EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "AGREEMENT") is made and entered into
as of October 15, 2007, between NATIONAL COAL CORP., a Florida corporation (the
"COMPANY"), and the investor identified on the signature page to this Agreement
(the "INVESTOR").
RECITALS
A. Subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined below), and Rule 506
promulgated thereunder, the Company proposes to issue and sell up to $12 million
in shares of Common Stock, par value $0.0001 per share (the "Common Stock"), of
the Company at a purchase price of $3.00 per share (the "OFFERING PRICE"), in
each case pursuant to an offering (the "OFFERING") to one or more potential
investors, including the Investor.
B. The Company desires to sell to the Investor, and the Investor
desires to buy from the Company, in the Offering the number of shares of the
Common Stock (the "SHARES") set forth on the signature page of this Agreement,
upon the terms and conditions and subject to the provisions hereinafter set
forth.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. PURCHASE AND SALE OF SECURITIES. Subject to the terms and conditions
of this Agreement, the Investor subscribes for and agrees to purchase and
acquire from the Company, and the Company agrees to sell and issue to the
Investor, the Shares in the manner set forth in SECTION 2 hereof, at the
Offering Price and for the aggregate consideration set forth on the signature
page of this Agreement (the "PURCHASE PRICE").
2. TERMS OF PURCHASE AND SALE OF SECURITIES. The closing of the
transactions contemplated hereby (the "CLOSING") shall take place at such time
and on such date as is determined by the Company as soon as practicable
following satisfaction of the closing conditions set forth in SECTION 7. On or
before October 16, 2007, the Investor shall deliver the Purchase Price to
Xxxxxx, Xxxxxxxx & Markiles LLP, legal counsel to the Company (the "ESCROW
AGENT"), by wire transfer of immediately available funds in accordance with the
following wire transfer instructions:
National Bank of California
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxx, XX 00000
Account Name: Xxxxxx Xxxxxxxx & Markiles, LLP
Address: 00000 Xxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx Xxxx, XX 00000
ABA Routing#: 000000000
Account #: 003209873
Ref: NCC Closing
The Purchase Price will be held by the Escrow Agent and released to the
Company at Closing against delivery to the Investor of stock certificates
representing the Shares pursuant to the terms and conditions of that certain
Closing Escrow Agreement by and among the Investor, the Company and the Escrow
Agent in the form attached hereto as EXHIBIT A (the "ESCROW AGREEMENT").
Notwithstanding that the offer and sale of the Securities pursuant to this
Agreement is part of the larger Offering, the obligations of the Company and the
Investor hereunder are independent of, and not subject to the terms and
conditions of, any other agreement between the Company and any other investor in
the Offering, and the Closing may occur separate and apart from, and
irrespective of, the closing, if any, of any other purchase and sale of
securities in the Offering.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In order to induce
the Investor to enter into this Agreement and consummate the transactions
contemplated hereby, the Company represents and warrants to the Investor as
follows:
3.1 INCORPORATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida and is qualified to do business in each jurisdiction
in which the character of its properties or the nature of its business
requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business, condition
(financial or otherwise) or prospects of the Company (a "MATERIAL
ADVERSE EFFECT"). Except for short-term investments and investments
that are not material to the Company, the Company does not own any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership,
limited liability company, joint venture, association or other entity,
except disclosed in the SEC Documents (as defined below), and except as
contemplated by the Xxxx Acquisition (as defined and described below).
Complete and correct copies of the articles of incorporation (the
"ARTICLES OF INCORPORATION") and bylaws (the "BYLAWS") of the Company
as in effect on the Effective Date have been filed by the Company with
the SEC. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Escrow Agreement and the Registration Rights Agreement attached hereto
as EXHIBIT B (the "REGISTRATION RIGHTS AGREEMENT" and, together with
this Agreement and the Escrow Agreement, the "TRANSACTION DOCUMENTS")
and to carry on its business as now conducted.
