Document:

Bonanza Oil & Gas, Inc. : Exhibit 4.3 - Filed by newsfilecorp.com

Exhibit 4.3

BONANZA OIL & GAS, INC.

A Nevada Corporation

$800,000 SENIOR SECURED PROMISSORY NOTE 

PRINCIPAL AMOUNT DUE JANUARY 31, 2009 

14.0% COUPON, PAYABLE MONTHLY 

PRINCIPAL AMOUNT OF THIS NOTE: $800,000.00 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES ARE RESTRICTED AND
MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. 

THIS NOTE AND SECURITY AGREEMENT is issued by BONANZA OIL & GAS, Inc., a Nevada corporation (hereinafter called the "Company") and is designed as its 14.0% Senior Secured Promissory Notes due January 31, 2009 (the “Note”). This Note is
one of an authorized issue of unregistered debt obligations of the Company, which are collectively secured by the Company’s assets set forth in the Security Agreement attached hereto as Exhibit “A”. The Company has also entered in to
concurrently herewith the Securities Purchase Agreement attached hereto as Exhibit “B”. Exhibits A and B, along with this Note, are referred to collectively herein as the “Loan Documents.” This Note matures on January 31, 2009
with interest payments due monthly beginning March 31, 2008.

FOR VALUE RECEIVED, the Company promises to pay to _________ (the “Lender”), the principal sum of ______________________________________ DOLLARS on January 31, 2009 (the “Maturity Date”) and to pay interest
on the principal sum outstanding on a quarterly basis at the rate of 14.0% per annum, accruing from the date of initial issuance (the “Monthly Interest Dates”). If the Maturity Date is not a business day in the State of Nevada, then such
payment shall be made on the next succeeding business day. The Company will pay the principal amount and interest due upon this Note by cashier’s or certified check on the Maturity Date and the Monthly Interest Dates, less any amount required
by law to be deducted.

	
I. 		
THE NOTE AGREEMENT

	
	 	 	 
		
1. 		
MATURITY. This Note shall mature and the outstanding principal balance and the final accrued monthly interest payment shall be due and payable on the Maturity Date. The Company will pay the principal amount and interest due
upon this Note by cashier's or certified check on the Maturity Date.

	
	 	 	 
		
2. 		
INTEREST 

	

a. 

The outstanding principal balance of this Note shall bear interest at the rate of fourteen (14.0%) per annum. Interest shall accrue and be calculated on the basis of a 365-day year for the actual days elapsed. Interest payments shall be made on a quarterly basis commencing March 31, 2008 and on the
Maturity Date.

	 	 	 	 
	 		
b. 		
This Note shall be deemed to be entered into by the parties within the State of Nevada and shall not be subject to any usury law or limitation.

	
	 	 	 	 
	 
	
3. 		
PREPAYMENT. At its option, the Company may prepay all or any portion of the outstanding principal balance of this Note at any time or from time to time without penalty or premium by giving the Lender not less than ten (10)
days advance written notice and paying one hundred percent (100%) of the principal amount being prepaid plus all accrued and. unpaid interest thereon. All principal amounts prepaid shall cease to bear interest on the date of payment. If the Notes
are held by more than one person and the Company elects to prepay less than all of the outstanding principal balance, then the Company shall prepay the same percentage of the outstanding principal balance of the Notes held by each such person
resulting in a pro rata payment to the holders of the Notes.

	
	 	 	 	 
	 
	
4. 		
TRANSFER. The Lender may offer, sell, transfer, assign, pledge, hypothecate, or otherwise dispose of or encumber this Note, in person or by duly authorized attorney, at the offices of the Company upon surrender of this Note
and on presentation of a duly executed written instrument of transfer, together with a written opinion of the Lender's legal counsel, reasonably satisfactory to the Company and its legal counsel, to the effect that this Note may be lawfully offered,
sold, transferred, assigned, pledged, hypothecated, or otherwise disposed of or encumbered without registration and/or qualification under an applicable federal and state securities laws then in effect or in reliance upon an applicable exemption
from such registration and/or qualification requirements. Thereupon, the Company shall issue a new Note or Notes of the same aggregate principal amount and amount and in authorized denominations. The Company may issue stop transfer to its transfer
agent in connection with such securities laws restrictions. Any offer to sell, sale, transfer, assignment, pledge, hypothecation, or other disposition or encumbrance of this Note, or any interest therein, effected in violation of the foregoing
transfer restrictions, is unlawful and shall not be consummated on the books and records of the Company or otherwise be recognized as valid by the Company, and the Company shall not have any liability therefor. The Company may, in its sole and
absolute discretion, require the Lender seeking to offer, sell, transfer, assign, pledge, hypothecate, or otherwise dispose of or encumber this Note, to indemnify the Company for any claim or loss resulting from the transfer, and failure to do so,
shall be substantial and good faith justification for the Company to decline the requested transfer on the books and records of the Company.

