Blueprint





  Exhibit 10.1











 



THIS NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS NOTE (THE “SECURITIES”) HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED
UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT” OR THE
“SECURITIES
ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO
OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER
THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER
NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS
LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS
NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE
(EXCEPT AS OTHERWISE PROVIDED BELOW).


 



CONVERTIBLE PROMISSORY NOTE


 


[CN-__]  Effective
August 1, 2018


 


NOW THEREFORE FOR VALUE RECEIVED, the
undersigned,



PEDEVCO Corp., a Texas corporation (the “Borrower”),
hereby promises to pay to the order of ______________________ and assigns
(“Holder”),
the principal amount of _________________________________ (US
$_______________)(the “Principal”),
in lawful money of the United States of America, which shall be
legal tender, bearing interest and payable as provided herein. This
Convertible Promissory Note (this “Note”
or “Promissory
Note”) has
an effective date of August 1, 2018 (the “Effective
Date”). This Note is entered into to evidence the loan
of the Principal to the Borrower on the Effective Date (the
“Loan”).
This Note is one of six Convertible Promissory Notes entered into
between the Borrower and various lenders, including the Holder, on
or around the date hereof in the aggregate amount not to exceed
$25,000,000 (collectively, with the Holder, the holders of the
other Convertible Promissory Notes are defined herein as the
“Note
Holders” and this Note, collectively with the
Convertible Promissory Notes of the other Note Holders (identified
as Convertible Promissory Notes CN-1 through CN-__), including any
replacement notes, notes which are assigned, reissued, or broken
into smaller notes, are defined as the “Note Holders’
Notes”). “Required Note
Holders” means Note Holders holding at least a
majority in interest of the then aggregate dollar value of the Note
Holders’ Notes outstanding at such time of determination. The
payment of any amounts due to the Note Holders under the Note
Holders’ Notes is expressly subordinated and deferred until
full payment and satisfaction of that certain Promissory Note,
dated June 25, 2018, in the amount of $7.7 million, issued by the
Company to SK Energy, LLC, as the same may be amended or modified
in accordance with its terms (the “Senior
Note”), unless otherwise waived or permitted by SK
Energy, LLC, provided, however, nothing in the Senior Note or any
Note Holders’ Notes shall restrict a Note Holder from
exercising its Holder Conversion Option (as defined below) as set
forth, and in accordance with, the provisions set forth
herein.


 


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 

1. Interest
(“Interest”)
shall accrue on the Principal amount of this Note then outstanding
at the rate of eight and one-half percent (8.5%) per annum (the
“Interest
Rate”), compounded monthly at the rate of
1/12th of
such annual interest per month, on the last day of each calendar
month (“Monthly
Interest”). The Monthly Interest shall accrue and be
payable on the Maturity Date, if not paid prior to such Maturity
Date, or converted into Shares (as defined in Section 2) as provided
herein.


 

2. Holder’s
Option to Convert This Note Into Shares.


 

(a) At any time
following (i) the date that the VWAP Price is determined (as
defined below) and (ii) prior to the payment in full by the
Borrower of this Note, subject to the provisions of Section 2, below, Holder shall
have the option to convert the Principal (or any portion thereof)
and accrued Interest (or any portion thereof), into
shares (the
“Shares”)
of common stock of the Borrower (“Common
Stock”), at the applicable Conversion Price (the
“Holder Conversion
Option”), which shall apply for the conversion of
Principal and all accrued Interest (each a “Conversion”).
The “Conversion
Price” shall equal: the greater of (x) $0.10 above the
Book/Market Price; (y) $1.63 per Share; and (z) the VWAP
Price.


 

(b) In order to
exercise this Holder Conversion Option, the Holder shall provide
the Borrower a written notice of its intentions to exercise this
Holder Conversion Option, which notice shall set forth the amount
of this Promissory Note to be converted, the applicable Principal
and Interest to be converted and the calculation of the applicable
Conversion Price, which shall be in the form of Exhibit A, attached hereto
(“Notice of
Conversion”). Within ten (10) business days of the
Borrower’s receipt of the Notice of Conversion (reflecting
Conversion Price confirmed by the Borrower), the Borrower shall
deliver or cause to be delivered to the Holder, written
confirmation that the Shares have been issued in the name of the
Holder. If the Borrower reasonably believes that there is an error
in Holder’s calculation of the Shares issuable in connection
with the Notice of Conversion or the Conversion Price provided for
therein, or another issue with the conversion, the Borrower shall
not be obligated to honor such defective Notice of Conversion and
shall promptly notify Holder of such errors. Notwithstanding
anything herein to the contrary, the Holder shall not be required
to physically surrender this Note to the Borrower until the Holder
has converted the entire amount of this Note, in which case, the
Holder shall surrender this Note to the Borrower for cancellation
within three (3) business days of the date the final Notice of
Conversion is delivered to the Borrower. Partial conversions of
this Note shall have the effect of lowering the outstanding
Principal amount of this Note. The Holder and the Borrower shall
maintain records showing the actual Principal Amount of this Note,
provided that absent manifest error, the Borrower’s records
shall control.


