EXHIBIT 10.4
WAIVER AND AMENDMENT NO. 3
THIS WAIVER AND AMENDMENT NO. 3, dated as of October 19, 2007 (this
"WAIVER AND AMENDMENT"), to the CREDIT AGREEMENT, dated as of October 12, 2006
(as amended by the Amendment dated March 30, 2007 and Amendment No. 2 and
Limited Waiver dated August 16, 2007, the "CREDIT AGREEMENT"), among NATIONAL
COAL CORP., a Florida corporation ("HOLDINGS"), NATIONAL COAL CORPORATION, a
Tennessee corporation (the "BORROWER"), the LENDERS party thereto from time to
time, and GUGGENHEIM CORPORATE FUNDING, LLC, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") and as collateral agent for the Lenders.
Capitalized terms used herein but not defined herein are used as defined in the
Credit Agreement.
W I T N E S S E T H:
WHEREAS, Holdings and the Borrower have requested that the
Administrative Agent and the Lenders waive certain provisions of the Credit
Agreement;
WHEREAS, Holdings and the Borrower desire to amend certain provisions
of the Credit Agreement; and
WHEREAS, the Lenders and the Administrative Agent have agreed to waive
certain provisions of the Credit Agreement and amend certain provisions of the
Credit Agreement, in each case, on the terms and subject to the conditions
herein provided.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and other good and valuable consideration, the
adequacy and receipt of which is hereby acknowledged, and in reliance upon the
representations, warranties and covenants herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. WAIVER. As of the Effective Date (as defined below), the
Administrative Agent and each Lender hereby:
(a) waive the Fee set forth in Section 2.9(f) of the Credit
Agreement in respect of the December 31, 2007 Target Date;
(b) waive compliance with Section 6.1(a) of the Credit
Agreement in respect of each of the fiscal quarters ending September
30, 2007 and December 31, 2007; and
(c) waive the registration and processing fee of $3,500 set
forth in Section 9.6(e) of the Credit Agreement solely with respect to
each Assignment and Acceptance delivered on or before the Effective
Date pursuant to Section 3(d) hereof.
Section 2. AMENDMENT. As of the Effective Date, the Administrative
Agent and each Lender hereby consent to the following amendments to the Credit
Agreement:
(a) Section 1.1 of the Credit Agreement is hereby amended by
inserting the following defined terms in the appropriate place so as to
preserve the alphabetical order of the definitions in such Section:
"ACCELERATING LENDERS" as defined in Section 9.1.
"ACCELERATION" as defined in Section 9.1.
"ACCELERATION NOTICE" as defined in Section 9.1.
"ACCELERATION NOTICE LENDERS" as defined in Section 9.1.
"ACCELERATION PURCHASE NOTICE" as defined in Section 9.1.
"ACQUISITION": the acquisition of ▇▇▇▇ Steel Products, Inc.,
an Alabama corporation, expected to be consummated on or about October
19, 2007.
"AGREED ACCELERATION NOTICE" as defined in Section 9.1.
"AGREED REMEDY NOTICE" as defined in Section 9.1.
"GCF" as defined in Section 8.9.
"KEY DEFAULT" as defined in Section 7.
"LENDER FEE LETTER" means the letter dated October 19, 2007,
addressed to Holdings and Borrower with respect to certain fees to be
paid from time to time to Big Bend 38 Investments L.P., J-K Navigator
Fund, L.P. and Steelhead Offshore Capital, LP or any of their
respective successors or assigns.
"NON-ACCELERATING LENDER" as defined in Section 9.1.
"NON-REMEDYING LENDER" as defined in Section 9.1.
"REMEDIES" as defined in Section 9.1.
"REMEDYING LENDERS" as defined in Section 9.1.
"REMEDY NOTICE" as defined in Section 9.1.
"REMEDY NOTICE LENDERS" as defined in Section 9.1.
"REMEDY PURCHASE NOTICE" as defined in Section 9.1.
"SPECIAL ACCELERATION INSTRUCTION" as defined in Section 9.1.
"SPECIAL REMEDY INSTRUCTION" as defined in Section 9.1.
"THIRD AMENDMENT" means the Waiver and Amendment No. 3 dated
October 19, 2007 among Holdings, Company, and Administrative Agent.
"THIRD AMENDMENT EFFECTIVE DATE": means October 19, 2007.
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"UNRESTRICTED SUBSIDIARIES": means: (i) NCC Corp., an Alabama
corporation and wholly-owned subsidiary of Holdings, and (ii) the
subsidiaries of NCC Corp. acquired pursuant to that certain Purchase
Agreement, dated as of June 18, 2007, as amended to date; PROVIDED,
that such entities constitute "Unrestricted Subsidiaries" as defined in
the Senior Secured Indenture. To the extent NCC Corp. or any of its
subsidiaries no longer constitute an "Unrestricted Subsidiary" under
the Senior Secured Indenture, each such Unrestricted Subsidiary shall
no longer be an "Unrestricted Subsidiary" hereunder, shall
automatically be designated as a Subsidiary of Holdings hereunder and
shall be joined to this Agreement and the other Loan Documents pursuant
to Section 5.10(c).
"WARRANT" means each of the warrants, substantially in the
form of Exhibit A, that may be issued by Holdings to each of the
Warrantholders pursuant to the Lender Fee Letter.
"WARRANTHOLDER" means each of the Lenders party to the Lender
Fee Letter and their respective successors and assigns.
(b) Section 1.1 of the Credit Agreement is hereby amended by
inserting the following definitions in lieu thereof:
"ADMINISTRATIVE AGENT" as defined in the preamble hereto and
any successor administrative agent pursuant to Section 8.9.
"LOAN DOCUMENTS": this Agreement, the Security Documents, the
Fee Letter, the Lender Fee Letter, the Warrants (if any), any Term
Notes and each other agreement or document executed by a Loan Party and
delivered to the Administrative Agent or any Lender in connection with
or pursuant to any of the foregoing.
"REQUIRED LENDERS": at any time, the holders of more than 50%
of the sum of the aggregate unpaid principal amount of the Term Loans
then outstanding.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower. An
Unrestricted Subsidiary shall not be considered a Subsidiary of either
the Borrower or Holdings unless such Unrestricted Subsidiary no longer
constitutes an "Unrestricted Subsidiary" under the Senior Secured
Indenture and in such event, such Unrestricted Subsidiary shall
automatically be designated as a Subsidiary of Holdings hereunder and
shall be joined to this Agreement and the other Loan Documents pursuant
to Section 5.10(c).
"SUBSIDIARY GUARANTOR": each Subsidiary of Holdings other than
any Excluded Foreign Subsidiary and the Unrestricted Subsidiaries.
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(c) Section 1.1 of the Credit Agreement is hereby amended by
replacing "Administrative Agent" with "Required Lenders" in each
instance in the definition of "Consolidated Leverage Ratio" and
"Permitted Acquisition".
(d) Section 2.4(f) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(f) FEES. The Borrower agrees to pay the fees payable
to the Administrative Agent for acting in such capacity in the
amounts and on the dates set forth in the Fee Letter;
provided, however, the fees set forth in the Fee Letter shall
not be increased without the consent of Required Lenders.
Holdings and the Borrower agree to pay the fees payable to the
Lenders in accordance with the Lender Fee Letter.
(e) Section 2.6(b) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(b) Unless the Required Lenders shall otherwise
agree, if on any date Holdings, the Borrower or any of their
respective Subsidiaries shall receive Net Cash Proceeds from
any Asset Sale, Purchase Price Refund or Recovery Event then,
on the date of receipt by Holdings, the Borrower or any of
their respective Subsidiaries of such Net Cash Proceeds, the
Term Loans shall be prepaid by an amount equal to the amount
of such Net Cash Proceeds, as set forth in Section 2.12(e).
The provisions of this Section do not constitute a consent to
the consummation of any Disposition not permitted by Section
6.5.
(f) Section 2.12(e) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(e) (A) after the occurrence and during the
continuance of an Event of Default specified in Section 7(a)
or Section 7(j), (B) after the occurrence and during the
continuance of an Event of Default specified in Section 7(i)
with respect to a material portion of the Collateral, (C)
after the occurrence and during the continuance of any other
Event of Default not specified in subclause (A) or (B) above
and the acceleration of the Obligations pursuant to Section 7
or (D) with respect to any mandatory prepayments pursuant to
Section 2.6, in each case, all payments in respect of the
Obligations and all proceeds of the Collateral shall be
applied against the Obligations in the following order:
(i) FIRST, to pay incurred and unpaid fees, expenses
and indemnities of the Administrative Agent under the Loan
Documents;
(ii) SECOND, to pay incurred and unpaid fees,
expenses and indemnities of the Lenders under the Loan
Documents;
(iii) THIRD, to pay interest then due and payable in
respect of the Term Loans;
(iv) FOURTH, to the prepayment of the Term Loans then
outstanding; and
(v) FIFTH, to pay all other Obligations.
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If sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the
foregoing clauses (i) through (v), the available funds being applied
with respect to any such Obligation shall be allocated to the payment
of such Obligations ratably, based on the proportion of the
Administrative Agent's, Lender's or other Secured Party's interest in
the aggregate outstanding Obligations described in such clause. The
order of priority set forth in clauses (ii) through (v) of this Section
2.12(e) may at any time and from time to time be changed by the
agreement of the Lenders in the Term Loan Facility without necessity of
notice to or consent of or approval by the Borrower, any other Loan
Party, any Secured Party that is not a Lender or any other Person.
