Document:

besv_ex101.htm

EXHIBIT 10.1

 

FOURTH AMENDMENT TO SENIOR SECURED PROMISSORY NOTES

 

(FIRST AND SECOND TRANCHE)

 

THIS FOURTH AMENDMENT TO THE SENIOR SECURED PROMISSORY NOTES (this “Amendment”) is executed as of this 23th day of November, 2012 by and between PEDEVCO CORP. (formerly BLAST ENERGY SERVICES, INC.), a Texas corporation (“Company”), and CENTURION CREDIT FUNDING LLC, a Delaware limited liability company (“Centurion”).  All capitalized terms used but not otherwise defined herein have the respective meanings given them in the Promissory Notes (as defined below).

 

W I T N E S S E T H

 

WHEREAS, the Company and Centurion entered into that certain Senior Secured Promissory Note (First Tranche) and that certain Senior Secured Promissory Note (Second Tranche) (each, a "Promissory Note" and together, the “Promissory Notes”), pursuant to the Note Purchase Agreement, dated February 24, 2011 (together with the Transaction Documents referenced and defined therein, including the First and Second Tranche Promissory Notes, as amended, the Royalty Payment Agreement, the Mortgages, the Security Agreement, the Warrant Agreement, the Intercreditor Agreement, and the Guarantee, the “Note Purchase Agreement”).

 

WHEREAS, the Company and Centurion entered into that certain First Amendment to the Senior Secured Promissory Note (First Tranche) and that certain First Amendment to the Senior Secured Promissory Note (Second Tranche) (together, the “First Amendments”) on January 13, 2012, that certain Second Amendment to the Senior Secured Promissory Note (First Tranche) and that certain Second Amendment to the Senior Secured Promissory Note (Second Tranche) (together, the “Second Amendments”) on May 29, 2012, and that certain Third Amendment to the Senior Secured Promissory Notes (First and Second Tranche) (the “Third Amendments,” and together with the First Amendments and the Second Amendments, the “Amendments”) on August 28, 2012;

 

WHEREAS, the parties propose to enter into this Fourth Amendment to Senior Secured Promissory Notes (First and Second Tranche), on the terms and for the consideration set forth herein, to provide for, among other things, (i) to permit the conversion of an additional $392,045.25 of the total outstanding principal amounts, Exit Fees, and accrued interest under the Promissory Notes into Common Stock of the Company (this and as further defined below, the “Conversion Shares”) in accordance with Section 2(b) of the First Amendments, and (ii) to provide for the prepayment and full satisfaction of the Promissory Notes by the Company on the date hereof upon the payment by the Company to Centurion of the amount of $200,000.00 (the “Payoff Amount”), which amount shall be collected by Centurion from the Company’s bank account at Amegy Bank N.A. (the “Bank”) that is subject to the Deposit Account Control Agreement (the “DACA Account”) entered into by and between the Company and Centurion and referenced in Section 4.3(c) of the Note Purchase Agreement;

 

NOW THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

 

1. Effective Date.

 

a. This Amendment shall take effect immediately upon the satisfaction of the following four (4) conditions;

 

(i) The Company has issued and delivered the shares as instructed in the two Irrevocable Debt Conversion Notices dated November 13, 2012 and November 20, 2012 attached hereto as Exhibit A (the “Notices”), and submitted by Centurion to the Company on or about November 21, 2012 (the “Notice Date”) for a total of 522,727 shares (the “Conversion Shares”).

 

(ii) Centurion has recovered the 135,000 shares issued to Centurion in September 2012 and which subsequently seems to have been lost at the DTC’s offices in New York, New York as a result of Hurricane Sandy.

 

(iii) Centurion has received the Payoff Amount.

 

(iv)  The Company has issued and delivered the 106,633 shares as instructed in the Warrant Exercise Form dated November 18, 2012 attached hereto as Exhibit B, and submitted by Centurion to the Company on the Notice Date (the “Warrant Shares”).

 

b. The day on which all four (4) of the aforementioned conditions have been satisfied shall be considered, for the purposes of this Fourth Amendment to the Senior Secured Promissory Notes, the “Effective Date”.

 

  

  

  

 

2. Conversion of Promissory Notes.

 

a. Promissory Note Conversion Notice.  Centurion has executed and delivered to the Company two Irrevocable Debt Conversion Notices in the forms attached hereto as Exhibit A, pursuant to which Centurion has irrevocably elected to convert such outstanding principal amounts, Exit Fees, and accrued interest under the Promissory Notes into Conversion Shares as set forth therein.

 

b. Notices Acceptance and Maximum Conversion Waiver.  Upon receipt of the executed Notices from Centurion, the Company shall countersign and return the fully-executed Notices to Centurion acknowledging receipt of the same, and hereby waives the maximum permitted conversion permitted under the Promissory Notes to the extent reflected in the Notices.

 

c. Issuance of Conversion Shares & Warrant Shares.  Promptly upon receipt of the Notices and the Warrant Exercise Form from Centurion and countersignature and return delivery of the same by the Company to Centurion on or about the Notice Date, the Company shall cause to be issued to Centurion or its designees the Conversion Shares and the Warrant Shares as instructed by Centurion, with physical share certificates representing the Conversion Shares and the Warrant Shares to be delivered to Centurion or its designees within five (5) business days following the Notice Date.