 


 




 


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Promissory Note CN-__


PEDEVCO
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(c)           In
the event of the exercise of the Holder Conversion Option, Holder
shall cooperate with the Borrower to promptly take any and all
additional actions required to make Holder a stockholder of the
Borrower including, without limitation, in connection with the
issuance of the Shares and providing the Borrower or its legal
counsel or Transfer Agent, representations as to financial
condition, investment intent and sophisticated investor status of
such Holder as may be reasonably requested or required. The
Borrower shall at all times take any and all additional actions as
are necessary to maintain the required authority to issue the
Shares to the Holder, in the event the Holder exercises its rights
under the Holder Conversion Option.


 


(d)           Following
the effective time of any Conversion, all rights of any Holder with
respect to the amount of this Note converted, will terminate,
except only for the rights of any such Holder to receive
certificates (if applicable) for the number of Shares which this
Note has been Converted.


 


(e)           The
following terms have the meanings given to them below as used in
this Section
2:


 

(i) “VWAP”
means, for any Trading Day, the volume-weighted average price,
calculated by dividing (a) the aggregate value of all shares of
Common Stock traded on the Principal Market during regular trading
hours, calculated by multiplying the closing price per share of
Common Stock on such applicable Trading Date, by the aggregate
number of shares of Common Stock traded on such Trading Day, by (b)
the total volume (number of shares) of Common Stock traded on the
Principal Market for such Trading Day, or if such volume-weighted
average price is unavailable, the market value of one share of
Common Stock on such Trading Day as determined by the Board of
Directors of the Company in a commercially reasonable
manner.


 

(ii) “VWAP
Price” means the average of the VWAP during the twenty
(20) Trading Days subsequent to, but not including, the date that
the Loan has been publicly disclosed by the Borrower pursuant to
the filing of a Current Report on Form 8-K with the Securities and
Exchange Commission.

 

(iii)  “Trading
Day” means any day on which the Common Stock is traded
on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the
Common Stock is then traded; provided that “Trading
Day” shall not include any day on which the Common
Stock is scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Common Stock is suspended from
trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the
closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York Time).

 


 




 


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Promissory Note CN-__


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(iv) “Principal
Market” means initially the NYSE American, and shall
also include the NASDAQ Capital Market, New York Stock Exchange,
the NASDAQ National Market, the OTCQB Market, the OTCQX Market, or
the OTC Pink Market, whichever is at the time the principal trading
exchange or market for the Common Stock, based upon share
volume.

 

(v) “Book/Market
Price” means the greater of (i) the book value of one
share of Common Stock, as calculated pursuant to the applicable
rules and regulations of the Principal Market; and (ii) the closing
sales price of the Common Stock on the Principal Market, each (i)
and (ii), calculated on the Effective Date.

 

3. General
Provisions Relating to the Shares and
Conversions.


 

(a) Conversion
calculations pursuant to Section 2, shall be rounded to
the nearest whole share of Common Stock.

 

(b) If the Borrower at
any time or from time to time on or after the Effective Date
effects a subdivision of its outstanding Common Stock, the
Conversion Price, VWAP Price and Book/Market Price then in effect
immediately before that subdivision shall be proportionately
decreased, and conversely, if the Borrower at any time or from time
to time on or after the Effective Date combines its outstanding
shares of Common Stock into a smaller number of shares, the
Conversion Price, VWAP Price and Book/Market Price then in effect
immediately before the combination shall be proportionately
increased.

 

(c) Unless the Holder
provides the Borrower a valid legal opinion within five (5) days of
the date the Conversion Notice is received that such Shares can be
issued free of restrictive legend, the Shares shall be issued with
a standard Rule 144 restrictive legend.