(g) Section 2.18(b)(vi) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
(vi) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the
Required Lenders
(h) Section 5.9 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
5.9 [Reserved].
(i) Section 5.10(c) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(c) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary or an Unrestricted Subsidiary)
created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary or
an Unrestricted Subsidiary which ceases to be an Unrestricted
Subsidiary) by Holdings, the Borrower or any of their
respective Subsidiaries, promptly (i) execute and deliver to
the Administrative Agent such amendments to the Security
Agreement as the Administrative Agent or Required Lenders
deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such
new Subsidiary that is owned by Holdings, the Borrower or any
of their respective Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of
Holdings, the Borrower or such Subsidiary, as the case may be,
(iii) cause such new Subsidiary (A) to become a party to the
Security Agreement, (B) to comply with Section 5.10(a) and
Section 5.10(b) and (C) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit
of the Secured Parties a perfected first priority security
interest in the Collateral described in the Security Agreement
with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the
Security Agreement or by law or as may be requested by the
Administrative Agent or Required Lenders, and (iv) if
requested by the Administrative Agent or Required Lenders,
deliver to the Administrative Agent legal opinions relating to
the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to
the Administrative Agent and Required Lenders.
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(j) Section 5 is hereby amended by adding a new Section 5.14:
5.14 POST-THIRD AMENDMENT EFFECTIVE DATE
REQUIREMENTS.
(a) Within 15 days of the Third Amendment Effective
Date, the Lenders shall have received a reliance letter with
respect to the legal opinion delivered on the Closing Date
pursuant to Section 4.1(i) from Trenam, Kemker, Scharf,
Barkin, Frye, ▇'▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Association,
special counsel to the Loan Parties, in form and substance
reasonably satisfactory to the Required Lenders.
(b) Borrower agrees to promptly provide to Lenders
such additional information regarding Borrower and the
Collateral as the Lenders may from time to time reasonably
request.
(k) Section 6.4(c) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(c) [Reserved].
(l) Section 6.5(d) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(d) the sale or issuance of (i) any Subsidiary's
Capital Stock to Holdings, the Borrower or any Subsidiary
Guarantor, or (ii) the Capital Stock of Holdings in an amount
not to exceed $12,000,000; provided the proceeds thereof are
used to consummate the Acquisition, including the financing
thereof, or (iii) warrants to purchase up to 250,000 shares of
the Capital Stock of Holdings issued to NCC Corp. in
connection with the capitalization thereof and any shares of
Capital Stock of Holdings issued or issuable upon the exercise
thereof;
(m) Section 6.6(b) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(b) [Reserved].
(n) Section 6.8(f) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(f) [Reserved].
(o) Section 6.8 of the Credit Agreement is hereby amended by
deleting "and" at the end of Section 6.8(g), by replacing the period
after Section 6.8(h) with "; and" and by adding the following as a new
clause (i):
(i) the following Investments by Holdings in NCC
Corp. (i) an Investment in NCC Corp. in an amount not to
exceed $12,000,000 from the proceeds of the Disposition
permitted under Section 6.5(d)(ii), and (ii) the issuance of
the warrant to NCC Corp. to purchase up to 250,000 shares of
Capital Stock of Holdings described in Section 6.5(d)(iii).
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(p) Section 6.9(c) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(c) amend its certificate of incorporation in any
manner determined by the Required Lenders to be adverse to the
Lenders.
(q) Section 6.16 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
6.16 LIMITATION ON HEDGE AGREEMENTS. Enter into any
Hedge Agreement other than Hedge Agreements entered into in
the ordinary course of business, and not for speculative
purposes, to protect against changes in prices of commodities
used by the Loan Parties in the ordinary course of business.
(r) The last paragraph of Section 7 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
then, and in any such event (and subject to the
Intercreditor Agreement),
(A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above, automatically the Term Loans
hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately
become due and payable;
(B) if such event is an Event of Default specified in
paragraph (a) above arising out of the failure to pay any principal of,
or interest on, any Term Loan or the failure to pay amounts due and
payable under the Lender Fee Letter (a "KEY DEFAULT"), upon (i) the
request of the Required Lenders or (ii) receipt of an Agreed
Acceleration Notice or a Special Acceleration Instruction pursuant to
Section 9.1, the Administrative Agent shall, by notice to the Borrower,
declare the Term Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable; or
(C) if such event is any other Event of Default, upon
the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Term Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable forthwith, whereupon the
same shall immediately become due and payable.
Notwithstanding anything to the contrary in the Loan Documents
(including Section 6.2 of the Security Agreement), and subject to the
Intercreditor Agreement, if such event is a Key Default, upon (i) the
request of the Required Lenders or (ii) receipt of an Agreed Remedy
Notice or a Special Remedy Instruction pursuant to Section 9.1, the
Administrative Agent shall, by notice to the Borrower, exercise any and
all rights and remedies available at law or in equity, including
without limitation, all rights and remedies under the Security
Documents, to collect the amounts due.
(s) Section 8.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
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8.1 APPOINTMENT. Each Lender hereby designates and
appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each
Lender authorizes the Administrative Agent, in such capacity,
to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and
the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative
Agent.
(t) Section 8.9 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
8.9 SUCCESSOR ADMINISTRATIVE AGENT. Guggenheim
Corporate Funding, LLC ("GCF") in its capacity as
Administrative Agent may resign upon 30 days' notice to the
Lenders and the Borrower; provided that the effective date of
such resignation is no earlier than January 15, 2008. Any
successor Administrative Agent to GCF may resign upon 60 days'
notice to the Lenders and the Borrower. If the Administrative
Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents in accordance with this
Section 8.9, then (i) if GCF is the resigning Administrative
Agent, the Borrower shall pay to GCF the amount of fees due
and owing under the Fee Letter; provided such fees do not
exceed $7,500 in any fiscal quarter (or the pro rata portion
thereof, as applicable) and (ii) the Required Lenders shall
appoint a successor agent for the Lenders, which successor
agent shall (unless an Event of Default under Section 7(a) or
Section 7(f) with respect to the Borrower shall have occurred
and be continuing or unless such successor agent is a Lender)
be subject to approval by the Borrower (which approval shall
not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties
of the Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative
Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed
on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Term Loans. If
no successor agent has accepted appointment as Administrative
Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative
Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent under this Agreement and
the other Loan Documents. Notwithstanding anything herein in
the contrary, the Required Lenders may, in consultation with
Borrower, replace the Administrative Agent upon three Business
Days' written notice to Administrative Agent.
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(u) Section 8.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
8.10 AMENDMENTS; NOTICES. Notwithstanding anything to
the contrary herein or in any Security Document,
Administrative Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any
provision contained in any Security Document (except as
otherwise expressly permitted or required pursuant to the
terms of this Agreement or the applicable Security Document)
without the prior consent of Required Lenders (or, if required
pursuant to Section 9.1, all Lenders). The Administrative
Agent is hereby authorized by each of the Lenders to effect
any release of Liens or guarantee obligations contemplated by
Section 5.1 of the Intercreditor Agreement. All notices
delivered to or by Administrative Agent hereunder or under the
other Loan Documents shall promptly be delivered to Required
Lenders in accordance with Section 9.2.
(v) The first paragraph of Section 9.1 of the Credit Agreement
is hereby amended by replacing the following phrase "(upon the written
consent of the Required Lenders)" with "(with the written instruction
of the Required Lenders)".
(w) Section 9.1(i) of the Credit Agreement is hereby amended
by replacing the following phrase "without the consent of the
Administrative Agent and each Lender directly affected thereby" with
"without the consent of each Lender directly affected thereby".
(x) Section 9.1(ii) of the Credit Agreement is hereby amended
by replacing the following phrase "without the consent of the
Administrative Agent and all Lenders" with "without the consent of all
Lenders".
(y) Section 9.1(iii) of the Credit Agreement is hereby amended
by replacing the following phrase "without the written consent of the
Administrative Agent and all Lenders" with "without the written consent
of all Lenders".
(z) Section 9.1(v) of the Credit Agreement is hereby amended
by replacing the following phrase "without the consent of the
Administrative Agent and each Lender directly affected thereby" with
"without the consent of each Lender directly affected thereby".
(aa) The last paragraph of Section 9.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
If, in connection with any proposed amendment,
modification, waiver, or termination (a "PROPOSED CHANGE")
requiring the consent of the Required Lenders or all affected
Lenders, the consent of holders of 50% or more of the sum of
the aggregate unpaid principal amount of the Term Loans then
outstanding is obtained but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.1 being
referred to as a "NON-CONSENTING LENDER"), then, an Eligible
Assignee shall have the right to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees
that it shall sell and assign to such Eligible Assignee, all
of the applicable Term Loans of such Non-Consenting Lender for
an amount equal to the principal balance of all applicable
Term Loans held by the Non-Consenting Lender and all accrued
interest and fees with respect thereto through the date of
sale; PROVIDED, HOWEVER, that such purchase and sale shall not
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be effective until the Administrative Agent shall have
received from such Eligible Assignee an executed Assignment
and Acceptance whereby such Eligible Assignee shall agree to
be bound by the terms hereof.
