Exhibit 10.28

 

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED (the “Securities Act”), (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT WITHOUT RESTRICTION, OR (III) THE PARTNERSHIP
HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE
FOREGOING THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR ANY OTHER MARGIN LOAN ENTERED INTO BY THE HOLDER OF THE SECURITIES OR
ITS AFFILIATES IN THE ORDINARY COURSE OF BUSINESS.

 

No. OXFCW-_____                                     

 June 24, 2013

 

Oxford Resource Partners, LP

WARRANT TO PURCHASE COMMON UNITS

For VALUE RECEIVED, [•] (the “Warrantholder”) is entitled to purchase, subject
to the provisions of this Warrant to Purchase Common Units (this “Warrant”),
from OXFORD RESOURCE PARTNERS, LP, a Delaware limited partnership (the
“Partnership”), at an exercise price per unit equal to $0.01 per Common Unit
(the “Exercise Price”), at any time after the date hereof (the “Exercise
Commencement Date”) and not later than 5:00 P.M., New York City time, on the
fifth anniversary of the date hereof (the “Exercise Expiration Date”), up to [•]
units (the “Warrant Units”) of the Partnership’s common units representing
limited partner interests (the “Common Units”). The number of Warrant Units
purchasable upon exercise of this Warrant (the “Purchasable Warrant Units”)
shall be subject to adjustment from time to time as described herein.

This Warrant is authorized under the terms of that certain Third Amended and
Restated Agreement of Limited Partnership of Oxford Resource Partners, LP dated
July 19, 2010, as amended by that certain First Amendment to Amended and
Restated Agreement of Limited Partnership dated June 24, 2013 (the “Partnership
Agreement”), and is issued in connection with that certain Financing Agreement,
dated as of June 24, 2013, by and among Oxford Mining Company, LLC, a wholly
owned subsidiary of the Partnership, as borrower (the “Borrower”), the lenders
signatory thereto, and Obsidian Agency Services, Inc., as administrative agent
(the “Second Lien Financing Agreement”). Unless otherwise indicated herein or
therein, capitalized terms used in this Warrant or any appendix hereto shall
have the respective meanings ascribed to such terms herein or in the Partnership
Agreement.

Section 1. Registration. The Partnership shall maintain books for the transfer
and registration of this Warrant. Upon the initial issuance of this Warrant, the
Partnership shall issue and register this Warrant in the name of the
Warrantholder.

 

 
 

--------------------------------------------------------------------------------

 

 

Section 2. Transfers. As provided herein, this Warrant may be transferred only
pursuant to a registration statement filed under the Securities Act, or an
exemption from such registration, and in compliance with any applicable state
securities laws. Subject to such restrictions, the Partnership shall transfer
this Warrant in whole or in part from time to time upon the books to be
maintained by the Partnership for that purpose, upon surrender thereof for
transfer, properly endorsed or accompanied by appropriate instructions for
transfer and such other documents as may be reasonably required by the
Partnership, including, if required by the Partnership, an opinion of its
counsel to the effect that such transfer is exempt from the registration
requirements of the Securities Act, to establish that such transfer is being
made in accordance with the terms hereof, and a new warrant shall be issued to
the transferee with this Warrant being surrendered in whole or in part by the
Warrantholder and voided and canceled by the Partnership.

Section 3. Exercise of Warrant.

(a) This Warrant may be exercised in whole or in part at any time on or after
the Exercise Commencement Date and prior to the Exercise Expiration Date, upon
delivery of the warrant exercise form attached hereto as Appendix A (the “Notice
of Exercise”) and payment by certified check or wire transfer (or by net
issuance exercise as provided in Section 3(f)) for the aggregate Exercise Price
for that number of Warrant Units then being purchased, to the Partnership during
normal business hours on any day other than a Saturday or Sunday on which banks
are open for business in New York City (a “Business Day”) at the Partnership’s
principal executive offices (or such other office or agency of the Partnership
as the Partnership may designate by notice to the Warrantholder, provided that
any Notice of Exercise delivered after 12:00 noon, New York City time, will be
deemed delivered the next Business Day). The Warrant Units so purchased shall be
deemed to be issued to the Warrantholder or the Warrantholder’s designee, as the
record owner of such Warrant Units, as of 5:00 P.M., New York City time, on the
date on which the aggregate Exercise Price shall have been paid (unless the
exercise is a net issuance exercise as provided in Section 3(f)) and the
completed Notice of Exercise, or Net Issue Election Notice (as defined below),
as applicable, shall have been delivered. Certificates for the Warrant Units so
purchased, representing the aggregate number of Warrant Units specified in the
Notice of Exercise, shall be transmitted by the Partnership’s transfer agent by
crediting the account of the Warrantholder’s prime broker with The Depository
Trust Company (“DTC”) through its Deposit / Withdrawal At Custodian system if
the Partnership is a participant in such system, and otherwise by physical
delivery to the address specified by the Warrantholder in the Notice of
Exercise, within a reasonable time, not exceeding three (3) Trading Days (as
defined below) after this Warrant shall have been so exercised, including
payment of the aggregate Exercise Price (unless the exercise is a net issuance
exercise as provided in Section 3(f)) and the delivery of a completed Notice of
Exercise, or Net Issue Election Notice, as applicable (the “Warrant Unit
Delivery Date”). The certificates so delivered shall be in such denominations as
may be requested by the Warrantholder and shall be registered in the name of the
Warrantholder or such other name as shall be designated by the Warrantholder in
the Notice of Exercise.

