Unassociated Document


    Exhibit
4.16

     

     

    THIS NOTE
HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE.  THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THE
SECURITIES ARE “RESTRICTED” AND MAY
NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT,
PURSUANT TO REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH
OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.  FURTHER HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH
THE ACT.

     

    


    BONANZA
OIL & GAS, INC.

     

    PROMISSORY NOTE

     

    
      	
              Amount:
      $340,000

            	 	
                          Houston,
      Texas

            


    

     

    May 26,
2009

     

    


     

    FOR VALUE
RECEIVED, the adequacy of which is hereby acknowledged, BONANZA OIL & GAS,
INC., a Nevada corporation (“Borrower”), hereby promises to pay to the order of
Calibre Fund SPC, for and on behalf of the Calibre Secured and Mezzanine Loan
Fund segregated portfolio, a Cayman Islands Segregated Portfolio Company with
its registered office address at c/o Mourant Cayman Corporate Services, Ltd.
Harbour Centre, 42 North Church Street PO Box 1348 Grand Cayman
KY1-1108 Cayman Islands (the “Lender”), the principal sum of three hundred
and forty thousand dollars ($340,000) (the “Principal Amount”), in lawful money
of the United States of America, ninety (90) days from the date hereof (the
“Maturity Date”).

     

    This
Promissory Note (the “Note”) evidences
loans to be made to Borrower. The Lender is entitled to the benefits of the Note
and, subject to the terms and conditions set forth herein and therein, may
enforce the agreements contained herein and therein and exercise the remedies
provided for hereby and thereby or otherwise available in respect hereto and
thereto.

     

    


    
      	
              1.  

            	
              Interest. The
      interest on the Principal Amount ($13,600), calculated at a rate of
      sixteen percent (16%) per annum shall be paid on the Maturity Date. Any
      amount of principal, fees or interest on this Note which are not paid at
      the Maturity Date shall bear interest at the rate of eighteen percent
      (18%) per annum from the due date thereof until the same is paid (“Default
      Interest”).

            


    

    


    
      	
              2.  

            	
              Transaction
      Fee. A transaction fee equal to eight and eight tenths percent
      (8.8%) of the Principal Amount (the “Fee”) whereas five percent (5%) will
      be due and payable by the Borrower upon the closing of this transaction
      (the “Closing”) and the remaining three and eight tenths percent (3.8%) is
      due and payable within 30 days of the transaction (the
      “Closing”).

            


    

     

     

     

    
      
         

      

      
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              3.  

            	
              Warrants:  Upon
      the Closing, Borrower will also issue five hundred thousand (500,000)
      warrants exercisable into shares of $0.001 par value common stock of
      Borrower at an exercise price of $0.10 per share and having a maturity of
      three (3) years from the Closing.

            


    

     

    
      	
              4.  

            	
              Use of
      Proceeds. Borrower anticipates the use of proceeds to be for: a)
      payment of principal and accrued interest on the
      outstanding  $285,000.00 note held by Mr. Harris which became
      due and payable as of May 22, 2009  b) Transaction fees for this
      note, c) Audit fees, d) Transfer agent fees, e) General
      &Administrative expenses.

            


    

     

    
      	
              5.  

            	
              Events of
      Default. The following events shall constitute an “Event of
      Default” under this Note:

            


    

    
      	
              a.  

            	
              Failure
      by Borrower to pay principal, fees, or accrued interest when due under
      this Note and such failure shall continue for ten days, in the case of
      overdue principal, and fifteen days, in the case of overdue interest or
      fees;

            


    

    


    
      	
              b.  

            	
              The
      institution by Borrower of proceedings to be adjudicated as bankrupt or
      insolvent or the filing by Borrower of a petition or answer or consent
      seeking reorganization, arrangement, composition or other relief with
      respect to their debts; or the consent by Borrower to institution of
      bankruptcy or insolvency proceedings against Borrower or the consent by
      Borrower to the filing of any such petition; or the appointment of a
      receiver, liquidator, assignee, trustee or other similar official for all
      or any substantial part of its property or the general assignment by
      Borrower for the benefit of its creditors; or the taking of any action by
      Borrower in furtherance of any such action;
or

            


    

    


    
      	
              c.  

            	
              If,
      within sixty (60) days after the commencement of an action against
      Borrower (and service of process in connection therewith on Borrower)
      seeking any bankruptcy, insolvency, reorganization, liquidation or similar
      relief under any present or future statute, law or regulation, such action
      shall not have been resolved in favor of Borrower, or all orders or
      proceedings thereunder affecting the property of Borrower stayed, or if
      the stay of any such order or proceeding shall thereafter be set aside, or
      if, within sixty (60) days after the appointment without the consent or
      acquiescence of Borrower of any trustee or receiver for all or any
      substantial part of the property of Borrower, such appointment shall not
      have been vacated.

