EXHIBIT 2.1
May 20, 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 June 3, 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 0.90 plus the accrued but unpaid interest through and including
the Settlement Date, divided by (b) $6.81, 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
$6.81 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 2007 and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2008. Representative and
Holders acknowledge that the Company has in its possession (i) non-public
information concerning the Company's business, operations and prospects, (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 behalf of
Holders, including without limitation in connection with the execution,
warranties and performance contemplated hereunder.
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(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.
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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
By: /S/ XXXXXXX XXXXXXX
-----------------------------------
Name: Xxxxxxx X. 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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