 

(d) No Shares shall be
issued by the Borrower hereunder unless or until the additional
listing of such Shares has been approved by the NYSE
American.

 

(e) At any time this
Note is held by SK Energy LLC, a Delaware limited liability
company, or its assigns, or any affiliate (as such term is defined
and/or interpreted under the rules and regulations of the
Securities Act (as defined in Section 15)) of SK Energy LLC
(collectively, “SK
Energy”), the applicable portion of this Note shall
not be convertible by the applicable Holder pursuant to the Holder
Conversion Option during any time that, and only to the extent
that, the number of Shares to be issued to Holder upon such
Conversion, when added to the number of shares of Common Stock, if
any, that such applicable Holder otherwise beneficially owns
(outside of this Note, and not including any other securities of
the Borrower held by Holder having a provision substantially
similar to this paragraph) at the time of such Conversion, would
exceed 49.9% (the “SK
Energy Maximum
Percentage”) of (A) the number of shares of Common
Stock of the Borrower; or (B) the voting rights of the security
holders of the Borrower; outstanding immediately after giving
effect to the issuance of the Shares upon Conversion of this Note
held by the Holder, as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the
“SK
Energy Beneficial
Ownership Limitation”).

 


 




 


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Promissory Note CN-__


PEDEVCO
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(f) At any time this
Note is not held or
beneficially owned by (i) SK Energy; (ii) any officer of the
Borrower; (iii) any director of the Borrower; or (iv) any person
which at the time of obtaining beneficial ownership (as defined in
the Securities Exchange Act of 1934, as amended) beneficially owns
more than 9.99% of the Borrower’s outstanding Common Stock or
voting stock (each of (ii) through (iv) above, a
“Borrower
Affiliate”), the applicable portion of this Note shall
not be convertible by the applicable Holder pursuant to the Holder
Conversion Option during any time that, and only to the extent
that, the number of Shares to be issued to such applicable Holder
upon such Conversion, when added to the number of shares of Common
Stock, if any, that the applicable Holder otherwise beneficially
owns (outside of this Note, and not including any other securities
of the Borrower held by Holder having a provision substantially
similar to this paragraph) at the time of such Conversion, would
exceed 4.99% (the “Non-Affiliate
Maximum Percentage” and together with the SK Energy
Maximum Percentage, as applicable, the “Maximum
Percentage”) of (A) the number of shares of Common
Stock of the Borrower; or (B) the voting rights of the security
holders of the Borrower; outstanding immediately after giving
effect to the issuance of Shares upon Conversion of this Note held
by the Holder, as determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the
“Non-Affiliate
Beneficial
Ownership Limitation” and together with the SK Energy
Beneficial Ownership Limitation, as applicable, the
“Beneficial
Ownership Limitation”).

 

(g)   For the
sake of clarity, at any time that this Note or any portion hereof
shall be beneficially owned by a Borrower Affiliate (other than SK
Energy), no Maximum Percentage or Beneficial Ownership Limitation
shall apply to this Note while beneficially owned (as defined in
the Securities Exchange Act of 1934, as amended) by such Borrower
Affiliate (other than SK Energy), provided that the Maximum
Percentage and Beneficial Ownership Limitation, each as applicable,
shall automatically apply to such Note or portion thereof, at any
time this Note or the applicable portion thereof, is transferred,
sold or assigned to such non-Borrower Affiliate, effective
immediately upon such transfer, sale or assignment.

 


4. All past-due
Principal and Interest shall bear interest at the lesser of (a) the
rate of ten percent (10%) per annum; and (b) the Maximum Rate,
until paid in full (the “Default
Rate”).


 

5. The
“Maturity
Date” of this Note shall be the earlier of (a) August
1, 2021; and (b) the date that the Required Note Holders have
effected an Acceleration as described in Section 16, below.


 

6. Upon
the occurrence of an Event of Default hereunder the Principal
amount of this Note and any accrued Interest thereon shall bear
interest at the Default Rate.


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 

7. This
Note may be prepaid in whole or in part, at any time and from time
to time, without premium or penalty, with such payments to be
applied as described in Section 8 below.


 

8. All
payments made by Borrower under this Note will be applied: (i)
first, to late charges, costs of collection or enforcement, and
similar amounts due, if any, under the Note; (ii) second, to
Interest that is due and payable under this Note, if any; and (iii)
third, the remainder to Principal due and payable under this
Note.