 

 
2

--------------------------------------------------------------------------------

 

 

(b) Notwithstanding anything herein to the contrary, the Warrantholder shall not
be required to physically surrender this Warrant to the Partnership until the
Warrantholder has purchased all of the Warrant Units available hereunder and
this Warrant has been exercised in full, in which case the Warrantholder shall
surrender this Warrant to the Partnership for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is delivered to the
Partnership. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Units available hereunder shall have the
effect of lowering the outstanding number of Purchasable Warrant Units hereunder
in an amount equal to the applicable number of Warrant Units purchased. The
Partnership shall maintain records showing the number of Warrant Units purchased
and the date of such purchases. The Partnership shall deliver any objection to
any Notice of Exercise within one (1) Business Day of receipt of such Notice of
Exercise. In the event of any dispute or discrepancy, the records of the
Partnership shall be controlling and determinative in the absence of manifest
error. The Warrantholder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this Section 3(b),
following the purchase of a portion of the Warrant Units hereunder, the number
of Warrant Units available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.

(c) If this Warrant shall have been exercised in part and surrendered, the
Partnership shall, at its own expense and at the time of delivery of the
certificate or certificates representing Warrant Units, deliver to the
Warrantholder a new Warrant evidencing the rights of the Warrantholder to
purchase the unpurchased Warrant Units called for by this Warrant, which new
Warrant shall in all other respects be identical to this Warrant.

 

(d) In addition to any other rights available to the Warrantholder, if the
Partnership fails to deliver to the Warrantholder a certificate or certificates
representing the Warrant Units pursuant to an exercise on or before the
applicable Warrant Unit Delivery Date, and if after such date the Warrantholder
is required by its broker to purchase (in an open market transaction or
otherwise) Common Units to deliver in satisfaction of a sale by the
Warrantholder of the Warrant Units which the Warrantholder anticipated receiving
upon such exercise (a “Buy-In”), then the Partnership shall, at the
Warrantholder’s option, either (i) pay cash to the Warrantholder in an amount
equal to the Warrantholder’s total purchase price (including brokerage
commissions, if any) (the “Buy-In Price”) for the Common Units so purchased (the
“Buy-In Units”), at which point the Partnership’s obligation to deliver such
certificate or certificates (and to issue such Common Units) or credit such
Warrantholder’s balance account with DTC with respect to such Buy-In Units shall
terminate, or (ii) promptly honor its obligation to deliver to the Warrantholder
a certificate or certificates representing such Common Units or credit such
Warrantholder’s balance account with DTC and pay cash to the Warrantholder in an
amount equal to the excess (if any) of the Buy-In Price over the product of
(A) such number of Common Units times (B) the closing bid price on the date of
exercise. The Warrantholder shall provide the Partnership written notice
indicating the amounts payable to the Warrantholder in respect to the Buy-In,
together with applicable confirmations and other evidence reasonably requested
by the Partnership. Nothing herein shall limit the Warrantholder’s right to
pursue any other remedies available to it hereunder, at law or in equity,
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Partnership’s failure to timely deliver
certificates representing Common Units upon exercise of this Warrant as required
pursuant to the terms hereof.

 

 
3

--------------------------------------------------------------------------------

 

 

(e) For purposes of this Warrant, (i) a “Trading Day” means (A) a day on which
the Common Units are traded on a Trading Market (as defined below), or (B) if
the Common Units are not listed on a Trading Market, a day on which the Common
Units are traded on the over the counter market, as reported by the Financial
Industry Regulatory Authority OTC Bulletin Board (the “Bulletin Board”), or
(C) if the Common Units are not quoted on the Bulletin Board, a day on which
prices for the Common Units are reported in the Pink Sheets published by Pink
Sheets LLC (or any similar organization or agency succeeding to its functions of
reporting prices), provided that, in the event that the Common Units are not
listed, quoted or reported as set forth in clause (A), (B) or (C), then it means
a Business Day, and (ii) “Trading Market” means the New York Stock Exchange or
such other exchange on which the Common Units are then listed or quoted for
trading on the date in question.

(f) Notwithstanding any other provision contained herein to the contrary, the
Warrantholder may elect to receive, without the payment by the Warrantholder of
the aggregate Exercise Price in respect of the Common Units to be acquired,
Common Units equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant (or such portion of this Warrant being so exercised)
together with the Net Issue Election Notice attached hereto as Appendix B (the
“Net Issue Election Notice”) duly executed, at the office of the Partnership.
Thereupon, the Partnership shall issue to the Warrantholder such number of fully
paid, validly issued and non-assessable (except as such non-assessability may be
affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform
Limited Partnership Act) Common Units as is computed using the following
formula:

 

X =

Y (A - B)

A

 

where

X = the number of Common Units which shall be issued to the Warrantholder;

Y = the number of Warrant Units covered by this Warrant that the Warrantholder
is surrendering at such time for net issuance exercise (including both units to
be issued to the Warrantholder and units to be canceled as payment therefor);

A = the Market Price (as defined below) of one Common Unit as at the time the
net issue election is made; and

B = the Exercise Price in effect under this Warrant at the time the net issue
election is made.