            


    

    


    
      	
              6.  

            	
              Remedies Upon an Event
      of Default.  If an Event of Default should occur, all
      outstanding Principal Amount of this Note and all interest accrued on the
      unpaid Principal Amount and all other amounts owing by Borrower including,
      but not limited to the Fee, shall be converted, at the option of the
      Lender, into non-restricted $0.001 par value common stock of the Borrower
      at a conversion price of $0.001 per share (the “Conversion Right”). This
      Conversion Right shall not be modified or deleted without the express
      written permission of the Lender.  All such rights and remedies
      are cumulative and not exclusive of any rights or remedies which the
      Lender would otherwise have under this Note or under any applicable
      law.

            


    

    


     

     

    
      
         

      

      
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              7.  

            	
              Expenses.
      Borrower agrees to pay any and all expenses (including attorneys’ fees and
      expenses) incurred by the Lender which are incurred in endeavoring to
      collect any amounts payable hereunder which are not paid when due (whether
      by acceleration or otherwise) or in otherwise enforcing any rights under
      this Note.

            


    

    


    
      	
              8.  

            	
              Notices. All
      notices and other communications provided for herein shall be in writing
      and shall be deemed to have been duly given if delivered personally, sent
      by registered or certified mail, return receipt requested, postage
      prepaid, sent via overnight delivery service or sent via facsimile, and
      shall be effective (1) when personally delivered, (2) on the day following
      delivery to an overnight courier service if sent for delivery within the
      United States (or on the second business day following delivery to such
      courier service if sent for delivery outside the United States), (3) on
      the business day following receipt of transmission if sent via facsimile,
      or (4) on the fifth business day after the date of mailing if sent by
      registered or certified mail, in each case to the following
      addresses:

            


    

    


    
      	
              (a)  

            	
              If
      to the Borrower:

            


    

     

    BONANZA
OIL & GAS, Inc.

    3000
Richmond Ave, Suite 400

    Houston,
TX 77098

    


    
      	
              (b)  

            	
              If
      to the Lender, to the address set forth in the Note Purchase Agreement, or
      such other address as is provided in writing to the Borrower by the
      Lender.

            


    

     

    
      	
              9.  

            	
              Assignment.
      This Note shall be binding on the Borrower and its successors and
      permitted assigns, and shall be binding upon and inure to the benefit of
      the Lender, any future holder of this Note and their respective successors
      and permitted assigns.  Neither the Borrower nor the Lender may
      assign or transfer this Note or any of its rights or obligations hereunder
      (other than by operation of law) without the other party’s prior written
      consent.

            


    

     

    
      	
              10.  

            	
              Waivers;
      Amendments. No delay or omission of Lender in exercising any right
      or power hereunder shall impair such right or power or be a waiver of any
      default or an acquiescence therein; and no single or partial exercise of
      any such right or power shall preclude other or further exercise thereof,
      or the exercise of any other right; and no waiver shall be valid unless in
      writing signed by Lender, and then only to the extent specifically set
      forth in such writing.  All remedies hereunder or by law
      afforded shall be cumulative and shall be available to Lender until the
      principal amount of and all interest on this Note have been paid in
      full.  No amendment of any provision of this Note shall be
      effective unless the same shall be in writing and signed by the Borrower
      and the Lender.

            


    

     

    
      	
              11.  

            	
              Governing Law.
      This Note shall be governed by and construed in accordance with the laws
      of the State of Virginia, without regard for the conflicts of laws
      principles thereof.

            


    

     

     

     

    
      
         

      

      
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              12.  

            	
              Severability.
      In the event any one or more of the provisions contained in this Note
      shall for any reason be held to be invalid, illegal or unenforceable in
      any respect, such invalidity, illegality or unenforceability shall not
      affect any other provision hereof, and this Note shall be construed as if
      such invalid, illegal or unenforceable provision had never been contained
      herein.

            


    

     

    


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    IN
WITNESS WHEREOF, Lender has executed this Note as of the date first above
written.

    


    


    


    BORROWER:

     

    BONANZA
OIL & GAS, INC.

     

    By:/s/ Bill
Wiseman

    Signature

    


    Name:   Bill
Wiseman

    Title:    CEO

    


     

    


     

    LENDER:

     

    CALIBRE
FUND SPC, FOR AND ON BEHALF OF CALIBRE MEZZANINE AND SECURED LOAN FUND
SEGREGATED PORTFOLIO

     

    


     

    By:/s/ Ryan R.
Riley

     

    Print Name: Ryan R.
Riley

     

    Title: Investment Manager,
Director

     

    Address: c/o Ryan Riley
18517 Perdido Bay Terrace Leesburg VA 20176_USA

     

    Telephone: 703 669
8023

     

    Facsimile: _703 935
4465

     

    Email:
rrr@calibrecg.com

     

     

     

     

    
 

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