SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), is dated as of December
12, 2013, by and between Petro River Oil, Corp. a Delaware corporation (the
“Company”), and Petrol Lakes Holding Limited (the “Subscriber”).

 

WHEREAS:

 

A. The Company and the Subscriber are executing and delivering this Agreement in
reliance upon an exemption from securities registration afforded by the
provisions of Section 4(2), Section 4(6), Regulation D (“Regulation D”) and/or
Regulation S (“Regulation S”) as promulgated by the United States Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as
amended (the “1933 Act”); and

 

B. The parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Subscriber, as
provided herein, and the Subscriber shall purchase (i) an aggregate of
81,250,000 shares (the “Common Shares”) of the Company’s common stock, $0.00001
par value per share (the “Common Stock”), at a per share price of $0.08 (the
“Per Share Purchase Price”); and (ii) warrants (the “Warrants”) in the forms
attached hereto as Exhibit A, to purchase shares of the Company’s Common Stock
(the “Warrant Shares”) for an aggregate purchase price of $6,500,000 (the
“Purchase Price”). The Common Shares, Warrant and Warrant Shares are also
referred to herein as the “Securities.” The issuance and sale of the Common
Shares and Warrant Shares is referred to herein as the “Offering”.

 

NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement the Company and the Subscriber hereby agree as
follows:

 

1. Closing. Subject to the satisfaction or waiver of the terms and conditions of
this Agreement, on the “Closing Date” Subscriber shall purchase and the Company
shall sell to Subscriber the Common Shares and Warrants. The date the Company
receives the funds from the Subscriber shall be the Closing Date, and such
receipt is referred to herein as the “Closing.” There shall be only one Closing.

 

2. Closing Conditions. The Closing hereunder is subject to the following
conditions being met:

 

(a) Subscriber’s representations and warranties being accurate and true in all
material respects as of the Closing Date (unless as of a specific date therein
in which case they shall be accurate and true as of such date);

 

(b) the performance in all material respects of all obligations, covenants and
agreements of Subscriber and the Company that are required to be performed at or
prior to the Closing Date; and

 

(c) Subscriber shall have delivered, or caused to be delivered, the Purchase
Price to the Company, by wire transfer of immediately available funds, to an
account designated by the Company in writing to the Subscriber.

 

3. Issuance of Common Shares and Warrants. On the Closing Date and against
receipt of the Purchase Price payable pursuant to Section 2(c) from Subscriber
(which Subscriber agrees to pay subject to the Company’s satisfaction of the
conditions set forth in Section 2(a) through (b)), the Company shall deliver, or
cause to be delivered, to Subscriber, within 10 business days after the closing
a stock certificate of the Company certifying that Subscriber is the holder of
record of the Common Shares and an executed Warrant.

 

 

 

 

4. Subscriber Representations and Warranties. Subscriber hereby represents and
warrants to and agrees with the Company that:

 

(a) Organization and Standing of the Subscriber. Subscriber is a corporation,
duly incorporated or organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite corporate power to own its assets and to carry on its business.

 

(b) Authorization and Power. Subscriber has the requisite legal capacity, power
and authority to enter into, and perform under, this Agreement, and to purchase
the Securities being sold to Subscriber hereunder and thereunder. The execution,
delivery and performance of this Agreement by Subscriber and the consummation by
Subscriber of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate, partnership or similar action on the part
of Subscriber and no further consent or authorization is required. This
Agreement has been duly authorized, executed and delivered. This Agreement will
be a valid and binding obligation of Subscriber, enforceable against Subscriber
in accordance with the terms thereof.

 

(c) No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by Subscriber of the transactions contemplated hereby and
thereby or relating hereto or thereto do not and will not (i) result in a
violation of Subscriber’s charter documents, bylaws or other organizational
documents, if applicable, (ii) conflict with nor constitute a default (or an
event which with notice or lapse of time or both would become a default) under
any agreement to which Subscriber is a party, nor (iii) result in a violation of
any law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to Subscriber or its properties (except for such
conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on Subscriber). Subscriber is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement nor to purchase
the Securities in accordance with the terms hereof, provided that for purposes
of the representation made in this sentence, Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.