3.2 CAPITALIZATION. The authorized capital stock of the
Company consists of (i) 80,000,000 shares of Common Stock, of which
21,878,885 shares are outstanding on the date hereof; and (ii)
10,000,000 shares of preferred stock, of which 1,611 shares have been
designated
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"Series A Cumulative Convertible Preferred Stock, of which 167.33
shares are outstanding on the date hereof. The outstanding shares of
capital stock of the Company have been duly and validly issued and are
fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and were not issued in violation of
any preemptive or similar rights to subscribe for or purchase
securities. Except for (i) options to purchase Common Stock or other
equity awards issued to employees and consultants of the Company
pursuant to the employee benefits plans disclosed in the SEC Documents,
(ii) warrants to purchase an aggregate of 1,872,632 shares of Common
Stock at an exercise price of $8.50 per share, (iii) the Series A
Cumulative Convertible Preferred Stock, and (iv) the Debt Warrant (as
defined below) to be issued in connection with the Acquisition
Financing (as defined below), there are no existing options, warrants,
calls, preemptive (or similar) rights, subscriptions or other rights,
agreements, arrangements or commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred
or sold, any shares of the capital stock of the Company or other equity
interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity
interests, and there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of its
capital stock or other equity interests. There are no voting agreements
or other similar arrangements with respect to the Common Stock to which
the Company is a party. The issuance of the Shares contemplated hereby
will not result in an over-issuance of shares of Common Stock under the
Articles of Incorporation.
3.3 VALID ISSUANCE OF THE SHARES. The Shares being purchased
by the Investor hereunder will, upon issuance pursuant to the terms
hereof, be duly authorized and validly issued, fully paid and
nonassessable. No preemptive rights or other rights to subscribe for or
purchase the Company's capital stock exist with respect to the issuance
and sale of the Shares by the Company pursuant to this Agreement.
Except as disclosed in the SEC Documents, and except with respect to
the Debt Warrant as described more fully below, no stockholder of the
Company (other than the stockholders who purchase Shares in the
Offering) has any right which has not been properly waived or has not
expired by reason of lapse of time following the notification of the
Company's intent to file the registration statement to be filed by the
Company pursuant to Registration Rights Agreement (the "REGISTRATION
STATEMENT") to require the Company to register the sale of any shares
owned by such stockholder under the Securities Act in the Registration
Statement. No further approval or authority of the stockholders or the
Board of Directors of the Company shall be required for the issuance
and sale of the Shares by the Company or the filing of the Registration
Statement by the Company.
3.4 ENFORCEABILITY. The execution, delivery, and performance
of the Transaction Documents by the Company have been duly authorized
by all requisite corporate action. This Agreement has been duly
executed and delivered by the Company, and, upon its execution by the
Investor, shall constitute the legal, valid, and binding obligation of
the Company, enforceable in accordance with its terms, except to the
extent that its enforceability is limited by bankruptcy, insolvency,
reorganization, or other laws relating to or affecting the enforcement
of creditors' rights generally and by general principles of equity.
3.5 NO VIOLATIONS. The execution, delivery, and performance of
the Transaction Documents by the Company do not and will not violate or
conflict with any provision of the Company's Articles of Incorporation
or Bylaws, each as amended and in effect
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on the date hereof, and do not and will not, with or without the
passage of time or the giving of notice, result in the breach of, or
constitute a default, cause the acceleration of performance, or require
any consent under (except such consents as have been obtained as of the
date hereof), or result in the creation of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any
material instrument or agreement to which the Company is a party or by
which the Company or its properties are bound, except such consents as
have been obtained as of the date hereof. The Company is not otherwise
in violation of its Articles of Incorporation, Bylaws or other
organizational documents, nor is the Company in violation of any law,
administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the
Company, which violation, individually or in the aggregate, would be
reasonably expected to have a Material Adverse Effect. The Company is
not in default (and there exists no condition which, with the passage
of time or otherwise, would constitute a default) in the performance of
any material bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other
material agreement or instrument to which the Company is a party or by
which the Company is bound or by which the property of the Company is
bound, which would be reasonably expected to have a Material Adverse
Effect.
3.6 APPROVALS. Neither the execution, delivery, and
performance by the Company of the Transaction Documents, nor the offer
and sale of the Shares contemplated hereby require the consent of,
action by or in respect of, or filing with, any person, governmental
body, agency, or official, other than those consents that have been
obtained and filings that have been made pursuant to applicable state
securities laws ("STATE ACTS") and post-sale filings pursuant to
applicable state and federal securities laws and NASDAQ Global Market
listing requirements, which the Company undertakes to file within the
applicable time period, and other consents which have been obtained as
of the date hereof.