For purposes of Rule 144(d) promulgated under the Securities Act of 1933, as in
effect on the Exercise Commencement Date, it is intended that the Warrant Units
issued in a net issuance exercise shall be deemed to have been acquired by the
Warrantholder, and the holding period for the Warrant Units shall be deemed to
have commenced, on the Exercise Commencement Date. As used herein, “Market
Price” as of a particular date (the “Valuation Date”) shall mean the following:
(i) if the Common Units are then listed on a national stock exchange, the
closing sale price of one Common Unit on such exchange on the last trading day
prior to the Valuation Date; (ii) if the Common Units are then quoted on the
Nasdaq Stock Market, Inc. (“Nasdaq”), the Bulletin Board or such similar
exchange or association, the closing sale price of one Common Unit on Nasdaq,
the Bulletin Board or such other exchange or association on the last trading day
prior to the Valuation Date or, if no such closing sale price is available, the
average of the high bid and the low asked price quoted thereon on the last
trading day prior to the Valuation Date; or (iii) if the Common Units are not
then listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board
or such other exchange or association, the fair market value of one Common Unit
as of the Valuation Date shall be determined and agreed upon in good faith by
both the Board of Directors of the general partner of the Partnership and the
Warrantholder.

 

 
4

--------------------------------------------------------------------------------

 

 

(g) If this Warrant is not exercised on or prior to 5:00 P.M., New York City
time on the Exercise Expiration Date, this Warrant shall be void and all rights
of the holder hereof shall cease.

(h) Notwithstanding anything to the contrary contained herein, the Partnership
shall not effect the exercise of this Warrant and the Warrantholder shall not
have the right to exercise this Warrant pursuant to the terms and conditions of
this Warrant, and any such exercise shall be null and void and treated as if
never made, to the extent that, after giving effect to such exercise, such
Warrantholder (together with such Warrantholder's affiliates) would beneficially
own in excess of 4.99% (the “Maximum Percentage”) of the number of Common Units
outstanding immediately after giving effect to such exercise. For purposes of
the foregoing sentence, the aggregate number of Common Units beneficially owned
by such Warrantholder and its affiliates shall include the number of Common
Units issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number of
Common Units which would be issuable upon (i) exercise of the remaining,
unexercised portion of this Warrant beneficially owned by such Warrantholder or
any of its affiliates and (ii) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Partnership beneficially
owned by such Warrantholder or any of its affiliates (including, without
limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein. Except as set forth in the preceding sentence, for purposes of
this paragraph, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934
Act”). For purposes of determining the number of outstanding Common Units, the
Warrantholder may rely on the number of outstanding Common Units as reflected in
(1) the Partnership's most recent Form 10-K, Form 10-Q, Form 8-K or other public
filing with the Securities and Exchange Commission, as the case may be, (2) a
more recent public announcement by the Partnership or (3) any other notice by
the Partnership or its transfer agent setting forth the number of Common Units
outstanding. For any reason at any time, upon the written or oral request of the
Warrantholder, the Partnership shall within one (1) Business Day confirm orally
and in writing to the Warrantholder the number of Common Units then outstanding.
In any case, the number of outstanding Common Units shall be determined after
giving effect to the conversion or exercise of securities of the Partnership,
including the Warrant, by the Warrantholder and its affiliates since the date as
of which such number of outstanding Common Units was reported. By written notice
to the Partnership, the Warrantholder may from time to time increase or decrease
the Maximum Percentage to any other percentage not in excess of 9.99% specified
in such notice; provided that any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Partnership. The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 3(h) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended beneficial ownership limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.

 

 
5

--------------------------------------------------------------------------------

 

 

Section 4. Compliance with the Securities Act. Except as set forth in Section
2(g) of the Warrant Issuance Agreement, dated as of June 24, 2013, pursuant to
which this Warrant was issued, the certificate evidencing the Warrant Units
shall bear a restrictive legend set forth on the first page of this Warrant. In
addition, as a condition precedent to the issuance of the Warrant Units upon
such exercise, the Warrantholder shall be required to covenant and agree that
(a) if this Warrant or any portion hereof is exercised pursuant to the net issue
election provided for in Section 3(f) within a year of the date this Warrant was
first issued, such Warrantholder will not sell such Warrant Units under Rule 144
or a similar rule under the Securities Act if it has been notified by the
Partnership that the Partnership is not current in its reporting obligations
under the Securities Exchange Act of 1934 (the “Exchange Act”), and (b) if this
Warrant or any portion hereof is exercised for cash consideration, until the
date that is one year from the date the applicable Warrant Units are first
delivered to the Warrantholder, such Warrantholder will not sell such Warrant
Units under Rule 144 or a similar rule under the Securities Act if it has been
notified by the Partnership that the Partnership is not current in its reporting
obligations under the Exchange Act.

  

Section 5. Payment of Taxes. The Partnership will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Units issuable upon the
exercise of this Warrant; provided, however, that the Partnership shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Units in a
name other than that of the Warrantholder in respect of which such Warrant Units
are issued, and in such case the Partnership shall not be required to issue or
deliver any certificate for Warrant Units or any Warrant until the person
requesting the same has paid to the Partnership the amount of such tax or has
established to the Partnership’s reasonable satisfaction that such tax has been
paid. The Warrantholder shall be responsible for income taxes due under federal,
state or other law, if any such taxes are due.

Section 6. Mutilated or Missing Warrants. In case this Warrant shall be
mutilated, lost, stolen or destroyed, the Partnership shall issue in exchange
and substitution of and upon cancellation of the mutilated Warrant, or in lieu
of and substitution for this Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Units, but only upon
receipt of evidence reasonably satisfactory to the Partnership of such loss,
theft or destruction of this Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Partnership.

Section 7. Adjustments. The Exercise Price and number of Purchasable Warrant
Units subject to this Warrant shall be subject to adjustment from time to time
as set forth in this Section 7.

