EXHIBIT 10.21
 
NEITHER THIS NOTE, NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR ANY STATE SECURITIES LAWS. THIS
NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISPOSITION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
PACIFIC ENERGY DEVELOPMENT CORP

SECURED CONVERTIBLE PROMISSORY NOTE
 

$900,000.00  July 6, 2011   Danville, California

 
For value received, Pacific Energy Development Corp, a Nevada corporation (the
“Company”), promises to pay to the order of Global Venture Investments LLC (the
“Holder”), the principal sum of $900,000.00, together with interest accrued on
the unpaid principal amount of this Secured Convertible Promissory Note (this
“Note”) at the rate of 3.0% per annum commencing on the date hereof, compounded
annually.  This Note is subject to the following terms and conditions:
 
1.           Maturity.  Unless converted as provided in Section 2 below, all
unpaid principal and accrued interest under this Note shall be due and payable
upon written demand made by the Holder at any time on or after November 30,
2011, except as otherwise provided hereunder.  Notwithstanding the foregoing,
the entire unpaid principal sum of this Note, together with accrued and unpaid
interest thereon, shall become immediately due and payable upon the insolvency
of the Company, the commission of any act of bankruptcy by the Company, the
execution by the Company of a general assignment for the benefit of creditors,
the filing by or against the Company of a petition in bankruptcy or any petition
for relief under the federal bankruptcy act or the continuation of such petition
without dismissal for a period of 90 days or more, or the appointment of a
receiver or trustee to take possession of the property or assets of the Company.
 
 
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2.           Conversion.
 
(a)           Mandatory Conversion. In the event of the closing by the Company
of a Qualified Financing (as defined below), the Holder shall be required to
convert the then-outstanding principal of this Note, together with, at the
Company’s option, any accrued and unpaid interest thereon, into the securities
being issued and sold in the Qualified Financing (“Conversion Securities”) at a
conversion price equal to 50% of the purchase price per share of the Conversion
Securities paid in the Qualified Financing and otherwise on the terms and
conditions of the Qualified Financing.  For example, if the then-outstanding
principal of this Note was $500,000 and the Conversion Securities purchase price
per share in the Qualified Financing was $0.75 per share, then the principal of
this Note would convert into 1,333,334 shares of Conversion Securities ($500,000
/ ($0.75 * 50%) (rounded up to the nearest whole share).  A “Qualified
Financing” shall mean the closing of one or more investments (including the
conversion of this Note or any other convertible notes of the Company) in which
the Company receives gross proceeds totaling at least $2,000,000 in exchange for
equity securities of the Company.  In the event that this Note is automatically
converted in accordance with this Section 2(a), then the Holder shall become
party to a securities subscription agreement, in customary form, and all related
agreements, along with the investors participating in such Qualified
Financing. In the event that the Company elects not to convert all or any
portion of the accrued interest on this Note upon the closing of a Qualified
Financing, all such unconverted accrued interest shall be payable in full in
cash upon the closing of the Qualified Financing.  In addition, in the event
that this Note is automatically converted in a Qualified Financing in accordance
with this Section 2(a), then upon the date of conversion of this Note, the
Holder shall be issued a 3 year warrant to purchase an additional number of
shares of Conversion Securities equal to the quotient of (x) 40% of the original
principal sum of the Note divided by (y) the price per share paid by investors
in the Qualified Financing (rounded up to the nearest whole share), with an
exercise price equal to the per share price paid by investors in the Qualified
Financing (contemplated to be $0.75 per share) (the “Warrants”).  The Warrants
may be exercised on a cashless basis.
 
(b)           Optional Conversion. If a Qualified Financing does not occur on or
before November 30, 2011, then, upon written notice made by the Holder which is
received by the Company no later than November 30, 2011 (the “Notice”), all
principal and (at the Company’s option) accrued and unpaid interest outstanding
under this Note as of the date of the Notice shall be converted into equity
securities of the Company based upon terms and conditions (including valuation)
to be agreed upon in good faith by the Company and the Holder.  In the event
that the Company elects not to convert all or any portion of the accrued
interest on this Note pursuant to the foregoing, all such unconverted accrued
interest shall be payable in full in cash upon such conversion of the principal
amount of this Note.  If, however, the Company and Holder cannot agree upon
conversion terms and conditions within 30 days of the Notice, then all principal
and accrued interest outstanding under this Note shall become due and payable
upon demand by the Holder at any time as if such Notice had not been given.

(c)           Change of Control.  Notwithstanding the above, in the event a
Change of Control (as defined below) is consummated prior to the conversion of
the principal amount of this Note, then this Note shall become immediately due
and payable in an amount equal to 100% of the principal amount of this Note and
100% of the accrued interest outstanding thereon, payment of which shall be in
full satisfaction of this Note and shall be made upon the consummation of such
Change of Control.  The term “Change of Control” shall mean the sale, conveyance
or other disposition of all or substantially all of the Company’s property or
business or the Company’s merger with or into or consolidation with any other
corporation, limited liability company or other entity (other than a wholly
owned subsidiary of the Company), provided that the term “Change of Control”
shall not include (i) a merger of the Company effected exclusively for the
purpose of changing the domicile of the Company or (ii) a transaction in which
the shareholders of the Company immediately prior to the transaction own 50% or
more of the voting power of the surviving entity following the transaction.
 
