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                               SECURITY AGREEMENT

THIS SECURITY AGREEMENT ("Agreement") is made and entered into   as  of the 17th
day of March, 2006, by  and   between   Brasada   California, Inc., a   Delaware
corporation (the "Borrower"),   John  L. Moran, Dennis B. Tower, MMP LLP, and W.
Kirk Bosche (each a "Stockholder" and   collectively,   the  "Stockholders"),and
Foothills Resources, Inc. ("Lender"), a Nevada corporation.

                                    RECITALS:

         The Borrower has issued and  delivered or will issue and deliver to the
Lender Secured  Bridge  Promissory  Note in the principal  amount of up to Three
Million Dollars  ($3,000,000),  dated as of the date of this Agreement  (each, a
"Note").  Pursuant  to the Note,  the  Borrower  has  agreed to grant a security
interest in and to the  Collateral  (as defined in this  Agreement) on the terms
and conditions set forth in this Agreement.

         In consideration  of the Debt (as defined in this Agreement)  evidenced
by the Note, and to secure repayment  thereof,  the Stockholder has agreed grant
Lender a security  interest in and to the Borrower Control Shares (as defined in
this Agreement).

         NOW,  THEREFORE,  for and in  consideration  of the Debt (as defined in
this  Agreement),  and of the premises and  intending to be legally  bound,  the
parties covenant and agree as follows:

1.       Definitions. In addition to the words and terms defined elsewhere in
         this Agreement, the following words and terms shall have the following
         meanings, unless the context otherwise clearly requires:

         "Accounts"  shall have the  meaning  given to that term in the Code and
         shall include without  limitation all rights of the Borrower,  whenever
         acquired, to payment for goods sold or leased or for services rendered,
         whether or not earned by performance.

         "As-extracted  Collateral"  shall have the  meaning  given to that term
          under the Code.

         "Borrower  Control  Shares"  shall  mean  Instruments  representing  or
         evidencing  equity  interests  representing  51% or more of the capital
         stock of the Borrower or other equity interests therein.

         "Bridge Loan  Agreement"  shall mean the Bridge Loan and Control  Share
         Pledge and  Security  Agreement  by and  between the  Borrower  and the
         Lender dated as of even date herewith.

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         "Chattel  Paper" shall have the meaning  given to that term in the Code
         and shall include without limitation all writings owned by the Borrower
         or, whenever acquired,  which evidence both a monetary obligation and a
         security interest in or a lease of specific goods.

         "Code" shall mean the Uniform  Commercial Code as in effect on the date
         of this  Agreement  and as amended  from time to time,  of the state or
         states  having  jurisdiction  with respect to all or any portion of the
         Collateral from time to time.

         "Collateral"  shall mean (i) the Borrower Control Shares,  and (ii) all
         tangible  and  intangible  assets  of  Borrower,   including,   without
         limitation, collectively the Accounts, As-extracted Collateral, Chattel
         Paper,  Deposit  Accounts,  Documents,   Equipment,  Fixtures,  General
         Intangibles,  Instruments, Intellectual Property, Inventory, Investment
         Property,  all oil and gas in and extracted from any other  Collateral,
         and Proceeds of each of them,  as well as the meaning  ascribed to that
         term in Section 2.

         "Debt" shall mean (i) all indebtedness, both principal and interest, of
         the  Borrower  to the  Lender  now or after the date of this  Agreement
         evidenced by the Notes, (ii) all other debts,  liabilities,  duties and
         obligations  of the  Borrower to the Lender  arising  after the date of
         this  Agreement  contracted  or incurred,  whether  arising under or in
         connection  with the Loan  Documents or arising  under or in connection
         with any other agreement, instrument, or undertaking made by or for the
         benefit of the Borrower to or for the benefit of the Lender,  (iii) all
         costs and expenses  incurred by the Lender in the  collection of any of
         the indebtedness  described in this paragraph or in connection with the
         enforcement of any of the duties and obligations of the Borrower to the
         Lender described in this paragraph, including reasonable attorneys' and
         paralegals' fees and expenses, and (iv) all future advances made by the
         Lender for the maintenance, protection, preservation or enforcement of,
         or realization  upon, the Collateral or any portion of the  Collateral,
         including  advances  for  storage,   transportation   charges,   taxes,
         insurance, repairs and the like.