3.7 SEC DOCUMENTS. The Company has made available to Investor
true and complete copies of all reports or registration statements the
Company has filed with the Securities Exchange Commission ("SEC") under
the Securities Act of 1933 ("SECURITIES ACT") and the Securities
Exchange Act of 1934 (the "EXCHANGE ACT"), for all periods subsequent
to December 31, 2005, all in the form so filed (collectively the "SEC
DOCUMENTS"). The Company has filed in a timely manner all documents
that the Company was required to file under the Exchange Act during the
12 months preceding the date of this Agreement. As of their respective
filing dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as
applicable, and none of the SEC Documents filed under the Exchange Act
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent corrected by a
subsequently filed document with the SEC. None of the SEC Documents
filed under the Securities Act contained an untrue statement of
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading at
the time such SEC Documents became effective under the Securities Act.
Without limiting the foregoing, the Company meets each of the
eligibility requirements for the use of Form S-3 in connection with the
resale registration of the Shares as contemplated under the
Registration Rights Agreement.
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3.8 FINANCIAL STATEMENTS. The Company's financial statements,
including the notes thereto, included in the SEC Documents (the
"FINANCIAL STATEMENTS") comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles
("GAAP") consistently applied (except as may be indicated in the notes
thereto) and present fairly the Company's consolidated financial
position at the dates thereof and of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements,
to normal audit adjustments). The Company has implemented and maintains
a system of internal controls meeting the requirements of the SEC and
the Xxxxxxxx-Xxxxx Act of 2002 as applicable to the Company on the date
hereof. Since June 30, 2007, except as disclosed in the SEC Documents,
there has been no material adverse change (actual or threatened) in the
assets, liabilities (contingent or other), affairs, operations,
prospects or condition (financial or other) of the Company.
3.9 NASDAQ GLOBAL MARKET. The Common Stock is listed on the
NASDAQ Global Market. The Company has taken no action designed to
de-list, or which, to the Company's knowledge, is likely to have the
effect of, suspending or terminating the listing of the Common Stock on
the NASDAQ Global Market. The Company is in compliance with all
corporate governance requirements of NASDAQ Global Market. The Company
shall comply with all requirements of the NASDAQ Stock Market LLC
(together with its affiliates, the "NASDAQ") with respect to the
issuance of the Shares and the listing of the Shares on the NASDAQ
Global Market.
3.10 INTELLECTUAL PROPERTY.
(a) To the knowledge of the Company, the Company has
ownership of or license or legal right to use all patent,
copyright, trade secret, trademark, customer lists, designs,
manufacturing or other processes, computer software, systems,
data compilation, research results or other proprietary rights
used in the business of the Company and material to the
Company (collectively, "INTELLECTUAL PROPERTY"), other than
Intellectual Property generally available on commercial terms
from other sources.
(b) There is no material default by the Company under
any material licenses or other material agreements under which
(i) the Company is granted rights in Intellectual Property or
(ii) the Company has granted rights to others in Intellectual
Property owned or licensed by the Company.
(c) The Company believes it has taken those steps
required in accordance with sound business practice and
commercially reasonable business judgment to establish and
preserve its ownership of all material patent, copyright,
trade secret and other proprietary rights with respect to its
products and technology.
(d) To the knowledge of the Company, the present
business, activities and products of the Company do not
infringe any intellectual property of any other person, except
where such infringement would not have a Material Adverse
Effect. The Company has not been notified that any proceeding
charging the Company with infringement of any adversely held
Intellectual Property has been filed. To the Company's
knowledge, there exists no patent or
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patent application held by any other person which includes
claims that would be infringed by the Company in the conduct
of its business as currently conducted and as proposed to be
conducted in the SEC Documents, where such infringement would
have a Material Adverse Effect. To the knowledge of the
Company, the Company is not making unauthorized use of any
confidential information or trade secrets of any person.
Neither the Company nor, to the knowledge of the Company, any
of its employees have any agreements or arrangements with any
persons other than the Company restricting the Company's or
any such employee's engagement in business activities that are
material aspects of the Company's business as currently
conducted or as proposed to be conducted in the SEC Documents.
