EXHIBIT 4.9
FORM OF REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made and
entered into as of the 28th day of February, 2007 (the "EFFECTIVE DATE"), by and
among National Coal Corp., a Florida corporation (the "COMPANY"), 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 entitling the holders thereof to purchase shares of Common Stock, pursuant
to Subscription Agreements (each, a "SUBSCRIPTION AGREEMENT" and collectively,
the "SUBSCRIPTION AGREEMENTS") by and between the Company and each Purchaser.
B. The Company and the Purchasers desire to set forth the
registration rights to be granted by the Company to the Purchasers.
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, recommence taking steps to make such
Registration Statement effective, or allow sales pursuant to such Registration
Statement to resume; PROVIDED, HOWEVER, that (i) the Company shall limit its use
of Blackout Periods described in the 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 March 1, 2007, or such other time as is mutually
agreed between the Company and the Purchasers for the closing of the sale
referred to in Recital A above.
"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.
"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
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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 or any of such Purchaser's respective
successors and Permitted Assigns who acquire rights in accordance with this
Agreement with respect to the Registrable Securities directly or indirectly from
a Purchaser, including from any Permitted Assignee.
"INSPECTOR" means any attorney, accountant, or other agent retained by
a Purchaser 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.
"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, or (f) a party to this Agreement.
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 shares of Common Stock issued to each
Purchaser pursuant to the Subscription Agreements, but EXCLUDING (i) any
Registrable Securities that have been publicly sold or may be sold immediately
without registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Securities sold by a person in
a transaction pursuant to a registration statement filed under the Securities
Act; or (iii) any Registrable Securities that are at the time subject to an
effective registration statement under the Securities Act.
"REGISTRATION DEFAULT DATE" means July 30, 2007.
"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);
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(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 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
for a period of two (2) years from the Effective Date, unless terminated sooner
hereunder.
3. REGISTRATION.
(a) REGISTRATION ON FORM S-3. As promptly as reasonably
practicable after the date hereof, but in any event not later than April 30,
2007 (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 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
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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:
(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
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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.
(e) DEFAULT. If a Registration Event occurs, then the
Company will make payments to each Purchaser, as partial liquidated damages for
the minimum amount of damages to the Purchaser by reason thereof, and not as a
penalty, at a rate equal to one percent (1%) of the Offering Price per share of
Common Stock held by such Purchaser per month, 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 Purchaser 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 Purchaser'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 Purchaser, and shall not constitute the Purchaser'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
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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 Purchaser
hereunder with respect to each share of Registrable Securities shall cease when
the Purchaser 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) 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;
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(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 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;
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(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 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 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;
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(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
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)(III) 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
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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 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
shares 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
11
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 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
12
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 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 Purchasers and make publicly available in
accordance with Rule 144(c) such information as is required for the Purchasers
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
13
extent required from time to time to enable the Purchasers 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 Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and each Purchaser shall not be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. The decision of each Purchaser to purchase
Common Stock and enter into this Agreement has been made by each Purchaser
independently of any other Purchaser. Nothing contained herein and no action
taken by any Purchaser pursuant hereto, shall be deemed to constitute such
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 this Agreement. Each Purchaser acknowledges that no other
Purchaser has acted as agent for the Purchaser in connection with making its
investment in Common Stock and that no other Purchaser will be acting as agent
of the Purchaser in connection with monitoring its investment in the Common
Stock or enforcing its rights under this Agreement. Each Purchaser 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 Purchaser to be joined as an additional party in any
proceeding for such purpose.
12. MISCELLANEOUS
(a) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee and the
United States of America, both substantive and remedial. Any judicial proceeding
brought against either 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 Tennessee, Xxxx County, or in the United States District
Court for the Eastern District of Tennessee 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.
14
(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 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. The Purchasers acknowledge
that by the operation of this SECTION 12(H), the Majority Holders may have the
right and power to diminish or eliminate all rights of the Purchasers under this
Agreement.
[SIGNATURES ON FOLLOWING PAGE]
15
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
PURCHASER:
(Print Name)
By:
---------------------------------
Name:
---------------------------------
Its:
---------------------------------
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EXHIBIT A
PURCHASER INFORMATION
------------------------------------------------- ------------------------------
NAME ADDRESS
------------------------------------------------- ------------------------------
The J-K Navigator Fund, L.P. c/o/ Steelhead Partners, LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Steelhead Offshore, Ltd. c/o/ Steelhead Partners, LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx c/o National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xx.
Xxxxxxxxx, XX 00000
17