         "Deposit  Accounts"  shall have the  meaning  given to that term in the
         Code and shall  include a demand,  time,  savings,  passbook or similar
         account  maintained  with  a  bank,  savings  bank,  savings  and  loan
         association,  credit union, trust company or other organization that is
         engaged in the business of banking.

         "Documents"  shall have the meaning  given to that term in the Code and
         shall include without  limitation all warehouse receipts (as defined by
         the Code) and other  documents  of title (as defined by the Code) owned
         by the Borrower, whenever acquired.

         "Equipment"  shall have the meaning  given to that term in the Code and
         shall  include  without  limitation  all goods  owned by the  Borrower,
         whenever  acquired  and  wherever  located,  used  or  brought  for use
         primarily  in the  business or for the benefit of the  Borrower and not
         included in Inventory of the Borrower,  together with all  attachments,
         accessories  and parts  used or  intended  to be used with any of those
         goods or Fixtures,  whether now or in the future  installed  therein or
         thereon or affixed thereto, as well as all substitutes and replacements
         thereof in whole or in part.

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         "Escrow Agent" shall mean Gottbetter & Partners, LLP.

         "Escrow Agreement" shall mean the Pledge and Escrow Agreement among the
         Borrower,  the  Lender,  the  Stockholders  and the  Escrow  Agent with
         respect to the Pledged Shares.

         "Event  of  Default"  shall  mean  (i)  any of the  Events  of  Default
         described in the Note or the Loan Documents, or (ii) any default by the
         Borrower in the performance of its obligations under this Agreement.

         "Fixtures"  shall have the meaning given to that term in the Code,  and
         shall include without limitation leasehold improvements.

         "General  Intangibles" shall have the meaning given to that term in the
         Code and shall include, without limitation,  all leases under which the
         Borrower  now or in the future  leases and or obtains a right to occupy
         or use real or personal  property,  or both,  all of the other contract
         rights of the Borrower,  whenever acquired,  and customer lists, choses
         in  action,  claims  (including  claims  for  indemnification),  books,
         records, patents, copyrights, trademarks, blueprints, drawings, designs
         and plans,  trade secrets,  methods,  processes,  contracts,  licenses,
         license  agreements,  formulae,  tax and any  other  types of  refunds,
         returned  and  unearned  insurance  premiums,  rights and claims  under
         insurance policies,  and computer  information,  software,  records and
         data,  and oil, gas, or other minerals  before  extraction now owned or
         acquired after the date of this Agreement by the Borrower.

         "Instruments" shall have the meaning given to that term in the Code and
         shall  include,  without  limitation,  all negotiable  instruments  (as
         defined in the Code),  all  certificated  securities (as defined in the
         Code) and all other  writings  which evidence a right to the payment of
         money now or after the date of this Agreement owned by the Borrower.

         "Inventory"  shall have the meaning  given to that term in the Code and
         shall  include  without  limitation  all goods  owned by the  Borrower,
         whenever  acquired  and  wherever  located,  held  for sale or lease or
         furnished or to be furnished  under  contracts of service,  and all raw
         materials, work in process and materials owned by the Borrower and used
         or consumed in the Borrower's business,  whenever acquired and wherever
         located.

         "Investment  Property,"  "Securities   Intermediary"  and  "Commodities
         Intermediary" each shall have the meaning set forth in the Code.


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<page>


         "Know-How" means all documented and undocumented research, ideas, data,
         theories,   conclusions,   reports,  drawings,   designs,   blueprints,
         schematics,  exhibits,  models,  prototypes,  source code, object code,
         flow charts,  manuals,  processes,  specifications,  formulae,  product
         configurations,  notes,  inventions  (whether  or  not  patentable  and
         whether or not reduced to practice)  and any other  information  of any
         kind developed,  in development or maintained by the Borrower or any of
         its  employees,  agents  or  representatives  relating  to any goods or
         services  sold or  licensed  or  offered  for  sale or  license  by the
         Borrower  or  goods  or  services  which  the  Borrower  has a  present
         intention to sell or license.

