EXHIBIT 2.1
February 22, 2008
National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX
Attention: Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
RE: EXCHANGE OF THE NOTES FOR COMMON STOCK
Ladies and Gentlemen:
This letter will confirm your agreement to an exchange with the undersigned in
its capacity as authorized representative (the "Representative") for certain
advisory clients (the "Holders") of a minimum of $2.0 million and a maximum of
$10.0 million principal amount of 10.5% senior secured notes due 12/15/10
(referred to as the "Notes") of or guaranteed by National Coal Corp., a Florida
corporation (the "Company") currently held by Holders for shares of the
Company's common stock, $.01 par value per share CUSIP # 000000000 (the "Common
Stock"), on the terms set forth herein (the "Exchange").
1. EXCHANGE OF NOTES. The settlement of the Exchange will take place on
or before March 21, 2008 (the "Settlement Date"), at which time Holders will
cause delivery of the Notes to the Company, and the Company will cause delivery
to Holders of the number of shares of Common Stock (the "Exchange Shares") equal
to (a) the principal amount of each respective Note exchanged multiplied by 0.82
plus the accrued but unpaid interest through and including the Settlement Date,
divided by (b) $4.85, in exchange for the Notes and all claims Holders may have
arising out of or relating to the Notes (including without limitation any
accrued but unpaid interest thereon). Representative may elect to deliver the
Notes to the Company in partial amounts for next day settlement of shares at
dates prior to Settlement Date. Representative will inform the Company of the
principal amount of Notes to be exchanged no later than 5:00 pm EST on a date
which is two business day prior to the Settlement Date.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) In connection with this transaction, Representative and
Holders hereby represent, warrant, acknowledge and agree as follows:
(1) The Holders are the sole legal and beneficial
owner of the Notes and the Notes being transferred hereunder
are free and clear of any liens, charges or encumbrances and
upon completion of the Exchange, Holders will convey to the
Company good title to the Notes free and clear of all liens,
charges and encumbrances.
(2) Representative and Holders approached the Company
and initiated negotiations with the Company regarding the
exchange of Notes for Common Stock as described above. Neither
the Company nor anyone acting on the Company's behalf
approached the Holders regarding this transaction.
(3) Neither the Representative, Holders nor anyone
acting on their behalf has received any commission or
remuneration directly or indirectly in connection with or in
order to solicit or facilitate the Exchange.
(4) The Representative and the Holders agree to not
sell shares from the date hereof through the Settlement Date
at price below $4.85 per share.
(5) The Holders and Representative acknowledge that
the transaction contemplated hereby is intended to be exempt
from registration by virtue of Section 3(a)(9) of the
Securities Act of 1933, as amended (the "Securities Act"). The
Representative and Holders know of no reason why such
exemption is not available.
(6) Representative and Holders have sufficient
experience in business, financial and investment matters to be
able to evaluate the risks involved in the acquisition of the
Exchange Shares and to make an informed investment decision
with respect to such acquisition and the Exchange, and the
Representative and Holders acknowledge that the Company makes
no representation regarding the value of the Notes or the
Exchange Shares.
(7) Representative and Holders have had such
opportunity as they have deemed adequate to obtain from
representatives of the Company such information as is
necessary to permit Representative and Holders to evaluate the
merits and risks of the transaction contemplated hereby and
acknowledges that it, among other things, has received or
reviewed copies of the Company's Annual Report on Form 10-K
for the year ended 2006 and Quarterly Report on Form 10-Q for
the quarter ended September 30, 2007. Representative and
Holders acknowledge that the Company has in its possession (i)
non-public information concerning the Company's business,
operations and prospects, including preliminary financial
results for the 2007 fourth quarter and full 2007 fiscal year,
and (ii) non-public information specifically relating to the
Notes and the Common Stock, which if known publicly could
materially affect the market price of the Notes and the Common
Stock (collectively, the "Excluded Information"), which may be
positive or negative, which information has not been
communicated, directly or indirectly, by the Company to
Representative or the Holders. The Company has offered to
disclose the Excluded Information to Representative and
Holders prior to the execution of this Agreement, but the
Representative has advised the Company that neither the
Representative nor Holders wants to receive the Excluded
Information.
