Exhibit 10.3
 
EXCHANGE AGREEMENT
 
EXCHANGE AGREEMENT (the "Agreement"), dated as of December ___, 2010, by and
among Tri-Valley Corporation, a Delaware corporation, with offices located at
4550 California Avenue, Suite 600, Bakersfield, California 93309 (the "Company")
and the investor that is a signatory to this Agreement (the "Investor").
 
WHEREAS:
 
A.           The Company entered into that certain Securities Purchase
Agreement, dated as of April 6, 2010 (the "Existing Securities Purchase
Agreement"), pursuant to which, among other things, the Investor purchased from
the Company (i) the Company's common stock, par value $0.001 per share (the
"Common Stock"); (ii) a warrant to initially acquire up to that number of
additional shares of Common Stock set forth opposite the Investor's name in
column (4) on the Schedule of Buyers attached thereto (the "Schedule of Buyers")
(the "Investor Series A Warrants"), (iii) a warrant to initially acquire  up to
that number of additional shares of Common Stock set forth opposite the
Investor's name in column (5) on the Schedule of Buyers (the "Investor Series B
Warrants"), and (iv) a warrant to initially acquire up to that number of
additional shares of Common Stock set forth opposite the Investor’s name in
column (6) on the Schedule of Buyers ( the “Investor Series C Warrants”), all of
which Investor Series A Warrants, Investor Series B Warrants, and Investor
Series C Warrants, are sometimes called, the "Investor Warrants.")
 
B.           The Company and the Investor desire to enter into this Agreement,
pursuant to which, among other things, the Investor shall exchange the Investor
Warrants for 1,575,000 of shares of Common Stock (the "Exchange Shares").
 
C.           The exchange of the Investor Warrants for the Exchange Shares are
being made in reliance upon the exemption from registration provided by Section
3(a)(9) of the 1933 Act.
 
D.           Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed to them in the Existing Securities
Purchase Agreement, as amended hereby.
 
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the Company and the Investor hereby agree as
follows:
 
1.           EXCHANGE OF INVESTOR WARRANTS.
 
(a)           Exchange.  Subject to satisfaction (or waiver) of the conditions
set forth in Sections 4 and 5 below, the Investor Warrants shall be exchanged
for the Exchange Shares.  In connection therewith, at the closing contemplated
by this Agreement (the "Closing"), the Investor shall surrender the Investor
Warrants, and the Company shall cause the Transfer Agent to credit the Exchange
Shares to the Investor's or its designee's balance account with the Depositary
Trust Company ("DTC") Fast Automated Securities Transfer Program.
 

 
 

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(b)           Closing Date.  The date and time of the Closing (the "Closing
Date") shall be 10:00 a.m., New York Time, on the date that is one Trading Day
from the date hereof, subject to notification of satisfaction (or waiver) of the
conditions to the Closing set forth in Sections 4 and 5 below (or such earlier
date as is mutually agreed by the Company and the Investor).  The Closing shall
occur on the Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third
Avenue, New York, New York 10022.
 
(c)           Purchase Price.  The Exchange Shares shall be issued to the
Investor in exchange for the Investor Warrants and without the payment of any
additional consideration pursuant to Section 3(a)(9) of the 1933 Act.
 
2.           REPRESENTATIONS AND WARRANTIES
 
(a)           Investor Representations and Warranties.  The Investor hereby
represents and warrants to the Company, as of the date hereof and as of the
Closing Date, as follows:
 
    (i)           Organization; Authority.  The Investor is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and authority to enter
into and to consummate the transactions contemplated by this Agreement and carry
out its obligations hereunder. The execution, delivery and performance by the
Investor of the transactions contemplated by this Agreement has been duly
authorized by all necessary action on the part of the Investor.  This Agreement
has been duly executed by the Investor, and when delivered by the Investor in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of the Investor, enforceable against it in accordance with its terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
 
    (ii)           No Conflicts.  The execution, delivery and performance by the
Investor of this Agreement and the consummation by the Investor of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents of the Investor or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Investor is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment  or decree (including federal and state securities
laws) applicable to the Investor, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Investor to perform its obligations
hereunder.
 

