ex41.htm


    Exhibit
4.1

     

    BRIDGE
NOTE

    


    February
2, 2009

    Houston,
Texas

    


    FOR VALUE
RECEIVED, Bonanza Oil and Gas, Inc. (the "Maker"), hereby promises to pay Thomas
D. Harris (the "Payee"),
at such place as Payee may, from time to time, designate, the principal sum of
$285,000 (two hundred eighty
five thousand and no/100) in lawful money of the United States ninety
(90) days from the date hereof (the “Maturity Date”).

    


    Maker
further promises to pay interest on the unpaid principal balance hereof at the
rate of fourteen percent (14%) per annum, such interest to be paid at maturity.
Interest shall be calculated on the basis of a 360 day year and actual days
elapsed. In no event shall the interest charged hereunder exceed the maximum
permitted under the laws of the State of Virginia.

    


    This Note
can be prepaid in whole or in part at any time without the consent of the Payee
provided that Maker shall pay all interest on the principal for the entire term
of the note.

    


    Maker
warrants that any proceeds from an offering of financial instruments of any type
(including equity, debt, hybrid, or other offering) that it receives after the
date of receipt of monies related to this Note shall be first used to repay all
interest and principal pursuant to this Note before being used for any other
purpose whatsoever.

    


    Notwithstanding
the due date of this Note specified above, the entire unpaid principal balance
of this Note and interest accrued with respect thereto shall be immediately due
and payable upon the occurrence of any of the following:

    


    The Maker
becoming insolvent (however defined or evidenced), committing an act of
bankruptcy, making an assignment for the benefit of creditors or making or
sending a notice of intended bulk transfer, or if a meeting of creditors is
convened or a committee of creditors is appointed for, or any petition or
proceeding for any relief under any bankruptcy, reorganization, insolvency,
readjustment of debt, receivership, liquidation or dissolution law or statute
now or hereinafter in effect (whether at law or in equity) is filed or commenced
by or against Maker or any property of Maker, or the appointment of a receiver
or trustee for Maker or any property of Maker.

    


    The Maker
waives demand, presentment, protest and notice of any kind.

    


    This Note
may not be changed, modified or terminated orally, but only by an agreement in
writing, signed by both parties.

    


    This Note
shall be governed by and construed in accordance with the laws of the State of
Virginia to the benefit of the Payee, its successors, endorsees, assigns, heirs,
administrators and executors and shall be binding upon the successors, assigns,
heirs, administrators and executors of the Maker.

    


    The
outstanding principal balance of this Note, and any accrued interest thereon,
shall become immediately due and payable without notice, presentment, protest or
demand upon the occurrence at any time of any of the following events of default
(individually, “an Event of Default” and collectively, “Events of
Default”):

    


    
      	
              (i)  

            	
               the
      Maker fails to pay any of the principal, interest or any other amounts
      payable under this Note within five (5) business days when due and
      payable;

            


    

    


    
      	
              (ii)  

            	
              the
      Maker files any petition or action for relief under any bankruptcy,
      reorganization, insolvency or moratorium law or any other law for the
      relief of, or relating to, debtors, now or hereafter in effect, or seeks
      the appointment of a custodian, receiver, trustee (or other similar
      official) of the Maker or all or any substantial portion of the Maker’s
      assets, or makes any assignment for the benefit of creditors or takes any
      action in furtherance of any of the foregoing, or fails to generally pay
      its debts as they become due;

            


    

     

    
      
        
        

      

      
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              (iii)  

            	
               an
      involuntary petition is filed, or any proceeding or case is commenced,
      against the Maker (unless such proceeding or case is dismissed or
      discharged within ninety (90) days of the filing or commencement thereof)
      under any bankruptcy, reorganization, arrangement, insolvency, adjustment
      of debt, liquidation or moratorium statute now or hereafter in effect, or
      a custodian, receiver, trustee, assignee for the benefit of creditors (or
      other similar official) is applied or appointed for the Maker or to take
      possession, custody or control of any property of the Maker, or an order
      for relief is entered against the Maker by any court having jurisdiction
      in any of the foregoing;

            


    

     

    
      	
              (iv)  

            	
              (iv)
      the occurrence of a breach or default under any agreement, instrument or
      document to which the Maker is a party or by which it is bound involving
      any obligation for borrowed money of more than $100,000 in the aggregate
      that remains uncured for at least thirty (60) business days;
      or

            


    

    


    Upon and
after an Event of Default, the outstanding principal balance hereunder shall
continue to bear interest at a per annum interest rate equal to prime plus ten
percent (10%) until the Event of Default is cured or repayment in full has been
made to the Payee.

    


    Upon the
existence of an Event of Default that remains uncured, the Payee shall have the
right to declare the outstanding principal balance of this Note, together with
all accrued interest, immediately due and payable and the Payee shall thereafter
have all of the rights and remedies afforded creditors generally by the
applicable federal laws or the laws of the state of Virginia.

