EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 17th day of October, 2007 (the "EFFECTIVE DATE"), by and
among National Coal Corp., a Florida corporation (the "COMPANY"), NCC Corp., an
Alabama corporation ("ACQUISITION CO."), and the parties set forth on the
signature page and EXHIBIT A hereto (each, a "PURCHASER" and collectively, the
"PURCHASERS").
RECITALS
A. The Purchasers have purchased shares of the Company's Common Stock
pursuant to Subscription Agreements (each, a "SUBSCRIPTION AGREEMENT" and
collectively, the "SUBSCRIPTION AGREEMENTS") by and between the Company and each
Purchaser.
B. Acquisition Co. has acquired warrants (individually, a "WARRANT"
and, collectively, the "WARRANTS") to purchase up to 250,000 shares (as adjusted
pursuant to the below defined Warrant Agreement, the "WARRANT SHARES") of the
Company's Common Stock, pursuant to a Warrant Agreement dated as of even date
herewith (the "WARRANT AGREEMENT").
C. The Company, on the one hand, and the Purchasers and Acquisition
Co., on the other hand, desire to set forth the registration rights to be
granted by the Company to the Purchasers and Acquisition Co.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants, and conditions set forth herein and in
the Subscription Agreements, the parties mutually agree as follows:
AGREEMENT
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"APPROVED MARKET" means the NASDAQ Global Market, the NASDAQ Capital
Market, the New York Stock Exchange, Inc., the American Stock Exchange, Inc. or
the NASD's OTC Bulletin Board.
"BLACKOUT PERIOD" means, with respect to a registration, a period:
(a) in each case commencing on the day immediately after the
Company notifies the Holders that they are required, pursuant to SECTION 4(f),
to suspend offers and sales of Registrable Securities during which the Company,
in the good faith judgment of its Board of Directors, determines (because of the
existence of, or in anticipation of, any acquisition, financing activity, or
other transaction involving the Company, or the unavailability for reasons
beyond the Company's control of any required financial statements, disclosure of
information which is in its best interest not to publicly disclose, or any other
event or condition of similar significance to the Company) that the registration
and distribution of the Registrable Securities to be covered by such
registration statement, if any, would be seriously detrimental to the Company
and its shareholders and ending on the earlier of (1) the date upon which the
material non-public information commencing the Blackout Period is disclosed to
the public or ceases to be material and (2) such time as the Company notifies
the selling Holders that the Company will no longer delay such filing of the
Registration Statement, recommences taking steps to make such Registration
Statement effective, or allows sales pursuant to such Registration Statement to
resume; PROVIDED, HOWEVER, that (i) the Company shall limit its use of Blackout
Periods described in this CLAUSE (A), in the aggregate, to 30 Trading Days in
any 12-month period and (ii) no Blackout Period pursuant to this CLAUSE (A) may
commence sooner than 60 days after the end of a prior such Blackout Period; or
(b) commencing on the day immediately after the Company
notifies the Holders that they are required pursuant to SECTION 5 to suspend
offers and sales of Registrable Securities because, with respect to a
registration statement on a form other than Form S-3, the Company reasonably
determines that, based on the advice of counsel, a post-effective amendment to
the registration statement must be filed with the Commission in order to update
the audited financial statements in the registration statement, or the Company
elects, in its discretion, to file a post-effective amendment to such
registration statement for the purpose of converting it to a Form S-3 after such
form becomes available for use by the Company, and, in either case, such
post-effective amendment is reviewed by the Commission, and ending at such time
as the post-effective amendment is declared effective by the Commission;
PROVIDED, HOWEVER, that (i) the Company shall use its reasonable best efforts to
promptly cause such post-effective amendment to be declared effective by the
Commission and (ii) the Company may suspend effectiveness of a registration
statement for a period not to exceed 60 consecutive days, provided that the
Company may not suspend its obligation under this CLAUSE (B) for more than 90
days in the aggregate during any 12-month period.
"BUSINESS DAY" means any day of the year, other than a Saturday,
Sunday, or other day on which the Commission is required or authorized to close.