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(8) Representative and Holders hereby irrevocably and
unconditionally waive and release the Company, and their
respective officers, directors, employees, agents and
affiliates (the "Releasees") from all claims that they might
have whether under applicable securities laws or otherwise,
based on the Company's possession, or non-disclosure to
Representative and Holders of the Excluded Information or any
other material non-public information concerning the Company
and neither the Representative nor Holders, or any of their
respective affiliates shall sue or assert or maintain, any
claim, suit or other proceeding, regarding any claim, known or
unknown, which Representative or the Holders or their
respective affiliates may now or in the future have against
the Releasees based upon or relating to the Excluded
Information; and Representative and the Holders agree to
indemnify and hold each Releasee harmless from any and all
damages, including but not limited to attorney's fees, that
result from any breach of the foregoing. Representative and
Holders further confirms that it understands the significance
of the foregoing waiver and release.
(9) Representative and Holders acknowledge that they
have been advised by the Company that the Company is
considering various strategies as part of its ongoing efforts
to improve its financial position including the possible
restructuring of its existing debt (including the Notes).
Representative and Holders have been further advised that any
possible debt restructuring (i) may include the issuance of
new secured and unsecured debt or equity securities by the
Company or its subsidiaries for cash or in exchange for some
or all of its outstanding debt, cash tender offers for some or
all of its outstanding debt, or any combination of the
foregoing, and other debt restructuring transactions involving
the Notes, (ii) may occur at any time following the date
hereof, and (iii) may be on terms materially more favorable
and provide materially greater value to holders of Notes than
Holders will receive in the Exchange contemplated hereby.
Representative and Holders hereby release the Company and its
affiliates from any and all claims arising out of or relating
to the Notes and the Exchange contemplated hereby, including
any claims arising out of or relating to any debt
restructuring transaction the Company may engage in subsequent
to the Exchange.
(10) Representative represents that (i) it is a
Delaware limited liability company (ii) it has all of the
power and authority necessary to enter into this transaction
and to consummate the transaction contemplated hereunder,
(iii) it has taken all action as may be necessary to authorize
the execution and delivery of this agreement and the
consummation of the transaction contemplated by this agreement
and the performance of its obligations hereunder, (iv) this
agreement is an obligation enforceable in accordance with its
terms, and (v) neither the execution and delivery hereof or
the performance of its obligations hereunder will violate or
contravene any applicable requirements of law or any of its
governing documents or material agreements.
(11) Holders do not hold in excess of 4.99% of the
Common Stock of the Company.
(12) Holders and Representative warrant and affirm
that Representative has full discretionary authority to act on
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behalf of Holders, including without limitation in connection
with the execution, warranties and performance contemplated
hereunder.
(b) In connection with this transaction, the Company hereby
represents, warrants, acknowledges and agrees as follows:
(1) The Exchange Shares will not be "restricted
securities" within the meaning of the Securities Act and will
be freely transferable by the Holders. The certificate(s)
representing the Exchange Shares will not bear a restrictive
legend under the Securities Act.
(2) The Company acknowledges that the transaction
contemplated hereby is intended to be exempt from registration
by virtue of Section 3(a)(9) of the Securities Act of 1933, as
amended (the "Securities Act"). The Company knows of no reason
why such exemption is not available.
(3) The Company represents that (i) it is a
corporation duly organized and validly existing under the laws
of the State of Florida, (ii) it has all of the corporate
power and authority necessary to enter into this transaction
and to consummate the transaction contemplated hereunder,
(iii) it has taken all corporate action as may be necessary to
authorize the execution and delivery of this agreement and the
consummation of the transaction contemplated by this agreement
and the performance of its obligations hereunder, (iv) this
agreement is an obligation enforceable in accordance with its
terms, and (v) neither the execution and delivery hereof or
the performance of its obligations hereunder will violate or
contravene any applicable requirements of law or any of its
charter, by-laws or material agreements.
3. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York without giving effect to the conflict of law rules contained
therein and each party hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of any New York State court or Federal court sitting in
New York City in any action or proceeding arising out of or relating to this
Agreement.
4. NO CONFIDENTIALITY. Representative acknowledges and agrees that the
Company will publicly disclose this Agreement on a Current Report on Form 8-K
filed with the SEC, and that neither the existence of this Agreement or its
terms and conditions will remain confidential.
Very truly yours,
Xxxxxxxxx Xxxxxx, LLC
LibertyView Capital Management Division
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By: /S/ XXXXXXX XXXXXXX
-----------------------------------------
NAME: Xxxxxxx Xxxxxxx
TITLE: Authorized Person
AGREED AND ACCEPTED:
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NATIONAL COAL CORP.
By: /S/ XXXXXX XXXXXX
--------------------------------
NAME: Xxxxxx Xxxxxx
TITLE: Chief Executive Officer
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