EXHIBIT 10.2
 
THIS NOTE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE ALIENATED OR ENCUMBERED WITHOUT THE PRIOR WRITTEN CONSENT OF THE
BORROWER.
 
 
$750,000.00
State of Utah
October 1, 2012

BUYER NOTE
 
FOR VALUE RECEIVED, Tonaquint, Inc., a Utah corporation (the “Borrower”), hereby
promises to pay to Bonanza Goldfields Corp., a Nevada corporation (the “Lender,”
and together with the Borrower, the “Parties”), the principal sum of $750,000.00
together with all accrued and unpaid interest thereon, fees incurred or other
amounts owing hereunder, all as set forth below in this Buyer Note (this
“Note”). This Note is issued pursuant to that certain Securities Purchase
Agreement of even date herewith entered into by and between the Borrower and the
Lender (as the same may be amended from time to time, the “Purchase Agreement”),
pursuant to which the Lender issued to the Borrower that certain Secured
Convertible Promissory Note in the principal amount of $1,660,000.00 (as the
same may be amended from time to time, the “Lender Note”), convertible into
shares of the Company’s Common Stock.  All capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the
Purchase Agreement.
 
1. Principal and Interest. Interest shall accrue on the unpaid principal balance
and any unpaid late fees or other fees under this Note at a rate of five percent
(5.0%) per annum until the full amount of the principal and fees has been
paid.  Interest shall be computed on the basis of a 365-day year for the actual
number of days elapsed.  Notwithstanding any provision to the contrary herein,
in no event shall the applicable interest rate at any time exceed the maximum
interest rate allowed under applicable law, as provided in Section 11
below.  The entire unpaid principal balance and all accrued and unpaid interest,
if any, under this Note, shall be due and payable on or before the earlier of
(i) sixty (60) days following the occurrence of the Maturity Date (as defined in
the Lender Note) under the Lender Note, and (ii) so long as (A) the Conversion
Shares (as defined in the Lender Note) are then freely saleable under Rule 144
promulgated under the Securities Act of 1933, as amended (the “1933 Act”) or the
Conversion Shares are covered by an effective registration statement of the
Lender under the 1933 Act, (B) the Borrower has been required to prepay that
certain Buyer Mortgage Note #3 of even date herewith in the principal amount of
$400,000 (“Buyer Mortgage Note #3”) pursuant to Section 1(ii) of such Buyer
Mortgage Note #3, and (C) the Lender has produced two hundred (200) ounces of
gold within sixty (60) days of the date the Borrower was required to prepay
Buyer Mortgage Note #3 pursuant to the terms thereof, and does so with an
average production of at least 1 (one) gram per ton of processed material (all
as independently verified by the Borrower prior to such condition being deemed
satisfied), the date on which the Outstanding Balance (as defined in the Lender
Note) owed by the Lender under the Lender Note is equal to or less than
$900,000.00 (the “Buyer Note Maturity Date”).
 
 
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2. Payment. Unless prepaid, all principal and accrued interest under this Note
is payable in one lump sum on the Buyer Note Maturity Date. All payments of
interest and principal shall be (i) in lawful money of the United States of
America, and (ii) in the form of immediately available funds. All payments shall
be applied first to costs of collection, if any, then to accrued and unpaid
interest, and thereafter to principal. Payment of principal and interest
hereunder shall be delivered to the Lender at the address furnished to the
Borrower for that purpose.
 
3. Prepayment by the Borrower. The Borrower may, in its sole and absolute
discretion, pay, without penalty, all or any portion of the outstanding balance
along with any accrued but unpaid interest on this Note at any time prior to the
Buyer Note Maturity Date.
 
4. Security. The Borrower may, in its sole discretion, designate collateral (the
“Collateral”) as it deems fit, as security for the Borrower’s obligations
hereunder, which Collateral may be, but is not required to be, in the form of a
letter of credit with a financial institution determined by the Borrower in its
sole discretion, provided that the fair market value of the Collateral shall not
be less than the principal balance of this Note as of the date of any such
designation.  Upon the Borrower’s designation of Collateral, each of the
Borrower and the Lender shall timely execute any and all documents necessary or
advisable in order to properly grant a security interest upon the Collateral in
favor of the Lender.
 
