the other
parties; provided, however, that any of the Purchasers shall be permitted to
assign this Agreement to any Person to whom it assigns or transfers securities
or rights issued or issuable pursuant to this Agreement. Any assignee must be an
"ACCREDITED INVESTOR" as defined in Rule 501(a) promulgated under the Securities
Act.
9.7 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason or to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall continue in full force and effect and in
no way be affected, impaired or invalidated.
9.8 ENTIRE AGREEMENT. This Agreement and the other agreements and
instruments referenced herein constitute the entire understanding and agreement
of the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings.
9.9 OTHER REMEDIES. Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party shall be deemed cumulative
with and not exclusive of any other remedy conferred hereby or by law, or in
equity on such party, and the exercise of any one remedy shall not preclude the
exercise of any other.
9.10 AMENDMENT AND WAIVERS. Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the Seller and the holders of at
least a majority of the Preferred Stock then outstanding, and such waiver or
amendment, as the case may be, shall be binding upon all Purchasers. The waiver
by a party of any breach hereof or default in the performance hereof shall not
be deemed to constitute a waiver of any other default or any succeeding breach
or default. This Agreement may not be amended or supplemented by any party
hereto except pursuant to a written amendment executed by the Seller and the
holders of at least a majority of the Preferred Stock then outstanding. No
amendment shall be effected to impact a holder of Preferred Stock in a
disproportionately adverse fashion without the consent of such individual holder
of Preferred Stock. No consideration shall be offered or paid to any person to
amend or consent to a waiver or modification of any provision of this Agreement
or any of the Related Documents unless the same consideration is also offered to
all of the parties to this Agreement or the Related
27
Documents.
9.11 NO WAIVER. The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
9.12 CONSTRUCTION OF AGREEMENT; KNOWLEDGE. For purposes of this
Agreement, the term "KNOWLEDGE," when used in reference to a corporation means
the knowledge of the directors and executive officers of such corporation
(including, if applicable, any person designated as a chief scientific, medical
or technical officer) assuming such persons shall have made inquiry that is
customary and appropriate under the circumstances to which reference is made,
and when used in reference to an individual means the knowledge of such
individual assuming the individual shall have made inquiry that is customary and
appropriate under the circumstances to which reference is made.
9.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and the
same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as signatories. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
9.14 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.
9.15 WAIVER OF TRIAL BY JURY. THE PARTIES HERETO IRREVOCABLY WAIVE
TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
9.16 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under this Agreement or any Related Documents are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any such agreement. Nothing contained herein or in
any Related Documents, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by such agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation, the rights arising out of this Agreement or out of the other
Related Documents, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any proceeding for such purpose. Each Purchaser
represents that it has been represented by its own separate legal counsel in its
review and negotiation of this Agreement and the Related Documents. For reasons
of administrative convenience only, the Purchasers acknowledge and agree that
they and their respective counsel have chosen to communicate with
28
the Seller through ▇▇▇▇▇▇ and ▇▇▇▇ LLP, but ▇▇▇▇▇▇ and ▇▇▇▇ LLP does not
represent any of the Purchasers in this transaction other than North Sound
Capital LLC.
[Signature Page Follows]
29
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER:
NATIONAL COAL CORP.
By: /S/ ▇▇▇ ▇. ▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇
Title: Chief Executive Officer
30
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ASSET MANAGERS INTERNATIONAL LMTD
By: JAFAR OMID /S/
---------------------------------------------
Name: JAFAR OMID
---------------------------------------------
Title: INVESTMENT MANAGER
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
LONDON
---------------------------------------------
W1U 6T2
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 8
----------------------------------------------------
Number of Warrants Purchased
at Closing 10,000
--------------------------------------------------
Aggregate Purchase Price $120,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇ ▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 4
----------------------------------------------------
Number of Warrants Purchased
at Closing 8,000
--------------------------------------------------
Aggregate Purchase Price $60,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: BIG BEND XII INVESTMENTS, LP
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: SECRETARY: 2M COMPANIES INC.
---------------------------------------------
General Partner
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 133.33
----------------------------------------------------
Number of Warrants Purchased
at Closing 266,267
--------------------------------------------------
Aggregate Purchase Price $2,000,000
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: BLACKPOOL PARTNERS, LLC
By: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: MANAGING MEMBER
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
---------------------------------------------
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 4
----------------------------------------------------
Number of Warrants Purchased
at Closing 8,000
--------------------------------------------------
Aggregate Purchase Price $60,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇.
---------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 4
----------------------------------------------------
Number of Warrants Purchased
at Closing 8,000
--------------------------------------------------
Aggregate Purchase Price $60,000.00
-------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: CRESTVIEW CAPITAL MASTER, LLC
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Title: MANAGER
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 84
----------------------------------------------------
Number of Warrants Purchased
at Closing 168,000
--------------------------------------------------
Aggregate Purchase Price $1,260,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: CRESTVIEW CAPITAL MASTER, LLC
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Title: MANAGER
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 66.67
----------------------------------------------------
Number of Warrants Purchased
at Closing 133,333
--------------------------------------------------
Aggregate Purchase Price $1,000,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 2
----------------------------------------------------
Number of Warrants Purchased
at Closing 4,000
--------------------------------------------------
Aggregate Purchase Price $30,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: 170 CRESTVIEW
---------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 8.33
----------------------------------------------------
Number of Warrants Purchased
at Closing 16,667
--------------------------------------------------
Aggregate Purchase Price $125,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 2
----------------------------------------------------
Number of Warrants Purchased
at Closing 4,000
--------------------------------------------------
Aggregate Purchase Price $30,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: GLL SINGLE STRATEGY, L.P.
By: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /S/
---------------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: PRESIDENT
---------------------------------------------
Address: GLL INVESTORS, INC.
---------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 20
----------------------------------------------------
Number of Warrants Purchased
at Closing 40,000
--------------------------------------------------
Aggregate Purchase Price $300,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 56.667
----------------------------------------------------
Number of Warrants Purchased
at Closing 113,333
--------------------------------------------------
Aggregate Purchase Price $850,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: JACOB CAPITAL, LLC
---------------------------------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
Title: MANAGER
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 6.667
----------------------------------------------------
Number of Warrants Purchased
at Closing 13,333
--------------------------------------------------
Aggregate Purchase Price $100,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: C/O ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
---------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 20
----------------------------------------------------
Number of Warrants Purchased
at Closing 40,000
--------------------------------------------------
Aggregate Purchase Price $300,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
By: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 20
----------------------------------------------------
Number of Warrants Purchased
at Closing 40,000
--------------------------------------------------
Aggregate Purchase Price $300,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇ ▇▇▇▇ JR. DECLARATION OF TRUST,
---------------------------------------------
UAD MAY 1, 1986
---------------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇ JR. /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ JR.
---------------------------------------------
Title: TRUSTEE
---------------------------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 4
----------------------------------------------------
Number of Warrants Purchased
at Closing 8,000
--------------------------------------------------
Aggregate Purchase Price $60,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇ ▇▇▇▇ REVOCABLE TRUST
By: ▇▇▇▇▇ ▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
Title: TRUSTEE
---------------------------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 35
----------------------------------------------------
Number of Warrants Purchased
at Closing 70,000
--------------------------------------------------
Aggregate Purchase Price $525,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇ ▇. LOW ▇▇▇▇ ▇▇▇
---------------------------------------------
By: ▇▇▇▇▇▇ LOW /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. LOW ▇▇▇▇ ▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
---------------------------------------------
▇▇▇▇ ▇▇.