 

9. If
any payment of Principal or Interest on this Note shall become due
on a non-Business Day, such payment shall be made on the next
succeeding Business Day. “Business
Day” means a day other than (i) a Saturday, (ii) a
Sunday or (iii) a day on which commercial banks in the City of
Houston, Texas are authorized or required to be closed for
business.


 

10. This
Note shall be binding upon Borrower and inure to the benefit of
Holder and Holder’s respective successors and assigns. Each
holder of this Note, by accepting the same, agrees to and shall be
bound by all of the provisions of this Note (including, but not
limited to Section
25 hereof). Holder may assign this Note or any of its rights,
interests or obligations to this Note to another party with the
prior written approval of Borrower, which shall not be unreasonably
withheld, conditioned or delayed, provided that the Borrower may
require such subsequent holder to consent to and to agree to the
assumption of the terms and conditions of this Note, including, but
not limited to Section
25.


 

11. No
provision of this Note shall alter or impair the obligation of
Borrower to pay the Principal of and Interest on this Note at the
times, places and rates, and in the coin or currency, herein
prescribed.


 

12. Borrower
will do or cause to be done all things reasonably necessary to
preserve and keep in full force and effect its corporate existence,
rights and


franchises
and comply with all laws applicable to Borrower, except where the
failure to comply could not reasonably be expected to have a
material adverse effect on Borrower.


 

13. Notwithstanding
anything to the contrary in this Note or any other agreement
entered into in connection herewith, whether now existing or
hereafter arising and whether written or oral, it is agreed that
the aggregate of all Interest and any other charges constituting
interest, or adjudicated as constituting interest, and contracted
for, chargeable or receivable under this Note or otherwise in
connection with this loan transaction, shall under no circumstances
exceed the Maximum Rate.


 


 




 


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Promissory Note CN-__


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14. Borrower
represents and warrants to Holder as follows:


 

(a) The execution and
delivery by Borrower of this Note (i) are within Borrower’s
power and authority, and (ii) have been duly authorized by all
necessary action.


 

(b) This Note is a
legally binding obligation of Borrower, enforceable against
Borrower in accordance with the terms hereof, except to the extent
that (i) such enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors’ rights, and (ii) the
availability of the remedy of specific performance or injunctive or
other equitable relief is subject to the discretion of the court
before which any proceeding therefore may be brought.


 

(c) The Shares, when
issued, sold and delivered in accordance with the terms of this
Note, will be duly and validly issued, fully paid and
nonassessable, and will be free and clear of any pledges, liens and
encumbrances, other than restrictions on transfer under this Note
and applicable securities laws of any state or other
jurisdiction.


 

15. Holder
represents and warrants to the Borrower, and agrees, as follows
(collectively the “Representations”):

 

(A) The
execution and delivery by the Holder of this Note (i) are within
the Holder’s corporate power and authority, and (ii) have
been duly authorized by all necessary corporate action. Further,
the undersigned is a duly authorized representative of the Holder
who has been authorized by a resolution of the governing body of
the Holder to exercise any and all documents necessary to
effectuate the purchase of this Note.

 

(B) This
Note and any Shares issuable pursuant to the terms of this are
being acquired by Holder for its own account for investment and not
with a view to, or for sale in connection with, any distribution
thereof.

 

(C) Holder
acknowledges that it is an “accredited
investor” as such term is defined in Rule 501 of
Regulation D of the Securities Act of 1933, as amended (the
“Act”
or the “Securities
Act”).

 

(D) Holder
has sufficient knowledge and experience in financial and business
matters and is capable of evaluating the risks and merits of
Holder’s investment in the Note and where applicable the
Shares; Holder believes that Holder has received or had access to
all information Holder considers necessary or appropriate to make
an informed investment decision with respect to this Note (and
where and if applicable, the Shares), including the opportunity ask
the Borrower or its officers any questions it has regarding the
Borrower or the Note; and Holder is able financially to bear the
risk of losing Holder’s full investment in this Note and
where applicable, the Shares.

 


 




 


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Promissory Note CN-__


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Corp.


 








 






 

(e) Holder has not
become aware of and has not been offered the Note by any form of
general solicitation or advertising, including, but not limited to,
advertisements, articles, notices or other communications published
in any newspaper, magazine, or other similar media or television or
radio broadcast or any seminar or meeting where, to such
Holder’s knowledge, those individuals that have attended have
been invited by any such or similar means of general solicitation
or advertising.