3.11 ABSENCE OF LITIGATION. Except as disclosed in the SEC
Documents, there is no action, suit or proceeding or, to the Company's
knowledge, any investigation, pending, or to the Company's knowledge,
threatened by or before any court, governmental body or regulatory
agency against the Company that is required to be disclosed in the SEC
Documents and is not so disclosed. The Company has not received any
written or oral notification of, or request for information in
connection with, any formal or informal inquiry, investigation or
proceeding from the SEC, the NASDAQ, the National Association of
Securities Dealers, Inc. or the Financial Industry Regulatory
Authority, Inc. The foregoing includes, without limitation, any such
action, suit, proceeding or investigation that questions any of the
Transaction Documents or the right of the Company to execute, deliver
and perform under same.
3.12 ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and no material
expenditures are or, to the Company's knowledge, will be required in
order to comply with any such existing statute, law or regulation. No
Hazardous Materials (as defined below) are used or have been used,
stored, or disposed of by the Company or by any other person or entity
on any property owned, leased or used by the Company, other than
Hazardous Materials used, stored, or disposed of by the Company in the
ordinary course of business and in accordance with customary standards
in the coal mining industry. For the purposes of the preceding
sentence, "HAZARDOUS MATERIALS" shall mean (a) materials which are
listed or otherwise defined as "hazardous" or "toxic" under any
applicable local, state, federal and/or foreign laws and regulations
that govern the existence and/or remedy of contamination on property,
the protection of the environment from contamination, the control of
hazardous wastes, or other activities involving hazardous substances,
including building materials, or (b) any petroleum products or nuclear
materials.
3.13 INVESTMENT COMPANY. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for an investment company, within the meaning of the
Investment Company Act of 1940, as amended.
3.14 NO MANIPULATION OF STOCK. The Company has not taken and
will not, in violation of applicable law, take, any action designed to
or that might reasonably be expected to cause or result in unlawful
manipulation of the price of the Common Stock.
3.15 ACCOUNTANTS. Xxxxxx, Xxxxxx & Banks, LLP, who issued
their report with respect to the financial statements incorporated by
reference into the Company's Annual Reports on Form 10-K for the years
ended December 31, 2005 and December 31, 2006, and
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Ernst & Young LLP, who issued their report with respect to the
financial statements incorporated by reference into the Company's
Annual Report on Form 10-K for the year ended December 31, 2006, are
each independent registered public accounting firms as required by the
Securities Act.
3.16 TAXES. The Company has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued
all taxes shown as due thereon, and the Company has no knowledge of a
tax deficiency which has been or might be asserted or threatened
against it which would have a Material Adverse Effect.
3.17 BROKERS OR FINDERS. The Company has not dealt with any
broker or finder in connection with the transactions contemplated by
this Agreement, and the Company has not incurred, and shall not incur,
directly or indirectly, any liability for any brokerage or finders'
fees or agents commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
3.18 SECURITIES LAWS. Assuming that all of the representations
and warranties of the Investor set forth in SECTION 4, and all of the
representations and warranties of the other Investors participating in
the Offering, are true and correct, the offer and sale of the Shares in
the Offering was conducted and completed in compliance with the
Securities Act.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. In order to induce
the Company to enter into this Agreement and consummate the transaction
contemplated hereby, the Investor represents and warrants to the Company the
following:
4.1 AUTHORITY. If a corporation, partnership, limited
partnership, limited liability company, or other form of entity, the
Investor is duly organized or formed, as the case may be, validly
existing, and in good standing under the laws of its jurisdiction of
organization or formation, as the case may be. The Investor has all
requisite individual or entity right, power, and authority to execute,
deliver, and perform the Transaction Documents to which it is a party.
4.2 ENFORCEABILITY. The execution, delivery, and performance
by the Investor of the Transaction Documents to which it is a party
have been duly authorized by all requisite partnership or corporate
action, as the case may be. This Agreement has been duly executed and
delivered by the Investor, and, upon its execution by the Company,
shall constitute the legal, valid, and binding obligation of the
Investor, enforceable in accordance with its terms, except to the
extent that its enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of
equity.