	
	 	 	 	 
	 
	
5. 		
Representations and Warranties of Company. As a material inducement for Lender to enter into this Agreement. Company hereby represents and warrants to Lender as follows:

	
	 	 	 	 
	 		
a. 		
Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the power and authority to carry on its business as is now being conducted.

	
	 	 	 	 
	 		
b. 		
Company has all requisite power and authority to enter into this Agreement and the other Loan Documents contemplated hereby and to assume and perform fully its obligations hereunder. The execution and delivery by Company of this Agreement and the other Loan Documents contemplated hereby and the performance by Company of its obligations hereunder have been
duly and validly authorized by all necessary corporate action of Company. This Agreement and the other Loan Documents contemplated hereby have been duly executed and delivered by the Company. This Agreement and the other Loan Documents contemplated
hereby constitute valid and binding obligations and agreements of Company and are enforceable in accordance with their terms.

	

	 
	 
	
c. 		
The execution and delivery of this Agreement and the other Loan Documents contemplated hereby and the performance by Company hereunder (i) do not and will not conflict with or violate any provision of the bylaws of Company and
(ii) do not and will not (A) conflict with or result in a breach of the terms, conditions or provisions of, (B) constitute a default under (C) result in the creation of any encumbrance, lien or other restriction of any nature upon the Company's
assets pursuant to, (D) give any third party the right to modify, terminate or acce1erate any obligation under, (E) result in a violation of, or require any authorization. consent, approval, exemption or other action by or notice to any third party
pursuant to, any agreement, instrument, order, judgment, license, permit, decree, law, regulation, ordinance or judgment to which any of Company or the Collateral (as that term is defined in the Security Agreement) or is a patty or is subject or
bound.

	
	 	 	 	 
	 
	 
	
d. 		
No filings with, notices to or approvals or consents of, any federal, state or local governmental or regulatory agency or body or any other third person or entity are required to be obtained by Company in connection with the
consummation of the transactions contemplated by the Loan Documents.

	
	 	 	 	 
	 
	 
	
e. 		
Company has no material liability or obligation of any nature relating directly or indirectly to the assets of Company, with the exception of the Company’s $250,000 Secured Promissory Note due December 17, 2008 which are
secured by the Company’s Plantation assets (whether accrued or unaccrued, absolute or contingent, known or unknown, due or to become due, liquidated or unliquidated or secured or unsecured or otherwise). Company is not aware of any basis upon
which any such liability or obligation may he asserted against Company or its employees, contractors or affiliates or otherwise adversely affect the transactions contemplated by the Loan Documents.

	
	 	 	 	 
	 
	 
	
f. 		
There are no charges, complaints, actions, suits, disputes. investigations, arbitrations, demands or other proceedings pending or, to the best knowledge of Company, threatened before or by any court, governmental agency or
instrumentality, arbitrator, person or entity to which Company is, or is threatened to be, a party or to which. to the best knowledge of Company, any employee, independent contractor or affiliate of Company is or is threatened to be a party, or
which relate to Company, the business of Company, or any of the assets of Company or any other agreement related hereto. To the best knowledge of Company, there is no basis or grounds for any of the foregoing. Company is not subject to or bound by
any injunction, order or decree of any court or governmental or administrative agency.

	

	 		
g. 		
There are no existing defaults, events of default, breaches or other circumstances, facts or events that with the passage of time or giving of notice, or both, would constitute a default, event of default or breach on the part of
Company under any agreement of Company or otherwise.

	
	 	 	 	 
	 		
h. 		
Company has obtained and maintained all required local, state and federal licenses and permits necessary to operate Company’s business and all such licenses and permits are in good standing and Company has no knowledge of any
actions, claims or violations that are pending that would result in any limitations on or suspension or termination of such licenses.

	
	 	 	 	 
	 		
i. 		
All financial statements and reports relating to the Company provided by Company or made available or disclosed to Lender and its accountants, attorneys and other agents are complete, accurate and fairly present the financial
position and performance of Company in all material respects for the periods to which they relate, and there has been no adverse change in the condition, financial or otherwise, of Company since the last disclosed statement.

	
	 	 	 	 
	 		
j. 		
All of the representations and warranties made by Company contained in the Loan Documents contemplated hereby and all information delivered in any schedule, attachment, certificate or exhibit hereto are true, correct and complete
on the date of this Agreement, throughout the term of this Agreement. Company has not omitted to state to Lender any fact relating to the Company, which (i) is necessary to make the information given by or on behalf of Company not misleading, (ii)
if disclosed would reasonably affect the decision of a person considering making a loan to Company or (ill) has or which could reasonably be expected to have an adverse effect upon the Company or the profits, condition (financial or otherwise) or
prospects of the Company’s business.