 

3. Prepayment and Satisfaction of Promissory Notes and Termination of Deposit Control Account Agreement.

 

a. Payment of Payoff Amount.  Centurion shall collect the Payoff Amount from the DACA Account as prepayment in full, and in full satisfaction of, all amounts due and owing under the Promissory Notes, including, but not limited to, all outstanding principal amounts, Exit Fees, and accrued interest thereunder.

 

b. Termination of Deposit Control Account Agreement.  Immediately upon on the Effective Date, the Deposit Control Account Agreement, entered into by and between the Company and Centurion on or about February 24, 2011, as amended August 28, 2012 (the “DACA”), shall be automatically terminated and have no further force and effect, and Centurion and the Company agree to take such further actions as reasonable or necessary to return all remaining funds in the DACA Account to the Company and close the same.

 

4. Termination of Transaction Documents and Release of Security Interest.   On the Effective Date, (i) the Transaction Documents, including, but not limited to, the Promissory Notes, the Royalty Payment Agreement, the Mortgages, the Security Agreement, the Intercreditor Agreement, and the Guarantee, shall automatically and without any further action by Centurion or the Company terminate and have no further force or effect, (ii) all security interests and liens held by Centurion created under the Security Agreement shall be released, terminated and have no further force or effect, and (iii) Centurion agrees to execute and deliver to the Company such documents as reasonably requested by the Company to release Centurion’s security interests and liens created under the Security Agreement.

 

5. Further Assurances.  Each of Centurion and the Company agree to do all such things and execute all such documents, as the other party may consider reasonably necessary or desirable to give full effect to this Amendment.

 

6. Representations and Warranties.

 

a. The Company has the requisite corporate power and authority to enter into and perform this Amendment in accordance with the terms hereof.  The execution, delivery and performance of this Amendment by the Company and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, no further consent or authorization of the Company, its Board of Directors, stockholders or any other third party is required.  When executed and delivered by the Company, this Amendment shall constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

b. Centurion has the requisite corporate power and authority to enter into and perform this Amendment in accordance with the terms hereof.  The execution, delivery and performance of this Amendment by Centurion and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, no further consent or authorization of Centurion, its Board of Directors, stockholders or any other third party is required.  When executed and delivered by Centurion, this Amendment shall constitute a valid and binding obligation of Centurion enforceable against Centurion in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.

 

7. Expenses.  Each party shall pay its own fees, costs and expenses incurred in connection with this Amendment and the transactions contemplated hereunder.

 

8. Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to conflicts of law principles) as to all matters, including validity, construction, effect, performance and remedies of and under this Amendment.

 

9. Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

10. Counterparts.  This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

  

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IN WITNESS WHEREOF, the parties hereto, have caused this Fourth Amendment to Senior Secured Promissory Notes to be duly executed and delivered as of the date first written above.

 

 

	PEDEVCO CORP.	 	 	
CENTURION CREDIT FUNDING LLC

	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:	
/s/ Michael L. Peterson 

	 	 	By:	
/s/ David Steinberg  

	 
	 	
Name: Michael L. Peterson

	 	 	 	
Name: David Steinberg

	 
	 	
Title: Executive VP and CFO

	 	 	 	
Title:Authorized Signatory

	 

 

 

 

3besv_ex102.htm

EXHIBIT 10.2

 

 

November 20, 2012

Via Electronic Mail

Esenjay Oil & Gas, Ltd. (Gardner@epc-cc.com; Schibi@epc-cc.com)

Winn Exploration Co., Inc. (MWCalley@WinnExCo.com; LWebster@winnexco.com)

Crain Energy, Ltd. (MTodd@rlacyinc.com; dgroce@rlacyinc.com)

Lacy Properties, Ltd. (MTodd@rlacyinc.com and dgroce@rlacyinc.com)

Re:           Closing Payment Extension Amendatory Letter Agreement

Purchase and Sale Agreement, dated August 23, 2011, as amended

PEDCO Niobrara Prospect

Weld County, Colorado

Ladies and Gentlemen:

 

Reference is hereby made to that certain Purchase and Sale Agreement (the “Purchase Agreement”), dated August 23, 2011, by and among Esenjay Oil & Gas, Ltd. (“Esenjay”), Winn Exploration Co., Inc. (“Winn”), Lacy Properties, Ltd. (“Lacy”), and Crain Energy, Ltd. (“Crain”), as Sellers, and PEDEVCO Corp (as successor-in-interest to Pacific Energy Development Corp.) (“PEDCO”), as Buyer. Esenjay, Winn, Lacy, Crain, and PEDCO are sometimes referred to herein collectively, as the “Parties” or individually, as a “Party.” This Closing Payment Extension Amendatory Letter Agreement (this “Amendment”) sets forth the terms and conditions of the agreement among the Parties with regard to the above-referenced matter. All capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Purchase Agreement.

