THIS WARRANT AND ANY SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), NOR
UNDER ANY APPLICABLE STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE PLEDGED,
SOLD, ASSIGNED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
APPLICABLE STATE SECURITIES
LAWS, OR IF THE PROPOSED TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE
ACT OR REGISTRATION OR QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT, THE SECURITIES REPRESENTED BY THIS WARRANT AND
THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT ARE
SUBJECT TO RESTRICTIONS ON TRANSFER.
NATIONAL COAL CORPORATION
-------------------------
March 25, 2003
Warrant for the purchase of 751,500 shares of Common Stock
$.0001 par value per share
THIS CERTIFIES that, for good and valuable consideration, the
receipt
and sufficiency of which are hereby
acknowledged, Webb Financial Group, Inc.
(the "Holder") is entitled to subscribe for
and purchase from the Company, upon
the terms and conditions set forth herein,
during the period commencing on the
date hereof and expiring at 5:00 p.m.
eastern standard time on March 25, 2005
(the "Exercise Period"), up to 751,500
shares of the Common Stock, $.0001 par
value per share (the "Common Stock"), at a
price (the "Exercise Price") per
share equal to fifty cents ($0.50). As used
herein, the term "this Warrant"
shall mean and include this Warrant and any
Warrant or Warrants hereafter issued
as a consequence of the exercise or
transfer of this Warrant in whole or in
part; the term "Holder" shall include any
transferee to whom this Warrant has
been transferred in accordance with the
terms hereof; the term "Warrant Shares"
shall mean the number of shares of Common
Stock issuable upon exercise of this
Warrant; and the term "Common Stock" shall
mean (i) the class of stock
designated as Common Stock in the
Certificate of Incorporation of the Company,
or (ii) any other class of stock resulting
from successive changes or
reclassifications of such Common Stock
consisting solely of changes in par
value, or from par value to no par value,
or from no par value to par value. The
Warrant Shares and the Exercise Price may
be adjusted from time to time as
hereinafter set forth.
1. Subject to the provisions of Section 2, hereunder, this Warrant
may
be exercised during the Exercise Period, as
to the whole or any lesser number of
whole Warrant Shares, by transmission by
telecopy of the Election to Exercise,
followed within three (3) business days by
the surrender of this Warrant (with
the Election to Exercise attached hereto
duly executed) to the Company at 319
Ebenezer Road, Knoxville, TN 37923, or at
such other place as is designated in
writing by the Company, together with
checks payable to the order of the Company
in an aggregate amount equal to the product
of the Exercise Price and the number
of Warrant Shares for which the Warrant is
being exercised, pro rata if
applicable.
<PAGE>
2. Upon each exercise of the Holder's rights to purchase
Warrant
Shares, the Holder shall be deemed to be
the holder of record of the Warrant
Shares issuable upon such exercise,
notwithstanding that the transfer books of
the Company shall then be closed or
certificates representing such Warrant
Shares shall not then have been actually
delivered to the Holder. Within five
(5) business days after each such exercise
of this Warrant and this receipt by
the Company of this Warrant, the Election
of Exercise and the Exercise Price,
the Company shall issue and deliver to the
Holder a certificate or certificates
for the Warrant Shares issuable upon such
exercise, registered in the name of
the Holder or its designee. If this Warrant
shall be exercised in part only, the
Company shall, upon surrender of this
Warrant for cancellation, execute and
deliver a new Warrant evidencing the right
of the Holder to purchase the balance
of the Warrant Shares (or portions thereof)
subject to purchase hereunder.
3. The Warrant
shall vest and be exercisable 120 days after issuance. The
Common Stock will cease to be restricted and will become free trading shares
when registered under the Securities Act of
1933, as amended.
4. This
Warrant may be assigned to an affiliate of the Holder with the
prior written consent of the Company,
so long as such
assignment
is made in
accordance with applicable securities
laws.
5. Any
Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be
registered
in a warrant
register (the
"Warrant Register") as they are issued.
The Company shall be
entitled to treat
the registered Holder of any Warrant on the
Warrant Register as the owner in
fact thereof for all purposes and shall not
be bound to recognize
any equitable
or other claim to or interest in such
Warrant on the part of
any other person,
and shall not be liable for any
registration
or transfer of
Warrants which are
registered or to be registered in the name of a fiduciary or the
nominee of a
fiduciary unless made with the actual
knowledge of the Company that a fiduciary
or nominee is committing a breach of trust
in requesting such
registration
of
transfer. In all cases of transfer
by an attorney, executor, administrator,
guardian, or other legal representative,
duly authenticated
evidence of his or
her authority shall be produced.
Upon any registration
of transfer, the Company
shall deliver a new Warrant or Warrants
to the person entitled
thereto. This
Warrant may be exchanged, at the option of the Holder hereof, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of
Warrant
Shares (or portions thereof), upon surrender to the Company or its duly
authorized agent. Notwithstanding anything
contained herein to the contrary, the
Company shall have no obligation to cause Warrants to be transferred on the
Warrant Register to any person if, in the
opinion of counsel to
the Company,
such transfer does not comply with the
provisions of the Act
and the rules and
regulations thereunder.
6. The Company
covenants that all shares of Common
Stock issuable upon
exercise of this Warrant shall be validly
issued, fully paid, nonassessable, and
free of preemptive rights.
<PAGE>
7. The
Exercise Price in effect at any time and the
number and kind of
securities purchasable upon the exercise of this
Warrant shall be subject to
adjustment from time to time upon the
happening of certain events as follows:
(a) In case the
Company shall (i) declare a dividend or make a
distribution
on its outstanding shares of Common Stock, in each
case, in
shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares
of Common
Stock into a gr