"CLOSING DATE" means October 17, 2007.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"COMMON STOCK" means the common stock, par value $0.0001 per share, of
the Company and any and all shares of capital stock or other equity securities
of: (i) the Company which are added to or exchanged or substituted for the
Common Stock by reason of the declaration of any stock dividend or stock split,
the issuance of any distribution or the reclassification, readjustment,
recapitalization or other such modification of the capital structure of the
Company; and (ii) any other corporation, now or hereafter organized under the
laws of any state or other governmental authority, with which the Company is
merged, which results from any consolidation or reorganization to which the
Company is a party, or to which is sold all or substantially all of the shares
or assets of the Company, if immediately after such merger, consolidation,
reorganization or sale, the Company or the stockholders of the Company own
equity securities having in the aggregate more than 50% of the total voting
power of such other corporation.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"FAMILY MEMBER" means (a) with respect to any individual, such
individual's spouse, any descendants (whether natural or adopted), any trust all
of the beneficial interests of which are owned by any of such individuals or by
any of such individuals together with any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any
such individual, and any corporation, association, partnership or limited
liability company all of the equity interests of which are owned by those above
described individuals, trusts or organizations and (b) with respect to any
trust, the owners of the beneficial interests of such trust.
"HOLDER" means each Purchaser, Acquisition Co., or any of such
Purchaser's or Acquisition Co.'s respective successors and Permitted Assigns who
acquire rights in accordance with this Agreement with respect to the Warrants or
Registrable Securities directly or indirectly from a Purchaser or Acquisition
Co., including from any Permitted Assignee.
"INSPECTOR" means any attorney, accountant, or other agent retained by
a Holder for the purposes provided in SECTION 4(j).
"MAJORITY HOLDERS" means at any time Holders of a majority of the
Registrable Securities outstanding at such time. For purposes of this
definition, a holder of a Warrant shall be regarded as owning the number of
Warrant Shares into which such Warrant is convertible.
"MARKET VALUE" means the Market Value as defined in the Warrant
Agreement.
"NET WARRANT VALUE" mean, with respect to a Warrant, the Market Value
of a Warrant Share less the exercise price of such Warrant.
"OFFERING PRICE" means the Offering Price set forth in the Subscription
Agreements.
"PERMITTED ASSIGNEE" means (a) with respect to a partnership, its
partners or former partners in accordance with their partnership interests, (b)
with respect to a corporation, its shareholders in accordance with their
interest in the corporation, (c) with respect to a limited liability company,
its members or former members in accordance with their interest in the limited
liability company, (d) with respect to an individual party, any Family Member of
such party, (e) an entity that is controlled by, controls, or is under common
control with a transferor, (f) a party to this Agreement, or (g) only with
respect to Acquisition Co. or any Permitted Assignee of Acquisition Co., any
transferee that acquires all or any portion of a Warrant or any Warrant Shares
in accordance with the assignment provisions thereof.
The terms "REGISTER," "REGISTERED," and "REGISTRATION" refers to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means (i) Warrant Shares and (ii) shares of
Common Stock issued to each Purchaser pursuant to the Subscription Agreements;
provided, however, that such securities shall cease to be Registrable Securities
when (a) a registration statement covering such Registrable Security has been
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declared effective by the Commission and such Registrable Security has been sold
or disposed of pursuant to such effective registration statement, (b) such
Registrable Security has been disposed of pursuant to any section of Rule 144
(or any similar provision then in force) under the Securities Act or (c) such
Registrable Security can be disposed of pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act.
"REGISTRATION DEFAULT DATE" means the July 31, 2008.
"REGISTRATION DEFAULT PERIOD" means the period during which any
Registration Event occurs and is continuing.
"REGISTRATION EVENT" means the occurrence of any of the following
events:
(a) the Company fails to file with the SEC the Registration
Statement on or before the Registration Filing Date pursuant to SECTION
3(a);
(b) the Registration Statement covering Registrable Securities
is not declared effective by the Commission on or before the
Registration Default Date; or
(c) after the SEC Effective Date, sales cannot be made
pursuant to the Registration Statement for any reason (including
without limitation by reason of a stop order, or the Company's failure
to update the Registration Statement) but except as (i) excused
pursuant to SECTION 3(a), or (ii) as otherwise permitted by this
Agreement, including pursuant to a Blackout Period and as provided in
SECTION 5.
"REGISTRATION FILING DATE" means the April 15, 2008.