---------------------------------------------
▇.▇. ▇▇ ▇▇▇▇▇
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 13.33
----------------------------------------------------
Number of Warrants Purchased
at Closing 26,667
--------------------------------------------------
Aggregate Purchase Price $200,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: NORTH SOUND LEGACY FUND LLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: CHIEF INVESTMENT OFFICER
---------------------------------------------
Address: C/O NORTH SOUND CAPITAL LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 8
----------------------------------------------------
Number of Warrants Purchased
at Closing 16,000
--------------------------------------------------
Aggregate Purchase Price $120,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: NORTH SOUND LEGACY INSTITUTIONAL FUND LLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: CHIEF INVESTMENT OFFICER
---------------------------------------------
Address: C/O NORTH SOUND CAPITAL LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 124
----------------------------------------------------
Number of Warrants Purchased
at Closing 248,000
--------------------------------------------------
Aggregate Purchase Price $1,860,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: NORTH SOUND LEGACY INTERNATIONAL
FUND LLC
---------------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: CHIEF INVESTMENT OFFICER
---------------------------------------------
Address: C/O NORTH SOUND CAPITAL LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 268
----------------------------------------------------
Number of Warrants Purchased
at Closing 536,000
--------------------------------------------------
Aggregate Purchase Price $4,020,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: RHP MASTER FUND, LTD.
---------------------------------------------
By: ROCK HILL INVESTMENT MANAGEMENT, L.P.
---------------------------------------------
By: RHP GENERAL PARTNER, LLC
---------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: DIRECTOR
---------------------------------------------
Address: C/O ROCK HILL INVESTMENT
MANAGEMENT, L.P.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 13.3334
----------------------------------------------------
Number of Warrants Purchased
at Closing 26,667
--------------------------------------------------
Aggregate Purchase Price $200,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address:
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 16,667
----------------------------------------------------
Number of Warrants Purchased
at Closing 33,333
--------------------------------------------------
Aggregate Purchase Price $250,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ /S/
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 7
----------------------------------------------------
Number of Warrants Purchased
at Closing 14,000
--------------------------------------------------
Aggregate Purchase Price $126,630.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /S/
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
Address: 1 ▇▇▇▇▇ OF ▇▇▇▇ PLZ.
---------------------------------------------
▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 33
----------------------------------------------------
Number of Warrants Purchased
at Closing 66,000
--------------------------------------------------
Aggregate Purchase Price $596,970.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇.▇.
---------------------------------------------
By: ▇. ▇▇▇▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: PRESIDENT
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
---------------------------------------------
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 27
----------------------------------------------------
Number of Warrants Purchased
at Closing 54,000
--------------------------------------------------
Aggregate Purchase Price $400,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: TIBERIUS INVESTMENT & CAPITAL
By: ▇. ▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: DIRECTOR
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
LONDON
---------------------------------------------
EC1 A430
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 13.34
----------------------------------------------------
Number of Warrants Purchased
at Closing 26,666.66
--------------------------------------------------
Aggregate Purchase Price $200,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ LIFE INSURANCE
---------------------------------------------
TRUST DTD 1-22-97
By: ▇.▇. CORYDON /S/
---------------------------------------------
Name: ▇▇▇▇▇ ▇. CORYDON
---------------------------------------------
Title: TRUSTEE
---------------------------------------------
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 1.667
----------------------------------------------------
Number of Warrants Purchased
at Closing 3,333.33
--------------------------------------------------
Aggregate Purchase Price $25,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: TREELINE INVESTMENT PARTNERS, L.P.
By: TREELINE MANAGEMENT, LLC
---------------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
---------------------------------------------
Title: MANAGING MEMBER
---------------------------------------------
Address: 61 SPINDRIFT PASSAGE
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 6.67
----------------------------------------------------
Number of Warrants Purchased
at Closing 13,333
--------------------------------------------------
Aggregate Purchase Price $100,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title:
---------------------------------------------
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 10
----------------------------------------------------
Number of Warrants Purchased
at Closing 20,000
--------------------------------------------------
Aggregate Purchase Price $150,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: WHALEHAVEN CAPITAL LP
---------------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: EVAN SCHEMANAUER
---------------------------------------------
Title: AUTHORIZED SIGNATORY
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇.▇. ▇▇▇ ▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 7
----------------------------------------------------
Number of Warrants Purchased
at Closing 14,000
--------------------------------------------------
Aggregate Purchase Price $105,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: WHALEHAVEN FUND LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: EVAN SCHEMANAUER
---------------------------------------------
Title: DIRECTOR
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
P.O. BOX HM 2257
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇ BERMUDA
---------------------------------------------
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 7
----------------------------------------------------
Number of Warrants Purchased
at Closing 14,000
--------------------------------------------------
Aggregate Purchase Price $105,000.00
------------------------------------
OMNIBUS SIGNATURE PAGE TO
NATIONAL COAL CORP.
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Preferred Stock and Warrant
Purchase Agreement to which this signature page is attached, which, together
with all counterparts of the Agreement and signature pages of the other parties
named in said Agreement, shall constitute one and the same document in
accordance with the terms of the Agreement.
Print Name: WOODLAND FINANCIAL GROUP, LLC
By: ▇ ▇ ▇▇▇▇▇▇▇▇ /S/
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Title: MANAGING DIRECTOR
---------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone:
---------------------------------------------
Facsimile:
---------------------------------------------
E-Mail:
---------------------------------------------
SOC/EIN#:
---------------------------------------------
Number of Shares of Series A Preferred Stock Purchased at
Closing 10
----------------------------------------------------
Number of Warrants Purchased
at Closing 20,000
--------------------------------------------------
Aggregate Purchase Price $150,000.00
------------------------------------
SCHEDULE 1
National Coal Corp.
Preferred Stock Purchase Agreement
Purchasers and Shares of Preferred Stock
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Asset Managers International Lmtd 8 16,000 2.67 $120,000
c/o
Vision Capital Advisors
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
London, England
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Daytime 4 8,000 0 $60,000 by cancellation of
▇▇▇-▇▇▇-▇▇▇▇ Evening Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Big Bend XII Investments, LP
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ 133.33 266,667 44.44 $2,000,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Blackpool Partners, LLC
c/o
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ $60,000 by cancellation of
Fax: ▇▇▇-▇▇▇-▇▇▇▇ 4 8,000 0 Promissory Notes
▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $60,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 4 8,000 0 Promissory Notes
Fax: N/A
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Crestview Capital Master LLC
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 84 168,000 28 $1,260,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Crestview Capital Master LLC
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 66.67 133,333 0 $1,000,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ $30,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 2 4,000 0 Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c/o
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 8.33 16,667 0 $125,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ -------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $30,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 2 4,000 0 Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
GLL Single Strategy, L.P.
c/o
W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
GLL Investors Inc. $300,000 by cancellation of
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 20 40,000 0 Promissory Notes
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $850,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 56.67 113,333 0 Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Jacob Capital, LLC
▇/▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ 6.67 13,333 0 $100,000 by cancellation of
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Promissory Notes
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/o
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ $300,000 by cancellation of
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 20 40,000 0 Promissory Notes
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇▇ Family Limited Partnership
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 20 40,000 0 $300,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇ ▇▇▇▇ Jr. Declaration of
Trust, UAD May 1, 1986
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ $60,000 by cancellation of
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 4 8,000 0 Promissory Notes
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇ ▇▇▇▇ Revocable Trust
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ 35 70,000 0 $525,000 by cancellation of
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Promissory Notes
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Bear ▇▇▇▇▇▇▇ as custodian for
▇▇▇▇▇▇ ▇. Low ▇▇▇▇ ▇▇▇
c/o
Sunrise Securities Corp.
Attn: ▇▇▇▇▇▇ Low
25th Floor 13.33 26,667 4.44 $200,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
North Sound Legacy Fund LLC
c/o
North Sound Capital LLC
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
8 16,000 2.67 $120,000
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
North Sound Legacy Institutional
Fund LLC
c/o
North Sound Capital
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ 124 248,000 41.33 $1,860,000
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
North Sound Legacy International Ltd
c/o
North Sound Capital
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ 268 536,000 89.33 $4,020,000
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
RHP Master Fund Ltd
c/o
Rock Hill Investment Management, L.P
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 13.33 26,667 4.44 $200,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 16.67 33,333 0 $250,000 by cancellation of
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ 7 14,000 2.33 $105,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇- ▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
1 ▇▇▇▇▇ of ▇▇▇▇ Plz.
▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ 33 66,000 11 $495,000
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇.▇.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 27 54,000 9 $405,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇_▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Tiberius Investments & Capital
c/o
Vision Capital Advisors
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 13.33 26,667 4.44 $200,000
London, England
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Life Insurance
Trust U/A Dtd. 1-22-97
c/o
▇▇▇▇▇ ▇. Corydon
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1.67 3,333 0 $25,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Treeline Investment Partners, L.P
Attn: ▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 6.67 13,333 2.22 $100,000
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
NUMBER OF SHARES
NUMBER OF SHARES COMMON STOCK OF PREFERRED STOCK
NAME, ADDRESS AND FAX NUMBER OF OF PREFERRED UNDERLYING WARRANTS SUBJECT TO PURCHASE PRICE AND DESCRIPTION
PURCHASER STOCK PURCHASED PURCHASED AT ADDITIONAL OF PROMISSORY NOTES TO BE
AT CLOSING CLOSING PURCHASE RIGHT CANCELLED AS APPLICABLE
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 10 20,000 0 $150,000 by cancellation of
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Promissory Notes
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Whalehaven Capital LP
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
3rd Floor
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇ ▇▇▇ 7 14,000 2.33 $105,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Whalehaven Fund Limited
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
3rd Floor
▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇ ▇▇▇▇ 7 14,000 2.33 $105,000
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
Woodland Financial Group, LLC
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ $150,000 by cancellation of
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 10 20,000 0 Promissory Notes
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
TOTALS: 1044.67 2,089,333 203.86 $15,670,000
--------------------------------- ---------------- ------------------- ------------------ ------------------------------
SCHEDULE 2
National Coal Corp.
Preferred Stock Purchase Agreement
Purchasers and Restricted Stock to be Purchased
NUMBER OF SHARES OF RESTRICTED COMMON
NAME OF PURCHASER STOCK TO BE PURCHASED AT A PRICE OF $0.65
PER SHARE PRIOR TO CLOSING
---------------------------------- -----------------------------------------
Asset Managers International Lmtd 38,031
---------------------------------- -----------------------------------------
▇▇▇ ▇▇▇▇▇▇ 19,015
---------------------------------- -----------------------------------------
Big Bend XII Investments, LP 633,846
---------------------------------- -----------------------------------------
Blackpool Partners, LLC 19,015
---------------------------------- -----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 19,015
---------------------------------- -----------------------------------------
Crestview Capital Master LLC 716,246
---------------------------------- -----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 9,508
---------------------------------- -----------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 39,615
---------------------------------- -----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 9,508
---------------------------------- -----------------------------------------
GLL Single Strategy, L.P. 95,077
---------------------------------- -----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 269,385
---------------------------------- -----------------------------------------
Jacob Capital, LLC 31,692
---------------------------------- -----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 95,077
---------------------------------- -----------------------------------------
▇▇▇▇▇▇▇ Family Ltd. Partnership 95,077
---------------------------------- -----------------------------------------
NUMBER OF SHARES OF RESTRICTED COMMON
NAME OF PURCHASER STOCK TO BE PURCHASED AT A PRICE OF $0.65
PER SHARE PRIOR TO CLOSING
---------------------------------- -----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇ Jr. 19,015
---------------------------------- -----------------------------------------
▇▇▇▇▇ ▇▇▇▇ Revocable Trust 166,385
---------------------------------- -----------------------------------------
Bear ▇▇▇▇▇▇▇ as custodian for
▇▇▇▇▇▇ ▇. Low ▇▇▇▇ ▇▇▇ 63,385
---------------------------------- -----------------------------------------
North Sound Legacy Fund LLC 38,031
---------------------------------- -----------------------------------------
North Sound Legacy Institutional
Fund LLC 589,477
---------------------------------- -----------------------------------------
North Sound Legacy International
Ltd 1,274,031
---------------------------------- -----------------------------------------
RHP Master Fund Ltd 63,385
---------------------------------- -----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 79,231
---------------------------------- -----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 33,277
---------------------------------- -----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 156,877
---------------------------------- -----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇.▇. 128,354
---------------------------------- -----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Life Insurance
Trust U/A Dtd 1-22-97 7,923
---------------------------------- -----------------------------------------
Tiberius Investments & Capital 63,385
---------------------------------- -----------------------------------------
Treeline Investment Partners, L.P. 31,692
---------------------------------- -----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 47,538
---------------------------------- -----------------------------------------
Whalehaven Capital LP 33,277
---------------------------------- -----------------------------------------
NUMBER OF SHARES OF RESTRICTED COMMON
NAME OF PURCHASER STOCK TO BE PURCHASED AT A PRICE OF $0.65
PER SHARE PRIOR TO CLOSING
---------------------------------- -----------------------------------------
Whalehaven Fund Limited 33,227
---------------------------------- -----------------------------------------
Woodland Financial Group, LLC 47,538
---------------------------------- -----------------------------------------
TOTAL: 4,966,185
---------------------------------- -----------------------------------------
EXHIBIT B
FORM OF COMMON STOCK PURCHASE WARRANT
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT
REQUIRED.
Warrant No. W-__
COMMON STOCK PURCHASE WARRANT
To Purchase ____________ [20% COVERAGE] Shares of Common Stock of
NATIONAL COAL CORP.
THIS IS TO CERTIFY THAT _______________, or registered assigns (the
"Holder"), is entitled, during the Exercise Period (as hereinafter defined), to
purchase from National Coal Corp., a Florida corporation (the "Company"), the
Warrant Stock (as hereinafter defined and subject to adjustment as provided
herein), in whole or in part, at a purchase price of $2.10 per share, all on and
subject to the terms and conditions hereinafter set forth.
1. DEFINITIONS. As used in this Warrant, the following terms have
the respective meanings set forth below:
"ADDITIONAL SHARES OF COMMON STOCK" means any shares of Common Stock
issued by the Company after the Closing Date other than: (i) Warrant Stock; (ii)
shares issued or issuable pursuant to anti-dilution provisions of the Preferred
Stock; (iii) shares issued or issuable upon the conversion of the Preferred
Stock; (iv) shares issued or issuable upon the exercise of any warrants or
options outstanding as of the Closing Date; (v) shares of Common Stock or Common
Stock Equivalents issued in connection with a bona-fide strategic transaction;
(vii) shares of Common Stock or Common Stock Equivalents issued in connection
with any stock-based compensation plans of the Company approved by the Board of
Directors of the Company including all (which shall be at least three)
Independent Directors (as defined in the Purchase Agreement), the number of such
shares of Common Stock (or, in the case of Common Stock Equivalents, the number
of shares of Common Stock acquirable pursuant thereto) not to exceed 5 million
(as adjusted for stock splits, stock dividends and the like) and the value
assigned upon grant not to be less than 85% of the Current Market Price or
(viii) shares issuable upon the exercise of any warrants that are issuable
pursuant to the terms of the Purchase Agreement or upon conversion of the Notes
(as defined in the Note Purchase Agreement).
"AFFILIATE" means any person or entity that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a person or entity, as such terms are used in and construed
under Rule 144 under the Securities Act. With respect to a Holder of Warrants,
any investment fund or managed account that is managed on a discretionary basis
by the same investment manager as such Holder will be deemed to be an Affiliate
of such Holder.
"APPRAISED VALUE" means, in respect of any share of Common Stock on any
date herein specified, the fair saleable value of such share of Common Stock
(determined without giving effect to the discount for (i) a minority interest or
(ii) any lack of liquidity of the Common Stock or to the fact that the Company
may have no class of equity registered under the Exchange Act) as of the last
day of the most recent fiscal month ending prior to such date specified, based
on the value of the Company on a fully-diluted basis, as determined by a
nationally recognized investment banking firm selected by the Company's Board of
Directors and having no prior relationship with the Company.
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in Tennessee
generally are authorized or required by law or other government actions to
close.