	
	 	 	 	 
	 
	
6. 		
Affirmative and negative Covenants:

	
	 	 	 	 
	 		
a. 		
Company will provide unaudited copies of all quarterly financial statements to Lender within 45 days after the end of each quarter and audited yearly financial statements within 90 days after the end of each year.

	
	 	 	 	 
	 		
b. 		
Company shall maintain its existence, good standing and qualification to do business, where required, and comply with all laws, regulations and governmental requirements applicable to it or to any of its property, business
operations and transactions.

	
	 	 	 	 
	 		
c. 		
Company will notify Lender immediately if it becomes aware of the occurrence of any event of defaults (as defined herein or in any Loan Document, an “Event of Default”) or of any event that with the giving of notice or
passage of time, or both, could become an Event of Default.

	
	 	 	 	 
	 		
d. 		
During the term of the Loan Documents, Company agrees for itself and on behalf of any entity owned or controlled by Company ("Company's Subsidiary”) not to encumber further nor to further voluntarily grant a lien or security
interest upon any assets or property of Company or Company's Subsidiary (whether real, personal, or intangible) identified in Exhibit A. Company, for itself and Company’s Subsidiary, further covenants not to suffer or permit the filing of a lien by third parties (including
but not limited to tax liens and mechanics’ or materialman’s liens) upon any of the assets or property of Company or Company’s Subsidiary (whether real, personal, or intangible) identified in Exhibit A.

	

	 
	
7. 		
Events of Default: The occurrence of any of the following events, in addition to any other Events of Default as defined in any Loan Document, shall constitute an "Event of Default” hereunder:

	
	 	 	 	 	 
	 		
a. 		
Any provision of this Agreement or the Loan Documents, and any amendments thereto, is breached, with any applicable notice having been given and time to cure expired, or is untrue or misleading in any material respect;

	
	 	 	 	 	 
	 		
b. 		
Any warranty, representation, or statement made or furnished to Lender by Company in connection with any of the Loan Documents, is untrue or misleading in any material respect;

	
	 	 	 	 	 
	 		
c. 		
Company is in default under any provision of any Loan Document and/or any amendments thereto, including without limitation if the Company shall fail to pay on the due date any payment of money, whether as principal, interest, late
charge, or Enforcement Costs (as defined below), as required under this Agreement or any Loan Document, with any applicable notice having been given and time to cure expired;

	
	 	 	 	 	 
	 		
d. 		
The insolvency of the Company. For purposes hereof, the term “insolvency" shall mean: (i) the appointment, by the order of a court of competent jurisdiction, of a trustee, receiver, or liquidator of the Company, if such order
shall not be discharged or dismissed within sixty (60) days after such appointment; (ii) application for, or consent in writing to, the appointment of a receiver, trustee, or liquidator of all or substantially all of tile assets of the Company;
(iii) the filing of a voluntary petition in bankruptcy or the admission in writing of inability to pay debts as they become due; (iv) a general assignment for the benefit of creditors; (v) the filing of a petition or an answer seeking a
reorganization (other than a reorganization not involving the liabilities of the Company) or an arrangement with creditors or taking advantage of an bankruptcy or insolvency law; (vi) the filing of an answer admitting the material allegations of a
petition filed against the Company in any bankruptcy reorganization, or insolvency proceeding;
(vii) the insolvency of Company; (viii) the Company has suffered a material adverse effect in the reasonable discretion of the Lender; or
(ix) the entering of an order, judgment, or decree by any court of competent jurisdiction on the application of a creditor adjudicating the Company as bankrupt or insolvent, or the appointment of a receiver, trustee, or 1iquidator of the Company, or of all or substantially all of the assets of
the Company, if such order, judgment or decree continues unstayed and in effect for a period of sixty (60) days from the date entered;

	

	 		
e. 		
A Change in Control of Company. For purposes hereof, the term "Change in Control" shall mean an event whereby Company is acquired, or sells, conveys, leases in one transaction all or substantially all of its property, or otherwise
disposes of all or substantially all of its property or business or mergers, consolidates or enters into any recapitalization, reclassification, share exchange, conversion or other business combination or reorganization or acquisition or similar
transaction with any other entity (other than a wholly-owned subsidiary); provided, however, that any such transaction with which the Company is the surviving entity shall not be a Change in Control unless as a result of the transaction the
stockholders of Company own less than fifty percent (50%) of the voting power of the surviving entity after such extraordinary transaction or Company or its shareholders effect any other transaction or series of related transactions in which more
than fifty percent (50%) of the voting power of the Company directly or indirectly beneficially owned by Company's shareholders of record as of November 15, 2007 is disposed of; provided that a merger or sale effected solely for the purpose of
changing the domicile of the Company shall not be deemed a change in control of Company.

