EXHIBIT 4.5
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EQUITY REGISTRATION RIGHTS AGREEMENT
DATED AS OF DECEMBER 29, 2005
BETWEEN
NATIONAL COAL CORP.,
AS ISSUER,
AND
XXXXXXXXX & COMPANY, INC.,
THE INITIAL PURCHASER
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS..................................................1
SECTION 2. HOLDERS OF REGISTRABLE SECURITIES............................2
SECTION 3. REGISTRATION PROCEDURES......................................3
SECTION 4. SHELF REGISTRATION...........................................6
SECTION 5 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO
OBLIGATIONS UNDER REGISTRATION COVENANTS.....................7
SECTION 6. REGISTRATION EXPENSES........................................8
SECTION 7. INDEMNIFICATION.............................................10
SECTION 8. RULE 144A AND RULE 144......................................13
SECTION 9. MISCELLANEOUS...............................................13
-i-
EQUITY REGISTRATION RIGHTS AGREEMENT
This Equity Registration Rights Agreement, dated as of December 29,
2005 (this "AGREEMENT"), is entered into by and between National Coal Corp., a
Florida corporation, (the "COMPANY") and Xxxxxxxxx & Company, Inc. (the "INITIAL
PURCHASER").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of December 22, 2005, by and among the Company, the
Guarantors named therein and the Initial Purchaser (the "PURCHASE AGREEMENT"),
relating to the offering of 55,000 Units (the "UNITS") consisting of $55,000,000
aggregate principal amount of the Company's 10.5% Senior Secured Notes due 2010
(the "NOTES") and 55,000 Common Stock Purchase Warrants (the "WARRANTS"). Each
Unit consists of (A) $1,000 in principal amount of Notes and (B) one Warrant,
each Warrant representing the right to purchase 31.5024 shares of Common Stock
of the Company, at an exercise price of $8.50 per share, subject to adjustment.
The execution and delivery of this Agreement is a condition to the Initial
Purchaser's obligation to purchase the Units under the Purchase Agreement.
The parties hereby agree as follows:
Section 1. DEFINITIONS.
Unless otherwise defined herein, capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Purchase
Agreement. As used in this Agreement, the following capitalized terms shall have
the following meanings:
"AFFILIATE": As defined in Rule 144 of the Securities Act.
"CLOSING DATE": The date hereof.
"COMMON STOCK": The common stock, par value $0.0001 per share, of the
Company.
"EFFECTIVENESS DATE": The date occurring 240 days after the Closing
Date.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"HOLDER": As defined in SECTION 2 hereof.
"NASD": means the National Association of Securities Dealers, Inc.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PROSPECTUS": The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as supplemented by
any prospectus supplement, and all material incorporated by reference into such
prospectus.
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"PUBLIC EQUITY OFFERING": means an underwritten offering of Common
Stock pursuant to a registration statement that has been declared effective by
the SEC pursuant to the Securities Act (other than a registration statement on
Form S-4 or Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company).
"REGISTRABLE SECURITIES": At any time, any of (i) the Warrants, (ii)
the Warrant Shares (whether or not the related Warrants have been exercised) and
(iii) any other securities issued or issuable with respect to any Warrant Shares
by way of stock dividends or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when (a) a Registration Statement with
respect to the offering of such securities by the Holder thereof shall have been
declared effective under the Securities Act and such securities shall have been
disposed of by such Holder pursuant to such Registration Statement, (b) such
securities may be sold to the public pursuant to Rule 144(k) (or any similar
provisions then in force, but not Rule 144A) promulgated under the Securities
Act, (c) such securities shall have been otherwise transferred by the Holder
thereof and new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company or its
transfer agent and subsequent disposition of such securities shall not require
registration or qualification under the Securities Act or (d) such securities
shall have ceased to be outstanding.
"REGISTRATION STATEMENT": Any registration statement of the Company
relating to, or entitling a Holder to request, the registration for resale of
Registrable Securities, including the Prospectus included therein, all
amendments thereto (including post-effective amendments) and all exhibits and
all material incorporated by reference therein.