 

(F) The
Holder understands that the Note and the Shares are being offered
to it in reliance on specific exemptions from or non-application of
the registration requirements of federal and state securities laws
and that the Borrower is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Holder set forth herein in order to determine
the applicability of such exemptions and the suitability of Holder
to acquire the Note and Shares. All information which Holder has
provided to the Borrower concerning the Holder’s financial
position and knowledge of financial and business matters is correct
and complete as of the date hereof, and if there should be any
material change in such information, the Holder will immediately
provide Borrower with such information.

 

(G) Holder
understands that this Note and any Shares issuable upon the terms
hereof have not been registered under the Securities Act or
registered or qualified under any securities laws of any state or
other jurisdiction, are “restricted
securities,” and cannot be resold or otherwise
transferred unless they are registered under the Securities Act,
and registered or qualified under any other applicable securities
laws, or an exemption from such registration and qualification is
available. Prior to any proposed transfer of this Note, subject to
the terms and conditions of this Note or any Shares, Holder shall,
among other things, give written notice to the Borrower of its
intention to effect such transfer, identifying the transferee and
describing the manner of the proposed transfer and, if requested by
the Borrower, accompanied by (i) investment representations by the
transferee similar to the Representations and (ii) an opinion of
counsel satisfactory to the Borrower to the effect that the
proposed transfer may be effected without registration under the
Securities Act and without registration or qualification under
applicable state or other securities laws. Each certificate issued
to evidence the Shares shall bear a legend as follows:

 

 


“The
securities represented by this certificate have not been registered
under the Securities Act of 1933 or any state securities act. The
securities have been acquired for investment and may not be sold,
transferred, pledged or hypothecated unless (i) they shall have
been registered under the Securities Act of 1933 and any applicable
state securities act, or (ii) the corporation shall have been
furnished with an opinion of counsel, satisfactory to counsel for
the corporation, that registration is not required under any such
acts.”

 


 




 


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Promissory Note CN-__


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16. If
an Event of Default (as defined herein) occurs (unless all Events
of Default have been cured or waived by the Required Note Holders),
 SK
Energy, LLC (or its assign(s))(the “Designated
Holder”), with the consent of the Required Note
Holders may, by written notice to the Borrower, declare the
Principal amount then outstanding of, and the accrued Interest and
all other amounts payable on, this Note to be immediately due and
payable (an “Acceleration”)
(provided that upon the occurrence of an Event of Default described
in Section 16(c)
below, the Principal amount then outstanding of, and the accrued
Interest and all other amounts payable on, this Note shall
immediately be due and payable) and can take any and all other
actions provided for under applicable law. The following events
and/or any other Events of Default defined elsewhere in this Note
are “Events of
Default” under this Note, unless waived in writing by
the Designated Holder with the consent of the Required Note
Holders:

 

 

(A) Borrower
shall fail to pay, when and as due, the Principal, Interest or any
other amount payable hereunder (including, the Shares), and such
failure has continued for ten (10) days from the date that the
Required Note Holders have provided the Borrower written notice of
such failure; or

 

 

(B) Borrower
shall have breached in any material respect any covenant, term or
conditions in this Note, and, with respect to breaches capable of
being cured, such breach shall not have been cured within ten (10)
days from the date that the Required Note Holders have provided the
Borrower written notice of such breach; or

 

 

(C) Borrower
shall: (i) become insolvent or take any action which constitutes
its admission of inability to pay its debts as they mature; (ii)
make an assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appointment
of a custodian, receiver or a trustee for it or a substantial
portion of its assets; (iii) commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation or statute of any jurisdiction, whether
now or hereafter in effect; (iv) have filed against it any such
petition or application in which an order for relief is entered or
which remains undismissed for a period of ninety (90) days or more;
(v) indicate its consent to, approval of or acquiescence in any
such petition, application, proceeding or order for relief or the
appointment of a custodian, receiver or trustee for it or a
substantial portion of its assets; or (vi) suffer any such
custodianship, receivership or trusteeship to continue undischarged
for a period of ninety (90) days or more; or

 

 

(D) Borrower
shall take any action authorizing, or in furtherance of, any of the
foregoing.

 


 




 


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Promissory Note CN-__


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Corp.


