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WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS
THE HOLDER OF THIS WARRANT AND/OR SHARES DELIVERS TO THE COMPANY AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
BLUE RIDGE ENERGY, INC.
COMMON STOCK PURCHASE WARRANT
Expiring February 28, 2003
THIS CERTIFIES THAT, for value received, Blue Ridge Group, Inc. (the "Warrant
Holder"), at any time and from time to time on any Business Day on or prior to
5:00 p.m., Central Time, on February 28, 2003 (the "Expiration Date") is
entitled to subscribe for and purchase from BLUE RIDGE ENERGY, INC., a Nevada
corporation (the "Company"), 5,000,000 shares of Common Stock at a price per
share equal to the Exercise Price.
1. CERTAIN DEFINITIONS
The following terms, as used herein, have the following meanings:
"Business Day" means any day except a Saturday, Sunday, or other day on
which commercial banks in Bowling Green, Kentucky, are authorized by law to
close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's currently authorized common stock, $.01
par value, and stock of any other class or other consideration into which
such currently authorized common stock may hereafter have been changed.
"Exercise Price" means Five cents ($0.05) per share.
"Securities Act" means the Securities Act of 1933, or any successor Federal
statute, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
"Warrant Shares" means the 5,000,000 shares of Common Stock issued or
issuable upon exercise for this Warrant.
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2. EXERCISE OF WARRANT
The Warrant Holder or its assignee may exercise this Warrant, in whole or in
part, at any time or from time to time on any Business Day prior to the
Expiration Date, by delivering to the Company a duly executed notice (a "Notice
of Exercise") in the form of Exhibit A hereto and by payment to the Company of
the Exercise Price per Warrant Share by cashier's check in an amount equal to
the product of (I) the Exercise Price time (ii) the number of Warrant Shares as
to which this warrant is being exercised.
As soon as reasonably practicable but not later than twenty Business Days after
the Company shall have received such Notice of Exercise and payment, the Company
shall execute and deliver certificates representing the number of shares of
common Stock specified in such Notice of Exercise, issued in the name of the
Warrant Holder. This Warrant shall be deemed to have been exercised and such
share certificate or certificates shall be deemed to have been issued, and such
Warrant Holder shall be deemed for all purposes to have become a holder of
record of shares of Common Stock, as of the first Business Day after the date
that such Notice of Exercise and payment shall has been received by the Company.
The Warrant Holder shall surrender this Warrant Certificate to the Company when
it delivers the Notice of Exercise, and in the event of a partial exercise of
the Warrant, the Company shall execute and deliver to the Warrant Holder, at the
time the Company delivers the share certificate or certificates issued pursuant
to such Notice of Exercise, a new Warrant Certificate for the unexercised
balance of the Warrant.
Each Certificate for Warrant Shares issued upon exercise of this Warrant, unless
at the time of exercise such Warrant Shares are registered under the Securities
Act, shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS THE HOLDER OF THE
SHARES DELIVERS TO THE COMPANY AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Any certificate for Warrant Shares issued at any time in exchange or
substitution for any certificate bearing such legend shall also bear such legend
unless, in the written opinion of counsel, which counsel and opinion shall be
reasonably accepted to the Company, the Warrant Shares represented thereby need
no longer be subject to restrictions on resale under the Securities Act.
The Company shall not be required to issue fractions of shares of common Stock
upon an exercise
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of the Warrant. If any fraction of a share would, but for this restriction, be
issuable upon an exercise of the Warrant, in lieu of delivering such fractional
share, the Company shall pay to the Warrant Holder, in cash, an amount equal to
the same fraction times the Closing Price on the trading day immediately prior
to the date of such exercise.
3. INVESTMENT REPRESENTATION
By accepting the Warrant, the Warrant Holder represents that he is acquiring the
Warrant for his own account for investment purposes and not with the view to any
sale or distribution, and that the Warrant Holder will not offer, sell or
otherwise dispose of the Warrant or the Warrant Shares except under
circumstances as will not result in a violation of applicable securities laws.
4. VALIDITY OF WARRANT AND ISSUANCE OF SHARES
The Company represents and warrants that this Warrant has been duly authorized
and is validly issued.
The Company further represents and warrants that on the date hereof it duly
authorized and reserved, and the Company hereby agrees that it will at all times
until the Expiration Date have duly authorized and reserved, such number of
shares of Common Stock as will be sufficient to permit the exercise in full of
the Warrant, and that all such shares are and will be duly authorized and, when
issued upon exercise of the Warrant, will be validly issued, fully paid and
non-assessable, and free and clear of all security interests, claims, liens,
equities and other encumbrances.
5. ADJUSTMENTS
The Exercise Price in effect at any time, and the number of Warrant Shares that
may be purchased upon any exercise of the Warrant, shall be subject to change or
adjustment as follows:
(a) Common Stock Reorganization. If the Company shall subdivide its
outstanding shares of Common Stock into a greater number of shares, by way
of stock split, stock dividend or otherwise, or consolidate its outstanding
shares of Common Stock into a smaller number of shares (any such event
being herein call a "Common Stock Reorganization"), then (I) the Exercise
Price shall be adjusted, effective immediately after the effective date of
such Common Stock Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such effective date by a
fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such effective date before giving effect to such
Common Stock Reorganization and the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization, and (ii) the number of shares of Common Stock
subject to purchase upon exercise of this Warrant shall be adjusted,
effective at such time, to a number determined by multiplying the number of
shares of Common Stock subject
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to purchase immediately before such Common Stock Reorganization by a
fraction, the numerator of which shall be the number of shares outstanding
after giving effect to such Common Stock Reorganization and the denominator
of which shall be the number of shares of Common Stock outstanding
immediately before giving effect to such Common Stock Reorganization.
