FIRST AMENDMENT TO CONVERTIBLE PROMISSORY NOTES
Exhibit 10.4
FIRST AMENDMENT TO CONVERTIBLE PROMISSORY NOTES
THIS
FIRST AMENDMENT TO CONVERTIBLE PROMISSORY NOTES (the
“First
Amendment”) is executed and effective as of February
15, 2019 (the “Effective Date”) by and between PEDEVCO
CORP., a Texas corporation (“Company”), and SK Energy, LLC, a
Delaware limited liability company (“Holder”). Capitalized terms used
below and otherwise not defined herein shall have the meanings
given to them in the Notes (as defined below).
W I T N E S S E T H
WHEREAS, on August 1, 2018, the Company
issued a convertible promissory note number CN-1 with a principal
amount of $22,000,000 to the Holder1 (the “August 2018 Note”);
WHEREAS, on October 25, 2018, the
Company issued a convertible promissory note number CN-7 with a
principal amount of $7,000,000 to the Holder2 (the “October 2018 Note”);
WHEREAS, on January 11, 2019, the
Company issued a convertible promissory note number CN-8 with a
principal amount of $15,000,000 to the Holder3 (the “January 2019 Note,” and together
with the August 2018 Note and the October 2018 Note, the
“Notes”);
WHEREAS, each of the Notes include a
beneficial ownership “blocker” provision in Section
3(e) thereof that prohibits the Holder from converting any of the
Notes to the extent that the shares issuable to the Holder upon
such conversion, when added to all Company Common Stock held by the
Holder, would make the Holder’s beneficial ownership exceed
49.9% of (i) the number of shares of Common Stock of the Company or
(ii) the voting rights of the security holders of the Company,
outstanding immediately after giving effect to the issuance of the
shares upon conversion of such Notes by the Holder (the
“Blocker
Provision”);
WHEREAS, the Company and the Holder
desire to amend the Notes to remove the Blocker Provision in each
Note to permit the Holder to convert each Note in accordance with
its terms without any limitations with respect to beneficial
ownership by the Holder;
WHEREAS, the August 2018 Note may be
amended and any term thereof waived, with such amendment applicable
to all of the Note Holders’ Notes (without any required
action by any of the non-consenting Note Holders) upon the approval
of the Company and the written consent of 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;
WHEREAS, the Holder holds a majority in
interest of the aggregate dollar value of the Note Holders’
Notes outstanding as of the Effective Date; and
WHEREAS, the October 2018 Note and
January 2019 Note may be amended and any term thereof waived upon
the approval of the Holder and the Company.
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. Amendment of Notes to Revise Section
3(e). Each of the Notes (and each of the other Note
Holders’ Notes) are hereby amended to replace Section 3(e)
thereto with the following new Section 3(e):
“3(e) Reserved.”
2. Limited Effect. Except as
amended hereby, each of the Notes and all of the other Note
Holders’ Notes shall remain in full force and effect, and the
valid and binding obligation of the parties thereto. Upon the
effectiveness of this First Amendment, each reference in the Notes
and other Note Holders’ Notes to “Note,”
“Agreement,” “hereunder,”
“hereof,” “herein” or words of like import
shall mean and be a reference to such Note and other Note
Holders’ Notes as amended and modified by the First Amendment
and hereby. Effective upon the Effective Date, each of the Notes
and each of the other Note Holders’ Notes shall automatically
represent and evidence each Note and each other Note Holders’
Notes, respectively as amended to date, and it shall not be
necessary for the Company to provide the Holder or any other Note
Holders a replacement or amended Note or other Note Holders’
Note evidencing the provisions hereof.
3. Consideration. Each of the
parties agrees and confirms by signing below that they have
received valid consideration in connection with this First
Amendment and the transactions contemplated herein.
4. Written Consent. For the sake
of clarity, the Company and the Holder desire for this First
Amendment to be treated as a ‘written consent’ of the
Required Note Holders for all purposes under the August 2018 Note
and the other Note Holders’ Notes.
5. Effective Time. This First
Amendment shall be deemed effective from and after due execution
and delivery by each party hereto, as of the Effective
Date.
6. Further Assurances. The parties
agree that, from time to time, each of them will take such other
action and to execute, acknowledge and deliver such contracts,
deeds, or other documents as may be reasonably requested and
necessary or appropriate to carry out the purposes and intent of
this First Amendment and the transactions contemplated
herein.
7. Counterparts. This First
Amendment may be executed in several counterparts, each of which is
an original. It shall not be necessary in making proof of this
First Amendment or any counterpart hereof to produce or account for
any of the other counterparts. A copy of this First Amendment
signed by one party and faxed to another party shall be deemed to
have been executed and delivered by the signing party as though an
original. A photocopy of this First Amendment shall be effective as
an original for all purposes.
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Amendment to Convertible Promissory Notes
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IN WITNESS WHEREOF, the parties hereto,
have caused this First Amendment to Convertible Promissory Notes to
be duly executed and delivered as of the date first written above
to be effective as of the Effective Date.
/s/ Xxxxx X.
Xxxxx
Xxxxx
X. Xxxxx
Executive
Vice President and General Counsel
HOLDER:
SK ENERGY, LLC
By: /s/ Xxxxx X.
Xxxxx
Name: Xxxxx X.
Xxxxx
Title: CEO and
Owner
First
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