 








 






 


In case
any one or more Events of Default shall occur and be continuing,
the Designated Holder, with the consent of the Required Note
Holders, may proceed to protect and enforce the rights of all of
the Note Holders by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any
agreement contained herein or for an injunction against a violation
of any of the terms hereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise. In case of a
default in the payment of any Principal of or premium, if any, or
Interest on this Note, Borrower will pay to the Designated Holder
(for the benefit of the Note Holders, where applicable) such
further amount as shall be sufficient to cover the reasonable cost
and expenses of collection, including, without limitation,
reasonable attorneys’ fees, expenses and disbursements. No
course of dealing and no delay on the part of the Designated Holder
or the Required Note Holders in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise prejudice the
Designated Holder’s or the Required Note Holders’
rights, powers or remedies. No right, power or remedy conferred by
this Note upon the Designated Holder or the Required Note Holders
shall be exclusive of any other right, power or remedy referred to
herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.

 

17. Rights
and Obligations of Designated Holder.


 

(a) Each Note Holder
hereby designates and appoints Designated Holder as its
representative and agent under the Note Holders’ Notes, and
each Note Holder hereby irrevocably authorizes Designated Holder to
act on its behalf under the provisions of the Note Holders’
Notes and to exercise such powers and perform such duties as
instructed by the Required Note Holders or all of the Note Holders,
as applicable, by the terms of the Note Holders’ Notes,
together with such powers as are reasonably incidental thereto. The
provisions of this Section
17 are solely for the benefit of Designated Holder and the
Note Holders, and Borrower shall have no rights as a third party
beneficiary of any of the provisions contained herein, except that
Borrower shall be able to rely on the authority of Designated
Holder to take action under the Note Holders’ Notes as
described herein. Any provision to the contrary contained elsewhere
in the Note Holders’ Notes notwithstanding, Designated Holder
shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall Designated Holder have or be
deemed to have any fiduciary relationship with any Note Holder, and
no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Note
Holders’ Notes or otherwise exist against Designated
Holder.


 

(b) Each Note Holder
agrees that any action taken by Designated Holder in accordance
with the terms of the Note Holders’ Notes and the exercise by
Designated Holder of its powers set forth herein or therein,
together with such other powers that are reasonably incidental
thereto, shall be binding upon all of the Note
Holders.


 




 


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Promissory Note CN-__


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Corp.


 








 






 

(c) Designated Holder
may execute any of its duties under the Note Holders’ Notes
by or through agents, employees or attorneys in fact or other
persons and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Designated Holder shall not be
responsible for the negligence or misconduct of any agent or
attorney in fact that it selects as long as such selection was made
without gross negligence or willful misconduct.


 

(d) The Designated
Holder may assign its rights and obligations hereunder to a
replacement Designated Holder with written notice to the Note
Holders.


 

18. Except
as expressly provided otherwise in this Note, Borrower and every
endorser or guarantor, if any, of this Note waive presentment,
demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or
enforcement of this Note, and assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral available to the
Designated Holder and/or the Required Note Holders, if any, and to
the addition or release of any other party or person primarily or
secondarily liable.


 

19. If
from any circumstance any holder of this Note shall ever receive
Interest or any other charges constituting interest, or adjudicated
as constituting interest, the amount, if any, which would exceed
the Maximum Rate shall be applied to the reduction of the Principal
amount owing on this Note, and not to the payment of interest; or
if such excessive interest exceeds the unpaid balance of Principal
hereof, the amount of such excessive interest that exceeds the
unpaid balance of Principal hereof shall be refunded to Borrower.
In determining whether or not the interest paid or payable exceeds
the Maximum Rate, to the extent permitted by applicable law (i) any
non-Principal payment shall be characterized as an expense, fee or
premium rather than as Interest; and (ii) all Interest at any time
contracted for, charged, received or preserved in connection
herewith shall be amortized, prorated, allocated and spread in
equal parts during the period of the full stated term of this Note.
The term “Maximum
Rate” shall mean the maximum rate of interest allowed
by applicable federal or state law.


 

20. It
is the intention of the parties hereto that the terms and
provisions of this Note are to be construed in accordance with and
governed by the laws of the State of Texas, except as such laws may
be preempted by any federal law controlling the rate of Interest
which may be charged on account of this Note. The parties hereby
consent and agree that, in any actions predicated upon this Note,
venue is properly laid in Texas and that the Circuit Court in and
for Harris County, Texas, shall have full subject matter and
personal jurisdiction over the parties to determine all issues
arising out of or in connection with the execution and enforcement
of this Note.