After the occurrence and during the continuance of a
Key Default, if the holders of 50% of the sum of aggregate
unpaid principal amount of the Term Loans then outstanding
(the "ACCELERATING LENDERS") wish to instruct the
Administrative Agent to declare the Term Loans hereunder (with
accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents to be due and
payable forthwith (an "ACCELERATION"), such Accelerating
Lenders may send a written notice (an "ACCELERATION NOTICE")
to the other Lenders (the "ACCELERATION NOTICE LENDERS") of
their proposal to instruct the Administrative Agent to cause
an Acceleration. Within five days after the Acceleration
Notice is given, the Acceleration Notice Lenders (or any of
them) may then take either the following actions: (i) send a
notice to the Accelerating Lenders and to the Administrative
Agent indicating their agreement with the Accelerating
Lenders' proposal and instructing the Administrative Agent to
cause an Acceleration (the "AGREED ACCELERATION NOTICE"); or
(ii) send a notice to the Accelerating Lenders and to the
Administrative Agent indicating that they do NOT agree with
the Accelerating Lenders' proposal and offering to purchase
the Accelerating Lenders' Term Loans in accordance with this
Section 9.1 (the "ACCELERATION PURCHASE NOTICE"). If none of
the Acceleration Notice Lenders sends an Agreed Acceleration
Notice or an Acceleration Purchase Notice within five days
after the Acceleration Notice is given, the Acceleration
Notice Lenders shall be deemed to have given an Agreed
Acceleration Notice and the Accelerating Lenders (without the
requirement of affirmative consent from any Acceleration
Notice Lender) shall be entitled to instruct the
Administrative Agent to cause an Acceleration (a "SPECIAL
ACCELERATION INSTRUCTION"). In the event that an Agreed
Acceleration Notice and an Acceleration Purchase Notice are
timely given by different Acceleration Notice Lenders in
response to the same Acceleration Notice, then the Agreed
Acceleration Notice shall govern.
Any Acceleration Notice Lender who sends an
Acceleration Purchase Notice as contemplated by clause (ii) in
the paragraph above is referred to herein as a
"NON-ACCELERATING LENDER"). Within five days after an
Acceleration Purchase Notice is given and provided that the
Accelerating Lenders have not revoked their Acceleration
Notice or the Event of Default upon which such Acceleration
Notice is based has not been cured or waived on or before such
fifth day, a Non-Accelerating Lender shall purchase (or shall
arrange for an Eligible Assignee to purchase), and such
Accelerating Lender agrees that it shall sell and assign to
such Non-Accelerating Lender or Eligible Assignee, as the case
may be, all of the applicable Term Loans of such Accelerating
Lender for an amount equal to the principal balance of all
applicable Term Loans held by the Accelerating Lender all
accrued interest and fees with respect thereto through the
date of sale; PROVIDED, HOWEVER, that such purchase and sale
shall not be effective until the Administrative Agent shall
have received from such Non-Accelerating Lender or Eligible
Assignee, as the case may be, an executed Assignment and
Acceptance whereby such Non-Accelerating Lender or Eligible
Assignee, as the case may be, shall agree to be bound by the
terms hereof; PROVIDED FURTHER that if such executed
Assignment and Acceptance is not delivered to the
Administrative Agent within five days after an Acceleration
Purchase Notice is given, then the Non-Accelerating Lender
shall be deemed to have given an Agreed Acceleration Notice
and the Accelerating Lenders shall be entitled to give a
Special Acceleration Instruction to the Administrative Agent.
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After the occurrence and during the continuance of a
Key Default, if the holders of 50% of the sum of aggregate
unpaid principal amount of the Term Loans then outstanding
(the "REMEDYING LENDERS") wish to instruct the Administrative
Agent to exercise any and all rights and remedies available at
law or in equity, including without limitation, all rights and
remedies under the Security Documents, to collect the amounts
due ("REMEDIES"), such Remedying Lenders may (either following
an acceleration pursuant to clause (B) of the last paragraph
of Section 7 or concurrently with delivery of an Acceleration
Notice) send a written notice (a "REMEDY NOTICE") to the other
Lenders (the "REMEDY NOTICE LENDERS") of their proposal to
instruct the Administrative Agent to exercise Remedies. Within
five days after the Remedy Notice is given, the Remedy Notice
Lender (or any of them) may then take either the following
actions: (i) send a notice to the Remedying Lenders and to the
Administrative Agent indicating their agreement with the
Remedying Lenders' proposal and instructing the Administrative
Agent to exercise Remedies (the "AGREED REMEDY NOTICE"); or
(ii) send a notice to the Remedying Lenders and to the
Administrative Agent indicating that they do NOT agree with
the Remedying Lenders' proposal and offering to purchase the
Remedying Lenders' Term Loans in accordance with this Section
9.1 (the "REMEDY PURCHASE NOTICE"). If none of the Remedy
Notice Lenders sends an Agreed Remedy Notice or a Remedy
Purchase Notice within five days after the Remedy Notice is
given, the Remedy Notice Lenders shall be deemed to have given
an Agreed Remedy Notice and the Remedying Lenders (without the
requirement of affirmative consent from any Remedy Notice
Lender) shall be entitled to instruct the Administrative Agent
to exercise Remedies (a "SPECIAL REMEDY INSTRUCTION"). In the
event that an Agreed Remedy Notice and a Remedy Purchase
Notice are timely given by different Remedy Notice Lenders in
response to the same Remedy Notice, then the Agreed Remedy
Notice shall govern.
Any Remedy Notice Lender who sends a Remedy Purchase
Notice as contemplated by clause (ii) in the paragraph above
is referred to herein as a "NON-REMEDYING LENDER"). Within
five days after a Remedy Purchase Notice is given and provided
that the Remedying Lenders have not revoked their Remedy
Notice or the Event of Default upon which such Remedy Notice
is based has not been cured or waived on or before such fifth
day, a Non-Remedying Lender shall purchase (or shall arrange
for an Eligible Assignee to purchase), and such Remedying
Lender agrees that it shall sell and assign to such
Non-Remedying Lender or Eligible Assignee, as the case may be,
all of the applicable Term Loans of such Remedying Lender for
an amount equal to the principal balance of all applicable
Term Loans held by the Remedying Lender all accrued interest
and fees with respect thereto through the date of sale;
PROVIDED, HOWEVER, that such purchase and sale shall not be
effective until the Administrative Agent shall have received
from such Non-Remedying Lender or Eligible Assignee, as the
case may be, an executed Assignment and Acceptance whereby
such Non-Remedying Lender or Eligible Assignee, as the case
may be, shall agree to be bound by the terms hereof; PROVIDED
FURTHER that if such executed Assignment and Acceptance is not
delivered to the Administrative Agent within five days after a
Remedy Purchase Notice is given, then the Non-Remedying Lender
shall be deemed to have given an Agreed Remedy Notice and the
Remedying Lenders shall be entitled to give a Special Remedy
Instruction to the Administrative Agent.
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Each Lender agrees that, in the event that its Term
Loans are being purchased by another Lender pursuant to this
Section 9.1, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence
such sale and purchase and shall deliver to the Administrative
Agent any Term Note (if the assigning Lender's Term Loans are
evidenced by Term Notes) subject to such Assignment and
Acceptance; PROVIDED, HOWEVER, that the failure of any such
Lender or Eligible Assignee to execute an Assignment and
Acceptance shall not render such sale and purchase (and the
corresponding assignment) invalid.
(bb) Section 9.5(a) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(a) to pay or reimburse the Administrative Agent and
each Lender for all of their respective reasonable out of
pocket costs and expenses incurred in connection with the
syndication of the Term Loan Facility and the development,
preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents
and any other documents prepared in connection herewith or
therewith (including without limitation the Assignment and
Acceptance of each Lender dated on or about the Third
Amendment Effective Date, the Lender Fee Letter and the
Warrants), and the consummation and administration of the
transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and
other charges of counsel to the Administrative Agent and each
Lender and the charges of Intralinks,
(cc) Section 9.6(a) of the Credit Agreement is hereby amended
by replacing the following phrase "without the prior written consent of
the Administrative Agent and each Lender" with "without the prior
written consent of each Lender".
(dd) Section 9.6(c) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(c) Any Lender (an "ASSIGNOR") may, in accordance
with applicable law and upon written notice to the
Administrative Agent, at any time and from time to time assign
to any Eligible Assignee or, with the consent of the Required
Lenders and the Borrower (which, in each case, shall not be
unreasonably withheld or delayed), to a Person that is not an
Eligible Assignee (each, an "ASSIGNEE") all or any part of its
rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of
Exhibit D (an "ASSIGNMENT AND ACCEPTANCE"), executed by such
Assignee and such Assignor (and, where the consent of the
Required Lenders and the Borrower is required pursuant to the
foregoing provisions, by the Required Lenders and the
Borrower) and delivered to the Required Lenders for its
acceptance and recording in the Register; PROVIDED that no
such assignment to an Assignee (other than any Lender or any
Affiliate, Related Fund or Control Investment Affiliate
thereof) shall be in an aggregate principal amount of less
than $1,000,000 (other than in the case of an assignment of
all of a Lender's interests under this Agreement), unless
otherwise agreed by the Required Lenders. Upon such execution,
delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender
hereunder with Term Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such
- 12 -
Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to
be a party hereto, except as to Section 2.13, 2.14 and 9.5 in
respect of the period prior to such effective date). For
purposes of the minimum assignment amounts set forth in this
paragraph, multiple assignments by two or more Related Funds
shall be aggregated. Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for
any assignment that occurs at any time when any Event of
Default shall have occurred and be continuing.
(ee) Section 9.15 of the Credit Agreement is hereby amended by
replacing the following phrase "then the Borrower and the
Administrative Agent agree" with "then the Borrower and the Required
Lenders agree".
