PEDEVCO CORP. WARRANT FOR THE PURCHASE OF COMMON STOCK

 

NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

Warrant No.                                CSW-___                                                                Number of Shares: _________

 

Warrant Date:                                           _________________, 2015

 

 

 

 

 

 

 

1. Issuance.  For value received, the receipt of which is hereby acknowledged by PEDEVCO Corp., a Texas corporation (the “Company”), ___________________________, or registered assigns (the “Holder”), is hereby granted the right to purchase, at any time until the close of business on ____________________, 2018 (the “Expiration Date”), _________________________________ (__________________) fully paid and nonassessable shares of the Company’s Common Stock, par value US$0.001 per share (the “Common Stock”), at an exercise price of US$1.50 per share (the “Exercise Price”).

 

2. Procedure for Exercise.  Upon surrender of this Warrant with the annexed Notice of Exercise Form duly executed, together with payment in cash, by wire transfer or by certified check of the Exercise Price for the shares of Common Stock purchased, the Holder shall be entitled to receive a certificate or certificates for the shares of Common Stock so purchased within five business days of the Company’s receipt of the Notice of Exercise and Exercise Price.  This Warrant may be exercised in whole or in part. On any such partial exercise, provided the Holder has surrendered the original Warrant, the Company promptly will issue and deliver to the order of the Holder a new Warrant of like tenor, in the name of the Holder, for the whole number of shares of Common Stock for which such Warrant may still be exercised.  Notwithstanding the foregoing, at any time that there is not an effective registration statement of the Company covering the resale of the Warrant Shares (as defined below), then in lieu of paying the Exercise Price in cash or by wire transfer or by certified check, at the Holder’s election, as indicated on its Notice of Exercise, the Holder may exercise this Warrant, in whole or in part, by way of Cashless Exercise.  For purposes of this Section 2, the term “Cashless Exercise” means an exercise of this Warrant pursuant to which the Company issues to the Holder a number of Warrant Shares determined as follows:

 

X = Y ((A-B)/A)

 

Where:

 

X = the number of Warrant Shares to be issued to the Holder, subject to adjustment as provided in Section 6.

 

Y = the total number of Warrant Shares designated in the applicable subscription as being subject to the Cashless Exercise (as adjusted as provided herein).

 

A = the average closing price of the Common Stock for the ten (10) consecutive trading days immediately preceding the Company’s receipt of the respective Exercise Notice (the “Fair Market Value”).

 

B = the Warrant Exercise Price

 

 

3. Reservation of Shares.  The Company hereby agrees that at all times during the term of this Warrant there shall be reserved for issuance upon exercise of this Warrant such number of shares of Common Stock as shall be required for issuance upon exercise hereof (the “Warrant Shares”).  Any shares issuable upon exercise of this Warrant will be duly and validly issued, fully paid and free of all liens and charges and not subject to any preemptive rights.

 

4. Mutilation or Loss of Warrant.  Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) receipt of reasonably satisfactory indemnification, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver a new warrant of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall thereupon become void.

 

5. No Rights as Shareholder.  The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company, either at law or in equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

 

6. Effect of Certain Transactions

 

6.1 Adjustments for Stock Splits, Stock Dividends Etc.  If the number of outstanding shares of Common Stock of the Company are increased or decreased by a stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like, the Exercise Price and the number of shares purchasable pursuant to this Warrant shall be adjusted proportionately so that the ratio of (i) the aggregate number of shares purchasable by exercise of this Warrant to (ii) the total number of shares outstanding immediately following such stock split, reverse stock split, stock dividend, stock combination, recapitalization or the like shall remain unchanged, and the aggregate purchase price of shares issuable pursuant to this Warrant shall remain unchanged.

 

6.2 Expiration Upon Certain Transactions.  If at any time the Company plans to sell all or substantially all of its assets or engage in a merger or consolidation of the Company in which the Company will not survive and in which holders of the Common Stock will receive consideration at or above the Exercise Price, as adjusted (other than a merger or consolidation with or into a wholly- or partially-owned subsidiary of the Company or a migratory merger to establish a new state of incorporation), the Company will give the Holder of this Warrant advance written notice.  Upon the occurrence of any such event, this Warrant shall automatically be deemed to be exercised in full without any action required on the part of the Holder.