4.3 NO VIOLATIONS. The execution, delivery, and performance by
the Investor of the Transaction Documents to which it is a party do not
and will not, with or without the passage of time or the giving of
notice, result in the breach of, or constitute a default, cause the
acceleration of performance, or require any consent under, or result in
the creation of any lien, charge or encumbrance upon any property or
assets of the Investor pursuant to, any material instrument or
agreement to which the Investor is a party or by which the Investor or
its properties may be bound or affected, and, do not or will not
violate or conflict with any provision of the
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articles of incorporation or bylaws, partnership agreement, operating
agreement, trust agreement, or similar organizational or governing
document of the Investor, as applicable.
4.4 KNOWLEDGE OF INVESTMENT AND ITS RISKS. The Investor has
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of Investor's investment in
the Shares. The Investor understands that an investment in the Company
represents a high degree of risk and there is no assurance that the
Company's business or operations will be successful. The Investor has
considered carefully the risks attendant to an investment in the
Company, and that, as a consequence of such risks, the Investor could
lose Investor's entire investment in the Company.
4.5 INVESTMENT INTENT. The Investor hereby represents and
warrants that (i) the Shares are being acquired for investment for the
Investor's own account, and not as a nominee or agent and not with a
view to the resale or distribution of all or any part of the Shares,
and the Investor has no present intention of selling, granting any
participation in, or otherwise distributing any of the Shares within
the meaning of and in violation of the Securities Act, and (ii) the
Investor does not have any contracts, understandings, agreements, or
arrangements, directly or indirectly, with any person and/or entity to
distribute, sell, transfer, or grant participations to such person
and/or entity with respect to, any of the Shares. The Investor is not
purchasing the Shares as a result of any advertisement, article, notice
or other communication regarding the Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
4.6 INVESTOR STATUS. The Investor is an "accredited investor"
as that term is defined by Rule 501 of Regulation D promulgated under
the Securities Act and the information provided by the Investor in the
Investor Questionnaire, a copy of which is attached hereto as EXHIBIT
C, is truthful, accurate, and complete.
4.7 NO REGISTRATION. The Investor understands that Investor
may be required to bear the economic risk of Investor's investment in
the Company for an indefinite period of time. The Investor further
understands that (i) neither the offering nor the sale of the Shares
has been registered under the Securities Act or any applicable State
Acts in reliance upon exemptions from the registration requirements of
such laws, (ii) the Shares must be held by he, she or it indefinitely
unless the sale or transfer thereof is subsequently registered under
the Securities Act and any applicable State Acts, or an exemption from
such registration requirements is available, (iii) except as set forth
in the Registration Rights Agreement, the Company is under no
obligation to register any of the Shares on the Investor's behalf or to
assist the Investor in complying with any exemption from registration,
and (iv) the Company will rely upon the representations and warranties
made by the Investor in this Agreement in order to establish such
exemptions from the registration requirements of the Securities Act and
any applicable State Acts.
4.8 TRANSFER RESTRICTIONS. The Investor will not transfer any
of the Shares unless such transfer is registered or exempt from
registration under the Securities Act and such State Acts, and, if
requested by the Company in the case of an exempt transaction, the
Investor has furnished an opinion of counsel reasonably satisfactory to
the Company that such transfer is
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so exempt. The Investor understands and agrees that (i) the
certificates evidencing the Shares will bear appropriate legends
indicating such transfer restrictions placed upon the Shares, (ii) the
Company shall have no obligation to honor transfers of any of Shares in
violation of such transfer restrictions, and (iii) the Company shall be
entitled to instruct any transfer agent or agents for the securities of
the Company to refuse to honor such transfers.
4.9 PRINCIPAL ADDRESS. The Investor's principal residence, if
an individual, or principal executive office, if an entity, is set
forth on the signature page of this Agreement.
5. INDEPENDENT NATURE OF INVESTOR'S OBLIGATIONS AND RIGHTS. The
obligations of the Investor under the Transaction Documents to which it is a
party are several and not joint with the obligations of any other purchaser of
Shares, and the Investor shall not be responsible in any way for the performance
of the obligations of any other purchaser of Shares under any Transaction
Document or otherwise. The decision of the Investor to purchase Shares pursuant
to the Transaction Documents has been made by the Investor independently of any
other purchaser of Shares. Nothing contained herein or in any other Transaction
Document, and no action taken by any purchaser of Shares pursuant thereto, 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 of Shares are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by the Transaction
Document. The Investor acknowledges that no other purchaser of Shares has acted
as agent for the Investor in connection with making its investment hereunder and
that no other purchaser of Shares will be acting as agent of the Investor in
connection with monitoring its investment in the Shares or enforcing its rights
under the Transaction Documents. The Investor shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other purchaser of Shares to be joined as an additional
party in any proceeding for such purpose.