	
					
	 		
f. 		
Notwithstanding anything herein to the contrary, Company shall have
a ten (10) day grace period after notice from Lender to cure any non-monetary default hereunder. There shall be no grace period tor monetary default and no notice required by Lender for such default to be immediate and material. Time is of the essence hereunder.

	
					
	
    	
8. 		
Remedies Upon Default.

	
					
	 		
a. 		
If an Event of Default shall occur for any reason whatsoever (and whether such occurrences shall be voluntary or involuntary, or come about or be effected by operation of law or pursuant to or in compliance with any judgment,
decree, or order of any court, or any order, rule or regulation of any administrative or governmental body), or the discovery by Lender of the occurrence of any Event of Default, Lender shall have all of the rights and remedies under applicable law
and, in addition, without limiting the foregoing, the right to (a) cure such defaults, with the result that all costs and expenses incurred or paid by Lender in effecting such cure shall bear interest at the highest rate permitted by law, and shall
be payable upon demand; (b) accelerate the maturity of the Obligations (as defined in the Security Agreement) und demand the immediate payment thereof, and to charge the Default Rate on such Obligations without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, and the Lender shall have all of the rights, powers., and remedies available under the terms of the Loan Documents and all applicable laws; and (c) if the Note is not paid when due, whether at
maturity or by acceleration, the Company promises to pay all costs of collection and enforcement, including but not limited to, all expenses, including reasonable attorneys' fees, paralegals' fees, legal assistant’s fees and costs, including
those incurred on the appellate level and those incurred in connection with a determination of the amount of such fees and costs to which the other party is entitled, incurred by the Lender on account of such collection, whether or not suite is filed thereon (collectively, the "Enforcement Costs"). “Default Rate” shall mean 24% APR.

	

	 		
b. 		
Company hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, slay of execution, inquisition, and other rights to which Lender may otherwise be entitled under the laws or the
United States of America or of any state or possession of the United States of America now in force and which may hereafter be enacted.

	
				
	 
	
9. 		
Expenses. Upon the Closing, Company shall pay all costs and fees referenced herein, including without limitation documentary stamps, intangible tax, filing fees and costs and reasonable professional and attorney's fees,
with all such amounts deducted from loan proceeds at Closing.

	
				
	 
	
10. 		
Financing Statements. Company hereby consents to tile Lender's filing of any and all Uniform Commercial Code financing statements and deeds of trust as Lender deems necessary to perfect Lender's rights in the Collateral (as
that term is defined below) pursuant to the terms of this Agreement or other Loan Documents.

	
				
	 
	
11. 		
Company Indemnity. Company shall indemnify, defend and hold harmless Lender and its members, agents, partners, employees and independent contractors, at all times from and after the Closing Date, from and against any and
all claims, actions, damages, liabilities, losses (including consequential losses), judgments, penalties, interest, fines, expenses, and/or other costs (including attorneys' fees and court costs) arising from or relating to:

	
				
	 		
a. 		
any negligent action or omission of Company or any of the Company's employees, contractors, agents or any other person acting under Company's supervision or control prior to, as of, or following the Closing Date;

	
				
	 		
b. 		
any inaccuracy or breach of any representation or warranty made by Company in this Agreement or any other Loan Document, document or instrument executed or delivered by Company in connection with this Agreement or any breach or
non-performance of any covenant or agreements made by Company in this Agreement or any other Loan Document, document or instrument executed or delivered by Company in connection with this Agreement;

	
				
			
c. 		
any Loan Document and the payments due thereunder;

	
				
			
d. 		
the negligence or willful misconduct of Company, their agents or employees;

	
				
			
e. 		
the misapplication or conversion by Company of any insurance proceeds paid by reason of any loss, damage or destruction to the Collateral;

	
				
	 		
f. 		
any state of local documentary stamp taxes, intangible taxes, personal property taxes and sales tax, if any, imposed by virtue of the execution and acceptance of this Agreement, the Loan Documents, Lender's perfection of its
security interest in the Collateral, including without limitation deeds of trust filed with regard to the Lease Agreements, and the transactions contemplated hereby; and

	
				
			
g. 		
the Company voluntarily filing for bankruptcy under federal or state
laws.