"CHANGE OF CONTROL" means the (i) acquisition by an individual or legal
entity or group (as set forth in Section 13(d) of the Exchange Act) of more than
one-half of the voting rights or equity interests in the Company; or (ii) sale,
conveyance, or other disposition of all or substantially all of the assets,
property or business of the Company or the merger into or consolidation with any
other corporation (other than a wholly owned subsidiary corporation) or
effectuation of any transaction or series of related transactions where holders
of the Company's voting securities prior to such transaction or series of
transactions fail to continue to hold at least 50% of the voting power of the
Company.
"CLOSING DATE" means August 31, 2004.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"COMMON STOCK" means (except where the context otherwise indicates) the
Common Stock, $0.0001 par value per share, of the Company as constituted on the
Closing Date, and any capital stock into which such Common Stock may thereafter
be changed or converted, and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets on liquidation over any other class of stock
of the Company and which is not subject to redemption and (ii) shares of common
stock of any successor or acquiring corporation received by or distributed to
the holders of Common Stock of the Company in the circumstances contemplated by
Section 4.7.
"COMMON STOCK EQUIVALENTS" has the meaning set forth in Section 4.4.
"CURRENT MARKET PRICE" means, in respect of any share of Common Stock
on any date herein specified,
(1) if there shall not then be a public market for the Common
Stock, the higher of
(a) the book value per share of Common Stock at such
date, and
(b) the Appraised Value per share of Common Stock at such
date,
or
(2) if there shall then be a public market for the Common Stock, the
higher of (x) the book value per share of Common Stock at such date, and (y) the
average of the daily market prices for the 5 consecutive trading days
immediately before such date. The daily market price for each such trading day
shall be (i) the closing price on such day on the principal stock exchange
(including Nasdaq) on which such Common Stock is then listed or admitted to
trading, or quoted, as applicable, (ii) if no sale takes place on such day on
any such exchange, the last reported closing price on such day as officially
quoted on any such exchange (including Nasdaq), (iii) if the Common Stock is not
then listed or admitted to trading on any stock exchange, the last reported
closing bid price on such day in the over-the-counter market, as furnished by
the National Association of Securities Dealers Automatic Quotation System or the
National Quotation Bureau, Inc., (iv) if neither such corporation at the time is
engaged in the business of reporting
2
such prices, as furnished by any similar firm then engaged in such business, or
(v) if there is no such firm, as furnished by any member of the National
Association of Securities Dealers, Inc. (the "NASD") selected mutually by the
holder of this Warrant and the Company or, if they cannot agree upon such
selection, as selected by two such members of the NASD, one of which shall be
selected by holder of this Warrant and one of which shall be selected by the
Company.
"CURRENT WARRANT PRICE" means, in respect of a share of Common Stock at
any date herein specified, the price at which a share of Common Stock may be
purchased pursuant to this Warrant on such date. Until the Current Warrant Price
is adjusted pursuant to the terms herein, the initial Current Warrant Price
shall be $2.10 per share of Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"EXERCISE PERIOD" means the period during which this Warrant is
exercisable pursuant to Section 2.1.
"EXPIRATION DATE" means August 31, 2006.
"GAAP" means generally accepted accounting principles in the United
States of America as from time to time in effect.
"NASD" means the National Association of Securities Dealers, Inc., or
any successor corporation thereto.
"OTHER PROPERTY" has the meaning set forth in Section 4.7.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, incorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
"PREFERRED STOCK" shall mean the Company's Series A Cumulative
Convertible Preferred Stock, par value $0.0001 per share.
"PURCHASE AGREEMENT" means, as applicable, (i) that certain Preferred
Stock and Warrant Purchase Agreement (the "PREFERRED STOCK PURCHASE AGREEMENT")
dated as of August 31, 2004 among the Company and the other parties named
therein, if this Warrant was issued pursuant thereto or (ii) that certain Note
Purchase Agreement (the "NOTE PURCHASE AGREEMENT") dated as of August 31, 2004
among the Company and the other parties named therein, if this Warrant was
issued upon conversion of the Notes (as Defined in the Note Purchase Agreement)
issued pursuant thereto.
"RESTRICTED COMMON STOCK" means shares of Common Stock which are, or
which upon their issuance upon the exercise of any Warrant would be required to
be, evidenced by a certificate bearing the restrictive legend set forth in
Section 3.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"TRADING DAY" means any day on which the primary market on which shares
of Common Stock are listed is open for trading.
3
"TRANSFER" means any disposition of any Warrant or Warrant Stock or of
any interest in either thereof, which would constitute a sale thereof within the
meaning of the Securities Act.
"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.
"WARRANT PRICE" means an amount equal to (i) the number of shares of
Common Stock being purchased upon exercise of this Warrant pursuant to Section
2.1, multiplied by (ii) the Current Warrant Price.
"WARRANT STOCK" means the ____________ [20% COVERAGE] shares of Common
Stock to be purchased upon the exercise hereof, subject to adjustment as
provided herein.
2. EXERCISE OF WARRANT.
2.1. MANNER OF EXERCISE. From and after the Closing Date, and until
5:00 P.M., New York time, on the Expiration Date (the "Exercise Period"), the
Holder may exercise this Warrant, on any Business Day, for all or any part of
the number of shares of Warrant Stock purchasable hereunder.
In order to exercise this Warrant, in whole or in part, the Holder
shall deliver to the Company at its principal office or at the office or agency
designated by the Company pursuant to Section 12, (i) a written notice of
Holder's election to exercise this Warrant, which notice shall specify the
number of shares of Warrant Stock to be purchased, (ii) payment of the Warrant
Price as provided herein, and (iii) this Warrant. Such notice shall be
substantially in the form of the subscription form appearing at the end of this
Warrant as EXHIBIT A, duly executed by the Holder or its agent or attorney. Upon
receipt thereof, the Company shall, as promptly as practicable, and in any event
within three Business Days thereafter, execute or cause to be executed and
deliver or cause to be delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Warrant Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as the Holder
shall request in the notice and shall be registered in the name of the Holder or
such other name as shall be designated in the notice. This Warrant shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and the Holder or any other Person so designated to
be named therein shall be deemed to have become a Holder of record of such
shares for all purposes, as of the date when the notice, together with the
payment of the Warrant Price and this Warrant, is received by the Company as
described above. If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Stock, 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, or at the request of the Holder, appropriate notation may be made on
this Warrant and the same returned to the Holder.
If the Company intentionally and willfully fails to deliver to the
holder such certificate or certificates pursuant to this Section 2.1 (free of
any restrictions on transfer or legends, if such shares have been registered) in
accordance herewith, prior to the seventh trading day after the receipt by the
Company of (i) a written notice of Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Warrant Stock to be
purchased, (ii) payment of the Warrant Price as provided herein, and (iii) this
Warrant (the "Date of Receipt"), the Company shall pay to such Holder, in cash,
on a per diem basis, an amount equal to 2% of the value of the undelivered
Warrant Stock (based on the Current Market Price of the Common Stock on the Date
of Receipt) per month until such delivery takes place.
4
Payment of the Warrant Price may be made at the option of the Holder
by: (i) certified or official bank check payable to the order of the Company,
(ii) wire transfer to the account of the Company or (iii) at any time after
January 28, 2005 if, at any time and from time to time, the Warrant Stock is not
registered for resale pursuant to an effective registration statement pursuant
to which sales may be made, the surrender and cancellation of a portion of
shares of Common Stock then held by the Holder or issuable upon such exercise of
this Warrant, which shall be valued and credited toward the total Warrant Price
due the Company for the exercise of the Warrant based upon the Current Market
Price of the Common Stock. All shares of Common Stock issuable upon the exercise
of this Warrant pursuant to the terms hereof shall be validly issued and, upon
payment of the Warrant Price, shall be fully paid and nonassessable and not
subject to any preemptive rights.
2.2. FRACTIONAL SHARES. The Company shall not be required to issue
a fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay an amount in cash equal to
the Current Market Price per share of Common Stock on the date of exercise
multiplied by such fraction.