"REGISTRATION STATEMENT" means the registration statement required to
be filed by the Company pursuant to SECTION 3(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"SEC EFFECTIVE DATE" means the date the Registration Statement is
declared effective by the Commission.
"TRADING DAY" means a day on whichever (a) the national securities
exchange, (b) the NASDAQ Global Market, or (c) such other securities market, in
any such case which at the time constitutes the principal securities market for
the Common Stock, is open for general trading of securities.
2. TERM. This Agreement shall continue in full force and effect until
such time as there are no Registrable Securities hereunder, unless terminated
sooner by agreement of the Company and each Holder.
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3. REGISTRATION.
(a) REGISTRATION ON FORM S-3. As promptly as reasonably
practicable after the date hereof, but in any event not later than the
Registration Filing Date, the Company shall file with the Commission a
shelf registration statement on Form S-3 relating to the resale by the
Holders of all of the Registrable Securities; PROVIDED, HOWEVER, that
the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this SECTION 3(a), or keep
such registration effective pursuant to SECTION 4: (i) in any
particular jurisdiction in which the Company would be required to
qualify to do business as a foreign corporation or as a dealer in
securities under the securities or blue sky laws of such jurisdiction
or to execute a general consent to service of process in effecting such
registration, qualification or compliance, in each case where it has
not already done so; or (ii) during any Blackout Period, in which case
the Registration Filing Date shall be extended to the date immediately
following the last day of such Blackout Period.
(b) PIGGYBACK REGISTRATION. If the Company shall determine to
register for sale for cash any of its Common Stock, for its own account
or for the account of others (other than all of the Holders), other
than (i) a registration relating solely to employee benefit plans or
securities issued or issuable to employees, consultants (to the extent
the securities owned or to be owned by such consultants could be
registered on Form S-8) or any of their Family Members (including a
registration on Form S-8) or (ii) a registration relating solely to a
Commission Rule 145 transaction, a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization, or
similar event, the Company shall promptly give to the Holders written
notice thereof (and in no event shall such notice be given less than 20
calendar days prior to the filing of such registration statement), and
shall, subject to SECTION 3(c), include in such registration (and any
related qualification under blue sky laws or other compliance) (a
"PIGGYBACK REGISTRATION"), all of the Registrable Securities specified
in a written request or requests, made within 10 calendar days after
receipt of such written notice from the Company, by any Holder or
Holders. However, the Company may, without the consent of the Holders,
withdraw such registration statement prior to its becoming effective if
the Company or such other stockholders have elected to abandon the
proposal to register the securities proposed to be registered thereby.
(c) UNDERWRITING. If a Piggyback Registration is for a
registered public offering involving an underwriting, the Company shall
so advise the Holders in writing or as a part of the written notice
given pursuant to SECTION 3(b). In such event the right of any Holder
to registration pursuant to SECTION 3(b) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent
provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and any
other stockholders of the Company distributing their securities through
such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting by the Company or selling stockholders, as applicable.
Notwithstanding any other provision of this SECTION 3(c), if the
underwriter or the Company determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter
may exclude some or all Registrable Securities from such registration
and underwriting. The Company shall so advise all Holders (except those
Holders who failed to timely elect to distribute their Registrable
Securities through such underwriting or have indicated to the Company
their decision not to do so), and the number of shares of Registrable
Securities that may be included in the registration and underwriting,
if any, shall be allocated among such Holders as follows:
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(i) In the event of a Piggyback Registration that is
initiated by the Company, the number of shares that may be included in
the registration and underwriting shall be allocated first to the
Company and then, subject to obligations and commitments existing as of
the date hereof, to all selling stockholders, including the Holders,
who have requested to sell in the registration on a pro rata basis
according to the number of shares requested to be included; and
(ii) In the event of a Piggyback Registration that is
initiated by the exercise of demand registration rights by a
stockholder or stockholders of the Company (other than the Holders),
then the number of shares that may be included in the registration and
underwriting shall be allocated first to such selling stockholders who
exercised such demand and then, subject to obligations and commitments
existing as of the date hereof, to all other selling stockholders,
including the Holders, who have requested to sell in the registration,
on a pro rata basis according to the number of shares requested to be
included.
No Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration; PROVIDED,
HOWEVER, that, if by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities pursuant to the terms and limitations set forth herein in the same
proportion used above in determining the underwriter limitation.