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    (iii)           Ownership of Investor Warrants.  The Investor is the record
and beneficial owner of the Investor Warrants and will transfer and deliver to
the Company at the Closing valid title to the Investor Warrants, free from
preemptive or similar rights, taxes, liens, charges and other encumbrances.
 
(b)          Company Representations and Warranties.  The Company represents and
warrants to the Investor, as of the date hereof and as of the Closing Date as
follows:
 
    (i)           Organization and Qualification.  Each of the Company and its
Subsidiaries is an entity duly organized and validly existing and in good
standing under the laws of the jurisdiction in which it is formed, and has the
requisite power and authorization to own its properties and to carry on its
business as now being conducted and as presently proposed to be conducted. Each
of the Company and its Subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect.
 
    (ii)           Authorization; Enforcement; Validity.  The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and to issue the Exchange Shares in accordance
with the terms hereof.  The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby, including, without limitation, the issuance of the Exchange Shares, have
been duly authorized by the Company's board of directors and no further filing,
consent or authorization is required by the Company, its board of directors or
its stockholders or other governing body. This Agreement has been duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state
securities law.
 
    (iii)           Issuance of Securities.  The issuance of the Exchange Shares
is duly authorized and upon issuance in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable and free from
all preemptive or similar rights, taxes, liens, charges and other encumbrances
with respect to the issue thereof.
 
    (iv)           No Conflicts.  The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby (including, without limitation, the issuance of
the Exchange Shares will not (i) result in a violation of the Certificate of
Incorporation (including, without limitation, any certificates of designation
contained therein) or other organizational documents of the Company or any of
its Subsidiaries, any capital stock of the Company, or Bylaws, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, federal and state securities laws and
regulations and the rules and regulations of the Principal market) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected except, in the case of
clause (ii) or (iii) above, to the extent such violations that could not
reasonably be expected to have a Material Adverse Effect.
 

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    (v)           Consents. The Company is not required to obtain any consent
from, authorization or order of, or make any filing or registration with any
court, Governmental Entity or any regulatory or self-regulatory agency or any
other Person in order for it to execute, deliver or perform any of its
obligations under, or contemplated by, this Agreement in accordance with the
terms hereof. All consents, authorizations, orders, filings and registrations
which the Company is required to obtain at or prior to the Closing have been
obtained or effected on or prior to the Closing Date. Except as described in
Schedule 2(b)(v), the Company is not in violation of the requirements of the
NYSE Amex, LLC, and has no knowledge of any facts or circumstances which could
reasonably lead to delisting or suspension of the Common Stock in the
foreseeable future.
 
    (vi)           Disclosure.  The Company confirms that neither it nor any
other Person acting on its behalf has provided the Investor or its agents or
counsel with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information.  The Company understands and
confirms that the Investor will rely on the foregoing representations in
effecting transactions in securities of the Company.  All disclosure provided to
the Investor regarding the Company and, its Subsidiaries, their business and the
transactions contemplated hereby, furnished by or on behalf of the Company is
true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.  Each press release issued by the Company or its Subsidiaries during
the twelve (12) months preceding the date of this Agreement did not at the time
of release contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
 

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    (vii)           No Commissions.  No commission or other remuneration is paid
or payable directly or indirectly to any Person for effecting the transactions
contemplated by this Agreement.
 
3.           CERTAIN COVENANTS AND AGREEMENTS.
 
           (a)           Best Efforts.  Each party shall use its best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 4 and 5 of this Agreement.
 
           (b)           Disclosure of Transactions and Other Material
Information.
 