"RESTRICTED SECURITIES": As defined in Rule 144 of the Securities Act.
"SEC": The Securities and Exchange Commission.
"SECURITIES ACT": The Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT": As defined in SECTION 4 hereof.
"WARRANT AGREEMENT": The Warrant Agreement dated as of the Closing Date
between the Company and Xxxxx
Fargo Bank, National Association, as Warrant Agent.
"WARRANT SHARES": The Common Stock or other securities that any Holder
may acquire upon exercise of a Warrant, together with any other securities which
such Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split or combination of such Common Stock as provided for in the Warrant
Agreement.
Section 2. HOLDERS OF REGISTRABLE SECURITIES.
A Person is deemed to be a Holder of Registrable Securities (a
"HOLDER") whenever such Person owns Registrable Securities or has the right to
acquire such Registrable Securities by exercising Warrants held by such Person,
whether or not such acquisition has actually been
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effected. Notwithstanding the foregoing, the Company and any of its agents may
treat the Person in whose name the Registrable Securities are registered as a
Holder for all purposes hereunder.
Section 3. REGISTRATION PROCEDURES.
In connection with any Registration Statement filed by the Company, the
Company shall:
(a) (i) furnish to the Holders, prior to the filing thereof with
the SEC, a copy of the Registration Statement (including all
such documents incorporated therein by reference) and each
amendment thereof, if any, to the Prospectus, which documents
will be subject to the review and comment of such Holders in
connection with such sale, if any, for a period of at least
five business days, and the Company will not file any such
Registration Statement or related Prospectus or any amendment
or supplement to any such Registration Statement or Prospectus
(including all documents incorporated therein by reference) to
which such selling Holders shall reasonably object within five
business days after the receipt thereof; and (ii) include the
names of the Holders who propose to sell Registrable
Securities pursuant to the Registration Statement as selling
securityholders. A selling Holder shall be deemed to have
reasonably objected to such filing if such Holder determines
or subsequently becomes aware that such Registration
Statement, amendment, related Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading
or fails to comply with the applicable requirements of the
Securities Act;
(b) give written notice to the Initial Purchaser and the Holders,
either directly or indirectly through the Warrant Agent:
(i) when the Registration Statement or any amendment
thereto has been filed with the SEC and when the
Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the SEC for amendments or
supplements to the Registration Statement or the
Prospectus or for additional information;
(iii) if at any time when a Prospectus is required by the
Securities Act to be delivered in connection with
sales of Registrable Securities the representations
and warranties of the Company contained in any
related underwriting agreement cease to be true and
correct in all material respects;
(iv) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for
that purpose;
(v) of the receipt by the Company or its legal counsel of
any notification with respect to the suspension of
the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or
threatening in writing of any proceeding for such
purpose; and
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(vi) of the happening of any event that requires the
Company to make changes in the Registration Statement
or the Prospectus in order that the Registration
Statement or the Prospectus does not contain an
untrue statement of a material fact nor omit to state
a material fact required to be stated therein or
necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances
under which they were made) not misleading.;
(c) use commercially reasonable efforts to obtain the withdrawal
at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement;
(d) furnish to each Holder upon request, without charge, at least
one copy of the Registration Statement and any post-effective
amendment thereto, including financial statements, and, if the
Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference);
(e) during the period which the Registration Statement is
effective, deliver to each Holder, without charge, as many
copies of the Prospectus (including each preliminary
Prospectus) included in the Registration Statement as such
Holder may reasonably request. The Company consents, subject
to the provisions of this Agreement, to the use of the
Prospectus by each of the Holders in connection with the
offering and sale of Registrable Securities;
(f) prior to any public offering of the Registrable Securities
pursuant to any Registration Statement, register or qualify or
reasonably cooperate with the Holders and their respective
counsel in connection with the registration or qualification
of the Registrable Securities for offer and sale under the
securities or "blue sky" laws of such states of the United
States as any Holder reasonably requests in writing and do any
and all other acts or things necessary or reasonably advisable
to enable the offer and sale in such jurisdictions of the
Registrable Securities; PROVIDED, HOWEVER, that the Company
shall not be required to (i) qualify generally to do business
in any jurisdiction where it is not then so qualified or (ii)
take any action which would subject it to general service of
process or to taxation in any jurisdiction where it is not
then so subject;
(g) use reasonable good faith efforts to cooperate with the