(d) OTHER REGISTRATIONS. Prior to the SEC Effective Date the
Company will not, without the prior written consent of the Majority
Holders, file or request the acceleration of any other registration
statement filed with the Commission, and during any time subsequent to
the SEC Effective Date when the Registration Statement for any reason
is not available for use by any Holder for the resale of any
Registrable Securities, the Company shall not, without the prior
written consent of the Majority Holders, file any other registration
statement or any amendment thereto with the Commission under the
Securities Act or request the acceleration of the effectiveness of any
other registration statement previously filed with the Commission,
other than (A) any registration statement on Form S-8 or Form S-4 and
(B) any registration statement or amendment which the Company is
required to file or as to which the Company is required to request
acceleration pursuant to any obligation in effect on the date of
execution and delivery of this Agreement. Notwithstanding the
foregoing, the Holders acknowledge and agree that the Company may
include shares to be registered for resale by other stockholders of the
Company in any registration statement filed pursuant to this Agreement.
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(e) DEFAULT. If a Registration Event occurs, then the Company
will make payments to each Holder, as partial liquidated damages for
the minimum amount of damages to the Holder by reason thereof, and not
as a penalty, at a rate equal to (i) in the case of a Purchaser, one
percent (1%) of the Offering Price per share of Common Stock held by
such Purchaser per month, and (ii) in the case of a Holder of a
Warrant, one percent (1%) of the product obtained by multiplying the
Net Warrant Value as of the first Trading Day of each month by the
number of Warrant Shares into which such Holder's Warrants are
convertible per month; provided, however, that with respect to the
Holder of a Warrant, if the exercise price thereof exceeds the Market
Value on such first Trading Day of such month, no amount shall be owed
in respect of such month pursuant to this clause (ii), in both cases,
for each calendar month of the Registration Default Period (pro rated
for any period less than 30 days); PROVIDED, however, if a Registration
Event occurs (or is continuing) on a date more than one year after the
Holder acquired the Registrable Securities (and thus the one year
holding period under Rule 144(d) has elapsed), liquidated damages shall
be paid only with respect to that portion of a Holder's Registrable
Securities that cannot then be immediately resold in reliance on Rule
144; and PROVIDED, FURTHER, that in no event shall the aggregate
liquidated damages payable by the Company to any Purchaser exceed 20%
of the aggregate Offering Price paid by such Purchaser for all shares
of Common Stock acquired by such Purchaser pursuant to the Subscription
Agreement. Each such payment shall be due and payable within five days
after the end of each calendar month of the Registration Default Period
until the termination of the Registration Default Period and within
five days after such termination. Such payments shall be in partial
compensation to the Holder, and shall not constitute the Holder's
exclusive remedy for such events. The Registration Default Period shall
terminate upon (i) the filing of the Registration Statement in the case
of CLAUSE (A) of the definition of "Registration Event," (ii) the SEC
Effective Date in the case of CLAUSE (B) of the definition of
"Registration Event," and (iii) the ability of the Purchaser to effect
sales pursuant to the Registration Statement in the case of CLAUSE (C)
of the definition of "Registration Event," and (iv) in the case of the
events described in CLAUSES (B) and (C) of the definition of
"Registration Event," the earlier termination of the Registration
Default Period. The amounts payable as partial liquidated damages
pursuant to this paragraph shall be payable in lawful money of the
United States. Amounts payable as partial liquidated damages to each
Holder hereunder with respect to each share of Registrable Securities
shall cease when the Holder no longer holds such share of Registrable
Securities or such share of Registrable Securities can be immediately
sold by the Purchaser in reliance on Rule 144.
4. REGISTRATION PROCEDURES. In the case of each registration,
qualification, or compliance effected by the Company pursuant to SECTION 3
hereof, the Company will keep each Holder including securities therein
reasonably advised in writing (which may include e-mail) as to the initiation of
each registration, qualification, and compliance and as to the completion
thereof. At its expense with respect to any registration statement filed
pursuant to SECTION 3, the Company will:
(a) prepare and file with the Commission with respect to such
Registrable Securities, a registration statement on Form S-3 or any
other form for which the Company then qualifies or which counsel for
the Company shall deem appropriate, and which form shall be available
for the sale of the Registrable Securities in accordance with the
intended method(s) of distribution thereof, and use its reasonable best
efforts to cause such registration statement to become and remain
effective at least for a period ending with the first to occur of (i)
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the sale of all Registrable Securities covered by the registration
statement and (ii) the availability under Rule 144 for the Holder to
immediately and freely resell without restriction all Registrable
Securities covered by the registration statement (in either case, the
"EFFECTIVENESS PERIOD").