(ff) Section 9.15 of the Credit Agreement is hereby further
amended by replacing the following phrase "the Administrative Agent and
the Required Lenders" with "the Required Lenders".
Section 3. CONDITIONS PRECEDENT. This Waiver and Amendment shall become
effective as of the date (the "EFFECTIVE DATE") on which each of the following
conditions precedent shall have been satisfied or duly waived:
(a) CERTAIN DOCUMENTS. The Administrative Agent and Required
Lenders shall have received each of the following, in form and
substance satisfactory to the Required Lenders:
(i) this Waiver and Amendment, duly executed by the
Borrower and Holdings, on behalf of itself and each other Loan
Party, the Lenders and the Administrative Agent;
(ii) the Lender Fee Letter, duly executed by each of
Borrower, Holdings and the Lenders.
(iii) a certificate of the Secretary or an Assistant
Secretary of Holdings and Borrower, dated the Effective Date,
certifying (1) that there have been no changes since the
Closing Date to (A) the by-laws (or equivalent constituent
document) of Holdings and Borrower, (B) the resolutions of
Holdings' and Borrower's Board of Directors (or equivalent
governing body) approving and authorizing the execution,
delivery and performance of the Credit Agreement and the other
Loan Documents to which it is a party and (C) the certificate
of incorporation (or equivalent constituent document) of each
Holdings and Borrower; and (2) the true, correct and complete
copy of the resolutions of such Holdings' and Borrower's Board
of Directors (or equivalent governing body) approving and
authorizing the execution, delivery and performance of this
Waiver and Amendment;
(iv) reliance letters with respect to the legal
opinions delivered on the Closing Date pursuant to Section
4.1(i) of the Credit Agreement from (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
Markiles, LLP, counsel to the Loan Parties and (2) ▇▇▇▇▇▇▇
▇▇▇▇, General Counsel of the Loan Parties; and
(v) such additional documentation as the Required
Lenders may reasonably require.
- 13 -
(b) PAYMENT OF COSTS AND EXPENSES. The Administrative Agent
and the Lenders shall have received payment of all fees, costs and
expenses, including, without limitation, all costs and expenses of the
Administrative Agent and the Lenders (including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and each Lender (including any Person that becomes
a Lender on the Third Amendment Effective Date) in connection with this
Waiver and Amendment, each of the Assignment and Acceptances dated on
or about the date hereof, the Lender Fee Letter, the Credit Agreement
and each other Loan Document.
(c) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties contained in Section 4 below shall be
true and correct.
(d) ASSIGNMENT AND ACCEPTANCE. The Administrative Agent shall
have received an Assignment and Acceptance from each of Big Bend 38
Investments L.P., J-K Navigator Fund, L.P. and Steelhead Offshore
Capital, LP, in each case, duly executed by each of the parties thereto
and appended hereto as Schedule A.
(e) [Reserved.]
(f) CONSUMMATION OF CERTAIN TRANSACTIONS.
(i) All conditions to the acquisition of ▇▇▇▇ Steel
Products, Inc. (the "ACQUISITION") set forth in Article 7 of
the Purchase Agreement dated June 18, 2007 by and between
Holdings, ▇▇▇▇ Steel Products, Inc., an Alabama corporation,
and ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "PURCHASE
AGREEMENT") shall have been satisfied or the fulfillment of
any such conditions shall have been waived with the consent of
the Required Lenders and the transactions contemplated thereby
shall have been (or contemporaneously with the consummation of
the transactions contemplated by Section 3(d) of this Waiver
and Amendment will be) consummated.
(ii) All conditions to the transactions contemplated
by the Subscription Agreement dated October 19, 2007 between
Holdings and the investors listed therein (the "SUBSCRIPTION
AGREEMENT") set forth in Section 7 of the Subscription
Agreement shall have been satisfied or the fulfillment of any
such conditions shall have been waived with the consent of the
Required Lenders and the transactions contemplated thereby
shall have been (or contemporaneously with the consummation of
the transactions contemplated by Section 3(d) of this Waiver
and Amendment will be) consummated.
(iii) The Lenders shall have received a certificate
in form and substance acceptable to the Lenders signed by an
appropriate officer of the Borrower and Holdings certifying to
the fulfillment of the conditions set forth in Section 3(c)
and 3(f) hereof.
(g) PURCHASE AGREEMENT; LOAN DOCUMENTS.
(i) The Lenders shall have received a fully executed
or conformed copy of the Purchase Agreement (including all
exhibits, schedules and side letters thereto) and any
documents executed in connection therewith, and the Purchase
Agreement shall be in full force and effect and no provision
thereof shall have been modified or waived in any respect
determined by the Lenders to be material, without the consent
of the Lenders.
- 14 -
(ii) The Lenders shall have received a final form of
the Subscription Agreement (including all exhibits, schedules
and side letters thereto) and any documents executed in
connection therewith, and no provision thereof shall have been
modified or waived in any respect determined by the Lenders to
be material, without the consent of the Lenders.
(iii) The Lenders shall have received complete copies
of all of the Loan Documents (in each case, including all
exhibits, schedules and side letters thereto other than the
Fee Letter) and such Loan Documents shall be in full force and
effect and shall not been amended, restated, supplemented or
otherwise modified other than by the Amendment to the Credit
Agreement dated March 30, 2007, the Amendment No. 2 and
Limited Waiver to the Credit Agreement dated August 16, 2007
and this Waiver and Amendment.
(h) VOTING AGREEMENT
(i) ▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇ Capital Corporation and Crestview
Capital Master, LLC shall each have entered into a Voting Agreement
dated the date hereof (the "VOTING AGREEMENT") satisfactory to the
Lenders, in the form set forth hereto as EXHIBIT B.
Section 4. REPRESENTATIONS AND WARRANTIES. Each of Holdings and the
Borrower, on behalf of itself and each Loan Party, hereby represents and
warrants to the Administrative Agent and each Lender, with respect to all Loan
Parties, as follows:
(a) After giving effect to this Waiver and Amendment, each of
the representations and warranties in the Credit Agreement and in the
other Loan Documents are true and correct in all material respects on
and as of the date hereof as though made on and as of such date, except
to the extent that any such representation or warranty expressly
relates to an earlier date and except for changes therein expressly
permitted by the Credit Agreement.
(b) The execution, delivery and performance by Holdings and
the Borrower of this Waiver and Amendment have been duly authorized by
all requisite corporate or limited liability company action and will
not violate the articles of incorporation or bylaws (or other
constituent documents) of Holdings or the Borrower.
(c) The Borrower has provided the Lenders with (i) true and
complete copies of all of the Loan Documents (in each case, including
all exhibits, schedules and side letters thereto other than the Fee
Letter) and such Loan Documents are in full force and effect and have
not been amended, restated, supplemented or otherwise modified other
than by the Amendment to the Credit Agreement dated March 30, 2007, the
Amendment No. 2 and Limited Waiver to the Credit Agreement dated August
16, 2007 and this Waiver and Amendment and (ii) true and complete
copies of the Purchase Agreement (including all exhibits, schedules and
side letters thereto) and the Purchase Agreement is in full force and
effect and has not been amended, restated, supplemented or otherwise
modified.
(d) After giving effect to this Waiver and Amendment, no
Default or Event of Default has occurred and is continuing as of the
date hereof.
(e) As of the Effective Date, Holdings and Borrower represent
and warrant that the aggregate outstanding principal balance of the
Term Loans is $10,000,000.
- 15 -
Section 5. COSTS AND EXPENSES. In accordance with and in addition to
Section 9.5 of the Credit Agreement, the Borrower agrees to reimburse the
Administrative Agent and the Lenders (including the Persons becoming Lenders on
the Effective Date) for all reasonable out-of-pocket expenses incurred by the
Administrative Agent and the Lenders (including the Persons becoming Lenders on
the Effective Date) in connection with this Waiver and Amendment, the Assignment
and Acceptances described in Section 3(d), including the reasonable fees,
charges and disbursements of counsel or other advisors for advice, assistance or
other representation in connection with this Waiver and Amendment, the
Assignment and Acceptances described in Section 3(d) and any due diligence
investigation or review of the Loan Documents and the transactions contemplated
hereby.
Section 6. IN ADDITION, TO INDUCE THE LENDERS TO AGREE TO THE TERMS OF
THE ASSIGNMENT AND ACCEPTANCE SET FORTH IN 3(D) HEREOF, HOLDINGS AND BORROWER:
(a) REPRESENT AND WARRANT THAT AS OF THE DATE OF THEIR
EXECUTION OF THE ASSIGNMENT AND ACCEPTANCE SET FORTH IN 3(D) HEREOF
THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH
RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO THEIR OBLIGATIONS UNDER THE
LOAN DOCUMENTS AND IN ACCORDANCE THEREWITH IT;
(b) WAIVE ANY AND ALL SUCH CLAIMS, OFFSETS, RIGHTS OF
RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN,
ARISING PRIOR TO THE DATE OF THEIR EXECUTION OF THIS AGREEMENT AND
(c) RELEASE AND DISCHARGE LENDERS AND THEIR RESPECTIVE
PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, CONSULTANTS, AGENTS,
SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED
PARTIES") FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES,
CLAIMS, RIGHTS, CAUSES OF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN
OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW OR EQUITY, WHICH HOLDINGS
AND BORROWER EVER HAD, NOW HAS, CLAIM TO HAVE OR MAY HAVE AGAINST ANY
RELEASED PARTY ARISING PRIOR TO THE DATE HEREOF AND FROM OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Section 7. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) As of the Effective Date, each reference in the Credit
Agreement and the other Loan Documents to "THIS AGREEMENT,"
"HEREUNDER," "HEREOF," "HEREIN," or words of like import, and each
reference in the other Loan Documents to the Credit Agreement
(including, without limitation, by means of words like "THEREUNDER",
"THEREOF" and words of like import), shall mean and be a reference to
the Credit Agreement as amended and as waived hereby with respect to
the certain requirements outlined above, and this Waiver and Amendment
and the Credit Agreement shall be read together and construed as a
single instrument.