     (i)           Press Release.  On or before 8:30 a.m., New York City time,
on the first Business Day following the date of this Agreement, the Company
shall issue and publicly disseminate a press release describing the terms of the
transactions contemplated by this Agreement (the “Press Release”).  From and
after dissemination of the Press Release, the Investor shall not be in
possession of any material, nonpublic information received from the Company, any
of its Subsidiaries or any of its respective officers, directors, employees or
agents, that is not disclosed in the Press Release.  The Company shall not, and
shall cause each of its Subsidiaries and its and each of their respective
officers, directors, employees and agents, not to, provide the Investor with any
material, nonpublic information regarding the Company or any of its Subsidiaries
from and after the dissemination of the Press Release without the express
written consent of the Investor.  If the Investor has, or believes it has,
received any such material, nonpublic information regarding the Company or any
of its Subsidiaries, it shall provide the Company with written notice
thereof.  The Company shall, within two (2) Trading Days (as defined in the
Investor Warrants) of receipt of such notice, make public disclosure of such
material, nonpublic information.  In the event of a breach of the foregoing
covenant by the Company, in addition to any other remedy provided herein or in
the Transaction Documents, the Investor shall have the right to make a public
disclosure, in the form of a press release, public advertisement or otherwise,
of such material, nonpublic information without the prior approval by the
Company, its Subsidiaries, or any of its or their respective officers,
directors, employees or agents.  The Investor shall not have any liability to
the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, stockholders or agents for any such disclosure.  To the
extent that the Company or any of its or their respective officers, directors,
employees, stockholders or agents deliver any material, non-public information
to a Buyer without such Buyer's consent, the Company hereby covenants and agrees
that such Buyer shall not have any duty of confidentiality with respect to, or a
duty not to trade on the basis of, such material, non-public
information.  Subject to the foregoing, neither the Company, its Subsidiaries
nor the Investor shall issue any press releases or any other public statements
with respect to the transactions contemplated hereby other than the Press
Release; provided, however, that the Company shall be entitled, without the
prior approval of the Investor, to make any press release or other public
disclosure with respect to such transactions (i) in substantial conformity with
the Press Release and the 8-K Filing (defined below) and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) the Investor shall be consulted by the Company in
connection with any such press release or other public disclosure prior to its
release).  Without the prior written consent of the Investor, neither the
Company nor any of its Subsidiaries or affiliates shall disclose the name of the
Investor in any filing, announcement, release or otherwise.
 
           (ii)           On or before 9:15 a.m., New York City time, on the
first day following the date of this Agreement on which the SEC’s EDGAR system
is open to accept submissions of electronic filings, the Company shall file a
Current Report on Form 8-K describing the terms of the transactions contemplated
by this Agreement in the form required by the 1934 Act and attaching this
Agreement (and all schedules to this Agreement) as exhibits to such filing
(including all attachments, the "8-K Filing").

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       (c)           Section 3(a)(9).  The Company represents that the exchange
of the Investor Warrants for the Exchange Shares is being made in reliance upon
the exemption from registration provided by Section 3(a)(9) of the 1933 Act and
agrees not to take any position contrary to this Section 3(c).  The Company
agrees to issue freely tradable Exchange Shares without any restrictions and
without any restrictive legend.
 
4.           CONDITIONS TO COMPANY'S OBLIGATIONS HEREUNDER.
 
The obligations of the Company to the Investor hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion by providing each Investor with prior written notice
thereof:

(a)           The Investor shall have duly executed this Agreement and delivered
the same to the Company.
 
(b)           {Left Blank Intentionally.}
 
(c)           The representations and warranties of the Investor shall be true
and correct in all respects as of the date when made and as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date which shall be true and correct as of such specified
date), and the Investor shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Investor at or
prior to the Closing Date.
 
5.           CONDITIONS TO INVESTOR'S OBLIGATIONS HEREUNDER.
 
The obligations of the Investor hereunder are subject to the satisfaction of
each of the following conditions, provided that these conditions are for the
Investor's sole benefit and may be waived by the Investor at any time in its
sole discretion by providing the Company with prior written notice thereof:

(a)           The Company shall have duly executed this Agreement and delivered
the same to the Investor.
 