         "Loan Documents" shall mean collectively, this Agreement, the Note, the
         Bridge Loan Agreement,  the Escrow Agreement and all other  agreements,
         documents  and   instruments   executed  and  delivered  in  connection
         therewith,  as each may be amended,  supplemented or modified from time
         to time.

         "Permitted  Liens" shall mean all (i) all existing  liens on the assets
         of the Borrower which have been disclosed to the Lender by the Borrower
         in the Bridge Loan  Agreement,  and (ii) all  purchase  money  security
         interests  hereinafter  incurred by the Borrower in the ordinary course
         of business to the extent permitted by the Bridge Loan Agreement.

         "Pledged Shares" shall mean the Borrower Control Shares.

         "Pledgors" shall mean the Borrower and the Stockholders.

         "Proceeds"  shall have the  meaning  given to that term in the Code and
         shall include without  limitation  whatever is received when Collateral
         or Proceeds are sold,  exchanged,  collected or otherwise  disposed of,
         whether cash or non-cash,  and includes without limitation  proceeds of
         insurance payable by reason of loss of or damage to Collateral.

         "Trade  Secret  Rights"  means all  documentation,  Know-How  and other
         materials owned by the Borrower that is considered to be proprietary to
         the Borrower,  is maintained on a confidential or secret basis,  and is
         generally not known to other persons or entities who are not subject to
         confidentiality restrictions.

2.      Security  Interest.  As  security  for the full and timely
payment of the Debt in accordance with the terms of the Debt and the performance
of the  obligations  of the  Borrower  under the Notes and this  Agreement,  the
Borrower and the Stockholders agree that the Lender shall have, and the Borrower
and the  Stockholders  grant and convey to and create in favor of the Lender,  a
security  interest  under  the Code in and to such of the  Collateral  as is now
owned or acquired  after the date of this  Agreement by the Borrower;  provided,
that with respect to the  Stockholders,  the security interest granted hereunder
is limited to the Borrower Control Shares.  The security interest granted to the
Lender in this Agreement shall be a first priority security interest,  prior and
superior to the rights of all third  parties  existing  on or arising  after the
date  of  this  Agreement,  subject  to  the  Permitted  Liens.  Certain  of the
Collateral is described on Exhibit A hereto, which Collateral is included in the
Collateral.

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<page>

3.       Provisions Applicable to the Collateral. The parties agree that the
following provisions shall be applicable to the Collateral:

         (a) The Borrower covenants and agrees that at all times during the term
of this  Agreement  it shall  keep  accurate  and  complete  books  and  records
concerning the  Collateral  that is now owned or acquired after the date of this
Agreement by the Borrower.

         (b) The  Lender  or its  representatives  shall  have the  right,  upon
reasonable  prior written notice to the Borrower and during the regular business
hours of the Borrower,  to examine and inspect the  Collateral and to review the
books and records of the Borrower concerning the Collateral that is now owned or
acquired  after the date of this  Agreement by the Borrower and to copy the same
and  make  excerpts  therefrom;  provided,  however,  that  from and  after  the
occurrence of an Event of Default,  the rights of inspection  and entry shall be
subject to the requirements of the Code.

         (c) The Borrower  shall at all times during the term of this  Agreement
keep the Equipment,  Inventory and Fixtures that are now owned or acquired after
the date of this  Agreement  by the Borrower at its various  locations  or, upon
written notice to the Lender,  at such other  locations for which the Lender has
filed  financing  statements,  and at no other  location  without 20 days' prior
written  notice to the  Lender,  except that the  Borrower  shall have the right
until one or more Events of Default shall occur to sell or otherwise  dispose of
Inventory and other Collateral in the ordinary course of business.

         (d) The Borrower shall not move the location of its principal executive
offices without prior written notification to the Lender.

         (e) Without the prior written consent of the Lender, the Borrower shall
not sell, lease or otherwise dispose of any Equipment or Fixtures, except in the
ordinary course of their business.

         (f) Promptly upon request of the Lender from time to time, the Borrower
shall  furnish the Lender with such  information  and  documents  regarding  the
Collateral  and  the  Borrower's  financial  condition,   business,   assets  or
liabilities,  at such  times  and in such  form and  detail  as the  Lender  may
request.