 
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(d)           Mechanics and Effect of Conversion.  Upon conversion of this Note
pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed,
at the principal offices of the Company or any transfer agent of the
Company.  At its expense, the Company will, as soon as practicable thereafter,
issue and deliver to the Holder, at such principal office, a certificate or
certificates for the number of securities to which such Holder is entitled upon
such conversion, together with any other securities and property to which the
Holder is entitled upon such conversion under the terms of this Note, including
a check payable to the Holder for any cash amounts payable as described
herein.  Upon conversion of this Note, the Company will be forever released from
all of its obligations and liabilities under this Note with regard to that
portion of the principal amount and accrued interest being converted including
without limitation the obligation to pay such portion of the principal amount
and accrued interest.
 
3.           Payment; Prepayment.  All payments shall be made in lawful money of
the United States of America at such place as the Holder hereof may from time to
time designate in writing to the Company.  Payment shall be credited first to
the accrued interest then due and payable and the remainder applied to
principal.  Prepayment of this Note may be made at any time without penalty.
 
4.           Transfer; Successors and Assigns.  The terms and conditions of this
Note shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties.  Notwithstanding the foregoing, the Holder may not
assign, pledge, or otherwise transfer this Note without the prior written
consent of the Company. Subject to the preceding sentence, this Note may be
transferred only upon surrender of the original Note for registration of
transfer, duly endorsed, or accompanied by a duly executed written instrument of
transfer in form satisfactory to the Company.  Thereupon, a new note for the
appropriate principal amount and interest will be issued to, and registered in
the name of, the transferee.  Interest and principal are payable only to the
registered holder of this Note.
 
5.           Governing Law.  This Note and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
 
6.           Amendments and Waivers.  The Company hereby waives presentment,
demand for performance, notice of non-performance, protest, notice of protest
and notice of dishonor.  No delay on the part of the Holder in exercising any
right hereunder shall operate as a waiver of such right or any other right.  Any
term of this Note may be amended or waived only with the written consent of the
Company and the Holder.
 
 
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7.           Security Interest.  As security for the prompt and complete payment
and performance in full of all the amounts due under this Note, the Company
hereby grants to the Holder a security interest in and continuing lien on all of
the Company’s right, title and interest in, to and under all of the Company’s
assets, tangible and intangible, whether now owned or existing or hereafter
acquired or arising, and wherever located (the “Collateral”).  The Holder agrees
to subordinate the foregoing security interest with respect to any liens in
connection with bank or other institutional financing approved by the Holder
(such approval not to be unreasonably withheld), or purchase money indebtedness.
 
8.           Company Covenant.  For so long as this Note is outstanding, the
Company shall not, without written consent of the Holder, sell or transfer any
Collateral outside of the ordinary course of business. Notwithstanding anything
to the contrary herein, nothing shall restrict the Company from using cash for
purposes of acquiring assets, capital stock or other equity interests from
unaffiliated third parties of the Company.
 
9.           No Usury.  This Note is hereby expressly limited so that in no
event whatsoever, whether by reason of deferment or advancement of loan
proceeds, acceleration of maturity of the loan evidenced hereby, or otherwise,
shall the amount paid or agreed to be paid to the Holder hereunder for the loan,
use, forbearance or detention of money exceed the maximum interest rate
permitted by the laws of the State of California.  If at any time the
performance of any provision involves a payment exceeding the limit of the price
that may be validly charged for the loan, use, forbearance or detention of money
under applicable law, then automatically and retroactively, ipso facto, the
obligation to be performed shall be reduced to such limit, it being the specific
intent of the Company and the Holder hereof that all payments under this Note
are to be credited first to interest as permitted by law, but not in excess of
(i) the agreed rate of interest hereunder, or (ii) that permitted by law,
whichever is the lesser, and the balance toward the reduction of principal.
 
10.         Shareholders, Officers and Directors Not Liable.  In no event shall
any shareholder, officer or director of the Company be liable for any amounts
due or payable pursuant to this Note.
 
11.         Counterparts.  This Note may be executed in counterparts and by
facsimile, each of which will be deemed to be an original and all of which
together will constitute a single agreement.
 
 
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This Secured Convertible Promissory Note was executed as of the date first above
written.
 

  COMPANY:          
PACIFIC ENERGY DEVELOPMENT CORP
          /s/ Clark R. Moore         Clark R. Moore     Executive Vice President
and General Counsel             Address:         4125 Blackhawk Plaza 
Circle
Suite 201A
Danville, CA 94506
        AGREED AND ACCEPTED:           GLOBAL VENTURE INVESTMENTS LLC          
/s/ Frank C. Ingriselli       Frank C. Ingriselli
President and CEO
            Address:         1707 Post Oak Blvd.
Houston, TX 77056
   

 
 
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