	

	 
	
12. 		
Waiver. The Company hereby waives diligence, presentment, protest, notice of protest, notice of dishonor, and notice of nonpayment of this Note, and specifically consents to and waives notice of any renewal or extension of
this Note. The Company hereby waives the benefits of the statute of limitations to the maximum extent allowed by Law. No delay by the Lender in exercising any power or privilege hereunder, nor the single or partial exercise of any power or privilege
hereunder, shall preclude any other or further exercise thereof, or the exercise of any other power or privilege hereunder.

	
	 	 	 
	 
	
13. 		
Amendment. This Note may be waived, changed, modified, or amended only with the written consent of both the Company and the Lender.

	
	 	 	 
	 
	
14. 		
Security Interest. The amounts due and payable in the ordinary course of performance under the terms of this Note and such amounts due and payable as the result of any acceleration by Lender or default by the Company shall
be secured solely by the Company’s real and personal property held by its wholly owned subsidiary, Bonanza Exploration, Inc. listed in the itemization and documentation package set forth in Exhibit "A" (the “Collateral”). Prepayment
by the Company of any portion of the principal and accrued interest pursuant to the terms of this Note shall not reduce or otherwise impair the security interest of the Lender in all of the real and personal property described in Exhibit
“A”, except that complete repayment of all outstanding principal and interest shall release and redeem to the Company all interest in the real and personal property securing the debt. The Lender shall be entitled, at its discretion, to
file with the State and/or county recorders office form UCC-1 financing statements with respect to the security interests herein contemplated. The Lender shall he entitled to and the Company shall file with the State and/or county recorders office
liens on the real property interests and/or mortgages, as appropriate, with respect to the real property collateral set forth in Exhibit “A”. The Company shall provide all necessary assistance to Lender and execute all documents required
by Lender to prepare and file the form UCC-1 financing statements, real property liens and mortgages, as appropriate. Prior to the filing contemplated herein, the Company agrees not to sell, transfer, assign or encumber any of the .property listed
in Exhibit “A”, except in the ordinary course of business for the purpose of conducting the same. The cost of such filings shall be borne by the Company.

	
	 	 	 
	 
	
15. 		
Investment Bankers. The Company acknowledges that Viewpoint Securities, LLC is the Company’s investment banker and shall receive a 5.0% cash commission on this Note.

	

	
II. 		
GENERAL PROVISIONS

	
	 	 	 
		
1. 		
Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the next business day, (c) three days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. The addresses for such communication shall be:

	

	
If to the Company:
		
Bonanza Oil & Gas, Inc.
	
	 

		
Attn: Bill Wiseman, President
	
	 

		
1901 Post Oak Drive, Suite 402
	
	 

		
Houston, TX 77027
	
	 

		
Tel: (713) 333-5808
	
	 

		
Fax: (713) 333-5928
	
	 

		 

	
	
If to the Lender:
		 

	

	 
	
2. 		
Assignment. This agreement is binding upon and inures to the benefit of the parties hereto and their respective heirs, successors and permitted assigns. The rights granted the Lender under this Agreement may be
assigned to any purchaser or substantially all or the Securities (or the rights thereto) from the Lender or any other assignee of the Lender. In the event of a transfer of the rights granted under this Agreement, Lender agrees that the Company may
require that the transferee to comply with reasonable conditions as determined in the discretion of the Company but in no case shall the obligations of the Company be relieved of its obligations to repay principal and accrued interest.

	
	 	 	 
	 
	
3. 		
Counterparts/Facsimile. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when together shall constitute but one and the same instrument, and
shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other party. In lieu of the original, a facsimile transmission or copy of the original shall be as effective and enforceable as the
original.

	
	 	 	 
	 
	
4. 		
Remedies. The remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and dec1ared to
be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

	
	 	 	 
	 
	
5. 		
Headings. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

	
	 	 	 
	 
	
6. 		
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada applicable to contracts made in Nevada by persons domiciled in Nevada and without regard to its
principles of conflicts of laws.

	
	 	 	 
	 
	
7. 		
Severability. If any provision of this Agreement shall for any reason be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained herein.

	

	 
	
8. 		
Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Purchase Agreement.

	
	 	 	 
	 
	
9. 		
Waiver of Jury Trial. COMPANY HEREBY KNOWINGLY., VOLUNTARILY AND INTENTIONALY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREIN. FURTHER, THE COMPANY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE LENDER NOR THE LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE THAT THE LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION,
SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. FINALLY, THE COMPANY ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALI, THE PROVISIONS OF THIS SECTION.

	

IN WITNESS WHEREOF, The parties hereto have set their hand and seal to this Agreement as of the day and year first set forth above. 