(b) Except as expressly amended hereby, all of the terms and
provisions of the Credit Agreement and all other Loan Documents are and
shall remain in full force and effect and are hereby ratified and
confirmed.
- 16 -
(c) The execution, delivery and effectiveness of this Waiver
and Amendment shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of the Administrative Agent,
any Lender under the Credit Agreement or any Loan Document, or
constitute a waiver or amendment of any other provision of the Credit
Agreement or any Loan Document except as and to the extent expressly
set forth herein.
(d) Each of Holdings, the Borrower and (by its acknowledgement
hereof as set forth on the signature pages hereto) each other Loan
Party, hereby confirms that the guaranties, security interests and
liens granted pursuant to the Loan Documents continue to guarantee and
secure the Obligations as set forth in the Loan Documents and that such
guaranties, security interests and liens remain in full force and
effect.
(e) In the event of any conflict between this Waiver and
Amendment and the Loan Documents, the terms of this Waiver and
Amendment shall govern (subject to the Intercreditor Agreement).
Section 8. COUNTERPARTS. This Waiver and Amendment may be executed in
any number of counterparts and by different 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.
Receipt by the Administrative Agent of a facsimile copy of an executed signature
page hereof shall constitute receipt by the Administrative Agents of an executed
counterpart of this Waiver and Amendment.
Section 9. GOVERNING LAW. This Waiver and Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 10. HEADINGS. Section headings contained in this Waiver and
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Waiver and Amendment for any other purposes.
Section 11. WAIVER OF JURY TRIAL. Each Of The Parties Hereto
Irrevocably Waives Trial By Jury In Any Action Or Proceeding With Respect To
This Waiver and Amendment Or Any Other Loan Document.
Section 12. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS. Each guarantor
listed on the signature pages hereof (each, a "GUARANTOR" and collectively,
"GUARANTORS") hereby acknowledges that it has read this Waiver and Amendment and
consents to the terms thereof, and hereby confirms and agrees that,
notwithstanding the effectiveness of this Waiver and Amendment, the obligations
of each Guarantor under the Security and Guarantee Agreement dated October 12,
2006 (as amended through the date hereof, the "SECURITY AND GUARANTEE
AGREEMENT") shall not be impaired or affected and the Security and Guarantee
Agreement is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects. Each Guarantor further agrees that
nothing in the Credit Agreement, this Waiver and Amendment or any other Loan
Document shall be deemed to require the consent of such Guarantor to any future
amendment to the Credit Agreement.
[SIGNATURE PAGES FOLLOW]
- 17 -
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be executed by their respective officers and members thereunto duly
authorized, on the date indicated below.
NATIONAL COAL CORP.
AS HOLDINGS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________________
Name:
Title:
NATIONAL COAL CORPORATION
AS THE BORROWER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________________
Name:
Title:
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 18 -
NC Railroad, Inc., AS A GUARANTOR
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________________
Name: ▇▇▇▇▇▇▇ ▇. Kit
Title: Pres
NC Transportation Inc., AS A GUARANTOR
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 19 -
GUGGENHEIM CORPORATE FUNDING, LLC,
AS ADMINISTRATIVE AGENT
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Partner
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 20 -
BIG BEND 38 INVESTMENTS L.P., AS A LENDER
By: The 2M Companies, Inc., General Partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 21 -
J-K NAVIGATOR FUND, L.P., AS A LENDER
By: Steelhead Partners, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 22 -
STEELHEAD OFFSHORE CAPITAL, LP, AS A LENDER
By: Steelhead Partners, LLC
Its: Investment Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager
[SIGNATURE PAGE TO AMENDMENT AND WAIVER]
- 23 -
EXHIBIT A
WARRANT AGREEMENT
Dated as of [_______]
Between
NATIONAL COAL CORP.,
as Issuer
and
BIG BEND 38 INVESTMENTS L.P.
J-K NAVIGATOR FUND, L.P.
STEELHEAD OFFSHORE CAPITAL, LP
as Holders
Warrants to Purchase
Shares of Common Stock
WARRANT AGREEMENT, dated as of [_______] (this "AGREEMENT"), between
National Coal Corp., a Florida corporation (the "COMPANY"), Big Bend 38
Investments L.P., J-K Navigator Fund, L.P., and Steelhead Offshore Capital, LP
(collectively, the "INITIAL HOLDERS" and each, an "INITIAL HOLDER").
WHEREAS, the Company desires to issue to the Initial Holders, Warrants
(as hereinafter defined), with an initial exercise price of $[3.00] per share
(subject to adjustment as provided herein), to purchase a number of shares
(subject to adjustment as provided herein) of Common Stock (as hereinafter
defined) such that, upon exercise of all the Warrants, holders of the Warrants
would, in the aggregate, acquire [750,000] shares of Common Stock; and
WHEREAS, the Company and the Initial Holders desire to enter into this
Agreement in order to set forth terms and conditions applicable to the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 25% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors or
similar governing body of such Person or any duly authorized committee thereof.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CASHLESS EXERCISE RATIO" has the meaning set forth in Section 3(b).
"CLOSING DATE" means the date hereof.
"COMMON STOCK" means the common stock, par value $0.0001 per share, of
the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NUMBER" has the meaning set forth in Section 3(a).
"EXERCISE PERIOD" means the period commencing on the Closing Date and
ending on the Expiration Date.
"EXERCISE PRICE" means [$3.00] per share of Common Stock, as adjusted
as herein provided.
"EXPIRATION DATE" means 5:00 p.m., New York City time, on December 31,
2011.
"HOLDERS" or "HOLDERS" means, collectively, the Initial Holder and its
successors and assigns.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"MARKET VALUE" per share of Common Stock as of any date shall equal (i)
if Common Stock is primarily traded on a securities exchange, the
volume-weighted average of the last sale prices of such Common Stock on such
securities exchange over the 10-trading day period ending on the trading day
immediately prior to the date of determination; (ii) if the principal market for
Common Stock is in the over-the-counter market, the volume-weighted average of
the closing sale prices of such Common Stock over the 10-trading day period
ending on the trading day immediately prior to the date of the determination, as
published by the National Association of Securities Dealers Automated Quotation
System or similar organization; and (iii) if there is no public market, or if no
trades have occurred during the aforementioned 10-trading day periods, the
Market Value shall be the value thereof, as agreed upon in good faith by the
Company and the holder; provided, however, that if the Company and the holder
cannot agree on such value, such value shall be determined by an independent
valuation firm experienced in valuing businesses jointly selected in good faith
by the Company and the holder. Fees and expenses of the valuation firm shall be
paid for equally by the Company and the holder.
"NON-AFFILIATE SALE" means a sale by the Company to a non-Affiliate in
an arm's length transaction.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TRANSFER" means any sale, transfer, assignment, or other disposition
of any interest in, with or without consideration, any security, including any
disposition of any security or of any interest therein which would constitute a
sale thereof within the meaning of the Securities Act.
"TRANSFER AGENT" has the meaning set forth in Section 5(b).
- 2 -
"VOTING STOCK" means, with respect to a Person, the capital stock of
such Person that has the right to vote for the election of the Board of
Directors or other governing body of such Person.
"WARRANT" means the right to purchase Warrant Shares on the terms
described herein evidenced by a Warrant Certificate.
"WARRANT CERTIFICATE" has the meaning set forth in Section 2(a)(i).
"WARRANT SHARES" means an aggregate of [750,000] shares of Common
Stock, after giving effect to all adjustments thereto provided for herein,
including without limitation those set forth in Section 7 hereof.
Section 2. CERTAIN ADMINISTRATIVE PROVISIONS.
(a) FORM OF WARRANT; REGISTER.
(i) Each Warrant issued hereunder shall be substantially in
the form of Exhibit A attached hereto (each, a "WARRANT CERTIFICATE")
and shall be executed on behalf of the Company by a duly authorized
officer of the Company. The Warrant may have notations, legends or
endorsements required by law, stock exchange rule or usage. The terms
and provisions contained in the Warrant shall constitute, and are
hereby expressly made, a part of this Warrant Agreement.
(ii) Each Warrant issued, exchanged or transferred hereunder
shall be registered in a warrant register (the "WARRANT REGISTER"). The
Warrant Register shall set forth (i) the number of each Warrant, (ii)
the name and address of the holder thereof, (iii) the original number
of Warrant Shares purchasable upon the exercise thereof, (iv) the
number of Warrant Shares purchasable upon the exercise thereof, as
adjusted from time to time in accordance with this Agreement and (v)
the Exercise Price for each Warrant Share, as adjusted from time to
time in accordance with this Agreement. The Warrant Register will be
maintained by the Company and will be available for inspection by any
holder at the principal office of the Company or such other location as
the Company may designate to the holders in the manner set forth in
Section 12.