 

(d) Information on Company. Subscriber has been furnished with or has had access
to the EDGAR Website of the Commission to the Company’s filings made with the
Commission during the period from the date that is two years preceding the date
hereof through the business day preceding the Closing Date (hereinafter referred
to collectively as the “Reports”). Subscriber is not deemed to have any
knowledge of any information not included in the Reports unless such information
is delivered in the manner described in the next sentence. In addition,
Subscriber may have received in writing from the Company such other information
concerning its operations, financial condition and other matters as Subscriber
has requested in writing, identified thereon as OTHER WRITTEN INFORMATION (such
other information is collectively, the “Other Written Information”), and
considered all factors Subscriber deems material in deciding on the advisability
of investing in the Securities. Subscriber was afforded (i) the opportunity to
ask such questions as Subscriber deemed necessary of, and to receive answers
from, representatives of the Company concerning the merits and risks of
acquiring the Securities; (ii) the right of access to information about the
Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable Subscriber to evaluate
the Securities; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to
acquiring the Securities.

 

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(e) Information on Subscriber. Subscriber is, an “accredited investor,” as such
term is defined in Regulation D promulgated by the Commission under the 1933
Act, is experienced in investments and business matters, has made investments of
a speculative nature and has purchased securities of United States
publicly-owned companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial, tax and other
business matters as to enable Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment. Subscriber has the authority and is duly
and legally qualified to purchase and own the Securities. Subscriber is able to
bear the risk of such investment for an indefinite period and to afford a
complete loss thereof. Subscriber has provided the information in the Accredited
Investor Questionnaire attached hereto as Exhibit B (the “Investor
Questionnaire”). The information set forth on the signature pages hereto and the
Investor Questionnaire regarding Subscriber is true and complete in all
respects. Except as disclosed in the Investor Questionnaire, Subscriber has had
no position, office or other material relationship within the past three years
with the Company or Persons (as defined below) known to Subscriber to be
affiliates of the Company, and is not a member of the Financial Industry
Regulatory Authority or an “associated person” (as such term is defined under
the FINRA Membership and Registration Rules Section 1011). Subscriber is not a
U.S. Person (as used herein a U.S. Person means any one of the following: (a)
any U.S. Citizen; (b) any natural person resident in the United States of
America; (c) any partnership or corporation organized or incorporated under the
laws of the United States of America; (d) any estate of which any executor or
administrator is a U.S. person; (e) any trust of which any trustee is a U.S.
person; (f) any agency or branch of a foreign entity located in the United
States of America; (g) any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. Person; (h) any discretionary account or similar account
(other than an estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if an individual) resident in the United States of America; and
(i) any partnership or corporation if: (1) organized or incorporated under the
laws of any foreign jurisdiction; and (2) formed by a U.S. Person principally
for the purpose of investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by accredited investors
(as defined in Rule 501(a) under the Securities Act) who are not natural
persons, estates or trusts.). At the time of the origination of contact
concerning this Agreement and the date of the execution and delivery of this
Agreement, Subscriber was outside of the United States.

 

(f) Resale. Subscriber will not, during the period commencing on the date of
issuance of the Shares and ending on the first anniversary of such date, or such
shorter period as may be permitted by Regulation S or other applicable
securities law (“Restricted Period”), offer, sell, pledge or otherwise transfer
the Shares in the United States, or to a U.S. Person for the account or benefit
of a U.S. Person, or otherwise in a manner that is not in compliance with
Regulation S. All subsequent offers and sales of the Securities shall be made in
compliance with Regulation S and/or pursuant to registration of the Securities
under the 1933 Act or pursuant to an exemption from registration under the 1933
Act. Unless registered for sale under the 1933 Act, the Securities will not be
resold to U.S. Persons or within the United States until after the end of a one
year restricted period commencing on the date of closing of the purchase of the
Securities and otherwise in compliance with Rule 904 of Regulation S.