2.3. CONTINUED VALIDITY. A Holder of shares of Common Stock issued
upon the exercise of this Warrant, in whole or in part (other than a Holder who
acquires such shares after the same have been publicly sold pursuant to a
Registration Statement under the Securities Act or sold pursuant to Rule 144
thereunder), shall continue to be entitled with respect to such shares to all
rights to which it would have been entitled as the Holder under Sections 10 and
13 of this Warrant.
2.4. RESTRICTIONS ON EXERCISE AMOUNT.
(i) Unless a Holder delivers to the Company irrevocable written notice
(x) prior to the date of issuance hereof or sixty-one days prior to the
effective date of such notice that this Section 2.4(i) shall not apply to such
Holder or (y) prior to a Change of Control the terms of which require the
conversion of the Preferred Stock into Common Stock, the Holder may not acquire
a number of shares of Warrant Stock to the extent that, upon such exercise, the
number of shares of Common Stock then beneficially owned by such holder and its
Affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Exchange Act (including shares held by any "group" of which the holder is
a member, but excluding shares beneficially owned by virtue of the ownership of
securities or rights to acquire securities that have limitations on the right to
convert, exercise or purchase similar to the limitation set forth herein),
exceeds 9.99% if the holder is a Crestview Investor or any of their successors
or assigns, or 4.99% if the Holder is any other person, in each case, of the
total number of shares of Common Stock of the Company then issued and
outstanding. For purposes hereof, "group" has the meaning set forth in Section
13(d) of the Exchange Act and applicable regulations of the Securities and
Exchange Commission, and the percentage held by the holder shall be determined
in a manner consistent with the provisions of Section 13(d) of the Exchange Act.
Each delivery of a notice of exercise by a Holder will constitute a
representation by such Holder that it has evaluated the limitation set forth in
this paragraph and determined, based on the most recent public filings by the
Company with the Commission, that the issuance of the full number of shares of
Warrant Stock requested in such notice of exercise is permitted under this
paragraph. "Crestview Investor" shall mean a Holder designated as a Crestview
Investor on SCHEDULE 1 to the Purchase Agreement.
(ii) In the event the Company is prohibited from issuing shares of
Warrant Stock as a result of any restrictions or prohibitions under applicable
law or the rules or regulations of any stock exchange, interdealer quotation
system or other self-regulatory organization, the Company shall as soon as
possible seek the approval of its stockholders and take such other action to
authorize the issuance of the full number of shares of Common Stock issuable
upon exercise of this Warrant.
5
3. TRANSFER, DIVISION AND COMBINATION.
3.1. TRANSFER. The Warrants and the Warrant Stock shall be freely
transferable, subject to compliance with all applicable laws, including, but not
limited to the Securities Act. If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant or the resale of the Warrant
Stock, this Warrant or the Warrant Stock, as applicable, shall not be registered
under the Securities Act, the Company may require, as a condition of allowing
such transfer (i) that the Holder or transferee of this Warrant or the Warrant
Stock as the case may be, furnish to the Company a written opinion of counsel
that is reasonably acceptable to the Company to the effect that such transfer
may be made without registration under the Securities Act, (ii) that the Holder
or transferee execute and deliver to the Company an investment letter in form
and substance acceptable to the Company and substantially in the form attached
as EXHIBIT C hereto and (iii) that the transferee be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act. Transfer of this
Warrant and all rights hereunder, in whole or in part, in accordance with the
foregoing provisions, 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 2.1 or the office or agency
designated by the Company pursuant to Section 12, 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 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 execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination 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. Following a transfer that complies
with the requirements of this Section 3.1, the Warrant may be exercised by a new
Holder for the purchase of shares of Common Stock regardless of whether the
Company issued or registered a new Warrant on the books of the Company.
3.2. RESTRICTIVE LEGEND. Each certificate for Warrant Stock
initially issued upon the exercise of this Warrant, and each certificate for
Warrant Stock issued to any subsequent transferee of any such certificate, shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED."
3.3. DIVISION AND COMBINATION; EXPENSES; BOOKS. 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 3.1 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. The Company shall prepare, issue and deliver at its own
expense the new Warrant or Warrants under this Section 3. The Company agrees to
maintain, at its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants.
6
4. ADJUSTMENTS. The number of shares of Common Stock for which
this Warrant is exercisable, and the price at which such shares may be purchased
upon exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 4. The Company shall give the Holder notice of any
event described below which requires an adjustment pursuant to this Section 4 in
accordance with Sections 5.1 and 5.2.
4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time
while this Warrant is outstanding the Company shall:
(i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then:
(1) the number of shares of Common Stock acquirable upon exercise
of this Warrant immediately after the occurrence of any such event
shall be adjusted to equal the number of shares of Common Stock which a
record holder of the same number of shares of Common Stock that would
have been acquirable under this Warrant immediately prior to the record
date for such dividend or distribution or the effective date of such
subdivision or combination would own or be entitled to receive after
such record date or the effective date of such subdivision or
combination, as applicable, and
(2) the Current Warrant Price shall be adjusted to equal:
(A) the Current Warrant Price in effect at the time of the
record date for such dividend or distribution or of the effective date
of such subdivision or combination, multiplied by the number of shares
of Common Stock into which this Warrant is exercisable immediately
prior to the adjustment, divided by
(B) the number of shares of Common Stock into which this
Warrant is exercisable immediately after such adjustment.
Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clauses (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
4.2. CERTAIN OTHER DISTRIBUTIONS. If at any time while this Warrant
is outstanding the Company shall cause the holders of its Common Stock to be
entitled to receive any dividend or other distribution of:
(i) cash,
(ii) any evidences of its indebtedness, any shares of stock of
any class or any other securities or property or assets of any nature
whatsoever (other than cash or additional shares of Common Stock as
provided in Section 4.1 hereof), or
(iii) any warrants or other rights to subscribe for or
purchase any evidences of its indebtedness, any shares of stock of any
class or any other securities or property or assets of any nature
whatsoever, then:
7
(1) the number of shares of Common Stock acquirable upon
exercise of this Warrant shall be adjusted to equal the product of the
number of shares of Common Stock acquirable upon exercise of this
Warrant immediately prior to the record date for such dividend or
distribution, multiplied by a fraction (x) the numerator of which shall
be the Current Warrant Price per share of Common Stock at the date of
taking such record and (y) the denominator of which shall be such
Current Warrant Price minus the amount allocable to one share of Common
Stock of any such cash so distributable and of the fair value (as
determined in good faith by the Board of Directors of the Company) of
any and all such evidences of indebtedness, shares of stock, other
securities or property or warrants or other subscription or purchase
rights so distributable; and
(2) the Current Warrant Price in effect immediately prior to
the record date fixed for determination of stockholders entitled to
receive such distribution shall be adjusted to equal (x) the Current
Warrant Price multiplied by the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately prior to the
adjustment, divided by (y) the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately after such
adjustment. A reclassification of the Common Stock (other than a change
in par value, or from par value to no par value or from no par value to
par value) into shares of Common Stock and shares of any other class of
stock shall be deemed a distribution by the Company to the holders of
its Common Stock of such shares of such other class of stock within the
meaning of this Section 4.2 and, if the outstanding shares of Common
Stock shall be changed into a larger or smaller number of shares of
Common Stock as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4.1.
4.3. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.
(i) If at any time while this Warrant is outstanding the
Company shall issue or sell any Additional Shares of Common Stock in exchange
for consideration in an amount per Additional Share of Common Stock less than
$1.50 (as adjusted for stock splits, stock dividends and the like) at the time
the additional shares of Common Stock are issued or sold, then:
(A) the Current Warrant Price immediately prior to such issue
or sale shall be reduced to a price determined by dividing
(1) an amount equal to the sum of (a) the number of
shares of Common Stock outstanding immediately prior to such issue or
sale multiplied by the then existing Current Warrant Price, plus (b)
the consideration, if any, received by the Company upon such issue or
sale, by
(2) the total number of shares of Common Stock
outstanding immediately after such issue or sale; and
(B) the number of shares of Common Stock acquirable upon
exercise of this Warrant shall be adjusted to equal the amount obtained by
(1) multiplying the Current Warrant Price in effect
immediately prior to such issue or sale by the number of shares of
Common Stock acquirable upon exercise of this Warrant immediately prior
to such issue or sale and
(2) dividing the product thereof by the Current
Warrant Price resulting from the adjustment made pursuant to clause
(A).