5. Release. The Lender covenants and agrees that in the event that this Note is
secured by Collateral, the Lender shall timely execute any and all documents
necessary or advisable in order to release such security interest and Collateral
to Borrower, or Borrower’s designee, upon the earlier of (i) the date this Note
is paid in full and (ii) the date that is six (6) months and three (3) days
following the date such Collateral is given as security for this Note, or such
later date as determined in the sole discretion of the Borrower (the “Release
Date”).  For avoidance of doubt, as of the date hereof, there is no collateral
securing this Note, and after the Release Date, as applicable, there shall be no
collateral securing this Note.
 
6. Right of Offset. Notwithstanding anything to the contrary herein or in any of
the other Transaction Documents, in the event (i) of the occurrence of any Event
of Default (as defined in the Lender Note) under the Lender Note or any other
note issued by the Lender in connection with the Purchase Agreement, (ii) the
Borrower exercises any Event of Default Redemption Right or Fundamental
Transaction Redemption Right (as such terms are defined in the Lender Note)
under the Lender Note, (iii) the Lender Note is accelerated for any reason, or
(iv) of a breach of any material term, condition, representation, warranty,
covenant or obligation of the Lender under any Transaction Document, the
Borrower shall be entitled to deduct and offset any amount owing by the Lender
under the Lender Note from any amount owed by the Borrower under this Note.  In
the event that the Borrower’s exercise of its offset rights under this Section 6
results in the full satisfaction of the Borrower’s obligations under this Note,
then the Lender shall return this Note to the Borrower for cancellation or, in
the event this Note has been lost, stolen or destroyed, the Lender shall provide
the Borrower with a lost note affidavit in a form reasonably acceptable to the
Borrower.
 
 
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7. Default. If any of the events specified below shall occur (each, an “Event of
Default”) the Lender may declare the unpaid principal balance under this Note,
together with all accrued and unpaid interest thereon, fees incurred or other
amounts owing hereunder immediately due and payable, by notice in writing to the
Borrower.  If any default, other than a Payment Default (as defined below), is
curable, then the default may be cured (and no Event of Default will have
occurred) if the Borrower, after receiving written notice from the Lender
demanding cure of such default, either (a) cures the default within fifteen (15)
days of the receipt of such notice, or (b) if the cure requires more than
fifteen (15) days, immediately initiates steps that the Lender deems in the
Lender’s reasonable discretion to be sufficient to cure the default and
thereafter diligently continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical. Each of the
following events shall constitute an Event of Default:
 
(a) Failure to Pay. The Borrower’s failure to make any payment when due and
payable under this Note (a “Payment Default”);
 
(b) Breaches of Covenants. The Borrower’s failure to observe or perform any
other covenant, obligation, condition or agreement contained in this Note;
 
(c) Representations and Warranties. If any representation, warranty,
certificate, or other statement (financial or otherwise) made or furnished by or
on behalf of the Borrower to the Lender in writing in connection with this Note
or any of the other Transaction Documents, or as an inducement to the Lender to
enter into the Purchase Agreement, shall be false, incorrect, incomplete or
misleading in any material respect when made or furnished; and
 
(d) Involuntary Bankruptcy. If any involuntary petition is filed under any
bankruptcy or similar law or rule against the Borrower, and such petition is not
dismissed within sixty (60) days, or a receiver, trustee, liquidator, assignee,
custodian, sequestrator or other similar official is appointed to take
possession of any of the assets or properties of the Borrower or any guarantor.
 
8. Binding Effect; Assignment. This Note shall be binding on the Parties and
their respective heirs, successors, and assigns; provided, however, that neither
party shall assign any of its rights hereunder without the prior written consent
of the other party, except that the Borrower may assign this Note to any of its
Affiliates without the prior written consent of the Lender and, furthermore, the
Lender agrees that it shall not unreasonably withhold, condition or delay its
consent to any other assignment of this Note by the Borrower.
 
9. Governing Law; Venue. The terms of this Note shall be construed in accordance
with the laws of the State of Utah as applied to contracts entered into by Utah
residents within the State of Utah, which contracts are to be performed entirely
within the State of Utah.  With respect to any disputes arising out of or
related to this Note, the Parties consent to the exclusive personal jurisdiction
of, and venue in, the state courts located in Salt Lake County, State of Utah
(or in the event of federal jurisdiction, the United States District Court for
the District of Utah), and hereby waive, to the maximum extent permitted by law,
any objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdiction or to any claim that such
venue of the suit, action or proceeding is improper.
 