(iii) All Warrants issued hereunder shall be subject to the
terms and provisions of this Agreement and, any Person to whom a
Warrant is Transferred or to whom a Warrant is issued in connection
with an exchange or exercise, by such Person's acceptance thereof,
shall be deemed to have become a party to, and to be bound by the terms
of and entitled to the benefits under, this Agreement.
- 3 -
(b) EXCHANGE OF WARRANTS.
(i) A holder may exchange any Warrant issued hereunder for
another Warrant, or other Warrants of different denominations, of like
kind and tenor representing in the aggregate the right to purchase the
same number and class or series of Warrant Shares that could be
purchased pursuant to the Warrant being so exchanged. In order to
effect an exchange permitted by this Section 2(b), the holder shall
deliver to the Company such Warrant accompanied by a duly executed
written request specifying the number and denominations of Warrants to
be issued in such exchange and the names in which such Warrants are to
be issued. As promptly as practicable, but in any event within five
business days of receipt of such a request, the Company shall, without
charge, issue, register and deliver to the holder thereof each warrant
to be issued in such exchange and make any necessary changes to the
Warrant Register.
(ii) Upon receipt of evidence reasonably satisfactory to the
Company (an affidavit of the holder being satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any
Warrant, and in the case of any such loss, theft or destruction, upon
receipt of an indemnity agreement from the holder reasonably
satisfactory to the Company or, in the case of any such mutilation,
upon surrender of such Warrant, the Company shall, without charge,
issue, register and deliver in lieu of such Warrant a new Warrant of
like kind representing the same rights represented by, and dated the
date of, such lost, stolen, destroyed or mutilated Warrant.
(c) TRANSFER OF WARRANTS.
(i) Subject to the further provisions of this Agreement and
compliance with all applicable securities laws, each Warrant may be
Transferred, in whole or in part, by the holder thereof by delivering
to the Company such Warrant accompanied by a properly completed, duly
executed, Assignment in the form of Exhibit B hereto. As promptly as
practicable, but in any event within five business days of receipt of
such Assignment Form, the Company shall, without charge, issue,
register and deliver to the holder thereof a new Warrant of like kind
and tenor representing in the aggregate the right to purchase the same
number of Warrant Shares that could be purchased pursuant to the
Warrant being Transferred.
Section 3. EXERCISE OR EXCHANGE OF WARRANTS; TERMS OF WARRANTS.
(a) On any Business Day during normal business hours during the
Exercise Period, a holder may exchange a Warrant, in whole or in part, for
Warrant Shares by delivering to the Company such Warrant accompanied by a
properly completed, duly executed Exchange Form in the form of Exhibit C
attached hereto. The number of Warrant Shares to be received by a holder upon
such exchange shall be equal to the number of Warrant Shares allocable to the
portion of the Warrant being exchanged (the "EXCHANGE NUMBER"), as specified by
such holder in the Exchange Form, minus a number of Warrant Shares equal to the
quotient obtained by dividing (i) the product of (x) the Exercise Price and (y)
- 4 -
the Exchange Number by (ii) the Market Value (as defined below) of one Warrant
Share as of the delivery date of the Exchange Form. The Company acknowledges
that the provisions of this Section 3 are intended, in part, to ensure that a
full or partial exchange of a Warrant pursuant to this Section 3 will qualify as
a conversion, within the meaning of paragraph (d)(3)(ii) of Rule 144 under the
Securities Act. At the request of any holder, the Company will accept reasonable
modifications to the exchange procedures provided for in this Section 3 in order
to accomplish such intent.
The Company and each holder intend that if any holder exercises this
Warrant by surrendering Warrants as contemplated by Section 3(b) or Section 3(a)
hereof, such method of exercise shall be treated for United States tax purposes
as a "reorganization" pursuant to Section 368(a)(1)(E) of the Internal Revenue
Code of 1986. The Company and each holder intend that such holder (and its
direct and indirect beneficial owners) will neither realize nor recognize any
taxable income or gain as a result of its exercise of the Warrant by such
method. None of the parties hereto will take any position in their respective
tax or other financial or accounting filings that are contrary to or
inconsistent with the foregoing.
(b) On any Business Day during normal business hours during the
Exercise Period, a holder shall have the right to receive from the Company the
number of Warrant Shares which the holder may at the time be entitled to receive
on exercise of such Warrants upon payment of the aggregate Exercise Price for
all Warrant Shares being purchased by such holder (i) in cash, by wire transfer
or by certified or official bank check payable to the order of the Company, (ii)
by surrendering notes or other instruments evidencing indebtedness issued by the
Company ("INDEBTEDNESS") having a principal amount, plus accrued interest, at
the time of tender equal to or greater than the aggregate Exercise Price then in
effect for all Warrant Shares being purchased by such holder, (iii) by tendering
Warrants as set forth below or (iv) any combination of cash, Indebtedness or
Warrants. Each holder may elect, upon exercise of its Warrants during the
Exercise Period, provided that the Market Value is greater than the Exercise
Price, to receive Warrant Shares on a net basis, such that, without the exchange
of any funds, the holder will receive such number of Warrant Shares as shall
equal the product of (A) the number of Warrant Shares for which such Warrant is
exercisable as of the date of exercise (if the Exercise Price were being paid in
cash) and (B) the Cashless Exercise Ratio. The "CASHLESS EXERCISE RATIO" shall
equal a fraction, the numerator of which is the Market Value (as defined below)
per share of Common Stock on the date of exercise minus the Exercise Price per
share as of the date of exercise and the denominator of which is the Market
Value per share on the date of exercise. Each Warrant not exercised prior to the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time.
(c) In order to exercise or exchange all or any of the Warrants
represented by a Warrant Certificate pursuant to Section 3(a) or (b) hereof, the
holder thereof must surrender upon exercise or exchange the Warrant Certificate
to the Company and deliver to the Company the form of election to purchase on
the reverse thereof duly completed and signed or the Exchange Form, and shall
provide payment to the Company of the Exercise Price, for the number of Warrant
Shares in respect of which such Warrants are then exercised or exchanged.
Payment of the aggregate Exercise Price shall be made in accordance with Section
3(b) hereof.
(d) Subject to the provisions of Section 3 hereof, upon compliance with
subsection (c) above, the Company shall deliver or cause to be delivered with
all reasonable dispatch, to or to the written order of the holder and in such
name or names as the holder may designate, a certificate or certificates for the
number of whole Warrant Shares issuable upon the exercise or exchange of such
- 5 -
Warrants or other securities or property to which such holder is entitled
hereunder, together with cash as provided in Section 8 hereof; provided that if
any consolidation, merger or lease or sale of assets is proposed to be effected
by the Company or its subsidiaries as described in Section 7(g) hereof, or a
tender offer or an exchange offer for shares of Common Stock shall be made, upon
such surrender of Warrants and payment of the aggregate Exercise Price, the
Company shall, as soon as possible, but in any event not later than five
business days thereafter, deliver or cause to be delivered the full number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence or other securities or property to which such holder
is entitled hereunder, together with cash as provided in Section 8 hereof. All
certificates in this Section 3(d) shall be deemed to have been issued and any
Person so designated to be named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date of the surrender of such
Warrants and payment of the applicable Exercise Price.
(e) The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part. If less than all the
Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the number of Warrants which were not exercised shall be executed by the
Company, registered in such name or names as may be directed in writing by the
holder, and shall deliver or cause to be delivered the new Warrant Certificate
to the Person or Persons entitled to receive the same. If a holder surrenders a
portion of the principal amount of any Indebtedness in payment of the Exercise
Price pursuant to Section 3(b), the Company shall (or shall cause its applicable
wholly-owned subsidiary to) issue to such holder a new note or other instrument,
as applicable, representing the principal amount not so surrendered.
[NOTE: FOR BIG BEND 38 ONLY (f) Notwithstanding anything herein to the
contrary, in no event shall a holder be permitted to exercise its Warrants for
Warrant Shares to the extent that (i) the number of shares of Common Stock
beneficially owned by such holder, together with any Affiliate thereof (other
than Warrant Shares issuable upon exercise of its Warrants) plus (ii) the number
of Warrant Shares issuable upon exercise of its Warrants, would be equal to or
exceed 9.999% of the number of shares of Common Stock then issued and
outstanding, including shares issuable upon exercise of its Warrants held by
such holder after application of this Section 3(f). As used herein, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules promulgated thereunder. To the extent that the limitation
contained in this Section 3(f) applies to a holder, the determination of whether
such holder's Warrants are exercisable (in relation to other securities owned by
such holder) and of which a portion of the Warrants is exercisable shall be in
the sole discretion of such holder, and the submission of an Exchange Form or
form of election to purchase shall be deemed to be such holder's determination
of whether its Warrants are exercisable (in relation to other securities owned
by such holder) and of which portion of its Warrants is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such determination. Nothing
contained herein shall be deemed to restrict the right of a holder to exercise
its Warrants into Warrant Shares at such time as such exercise will not violate
the provisions of this Section 3(f). The provisions of this Section 3(f) may be
waived by a holder upon, at the election of such holder, not less than 61 days'
prior notice to the Company, and the provisions of this Section 3(f) shall
continue to apply until such 61st day (or such later date, as determined by such
- 6 -
holder, as may be specified in such notice of waiver). No exercise of a holder's
Warrants in violation of this Section 3(f) but otherwise in accordance with this
Warrant Agreement shall affect the status of the Warrant Shares as validly
issued, fully-paid and nonassessable.]