 

(g) No US sales. Subscriber has not in the United States, engaged in, and prior
to the expiration of the Restricted Period will not engage in, any short selling
of or any hedging transaction with respect to the Shares, including without
limitation, any put, call or other option transaction, option writing or equity
swap. Neither Subscriber nor or any person acting on its behalf has engaged, nor
will engage, in any directed selling efforts to U.S. Citizens with respect to
the Shares and Subscriber and any person acting on its behalf have complied and
will comply with the “offering restrictions” requirements of Regulation S under
the Securities Act. The transactions contemplated by this Agreement have not
been pre-arranged with a buyer located in the United States or with a U.S.
Person.

 

(h) Lack of Liquidity. The Subscriber acknowledges that the purchase of the
Securities involves a high degree of risk and further acknowledges that it can
bear the economic risk of the purchase of the Securities, including the total
loss of its investment. The Subscriber acknowledges and understands that the
Securities may not be sold to a U.S. Person (as hereinafter defined) or into the
United States for a period of one (1) year from the date of purchase and that
the Subscriber has no present need for liquidity in connection with its purchase
of the Securities. The Subscriber shall comply in all respects with US federal
and state securities laws, particularly with respect to any resale of the
Securities in any transaction subject to United States jurisdiction.

 

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(i) Purchase of Securities. On the Closing Date, Subscriber will purchase the
Securities for Subscriber’s own account for investment only and not with a view
toward, or for resale in connection with, the public sale or any distribution
thereof.

 

(j) Compliance with Securities Act; Reliance on Exemptions. Subscriber
understands and agrees that the Securities have not been registered under the
1933 Act or any applicable state securities laws, by reason of their issuance in
a transaction that does not require registration under the 1933 Act, and that
such Securities must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration. Subscriber understands and agrees that the
Securities are being offered and sold to Subscriber in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and Subscriber’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of Subscriber set
forth herein in order to determine the availability of such exemptions and the
eligibility of Subscriber to acquire the Securities.

 

(k) Communication of Offer. Subscriber is not purchasing the Securities as a
result of any “general solicitation” or “general advertising,” as such terms are
defined in Regulation D, which includes, but is not limited to, any
advertisement, article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or on the internet or
broadcast over television, radio or the internet or presented at any seminar or
any other general solicitation or general advertisement.

 

(l) Restricted Securities. Subscriber understands that the Securities have not
been registered under the 1933 Act and Subscriber will not sell, offer to sell,
assign, pledge, hypothecate or otherwise transfer any of the Securities unless
pursuant to an effective registration statement under the 1933 Act, or unless an
exemption from registration is available. Notwithstanding anything to the
contrary contained in this Agreement, Subscriber may transfer (without
restriction and without the need for an opinion of counsel) the Securities to
its Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. Affiliate includes each Subsidiary of the Company. For the
purposes of this Agreement, a “Person” means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind. For purposes of this
definition, “control” means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The Subscriber agrees to the imprinting,
so long as is required by this Section 7(a), of a legend on any of the
Securities in the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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(m) No Governmental Review. Subscriber understands that no United States federal
or state agency or any other governmental or state agency has passed on or made
recommendations or endorsement of the Securities or the suitability of the
investment in the Securities nor have such authorities passed upon or endorsed
the merits of the Offering.

 

(n) Survival. The foregoing representations and warranties shall survive the
Closing Date.

 

5. Company Representations and Warranties. The Company represents and warrants
to and agrees with Subscriber that:

 

(a) Due Incorporation. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its properties and to
carry on its business as presently conducted.

 

(b) Authority; Enforceability. This Agreement has been duly authorized, executed
and delivered by the Company and is valid and binding agreements of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights generally and to
general principles of equity.

 

(c) Consents. No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
any Subsidiary, or any of its Affiliates, or the Company’s stockholders is
required for the execution by the Company of this Agreement and performance by
the Company of its obligations under this Agreement, including, without
limitation, the issuance and sale of the Securities.

