|
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED
BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Warrant No. 0002
Number of Shares of Common Stock: 32,877
Date of Issuance: June 10, 2008
ROYALE ENERGY, INC.
WARRANT TO PURCHASE
COMMON STOCK
THIS CERTIFIES that, for value received, J.P.TURNER
PARTNERS, LP., is entitled to purchase from ROYALE ENERGY, INC., a
California corporation (the “ Corporation ”), subject to the
terms and conditions hereof, 32,877 shares (the “
Warrant Shares ”)
of common stock, no par value (the “ Common Stock ”). This warrant,
together with all warrants hereafter issued in exchange or
substitution for this warrant, is referred to as the “
Warrant ” and the
holder of this Warrant (together with its successors and assigns)
is referred to as the “ Holder .” The number of Warrant
Shares is subject to adjustment as hereinafter provided.
Notwithstanding anything to the contrary contained herein, this
Warrant shall expire at 5:00pm CDT on June 10, 2011 (the
“ Termination Date
”).
1. Exercise of
Warrants . (a) The Holder may, at any
time prior to the Termination Date, exercise this Warrant in whole
or in part at an exercise price per share equal to $7.30 per share,
subject to adjustment as provided herein (the “
Warrant Price ”),
by the surrender of this Warrant (properly endorsed) at the
principal office of the Corporation, or at such other agency or
office of the Corporation in the United States of America as the
Corporation may designate by notice in writing to the Holder at the
address of such Holder appearing on the books of the Corporation,
and by payment to the Corporation of the Warrant Price in lawful
money of the United States by check or wire transfer for each share
of Common Stock being purchased. Upon any partial exercise of this
Warrant, there shall be executed and issued to the Holder a new
Warrant in respect of the shares of Common Stock as to which this
Warrant shall not have been exercised. In the event of the exercise
of the rights represented by this Warrant, a certificate or
certificates for the Warrant Shares so purchased, as applicable,
registered in the name of the Holder, shall be delivered to the
Holder hereof as soon as practicable after the rights represented
by this Warrant shall have been so
exercised.
(b) If at
any time more than one hundred eighty (180) days after the date of
issuance set forth above, all of the Warrant Shares are not
registered for sale on an effective Registration Statement under
the Securities Act of 1933 (the “ Securities Act ”) (or the
prospectus contained therein is not available for use, then this
Warrant may also be exercised at such time by means of a
“cashless exercise” in which, at any time prior to the
Termination Date, the Holder of this Warrant may, at its option,
exchange this Warrant, in whole or in part (a “
Warrant Exchange ”), into Warrant Shares by surrendering this Warrant at
the principal office of the Corporation, accompanied by a notice
stating such Holder’s intent to effect such exchange, the
number of Warrant Shares to be exchanged and the date on which the
Holder requests that such Warrant Exchange occur (the
“ Notice of Exchange
”). The Warrant Exchange shall take place on
the date specified in the Notice of Exchange or, if later, within
five (5) days of the date the Notice of Exchange is received by the
Corporation (the “ Exchange
Date ”). Certificates for the
Warrant Shares issuable upon such Warrant Exchange and, if
applicable, a new Warrant of like tenor evidencing the balance of
the Warrant Shares remaining subject to this Warrant, shall be
issued as of the Exchange Date and delivered to the Holder within
three (3) business days following the Exchange Date. In connection
with any Warrant Exchange, this Warrant shall represent the receive
upon such exercise the “ Net
Number ” of shares of Common Stock
determined according to the following formula (a “
Cashless Exercise ”):
|
|
Net Number = (A x B) - (A x
C)
|
|
|
For purposes of the foregoing formula:
|
A= the total number of shares with respect to which
this Warrant is then being exercised.
B= the Closing Sale Price of the Common Stock on the
Trading Day immediately preceding the date of the Exercise
Notice.
C= the Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.
2. Reservation of Warrant
Shares . The Corporation agrees that,
prior to the expiration of this Warrant, it will at all times have
authorized and in reserve, and will keep available, solely for
issuance or delivery upon the exercise of this Warrant, the number
of Warrant Shares as from time to time shall be issuable by the
Corporation upon the exercise of this Warrant.
3. No Stockholder
Rights . This Warrant shall not entitle
the holder hereof to any voting rights or other rights as a
stockholder of the Corporation.
4. Transferability of
Warrant . Prior to the Termination Date
and subject to compliance with applicable laws, this Warrant and
all rights hereunder are transferable, in whole or in part, at the
office or agency of the Company by the Holder in person or by duly
authorized attorney, upon
surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed for
transfer.
5. Certain
Adjustments . With respect to any rights
that Holder has to exercise this Warrant and convert into shares of
Common Stock, Holder shall be entitled to the following
adjustments:
(a)
Merger or Consolidation . If at any time there shall be a merger, consolidation or sale
of substantially all of the assets of the Corporation with or into
another corporation when the Corporation is not the surviving
corporation, then, as part of such merger or consolidation, lawful
provision shall be made so that the holder hereof shall thereafter
be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the aggregate Warrant
Price then in effect, the number of shares of stock or other
securities or property (including cash) of the successor
corporation resulting from such merger or consolidation, to which
the Holder hereof as the holder of the stock deliverable upon
exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before
such merger or consolidation. In any such case, appropriate
adjustment shall be made in the application of the provisions of
this Warrant wi
|