 

Pursuant to Section 1.3(a)(2) of the Purchase Agreement, each of the Sellers have elected to receive their Proportionate Share of One Million Dollars ($1,000,000) (the “Cash Balance Due”).

 

The Sellers and the Buyer have agreed to defer the payment of the Cash Balance Due (the “Deferred Payment”) to February 18, 2013 (the “Cash Balance Due Date”).  In consideration for the Deferred Payment of the Cash Balance Due, Buyer has agreed to pay and issue to Sellers, and Sellers have agreed to accept (i) the Immediate Cash Payment set forth on the table below, to be wired by Buyer into each respective Seller’s account on Monday, November 26, 2012 (the “Immediate Cash Payment”), and (ii) the issuance of the number of shares of Buyer Series A Preferred Stock to each Seller as set forth on the table below (the “Equity Issuance”), with physical stock certificates to be issued and delivered to each Seller within ten (10) business days of the date this Amendment is fully executed by the Sellers.  Each Seller’s Immediate Cash Payment and Equity Issuance are as follows:

 

	
Seller

	 	
Immediate Cash Payment

	 	 	
Equity

Issuance

	 	 	
Deferred

Payment

	 
	
Esenjay Oil & Gas, Ltd.

	 	$	60,000.00	 	 	 	80,000	 	 	$	600,000.00	 
	
Winn Exploration Co., Inc.

	 	$	25,000.00	 	 	 	33,334	 	 	$	250,000.00	 
	
Crain Energy, Ltd.

	 	$	11,250.00	 	 	 	15,000	 	 	$	112,500.00	 
	
Lacy Properties, Ltd.

	 	$	3,750.00	 	 	 	5,000	 	 	$	37,500.00	 
	
TOTAL:

	 	$	100,000.00	 	 	 	133,334	 	 	$	1,000,000.00	 

 

  

  

  

 

Upon execution of this Amendment by each Seller, each Seller shall provide a completed subscription agreement in the form attached hereto as Exhibit A in connection with the issuance of each Seller’s respective Equity Issuance, which includes each Seller’s representation that it is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

 

As amended hereby and to date, the Purchase Agreement, is in full force and effect, and valid and binding upon the Parties. In the event of a conflict between this Amendment and the Purchase Agreement, as amended, the terms and conditions of this Amendment shall control and govern the point in conflict. Notwithstanding anything to the contrary, failure of this Amendment to address a point in the Purchase Agreement, as amended, shall not be deemed to be a conflict.

 

Each Party hereby agrees that such Party shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such instruments and take such other action as may be reasonably necessary or advisable to carry out such Party’s obligations under this Amendment. All of the exhibits referred to in this Amendment are hereby incorporated by reference as if set forth in their entirety herein. This Amendment shall be binding upon and inure to the benefit of the Parties, and their respective successors and assigns. This Amendment may not be altered, or amended, nor any rights hereunder waived, except by an instrument in writing executed by the Party or Parties to be charged with such amendment or waiver. This Amendment may be executed in counterparts, and each counterpart shall be deemed to be an original, but all of which shall be deemed to be one amendment. This Amendment may be executed by telefax or electronic signatures, and telefax and electronic signatures shall be valid and binding upon the Parties.

 

Please execute this letter in the space provided below indicating your agreement with the above amendments to the Purchase Agreement and return the executed letter to the undersigned by fax or email at your earliest convenience.

 

 

  

2

  

 

Should you have any questions, please do not hesitate to contact me. Thank you again for your prompt attention to this matter and your continued support of PEDCO.

 

	 	Sincerely,	 
	 	 	 
	 	

PEDEVCO CORP.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Frank C. Ingriselli 	 
	 	 	
Frank C. Ingriselli

President and Chief Executive Officer

	 
	 	 	 	 

 

	

ACCEPTED AND AGREED

this 20th day of November, 2012

	 
	 	 
	Esenjay Oil & Gas, Ltd.	 
	 	 	 
	
By: 

	Esenjay Petroleum Corporation,	 
	Its:	

Its General Partner

	 
	 	 	 
	By:	/s/ Linda D. Schibi   	 
	 	Linda D. Schibi	 
	 	Vice President Land	 
	 	 	 

 

	 
Winn Exploration Co., Inc.

	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	By:	
/s/ Michael W. Calley  

	 	 	 	
 

	 
	 	
Name: Michael W. Calley 

	 	 	 	 	 
	 	
Title: Executive Vice President

	 	 	 	 	 

 

	 
Lacy Properties, Ltd.

	 	 	
Crain Energy, Ltd.

	 
	 	 	 	 	 	 	 
	By:	
Lacy Property Management, Inc.

Its General Partner

	 	 	By:	
Crain Oil & Gas, LLC

Its General Partner

	 
	 	 	 	 	 	 	 
	By:	
/s/ Darren T. Groce 

	 	 	By:	
/s/ Darren T. Groce  

	 
	 	
Name: Darren T. Groce 

	 	 	 	
Name: Darren T. Groce

	 
	 	
Title: Interim President 

	 	 	 	
Title: Interim President 

	 

 

 

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