(b) if a registration statement is subject to review by the
Commission, promptly respond to all comments and use reasonable best
efforts to diligently pursue resolution of any comments to the
satisfaction of the Commission;
(c) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective during the Effectiveness Period (but in any event
at least until expiration of the 90-day period referred to in Section
4(3) of the Securities Act and Rule 174, or any successor thereto,
thereunder, if applicable), and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in accordance
with the intended method(s) of disposition by the sellers thereof set
forth in such registration statement;
(d) furnish, without charge, to each Holder of Registrable
Securities covered by such registration statement (i) a reasonable
number of copies of such registration statement (including any exhibits
thereto other than exhibits incorporated by reference), each amendment
and supplement thereto as such Holder may request, (ii) such number of
copies of the prospectus included in such registration statement
(including each preliminary prospectus and any other prospectus filed
under Rule 424 under the Securities Act) as such Holders may request,
in conformity with the requirements of the Securities Act, and (iii)
such other documents as such Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Holder, but only during the Effectiveness Period;
(e) use its reasonable best efforts to register or qualify
such Registrable Securities under such other applicable securities or
blue sky laws of such jurisdictions as any Holder of Registrable
Securities covered by such registration statement reasonably requests
as may be necessary for the marketability of the Registrable Securities
(such request to be made by the time the applicable registration
statement is deemed effective by the Commission) and do any and all
other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in such jurisdictions
of the Registrable Securities owned by such Holder; PROVIDED that the
Company shall not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (e), (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(f) as promptly as practicable after becoming aware of such
event, notify each Holder of such Registrable Securities at any time
when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event which comes to the
Company's attention if as a result of such event the prospectus
included in such registration statement contains an untrue statement of
a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading and the Company shall promptly prepare and furnish to such
Holder a supplement or amendment to such prospectus (or prepare and
file appropriate reports under the Exchange Act) so that, as thereafter
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delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, unless
suspension of the use of such prospectus otherwise is authorized herein
or in the event of a Blackout Period, in which case no supplement or
amendment need be furnished (or Exchange Act filing made) until the
termination of such suspension or Blackout Period;
(g) comply, and continue to comply during the period that such
registration statement is effective under the Securities Act, in all
material respects with the Securities Act and the Exchange Act and with
all applicable rules and regulations of the Commission with respect to
the disposition of all securities covered by such registration
statement, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve (12) months, but not more than eighteen (18) months,
beginning with the first full calendar month after the SEC Effective
Date, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
(h) as promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities being offered or
sold pursuant to the Registration Statement of the issuance by the
Commission of any stop order or other suspension of effectiveness of
the Registration Statement at the earliest possible time;
(i) permit the Holders of Registrable Securities being
included in the Registration Statement and their legal counsel, at such
Holders' sole cost and expense (except as otherwise specifically
provided in SECTION 6) to review and have a reasonable opportunity to
comment on the Registration Statement and all amendments and
supplements thereto at least two Business Days prior to their filing
with the Commission and refrain from filing any such document to which
the Majority Holders reasonably object;
(j) make available for inspection by any Holder and any
Inspector retained by such Holder, at such Holder's sole expense, all
Records as shall be reasonably necessary to enable such Holder to
exercise its due diligence responsibility, and cause the Company's
officers, directors, and employees to supply all information which such
Holder or any Inspector may reasonably request for purposes of such due
diligence; PROVIDED, HOWEVER, that such Holder shall hold in confidence
and shall not make any disclosure of any record or other information
which the Company determines in good faith to be confidential, and of
which determination such Holder is so notified at the time such Holder
receives such information, unless (i) the disclosure of such record is
necessary to avoid or correct a misstatement or omission in the
Registration Statement and a reasonable time prior to such disclosure
the Holder shall have informed the Company of the need to so correct
such misstatement or omission and the Company shall have failed to