(b)           The Company shall have caused the Transfer Agent to credit the
Exchange Shares to the Investor or its designee's balance account through the
DTC Fast Automated Transfer Program.
 
(c)           The Company shall have delivered to the Investor a certificate
evidencing the incorporation and good standing (if applicable) of the Company
and each of its Subsidiaries in such corporation's jurisdiction of incorporation
issued by the Secretary of State or other comparable authority of such
jurisdiction of incorporation as of a date within 10 days of the Closing Date,
or, in the case of California, as soon thereafter as is reasonably practicable.
 
(d)           From the date hereof to the Closing Date, (i) trading in the
Common Stock shall not have been suspended by the SEC or the Principal Market,
and, (ii) at any time prior to the Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or limited or
threatened either (A) in writing by the SEC or the Principal Market or (B)
except as described in Schedule 2(b)(v), by falling below the minimum listing
maintenance requirements of the Principal Market, or minimum prices shall not
have been established on securities whose trades are reported by such service,
or on the Principal Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall there have
occurred any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of the Investor, makes it impracticable or inadvisable to consummate
the transactions contemplated by this Agreement.
 

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(e)           The Company shall have delivered to the Investor a certificate, in
the form reasonably acceptable to the Investor, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions as adopted
by the Company's board of directors approving the transactions contemplated
hereby in a form reasonably acceptable to the Investor, (ii) the Certificate of
Incorporation and (iii) the Bylaws of the Company, each as in effect at the
Closing.
 
(f)           The representations and warranties of the Company shall be true
and correct as of the date when made and as of the Closing Date as though made
at that time (except for representations and warranties that were made as of a
specific date, which shall be true and correct as of such specific date) and the
Company shall have performed, satisfied and complied in all respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date. The Investor shall have received a certificate, executed by the Chief
Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by the
Investor in the form reasonably acceptable to the Investor.
 
(g)           The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the issuance of the
Exchange Shares.
 
(h)           There shall have been no Material Adverse Effect with respect to
the Company since the date hereof.
 
(i)           {Left Blank Intentionally.}
 
(j)           The Company shall have delivered to the Investor such other
documents relating to the transactions contemplated by this Agreement as the
Investor or its counsel may reasonably request.
 
6.           DELIVERY OF WARRANTS
 
The Investor shall deliver to the Company the Investor Warrants for cancellation
within five Trading Days after the Closing Date.
 
 
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        7.   TERMINATION OF EXISTING SECURITIES PURCHASE AGREEMENT
 
             Upon completion of the exchange contemplated by this Agreement, the
Existing Securities Purchase Agreement, including the covenants of the Company
and the Investor under Section 4 of the Existing Securities Purchase Agreement,
shall terminate.
 
8.           TERMINATION.
 
In the event that the Closing does not occur with respect to an Investor on or
before five (5) Business Days from the date hereof due to the Company's or the
Investor's failure to satisfy the conditions set forth in Sections 4 and 5
hereof (and the nonbreaching party's failure to waive such unsatisfied
conditions(s)), the nonbreaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party.  Upon such termination,
the terms hereof shall be null and void and the parties shall continue to comply
with all terms and conditions of the Transaction Documents, as in effect prior
to the execution of this Agreement.