(b) Capital Reorganization. If there shall be any consolidation or merger
to which the Company is a party, other than a consolidation or a merger of
which the company is the surviving corporation and which does not result in
any reclassification of, or change (other than a Common Stock
Reorganization) in, outstanding shares of Common Stock, or any sale or
conveyance of the property of the company as an entirety or substantially
as an entirety, or any recapitalization of the Company (any such event
being called a "Capital Reorganization"), then, effective upon the
effective date of such Capital Reorganization, the Warrant holder shall no
longer have the right to purchase Common Stock, but shall have instead the
right to purchase, upon exercise of this Warrant, the kind and amount of
shares of stock and other securities and property (including cash) which
the Warrant Holder would have owned or have been entitled to receive
pursuant to such Capital Reorganization if this Warrant had been exercised
immediately prior to the effective date of such Capital Reorganization. As
a condition to effecting any Capital Reorganization, the Company or the
successor or surviving corporation, as the case may be, shall execute and
deliver to the Warrant Holder an agreement as to the Warrant Holder's
rights in accordance with this Section 5(b), providing, to the extent of
any right to purchase equity securities hereunder, for subsequent
adjustments as nearly equivalent as may be practicable to the adjustments
provided for in this Section 5. The provisions of this Section 5 (b) shall
similarly apply to successive Capital Reorganizations.
(c) Notice of Adjustment. The Company shall give notice to the Warrant
Holder of any event which requires an adjustment pursuant to this Section
5, describing such event in reasonable detail and specifying the record
date or effective date, as the case may be, and, if determinable, the
required adjustment and computation thereof. If the required adjustment is
not determinable as the time of such notice, the Company shall give notice
to the Warrant Holder of such adjustment and computation as soon as
reasonably practicable after such adjustment becomes determinable.
6. LOST, MUTILATED OR MISSING WARRANT CERTIFICATES
Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant Certificate, and, in the case of loss,
theft or destruction, upon receipt of an indemnification or bond satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver a new
replacement Warrant Certificate of like tenor and representing the right to
purchase the same
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aggregate number of Warrant Shares. The recipient of any such Warrant
Certificate shall reimburse the Company for all reasonable expenses incidental
to the replacement of such missing or mutilated Warrant Certificate.
7. NOTICES
All notices, requests, demands and other communications under this Warrant must
be in writing and will be deemed duly given: (i) when personally delivered, (ii)
upon receipt of a facsimile transmission with a confirmed transmission answer
back, (iii) three (3) days after having been deposited in the United States
mail, certified or registered, return receipt requested, postage prepaid, or
(iv) one (1) business day after having been dispatched by a nationally
recognized overnight courier service, addressed to the parties as follows:
If to the Company: Blue Ridge Energy, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
If to the
Warrant Holder: Blue Ridge Group, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Any party may change its address for notice purposes by giving notice of such
change of address in accordance with the foregoing provisions.
8. MISCELLANEOUS
(a) This Warrant shall not entitle the Warrant Holder, prior to the
exercise of the Warrant, to any rights as a shareholder of the Company.
(b) In case any one or more of the provisions contained in this Warrant
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby. The parties shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable
provisions.
(c) This Warrant is personal to the Warrant Holder and may not be assigned
without the prior written consent of the Company and any attempt to assign
without such written consent shall be null and void. All of the provisions
of this Warrant by or for the benefit of the Company or the Warrant Holder
bind and inure to the benefit
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of their respective successors and permitted assigns.
(d) This Warrant, the construction, interpretation and enforcement hereof
and the rights of the parties hereto shall be determined under, governed by
and construed in accordance with the laws of the State of Kentucky without
regard to principles of conflicts of interest.
(e) The section headings used herein are for convenience of reference only
and shall not be construed in any way to affect the interpretation of any
provisions of the Warrant.
(f) This Warrant constitutes the entire agreement between the Company and
the Warrant Holder regarding the subject matter hereof and supersedes all
previous agreements. There are no verbal agreements, representations,
warranties, undertakings or agreements among the parties. This Warrant may
not be amended or modified in any respect, except by a written instrument
signed by the Company and the Warrant Holder.
IN WITNESS WHEREOF, the Company and the Warrant Holder agree to the foregoing
terms and conditions and have executed this Warrant as of the day and year first
above written.
COMPANY
BLUE RIDGE ENERGY, INC.,
a Nevada Corporation
/s/ XXXXXX X. XXXX
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By: Xxxxxx X. Xxxx, President and CEO
BLUE RIDGE GROUP, INC.
/s/ XXXXX X. XXXX, XX.
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By: Xxxxx X. Xxxx, Xx. Vice President-
Finance
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EXHIBIT A
COMMON STOCK WARRANT
FORM OF NOTICE OF EXERCISE
TO: BLUE RIDGE ENERGY, INC.
Reference is made to the Common Stock Purchase Warrant dated February 28,
1998 (the "Warrant"). Initially capitalized terms used herein have the
meaning as defined in the Warrant.
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby irrevocably elects and agrees to purchase 5,000,000 shares of Common
Stock, and makes payment herewith in full therefor at the Exercise Price of
Five cents ($0.05) by cash or check.
The undersigned hereby represents that it is exercising the Warrant for its
own account for investment purposes and not with the view to any sale or
distribution and that the Warrant Holder will not offer, sell or otherwise
dispose of the Warrant or any underlying Warrant Shares in violation of
applicable securities laws.
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Printed Name: Blue Ridge Group, Inc.
Date:
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