[signature page to follow]

"COMPANY"

By:                                                                  

          Bill Wiseman, President and CEO

      
Bonanza Oil & Gas, Inc. 

       A Nevada Corporation 

 

"LENDER"

By:                                                                  
 

  

   

Exhibit A

Apclark

25% working interest in APClark Prospect, Borden County, Texas. 

Cadillac

100% lease on Cadillac Prospect in Mercedes Field, Hidalgo County, Texas

Damon

25% lease on Damon Mound Field, Brazoria County, Texas.Bonanza Oil & Gas, Inc. : Exhibit 4.4 - Filed by newsfilecorp.com

Exhibit 4.4

Exhibit B

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of January 31, 2008 by and between Bonanza Oil & Gas, Inc. (OCTBB: BGOI), a corporation organized under the laws of the State of Nevada, with its principal offices at
1901 Post Oak Drive, Suite 402, Houston, TX 77027 (the "Company”), and _________________________________________ (the "Purchaser”).

WHEREAS, the Company and Purchaser have entered into a series of agreements dated of even date herewith comprised of that certain Loan Agreement (the "Loan Agreement"), that certain Secured Promissory Note (the "Note"), that certain Security
Agreement (the "Security Agreement”') (the Note, the Security Agreement and this Agreement are referred herein as the ”Loan Documents") pursuant to which the Purchaser has extended a loan to the Company (the "Loan"'), which is part of a
series of Loans which shall not be less than the aggregate minimum amount of $1,500,000 and shall not exceed the aggregate maximum amount of $2,500,000; and

WHEREAS, there will be no escrow in connection with this offering and the proceeds shall be funded directly to the Company which shall not use such proceeds until the minimum offering is achieved and if such minimum offering is not achieved then the
funds shall be returned to the investors.

IN CONSIDERATION of the mutual covenants contained in this Agreement, the sufficiency of which is hereby acknowledged, the Company and the Purchaser hereby agree as follows:

SECTION 1. Agreement to Issue Shares. In consideration for the making of the Loan, the Company hereby agrees to issue to the Purchaser __________ shares of the Company’s common stock (the "Shares"). The number of shares issued is
based upon the issuance of 20,000 shares for each $100,000 face value of the Notes. In addition, in the event that the Loan is not paid in full on or prior to the six month anniversary of the Maturity Date (as defined in the Note), then the
Company shall issue to the Purchaser an additional 20,000 shares of common stock of the Company for each $100,000 face value of the Notes.

SECTION 2. Closing of the Purchase of the Shares. The making of the Loan (the “Closing") shall take place on the date of this Agreement. At the Closing, the Company shall execute and deliver the Note to the Purchaser and each of
the Company and the Purchaser shall execute and deliver to the other a counterpart of the Loan Documents.

SECTION 3. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser as follows:

 3.1 

 Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and the Company is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except where the failure to so qualify would not individually or in the
aggregate have a material adverse effect on the financial condition, results of operations, properties or business of the Company taken as a who1e.

 3.2 

  Subsidiaries. As of the date hereof, the Company does not have any subsidiaries other than: Bonanza Exploration, Inc. (the "Subsidiaries"). The term "the Company" shall include the Subsidiaries. 

 3.3 

 Capitalization. The authorized capital stock of the Company consists of (a) 60,000,000 authorized shares of common stock, of which 25,650,273 shares of common stock are outstanding as of January 25, 2008; and (b) 15,000,000
authorized shares of preferred stock, of which 0 are outstanding. All of the outstanding shares of common and preferred stock were issued in compliance with all applicable federal and state securities laws.

 3.4 

 Issuance, Sale and Delivery of the Shares. The Shares have been duly authorized and, when issued and delivered in accordance with this Agreement, will be duly authorized, validly issued, fully paid and nonassessable. No preemptive
rights or other rights to subscribe for or purchase exist with respect to the issuance and sale of the Shares by the Company pursuant to this Agreement. No further approval or authority of the stockholders or the Board of Directors of the Company
will be required for the issuance of the Shares to the Purchaser as contemplated herein or by the Note. 

 3.5 

 Due Execution, Delivery and Performance of the Agreements. The Company has full legal right, corporate power and authority to enter into the Loan Documents and to perform the transactions contemplated hereby and thereby. This
Agreement has been duly authorized, executed and delivered by the Company. The execution, delivery and performance of the Loan Documents by the Company and the consummation of the transactions herein and therein contemplated will not violate any
provision of the organizational documents of the Company and will not (except for rights granted to the Purchaser under the Security Agreement) result in the creation of any lien, charge, security interest or encumbrance upon any assets or property
of the Company pursuant to the terms or provisions of, or wi11 not conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a default under any agreement. mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which the Company is a party or by which the Company or any of its assets or properties may be bound or affected or any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency or other governmental body applicable to the Company or any of its properties. No consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution, delivery and performance of the Loan Documents or the consummation by the Company of the transactions contemplated hereby or thereby, except for compliance with the Blue
Sky laws and federal securities laws app1icable to the issuance of the Note or the Shares. Assuming the va1id execution hereof and thereof by the Purchaser, the Loan Documents will constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar 1aws affecting creditors' rights generally.

