FIRST BLUSH, INC.
 
LOAN AGREEMENT

THIS LOAN AGREEMENT (tile “Agreement”) is made as of the 18th day of November,
2008 (the “Effective Date”) by and among FIRST BLUSH, INC., a Delaware
corporation (tile “Company”), and ROSE HILL GARDENS, LLC (the “Lender”).

RECITAL
 
WHEREAS, to provide the Company with additional resources to conduct its
business, the Lender is willing to loan to the Company up to an aggregate amount
of one million dollars ($1,000,000.00), subject to the conditions specified
herein.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the Company the Lender,
intending to be legally bound, hereby agree as follows:

1.           AMOUNT AND TERMS OF THE LOAN(S)
 
 
1.1
The Loan(s).

 
(a)           Subject to the terms of this Agreement. the Lender agrees to lend
to the Company up to the amount set forth opposite the Lender's name on SCHEDULE
1 hereto (the “Total Loan Amount” or “Loan”) against the issuance and delivery
by the Company of a senior secured promissory note or notes for such amount, in
substantially the form attached hereto as EXHIBIT A (each, a “Note” and
collectively, the “Notes”).
 
(b)           If the Company has not previously borrowed the full Loan Amount
committed by a Lender as set forth on SCHEDULE 1 hereto, at any time prior to
the first (1st) anniversary of the date hereof, the Company may borrow up to the
balance of the Loan Amount committed by the Lender (the “Remaining Loan
Amount”) as indicated on the Schedule of Purchases attached thereto as SCHEDULE
2 by delivering notice (in accordance with Section 5.5) to the Lender, which
notice shall include the amount requested (up to but not exceeding the Remaining
Loan Amount). Following receipt of such notice (as determined in accordance with
Section 5.5), if Lender and Company agree, in writing, to the amount to be
funded (the “Agreed Loan Amount”), Lender shall fund the amount requested by the
Company (up to an aggregate of' the Remaining Loan Amount) within three (3)
business days of reaching agreement on the Agreed Loan Amount, and the Company
shall issue a Note in respect of such additional Loan in accordance with the
terms hereof. Schedule 2 hereto shall be appropriately amended in accordance
with Section 2.2 below to reflect the additional Loan being made.

2.
CONDITIONS OF LOAN(S)

 
1.

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2.1           Conditions Precedent to Initial Loan. The obligation of Lender to
provide the initial loan amount is subject to the condition precedent that
Lender shall have received, in form and substance satisfactory to Lender, the
following:

(a)           this Agreement;

(b)           UCC National Form Financing Statement;

(c)           the Security Agreement as defined in Section 5.1; and

(d)           such other documents, and completion of such other matters, as
Lender may reasonably deem necessary or appropriate.
 
2.2           Conditions Precedent to all Loans. The obligation of Lender to
provide each subsequent loan amount after the initial loan amount, is Further
subject to the following conditions:
 
(a)           the Company and the Lender shall have agreed upon the Agreed Loan
Amount, in writing; and
 
(b)           no Event of Default shall have occurred and be continuing, or
would exist after issuing such Note. The issuance of each Note shall be deemed
to be a representation and warranty by Borrower on the date of such loan as to
the accuracy of the facts referred to in this Section 2.2.
 
This Agreement, including without limitation, the Schedule of Loans and
Schedule 1 hereto, may be amended by the Company without the consent of the
Lender to reflect the issuance of additional Notes in the event the Company
borrows additional funds pursuant to Section 1.1(b) and this Section 2.2. Any
Notes sold pursuant to Section 1.1(b) or this Section 2.2 shall be deemed to be
“Notes” for all purposes under this Agreement.

3.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

 
The Company hereby represents and warrants to each Lender as follows:
 
3.1           Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has the requisite corporate power to own
and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the Company or its business.
 
3.2           Corporate Power. The Company will have at the Closing Date all
requisite corporate power to execute and deliver this Agreement, to issue each
Note (collectively, the “Loan Documents”) and to carry out and perform its
obligations under the terms of this Agreement and under the terms of each Note.
The Company's Board of Directors has approved the Loan Documents based upon a
reasonable belief that the Loan is appropriate for the Company after reasonable
inquiry concerning the Company's financing objectives and financial situation.
 
2.

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3.3           Authorization. All corporate action on the part of the Company,
its directors and its stockholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Company and the performance of
the Company's obligations hereunder, including the issuance and delivery of the
Notes has been taken. This Agreement and the Notes, when executed and delivered
by the Company, shall constitute valid and binding obligations of the Company
enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency, the relief of debtors and, with
respect to rights to indemnity, subject to federal and state securities laws.
 
