BRIDGE LOAN NOTE
As of
March 4, 2010
$500,000.00
FOR VALUE
RECEIVED, EPIC ENERGY RESOURCES, INC., a Colorado corporation (“Borrower”),
promises to pay to the order of CASTEX NEW VENTURES, L.P., a [_______] limited
partnership (“Lender”), 000 X. Xxx Xxxxxxx Xxxx X., Xxxxx 0000,
Xxxxxxx, XX 00000, the principal sum of $500,000.00, or such lesser principal
amount as may be from time to time outstanding hereunder, together with interest
on the outstanding unpaid balance of such principal amount at the interest rate
provided below.
Subject
to the conditions set forth herein, the Lender will make loans under this Bridge
Loan Note to the Borrower from time to time until June 1, 2010, in an aggregate
amount of up to $500,000.00 at any time outstanding. The Borrower
may, prior to maturity, borrow, repay and reborrow such amount from the
Lender.
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1.
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Interest
Rate Options. Interest on each outstanding loan made
hereunder shall accrue at a rate of ten percent (10.00%) per annum
(compounded annually).
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2.
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Default
Interest Rate. Notwithstanding any provision of this
Bridge Loan Note to the contrary, upon any Default (as defined below) or
at any time during the continuation thereof (including failure to pay upon
maturity whether by acceleration or otherwise and including both before
and after the commencement of an insolvency or bankruptcy proceeding), the
Lender may, at its option and subject to applicable law, increase the
interest rate on loans outstanding under this Bridge Loan Note to a rate
of twelve percent (12.00%) per
annum.
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3.
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Maximum
Interest Rate. In no event will the interest rate
hereunder exceed that permitted by applicable law. If any
interest or other charge is finally determined by a court of competent
jurisdiction to exceed the maximum amount permitted by law, the interest
or charge shall be reduced to the maximum permitted by law, and the Lender
may credit any excess amount previously collected against the balance due,
or refund the amount to the
Borrower.
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4.
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Payment
of Principal and Interest; Maturity Date. All principal
outstanding on this Bridge Loan Note is payable at maturity, which is the
earliest of (a) three (3) business days following written demand to the
Borrower from the Lender, (b) June 1, 2010, and (c) the
date on which the Lender’s obligation to make additional Loans to the
Borrower under this Bridge Loan Note is terminated pursuant to Paragraph 7
below (such earliest date, the “Maturity Date”). Interest is
payable on the date of any repayment of any loans hereunder and on the
Maturity Date.
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5.
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Advances
and Paying Procedure. The Borrower shall give the Lender
written notice (effective upon receipt) of the Borrower’s intent to borrow
under this Bridge Loan Note no later than 10:00 a.m. Central time on
a business day in substantially the form of Exhibit A
attached hereto (a “Loan Request”). Each loan will be in an
integral multiple of $10,000.00. The Borrower will provide to
the Lender wire transfer instructions at the time of each requested
loan.
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6.
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Conditions
Precedent to Each Advance. Before any loan hereunder
will be made, the following conditions must be satisfied: (i) the Borrower
shall have delivered a Loan Request, duly executed and completed;
(ii) immediately after giving effect to such loan, the aggregate
principal amount of the Loans shall not exceed $500,000.00, and
(iii) no Default shall have occurred and be continuing, and no event
shall have occurred which would constitute the occurrence of a Default
after any grace or cure period has
passed.
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7.
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Defaults. Notwithstanding
any cure periods described below, the Borrower shall promptly notify the
Lender in writing when the Borrower obtains knowledge of the occurrence of
any default specified below (a “Default”). Regardless of
whether the Borrower has given the required notice, the occurrence of one
or more of the following shall constitute a
Default:
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a.
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Nonpayment. The
Borrower shall fail to pay (i) any interest due on this Bridge Loan Note
by 10 days after the same becomes due; or (ii) any principal amount of
this Bridge Loan Note when due.
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b.
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Inability
to Perform; Bankruptcy/Insolvency. Any bankruptcy,
insolvency or receivership proceedings, or an assignment for the benefit
of creditors, shall be commenced under any Federal or state law by or
against the Borrower that is unstayed or undismissed for 30
days.
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8.
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Termination
of Commitment to Advance Loans. Upon the occurrence of
any of the events identified in Paragraph 7(a),
the Lender may at any time immediately terminate its obligation to make
additional Loans to the Borrower. Upon the occurrence of any of
the events identified in Paragraph 7(b),
the Lender’s obligation to make additional Loans to the Borrower shall
immediately and automatically
terminate.
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9.
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Acceleration
of Obligations. Upon the occurrence of any of the events
identified in Paragraph 7(a),
and the passage of any applicable cure periods, the Lender may at any time
thereafter, by written notice to the Borrower, declare the unpaid
principal balance of any loans, together with the interest accrued
thereon, to be immediately due and payable; and the unpaid balance shall
thereupon be due and payable, all without presentation, demand, protest or
further notice of any kind, all of which are hereby waived,
notwithstanding anything to the contrary contained herein. Upon
the occurrence of any event under Paragraph 7(b),
the unpaid principal balance of all loans made pursuant hereto, together
with all interest accrued thereon and other amounts accrued hereunder,
shall thereupon be immediately due and payable, all without presentation,
demand, protest or notice of any kind, all of which are hereby waived,
notwithstanding anything to the contrary contained
herein.
