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Bridge Loan Promissory Note
$997,500 March 17, 2006
FOR VALUE RECEIVED, BRASADA CALIFORNIA, INC., a Delaware corporation
(hereinafter called the "Borrower"), hereby promises to pay to the order of
FOOTHILLS RESOURCES, INC., a Nevada corporation (hereinafter called the
"Lender"), c/o Gottbetter & Partners LLP, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, the principal sum of Nine Hundred Ninety Seven Thousand
Five Hundred Dollars ($997,500) (the "Loan"), in lawful money of the United
States of America and in immediately available funds.
1. The outstanding principal balance of this Note, together
with accrued and unpaid interest thereon, shall be due and payable no later than
the earlier of (i) July 20, 2006 and (ii) the date of closing of the Merger, as
contemplated by the term sheet between the parties, dated as of February 15,
2006 (the "Term Sheet"). The date such repayment is due is sometimes referred to
as the "Due Date." Upon the closing of the Merger, all indebtedness evidenced
hereby shall be deemed canceled and paid in full.
2. This Note shall bear interest at the rate of nine percent
(9%) per annum on the unpaid principal balance hereof. Interest shall be
calculated on the basis of a year of three hundred sixty (360) days applied to
the actual days on which there exists an unpaid balance under this Note.
3. Interest only shall be payable monthly in arrears,
commencing thirty (30) days from the date hereof. Thereafter, on the first
business day of each month through and including the month in which the Due Date
occurs, Borrower shall pay monthly installments of interest only.
4. Upon an "Event of Default," as defined in the Bridge Loan
Agreement described below, the rate of interest accruing on the unpaid principal
balance of this Note shall increase to fifteen percent (15%) per annum. Such
default interest rate shall continue until all defaults are cured.
5. This Note is subject to the terms of a Bridge Loan and
Control Share Pledge and Security Agreement (the "Bridge Loan Agreement") of
even date herewith by and among the Borrower, the Stockholders and the Lender.
This Note is secured by collateral pledged by the Borrower and the Stockholders
to the Lender pursuant to a Security Agreement of even date herewith by and
among the Borrower and the Lender (the "Security Agreement"), as well as by the
deposit into escrow of the Borrower Control Shares (as defined in the Bridge
Loan Agreement) pursuant to the terms of a Pledge and Escrow Agreement of even
date herewith by and among the Borrower, the Lender, the Stockholders and
Gottbetter & Partners LLP, as escrow agent (the "Escrow Agreement"). All
capitalized and undefined terms herein shall have the meaning given them in the
Bridge Loan Agreement, the Security Agreement or the Escrow Agreement.
6. Upon the occurrence of an Event of Default under the Bridge
Loan Agreement or the Security Agreement, the entire principal amount
outstanding hereunder and all accrued interest hereon, together with all other
sums due hereunder, shall, as provided in the Bridge Loan Agreement, become
immediately due and payable.
Notwithstanding the foregoing, if an Event of Default is cured (or
waived by the Lender), the Borrower shall use its best efforts to ensure that
the Merger and the Transactions are consummated.
7. This Note is secured by and is entitled to the benefits of
the Security Agreement. In addition to the rights and remedies given it by this
Note and the Security Agreement, the Lender shall have all those rights and
remedies allowed by applicable laws, including without limitation, the Uniform
Commercial Code as in effect in the State of New York. The rights and remedies
of the Lender are cumulative and recourse to one or more right or remedy shall
not constitute a waiver of the others. The Borrower shall be liable for all
commercially reasonable costs, expenses and attorneys' fees incurred by the
Lender in connection with the collection of the indebtedness evidenced by the
Note.
8. To the extent permitted by applicable law, the Borrower
waives all rights and benefits of any statute of limitations, moratorium,
reinstatement, marshalling, forbearance, valuation, stay, extension, redemption,
appraisement and exemption now provided or which may hereafter by provided by
law, both as to itself and as to all of its properties, real and personal,
against the enforcement and collection of the indebtedness evidenced hereby.
9. All notices, requests, demands, and other communications
with respect hereto shall be in writing and shall be delivered by hand, sent
prepaid by a nationally-recognized overnight courier service or sent by the
United States, certified, postage prepaid, return receipt requested, at the
addresses designated in the Bridge Loan Agreement or such other address as the
parties may designate to each other in writing.
10. This Note or any provision hereof may be waived, changed,
modified or discharged only by agreement in writing signed by the Borrower and
the Lender. The Borrower may not assign or transfer its obligation hereunder
without the prior written consent of the Lender.
11. The term "the Borrower" shall include each person and entity
now or hereafter liable hereunder, whether as maker, successor, assignee or
endorsee, each of whom shall be jointly, severally and primarily liable for all
of the obligations set forth herein.
12. If any provision of this Note shall for any reason be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Note, but this Note shall be construed as if this
Note had never contained the invalid or unenforceable provision.
13. This Note shall be governed by and construed in accordance
with the domestic laws of the State of New York, without giving effect to any
choice of law provision or rule. Any controversy or dispute arising out of or
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relating to this Note shall be settled solely and exclusively in accordance with
the provisions of the Bridge Loan Agreement and the Security Agreement, dated as
of even date herewith, which provisions are incorporated by reference herein as
though fully set forth.
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IN WITNESS WHEREOF, the undersigned Borrower has caused the due
execution of this Bridge Loan Promissory Note as of the day and year first
herein above written.
BRASADA CALIFORNIA, INC.
By:
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Name: Xxxxxx X. Tower
Title: Chief Executive Officer
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