(a) If the Partnership shall, at any time or from time to time while this
Warrant is outstanding, subdivide its outstanding Common Units into a greater
number of Common Units or combine its outstanding Common Units into a smaller
number of Common Units or issue by reclassification of its outstanding Common
Units any units representing its limited partner interests (including any such
reclassification in connection with a consolidation or merger in which the
Partnership is the continuing entity), then the number of Purchasable Warrant
Units upon exercise of this Warrant and the Exercise Price in effect immediately
prior to the date upon which such change shall become effective shall be
adjusted by the Partnership so that the Warrantholder thereafter exercising this
Warrant shall be entitled to receive the number of Common Units or other limited
partner interests which the Warrantholder would have received if this Warrant
had been exercised in full immediately prior to such event upon payment of an
Exercise Price that has been adjusted to reflect the economics of such event to
the Warrantholder. Such adjustments shall be made successively whenever any
event listed above shall occur.

 

 
6

--------------------------------------------------------------------------------

 

 

(b) If any capital reorganization, reclassification of the limited partner
interests of the Partnership, consolidation or merger of the Partnership with
another entity in which the Partnership is not the continuing entity, or sale,
transfer or other disposition of all or substantially all of the Partnership’s
assets to another entity shall be effected, in each case, directly or indirectly
or in one or more related transactions (each, a “Fundamental Transaction”),
then, as a condition of such Fundamental Transaction, lawful and adequate
provision shall be made whereby the Warrantholder shall thereafter have the
right to exercise this Warrant and receive, upon the basis and upon the terms
and conditions herein specified and in lieu of the Warrant Units immediately
theretofore issuable upon exercise of this Warrant, such limited partner
interests, securities or assets or property (including cash) as would have been
issuable or payable with respect to or in exchange for a number of Warrant Units
equal to the number of Warrant Units immediately theretofore issuable upon
exercise of this Warrant had this Warrant been exercised in full immediately
prior to such Fundamental Transaction (the “Transaction Consideration”), and in
any such case appropriate provision (as determined in good faith by the Board of
Directors of the general partner of the Partnership) shall be made with respect
to the rights and interests of each Warrantholder to the end that the provisions
hereof (including, without limitation, provision for adjustment of the Exercise
Price) shall thereafter be applicable as nearly equivalent as may be practicable
in relation to any Transaction Consideration deliverable upon the exercise
hereof. The Partnership shall not effect any such Fundamental Transaction unless
prior to or simultaneously with the consummation thereof the continuing entity
(if other than the Partnership) resulting from such consolidation or merger, or
the entity purchasing or otherwise acquiring such assets or other appropriate
entity, shall assume the obligation to deliver to the Warrantholder, at the last
address of the Warrantholder appearing on the books of the Partnership, such
Transaction Consideration as, in accordance with the foregoing provisions, the
Warrantholder may be entitled to receive upon exercise hereof, and the other
obligations under this Warrant. Without limiting the generality of the
foregoing, the terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
continuing entity to comply with the provisions of this Section 7(b) and
insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
The aggregate Exercise Price for this Warrant shall not be affected by any such
Fundamental Transaction, but the Partnership shall apportion such aggregate
Exercise Price among the Transaction Consideration in a reasonable manner
reflecting the relative value of any different components of the Transaction
Consideration, if applicable. If holders of Common Units are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Warrantholder shall be given the same choice as to the Transaction
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. At the Warrantholder’s request, any successor to the
Partnership or continuing entity in such Fundamental Transaction shall issue to
the Warrantholder a new Warrant consistent with the foregoing provisions and
evidencing the Warrantholder’s right to purchase the Transaction Consideration
for the aggregate Exercise Price upon exercise thereof.

 

 
7

--------------------------------------------------------------------------------

 

 

(c) If the Partnership shall, at any time or from time to time while this
Warrant is outstanding, declare or make any dividend or other distribution of
its assets (or rights to acquire its assets) to holders of Common Units, by way
of return of capital or otherwise (including, without limitation, any
distribution of cash, Common Units or other securities or limited partner
interests, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Warrant, then, in each
such case, the Warrantholder shall be entitled to participate in such
Distribution to the same extent that the Warrantholder would have participated
therein if the Warrantholder had held the number of Common Units acquirable upon
complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including, without limitation, the Maximum Percentage) immediately
before the date as of which a record is taken for such Distribution, or, if no
such record is taken, the date as of which the record holders of Common Units
are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Warrantholder’s right to participate in
any such Distribution would result in the Warrantholder and its affiliates
exceeding the Maximum Percentage, then the Warrantholder shall not be entitled
to participate in such Distribution to such extent (and shall not be entitled to
beneficial ownership of such Common Units as a result of such Distribution (and
beneficial ownership) to such extent) and the portion of such Distribution shall
be held in abeyance for the Warrantholder until such time or times as its right
thereto would not result in the Warrantholder and its affiliates exceeding the
Maximum Percentage, at which time or times the Warrantholder shall be granted
such rights (and any rights under this Section 7(c) on such initial rights or on
any subsequent such rights to be held similarly in abeyance) to the same extent
as if there had been no such limitation).

(d) An adjustment to the Exercise Price shall become effective immediately after
the payment date in the case of each distribution and immediately after the
effective date of each other event which requires an adjustment.

(e) In the event that, as a result of an adjustment made pursuant to this
Section 7, the Warrantholder shall become entitled to receive any limited
partner interests in the Partnership other than Common Units, the limited
partner interests so receivable upon exercise of this Warrant shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Units
contained in this Warrant.