3.4           Governmental Consents. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Notes or the consummation of any other
transaction contemplated hereby shall have been obtained and will be effective
at the Closing.
 
3.5           Compliance with Laws. To its knowledge, the Company is not in
violation of any applicable statute, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties, which
violation of which would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company.
 
3.6           Compliance with Other Instruments. The Company is not in violation
or default of any term of its certificate of incorporation or bylaws, or of any
provision of any mortgage, indenture or contract to which it is a party and by
which it is bound or of any judgment, decree, order or writ, other than such
violation(s) that would not have a material adverse effect on the Company. The
execution, delivery and performance of this Agreement and the Notes, and the
consummation of the transactions contemplated hereby or thereby will not result
in any such violation or be in conflict with, or constitute, with or without the
passage of time and giving of notice, either a default under any such provision,
instrument, judgment, decree, order or writ or an event that results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, impairment, forfeiture, or nonrenewal of any
material permit, license, authorization or approval applicable to the Company,
its business or operations or any of its assets or properties. Without limiting
the foregoing, the Company has obtained all waivers reasonably necessary with
respect to any preemptive rights, rights of first refusal or similar rights,
including any notice or offering periods provided for as part of any such
rights, in order for the Company to consummate the transactions contemplated
hereunder without any third party obtaining any rights to cause the Company to
offer or issue any securities of the Company as a result of the consummation of
the transactions contemplated hereunder.
 
3.7           Use of Proceeds. The Company shall use the proceeds of the Loan
solely for working capital purposes, and shall not in any event be used for (a)
the repayment of indebtedness for borrowed money, redemption or repurchase of
securities (other than the repurchase of shares from employees pursuant to the
Company's stock option plan), (b) dividends or payments to employees other than
regular salaries, relocation expenses and reimbursements for costs incurred on
behalf of the Company in the ordinary course of business, or (c) any personal,
family or household purpose.

3.

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4.
CREATION OF SECURITY INTEREST

4.1           Grant of Security Interest. To secure payment of obligations under
the Notes, the Company grants to the Lender a first position perpetual security
interest in all of the Company's property, now existing or hereafter arising,
including without limitation, all accounts, inventory, equipment, intellectual
property, general intangibles, deposit accounts, financial assets, securities,
instruments, and all proceeds thereof as provided in that certain Security
Agreement by and between the Company and the Lender, of even date herewith (the
“Security Agreement”). The Company will not dispose of or encumber any interest
in the Collateral (as defined in the Security Agreement) without the written
consent of the Lender, in each instance. The Company authorizes the Lender
to file such financing statements and take such other action as the Lender deems
appropriate in order to perfect this security interest.
 
4.2           Liabilities Unconditional. The Company is and shall remain
absolutely and unconditionally liable for the performance of its obligations
under the Loan Documents, including without limitation any deficiency by reason
of the failure of the Collateral to satisfy all amounts due to the Lender under
any Loan Document.

5.
MISCELLANEOUS

 
5.1           Binding Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, expressed or implied, is
intended to confer upon any third party any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
 
5.2           Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents, made and to be performed entirely within the State of
California, without giving effect to conflicts of laws principles.
 
5.3           Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
5.4           Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
 
5.5           Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex, electronic mail or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address set forth on the signature page hereto, and
to Lender at the address set forth on the Schedule of Lenders attached hereto or
at such other address(es) as the Company or Lender may designate by ten (10)
days advance written notice to the other parties hereto.

4.

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5.6           Modification; Waiver. Except as permitted pursuant to Section 2.2,
no modification or waiver of any provision of this Agreement or consent to
departure therefrom shall be effective unless in writing and approved by the
Company and the Lender. Any provision of the Notes may be amended or waived by
the written consent of the Company and the Lender.

5.7            Expenses. The Company and the Lender shall each bear its
respective expenses and legal fees incurred with respect to this Agreement and
the transactions contemplated herein.

 
5.8           Waiver of Conflicts. Each party to this Agreement acknowledges
that Cooley Godward Kronish LLP (“Cooley Godward”), outside general counsel to
the Company, has in the past performed and is or may now or in the future
represent one or more Lenders or their affiliates in matters unrelated to the
transactions contemplated by this Agreement (the “Bridge Financing”), including
representation of such Lenders or their affiliates in matters of a similar
nature to the Bridge Financing. The applicable rules of professional conduct
require that Cooley Godward inform the parties hereunder of this representation
and obtain their consent. Cooley Godward has served as outside general counsel
to the Company and has negotiated the terms of the Bridge Financing solely on
behalf of the Company. The Company and each Lender hereby (a) acknowledge that
they have had an opportunity to ask for and have obtained information relevant
to such representation, including disclosure of the reasonably foreseeable
adverse consequences of such representation; (b) acknowledge that with respect
to the Bridge Financing, Cooley Godward has represented solely the Company, and
not any Lender or any stockholder, director or employee of the Company or any
Lender; and (c) gives its informed consent to Cooley Godward's representation of
the Company in the Bridge Financing.
 