    


    The
outstanding principal balance of this Note, and accrued interest thereon, may be
prepaid in whole or in part at any time; however, the full interest will still
be levied. Maker shall not be liable hereunder for any further interest on any
amounts so prepaid. All prepayments of this Note shall be applied first to
accrued and unpaid interest, and then to outstanding principal.

    


    All
payments by the Maker under this Note shall be made without set-off or
counterclaim and be free and clear and without any deduction or withholding for
any taxes or fees of any nature whatever, unless the obligation to make such
deduction or withholding is imposed by law.

    


    No delay
or omission on the part of the Payee in exercising any right under this Note
shall operate as a waiver of such right or of any other right of the Payee, nor
shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion.

    If any
term or provision of this Note shall be held invalid, illegal or unenforceable,
the validity of all other terms and provisions hereof shall in no way be
affected thereby.

    


    Miscellaneous.

    


    a. The
representations and warranties of the Borrower contained herein shall not
survive the Closing Date.

    


    b. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Virginia without giving effect to conflicts of laws principles that
would result in the application of the substantive laws of another jurisdiction.
This Agreement shall not be interpreted or construed with any presumption
against the party causing this Agreement to be drafted.

     

    
      
        
        

      

      
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    c. The
Bank and Borrower agree to submit to binding arbitration by the American
Arbitration Association (the "AAA")of all claims, disputes and controversies
(whether in tort, contract, or otherwise, except
"core proceedings" under the U.S. Bankruptcy Code) arising between themselves
and their respective employees, officers, directors, attorneys and other agents,
which relate in any way without limitation to existing and future loans and
extensions of credit or requests for additional credit, including by way of
example but not by way of limitation the negotiation, collateralization,
administration, repayment, modification, default, termination and enforcement of
such loans or extensions of credit. Arbitration under this Agreement will be
governed by the Federal Arbitration Act and proceed in Virginia in accordance
with AAA Rules. Arbitration will be conducted before a single neutral arbitrator
selected in accordance with AAA Rules and who shall be an attorney who has
practiced commercial law for at least ten years. The arbitrator will determine
whether an issue is arbitratable and will give effect to applicable statutes of
limitation. Judgment upon the arbitrator's award may be entered in any court
having jurisdiction. The arbitrator has the discretion to decide, upon documents
only or with a hearing, any motion to dismiss for failure to state a claim or
any motion for summary judgment. The institution and maintenance of an action
for judicial relief or for any provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief. Discovery will be governed by the Virginia Rules of
Civil Procedure. Discovery must be completed at least 20 days before the hearing
date and within 180 days of the commencement of arbitration. Each request for an
extension and all other discovery disputes will be determined by the arbitrator
upon a showing that the request is essential for the party's presentation and
that no alternative means for obtaining information are available during the
initial discovery period. This Agreement does not limit the right of either
party to a) foreclose against real or personal property collateral; b) exercise
self-help remedies such as setoff or repossession; c) obtain provisional
remedies such as replevin, injunctive relief, attachment or the appointment of a
receiver during the pendency or before or after any arbitration proceeding; or
d) obtain a cognovit judgment, if available. These exceptions do not constitute
a waiver of the right or obligation of either party to submit any dispute to
arbitration, including those arising from the exercise of these
remedies.

    


    d. Any
forbearance, failure, or delay by the Lender in exercising any right, power, or
remedy shall not preclude the further exercise thereof, and all of the Lender’s
rights, powers, and remedies shall continue in full force and effect until
specifically waived in writing by the Lender.

    e. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other
party.

    


    f. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

    


    g. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

    


    h. This
Agreement, the Bridge Note and the instruments referenced herein contain the
entire understanding of the parties with respect to the matters covered herein
and therein. No provision of this Agreement may be waived or amended other than
by an instrument in writing signed by the party to be charged with
enforcement.

    


    i. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns. The Borrower shall not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the
Lender. Notwithstanding the foregoing, the Lender may assign its rights
hereunder to any other person or entity without the consent of the
Borrower.

    


    j. 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.

    


    k. All
remedies of the Lender under this Agreement, the Bridge Note and the other
Bridge Loan Documents (i) are cumulative and concurrent, (ii) may be exercised
independently, successively or together with other lenders against the Borrower,
(iii) shall not be exhausted by any exercise thereof, but may be exercised as
often as occasion therefore may occur, and (iv) shall not be construed to be
waived or released by the Lender’s delay in exercising, or failure to exercise,
them or any of them at any time it may be entitled to do so.

    


    
      
        
        

      

      
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        	 	Bonanza
      Oil and Gas, Inc.	 
	 	 	 	 
	
                February
      2, 2009

              	
                By:
      

              	/s/ William
      Wiseman	 
	 	 	William
      Wiseman	 
	 	 	CEO	 
	 	 	 	 


      



     

    


    By:/s/ Thomas
D. Harris

    
      

    

    Thomas D.
Harris

    8820 Path
Valley Road

    PO Box
289

    Fannettsburg,
PA 17221

    


    _________________

    Date

     

     

     

     

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