(f) Except as provided in Section 7(g), if and whenever the Partnership shall
issue or sell, or is, in accordance with any of Sections 7(f)(i) - (vii), deemed
to have issued or sold, any Common Units (a “Trigger Issuance”) for no
consideration or for a consideration per unit less than the Market Price of the
Common Units in effect at the time of such Trigger Issuance (the “Current Market
Price”), the number of Purchasable Warrant Units which may be purchased upon
exercise of the Warrant shall be increased by multiplying the number of Warrant
Units which currently may be purchased upon exercise of the Warrant by the
following fraction:

 

        B      

 C + (D / E)

 

where

 

 
8

--------------------------------------------------------------------------------

 

 

 

A=

the number of Warrant Units that can currently be purchased upon exercise of the
Warrant;

 

B =

the number of Common Units outstanding after giving effect to the issuance of
the number of Additional Common Units issued or deemed to be issued as a result
of the Trigger Issuance;

 

C =

the number of Common Units outstanding immediately prior to the Trigger
Issuance;

 

D =

the aggregate consideration, if any, received or deemed to be received by the
Partnership upon such Trigger Issuance; and

 

E =

the Current Market Price.

For purposes of this Section 7(f), “Additional Common Units” shall mean all
Common Units issued by the Partnership or deemed to be issued pursuant to this
Section 7(f), other than Excluded Issuances (as defined in Section 7(g)).

For purposes of this Section 7(f), the following Sections 7(f)(i) - (f)(vii)
shall also be applicable:

(i) Issuance of Rights or Options. In case at any time the Partnership shall in
any manner grant (directly and not by assumption in a merger or otherwise) any
warrants or other rights to subscribe for or to purchase, or any options for the
purchase of, Common Units or any limited partner interest or security
convertible into or exchangeable for Common Units (such warrants, rights or
options being called “Options” and such convertible or exchangeable limited
partner interests or securities being called “Convertible Securities”), whether
or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per unit for which Common
Units are issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities (determined by dividing (A) the sum
(which sum shall constitute the applicable consideration) of (1) the total
amount, if any, received or receivable by the Partnership as consideration for
the granting of such Options, plus (2) the aggregate amount of additional
consideration payable to the Partnership upon the exercise of all such Options,
plus (3), in the case of such Options which relate to Convertible Securities,
the aggregate amount of additional consideration, if any, payable upon the issue
or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (B) the total maximum number of Common Units issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Current Market Price in effect immediately prior to the time of the
granting of such Options, then the total number of Common Units issuable upon
the exercise of such Options or upon conversion or exchange of the total amount
of such Convertible Securities issuable upon the exercise of such Options shall
be deemed to have been issued for such price per unit as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the number of
Purchasable Warrant Units. Except as otherwise provided in Section 7(f)(iii), no
adjustment of the number of Purchasable Warrant Units shall be made upon the
actual issue of such Common Units or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Units upon
conversion or exchange of such Convertible Securities.

 

 
9

--------------------------------------------------------------------------------

 

 

(ii) Issuance of Convertible Securities. In case the Partnership shall in any
manner issue (directly and not by assumption in a merger or otherwise) or sell
any Convertible Securities, whether or not the rights to exchange or convert any
such Convertible Securities are immediately exercisable, and the price per unit
for which Common Units are issuable upon such conversion or exchange (determined
by dividing (A) the sum (which sum shall constitute the applicable
consideration) of (1) the total amount received or receivable by the Partnership
as consideration for the issue or sale of such Convertible Securities, plus
(2) the aggregate amount of additional consideration, if any, payable to the
Partnership upon the conversion or exchange thereof, by (B) the total number of
Common Units issuable upon the conversion or exchange of all such Convertible
Securities), shall be less than the Current Market Price in effect immediately
prior to the time of such issue or sale, then the total maximum number of Common
Units issuable upon conversion or exchange of all such Convertible Securities
shall be deemed to have been issued for such price per unit as of the date of
the issue or sale of such Convertible Securities and thereafter shall be deemed
to be outstanding for purposes of adjusting the number of Purchasable Warrant
Units, provided that (X) except as otherwise provided in Section 7(f)(iii), no
adjustment of the number of Purchasable Warrant Units shall be made upon the
actual issuance of such Common Units upon conversion or exchange of such
Convertible Securities and (Y) no further adjustment of the number of
Purchasable Warrant Units shall be made by reason of the issue or sale of
Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Exercise Price have been
made pursuant to the other provisions of Section 7(f).

(iii) Change in Option Price or Conversion Rate. Upon the happening of any of
the following events, namely, if the purchase price provided for in any Option
referred to in Section 7(f)(i), the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred to in
Section 7(f)(i) or Section 7(f)(ii), or the rate at which Convertible Securities
referred to in Section 7(f)(i) or Section 7(f)(ii) are convertible into or
exchangeable for Common Units shall change at any time (including, without
limitation, changes under or by reason of provisions designed to protect against
dilution), the number of Purchasable Warrant Units at the time of such event
shall forthwith be readjusted to the number of Purchasable Warrant Units that
could be purchased upon exercise of the Warrant had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold.

(iv) Distributions. Subject to the provisions of this Section 7(f), in case the
Partnership shall declare or make any other distribution upon any limited
partner interest in the Partnership (other than the Common Units) payable in
Common Units, Options or Convertible Securities, then any Common Units, Options
or Convertible Securities, as the case may be, issuable in payment of such
distribution shall be deemed to have been issued or sold without consideration.