Holders to facilitate the timely preparation and delivery of
certificates representing the Registrable Securities to be
sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered
in such names as the Holders may request a reasonable period
of time prior to sales of the Registrable Securities pursuant
to such Registration Statement;
(h) upon the occurrence of any event contemplated by PARAGRAPHS
(II) through (VI) of SECTION 3(B) above during the period for
which the Company is required to maintain an effective
Registration Statement, prepare and file as soon as reasonably
practicable a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus and any
other required document so that, as thereafter delivered to
Holders or purchasers of Securities, the Prospectus will not
contain an untrue statement
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of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(i) not later than the effective date of the Registration
Statement, provide a CUSIP number for the Registrable
Securities and provide the Warrant Agent with printed
certificates for the Registrable Securities, in a form
eligible for deposit with The Depository Trust Company;
(j) use its reasonable best efforts to comply with all rules and
regulations of the SEC to the extent and so long as they are
applicable to the Registration Statement and will make
generally available to its security holders (or otherwise
provide in accordance with Section 11(a) of the Securities
Act) an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act, no later than 45 days
after the end of a 12-month period (or 90 days, if such period
is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective
date of the Registration Statement, which statement shall
cover such 12-month period;
(k) require, at the Company's option, each Holder of Registrable
Securities to be sold pursuant to a Registration Statement to
furnish to the Company such information as may be required or
reasonably advisable (i) under applicable requirements of the
SEC or (ii) to obtain any acceleration of the effective date
of a Registration Statement, and the Company may exclude from
such registration the Registrable Securities of any Holder
that fails to furnish such information within 20 business days
after receiving such request;
(l) (i) make reasonably available for inspection by the Holders of
the Registrable Securities and any attorney, accountant or
other agent retained by the Holders of the Registrable
Securities all pertinent financial and other relevant
corporate records and documents of the Company and its
subsidiaries and (ii) cause the officers, directors,
employees, accountants and auditors of the Company and its
subsidiaries to supply all relevant information reasonably
requested by the Holders of the Registrable Securities or any
such attorney, accountant or agent in connection with the
Registration Statement, in each case, as shall be reasonably
necessary to enable such Persons, to conduct a reasonable
investigation within the meaning of Section 11 of the
Securities Act; PROVIDED, HOWEVER, that any such records,
documents and such information that is designated in writing
by the Company, in good faith, as confidential at the time of
delivery of such records, documents or information shall be
kept confidential by any such Persons pursuant to the terms of
a confidentiality agreement between the Company and such
Persons containing customary terms and provisions and in form
and substance reasonably satisfactory to the Company and such
Persons.
(m) cause (i) its counsel to deliver an opinion and updates
thereof relating to the Registrable Securities, containing
opinions customary for transactions of this type, addressed to
such Holders thereof and dated, in the case of the initial
opinion, the effective date of such Registration Statement (it
being agreed that the matters to be covered by such opinion
shall include, without limitation, a statement that it has not
come to such counsel's attention that such Registration
Statement and the prospectus included
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therein, as then amended or supplemented, and any documents
incorporated by reference therein contain an untrue statement
of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in light of
the circumstances under which they were made, and in the case
of any such documents, in light of the circumstances existing
at the time that such documents were filed with the SEC under
the Exchange Act) not misleading); and (ii) its independent
public accountants to provide to the Holders a comfort letter
in customary form and covering matters of the type customarily
covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
The Company shall be obligated to cause the delivery of the opinion of
counsel and comfort letter of its independent public accountants described in
this SUBSECTION 3(M) only if (1) the Company provides an opinion of counsel and
comfort letter to any holder of securities of the Company, other than the
Holders of Registrable Securities, in connection with the registration of
securities of any such holder, (2) the Company is requested to do so by Holders
of Registrable Securities representing 10% or more of the number of Warrant
Shares issuable upon exercise of the Warrants or (3) in the event that less than
10% of the Warrant Shares issuable upon exercise of the Warrants are Restricted
Securities at the time of the registration giving rise to the Company's
obligation, the Company is requested to do so by 100% of the Holders of such
Warrant Shares that are Restricted Securities.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder or any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
Section 4. SHELF REGISTRATION.