6. XXXX STEEL PRODUCTS ACQUISITION.
6.1 ACQUISITION. The Company is a party to that certain
Purchase Agreement, dated June 18, 2007, by and among the Company, Xxxx
Steel Products, Inc. ("XXXX STEEL"), and Xxxxx X. Xxxx, XX and Xxxxxxx
X. Xxxx (collectively, the "SELLERS"), as the amended to date and as
may be subsequently amended from time to time (the "XXXX PURCHASE
AGREEMENT"), pursuant to which a newly formed, wholly-owned subsidiary
of the Company ("ACQUISITION CO.") will acquire from the Sellers all of
the issued and outstanding equity interests in Xxxx Steel for a
purchase price of approximately $55 million. Such acquisition is
referred to herein as the "XXXX ACQUISITION."
6.2 CAPITALIZATION OF ACQUISITION CO. The Company will
capitalize Acquisition Co. by contributing to Acquisition Co.
concurrently with the Closing, (i) 100% of the proceeds of the Offering
PLUS (ii) a warrant to purchase up to 250,000 shares of the Company's
Common Stock, which warrant will have an exercise price of $4.00 per
share, be fully transferable by the holder thereof, contain a cashless
exercise feature, and expire on December 31, 2010 (the "DEBT WARRANT").
Acquisition Co., and any subsequent holder of the Debt Warrant, will be
a party to the Registration Rights Agreement as a Holder of Registrable
Securities thereunder, and will be entitled to include the shares of
Common Stock underlying the
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Debt Warrant in the Registration Statement filed by the Company in
accordance with the terms of the Registration Rights Agreement.
6.3 ACQUISITION FINANCING. The Company will finance 100% of
the purchase price for the Xxxx Acquisition by causing Acquisition Co.
to borrow directly, or by causing Xxxx Steel to borrow, at least $55
million in senior secured indebtedness (the "ACQUISITION FINANCING").
The proceeds of the Acquisition Financing will be used to purchase the
equity interests in Xxxx Steel from the Sellers and otherwise
consummate the Xxxx Acquisition.
7. CONDITIONS PRECEDENT.
7.1 CONDITIONS TO THE OBLIGATION OF THE INVESTOR TO CONSUMMATE
THE CLOSING. The obligation of the Investor to consummate the Closing
and to purchase and pay for the Shares being purchased by it pursuant
to this Agreement is subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties of the Company
contained herein shall be true and correct on and as of the
Closing Date with the same force and effect as though made on
and as of the Closing Date.
(b) The Xxxx Acquisition shall be scheduled to close
contemporaneously with (or immediately following) the Closing.
(c) The Investor shall have received a certificate in
form and substance acceptable to the Investor signed by an
appropriate officer of the Company: (i) certifying to the
fulfillment of the conditions set forth in SECTIONS 7.1(A) and
7.1(B); and (ii) attaching true and correct copies of the
resolutions adopted by the board of directors of the Company
approving the transactions contemplated hereby, and certifying
that such resolutions have not been in any way amended,
annulled, rescinded or revoked and are in full force and
effect as of the Closing Date.
(d) The Registration Rights Agreement and the Escrow
Agreement shall have been executed and delivered by the
Company.
(e) The Company shall have performed all obligations
and conditions required to be performed or observed by the
Company under this Agreement and the other Transaction
Documents on or prior to the Closing Date.
(f) Xxxxxx Xxxxxx shall have acquired 200,000 shares
of Common Stock from the Company in the Offering at the
Offering Price.