 

 
10

--------------------------------------------------------------------------------

 

 

(v) Consideration for Limited Partner Interests. In case any Common Units,
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the net amount received by
the Partnership therefor, after deduction therefrom of any expenses incurred or
any underwriting discounts, commissions or concessions paid or allowed by the
Partnership in connection therewith. In case any Common Units, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Partnership shall be deemed to be the fair value of such consideration as
determined in good faith and agreed upon by both the Board of Directors of the
general partner of the Partnership and the Warrantholder, after deduction of any
expenses incurred or any underwriting discounts, commissions or concessions paid
or allowed by the Partnership in connection therewith. In case any Options shall
be issued in connection with the issue and sale of other securities of the
Partnership, together comprising one integral transaction in which no specific
consideration is allocated to such Options by the parties thereto, such Options
shall be deemed to have been issued for such consideration as determined in good
faith by the Board of Directors of the general partner of the Partnership. If
Common Units, Options or Convertible Securities shall be issued or sold by the
Partnership and, in connection therewith, other Options or Convertible
Securities (the “Additional Rights”) are issued, then the consideration received
or deemed to be received by the Partnership shall be reduced by the fair market
value of the Additional Rights (as determined using the Black-Scholes Option
Pricing Model or another method mutually agreed to by both the Partnership and
the Warrantholder). The Board of Directors of the general partner of the
Partnership shall respond promptly, in writing, to an inquiry by the
Warrantholder as to its view of the fair market value of the Additional Rights.
In the event that the Board of Directors of the general partner of the
Partnership and the Warrantholder are unable to agree upon the fair market value
of the Additional Rights, the Partnership and the Warrantholder shall jointly
select an appraiser who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne evenly by the Partnership and the Warrantholder.

(vi) Record Date. In case the Partnership shall take a record of the holders of
its Common Units for the purpose of entitling them (A) to receive a distribution
payable in Common Units, Options or Convertible Securities or (B) to subscribe
for or purchase Common Units, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the Common
Units deemed to have been issued or sold upon the declaration or the making of
such distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

(vii) Treasury Units. The number of Common Units outstanding at any given time
shall not include units owned or held by or for the account of the Partnership
or any of its wholly owned subsidiaries, and the disposition of any such units
(other than the cancellation or retirement thereof) shall be considered an issue
or sale of Common Units for purposes of this Section 7(f).

 

 
11

--------------------------------------------------------------------------------

 

 

(g) Anything herein to the contrary notwithstanding, the Partnership shall not
be required to make any adjustment to the number of Purchasable Warrant Units in
the case of the issuance of (i) limited partner interests, Options or
Convertible Securities issued to directors, officers, employees or consultants
of the Partnership in connection with their service as directors of the general
partner of the Partnership (other than the foregoing nothing herein shall
exclude issuances to affiliates of the general partner of the Partnership from
the adjustment provisions of the Warrant), their employment by the Partnership
or their retention as consultants by the Partnership pursuant to an equity
compensation program approved by the Board of Directors of the general partner
of the Partnership or the compensation committee of the Board of Directors of
the general partner of the Partnership, provided that such issuances shall not
exceed 5% of the Reference Common Units (as defined below) for all such
issuances in excess of the Disregarded Number of Common Units (as defined
below), (ii) Common Units issued upon the conversion or exercise of Options or
Convertible Securities (including, without limitation, the Subordinated Units)
issued prior to the date hereof or hereafter issued pursuant to the exercise of
any warrants for the purchase of Subordinated Units issued to the Warrantholder
and/or other persons on the date hereof, provided that neither the conversion
price or exercise price nor number of units issuable under such Options or
Convertible Securities is amended, modified or changed after the date hereof
other than pursuant to the adjustment provisions of such Options or Convertible
Securities as they exist as of the date hereof, and (iii) Common Units issued or
issuable by reason of a unit split or other distribution on Common Units (but
only to the extent that such a unit split or distribution results in an
adjustment in the number of Purchasable Warrant Units that can be purchased upon
exercise of the Warrant pursuant to the other provisions of this Warrant)
(collectively, “Excluded Issuances”). For purposes hereof, the “Reference Common
Units” are 11,081,109 Common Units which equals the sum of (I) the 10,522,925
Common Units outstanding on the date hereof plus (II) the 559,184 Common Units
which are issuable upon the vesting of all of the currently outstanding grants
for Common Units previously made pursuant to the Partnership’s existing
long-term incentive plan (such number of common units provided for in this
clause (II), the “Disregarded Number of Common Units”).

 (h) The adjustments required by this Section 7 shall be made whenever and as
often as any specified event requiring an adjustment shall occur, except that no
adjustment that would otherwise be required shall be made unless and until such
adjustment either by itself or with other adjustments not previously made
increases or decreases the number of Purchasable Warrant Units immediately prior
to the making of such adjustment by at least 1%. Any adjustment representing a
change of less than such minimum amount (except as aforesaid) shall be carried
forward and made as soon as such adjustment, together with other adjustments
required by this Section 7 and not previously made, would result in such minimum
adjustment.