         (g) At all times during the term of this Agreement,  the Borrower shall
deliver to the Lender, upon its written request, without limitation,

                  (i) all invoices and customer  statements  rendered to account
         debtors,  documents,  contracts,  chattel paper,  instruments and other
         writings  pertaining to the Borrower's  contracts or the performance of
         the Borrower's contracts,

                                       5
<page>

                  (ii) evidence of the Borrower's accounts and statements
         showing the aging, identification, reconciliation and  collection
         thereof, and

                  (iii)  reports  as to  the  Borrower's  inventory  and  sales,
         shipment,  damage or loss thereof, all of the foregoing to be certified
         by authorized officers or other employees of the Borrower, and Borrower
         shall take all necessary  action  during the term of this  Agreement to
         perfect any and all  security  interests  in favor of  Borrower  and to
         assign to Lender all such security interests in favor of Borrower.

         (h)  Notwithstanding the security interest in the Collateral granted to
and created in favor of the Lender under this Agreement, the Borrower shall have
the right until one or more Events of Default  shall occur,  at its own cost and
expense,  to collect  the  Accounts  and the  Chattel  Paper and to enforce  its
contract rights.

         (i) After the occurrence of an Event of Default,  the Lender shall have
the right,  in its sole  discretion,  to give  notice of the  Lender's  security
interest  to account  debtors  obligated  to the  Borrower  and to take over and
direct  collection of the Accounts and the Chattel Paper, to notify such account
debtors to make  payment  directly  to the Lender and to enforce  payment of the
Accounts and the Chattel Paper and to enforce the Borrower's contract rights. It
is understood and agreed by the Borrower that the Lender shall have no liability
whatsoever  under this  subsection  (i) except for its own gross  negligence  or
willful misconduct.

         (j) At all times  during  the term of this  Agreement,  Borrower  shall
promptly deliver to the Lender,  upon its written request,  all existing leases,
and all other leases  entered into by Borrower  from time to time,  covering any
Equipment or Inventory ("Leased Inventory") which is leased to third parties.

         (l) Borrower shall not change its name, entity status, federal taxpayer
identification  number, or provincial  organizational or registration number, or
the state under which it is organized  without the prior written  consent of the
Lender.

         (m)  Borrower  shall not close any of its Deposit  Accounts or open any
new or  additional  Deposit  Accounts  without  first giving the Lender at least
fifteen (15) days prior written notice thereof.

         (n) The  Borrower  shall  cooperate  with  the  Lender,  at  Borrower's
expense,  in perfecting  Lender's  security  interest in any of the  Collateral,
including the execution of any control agreement(s) required in order to perfect
Lender's security interest in the Deposit Accounts.

         (o)  Lender  may file any  necessary  financing  statements  and  other
documents Lender deems necessary in order to perfect Lender's  security interest
without Borrower's signature.  Borrower grants to Lender a power of attorney for
the sole purpose of executing any  documents on behalf of Borrower  which Lender
deems necessary to perfect Lender's security interest.  Such power, coupled with
an interest, is irrevocable.

                                       6
<page>

         (p) The parties agree that the Lender shall have the right to designate
and  appoint a  collateral  agent to act for and on behalf of the  Lenders  with
respect to the  Collateral  under this  Agreement,  provided  that  Borrower  is
notified in writing at least ten (10) days in advance of such appointment.

         4.       Additional Provisions Applicable to the Pledged Shares.
                  ------------------------------------------------------

         (a)  Simultaneously  herewith the Pledgors have delivered to the Escrow
Agent one or more  certificates  representing the Pledged Shares,  together with
stock powers duly executed in blank by the Pledgors. The Escrow Agent shall hold
such Pledged Shares pursuant to the terms of the Escrow Agreement.

         (b) The Pledged  Shares  shall be held by the Escrow  Agent as security
for the timely payment of all of the Borrower's  obligations  under the Note and
for the Pledgors'  performance of all of their obligations under this Agreement,
as provided herein.

         (c) The Escrow  Agreement  shall  provide  that while the Escrow  Agent
holds the Pledged Shares as security,  the Pledgors shall have the right to vote
the Pledged  Shares at all meetings of the Borrower's  stockholders  to the same
extent as if such Pledged  Shares were held by Pledgors;  provided that no Event
of Default has  occurred  and is  continuing  and that the  Pledgors  are not in
default in the  performance of any term of this  Agreement.  In the event of any
such a default  or Event of  Default,  the  Lender  shall  have the right to the
extent permitted by law to vote and to give consents,  ratifications and waivers
and take any other action with respect to the Pledged Shares with the same force
and  effect as if the Lender  were the  absolute  and sole owner of the  Pledged
Shares.