5.9           Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to each Lender, upon any breach or
default of the Company under this Agreement or any Note shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character by Lender of any breach or default under this
Agreement, or any waiver by any Lender of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to the Lender, shall be cumulative
and not alternative.
 
5.10           Entire Agreement. This Agreement and the Exhibits hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein.
 
5.

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6.

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IN WITNESS WHEREOF, the parties have executed this LOAN AGREEMENT as of the
Effective Date.

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IN WITNESS WHEREOF, the parties have executed this LOAN AGREEMENT as of the
Effective Date.

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SCHEDULE 1
 
COMMITTED LOAN AMOUNT

NAME AND ADDRESS
 
COMMITTED
LOAN AMOUNT
           
Rose Hill Gardens, LLC
  $ 1,000,000  

 

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 SCHEDULE 2
 
SCHEDULE OF LOANS
 
INITIAL CLOSING (SEPTEMBER ___, 2008):

NAME AND ADDRESS
 
LOAN AMOUNT
           
Rose Hill Gardens, LLC
  $ [             ]  

 

 
SECOND CLOSING (_______ ___, 200_):

NAME AND ADDRESS
 
LOAN AMOUNT
           
Rose Hill Gardens, LLC
  $ [             ]  

A-1

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EXHIBIT A
 
FORM OF SENIOR SECURED PROMISSORY NOTE
 
A-2

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BILL OF SALE
 
This BILL OF SALE (this “Bill of Sale”) is made and entered into as of December
31, 2008 from Rose Hill Gardens, LLC, a California limited liability company
(“Seller”) to First Blush, Inc., a Delaware corporation (“Purchaser”).

RECITALS

WHEREAS, Seller desires to sell to Purchaser all raw materials, finished goods
and all other assets and reimburse certain payables related to the business of
the Purchaser (collectively the “Assets”) set forth on EXHIBIT A hereto for an
aggregate purchase price of $828,697.90 (the “Purchase Price”); and

WHEREAS, by this instrument Seller is vesting in Purchaser all right, title and
interest in, to and under the Assets.

AGREEMENT
 
1.           Sale and Assignment of Purchased Assets. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller hereby sells, assigns, transfers, conveys and delivers to Purchaser all
right, title and interest in, to and under all of the Assets.

 
2.           Purchase Price. Purchaser shall make payment for the Purchase Price
of the Assets to Seller promptly by drawing upon the Seller Secured Debt
Facility provided by the Seller or by payment in Cash.

 
3.           As-Is Transaction. The Seller makes no warranties, express or
implied, regarding the condition, merchantability or fitness for a particular
purpose of the Equipment. Buyer takes the Equipment on an "as is" basis with all
faults.

 
4.           Further Assurances. Seller and Purchaser each agree to cooperate
fully with the other party and to execute and/or cause to be delivered to
Purchaser such other assignments, transfers, conveyances and other instruments
and documents and to give such further written assurances as may be reasonably
requested by any other party to evidence, vest, perfect, confirm, document and
carry out the sale of the Assets and Purchaser's ownership of all right, title
and interest contemplated hereby.

 
5.           Governing Law. The internal laws of the State of California,
irrespective of its choice of law principles, will govern the validity of this
Bill of Sale, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.

7.           Counterparts. This Bill of Sale may be executed in any number of
counterparts, each of which is an original and all of which taken together
constitute one instrument.
 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Bill of Sale on the
date first written above.

ROSE HILL GARDENS, LLC
By: ______________________________
Name: Victoria Briggs
Title: Managing Member

FIRST BLUSH, INC.

By: ________________________________

Name: Daniel Ginsberg
Title: President
 

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EXHIBIT A
 
ASSETS
 

Concentrate/Contracts
  $ 387,508.15  
Trays
  $ 6,537.60  
Bottles
  $ 27,000.00  
Finished Juice/Tea
  $ 163,488.00  
Payables
  $ 184,316.02  
Cumulative Loss 07-08 Owed to RHG
  $ 52,328.91  
AR at 12/31/08 Owed RHG
  $ 7,519.22  

 
 

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