(a) The Company shall use its commercially reasonable efforts to
prepare and cause to be filed with the SEC pursuant to Rule
415 under the Securities Act a shelf registration statement on
the appropriate form relating to resales of all Registrable
Securities (the "SHELF REGISTRATION STATEMENT"), (ii) cause
the Shelf Registration Statement to be declared effective
under the Securities Act on or prior to the Effectiveness
Date, and (iii) keep the Shelf Registration Statement required
by this SECTION 4(A) continuously effective, amended and
current as required by and subject to the provisions of
SECTION 4(A) hereof and in conformity with the requirements of
this Agreement, the Securities Act and the rules and
regulations of the SEC promulgated thereunder from time to
time (including (A) preparing and filing with the SEC such
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amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep such Shelf
Registration Statement effective; (B) cause the Prospectus to
be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and complying fully with Rules 424 and 462, as
applicable, under the Securities Act in a timely manner; and
(C) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Shelf Registration Statement), until the second anniversary of
the effective date of such Shelf Registration Statement (the
"EFFECTIVENESS PERIOD"); PROVIDED that such obligation shall
expire before such date if all the Registrable Securities
covered by the Shelf Registration Statement (i) have been sold
pursuant thereto or (ii) are no longer Restricted Securities.
(b) No Holder may include any of its Registrable Securities in the
Shelf Registration Statement pursuant to this Agreement unless
and until such Holder furnishes to the Company in writing,
within 30 business days after receipt of a request therefor,
the information specified in Item 507 or 508 of Regulation
S-K, as applicable, of the Securities Act for use in
connection with any Shelf Registration Statement or Prospectus
or preliminary Prospectus included therein. Each selling
Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information
previously furnished to the Company by such Holder not
materially misleading.
Section 5. LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS.
(a) The obligations of the Company described in SECTION 4 of this
Agreement are subject to the obligations of the Holders (i) to
furnish all information and materials described in SECTION
3(K) hereof and (ii) to take any and all actions as may be
required under Federal and state securities laws and
regulations to permit the Company to comply with all
applicable requirements of the SEC and to obtain any
acceleration of the effective date of such Registration
Statement.
(b) Each Holder of Registrable Securities agrees that, upon actual
receipt of any notice from the Company (x) of the happening of
any event of the kind described in SECTION 3(B)(III),
3(B)(IV), 3(B)(V), or 3(B)(VI) hereof, or (y) that the Board
of Directors of the Company has resolved that the Company has
a BONA FIDE business purpose for doing so, then the Company
may delay the filing or the effectiveness of the Registration
Statement (if not then filed or effective, as applicable) and
shall not be required to maintain the effectiveness thereof or
amend or supplement the Registration Statement, in all cases,
for a period (a "DELAY PERIOD") expiring upon the earlier to
occur of (i) in the case of the immediately preceding clause
(x), such Holder's receipt of the copies of the supplemented
or amended Prospectus hereof or until it is advised in writing
by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any amendments or
supplements thereto or (ii) in the case of the immediately
preceding clause (y), the date which is the earlier of (A) the
date on which such business purpose ceases to interfere with
the Company's obligations to file or maintain the
effectiveness of any such Registration Statement pursuant to
this Agreement or (B) 60 days after the Company notifies the
Holders of such good faith determination. There
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shall not be more than 60 days of Delay Periods during any
12-month period. The Effectiveness Period shall be extended by
the number of days during any Delay Period.
In the event of any Delay Period pursuant to clause (y) of the
preceding paragraph, notice shall be given as soon as practicable after
the Board of Directors makes such a determination of the need for a
Delay Period and shall state, to the extent practicable, an estimate of
the duration of such Delay Period and shall advise the recipient
thereof of the agreement of such Holder provided in the next succeeding
sentence. Each Holder requesting inclusion of Registrable Securities in
a Registration Statement agrees that during any Delay Period, such
Holder will discontinue disposition of the Registrable Securities
covered by such Registration Statement or Prospectus or Exchange Notes
to be sold by such Holder or Participating Broker-Dealer, as the case
may be.