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10.
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Warranties. The
Borrower makes the following
warranties:
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a.
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Enforceability. This
Bridge Loan Note is the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally or
by equitable principles; and
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b.
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Authority. The
execution, delivery and performance of this Bridge Loan Note and any other
agreement delivered in connection herewith to which the Borrower is a
party (i) are within the Borrower’s power; (ii) have been duly authorized
by all appropriate entity action; (iii) do not require the approval
of any governmental agency, public body or authority, or any subdivision
thereof; (iv) will not violate (A) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower, (B) any
agreement (including the Borrower’s articles or certificate of
incorporation, by-laws or other organizational documents or any indenture,
material instrument or material agreement to which the Borrower is party
or is subject) or (C) restriction by which the Borrower is bound; and (v)
does not entitle any third party to accelerate any material debt of the
Borrower or its subsidiaries owing to such third
party.
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11.
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Applicable
Law and Jurisdiction; Interpretation; Severability. THIS
BRIDGE LOAN NOTE AND ANY OTHER AGREEMENT DELIVERED IN CONNECTION HEREWITH
SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT SUPERSEDED BY FEDERAL
LAW. Nothing herein shall affect the Lender’s right to serve
process in any manner permitted by law, or limit the Lender’s right to
bring proceedings against the Borrower in any other court having
jurisdiction over Borrower. This Bridge Loan Note, any other
agreement delivered in connection herewith and any amendments hereto
(regardless of when executed) will be deemed effective and accepted only
upon the Xxxxxx’s receipt of the executed originals
thereof. Invalidity of any provision of this Bridge Loan Note
shall not affect the validity of any other
provision.
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12.
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Notices. All
notices and other communications hereunder shall be in writing, shall be
directed to the applicable party at its address
below:
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To the
Lender:
Castex
New Ventures, L.P.
000 X.
Xxx Xxxxxxx Xxxx X., Xxxxx 0000,
Houston,
TX 77060
Attention: Xxxx
Xxxxxxxx
Phone:
000-000-0000
Fax:
000-000-0000
To the
Borrower:
0000 Xxxx
Xxxxxxx Xx., Xxx 000
The
Woodlands, TX 77380
Attention: Xxxx
Xxxxxx, CFO
Phone: 000-000-0000
Fax: 000-000-0000
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13.
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Waiver
of Jury Trial. THE BORROWER AND THE LENDER
HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE LOANS MADE
PURSUANT HERETO. THE BORROWER AND THE LENDER EACH REPRESENTS TO
EACH OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
GIVEN.
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14.
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No
Oral Agreements. THIS AGREEMENT AND THE OTHER AGREEMENTS
DELIVERED IN CONNECTION XXXXXXXX REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES.
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blank.]
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Borrower:
a
Colorado corporation
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By:
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/s/ Xxxx X. Xxxxxxxx | ||
| Xxxx X. Xxxxxxxx | |||
| President and CEO | |||
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Lender:
CASTEX
NEW VENTURES, L.P.,
a
[_____] limited partnership
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By:
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| Title: | |||
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Exhibit
A
FORM OF LOAN
REQUEST
Ladies
and Gentlemen:
This Loan
Request is delivered to you pursuant to Paragraph 6 of
the Bridge Loan Note dated as of March 4, 2010 (together with all amendments,
restatements, supplements and other modifications, if any, from time to time
made thereto, the “Bridge Loan Note”),
between EPIC ENERGY RESOURCES, INC., a Delaware corporation (the “Borrower”) and CASTEX
NEW VENTURES, L.P., (the “Lender”). Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Bridge Loan Note.
The
Borrower hereby requests that a Loan be made in the aggregate principal amount
of $500,000.00 on March 4, 2010.
The
Borrower hereby acknowledges that, pursuant to Paragraph 6 of
the Bridge Loan Note, before any loan will be made, no Default shall have
occurred and be continuing, and no event shall have occurred which would
constitute the occurrence of a Default after any grace or cure period has
passed. In addition, the Borrower represents and warrants that, on
the date of such advances, and before and after giving effect thereto and to the
application of the proceeds therefrom, all statements set forth in Paragraphs 10(a) and
10(b) are true
and correct in all material respects.
Please
wire transfer the proceeds of the borrowing to the following accounts: Epic
Corporate Account.
IN
WITNESS WHEREOF, the Borrower has caused this request to be executed and
delivered by its duly authorized officer as of March 3, 2010.
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a
Colorado corporation, as borrower
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By:
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/s/ Xxxx X. Xxxxxxxx | |
| Name: | Xxxx X. Xxxxxxxx | ||
| Title: | President and CEO | ||
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