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Exhibit 10.2
 
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August 28, 2015

HEARTLAND Bank
One Information Way, Suite 300
Little Rock, AR 72202
Attn:  Greg White

 
Re:
Consent and Agreement

Dear Mr. White:

Reference is made to that certain Note Purchase Agreement, dated March 7, 2014
(the “NPA”), by and among BRe BCLIC Primary, BRe BCLIC Sub (“BCLIC Sub”), BRe
WNIC 2013 LTC Primary (“WNIC Primary”), BRe WNIC 2013 LTC Sub (“WNIC Sub”) and
RJ Credit LLC (“RJC”) (collectively, the “Purchasers”), BAM Administrative
Services LLC, as agent for the Investors (the “Agent”), and PEDEVCO Corp. (the
“Company”), pursuant to which the Company issued Senior Secured Promissory Notes
to each of the Purchasers (collectively, but excluding the Heartland Note as
defined below, the “Notes”).  On March 19, 2015, BRe WNIC 2013 LTC Primary
transferred a portion of its Note to Heartland Bank (“Heartland”) and the
Company reissued a replacement note to Heartland (the “Heartland Note”).  On
April 1, 2015, BRe BCLIC Primary transferred the entirety of its Note to Senior
Health Insurance Company of Pennsylvania (“SHIP” and, collectively with the
Purchasers and Heartland, the “Investors”).  Reference is also made to that
certain Note and Security Agreement, dated April 10, 2014, as amended on
February 23, 2015, issued by the Company to RJC (the “RJC Junior Note”).  To the
extent not defined herein, capitalized terms shall have the meaning ascribed to
them in the NPA.

For good and valuable consideration, Heartland hereby agrees that, commencing
with the month of August 2015, (a) no mandatory principal payments shall be due
and payable under Section 3.2 of the Heartland Note for the six month period
commencing August 1, 2015 (the “Mandatory Principal Repayment Waiver”), (b) all
mandatory principal repayments otherwise due and payable monthly after February
1, 2016 under Section 3.2 of the Heartland Note shall instead accrue and be due
and payable each six (6) month period thereafter, such that the mandatory
principal repayments due and payable on the Heartland Note for the six (6) month
period commencing on February 1, 2016 shall be due and payable by the Company on
the third Business Day of August 2016, with mandatory principal repayments
accruing thereafter due and payable every six (6) months (the “Mandatory
Principal Repayment Amendment”), and (c) all interest accruing under the
Heartland Note shall compound and be due and payable each six (6) month period
thereafter, such that interest due and payable on the Heartland Note for the six
month period commencing August 1, 2015 shall be due and payable by the Company
on February 1, 2016, with interest accruing thereafter due and payable every six
(6) months (the “Semi-Annual Payment Term Amendment”).  In addition, beginning
on March 1, 2016 and continuing every month thereafter, the Company covenants
and agrees that the Company shall place an amount equal to 1/6th of the
semi-annual principal and interest payments due under the Heartland Note into a
sinking fund which shall be paid to Heartland every six (6) months when due and
owing thereunder.  For avoidance of doubt, nothing hereunder shall amend or
otherwise modify the terms and conditions of the Notes held by any Investors
except for Heartland (the “Other Investors”), which Notes Heartland agrees and
acknowledges are being modified pursuant to a separate written agreement by and
between the Other Investors and the Company on or about the date hereof, a final
copy of which has been provided to Heartland (the “Other Investors’ Notes
Amendment”).