 

 
12

--------------------------------------------------------------------------------

 

 

Section 8. Purchase Rights. In addition to any adjustments pursuant to Section
7, if at any time the Partnership grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
“Purchase Rights”), then the Warrantholder shall be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Warrantholder could have acquired if the Warrantholder had held the
number of Common Units acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof) immediately before the
date as of which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
Warrantholders of Common Units are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, that, to the extent that the
Warrantholder’s right to participate in any such Purchase Right would result in
the Warrantholder exceeding the Maximum Percentage, then the Warrantholder shall
not be entitled to participate in such Purchase Right to such extent (and shall
not be entitled to beneficial ownership of such Common Units as a result of such
Purchase Right (and beneficial ownership) to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Warrantholder until such
time or times as its right thereto would not result in the Warrantholder
(together with such Warrantholder’s affiliates) exceeding the Maximum
Percentage, at which time or times the Warrantholder shall be granted such right
(and any Purchase Right granted, issued or sold on such initial Purchase Right
or on any subsequent Purchase Right to be held similarly in abeyance) to the
same extent as if there had been no such limitation).

Section 9. Termination of Trading Event. If, at any time prior to the third
(3rd) anniversary of the Exercise Commencement Date, the Common Units have not
been listed for trading on an Eligible Market for a period of sixty (60) days (a
“Termination of Trading Event”), at the written request of the Warrantholder
delivered on or before the sixtieth (60th) day after the occurrence of the
Termination of Trading Event (the date the Warrantholder delivers a written
notice of such request, a “Put Notice Date”), the Partnership shall purchase
this Warrant from the Warrantholder by paying to the Warrantholder, within three
(3) Business Days of the date the Put Value is determined, cash in an amount
equal to the Put Value of the remaining unexercised portion of this Warrant on
the Put Notice Date. As used herein, “Eligible Market” means, the NYSE MKT LLC,
The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital
Market or The New York Stock Exchange, Inc. As used herein, “Put Value” means
the value of this Warrant as determined by an independent third party valuation
firm or investment bank jointly selected by the Partnership and the
Warrantholder based on an enterprise value without deduction for liquidity and
minority interests, the costs of which valuation shall be borne by the
Partnership. The Partnership shall promptly engage such valuation firm and
promptly provide such valuation firm with all such information as it shall
reasonably request in completing its valuation work.

Section 10. Income Tax Treatment. The Warrantholder and the Partnership agree
that, solely for income tax purposes, the Warrants shall be treated from and
after issuance as if exercised by the holder thereof.  In connection therewith,
the Partnership shall issue to the holder of the Warrants information returns on
IRS Form K-1 (and corresponding forms for state, local and foreign income tax
reporting purposes) reflecting the allocations of income, gain, loss, deduction
and credit to the holder of the Warrants computed as if the Warrants had been
exercised in full upon issuance.

Section 11. Calculations and Fractional Interest. All calculations made pursuant
to this Warrant shall be made to the nearest cent. The Partnership shall not be
required to issue fractions of Warrant Units upon the exercise of this Warrant.
If any fractional Common Unit would, except for the provisions of the first
sentence of this Section 11, be deliverable upon such exercise, the Partnership,
in lieu of delivering such fractional unit, shall pay to the exercising
Warrantholder an amount in cash equal to the Market Price of such fractional
Common Unit on the date of exercise.

 

 
13

--------------------------------------------------------------------------------

 

 

Section 12. Benefits. Nothing in this Warrant shall be construed to give any
person or entity (other than the Partnership and the Warrantholder) any legal or
equitable right, remedy or claim, it being agreed that this Warrant shall be for
the sole and exclusive benefit of the Partnership and the Warrantholder.

Section 13. Adjustment Notices. Upon the happening of any event requiring an
adjustment of the Exercise Price, the Partnership shall promptly give written
notice thereof to the Warrantholder at the address appearing in the records of
the Partnership, stating the adjusted Exercise Price and the adjusted number of
Warrant Units resulting from such event and setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
Failure to give such notice to the Warrantholder or any defect therein shall not
affect the legality or validity of the subject adjustment.

Section 14. Identity of Transfer Agent. The Transfer Agent for the Common Units
is American Stock Transfer and Trust Company, LLC. Upon the appointment of any
subsequent transfer agent for the Common Units or other units of the
Partnership’s capital securities issuable upon the exercise of the rights of
purchase represented by this Warrant, the Partnership will mail to the
Warrantholder a statement setting forth the name and address of such transfer
agent.

Section 15. Book Entry Option. Notwithstanding anything to the contrary in this
Warrant, the Partnership shall have the option to elect to issue any Common
Units issuable pursuant to the terms of this Warrant in book entry form rather
than issuing certificates evidencing such issuances.

Section 16. Notices. Unless otherwise provided, any notice required or permitted
under this Warrant shall be given in writing and shall be deemed effectively
given as hereinafter described: (a) if given by personal delivery, then such
notice shall be deemed given upon such delivery, (b) if given by electronic mail
or facsimile, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (c) if given by mail, then such notice
shall be deemed given upon the earlier of (i) receipt of such notice by the
recipient or (ii) three (3) days after such notice is deposited in the first
class mail, postage prepaid, and (d) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one (1) Business
Day after delivery to such carrier. All notices shall be addressed as follows:
if to the Warrantholder, at its address as set forth in the Partnership’s books
and records or at such other address as the Warrantholder may designate by
advance written notice to the Partnership, and if to the Partnership, at the
address as follows or at such other address as the Partnership may designate by
advance written notice to the Warrantholder:

Oxford Resource Partners, LP

41 South High Street, Suite 3450

Columbus, Ohio 43215

Attn: Chief Legal Officer

Email: dmaher@oxfordresources.com

Fax: (614) 754-7100

Section 17. Section Headings. The section headings in this Warrant are for the
convenience of the Partnership and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.

 

 
14

--------------------------------------------------------------------------------

 

 

Section 18. Successors. All the covenants and provisions hereof by or for the
benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.