(c) Each Holder agrees, if and to the extent requested by the
managing underwriter or underwriters in a Public Equity
Offering, not to effect any public sale or distribution of
Registrable Securities, including a sale pursuant to Rule 144A
(except as part of such Public Equity Offering), during the
180 day period beginning on the closing date of any such
Public Equity Offering, to the extent timely notified in
writing by the Company or such managing underwriter or
underwriters. In the event that the Company is not otherwise
in compliance with the provisions of this Agreement at the
time the Company or such managing underwriter or underwriters
send notice pursuant to this SECTION 5(C), the Holders shall
not be required to comply with this SECTION 5(C). In addition,
the provisions of this SECTION 5(C) shall not apply to any
Holder of Registrable Securities if such Holder is prevented
by applicable statute or regulation from entering into any
such agreement; provided, that any such Holder shall undertake
not to effect any public sale or distribution of any
Registrable Securities commencing on the closing date of any
such Public Equity Offering unless it has provided 45 days'
prior written notice of such sale or distribution to the
managing underwriter or underwriters.
Section 6. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of and
compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed
or becomes effective, including without limitation:
(i) all registration and filing fees and expenses
(including all SEC and stock exchange and NASD fees
and expenses);
(ii) all fees and expenses of compliance with federal
securities and state "blue sky" or securities laws
(including, without limitation, reasonable fees and
disbursements of counsel for any underwriters in
connection with blue sky qualifications of the
Registrable Securities);
(iii) all expenses of printing, preparing, filing,
duplicating and distributing a Registration Statement
and the related prospectus (including
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certificates for the Securities to be issued in the
registration and printing of Prospectuses) requested
in accordance with this Agreement,
(iv) messenger and delivery services and telephone usage
and costs and charges of any transfer agent;
(v) all fees and disbursements of counsel for the
Company;
(vi) all fees and disbursements of independent certified
public accountants of the Company (including the
expenses of any special audit required by or incident
to such performance);
(vii) the fees and disbursements of underwriters
customarily paid by issuers or sellers of securities
(but not including any underwriting discounts or
commissions or transfer taxes, if any, attributable
to the sale of Registrable Securities by selling
Holders);
(viii) fees and expenses of one counsel for the selling
Holders and other reasonable out-of-pocket expenses
of the selling Holders;
(ix) Securities Act liability insurance, if the Company
desires such insurance;
(x) the fees and expenses of all other Persons retained
by the Company;
(xi) fees and expenses of any "qualified independent
underwriter" or other independent appraiser
participating in an offering pursuant to Section 3 of
Schedule E to the By-laws of the NASD, but only where
such a "qualified independent underwriter" is
required due to a relationship with the Company;
(xii) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and
employees of the Company performing legal or
accounting duties);
(xiii) the expense of any annual audit;
(xiv) the fees and expenses of the Warrant Agent; and
(xv) the expenses relating to printing, word processing
and distributing all Registration Statements,
underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order
to comply with this Agreement.
(b) The Holders shall pay the underwriting discounts, commissions,
and transfer taxes, if any, in connection with the Shelf
Registration Statement under SECTION 4, which costs shall be
allocated pro rata among all Holders on whose behalf
Registrable
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Securities of the Company are included in such registration on
the basis of the respective amounts of the Registrable
Securities then being registered on their behalf.
