Attached files
| file | filename |
|---|---|
| EX-4.1 - EXHIBIT 4.1 - BONANZA OIL & GAS, INC. | ex41.htm |
| EX-10.3 - EXHIBIT 10.3 - BONANZA OIL & GAS, INC. | ex103.htm |
| EX-10.1 - EXHIBIT 10.1 - BONANZA OIL & GAS, INC. | ex101.htm |
| 8-K - BONANZA OIL & GAS, INC. FORM 8-K - BONANZA OIL & GAS, INC. | form8k.htm |
3417
Mercer, Suite E
Houston,
Texas 77027
December 2, 2009
Kenneth
Orr, CEO
Triumph
Small Cap Fund, Inc.
Re: Bonanza
Oil & Gas, Inc. (the “Company”)
Gentlemen:
The Company hereby 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.
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 lesser of (i)
the Variable Conversion Price (as defined herein) and (ii) the Fixed Conversion
Price (as defined herein). The “Variable Conversion Price”
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). “Market Price” means the
average of the lowest three (3) Trading Prices (as defined below) for the Common
Stock during the twenty (20) Trading Day period ending one Trading Day prior to
the date the Conversion Notice is sent by the Holder to the Borrower via
facsimile (the “Conversion
Date”). “Trading
Price” means, for any security as of any date, the intraday trading price
on the Over-the-Counter Bulletin Board (the “OTCBB”) as reported by a
reliable reporting service mutually acceptable to and hereafter designated by
Holders of a majority in interest of the Notes and the Borrower or, if the OTCBB
is not the principal trading market for such security, the intraday trading
price of such security on the principal securities exchange or trading market
where such security is listed or traded or, if no intraday trading price of such
security is available in any of the foregoing manners, the average of the
intraday trading prices of any market makers for such security that are listed
in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price
cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being
converted for which the calculation of the Trading Price is required in order to
determine the Conversion Price of such Notes. “Trading Day” shall mean any
day on which the Common Stock is traded for any period on the OTCBB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded. “Applicable Percentage” shall
mean 50.0%. The “Fixed
Conversion Price” shall mean $0.005.
1
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 lesser of (i) the
Variable Conversion Price (as defined herein) and (ii) the Fixed Conversion
Price (as defined herein). The “Variable Conversion Price”
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). “Market Price” means the
average of the lowest three (3) Trading Prices (as defined below) for the Common
Stock during the twenty (20) Trading Day period ending one Trading Day prior to
the date the Conversion Notice is sent by the Holder to the Borrower via
facsimile (the “Conversion
Date”). “Trading
Price” means, for any security as of any date, the intraday trading price
on the Over-the-Counter Bulletin Board (the “OTCBB”) as reported by a
reliable reporting service mutually acceptable to and hereafter designated by
Holders of a majority in interest of the Notes and the Borrower or, if the OTCBB
is not the principal trading market for such security, the intraday trading
price of such security on the principal securities exchange or trading market
where such security is listed or traded or, if no intraday trading price of such
security is available in any of the foregoing manners, the average of the
intraday trading prices of any market makers for such security that are listed
in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price
cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being
converted for which the calculation of the Trading Price is required in order to
determine the Conversion Price of such Notes. “Trading Day” shall mean any
day on which the Common Stock is traded for any period on the OTCBB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded. “Applicable Percentage” shall
mean 50.0%. The “Fixed
Conversion Price” shall mean $0.005.
TSC acknowledges that the Company
presently does not have an adequate amount of authorized and available shares of
common stock to convert all amounts owed under the Notes. The Company
is presently in the process of increasing its authorized shares of common stock
to 1,500,000,000 shares of common stock (the “Increase”). As such, in
the event that the Company does not have an adequate number of shares of common
stock, TSC shall refrain from converting the Notes until the Increase has been
implemented. 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. Upon increasing the authorized shares of common stock to
1,500,000,000, 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 | |
| Name: William Wiseman | |||
| Title: CEO | |||
AGREED
AND ACKNOWLEDGED:
Triumph
Small Cap Fund, Inc.
By:
/s/Kenneth Orr
Name:
Kenneth Orr
Title:
CEO
2