 

(d) Board Representation. The Subscriber shall have the right to appoint one
director to the Company’s Board of Directors (the “Subscriber Director”). The
Company shall ensure that the Subscriber Director shall remain on the Company’s
Board of Director at least through the first annual meeting of the Company after
the one year anniversary of the date of this Agreement.

 

6. Regulation D/ Regulation S Offering. The offer and issuance of the Securities
to the Subscriber is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act and/or Rule 506 of Regulation D promulgated thereunder.

 

7. Miscellaneous.

 

(a) Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (A) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (B) on the third (3rd) business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (1) if to the Company, to: 1980 Post Oak Boulevard
Suite 2020, Houston, Texas 77056, Attn: Scot Cohen, CEO, facsimile:
(646)449–0293, with an additional copy by fax only to: Grushko & Mittman, P.C.,
515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575,
and (2) if to the Subscriber, to: Unit D, 12/F, Seabright Plaza, 9-23 Shell
Street, North Point, Hong Kong.

 

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(b) Entire Agreement. This Agreement represents the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by both parties. The exhibit attached hereto or referred
to herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein. Neither the Company nor the Subscriber has relied on any
representations not contained or referred to in this Agreement and the documents
delivered herewith. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns.

 

(c) Waivers. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right.

 

(d) Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile signature and delivered by electronic transmission.

 

(e) Law Governing this Agreement; Consent to Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. Any action brought
against the Company concerning the transactions contemplated by this Agreement
shall be brought in the state courts or federal courts located in New York
County, New York. Any action brought against the Subscriber concerning the
transactions contemplated by this Agreement shall be brought in the state courts
or federal courts located in New York County, New York or Hong Kong. The parties
to this Agreement hereby irrevocably waive any objection to jurisdiction and
venue of any action instituted in compliance with this Section and shall not
assert any defense based on lack of jurisdiction or venue or based upon forum
non conveniens. The parties executing this Agreement agree to submit to the in
personam jurisdiction of such courts and hereby irrevocably waive trial by jury.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs.

 

(f) Specific Enforcement. The Company and the Subscriber acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.

 

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(g) Calendar Days. All references to “days” shall mean calendar days unless
otherwise stated. The terms “business days” and “trading days” shall mean days
that the New York Stock Exchange is open for trading for three or more hours.
Time periods shall be determined as if the relevant action, calculation or time
period were occurring in New York City. Any deadline that falls on a
non-business day shall be automatically extended to the next business day and
interest, if any, shall be calculated and payable through such extended period.

 

(h) Captions: Certain Definitions. The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.

 

(i) Severability. In the event that any term or provision of this Agreement
shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and
venue, that determination shall not impair or otherwise affect the validity,
legality or enforceability: (i) by or before that authority of the remaining
terms and provisions of this Agreement, which shall be enforced as if the
unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

 

[Signature Pages Follow]

 

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SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

“COMPANY”   “SUBSCRIBER” PETRO RIVER OIL, CORP.   PETROL LAKES HOLDING LIMITED.
      By: /s/ Scot Cohen   By: /s/ David Dai Name: Scot Cohen   Name: David Dai
Title: Executive Chairman   Title: Managing Director

 

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Exhibit A

 

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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS 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.

  

  Right to Purchase 40,625,000 shares of Common Stock of Petro River Oil, Corp.
(subject to adjustment as provided herein)

  

FORM OF COMMON STOCK PURCHASE WARRANT

 

No. 2013-A-001 Issue Date: December 12, 2013

  

PETRO RIVER OIL, CORP., a corporation organized under the laws of the State of
Delaware, hereby certifies that, for value received, PETROL LAKES HOLDING
LIMITED (the “Holder”), address at Unit D, 12/F, Seabright Plaza, 9-23 Shell
Street, North Point, Hong Kong Fax: the Company at any time after the Issue Date
until 5:00 p.m., Eastern Time on December 12, 2015 (the “Expiration Date”), up
to 40,625,000 fully paid and non-assessable shares of Common Stock at a per
share purchase price of $0.1356. The aforedescribed purchase price per share, as
adjusted from time to time as herein provided, is referred to herein as the
“Purchase Price”. The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein. The Company may
reduce the Purchase Price for some or all of the Warrants, temporarily or
permanently. Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase Agreement (the
“SPA”), dated as of December 12, 2013, entered into by the Company and the
Holder.