 


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 

21. The
term “Borrower”
as used herein in every instance shall include Borrower’s
successors, legal representatives and permitted assigns, including
all subsequent grantees, either voluntarily by act of Borrower or
involuntarily by operation of law and shall denote the singular
and/or plural and the masculine and/or feminine and natural and/or
artificial persons, whenever and wherever the contexts so requires
or properly applies. The term “Holder”
as used herein in every instance shall include Holder’s
successors, legal representatives and permitted assigns, as well as
all subsequent assignees and endorsees of this Note, either
voluntarily by act of the parties or involuntarily by operation of
law (subject in each case to Section 22 hereof). Captions
and paragraph headings in this Note are for convenience only and
shall not affect its interpretation. As used herein, words in the
singular shall be held to include the plural and vice versa, and
words of one gender shall be held to include the other gender as
the context requires.


 

22. If
and whenever this Note shall be assigned and transferred, or
negotiated, including transfers to substitute or successor
trustees, in each case subject to the terms of this Note,
applicable law and the availability of an exemption from
registration for such transfer, which shall be confirmed by the
Holder by the Holder providing the Borrower a legal opinion for
such transfer, which opinion shall be reasonably accepted by the
Borrower, the holder hereof shall be deemed the “Holder”
for all purposes under this Note.


 

23. Anything
else in this Note to the contrary notwithstanding, in any action
arising out of this Agreement, the prevailing party shall be
entitled to collect from the non-prevailing party all of its
attorneys’ fees. For the purposes of this Note, the party who
receives or is awarded a substantial portion of the damages or
claims sought in any proceeding shall be deemed the
“prevailing”
party and attorneys’ fees shall mean the reasonable fees
charged by an attorney or a law firm for legal services and the
services of any legal assistants, and costs of litigation,
including, but not limited to, fees and costs at trial and
appellate levels.


 

24. If
any term or other provision of this Note is invalid, illegal or
incapable of being enforced by any rule of law, or public policy,
all other conditions and provisions of this Note shall nevertheless
remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Note so as to affect the original intent of the parties
as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent
possible.


 


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 

25. Neither
this Note nor any term hereof may be amended or waived orally or in
writing, except that any term of this Note and the other Note
Holders’ Notes may be amended and the observance of any term
of this Note and the other Note Holders’ Notes may be waived
(either generally or in a particular instance and either
retroactively or prospectively), and such amendment or waiver shall
be applicable to all of the Note Holders’ Notes (without any
required action by such non-consenting Note Holders), upon the
approval of the Borrower and the written consent of the Required
Note Holders; provided, however, that any amendment that would (i)
reduce the principal amount of any Note Holders’ Note, (ii)
reduce the percentage in aggregate principal amount of Note
Holders’ Notes outstanding necessary to modify or amend the
Note Holders’ Notes pursuant to this Section 25; or (iii) increase
the Conversion Price, shall, in each case, require the approval of
the holder of each Note Holders’ Note to which such amendment
shall apply. Separately, the Borrower may, without the consent of
any holder of the Note Holders’ Notes, amend the Note
Holders’ Notes for the purpose of curing any ambiguity or
correcting or supplementing any defective provision contained in
the Note Holders’ Notes; provided that such modification or
amendment does not, in the good faith opinion of the Borrower,
adversely affect the interests of the Note Holders of the Note
Holders’ Notes in any material respect, or add or modify any
other provisions with respect to matters or questions arising under
the Note Holders’ Notes which the Borrower may deem necessary
or desirable and which will not adversely affect the interests of
the Note Holders of the Note Holders’ Notes. The Borrower
will not amend any provision of any Note Holders’ Note in a
manner more favorable to any other Note Holder, unless a similar
amendment is made or offered with respect to all of the Note
Holders’ Notes.


 

26. The
Note constitutes the entire agreement of the parties regarding the
matters contemplated herein, or related thereto, and supersedes all
prior and contemporaneous agreements, and understandings of the
parties in connection therewith.


 

27. This
Note and any signed agreement or instrument entered into in
connection with this Note, and any amendments hereto or thereto,
may be executed in one or more counterparts, all of which shall
constitute one and the same instrument. Any such counterpart, to
the extent delivered by means of a facsimile machine or by .pdf,
..tif, .gif, .jpeg or similar attachment to electronic mail (any
such delivery, an “Electronic
Delivery”) shall be treated in all manner and respects
as an original executed counterpart and shall be considered to have
the same binding legal effect as if it were the original signed
version thereof delivered in person. At the request of any party,
each other party shall re execute the original form of this Note
and deliver such form to all other parties. No party shall raise
the use of Electronic Delivery to deliver a signature or the fact
that any signature or agreement or instrument was transmitted or
communicated through the use of Electronic Delivery as a defense to
the formation of a contract, and each such party forever waives any
such defense, except to the extent such defense relates to lack of
authenticity.