Section 7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, to the
extent permitted by law, each Holder of Registrable Securities
and each Person, if any, who controls any such Person within
the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, the agents, employees, officers and
directors of each Holder and the agents, employees, officers
and directors of any such controlling Person (each, a
"PARTICIPANT") from and against any and all losses,
liabilities, claims, damages and expenses (including, but not
limited to, reasonable attorneys' fees and any and all
reasonable out-of-pocket expenses actually incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and
all reasonable amounts paid in settlement of any claim or
litigation (in the manner set forth in CLAUSE (C) below))
(collectively, "LOSSES") to which they or any of them may
become subject under the Securities Act, the Exchange Act or
otherwise insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by, arising out of or based
upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein, in the case of the Prospectus, in
the light of the circumstances under which they were made, not
misleading, PROVIDED that (i) the foregoing indemnity shall
not be available to any Participant insofar as such Losses are
caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with information relating to such Participant furnished to the
Company in writing by or on behalf of such Participant
expressly for use therein, and (ii) that the foregoing
indemnity with respect to any Prospectus shall not inure to
the benefit of any Participant from whom the Person asserting
such Losses purchased Registrable Securities if (x) it is
established in the related proceeding that such Participant
failed to send or give a copy of the Prospectus (as amended or
supplemented if such amendment or supplement was furnished to
such Participant prior to the written confirmation of such
sale) to such Person with or prior to the written confirmation
of such sale, if required by applicable law, and (y) the
untrue statement or omission or alleged untrue statement or
omission was completely corrected in the Prospectus (as
amended or supplemented if amended or supplemented as
aforesaid) and such Prospectus does not contain any other
untrue statement or omission or alleged untrue statement or
omission that was the subject matter of the related
proceeding. This indemnity agreement will be in addition to
any liability that the Company may otherwise have, including,
but not limited to, liability under this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 7(a))the Company, each
Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, and each of its
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agents, employees, officers and directors and the agents,
employees, officers and directors of any such controlling
Person from and against any Losses to which they or any of
them may become subject under the Securities Act, the Exchange
Act or otherwise insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in
any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by, arising out of or based
upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein, in the case of the Prospectus, in
the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the
extent, that any such Loss arises out of or is based upon any
untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with
information relating to such Participant furnished in writing
to the Company by or on behalf of such Participant expressly
for use therein.
(c) Promptly after receipt by an indemnified party under SECTION
7(A) or 7(B) above of notice of the commencement of any
action, suit or proceeding (collectively, an "ACTION"), such
indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought
in writing of the commencement of such action (but the failure
so to notify an indemnifying party shall not relieve such
indemnifying party from any liability that it may have under
this SECTION 7 except to the extent that it has been
prejudiced in any material respect by such failure). In case
any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement of such
action, the indemnifying party will be entitled to participate
in such action, and to the extent it may elect by written
notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to
assume the defense of such action with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ
its or their own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall
not have employed counsel to take charge of the defense of
such action within a reasonable time after notice of
commencement of the action, or (iii) the named parties to such
action (including any impleaded parties) include such
indemnified party and the indemnifying party or parties (or
such indemnifying parties have assumed the defense of such
action), and such indemnified party or parties shall have
reasonably concluded, that counsel selected by the
indemnifying party has a conflict of interest in representing
both the indemnifying party and the indemnified party (in
which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such
reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party
be liable for the fees and expenses of more than one counsel
(together with appropriate local counsel) at any time for all
indemnified parties in connection with any one action or
separate but substantially similar or related actions arising
in the same jurisdiction out of
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the same general allegations or circumstances. Any such
separate firm for the Participants shall be designated in
writing by Participants who sold a majority in interest of
Registrable Securities sold by all such Participants and shall
be reasonably acceptable to the Company and any such separate
firm for the Company, its affiliates, officers, directors,
representatives, employees and agents and such control Person
of the Company shall be designated in writing by the Company
and shall be reasonable acceptable to the Holders. An
indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent,
which consent may not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) In order to provide for contribution in circumstances in which
the indemnification provided for in this SECTION 7 is for any
reason held to be unavailable from the indemnifying party, or
is insufficient to hold harmless a party indemnified under
this SECTION 7, each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a
result of such aggregate Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by each