Heartland hereby consents and agrees that neither the Mandatory Principal
Repayment Waiver, the Mandatory Principal Repayment Amendment, the Semi-Annual
Payment Term Amendment, nor the Other Investors’ Notes Amendment as contemplated
and described hereunder (and with respect to the Other Investors’ Notes, as
contemplated and described under the Other Investors’ Notes Amendment), shall
give rise to a breach or an event of default under the NPA, the Notes, the
Heartland Note, the RJC Junior Note, or any other Transaction Documents, or
otherwise trigger any right to prepayment under the NPA, the Notes, the
Heartland Note, the RJC Junior Note, or any of the other Transaction
Documents.  Except as expressly described herein, nothing contained herein shall
(a) limit in any manner whatsoever the Company’s obligation to comply with, and
Heartland’s right to insist on the Company’s compliance with, each and every
term of the Heartland Note, the NPA and each other Transaction Document, or  (b)
constitute a waiver of any event of default or any right or remedy available to
Heartland, or of the Company’s or any other person’s obligation to pay and
perform all of its obligations, in each case whether arising under the Heartland
Note, the NPA, or any other Transaction Document, applicable law and/or in
equity, all of which rights and remedies howsoever arising are hereby expressly
reserved, are not waived and may be exercised by Heartland at any time, and none
of which obligations are waived.

 
 

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Consent and Agreement
Page 2
 
 
In the event the Company does not consummate either (i) the acquisition
transaction contemplated pursuant to that certain Agreement and Plan of
Reorganization, dated May 21, 2015 (as the same may be amended or supplemented,
the “Acquisition Agreement”), by and among the Company, PEDEVCO Acquisition
Subsidiary, Inc., Dome AB, and Dome Energy Inc. (the “Dome Transaction”), or
(ii) an Alternate Transaction (as defined below) on or before February 1, 2016,
unless the Company resumes full and prompt payment when due of all interest and
principal repayments as required pursuant to the Notes, the Heartland Note and
the RJC Junior Note, as applicable, commencing on February 1, 2016, then the
Company agrees that it shall cooperate with the Investors in exploring
opportunities to repay the Notes, the Heartland Note and the RJC Junior Note in
full as soon as possible following February 1, 2016.  For purposes of this
Consent and Agreement, an “Alternate Transaction” shall be any transaction
approved by the Investors in their sole discretion as an acceptable alternative
to the Dome Transaction.

The Company hereby represents and warrants to Heartland that on the date hereof
and after giving effect to this Consent and Agreement, (i) each of the
representations and warranties of the Company and the Subsidiaries in the NPA
and the other Transaction Documents are and shall be true and correct in all
material respects, except for representations and warranties that speak as of a
particular date, which shall be true and correct in all material respects as of
such date and (ii) no Default or Event of Default has occurred and is continuing
or will occur as a result of the consummation of this Consent and Agreement.

Company hereby further confirms and agrees, on behalf of itself and each of its
direct and indirect subsidiaries, that all security interests and liens granted
to Agent and Investors pursuant to the Transaction Documents continue in full
force and effect and shall continue to secure the Obligations (as defined in the
Security Agreement), including all liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter contracted or acquired, or owing, under the
Notes, the Heartland Note, the RJC Junior Note and any other instruments,
agreements or other documents executed and/or delivered in connection herewith
or therewith, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Investors as a preference, fraudulent transfer or otherwise as
such obligations may be amended, supplemented, converted, extended or modified
from time to time.

Subject in each case to any other prior and still effective intercreditor
agreements among the Investors that relate to payment priority, each of the
Investors hereby further agrees that on and after the occurrence of an Event of
Default and/or in connection with the distribution of proceeds from the sale or
transfer of all or substantially all of the assets or equity of the Company, all
accrued and unpaid interest deferred by any Investor pursuant to the Interest
Deferral shall be repaid in full prior to repayment of any other indebtedness of
the Company held by any other Investor.

[Signature Pages Follow]
 
 
 
 
 
 
 
 
 
 

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Consent and Agreement
Page 3
 

 
Except as specifically set forth herein, all terms and conditions of the NPA,
the Notes, the RJC Junior Note and other Transaction Documents shall remain in
full force and effect.

 

   
Regards,

/s/ Clark R. Moore                                                            
Clark R. Moore
Executive Vice President and General Counsel
PEDEVCO Corp.
               

 

Consented and Agreed:

HEARTLAND BANK

By:  /s/ Mark
Hoffpauir                                                                           

Name:  Mark
Hoffpauir                                                                           

Title:  CCO                                                                

Date:  August 27, 2015
 
 
 

 
 

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