 3.6        No Actions. Except as disclosed to the Purchaser, there are no legal or governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened to which the Company is or nay be a party which seeks to
prevent or restrain the transactions contemplated by this Agreement or to recover damages as a result of the consummation of such transactions. 

 3.7 

 Investment Company. The Company is not an “investment company" or an "affiliated person” of, or "promoter" or "principal underwriter" for an investment company, within the meaning of the Investment Company Act of 1940,
as amended.

 3.8 

 Brokers and Consultants. Viewpoint Securities, LLC is the Company’s investment bankers and will receive a cash commission equal to 5% of the Note as a result of the transactions contemplated by the Loan Documents. 

 3.9         Books and Records. The books, records and accounts of the Company, accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company, all to
the extent required by generally accepted accounting principles. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (:i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable interva1s and appropriate action is taken with respect to any
differences.

 3.10 

 Taxes. The Company has filed in a timely manner all federal, state and local tax returns that it has been required to file, and has paid in a timely manner all taxes shown thereon as owing. The Company has not incurred any tax
liabilities except in the ordinary course of business. The Company knows of no tax deficiency or claim tor additional taxes asserted or threatened to be asserted against Company by any taxing authority or any grounds for any such assessment. 

SECTION 4. Representations and Warranties of the Purchaser. The purchaser represents and warrants to the Company as follows: 

  4.1 

  Organization and Qualification. The Purchaser is an accredited investor or a company duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

 4.2 

 Due Execution, Delivery and Performance of the Agreements. The Purchaser has full legal right, power and authority to enter into the Loan Documents and to perform the transactions contemplated hereby and thereby. This Agreement
has been duly authorized, executed and delivered by the Purchaser. 

 4.3 

 No Actions. There are no legal or governmental actions, suits or proceedings pending or, to the Purchaser's knowledge, threatened to which the Purchaser is or may be a party which seeks to prevent or restrain the transactions
contemplated by the Loan Documents or to recover damages as a result of the consummation of such transactions. The Purchaser, to its knowledge, has not been and is not currently the subject of an investigation or inquiry by the Securities and
Exchange Commission, the NASD, or any state securities commission.

 4.4         Nature of Purchaser. If the purchaser is a corporation, the Purchaser is an "'accredited investor" within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act by virtue of the fact that all equity
holders of the Purchaser are "accredited investors", The Purchaser is not a "dealer" within the meaning of the Securities Act or a "broker" or "'dealer" within the meaning of the Securities Exchange Act of 1934, as Amended (the "Exchange Act").

 4.5 

 Investment Intent. The Purchaser is making the Loan and acquiring the Shares in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any interest in the Note
or any of the Shares or entering into any arrangement or understanding with any other person regarding such a distribution (it being understood that the foregoing does not limit the Purchaser's right to distribute the Shares to the equity investors
of the Purchaser in a transaction exempt from registration under applicable securities laws). The Purchaser understand that the Shares will be affixed with a standard restrictive legend as required by the Securities Act of 1933.

SECTION 5. Covenants.

5.1 

Registration Procedures and Expenses.

 (a)  

 If at any time the Company shall determine to prepare and f1le with the Securities and Exchange Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of 1933 as
amended, of any of its equity securities, (a "Registration Statement”), then the Company shall send to Purchaser a written notice of such determination and, if within 15 days after the date of such notice, Purchaser shall so request in writing,
the Company shall include in such Registration Statement all of the Shares. Company shall inc1ude in any Registration Statement all of the Shares issued to Purchaser under this Agreement even if the Shares have not been issued to Purchaser prior to
filing of the Registration Statement    

 (b)  

 The Company shall prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus forming a part thereof as may be necessary to keep the Registration
Statement effective until the earliest date on which (i) all the Shares have been disposed of pursuant to the Registration Statement, (ii) all of the Shares then held by the Purchaser may be sold under the provisions of Rule 144 without limitation
as to volume, whether pursuant to Rule 144(k) or otherwise, or (iii) all Shares then held by the Purchaser may be sold without restriction under the Securities Act and the transfer agent has removed any stop transfer instructions relating to such
Shares and offered to cause to be removed any restrictive legends on the certificates, if any representing such Shares (the period between the date the Registration Statement is declared effective (the “'Effective Date") and the earliest of
such dates is referred to herein as the “Registration Period"').