indemnifying party, on the one hand, and each indemnified
party, on the other hand, from the sale of the Warrants to the
Initial Purchaser or the resale of the Registrable Securities
by such Holder, as applicable, or (ii) if such allocation is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each
indemnified party, on the one hand, and each indemnifying
party, on the other hand, in connection with the statements or
omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and each
Participant, on the other hand, shall be deemed to be in the
same proportion as (x) the total proceeds from the sale of the
Warrants to the Initial Purchaser (net of discounts and
commissions but before deducting expenses) received by the
Company are to (y) the total net profit received by such
Participant in connection with the sale of the Registrable
Securities. The relative fault of the parties shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates
to information supplied by the Company or such Participant and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission or alleged statement or omission.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this SECTION 7 were determined by pro
rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to
above. Notwithstanding the provisions of this SECTION 7, (i)
in no case shall any Participant be required to contribute any
amount in excess of the amount by which the net profit
received by such Participant in connection with the sale of
the Registrable Securities exceeds the amount of any damages
that such Participant has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission
or
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alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for
contribution may be made against another party or parties
under this SECTION 7, notify such party or parties from whom
contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from
whom contribution may be sought from any obligation it or they
may have under this SECTION 7 or otherwise, except to the
extent that it has been prejudiced in any material respect by
such failure; PROVIDED, HOWEVER, that no additional notice
shall be required with respect to any action for which notice
has been given under this SECTION 7 for purposes of
indemnification. Anything in this section to the contrary
notwithstanding, no party shall be liable for contribution
with respect to any action or claim settled without its
written consent, PROVIDED, HOWEVER, that such written consent
was not unreasonably withheld.
Section 8. RULE 144A AND RULE 144.
Subject to the terms of the Indenture, dated as of December 29, 2005
among the Company, the Guarantors set forth therein and Xxxxx Fargo Bank,
National Association, as trustee, the Company shall file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time the Company is not required to file such reports, it will,
upon the request of any Holder, make publicly available other information so
long as necessary to permit sales of their securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule144A
(including the requirements of Rule 144A(d)(4)) and (ii) from and after the date
on which the Company becomes subject to the provisions of Section 13 or Section
15 of the Exchange Act, Rule 144. The Company will provide a copy of this
Agreement to prospective purchasers of Registrable Securities identified to the
Company by the Initial Purchaser upon request. Upon the request of any Holder,
the Company shall deliver to such Holder a written statement as to whether it
has complied with such requirements. Notwithstanding the foregoing, nothing in
this SECTION 8 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
Section 9. MISCELLANEOUS.
(a) REMEDIES. The Company acknowledges and agrees that any failure
by the Company to comply with its obligations under SECTION 4
hereof may result in material irreparable injury to the
Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, any
Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under SECTION 4
hereof.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Agreement enter into any agreement with
respect to its securities that is
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inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted
to the holders of the Company's securities under any agreement
in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be
given, except by the Company and the written consent of the
Holders of a majority of the Registrable Securities affected
by such amendment, modification, supplement, waiver or
consent.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery,
first-class mail, facsimile transmission, or air courier which
guarantees overnight delivery:
(1) if to a Holder of the Securities, at the most current
address given by such Holder to the Company or
Warrant Agent.
(2) if to the Company, at the address as follows:
National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Mayer, Brown, Xxxx & Maw
00 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
(3) if to the Warrant Agent, at its address as follows:
Xxxxx Fargo Bank, National Association
Corporate Trust Services
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(e) THIRD PARTY BENEFICIARIES. It is expressly understood and
agreed that each Holder is intended to be a beneficiary of the
Company's covenants contained in this Agreement to the same
extent as if those covenants were made directly to such Holder
by the Company, and each such Holder shall have the right to
take action against the Company to enforce, and obtain damages
for any breach of, those covenants.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Company, the Initial Purchaser and each of their
successors and assigns.
(g) COUNTERPARTS. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
(h) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(j) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(k) SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held
by the Company or its Affiliates (other than subsequent
Holders of Registrable Securities if such subsequent Holders
are deemed to be Affiliates solely by reason of their holdings
of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the
Holders of such required percentage.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NATIONAL COAL CORP., as the Company
By: /s/ Xxx X. Xxx
---------------------------------
Name: Xxx X. Xxx
Title: CEO
XXXXXXXXX & COMPANY, INC., as Initial Purchaser
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
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