8
(ii) The provisions of paragraph 4.3(i) shall not apply to any
issuance of additional shares of Common Stock for which an adjustment is
provided under Section 4.1 or 4.2. No adjustment of the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be made under
paragraph 4.3(i) upon the issuance of any additional shares of Common Stock
which are issued pursuant to the exercise of any warrants or other subscription
or purchase rights or pursuant to the exercise of any conversion or exchange
rights in any convertible securities, if any such adjustment shall previously
have been made upon the issuance of such warrants or other rights or upon the
issuance of such convertible securities (or upon the issuance of any warrant or
other rights therefor) pursuant to Section 4.4.
4.4. ISSUANCE OF COMMON STOCK EQUIVALENTS. If at any time while
this Warrant is outstanding the Company shall issue or sell any warrants or
other rights to subscribe for or purchase any additional shares of Common Stock
or any securities convertible into shares of Common Stock (other than the
Additional Shares of Common Stock) (collectively, "Common Stock Equivalents"),
whether or not the rights to exchange or convert thereunder are immediately
exercisable, and the effective price per share for which Common Stock is
issuable upon the exercise, exchange or conversion of such Common Stock
Equivalents shall be less than the Current Warrant Price in effect immediately
prior to the time of such issue or sale, then the number of shares of Warrant
Stock acquirable upon the exercise of this Warrant and the Current Warrant Price
shall be adjusted as provided in Section 4.3 on the basis that the maximum
number of additional shares of Common Stock issuable pursuant to all such Common
Stock Equivalents shall be deemed to have been issued and outstanding and the
Company shall have received all of the consideration payable therefor, if any,
as of the date of the actual issuance of such Common Stock Equivalents. No
further adjustments to the current Warrant Price shall be made under this
Section 4.4 upon the actual issue of such Common Stock upon the exercise,
conversion or exchange of such Common Stock Equivalents.
4.5. SUPERSEDING ADJUSTMENT.
(i) If, at any time after any adjustment of the number of
shares of Common Stock into which this Warrant is exercisable and the Current
Warrant Price shall have been made pursuant to Section 4.4 as the result of any
issuance of Common Stock Equivalents, (x) the right to exercise, convert or
exchange all or a portion of such Common Stock Equivalents shall expire
unexercised, or (y) the conversion rate or consideration per share for which
shares of Common Stock are issuable pursuant to such Common Stock Equivalents
shall be increased solely by virtue of provisions therein contained for an
automatic increase in such conversion rate or consideration per share upon the
occurrence of a specified date or event, then any such previous adjustments to
the Current Warrant Price and the number of shares of Common Stock for which
this Warrant is exercisable shall be rescinded and annulled and the additional
shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation.
(ii) Upon the occurrence of an event set forth in Section
4.5(i) above there shall be a recomputation made of the effect of such Common
Stock Equivalents on the basis of: (i) treating the number of additional shares
of Common Stock or other property, if any, theretofore actually issued or
issuable pursuant to the previous exercise, conversion or exchange of such
Common Stock Equivalents, as having been issued on the date or dates of any such
exercise, conversion or exchange and for the consideration actually received and
receivable therefor, and (ii) treating any such Common Stock Equivalents which
then remain outstanding as having been granted or issued immediately after the
time of such increase of the conversion rate or consideration per share for
which shares of Common Stock or other property are issuable under such Common
Stock Equivalents; whereupon a new adjustment to the number of shares of Common
Stock for which this Warrant is exercisable and the Current Warrant Price shall
be made, which new adjustment shall supersede the previous adjustment so
rescinded and annulled.
9
4.6. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS. The following
provisions shall be applicable to the making of adjustments of the number of
shares of Common Stock into which this Warrant is exercisable and the Current
Warrant Price provided for in Section 4:
(a) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by
Section 4 shall be made whenever and as often as any specified event requiring
an adjustment shall occur, except that any that would otherwise be required may
be postponed (except in the case of a subdivision or combination of shares of
the Common Stock, as provided for in Section 4.1) up to, but not beyond the date
of exercise if such adjustment either by itself or with other adjustments not
previously made adds or subtracts less than 1% of the shares of Common Stock
into which this Warrant is exercisable immediately prior to the making of such
adjustment. Any adjustment representing a change of less than such minimum
amount (except as aforesaid) which is postponed shall be carried forward and
made as soon as such adjustment, together with other adjustments required by
this Section 4 and not previously made, would result in a minimum adjustment or
on the date of exercise. 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.
(b) FRACTIONAL INTERESTS. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into account to
the nearest 1/100th of a share.
(c) WHEN ADJUSTMENT NOT REQUIRED. If the Company undertakes a
transaction contemplated under this Section 4 and as a result takes a record of
the holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights or other benefits
contemplated under this Section 4 and shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights or other benefits
contemplated under this Section 4, then thereafter no adjustment shall be
required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(d) ESCROW OF STOCK. If after any property becomes
distributable pursuant to Section 4 by reason of the taking of any record of the
holders of Common Stock, but prior to the occurrence of the event for which such
record is taken, a holder of this Warrant exercises the Warrant during such
time, then such holder shall continue to be entitled to receive any shares of
Common Stock issuable upon exercise hereunder by reason of such adjustment and
such shares or other property shall be held in escrow for the holder of this
Warrant by the Company to be issued to holder of this Warrant upon and to the
extent that the event actually takes place. Notwithstanding any other provision
to the contrary herein, if the event for which such record was taken fails to
occur or is rescinded, then such escrowed shares shall be canceled by the
Company and escrowed property returned to the Company.
4.7. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS.
(a) If there shall occur a Change of Control and if pursuant
to the terms of such Change of Control, shares of common stock of the successor
or acquiring corporation, 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 corporation ("Other Property"), are to be received by or distributed
to the holders of Common Stock of the Company, then the Holder of this Warrant
shall have the right thereafter to receive, upon the exercise of the Warrant,
the number of shares of common stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and the Other Property
receivable upon or as a result of such Change of Control by a holder of the
number of shares of Common Stock into which this Warrant is exercisable
immediately prior to such event.
10
(b) In case of any such Change of Control described above, the
successor or acquiring corporation (if other than the Company) and, if an entity
different from the successor or surviving entity, the entity whose capital stock
or assets the holders of Common Stock of the Company are entitled to receive as
a result of such transaction, shall expressly assume the due and punctual
observance and performance of each and every covenant and condition of contained
in 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 of Directors of the
Company) in order to provide for adjustments of shares of the Common Stock into
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in Section 4. For purposes of
Section 4, common stock of the successor or acquiring corporation shall include
stock of such corporation of any class which is not preferred as to dividends or
assets on liquidation over any other class of stock of such corporation and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 4 shall similarly apply to successive Change of Control
transactions.
4.8. OTHER ACTION AFFECTING COMMON STOCK. In case at any time or
from time to time the Company shall take any action in respect of its Common
Stock, other than the payment of dividends permitted by Section 4 or any other
action described in Section 4, then, unless such action will not have a
materially adverse effect upon the rights of the holder of this Warrant, the
number of shares of Common Stock or other stock into which this Warrant is
exercisable and/or the purchase price thereof shall be adjusted in such manner
as may be equitable in the circumstances.
4.9. CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by reason
of any adjustment hereunder, would cause the Current Warrant Price to be less
than the par value per share of Common Stock.