Section 19. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Warrant shall be governed by, and construed in accordance with, the internal
laws of the State of New York, without reference to the choice of law provisions
thereof. The Partnership and, by accepting this Warrant, the Warrantholder, each
irrevocably submits to the non-exclusive jurisdiction of the courts of the State
of New York located in New York County and the United States District Court for
the Southern District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Warrant and the
transactions contemplated hereby. Service of process in connection with any such
suit, action or proceeding may be served on each party hereto anywhere in the
world by the same methods as are specified for the giving of notices under this
Warrant. The Partnership and, by accepting this Warrant, the Warrantholder, each
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. The Partnership
and, by accepting this Warrant, the Warrantholder, each irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTNERSHIP AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER, HEREBY
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO
THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO
THIS WAIVER.

Section 20. No Rights as Limited Partner. Except as set forth herein or in the
Partnership Agreement, prior to the exercise of this Warrant, the Warrantholder
shall not have or exercise any rights as a limited partner of the Partnership by
virtue of its ownership of this Warrant, including, without limitation, the
right to receive distributions, exercise any rights to vote, or consent or
receive notice as unitholders in respect of the meetings of unitholders or any
other matter.

Section 21. Amendment; Waiver. Any term of this Warrant may be amended or waived
(including the adjustment provisions included in Section 7) only upon the
written consent of the Partnership and the Warrantholder, provided that nothing
herein shall preclude the Partnership from lowering the Exercise Price.

Section 22. Reservation of Common Units. The Partnership shall at all times
reserve and keep available a number of its authorized but unissued Common Units
that will be sufficient to permit the exercise in full of this Warrant and all
other outstanding warrants issued in connection with the Second Lien Financing
Agreement.

Section 23. Requirement for Signature. Unless and until signed by the
Partnership, this Warrant shall be invalid and of no force or effect and may not
be exercised by the holder hereof.

 

 
15

--------------------------------------------------------------------------------

 

 

Section 24. Severability. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not be in any way impaired so long as this
Warrant as so modified continues to express, without material change, the
original intentions of the Warrantholder and the Partnership as to the subject
matter hereof and the invalidity, illegality or unenforceability of any
provision in question does not substantially impair the respective expectations
or reciprocal obligations of the Warrantholder and the Partnership or the
practical realization of the benefits that would otherwise be conferred upon the
Warrantholder and the Partnership. The Warrantholder and the Partnership will
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provision with a valid provision, the effect of which comes as
close as possible to that of the invalid, illegal or unenforceable provision.

[Signature on Following Page]

 

 
16

--------------------------------------------------------------------------------

 

 

 

IN WITNESS WHEREOF, the Partnership has caused this Warrant to be duly executed
as of the date first above written.

 

 

 

Oxford Resource Partners, LP

By Oxford Resources GP, LLC, its general partner

 

 

By:                                                                        

      Daniel M. Maher, Senior Vice President

 

 

 
17

--------------------------------------------------------------------------------

 

 

 

APPENDIX A

Oxford Resource Partners, LP

WARRANT EXERCISE FORM

To [Name]:

The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant (the “Warrant”) for, and to purchase
thereunder by the payment of the Exercise Price and surrender of the Warrant,
Warrant Units as defined and provided for therein, and requests that
certificates for the Warrant Units be issued as follows:

 

 

________________________________________________  

Name

  ________________________________________________  
________________________________________________  

Address

     

__________________________________________

 

Federal Identification or Social Security No.

               

and delivered by:

 

☐      certified mail to the above address, or

☐      electronically (provide DWAC Instructions: ________________), or

☐      (other) ____________________________ (specify)

and, if the number of Warrant Units shall not be all the Warrant Units
purchasable upon exercise of this Warrant, that a new warrant for the balance of
the Warrant Units purchasable upon exercise of the Warrant be registered in the
name of the undersigned Warrantholder or the undersigned Warrantholder’s
assignee as below indicated and delivered to the address stated below.

Notwithstanding anything to the contrary contained herein, this election shall
constitute a representation by the Warrantholder of the Warrant submitting this
election that the recipient of the Common Units issued upon the exercise of this
Warrant is an Eligible Citizen. The Partnership may rely on this representation
and warranty of the Warrantholder in determining whether the recipient of the
Common Units issued upon the exercise of this Warrant is an Eligible Citizen.

[Signature Page Follows]

 

 

 
 A-1

--------------------------------------------------------------------------------

 

 

 

Dated: _________________, _________

 

 

Note:The signature must correspond with the name of the Warrantholder as written
on the first page of the Warrant in every particular, without alteration or
enlargement or any change whatever, unless the Warrant has been assigned.

 

Signature: ____________________________________

 

____________________________________________

Name (please print)

____________________________________________

____________________________________________

Address

 

____________________________________________

Federal Identification or Social Security No.

 

Assignee:

____________________________________________

____________________________________________

____________________________________________

 

 

 
A-2 

--------------------------------------------------------------------------------

 

 

APPENDIX B

Oxford Resource Partners, LP

NET ISSUE ELECTION NOTICE

To: [Name]

Date: ____________,_______

 

The undersigned hereby elects under Section 3(f) of the within Warrant (the
“Warrant”) to surrender the right to purchase __________________ Common Units
pursuant to the Warrant and hereby requests the issuance of ___________________
Common Units. The certificate(s) for the units issuable upon such net issue
election shall be issued in the name of the undersigned or as otherwise
indicated below.

 

 

_________________________________

Signature

 

_________________________________ 

Name for Registration

 

_________________________________

Mailing Address

 

B-1