9.           MISCELLANEOUS.
 
             (a)           Counterparts.  This Agreement may be executed in two
or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
 
             (b)           Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
 
(c)           Severability.  If any provision of this Agreement is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the
parties.  The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
 
(d)           Governing Law; Jurisdiction; Jury Trial.  All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement 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 manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 

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             (e)           No Third Party Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
 
(f)           Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
 
(g)           No Strict Construction.  The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
 
(h)           Entire Agreement; Effect on Prior Agreements; Amendments.  Except
for the Transaction Documents (to the extent any such Transaction Document in
effect prior to this Agreement is not amended by this Agreement), this Agreement
supersedes all other prior oral or written agreements between the Investor, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters.  No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company and the Investor.  No provision hereof may be waived other than by
an instrument in writing signed by the party against whom enforcement is
sought.  The Company has not, directly or indirectly, made any agreements with
any of the Buyers of Series A Warrants, Series B Warrants, and Series C Warrants
listed in the Existing Securities Purchase Agreement relating to the terms or
conditions of the transactions contemplated by this Agreement on terms more
favorable, in form or substance, than those offered in this Agreement.  The
Company hereby represents and warrants as of the date hereof and covenants and
agrees from and after the date hereof until the expiration of forty-five (45)
days from the Closing, that none of the terms offered to any other holder of the
Investor Warrants relating to the exchange, amendment or early exercise thereof
(the “Future Warrant Agreement”) is or will be more favorable to such person
than those provided to the Investor and this Agreement shall be, without any
further action by Investor or Company, deemed amended and modified in an
economically and legally equivalent manner such that the Investor shall receive
the benefit of the more favorable terms contained in such Future Warrant
Agreement and issued and/or paid any such more favorable consideration.
 

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(i)           Notices.  Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered:  (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such communications
shall be:
 
If to the Company:

Tri-Valley Corporation
4550 California Avenue, Suite 600
Bakersfield, California 93309
Telephone: 661-864-0500
Facsimile: 661-864-0600
Attention: John Durbin
 
with a copy (for informational purposes only) to:

Strasburger & Price, LLP
600 Congress Avenue, Suite 1600
Austin, Texas 78701
Telephone: 512-499-3600
Facsimile: 512-499-3660
Attention: Lee Polson

 
If to the Investor, to its address and facsimile number set forth on the
Schedule of Buyers attached to the Existing Securities Purchase Agreement,
 
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
 

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(j)           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
in accordance with the terms of the Existing Securities Purchase Agreement.
 
(k)           Survival.  Unless this Agreement is terminated under Section 6,
the representations and warranties of the Company and the Investors contained
herein and the agreements and covenants set forth herein shall survive the
Closing and the delivery and exercise of Securities, as applicable.  Each
Investor shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.
 

 
[Signature Page Follows]

  11
 

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IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature page to this Consent, Amendment and Exchange Agreement to be duly
executed as of the date first written above.
 

 
COMPANY:
 
 
TRI-VALLEY CORPORATION
 
 
 
By:
     
Name:  Maston N. Cunningham
   
Title:  President and Chief Executive Officer

 

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IN WITNESS WHEREOF, the Investor and the Company have caused their respective
signature page to this Amendment and Exchange Agreement to be duly executed as
of the date first written above.
 

 
INVESTOR:
 
 
HUDSON BAY MASTER FUND, LTD.
 
 
 
By:
     
Name:  ______________
   
Title:  _______________

 

  13
 

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EXCHANGE AGREEMENT
 
DISCLOSURE SCHEDULE
 

 
Schedule 2(b)(v)
 

 
On July 2, 2010, AMEX notified the Company that the Company was not in
compliance with AMEX’s continued listing standards for the three month period
ended March 31, 2010, because the Company’s stockholders’ equity was less than
$6,000,000 and the Company had experienced losses from continuing operations
and  net losses in its five most recent fiscal years.  The Company’s trading
symbol has been appended with the indicator (.BC) to signify such noncompliance
for trades reported on the "consolidated tape," which is an electronic service
that provides last sale and trade data throughout the day for stocks listed on
exchanges.
 

 
On August 2, 2010, the Company submitted a plan to regain compliance with
Section 1003(a)(iii) of the Company Guide.  On October 5, 2010, NYSE Amex
notified us that it had accepted our plan and had granted an extension until
March 31, 2011, for continued listing of our common stock and for us to regain
compliance with the continued listing standards.

 

 

 
 

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