 
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10. Customer Identification–USA Patriot Act Notice. The Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the
Lender’s policies and practices, the Lender is required to obtain, verify and
record certain information and documentation that identifies the Borrower, which
information includes the name and address of the Borrower and such other
information that will allow the Lender to identify the Borrower in accordance
with the Act.
 
11. Lawful Interest. It being the intention of the Lender and the Borrower to
comply with all applicable laws with regard to the interest charged hereunder,
it is agreed that, notwithstanding any provision to the contrary in this Note or
any of the other Transaction Documents, no such provision, including without
limitation any provision of this Note providing for the payment of interest or
other charges, shall require the payment or permit the collection of any
amount  in excess of the maximum amount of interest permitted by law to be
charged for the use or detention, or the forbearance in the collection, of all
or any portion of the indebtedness evidenced by this Note or by any extension or
renewal hereof (“Excess Interest”). If any Excess Interest is provided for, or
is adjudicated to be provided for, in this Note or any of the other Transaction
Documents, then in such event:
 
(a) the provisions of this Section shall govern and control;
 
(b) the Borrower shall not be obligated to pay any Excess Interest;
 
(c) any Excess Interest that the Lender may have received hereunder shall, at
the option of the Lender, be (i) applied as a credit against the principal
balance due under this Note or the accrued and unpaid interest thereon not to
exceed the maximum amount permitted by law, or both, (ii) refunded to the
Borrower, or (iii) any combination of the foregoing;
 
(d) the applicable interest rate or rates shall be automatically subject to
reduction to the maximum lawful rate allowed to be contracted for in writing
under the applicable governing usury laws, and this Note and the Transaction
Documents shall be deemed to have been, and shall be, reformed and modified to
reflect such reduction in such interest rate or rates; and
 
(e) the Borrower shall not have any action or remedy against the Lender for any
damages whatsoever or any defense to enforcement of this Note or arising out of
the payment or collection of any Excess Interest.
 
12. Pronouns. Regardless of their form, all words used in this Note shall be
deemed singular or plural and shall have the gender as required by the text.
 
 
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13. Headings. The various headings used in this Note as headings for sections or
otherwise are for convenience and reference only and shall not be used in
interpreting the text of the section in which they appear and shall not limit or
otherwise affect the meanings thereof.
 
14. Time of Essence. Time is of the essence with this Note.
 
15. Severability. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of the Parties to
the fullest extent permitted by law and the balance of this Note shall remain in
full force and effect.
 
16. Attorneys’ Fees. If any action at law or in equity is necessary to enforce
this Note or to collect payment under this Note, the Lender shall be entitled to
recover reasonable attorneys’ fees directly related to such enforcement or
collection actions.
 
17. Amendments and Waivers; Remedies. No failure or delay on the part of either
Party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to either
Party hereto at law, in equity or otherwise. Any amendment, supplement or
modification of or to any provision of this Note, any waiver of any provision of
this Note, and any consent to any departure by either Party from the terms of
any provision of this Note, shall be effective (i) only if it is made or given
in writing and signed by the Borrower and the Lender and (ii) only in the
specific instance and for the specific purpose for which made or given.
 
18. Notices. Unless otherwise provided for herein, all notices, requests,
demands, claims and other communications hereunder shall be given in accordance
with the subsection of the Purchase Agreement titled “Notices.” Either Party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by providing notice thereof in the
manner set forth in the Purchase Agreement.
 
19. Final Note. This Note, together with the other Transaction Documents,
contains the complete understanding and agreement of the Borrower and the Lender
and supersedes all prior representations, warranties, agreements, arrangements,
understandings, and negotiations of the Borrower and Lender with respect to the
subject matter of the Transaction Documents. THIS NOTE, TOGETHER WITH THE OTHER
TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
 
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IN WITNESS WHEREOF, the Parties have executed this Note as of the date set forth
above.
 

  BORROWER:           TONAQUINT, INC.        
 
By:
       
John M. Fife, President
          ACKNOWLEDGED, ACCEPTED AND AGREED:               BONANZA GOLDFIELDS
CORP.               By: ______________________________________        
Name: _____________________________        
Title:   _____________________________
     

 

 
[Signature page to Buyer Note]
 
 
 
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