 


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 

28. Each
party herein expressly represents and warrants to all other parties
hereto that (a) before executing this Note, said party has fully
informed itself of the terms, contents, conditions and effects of
this Note; (b) said party has relied solely and completely upon its
own judgment in executing this Note; (c) said party has had the
opportunity to seek and has obtained the advice of its own legal,
tax and business advisors before executing this Note; (d) said
party has acted voluntarily and of its own free will in executing
this Note; and (e) this Note is the result of arm’s length
negotiations conducted by and among the parties and their
respective counsel.


 

29. All
notices, approvals, consents, requests, and other communications
hereunder shall be in writing and shall be delivered (i) by
personal delivery, or (ii) by national overnight courier service,
or (iii) by certified or registered mail, return receipt requested,
or (iv) via facsimile transmission, with confirmed receipt, or (v)
via email. Notice shall be effective upon receipt except for notice
via fax (as discussed above). Such notices shall be sent to the
applicable party or parties at the address specified on the
signature page hereof, subject to notice of changes thereof from
any party with at least ten (10) business days’ notice to the
other parties. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice
was given shall be deemed to be receipt of the notice as of the
date of such rejection, refusal or inability to
deliver.


 


 


 


 


 


 


 


 


 



[Remainder of page left intentionally blank. Signature page
follows.]


 


 


 


 




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 






 


IN WITNESS
WHEREOF, Borrower has duly
executed this Promissory Note as of August 1,
2018, with an Effective Date as
provided above.


 



“Borrower”


 


PEDEVCO
Corp.


 


 


By:_________________________


 


Its:_________________________


 


Printed
Name:________________________


 


Address
for Notice:


 


4125
Blackhawk Plaza Circle, Suite 201


Danville,
California 94506


Attn:
Clark R. Moore


Email:
cmoore@pacificenergydevelopment.com


 


 


“Holder”


 



____________________________


 


By:_________________________


 


Printed
Name:________________________


 


Position
with Entity (if Holder is an
entity):_________________________


 



If held jointly, joint holder:


 


By:_________________________


 


Printed
Name:________________________


 


Address
for Notice:




 


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Promissory Note CN-__


PEDEVCO
Corp.


 








 







EXHIBIT A



Conversion Election Form


____________,
20__


 



Re:            


Conversion of Convertible Promissory Note [CN- ]






 


Ladies
and Gentlemen:


 


You are
hereby notified that, pursuant to, and upon the terms and
conditions of that certain Convertible Promissory Note CN-__ of
PEDEVCO Corp. (the “Company”)
dated August 1, 2018 in the amount of $_____________ (the
“Note”
– certain capitalized terms used herein have the meanings
given to such terms in the Note), held by us, we hereby elect to
exercise our Holder Conversion Option (as such term in defined in
the Note), in connection with $__________ of the amount currently
owed under the Note (including $___________ of Principal and
$_________ of accrued Interest), effective as of the date of this
writing, which amount will convert into __________ shares of the
common stock of the Company (the “Conversion”),
respectively, based on Conversion Price of $___________ (as defined
in the Note). Please issue certificate(s) for the applicable
securities issuable upon the Conversion, in the name of the person
provided below. The Conversion will not cause us to exceed the
Beneficial Ownership Limitation. We hereby re-confirm and
re-certify the Representations in connection with, and as of the
date of, this notice.


	
 

	

Very
truly yours,


	
 

	

___________________________


	
 

	

Name:_______________________


	
 

	
 


	
 

	


If on behalf of Entity:


	
 

	

Entity
Name:______________


	
 

	

Signatory’s
Position with Entity:


_____________________________







 



If held jointly:


Joint
Holder:___________________


Name:________________________


 


Please
issue certificate(s) for common stock as follows:


 


Name______________________________________________


Address______________________________________________


Social
Security No./EIN of Shareholder
______________________________________


 


Please
send the certificate(s) evidencing the common stock
to:


Attn:___________________________________________


Address:________________________________________




 


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PEDEVCO
Corp.