correct such misstatement of omission, (ii) the release of such record
is ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iii) the information in
such record has been made generally available to the public other than
by disclosure in violation of this or any other agreement. The Company
shall not be required to disclose any confidential information in such
records to any Inspector (other than counsel for a Holder) until and
unless such Inspector shall have entered into a confidentiality
agreement with the Company with respect thereto, substantially in the
form of this SECTION 4(j), which agreement shall permit such Inspector
to disclose records to the Holder who has retained such Inspector. Each
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Holder agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company
and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, the records deemed confidential. The Company shall hold in
confidence and shall not make any disclosure of information concerning
a Holder provided to the Company pursuant to this Agreement unless (i)
disclosure of such information is necessary to comply with federal or
state securities laws, (ii) disclosure of such information to the Staff
of the Division of Corporation Finance is necessary to respond to
comments raised by the Staff in its review of the Registration
Statement, (iii) disclosure of such information is necessary to avoid
or correct a misstatement or omission in the Registration Statement,
(iv) release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent
jurisdiction, or (v) such information has been made generally available
to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning a Holder is sought in or by a
court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Holder and allow such Holder, at such
Holder's expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information;
(k) use its reasonable best efforts to cause all the
Registrable Securities covered by the Registration Statement to be
quoted on the NASDAQ Global Market or such other principal securities
market on which securities of the same class or series issued by the
Company are then listed or traded;
(l) provide a transfer agent and registrar, which may be a
single entity, for the Registrable Securities at all times;
(m) cooperate with the Holders of Registrable Securities being
offered pursuant to the Registration Statement to issue and deliver
certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to the Registration
Statement after delivery of certificates to the Company and enable such
certificates to be in such denominations or amounts as the Holders may
reasonably request and registered in such names as the Holders may
request;
(n) during the Effectiveness Period, refrain from bidding for
or purchasing any Common Stock or any right to purchase Common Stock or
attempting to induce any Person to purchase any such security or right
if such bid, purchase or attempt would in any way limit the right of
the Holders to sell Registrable Securities by reason of the limitations
set forth in Regulation M under the 1934 Act; and
(o) take all other reasonable actions necessary to expedite
and facilitate disposition by the Holders of the Registrable Securities
pursuant to the Registration Statement.
5. SUSPENSION OF OFFERS AND SALES. Each Holder of Registrable
Securities agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in SECTION 4(f) hereof or of the
commencement of a Blackout Period, such Holder shall discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
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Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by SECTION 4(f) hereof or notice
of the end of the Blackout Period, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company's expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the period mentioned in SECTION
4(a) hereof shall be extended by the greater of (i) ten business days or (ii)
the number of days during the period from and including the date of the giving
of such notice pursuant to SECTION 4(f) hereof to and including the date when
each Holder of Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by SECTION 4(f) hereof.
6. REGISTRATION EXPENSES. The Company shall pay all expenses in
connection with any registration, including, without limitation, all
registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with securities or blue sky laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided that, in any underwritten registration, each party shall pay for its
own underwriting discounts and commissions and transfer taxes. Except as
provided above in this SECTION 6 and SECTION 9, the Company shall not be
responsible for the expenses of any attorney or other advisor employed by a
Holder of Registrable Securities.
7. ASSIGNMENT OF RIGHTS. No Holder may assign its rights under this
Agreement to any party without the prior written consent of the Company;
PROVIDED, HOWEVER, that a Holder may assign its rights under this Agreement
without such restrictions to a Permitted Assignee as long as (a) such transfer
or assignment is effected in accordance with applicable securities laws; (b)
such transferee or assignee agrees in writing to become subject to the terms of
this Agreement; and (c) the Company is given written notice by such Holder of
such transfer or assignment, stating the name and address of the transferee or
assignee and identifying the Registrable Securities with respect to which such
rights are being transferred or assigned.
8. INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing.
9. INDEMNIFICATION.
(a) In the event of the offer and sale of Registrable
Securities held by Holders under the Securities Act, the Company shall,
and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder, its directors, officers, partners, each
other person who participates as an underwriter in the offering or sale
of such securities, and each other person, if any, who controls or is
under common control with such Holder or any such underwriter within
the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, and expenses to which
the Holder or any such director, officer, partner or underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities or
11
expenses (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any
registration statement under which such Registrable Securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they
were made not misleading, and the Company shall reimburse the Holder,
and each such director, officer, partner, underwriter and controlling
person for any legal or any other expenses reasonably incurred by them
in connection with investigating, defending or settling any such loss,
claim, damage, liability, action or proceeding; provided that the
Company shall not be liable in any such case (i) to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from
such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance
upon and in conformity with written information furnished to the
Company through an instrument duly executed by or on behalf of such
Holder specifically stating that it is for use in the preparation
thereof or (ii) if the person asserting any such loss, claim, damage,
liability (or action or proceeding in respect thereof) who purchased
the Registrable Securities that are the subject thereof did not receive
a copy of an amended preliminary prospectus or the final prospectus (or
the final prospectus as amended or supplemented) at or prior to the
written confirmation of the sale of such Registrable Securities to such
person because of the failure of such Holder or underwriter to so
provide such amended preliminary or final prospectus and the untrue
statement or alleged untrue statement or omission or alleged omission
of a material fact made in such preliminary prospectus was corrected in
the amended preliminary or final prospectus (or the final prospectus as
amended or supplemented). Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Holders, or any such director, officer, partner, underwriter or
controlling person and shall survive the transfer of such shares by the
Holder.
(b) As a condition to including any Registrable Securities to
be offered by a Holder in any registration statement filed pursuant to
this Agreement, each such Holder agrees to be bound by the terms of
this SECTION 9 and to indemnify and hold harmless, to the fullest
extent permitted by law, the Company, its directors and officers, and
each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company or any
such director or officer or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement in or omission or alleged
omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in
conformity with written information about such Holder as a Holder of
the Company furnished to the Company, and such Holder shall reimburse
the Company, and each such director, officer, and controlling person
for any legal or other expenses reasonably incurred by them in
connection with investigating, defending, or settling and such loss,
claim, damage, liability, action, or proceeding; PROVIDED, HOWEVER,
that such indemnity agreement found in this SECTION 9(b) shall in no
event exceed the gross proceeds from the offering received by such
12
Holder. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or
any such director, officer or controlling person and shall survive the
transfer by any Holder of such shares.
(c) Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim
referred to in SECTION 9(a) or (B) hereof (including any governmental
action), such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying party, give written notice to the
indemnifying party of the commencement of such action; provided that
the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under
SECTION 9(a) or (B) hereof, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case
any such action is brought against an indemnified party, unless in the
reasonable judgment of counsel to such indemnified party a conflict of
interest between such indemnified and indemnifying parties may exist or
the indemnified party may have defenses not available to the
indemnifying party in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and,
after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's reasonable judgment
a conflict of interest between such indemnified and indemnifying
parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim
in a diligent manner, other than reasonable costs of investigation.
Neither an indemnified nor an indemnifying party shall be liable for
any settlement of any action or proceeding effected without its
consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement, which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation.
Notwithstanding anything to the contrary set forth herein, and without
limiting any of the rights set forth above, in any event any party
shall have the right to retain, at its own expense, counsel with
respect to the defense of a claim.
(d) In the event that an indemnifying party does or is not
permitted to assume the defense of an action pursuant to SECTION 9(c)
or in the case of the expense reimbursement obligation set forth in
SECTION 9(a) and (b), the indemnification required by SECTION 9(a) and
(B) hereof shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills
received or expenses, losses, damages, or liabilities are incurred.
(e) If the indemnification provided for in this SECTION 9 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall (i) contribute to
the amount paid or payable by such indemnified party as a result of
such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on
the one hand and the indemnified party on the other (determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission relates to information
13
supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission),
or (ii) if the allocation provided by CLAUSE (I) above is not permitted
by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate
relative fault of the indemnifying party and the indemnified party, but
also the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other, as well as any other
relevant equitable considerations. No indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.
(f) Indemnification similar to that specified in the preceding
subsections of this SECTION 9 (with appropriate modifications) shall be
given by the Company and each Holder of Registrable Securities with
respect to any required registration or other qualification of
securities under any federal or state law or regulation or governmental
authority other than the Securities Act.
