AMENDMENT TO WARRANT FOR THE
PURCHASE OF 845,750 SHARES OF COMMON STOCK
OF NATIONAL COAL CORPORATION
DATED MARCH 25, 2003
This Amendment to Warrant for the Purchase of 845,750 shares of common
stock of National Coal Corporation dated March 25, 2003 is hereby made by and
between National Coal Corporation, a corporation organized and existing under
the laws of the State of Tennessee (hereinafter referred to as "National"), and
the ▇▇▇▇ Group (hereinafter referred to as "Holder") effective as of March 25,
2003.
W I T N E S S E T H :
WHEREAS, National executed a Warrant (the "Warrant") for the Purchase
of 845,750 shares of common stock of National dated March 25, 2003 in favor of
the Holder; and
WHEREAS, terms regarding the exercise of the Warrant were inadvertently
omitted from said Warrant; and
WHEREAS, the parties now desire to set forth and incorporate in the
Warrant the following terms and conditions.
NOW, THEREFORE, for and in consideration of the foregoing recitals, the
mutual terms and conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. The following language is hereby added under paragraph 1 of the Warrant:
National shall not effect any exercise of this Warrant, and the Holder
shall not have the right to exercise any portion of this Warrant to the extent
that after giving effect to such issuance after exercise, the Holder (together
with the Holder's affiliates) would beneficially own in excess of 9.99% of the
number of shares of the common stock of National outstanding immediately after
giving effect to such issuance. For purposes of the foregoing sentence, the
number of shares of common stock of National beneficially owned by the Holder
and its affiliates shall include the number of shares of common stock of
National issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of common stock of National which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this paragraph, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act. To the
extent that the limitation contained in this paragraph applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of such Holder, and the submission
of Notice of Exercise shall be deemed to be such Holder's determination of
whether this Warrant is exercisable (in relation to other securities owned by
such Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and National shall have no
obligation to verify or confirm the accuracy of such determination. For purposes
of this paragraph, in determining the number of outstanding shares of common
stock of National, the Holder may rely on the number of outstanding shares of
common stock of National as reflected in National's most recent Form 10-Q or
Form 10-K, as the case may be, a more recent public announcement by National, or
any other notice by National or National's transfer agent setting forth the
number of shares of common stock of National outstanding. Upon the written or
oral request of the Holder, National shall within two (2) trading days confirm
orally or in writing to the Holder the number of shares of common stock of
National then outstanding. In any case, the number of outstanding shares of
common stock of National shall be determined after giving effect to the
conversion or exercise of securities of National, including this Warrant by the
Holder or its affiliates since the date as of which such number of outstanding
shares of common stock of National was reported. The provisions of this
paragraph may be waived by the Holder upon, at the election of the Holder, not
less than 61 days' prior notice to National, and the provisions of this
paragraph shall continue to apply until such 61st day (or such later date, as
determined by the Holder, as may be specified in such notice of waiver).
2. All other terms, provisions and conditions contained in this Agreement not
inconsistent herewith, shall remain in full force and effect.
This 26th day of February, 2004.
National Coal Corporation
By: _____________________________________
▇▇▇ ▇. ▇▇▇, President
The ▇▇▇▇ Group
By: _____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Authorized Signator