4.10. STOCK TRANSFER TAXES. The issue of stock certificates upon
exercise of this Warrant shall be made without charge to the holder for any tax
in respect of such issue. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares in any name other than that of the holder of this Warrant,
and the Company shall not be required to issue or deliver any such stock
certificate unless and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
5. NOTICES TO WARRANT HOLDERS.
5.1. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Current Warrant Price, the Company, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to the Holder of this Warrant a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon the written request at any time of the Holder of this Warrant,
furnish or cause to be furnished to such Holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) the Current Warrant Price at the
time in effect and (iii) the number of shares of Common Stock and the amount, if
any, or other property which at the time would be received upon the exercise of
Warrants owned by such Holder.
5.2. NOTICE OF CORPORATE ACTION. If at any time:
11
(a) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend (other than
a cash dividend payable out of earnings or earned surplus legally available for
the payment of dividends under the laws of the jurisdiction of incorporation of
the Company) or other distribution, or any right to subscribe for or purchase
any evidences of its indebtedness, any shares of stock of any class or any other
securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 20 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least 20 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall specify
(i) the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, the date on which the holders of Common Stock
shall be entitled to any such dividend, distribution or right, and the amount
and character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 16.2.
5.3. NO RIGHTS AS STOCKHOLDER. This Warrant does not entitle the
Holder to any voting or other rights as a stockholder of the Company prior to
exercise and payment for the Warrant Price in accordance with the terms hereof.
6. NO IMPAIRMENT. The Company shall not by any action, including,
without limitation, amending its articles of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (c) use its best efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant. Upon the request of the
Holder, the Company will at any time during the period this Warrant is
outstanding acknowledge in writing, in form satisfactory to the Holder, the
continuing validity of this Warrant and the obligations of the Company
hereunder.
12
7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH APPROVAL OF ANY GOVERNMENTAL AUTHORITY. From and after the Closing Date,
the Company shall at all times reserve and keep available for issue upon the
exercise of Warrants such number of its authorized but unissued shares of Common
Stock as will be sufficient to permit the exercise in full of all outstanding
Warrants (without regard to any ownership limitations provided in Section
2.4(i)). All shares of Common Stock which shall be so issuable, when issued upon
exercise of any Warrant and payment therefor in accordance with the terms of
such Warrant, shall be duly and validly issued and fully paid and nonassessable,
and not subject to preemptive rights. Before taking any action which would cause
an adjustment reducing the Current Warrant Price below the then par value, if
any, of the shares of Common Stock issuable upon exercise of the Warrants, the
Company shall take any corporate action which may be necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
such Common Stock at such adjusted Current Warrant Price. Before taking any
action which would result in an adjustment in the number of shares of Common
Stock for which this Warrant is exercisable or in the Current Warrant Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof. If any shares of Common Stock required to be reserved for
issuance upon exercise of Warrants require registration or qualification with
any governmental authority under any federal or state law before such shares may
be so issued (other than as a result of a prior or contemplated distribution by
the Holder of this Warrant), the Company will in good faith and as expeditiously
as possible and at its expense endeavor to cause such shares to be duly
registered.
8. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS. In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of Section 4 refers to the
taking of a record of such holders, the Company will in each such case take such
a record and will take such record as of the close of business on a Business
Day. The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
9. REGISTRATION RIGHTS. The resale of the Warrant Stock shall be
registered in accordance with the terms and conditions contained in that certain
Investor Rights Agreement dated of even date hereof, among the Holder, the
Company and the other parties named therein (the "Investor Rights Agreement").
The Holder acknowledges that pursuant to the Investor Rights Agreement, the
Company has the right to request that the Holder furnish information regarding
such Holder and the distribution of the Warrant Stock as is required by law or
the Commission to be disclosed in the Registration Statement (as such term is
defined in the Investor Rights Agreement), and the Company may exclude from such
registration the shares of Warrant Stock acquirable hereunder if Holder fails to
furnish such information within a reasonable time prior to the filing of each
Registration Statement, supplemented prospectus included therein and/or amended
Registration Statement.
10. SUPPLYING INFORMATION. Upon any default by the Company of its
obligations hereunder or under the Investor Rights Agreement, the Company shall
cooperate with the Holder in supplying such information as may be reasonably
necessary for such Holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Restricted Common Stock.
11. LOSS OR MUTILATION. Upon receipt by the Company from the
Holder of evidence reasonably satisfactory to it of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and indemnity or security
reasonably satisfactory to it and reimbursement to the Company of all reasonable
expenses incidental thereto 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 the Holder; provided, however, that in
13
the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.
12. 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.
13. FINANCIAL AND BUSINESS INFORMATION.
13.1. QUARTERLY INFORMATION. The Company will deliver to the Holder,
as soon as available and in any event within 45 days after the end of each of
the first three quarters of each fiscal year of the Company, one copy of an
unaudited consolidated balance sheet of the Company and its subsidiaries as at
the end of such quarter, and the related unaudited consolidated statements of
income, retained earnings and cash flow of the Company and its subsidiaries for
such quarter and, in the case of the second and third quarters, for the portion
of the fiscal year ending with such quarter, setting forth in each case in
comparative form the figures for the corresponding periods in the previous
fiscal year. Such financial statements shall be prepared by the Company in
accordance with GAAP and accompanied by the certification of the Company's chief
executive officer or chief financial officer that such financial statements
present fairly the consolidated financial position, results of operations and
cash flow of the Company and its subsidiaries as at the end of such quarter and
for such year-to-date period, as the case may be; provided, however, that the
Company shall have no obligation to deliver such quarterly information under
this Section 13.1 to the extent it is publicly available; and provided further,
that if such information contains material non-public information, the Company
shall so notify the Holder prior to delivery thereof and the Holder shall have
the right to refuse delivery of such information.
13.2. ANNUAL INFORMATION. The Company will deliver to the Holder as
soon as available and in any event within 90 days after the end of each fiscal
year of the Company, one copy of an audited consolidated balance sheet of the
Company and its subsidiaries as at the end of such year, and audited
consolidated statements of income, retained earnings and cash flow of the
Company and its subsidiaries for such year; setting forth in each case in
comparative form the figures for the corresponding periods in the previous
fiscal year; all prepared in accordance with GAAP, and which audited financial
statements shall be accompanied by an opinion thereon of the independent
certified public accountants regularly retained by the Company, or any other
firm of independent certified public accountants of recognized national standing
selected by the Company; provided, however, that the Company shall have no
obligation to deliver such annual information under this Section 13.2 to the
extent it is publicly available; and provided further, that if such information
contains material non-public information, the Company shall so notify the Holder
prior to delivery thereof and the Holder shall have the right to refuse delivery
of such information.
13.3. FILINGS. The Company will file on or before the required date
all regular or periodic reports (pursuant to the Exchange Act) with the
Commission and will deliver to Holder promptly upon their becoming available one
copy of each report, notice or proxy statement sent by the Company to its
stockholders generally.
14. LIMITATION OF LIABILITY. No provision hereof, in the absence
of affirmative action by the Holder 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 the Holder for the purchase price of any Common Stock,
whether such liability is asserted by the Company or by creditors of the
Company.
15. REDEMPTION AT COMPANY'S ELECTION.
14
15.1. The Company may at the option of the Board of Directors of the
Company redeem this Warrant, in whole or in part, at any time after March 1,
2006 provided that (i) the Current Market Price (as determined by paragraph (2)
of such definition) is greater than $4.20 (as adjusted for stock splits, reverse
splits, stock dividends and the like) for ten consecutive trading days and (ii)
all of the Warrant Stock underlying the Warrants to be redeemed (x) is then
registered under an effective registration statement in accordance with the
terms and conditions of the Investor Rights Agreement and the Company is in
compliance in all material respects with the Investor Rights Agreement or (y)
may be sold without restriction pursuant to Rule 144(k) promulgated by the
Commission under the Securities Act. The amount payable in redemption of the
rights to purchase the Warrant Stock pursuant to this Section 15.1 shall be cash
equal to $0.01 multiplied by the number of Warrant Shares that would be issuable
upon exercise of the Warrants being redeemed (the "Redemption Price").