 

As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

 

(a) The term “Company” shall mean Petro River Oil, Corp., a Delaware
corporation, and any corporation which shall succeed or assume the obligations
of Petro River Oil, Corp. hereunder.

 

(b) The term “Common Stock” includes (i) the Company’s Common Stock, $0.00001
par value per share, as authorized on the date of the SPA, and (ii) any other
securities into which or for which any of the securities described in (i) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.

 

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(c) The term “Other Securities” refers to any stock (other than Common Stock)
and other securities of the Company or any other person (corporate or otherwise)
which the holder of the Warrant at any time shall be entitled to receive, or
shall have received, on the exercise of the Warrant, in lieu of or in addition
to Common Stock, or which at any time shall be issuable or shall have been
issued in exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 or otherwise.

 

(d) The term “Warrant Shares” shall mean the Common Stock issuable upon exercise
of this Warrant.

 

1. Exercise of Warrant.

 

1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date
through and including the Expiration Date, the Holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole or in part, shares of Common
Stock of the Company, subject to adjustment pursuant to Section 3 below.

 

1.2. Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) in the manner and at the place provided in Section 1.3, except
that the amount payable by the Holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of whole shares of Common Stock
designated by the Holder in the Subscription Form by (b) the Purchase Price then
in effect. On any such partial exercise, provided the Holder has surrendered the
original Warrant, the Company, at its expense, will issue and deliver to the
Holder hereof a new Warrant of like tenor, in the name of the Holder hereof, the
whole number of shares of Common Stock for which such Warrant may still be
exercised. The original Warrant is not required to be surrendered to the Company
until it has been fully exercised.

 

1.3. Exercise. Exercise of the purchase rights represented by this Warrant may
be made, in whole or in part, at any time before the Expiration Date by delivery
to the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company) of a duly executed copy of the
form of subscription attached as Exhibit A hereto (the “Subscription Form”)
annexed hereto and the Purchase Price by wire transfer or cashier’s check drawn
on a United States bank. The Company agrees that the shares of Common Stock
purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder hereof as the record owner of such shares as of the close of business on
the date on which delivery of a Subscription Form and Purchase Price shall have
occurred. As soon as practicable after the exercise of this Warrant in full or
in part the Company will cause to be issued in the name of and delivered to the
Holder hereof a certificate for the number of duly and validly issued, fully
paid and non-assessable shares of Common Stock (or Other Securities) to which
Holder shall be entitled on such exercise.

 

2. Fundamental Transaction. If, at any time while this Warrant is outstanding,
(A) the Company effects any merger or consolidation of the Company with or into
another entity, other than a merger or consolidation that does not result in a
Change of Control of the Company, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Company or another entity) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, (D) the Company
consummates a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, or spin-off) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act), is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Company, or (F) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (in any such case, a “Fundamental Transaction”), then this Warrant
shall be cancelled and the Holder shall have no further rights hereunder.

 

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3. Extraordinary Events Regarding Common Stock. In the event that the Company
shall (a) subdivide its outstanding shares of Common Stock, or (c) combine its
outstanding shares of the Common Stock into a smaller number of shares of Common
Stock, then, in each such event, the Purchase Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the then Purchase Price
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Purchase Price then
in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof, be entitled to receive shall
be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.

 

4. Warrant Agent. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such Warrant Agent.

 

5. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or facsimile at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: if
to the Company, to: Petro River Oil, Corp.1980 Post Oak Boulevard Suite 2020,
Houston, Texas 77056, Attn: Scot Cohen, CEO, facsimile: (646)449–0293, with an
additional copy by fax only to: Grushko & Mittman, P.C., 515 Rockaway Avenue,
Valley Stream, New York 11581, facsimile: (212) 697-3575, and (ii) if to the
Holder, to the address and facsimile number listed on the first paragraph of
this Warrant.