Notwithstanding anything contained herein to the contrary, if,
for any reason, the Xxxx Acquisition has not closed on or before the
Acquisition Closing Deadline, then: (1) the Escrow Agent or the Company
(as applicable) shall promptly (subject to the last sentence of this
paragraph) return to the Investor the aggregate Purchase Price
originally deposited by the Investor into escrow in accordance with
Section 2 hereof; (2) the Escrow Agent or the Investor (as applicable)
shall promptly return to the Company the certificates representing the
Shares originally deposited by the Company into escrow; and (3) both
the Company and the Investor shall thereafter be released from any and
all obligations hereunder (including but not limited to
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the Investor's obligation to purchase, and the Company's obligation to
sell, the Shares as contemplated herein). In addition, in the event
that the Escrow Agent or the Company becomes obligated to return the
Purchase Price to the Investor pursuant to the preceding clause (1) but
fails to do so, the Company shall be further obligated to pay to the
Investor an amount equal to 0.25% of the Purchase Price for each full
day after the first Business Day following the Acquisition Closing
Deadline during which such failure continues unremedied.
For the purposes of this Agreement, the "ACQUISITION CLOSING
DEADLINE" shall mean October 22, 2007; PROVIDED, HOWEVER that the
Acquisition Closing Deadline shall be extended automatically until
October 31, 2007 unless and until the Investor provides the Company
with written notice of an earlier Acquisition Closing Deadline (which
may be the date of such written notice but may not be sooner than
October 23, 2007).
7.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CONSUMMATE
THE CLOSING. The obligation of the Company to consummate the Closing
and to issue and sell to the Investor the Shares to be purchased by it
at the Closing is subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties of the
Investor contained herein shall be true and correct on and as
of the Closing Date with the same force and effect as though
made on and as of the Closing Date.
(b) The Registration Rights Agreement and the Escrow
Agreement shall have been executed and delivered by the
Investor.
(c) The Investor shall have performed all obligations
and conditions required to be performed or observed by the
Investor under this Agreement and the other Transaction
Documents on or prior to the Closing Date.
8. PROSPECTUS DELIVERY REQUIREMENT. The Investor hereby covenants with
the Company not to make any sale of the Shares without complying with the
provisions hereof and of the Registration Rights Agreement, and without
effectively causing the prospectus delivery requirement under the Securities Act
to be satisfied (unless the Investor is selling such Shares in a transaction not
subject to the prospectus delivery requirement).
9. FURTHER ASSURANCES. The parties hereto will, upon reasonable
request, execute and deliver all such further assignments, endorsements and
other documents as may be necessary in order to perfect the purchase by the
Investor of the Shares.
10. ENTIRE AGREEMENT; NO ORAL MODIFICATION. This Agreement contains the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings with respect
thereto and may not be amended or modified except in a writing signed by both of
the parties hereto.
11. BINDING EFFECT; BENEFITS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, successors
and assigns; HOWEVER, nothing in this Agreement, expressed or implied, is
intended to confer on any other person other
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than the parties hereto, or their respective heirs, successors or assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
13. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the United States of America and
the State of New York, both substantive and remedial.
14. PREVAILING PARTIES. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party shall be entitled to receive and the
nonprevailing party shall pay upon demand reasonable attorneys' fees in addition
to any other remedy.
15. NOTICES. All communication hereunder shall be in writing and, if
sent to you shall be mailed, delivered, telegraphed or sent by facsimile or
electronic mail, and confirmed to an Investor at the address set forth on the
signature page of this Agreement, or if sent to the Company, shall be mailed,
delivered, telegraphed or sent by facsimile or electronic mail and confirmed to
the Company at National Coal Corporation, 0000 Xxxxxx Xxxxxxxx Xx., Xxxxxxxxx,
XX 00000, Attention: Chief Financial Officer, facsimile number (000) 000-0000.
16. HEADINGS. The section headings herein are included for convenience
only and are not to be deemed a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY:
NATIONAL COAL CORP.,
a Florida corporation
By:
--------------------------------------------
Name: Xxxxxx Xxxxxx
Its: Chief Executive Officer
INVESTOR:
-----------------------------------------------------
Print Name of Investor
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(Address)
-----------------------------------------------------
IRS Tax Identification No. (if applicable)
-----------------------------------------------------
Telephone Number
-----------------------------------------------------
Fax Number
-----------------------------------------------------
E-Mail Address
X $3.00 =
---------------- -------------- --------------
Number of Shares Offering Price Purchase Price
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
ESCROW AGREEMENT
EXHIBIT C
INVESTOR QUESTIONNAIRE