Section 4. PAYMENT OF TAXES.
The Company shall pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; provided that
the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer or reissuance of any Warrant Certificates or the
issuance of Warrant Shares in a name other than that of the registered holder of
a Warrant Certificate surrendered upon the exchange, and the Company shall not
be required to issue or deliver such Warrant Shares unless or until the Person
or Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
Section 5. RESERVATION OF WARRANT SHARES; REGISTRATION OF WARRANT SHARES.
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock and/or the authorized and issued Common Stock held in its treasury,
for the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the Common
Stock (the "TRANSFER AGENT") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company shall keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company shall supply such Transfer Agent with
duly executed certificates for such purposes and shall provide or otherwise make
available any cash which may be payable as provided in Section 8 hereof. The
Company shall furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to each holder pursuant to Section
10 hereof.
(c) Before or concurrently with taking any action which would cause an
adjustment pursuant to Section 7 hereof to reduce the Exercise Price below the
then par value (if any) of the Warrant Shares, the Company shall take any
corporate action which may, in the opinion of its counsel (which may be counsel
employed by the Company), be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
(d) The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants shall, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
- 7 -
Section 6. OBTAINING STOCK EXCHANGE LISTINGS.
The Company shall from time to time take all action which may be
reasonably necessary so that the Warrant Shares, immediately upon their issuance
upon the exercise of Warrants, will be listed on a principal securities
exchange, automated quotation system or other market within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.
Section 7. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE.
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant shall be subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section 7. Notwithstanding
anything to the contrary in this Agreement, in no event shall the Exercise Price
be less than the par value of the Common Stock. For purposes of this Section 7,
"COMMON STOCK" means shares now or hereafter authorized of any class of common
shares of the Company however designated, that has the right (subject to any
prior rights of any class or series of preferred stock) to participate in any
distribution of the assets or earnings of the Company without limit as to per
share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company (i) pays a
dividend or makes a distribution on its Common Stock payable in shares of its
Common Stock, (ii) subdivides its outstanding shares of Common Stock into a
greater number of shares, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, (iv) makes a distribution on its Common Stock
in shares of its capital stock other than Common Stock or (v) issues by
reclassification of its Common Stock any shares of its capital stock, then the
Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any then outstanding Warrant
exercised after such action may receive the aggregate number and kind of shares
of capital stock of the Company which such holder would have owned immediately
following such action assuming the exercise of such Warrant immediately prior to
such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If, after an adjustment pursuant to clause (v) above, a holder of a
Warrant upon exercise of it may receive shares of two or more classes of capital
stock of the Company, the Company shall determine, in good faith, the allocation
of the adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall after such action be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 7. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any rights,
options or warrants to all holders of its Common Stock entitling them to
subscribe for shares of Common Stock or securities convertible into, or
- 8 -
exchangeable or exercisable for, shares of Common Stock, in either case, at a
price per share less than the Market Value per share on that record date, the
Exercise Price shall be adjusted in accordance with the formula:
O + N X P
-----
E' = E x M
-----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on
the record date.
N = the number of additional shares of Common Stock
issued pursuant to such rights, options or warrants.
P = the price per share of the additional shares.
M = the Market Value per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company distributes to
all holders of its Common Stock any of its assets (including cash), debt
securities, preferred stock or any rights or warrants to purchase assets
(including cash), debt securities, preferred stock or other securities of the
Company, the Exercise Price shall be adjusted in accordance with the formula:
M - F
E' = E x ______________
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Market Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the debt
securities, preferred stock, assets, securities,
rights or warrants to be distributed in respect of
one share of Common Stock as determined in good faith
by the Board of Directors of the Company.
- 9 -
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section 7(c) shall not apply to cash dividends or other cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. In addition, this Section 7(c) shall not apply to rights,
options or warrants referred to in Section 7(b) hereof.
(d) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Exercise Price need be made unless the adjustment would require an increase or
decrease of at least 1% in the Exercise Price. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 7 shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be, it being understood that no
such rounding shall be made under Section 7(j).
(e) WHEN NO ADJUSTMENT REQUIRED. With respect to Warrants of any
holder, no adjustment need be made for a transaction referred to Section 7(a),
(b) or (c), hereof, if such holder is to participate (without being required to
exercise its Warrants) in the transaction on a basis that such holder agrees is
fair and appropriate in light of the basis on which holders of Common Stock
participate in the transaction. No adjustment need be made (i) for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest, (ii) for a change in the par value or no par value of the Common
Stock or (iii) that would result in the Exercise Price being less than the par
value of the Common Stock. To the extent the Warrants become convertible into
cash, no adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
(f) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is adjusted, the
Company shall provide the notices required by Section 10 hereof.
(g) REORGANIZATION OF COMPANY. Immediately after the date hereof, if
the Company consolidates or merges with or into, or transfers or leases all or
substantially all its assets to, any Person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind and
amount of securities, cash or other assets which the holder of a Warrant would
have owned immediately after the consolidation, merger, transfer or lease if the
holder had exercised the Warrant immediately prior to the consummation of the
transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the Person to which such sale or conveyance shall have been
made, shall enter into a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section 7(g). The successor
Company shall mail to Warrant holders a notice describing the supplemental
Warrant Agreement. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an Affiliate of the formed,
surviving, transferee or lessee corporation, such issuer shall join in the
supplemental Warrant Agreement. If this Section 7(g) shall be applicable,
Sections 7(a), (b) and (c) hereof shall not be applicable.
- 10 -
(h) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any case in which this
Section 7 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to Section 8 hereof;
provided that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the event
requiring such adjustment.
(i) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to this Section 7, each Warrant outstanding prior to the
making of the adjustment in the Exercise Price shall thereafter evidence the
right to receive upon payment of the adjusted Exercise Price that number of
shares of Common Stock (calculated to the nearest hundredth) obtained from the
following formula:
N x E
-------------
N' = E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise
Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(j) FORM OF WARRANTS. Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
Section 8. FRACTIONAL INTERESTS.
The Company shall not be required to issue fractional Warrant Shares on
the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this Section 8, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall calculate the amount in cash
equal to the Market Value per Warrant Share and pay such amount, as determined
on the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction, computed to the nearest whole U.S. cent.
- 11 -
Section 9. REPRESENTATIONS OF HOLDER; TRANSFER.
(a) REPRESENTATIONS. Each holder hereby represents and warrants to the
Company as follows: (i) such holder is a sophisticated investor having such
knowledge and experience in business and investment matters that holder is
capable of protecting holder's own interests in connection with the acquisition,
exercise or disposition of this Warrant; (ii) such holder is an "accredited
investor" within the meaning of Regulation D promulgated under the Act; (iii)
such holder is aware that the Warrants and the Warrant Shares are being, or will
be, issued to the holder in reliance upon holder's representation in this
Section 9 and that such securities are restricted securities that cannot be
publicly sold except in certain prescribed situations; (iv) such holder is aware
of the provisions of Rule 144 promulgated under the Act and of the conditions
under which sales may be made thereunder; (v) such holder has received such
information about the Company as the holder deems reasonable, has had the
opportunity to ask questions and receive answers from the Company with respect
to its business, assets, prospects and financial condition; and (vi) such
holder, by acceptance of the Warrants, acknowledges that the Warrants and the
Warrant Shares to be issued upon exercise hereof or conversion thereof are being
acquired solely for the holder's own account and not as a nominee for any other
party, and for investment, and that the holder will not offer, sell or otherwise
dispose of the Warrants or any Warrant Shares to be issued upon exercise hereof
or conversion thereof except under circumstances that will not result in a
violation of the Securities Act or any state securities laws.
(b) LEGENDS. The Warrants and the Warrant Shares shall be imprinted
with a legend in substantially the following form:
THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO REGISTRATION.
(c) COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. The Warrants and the
Warrant Shares issuable upon exercise the Warrants may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee.
- 12 -
Section 10. NOTICES TO WARRANT HOLDERS.
(a) Upon any adjustment of the Exercise Price pursuant to Section 7
hereof, the Company shall promptly thereafter prepare a certificate setting
forth the Exercise Price after such adjustment and setting forth in reasonable
detail the method of calculation and the facts upon which such calculations are
based and setting forth the number of Warrant Shares (or portion thereof)
issuable after such adjustment in the Exercise Price, upon exercise of a Warrant
and payment of the adjusted Exercise Price, and (ii) cause, at the Company's
expense, to be given to each holder of Warrants at the address appearing on the
Warrant Register for each such holder written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 10.
(b) In the event:
(i) that the Company shall authorize the issuance to all
holders of shares of Common Stock of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of any other
subscription rights or warrants;
(ii) that the Company shall authorize a dividend or the
distribution to all holders of shares of Common Stock or evidences of
its indebtedness or assets;
(iii) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer by the Company for
shares of Common Stock;
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(v) that the Company proposes to take any action (other than
actions of the character described in Section 7(a) hereof) which would
require an adjustment of the Exercise Price pursuant to Section 7
hereof;
then the Company shall, at the Company's expense, cause to be given to each
registered holder of Warrants at the address appearing on the Warrant Register,
at least 10 days prior to the applicable record date hereinafter specified, or
promptly in the case of events for which there is no record date, by first-class
mail, postage prepaid, a written notice stating (x) the date as of which the
holders of record of shares of Common Stock to be entitled to receive any such
rights, options, warrants or distribution are to be determined, (y) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (z) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
- 13 -
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 10 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
(c) Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
Section 11. REPORTS.