10. RULE 144. For a period of at least 24 months following the Closing
Date, the Company will use its reasonable best efforts (a) to timely file all
reports required to be filed by the Company after the date hereof under the
Securities Act and the Exchange Act (including the reports pursuant to Section
13(a) or 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule
144) and the rules and regulations adopted by the Commission thereunder), (b) if
the Company is not required to file reports pursuant to such sections, it will
prepare and furnish to the Holders and make publicly available in accordance
with Rule 144(c) such information as is required for the Holders to sell shares
of Common Stock under Rule 144, and (c) to take such further action as any
holder of shares of Common Stock may reasonably request, all to the extent
required from time to time to enable the Holders to sell shares of Common Stock
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144, including causing its attorneys to issue and
deliver any appropriate legal opinion required to permit a Purchaser to sell
shares of Common Stock under Rule 144 upon receipt of appropriate documentation
relating to such sale.
11. INDEPENDENT NATURE OF EACH PURCHASER'S OBLIGATIONS AND RIGHTS. The
obligations of each Holder under this Agreement are several and not joint with
the obligations of any other Holder, and each Holder shall not be responsible in
any way for the performance of the obligations of any other Holder under this
Agreement. The decision of each Holder to purchase Common Stock and enter into
this Agreement has been made by each Holder independently of any other Holder.
Nothing contained herein and no action taken by any Holder pursuant hereto,
shall be deemed to constitute such Holders as a partnership, an association, a
joint venture, or any other kind of entity, or create a presumption that the
Holders are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Holder
acknowledges that no other Holder has acted as agent for the Holder in
connection with making its investment in Common Stock and that no other Holder
will be acting as agent of the Holder in connection with monitoring its
investment in the Common Stock or enforcing its rights under this Agreement.
Each Holder shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
14
12. MISCELLANEOUS
(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
United States of America, both substantive and remedial. Any judicial
proceeding brought against any of the parties to this agreement or any
dispute arising out of this Agreement or any matter related hereto
shall be brought in the courts of the State of New York, City of New
York, or in the United States District Court for the Eastern District
of New York and, by its execution and delivery of this agreement, each
party to this Agreement accepts the jurisdiction of such courts. The
foregoing consent to jurisdiction shall not be deemed to confer rights
on any person other than the parties to this Agreement.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, Permitted Assigns, executors and
administrators of the parties hereto. In the event the Company merges
with, or is otherwise acquired by, a direct or indirect subsidiary of a
publicly traded company, the Company shall condition the merger or
acquisition on the assumption by such parent company of the Company's
obligations under this Agreement.
(c) ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to
the subjects hereof.
(d) NOTICES, ETC. All notices or other communications which
are required or permitted under this Agreement shall be in writing and
sufficient if delivered by hand, by facsimile transmission, by
registered or certified mail, postage pre-paid, by electronic mail, or
by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder),
and shall be deemed to have been delivered as of the date so delivered:
If to the Company: National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
If to the Purchasers: To each Purchaser at the address
set forth on Exhibit A
or at such other address as any party shall have furnished to the other parties
in writing.
(e) DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any Holder of any Registrable
Securities, upon any breach or default of the Company under this
Agreement, shall impair any such right, power or remedy of such Holder
nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default
thereunder occurring; nor shall any waiver of any single breach or
15
default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any Holder of any breach or default
under this Agreement, or any waiver on the part of any Holder of any
provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or
otherwise afforded to any holder, shall be cumulative and not
alternative.
(f) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall
constitute one instrument.
(g) SEVERABILITY. In the case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
(h) AMENDMENTS. The provisions of this Agreement may be
amended at any time and from time to time, and particular provisions of
this Agreement may be waived, with and only with an agreement or
consent in writing signed by the Company and by the Majority Holders;
provided, however, that no such amendment may impair the rights of a
Holder without that Holder's consent nor may such Holder's obligations
hereunder be expanded without such Holder's consent.
[SIGNATURES ON FOLLOWING PAGE]
16
This Registration Rights Agreement is hereby executed as of the date
first above written.
COMPANY:
NATIONAL COAL CORP.
By:
-----------------------------------
Name: Xxx Xxxxxx
Its: Chief Executive Officer
NCC CORP.
By:
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
PURCHASER:
(Print Name)
By:
-----------------------------------
Name:
-----------------------------------
Its:
-----------------------------------
17
EXHIBIT A
PURCHASER INFORMATION
18