 

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6. Law Governing This Warrant. This Warrant shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. 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 the
state and county 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. The Company and Holder waive trial by jury. The
prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. In the event that any provision of this
Warrant or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.

 

7. Non-Transferable. This Warrant is not transferable without the consent of the
Company which may be withheld for any reason in the Company’s absolute
discretion.

 

[-Signature Page Follows-]

 

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

 

  PETRO RIVER OIL, CORP.         By:     Name: Scot Cohen   Title: Executive
Chairman

  

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Exhibit A

 

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

 

TO: PETRO RIVER OIL, CORP.

 

Petrol Lakes Holding Limited (“Subscriber”), pursuant to the provisions set
forth in Warrant (No. 1), hereby irrevocably elects to purchase (check
applicable box):

 

________ shares of the Common Stock covered by such Warrant.

 

Subscriber herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is $___________.

 

Subscriber requests that the certificates for such shares be delivered to
__________________________________________ whose address
is___________________________ __________________ __________________.

 

Subscriber warrants and represents that as of the date hereof the Subscriber is,
an “accredited investor,” as such term is defined in Regulation D promulgated by
the Commission under the 1933 Act and that all the representations and
warranties of the Subscriber in the SPA and true and accurate as of the date
hereof.

 

The Subscriber represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

Dated:     PETROL LAKES HOLDING LIMITED                     Name:         Title:
 

  

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EXHIBIT B

 

Form of Investor Questionnaire

 

To: PETRO RIVER OIL, CORP. (the “Company”)

 

The information in this Accredited Investor Questionnaire (this “Questionnaire”)
is being furnished to allow the Company to confirm that the undersigned is an
“accredited investor,” as defined in Rule 501(a) of the Securities Act of 1933,
as amended (the “Securities Act”).

 

By signing the Securities Purchase Agreement to which this Questionnaire is
attached, you will be authorizing the Company to provide a completed copy of
this Questionnaire to such parties as the Company deems appropriate in order to
ensure that the offer and sale of the Company’s securities will not result in a
violation of the Securities Act or the securities laws of any state and that you
otherwise satisfy the suitability standards applicable to purchasers of the
Securities. All potential investors must answer all questions and complete this
Questionnaire in full.

 

I. The undersigned hereby represents that he, she or it is (please initial each
category applicable to you in the space provided):

 

_____ (1) A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;       _____ (2) A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended;       _____ (3) An insurance
company as defined in Section 2(13) of the Securities Act;       _____ (4) An
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;      
_____ (5) A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;       _____ (6) A plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a state
or its political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000;       _____ (7) An employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974,
if the investment decision is made by a plan fiduciary, as defined in Section
3(21) of such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are accredited investors;      
_____ (8) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;       _____ (9) An
organization described in Section 501(c)(3) of the Internal Revenue Code, a
Massachusetts or similar business trust, or a partnership, not formed for the
specific purpose of acquiring the Securities, with total assets in excess of
$5,000,000;       _____ (10) A trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person who has such knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of investing in the Company;

  

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_____ (11) A natural person whose individual net worth (total assets minus total
liabilities), or joint net worth with that person’s spouse, at the time of his
purchase exceeds $1,000,000, excluding the value of the primary residence of
such person;       _____ (12) A natural person who had an individual income in
excess of $200,000 in each of the two most recent years, or joint income with
that person’s spouse in excess of $300,000, in each of those years, and has a
reasonable expectation of reaching the same income level in the current year;  
    _____ (13) An executive officer or director of the Company;       _____ (14)
An entity in which all of the equity owners qualify under any of the above
subparagraphs. If the undersigned belongs to this investor category only, list
below the equity owners of the undersigned, and the investor category which each
such equity owner satisfies.

  

II. Exceptions to the representations and warranties made in Section 4(e) of the
Securities Purchase Agreement (if no exceptions, write “none” – if left blank,
the response will be deemed to be “none”):

  

   

 

PETROL LAKES HOLDING LIMITED         By:   Name:     Title:    

 

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