(a) The Company agrees with each holder, for so long as any Warrants
remain outstanding and during any period in which the Company (i) is not subject
to Section 13 or 15(d) of the Exchange Act, to make available, upon request of
any holder in connection with any sale thereof and any prospective purchaser of
such Warrants designated by such holder, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Warrants pursuant to
Rule 144A or such information as may be required in order to permit resales of
such Warrants pursuant to or other recognized resale exemptions and (ii) is
subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Warrants pursuant
to Rule 144A.
(b) The Company shall provide the holders copies of all such reports
under this Section 11. Any such delivery shall be on the instructions of and at
the expense of the Company.
Section 12. NOTICES TO COMPANY.
Any notice or demand authorized by this Agreement to be given or made
by the registered holder of any Warrant to the Company shall be sufficiently
given or made when received if deposited in the mail, first class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Company with the holders) as follows:
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Any notice or communication to a registered holder of Warrants will be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address
appearing on the Warrant Register. Failure to mail a notice or communication to
such a holder or any defect in it will not affect its sufficiency with respect
to other such holders.
Section 13. SUPPLEMENTS AND AMENDMENTS.
Any amendment or supplement to this Agreement or waiver of any
provision hereof shall require the written consent of the Company and each
holder.
- 14 -
Section 14. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 15. TERMINATION.
This Agreement shall terminate on the Expiration Date provided that the
Company has complied with its obligations hereunder. Notwithstanding the
foregoing, this Agreement will terminate on any earlier date if all Warrants
have been exercised.
Section 16. GOVERNING LAW.
(a) This Agreement and each Warrant Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of New York and for
all purposes shall be construed in accordance with the internal laws of said
state.
(b) Each of the parties hereto irrevocably consents to the
non-exclusive jurisdiction of Supreme Court of New York, New York county and the
United States District Court for the Southern District of New York, New York
county and waives trial by jury in any action or proceeding with respect to this
Agreement.
Section 17. BENEFITS OF THIS AGREEMENT.
This Agreement shall be for the sole and exclusive benefit of the
Company and the holders of Warrants. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
holders of Warrants any legal or equitable right, remedy or claim under this
Agreement.
Section 18. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
[Signature Page Follows]
- 15 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NATIONAL COAL CORP.
a Florida corporation
By:
________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and CEO
BIG BEND 38 INVESTMENTS L.P.
By: 2M Companies, Inc.
Its: General Partner
By:
________________________________
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
J-K NAVIGATOR FUND, L.P.
By: Steelhead Partners, LLC
Its: General Partner
By:
________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager
STEELHEAD OFFSHORE CAPITAL, LP
By: Steelhead Partners, LLC
Its: Investment Advisor
By:
________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager
- 16 -
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THIS SECURITY AND THE WARRANT SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, THE WARRANT SHARES TO BE ISSUED UPON ITS
EXERCISE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO REGISTRATION.
NATIONAL COAL CORP.
WARRANT CERTIFICATE
WARRANT NO. [ ]
This Warrant Certificate certifies that [ ], or its registered assigns,
is the registered holder of [ ] Warrants (the "WARRANTS") to purchase shares of
common stock, par value $0.0001 (the "COMMON STOCK"), of National Coal Corp., a
Florida corporation (the "COMPANY"). Each Warrant entitles the registered holder
upon exercise at any time until 5:00 p.m. New York City time on December 31,
2011 to receive from the Company [ ] fully paid and nonassessable shares of
Common Stock (the "WARRANTS SHARES") at the initial exercise price (the
"EXERCISE PRICE") of $3.00 per share payable upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office of the Company,
subject to the conditions set forth herein and in the Warrant Agreement (as
hereinafter defined) referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
No Warrant may be exercised after 5:00 p.m., New York City time on
December 31, 2011. To the extent not exercised by such time, any such Warrant
shall become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
*********
A-1
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed below.
DATED: _____________________
NATIONAL COAL CORP.
By:________________________________
Name:
Title:
A-2
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m. New York City time on
December 31, 2011 entitling the holder on exercise to receive shares of Common
Stock, and are issued pursuant to a Warrant Agreement dated as of[ ] (the
"WARRANT Agreement"), between the Company, Big Bend 38 Investments L.P., J-K
Navigator Fund, L.P., and Steelhead Offshore Capital, LP, which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. Capitalized terms used but not defined
herein have the meaning ascribed to such terms in the Warrant Agreement. A copy
of the Warrant Agreement may be obtained by the holder hereof upon written
request to the Company.
In order to exercise all or any of the Warrants represented by this
Warrant Certificate, the holder must deliver to the Company at its office set
forth in Section 12 of the Warrant Agreement this Warrant Certificate and the
form of election to purchase on the reverse hereof duly completed and signed,
and payment to the Company of the Exercise Price for the number of Warrant
Shares in respect of which such Warrants are then exercised. No adjustment shall
be made for any dividends on any Common Stock issuable upon exercise of this
Warrant.
The Warrant Agreement provides that, upon the occurrence of certain
events, the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted; provided that no adjustment may be made that reduces
the Exercise Price below the par value of the Common Stock. If the Exercise
Price is adjusted, the Warrant Agreement provides that the number of shares of
Common Stock issuable upon the exercise of each Warrant shall be adjusted. No
fractions of a share of Common Stock will be issued upon the exercise of any
Warrant, but the Company will pay the cash value thereof determined as provided
in the Warrant Agreement.
Warrant Certificates, when surrendered by the registered holder thereof
in person or by legal representative or attorney duly authorized in writing, may
be exchanged, in the manner and subject to the limitations provided in the
Warrant Agreement, but without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor evidencing in the
aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate a new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Each holder, by its acceptance of this Warrant, agrees to be bound by
the terms of the Warrant Agreement and all such replacements thereof.
A-3
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
A-4
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to receive ______ shares of Common Stock and herewith
tenders payment for such shares to the order of NATIONAL COAL CORP., [cash]
[Warrants] equal [in fair market value] Indebtedness equal [in principal amount
plus accrued interest] to $______ in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered in the
name of _____________, whose address is ______________________ and that such
shares be delivered to __________________ whose address
is_________________________. If said number of shares is less than all of the
shares of Common Stock purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of such shares be
registered in the name of ____________________, whose address
is______________________, and that such Warrant Certificate be delivered to
whose address is ________________________.
The undersigned represents that it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward the
resale or distribution thereof except in compliance with applicable securities
laws and hereby repeats the representations and warranties of the undersigned
that are set forth in Section 9(a) of the Warrant Agreement.
DATE: _________________________________
SIGNATURE
A-5
EXHIBIT B
ASSIGNMENT FORM
[To be signed only upon transfer of a Warrant]
For value received, the undersigned hereby sells, assigns and transfers
unto _________________________, all of the rights represented by the within
Warrant to purchase _________ shares of Common Stock of NATIONAL COAL CORP., a
Florida corporation the "ISSUER"), to which such Warrant relates, and appoints
________________________ attorney to transfer such Warrant on the books of the
Issuer, with full power of substitution in the premises.
Dated: ______________________
-----------------------------------
Name:
Title:
By executing and delivering this Assignment Form to the Issuer, the
undersigned hereby agrees to become a party to, to be bound by, and to comply
with the provisions of the Warrant Agreement dated as of [ ] (as amended,
restated, supplemented or otherwise modified from time to time, the "WARRANT
AGREEMENT"), among the Issuer, [?] and [?], in the same manner as if the
undersigned were an original signatory to the Warrant Agreement.
The undersigned agrees that he, she or it shall be a "holder", as such
term is defined in the Warrant Agreement.
Dated: ____________________
-----------------------------------
Signature of transferee
-----------------------------------
Print Name of transferee
-----------------------------------
-----------------------------------
-----------------------------------
Address
-----------------------------------
Facsimile
-----------------------------------
Telephone
B-1
EXHIBIT C
EXCHANGE FORM
[To be signed upon exchange of a Warrant]
TO NATIONAL COAL CORP.
The undersigned, being the holder of the within Warrant, hereby elects
to exchange, pursuant to Section 3(a) of the Warrant Agreement referred to in
such Warrant, the portion of such Warrant representing the right to purchase
_________ shares of Common Stock of NATIONAL COAL CORP., a Florida corporation
(the "ISSUER"). The undersigned hereby requests that the certificates or
evidence of ownership for the number of shares issuable in such exchange
pursuant to such Section 3(a) be issued in the name of, and be delivered to,
____________________________, whose address is ____________________________.
The undersigned represents to the Issuer that the undersigned (a) is
not exchanging the Warrant Shares with a view to Transfer such Warrant Shares in
violation of the Securities Act of 1933, as amended (the "SECURITIES ACT") or
any other applicable state or federal securities laws; (b) it is acquiring the
shares solely for its own account and not as a nominee for any other party and
not with a view toward the resale or distribution thereof except in compliance
with applicable securities laws and hereby repeats the representations and
warranties of the undersigned that are set forth in Section 9(a) of the Warrant
Agreement; and (c) acknowledges that the issuance of the Warrant Shares has not
been registered under the Securities Act and that the Warrant Shares may be
resold only if registered pursuant to the provisions of the Securities Act, or
if an exemption therefrom is available.
The foregoing exercise is (check one):
______ Irrevocable
______ Conditioned upon the consummation of the transaction described
briefly below:
Dated: _____________________________ _____________________________
Name:
Title:
C-1