ex101.htm


    Exhibit 10.1

     

    Bonanza
Oil & Gas, Inc.

    3417
Mercer, Suite E

    Houston,
Texas  77027

    


    January
29, 2010

    


    Kenneth
Orr, CEO

    Triumph
Small Cap Fund, Inc.

    


    Re:           Bonanza
Oil & Gas, Inc. (the “Company”)

    


    Gentlemen:

    


    The Company hereby further acknowledges
that Triumph Small Cap Fund, Inc. (“TSC”) has acquired 14% secured
promissory note in the principal amount of $750,000 (the “14% Note”) and (ii) a
convertible promissory note in the principal amount of $750,000 issued on May
2008 (the “May 2008 Note” and
collectively with the 14% Note, the “Notes”) from Samuel
Weiss.    On December 2, 2009, the Company and TSC amended
the Notes pursuant to that certain Letter Agreement.  The parties wish
to further amend the Notes as follows.

    


    The Company and TSC hereby agree that
the 14% Note shall be amended and restated to incorporate the following
provision:

    


    The
Lender shall have the right from time to time to convert all or any part of the
outstanding and unpaid principal amount of this Note into fully paid and
non-assessable shares of Common Stock at the conversion price (the “Conversion Price”) determined
as provided herein (a “Conversion”); provided, however, that in no
event shall the Lender be entitled to convert any portion of this Note in excess
of 4.9% of the outstanding shares of Common Stock. For purposes of the proviso
to the immediately preceding sentence, beneficial ownership shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder.  The number of shares of
Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of
conversion.  The term “Conversion Amount” means, with
respect to any conversion of this Note, the sum of (1) the principal amount of
this Note to be converted in such conversion plus (2) accrued and
unpaid interest, if any.  The Conversion Price is the Fixed Conversion
Price (as defined herein). The “Fixed Conversion Price” shall
mean $0.0025.

    


    The
Company and TSC hereby agree that Section 1.2 of the May 2008 Note shall be
amended and restated as follows:

    


    1.2
Conversion Price.  The Conversion Price is the the Fixed Conversion
Price (as defined herein). The “Fixed Conversion Price” shall
mean $0.0025.

    


    The parties further acknowledge that
the holder of the Notes is not an affiliate of the Company and TSC represents
that it is not an affiliate of the Company.  As a result, the shares
of common stock issued upon conversion of the Notes (the “Conversion Shares”)
will be eligible to resold under Rule 144 as the Conversion Shares holding
period will tack to the initial date of issuance of the
Notes.  Accordingly, the Company, upon conversion of the Notes and
receipt of the standard representation letters from TSC, will direct the
transfer agent to issue the Conversion Shares without the standard “33 Act”
restrictive legend.

    


    Further, the Company hereby represents
and warrants that it has reserved and the Company shall continue to reserve and
keep available at all times, free of preemptive rights, all shares of common
stock available enabling the Company to issue the Conversion
Shares.  The Company shall reserve a sufficient number of shares of
common stock for the purpose of enabling the Company to issue the Conversion
Shares. This letter agreement may be executed in one or more
counterparts.  We hereby request that you execute this letter
agreement below acknowledging and agreeing to the terms set forth
herein.

     

    
      
        	 	      
                Sincerely,

                 

                Bonanza Oil & Gas, Inc.

              	 
	 	 	 	 
	
              	
                By:
      

              	/s/ William
      Wiseman	 
	 	 	William
      Wiseman	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 


      

    

    


    
      
        	AGREED
      AND ACKNOWLEDGED:
      
                


                Triumph
      Small Cap Fund, Inc.

                 

                 

              	 	 	 	 
	
                /s/Kenneth
      Orr

              	 	 	
              	 
	
                Kenneth
      Orr

              	 	 	
                 

              	 
	
                Chief
      Executive Officer