15.2. The Company shall effect a redemption as follows:
(i) The number of warrants subject to redemption (including
the Warrants) shall be allocated pro rata among the holders of all of the
warrants to purchase Common Stock issued by the Company pursuant to the Purchase
Agreement together with those issued upon conversion of the Notes (as defined in
the Note Purchase Agreement) (collectively, the "Redemption Warrants"), based
upon the number of Redemption Warrants then outstanding that are held by each
such holder.
(ii) The Company shall pay the Redemption Price in cash for
the Redemption Warrants to be redeemed.
(iii) At least 15 but no more than 60 days prior to the date
fixed for any redemption of any Redemption Warrants (the "Redemption Date"),
written notice shall be given to each holder of record of Redemption Warrants to
be redeemed, notifying such holder of the redemption to be effected, specifying
the Redemption Date, the Redemption Price, the place at which payment may be
obtained and calling upon such holder to surrender to the Company, in the manner
and at the place designated, its certificate or certificates representing the
Redemption Warrants to be redeemed (the "Redemption Notice"). On or after the
Redemption Date, each holder of Redemption Warrants to be redeemed shall
surrender to the Company the certificate or certificates representing such
warrants, in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price therefor shall be paid to the person whose
name appears on such certificate or certificates as the owner thereof, and upon
such payment, each surrendered certificate shall be canceled. In the event less
than all the warrants represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed warrants. For avoidance
of doubt, the holder may exercise the Warrant at any time prior to the
redemption of the Warrant pursuant to this Section 15.
16. MISCELLANEOUS.
16.1. NONWAIVER AND EXPENSES. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice 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 such amounts as shall be sufficient to cover any
third party costs and expenses including, but not limited to, reasonable
attorneys' fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.
16.2. NOTICE GENERALLY. All notices, requests, demands or other
communications provided for herein shall be in writing and shall be given in the
manner and to the addresses set forth in the Purchase Agreement.
15
16.3. SUCCESSORS AND ASSIGNS. Subject to compliance with the
provisions of Section 3.1, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the successors and assigns of the Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant,
and shall be enforceable by any such Holder.
16.4. AMENDMENT. This Warrant may be modified or amended or the
provisions of this Warrant waived with the written consent of both the Company
and the Holder.
16.5. SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be modified to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
16.6. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
16.7. GOVERNING LAW. This Warrant and the transactions contemplated
hereby shall be deemed to be consummated in the State of New York and shall be
governed by and interpreted in accordance with the local laws of the State of
New York without regard to the provisions thereof relating to conflicts of laws.
The Company hereby irrevocably consents to the exclusive jurisdiction of the
State and Federal courts located in New York City, New York in connection with
any action or proceeding arising out of or relating to this Warrant. In any such
litigation the Company agrees that the service thereof may be made by certified
or registered mail directed to the Company pursuant to Section 16.2.
16
IN WITNESS WHEREOF, National Coal Corp. has caused this Warrant to be
executed by its duly authorized officer and attested by its Secretary.
Dated: August 31, 2004
NATIONAL COAL CORP.
By: ______________________________
Name:
Title:
Attest:
By:______________________________
Name:
Title: Secretary
17
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
1. The undersigned hereby elects to purchase shares of the Common Stock
of National Coal Corp. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Common Stock of National Coal Corp. through "cashless exercise" in the manner
specified in the Warrant. This conversion is exercised with respect to
_____________________ of the Shares covered by the Warrant.
3. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
----------------------------------------
(Name)
----------------------------------------
----------------------------------------
(Address)
[and, if such shares of Common Stock shall not include all of the
shares of Common Stock issuable as provided in this Warrant, that a new Warrant
of like tenor and date for the balance of the shares of Common Stock issuable
hereunder be delivered to the undersigned.]
-------------------------------------
(Name of Registered Owner)
-------------------------------------
(Signature of Registered Owner)
-------------------------------------
(Street Address)
-------------------------------------
(State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of common stock of National Coal Corp. 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 shares of common stock set
forth below:
---------------------------------------
---------------------------------------
---------------------------------------
(Name and Address of Assignee)
---------------------------------------
(Number of Shares of Common Stock)
and does hereby irrevocably constitute and appoint ____________ attorney-in-fact
to register such transfer on the books of the Company, maintained for the
purpose, with full power of substitution in the premises.
Dated:_________________________________
--------------------------------------
(Print Name and Title)
--------------------------------------
(Signature)
--------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT C
FORM OF INVESTMENT REPRESENTATION LETTER
In connection with the acquisition of [warrants (the "Warrants") to purchase
____ shares of common stock of National Coal Corp. (the "Company"), par value
$0.0001 per share (the "Common Stock")][___shares of common stock of National
Coal Corp. (the "Company"), par value $0.0001 per share (the "Common Stock")
upon the exercise of warrants by ________], by _______________ (the "Holder")
from _____________, the Holder hereby represents and warrants to the Company as
follows:
The Holder (i) is an "Accredited Investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"); and (ii) has the ability to bear the economic risks of such Holder's
prospective investment, including a complete loss of Holder's investment in the
Warrants and the shares of Common Stock issuable upon the exercise thereof
(collectively, the "Securities").
The Holder, by acceptance of the Warrants, represents and warrants to the
Company that the Warrants and all securities acquired upon any and all exercises
of the Warrants are purchased for the Holder's own account, and not with view to
distribution of either the Warrants or any securities purchasable upon exercise
thereof in violation of applicable securities laws.
The Holder acknowledges that (i) the Securities have not been registered under
the Act, (ii) the Securities are "restricted securities" and the certificate(s)
representing the Securities shall bear the following legend, or a similar legend
to the same effect, until (i) in the case of the shares of Common Stock
underlying the Warrants, such shares shall have been registered for resale by
the Holder under the Act and effectively been disposed of in accordance with a
registration statement that has been declared effective; or (ii) in the opinion
of counsel for the Company such Securities may be sold without registration
under the Act:
"[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES
INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND ALL SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE
SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE
EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter
to be executed in its corporate name by its duly authorized officer this __ day
of __________ 200_.
[Name]
By:______________________________
Name:
Title:
EXHIBIT G
SUBSCRIPTION FORM
[To be executed only upon exercise Additional Purchase Right]
1. The undersigned hereby elects to purchase shares of the Series A
Cumulative Convertible Preferred Stock of National Coal Corp. (the "Company")
along with the appropriate number of Warrants, in each case, pursuant to the
terms of the Preferred Stock and Warrant Purchase Agreement, dated as of August
31, 2004 among the Company and the Purchasers listed in Schedule 1 thereto (the
"Purchase Agreement"), and tenders herewith payment of the purchase price of
such shares in full.
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below. The
undersigned hereby makes for the benefit of the Company, as of the date hereof
and with respect to the shares of Series A Cumulative Convertible Stock being
acquired hereunder, the representations and warranties set forth in Section 4.3
through 4.6 of the Purchase Agreement.
----------------------------------------
(Name)
----------------------------------------
----------------------------------------
(Address)
-------------------------------------
(Name of Purchaser)
-------------------------------------
(Signature of Purchaser)
-------------------------------------
(Street Address)
-------------------------------------
(State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name
Purchaser in the Purchase Agreement in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT H
ASSIGNMENT FORM
FOR ADDITIONAL PURCHASE RIGHT
FOR VALUE RECEIVED the undersigned Purchaser pursuant to the Preferred Stock and
Warrant Purchase Agreement, dated as of August 31, 2004 among the Company and
the Purchasers listed in Schedule 1 thereto (the "Purchase Agreement") hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under Article VIII of the Purchase Agreement, with respect to
the number of shares of Preferred Stock and Warrant Shares set forth below:
---------------------------------------
---------------------------------------
---------------------------------------
(Name and Address of Assignee)
---------------------------------------
(Number of Shares of Preferred Stock)
---------------------------------------
(Number of Warrant Shares)
Dated:________________________________
--------------------------------------
(Print Name and Title)
--------------------------------------
(Signature)
--------------------------------------
(Witness)
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular, without alteration or
enlargement or any change whatsoever.