 (c) 

 With a view to making available to the Purchaser the benefits of Rule 144, the
 Company agrees, throughout the Registration Period and so long as the Purchaser
 owns Shares purchased pursuant to this Agreement, to:

	 
	 
	
(i) 		
comply with the provisions of paragraph (c)(l) of Rule 144; and

	
	 	 	 	 
	 
	 
	
(ii) 		
file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to
Section 13 or 15(d) under the Exchange Act; and, if at any time it is not required to file such reports but in the past had been required to or did file such reports, it will, upon the request of the Purchaser, make available other information as
required by, and so long as necessary to permit sales of its Shares pursuant to, Rule 144. 

	

 (d)  

 The Company shall bear all expenses incurred by it in connection with the procedures in paragraphs (a) through (c) of this Section 5.1 and the registration of the Shares pursuant to the Registration Statements. The Company shall not be
responsible for any expenses incurred by the Purchaser in connection with its sale of the Shares or its participation in the procedures in paragraphs (a) through (c) of this Section 5.1 including, without limitation, any fees and expenses of counselor other advisers to the Purchaser and any underwriting discounts; brokerage fees and commissions incurred by the Purchaser.

	 
	
5.2 		
Indemnification. For the purposes of this Section 5.2:

	

(i) 

the term "Purchaser Affiliate" shall mean any person who controls the Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act; and 

 

 (ii) 

 the term "Registration Statement" shall include any final prospectus, exhibit,
 supplement or amendment included in or relating to the Registration Statement
 referred to in Section 5.1. 

 (a)  

 The Company agrees to indemnify and hold harmless the Purchaser and each Purchaser Affiliate, against any losses, claims, damages, liabilities or expenses joint or several, to which such Purchaser or such Purchaser Affiliate may become subject
under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company),
insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the
Registration Statement, as amended as of the Effective Date, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434 promulgated under the Securities Act,
or the prospectus, in the form first filed with the Commission pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required (the “Prospectus"),
or
any amendment or supplement thereto, (ii) the omission or alleged omission to state in the Registration Statement as of the Effective Date a material fact required to be stated therein or necessary to make the statements in the Registration
Statement or any post-effective amendment or supplement thereto, or in the Prospectus or any amendment or supplement thereto, not misleading, in each case in the light of the circumstances under which the statements contained therein were made, or
(iii) any inaccuracy in the representations and warranties of the Company contained in this Agreement, or any failure of the Company to perform its obligations hereunder, and will reimburse the Purchaser and each such Purchaser Affiliate any legal
and other expenses as such expenses which are reasonably incurred by the Purchaser or such Purchaser Affiliate in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by the Purchaser expressly for use therein, or (ii) the failure
of the Purchaser to comply with the covenants and agreements contained in Section 5.2 hereof respecting the sale of the Shares, or (iii) the inaccuracy of any representations made by the Purchaser herein or (iv) any statement or omission in any
Prospectus that is corrected or disclosed in any subsequent Prospectus that was delivcrcd to the Purchaser prior to the pertinent sale or sales by the Purchaser.

SECTION 6. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed by first-class registered or certified mail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed as follows:

	
If to the Company:
		
Bonanza Oil & Gas, Inc.
	
	 

		
Attn: Bill Wiseman, President
	
	 

		
1901 Post Oak Drive, Suite 402
	
	 

		
Houston, TX 77027
	
	 

		
Tel: (713) 333-5808
	
	 

		
Fax: (713) 333-5928
	

With a copy to:

or to such other person at such other place as the Company shall designate to the Purchaser in writing, and

If to the Purchaser:

or to such other person at such other place as the Purchaser shall designate to the Company in writing, and

SECTION 7. Assignment. This agreement is binding upon and inures to the benefit of the
parties hereto and their respective heirs, successors and permitted assigns. The rights and shares granted to the Purchaser under this Agreement may be assigned by Purchaser to any other purchaser or assignee of the Purchaser. In the event of a
transfer of the rights granted under this Agreement, Purchaser agrees that the Company may require that the transferee to comply with reasonable conditions as determined in the discretion of the Company.

SECTION 8. Changes. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Purchaser.

SECTION 9. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

SECTION 10. Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

SECTION 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to its conf1icts of law principles and the federal law of the United States of
America.

SECTION 12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written.

[signature page to follow]

 

"COMPANY"

By: _______________________________

Bill Wiseman, President and CEO 

Bonanza Oil & Gas, Inc.

A Nevada Corporation

"PURCHASER"

By: _______________________________

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