 

6.3 Adjustments for Reorganization, Mergers, Consolidations or Sales of Assets.  If at any time there is a capital reorganization of the Common Stock (other than a recapitalization, combination, or the like provided for elsewhere in this Section 6) or merger or consolidation of the Company with another corporation (other than one covered by Section 6.2), or the sale of all or substantially all of the Company’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant (and only to the extent this Warrant is exercised), the number of shares of stock or other securities or property of the Company, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock, or other securities, deliverable upon the exercise of this Warrant would otherwise have been entitled on such capital reorganization, merger, consolidation or sale.  In any such case, appropriate adjustments shall be made in the application of the provisions of this Section 6 (including adjustment of the Exercise Price then in effect and number of Warrant Shares purchasable upon exercise of this Warrant, but no such adjustment shall increase the aggregate Exercise Price under this Warrant) which shall be applicable after such events.

 

7. Transfer to Comply with the Securities Act.  This Warrant has not been registered under the Securities Act of 1933, as amended, (the “Securities Act”) and has been issued to the Holder for investment and not with a view to the distribution of either this Warrant or the Warrant Shares.  Neither this Warrant nor any of the Warrant Shares or any other security issued or upon exercise of this Warrant may be sold, transferred, pledged or hypothecated in the absence of (a) an effective registration statement under the Act relating to such security, (b) in the case of a  Cashless Exercise and subsequent sale of transfer of the shares of Common Stock issued pursuant to such Cashless Exercise, evidence that the Holder has held this Warrant and such shares of Common Stock for an aggregate of six (6) continuous months so that such shares of Common Stock may be resold pursuant to Rule 144 under the Act  or (c) an opinion of counsel reasonably satisfactory to the Company that registration is not required under the Act.  Each certificate for this Warrant, the Warrant Shares and any other security issued or issuable upon exercise of this Warrant shall contain a legend in form and substance satisfactory to counsel for the Company, setting forth the restrictions on transfer contained in this Section.

 

 

8. Notices.  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally or sent by certified, registered or express mail, postage pre-paid.  Any such notice shall be deemed given when so delivered personally, or if mailed, two days after the date of deposit in the United States mails, as follows:

 

If to the Company, to:

 

PEDEVCO Corp.

4125 Blackhawk  Plaza Circle, Suite 201

Danville, CA 94506

 

Attention:  Chief Executive Officer and General Counsel

 

If to the Holder, to his address appearing on the Company’ records.

 

Any party may designate another address or person for receipt of notices hereunder by notice given to the other parties in accordance with this Section.

 

9. Supplements and Amendments; Whole Agreement.  This Warrant may be amended or supplemented only by an instrument in writing signed by the Company and the Holder hereof.  This Warrant contains the full understanding of the parties hereto with respect to the subject matter hereof, and there are no representations, warranties, agreements or understandings other than expressly contained herein.

 

10. Governing Law.  This Warrant shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in Southern District of New York.  The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

11. Counterparts.  This Warrant 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.

 

12. Descriptive Headings.  Descriptive headings of the several Sections of this Warrant are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

13. Assignability.  This Warrant or any part hereof may only be hereafter assigned by the Holder to an affiliate thereof executing documents reasonably required by the Company.  Any such assignment shall be binding on the Company and shall inure to the benefit of any such assignee.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Warrant Date set forth above.

 

	PEDEVCO CORP.     By:                                                                    Name:               Frank C. Ingriselli Title:Chairman and CEO   HOLDER:   ____________________________   By:
	Name:                                                                      Title:

 

 

The undersigned hereby irrevocably elects to exercise the right, represented by the Warrant dated as of ____________________, 2015, to purchase _____________ shares of the Common Stock of PEDEVCO Corp., pursuant to Section 2 of the Warrant and either (check one):

 

______   tenders herewith payment in accordance with the first paragraph of Section 2 of the Warrant; or

 

______   elects a Cashless Exercise in accordance with the first paragraph of Section 2 of the Warrant based on a Fair Market Value of $____________ which results in a number of shares of Common Stock to be issued to the Holder of ______________.

 

Please deliver the stock certificate to:

 

______________________________________

 

______________________________________

 

______________________________________

 

 

Dated:___________________

By:______________________

 

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