         4. Actions with Respect to Accounts.     The Borrower  irrevocably
makes,  constitutes and appoints the Lender its true and lawful attorney-in-fact
with power to sign its name and to take any of the  following  actions after the
occurrence  and prior to the cure of an Event of  Default,  at any time  without
notice to the Borrower and at the Borrower's expense:

         (a) Verify the validity and amount of, or any other matter relating to,
          the Collateral by mail, telephone, telegraph or otherwise;

         (b) Notify all account  debtors that the Accounts have been assigned to
         the Lender and that the Lender has a security interest in the Accounts;

         (c) Direct all account debtors to make payment of all Accounts directly
          to the Lender;

         (d) Take control in any reasonable manner of any cash or non-cash items
         of payment or proceeds of Accounts;

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<page>

         (e) Receive, open and dispose of all mail addressed to the Borrower;

         (f) Take control in any manner of any rejected, returned, stopped in
          transit or repossessed goods relating to Accounts;

         (g) Enforce payment of and collect any Accounts,  by legal  proceedings
          or otherwise, and for such purpose the Lender may:

         (1) Demand payment of any Accounts or direct any account
          debtors to make payment of Accounts directly to the Lender;

          (2)  Receive and collect all monies due or to become due to the
               Borrower pursuant to the Accounts;

          (3)  Exercise all of the Borrower's rights and remedies with respect
               to the collection of Accounts;

          (4)  Settle, adjust, compromise, extend, renew, discharge or release
               Accounts in a commercially reasonable manner;

          (5)  Sell or assign Accounts on such reasonable terms, for such
               reasonable amounts and at such reasonable times as the Lender
               reasonably deems advisable;

          (6)  Prepare, file and sign the Borrower's name or names on any Proof
               of Claim or similar documents in any proceeding filed under
               federal or state bankruptcy, insolvency, reorganization or other
               similar law as to any account debtor;

          (7)  Prepare, file and sign the Borrower's name or names on any notice
               of lien, claim of mechanic's lien, assignment or satisfaction of
               lien or mechanic's lien or similar document in connection with
               the Collateral;

          (8)  Endorse the name of the Borrower upon any chattel papers,
               documents, instruments, invoices, freight bills, bills of lading
               or similar documents or agreements relating to Accounts or goods
               pertaining to Accounts or upon any checks or other media of
               payment or evidence of a security interest that may come into the
               Lender, possession;

          (9)  Sign the name of the Borrower to verifications of Accounts and
               notices of Accounts sent by account debtors to the Borrower; or

          (10) Take all other actions that the Lender reasonably deems to be
               necessary or desirable to protect the Borrower's interest in the
               Accounts.

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         (h)  Negotiate  and endorse any  Document in favor of the Lender or its
designees,   covering  Inventory  which  constitutes  Collateral,   and  related
documents for the purpose of carrying out the  provisions of this  Agreement and
taking any action and executing in the name of Borrower any instrument which the
Lender may  reasonably  deem  necessary or advisable to  accomplish  the purpose
hereof. Without limiting the generality of the foregoing,  the Lender shall have
the right and power to receive,  endorse and collect checks and other orders for
the payment of money made  payable to the Borrower  representing  any payment or
reimbursement made under,  pursuant to or with respect to, the Collateral or any
part thereof and to give full  discharge to the same.  The Borrower  does hereby
ratify and approve all acts of said attorney and agrees that said attorney shall
not be  liable  for any acts of  commission  or  omission,  nor for any error of
judgment  or  mistake  of fact or law,  except  for said  attorney's  own  gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable  until the Debt is paid in full (at  which  time  this  power  shall
terminate  in  full)  and  the  Borrower  shall  have  performed  all  of  their
obligations  under  this  Agreement.  The  Borrower  further  agrees  to use its
reasonable efforts to assist the Lender in the collection and enforcement of the
Accounts  and will not  hinder,  delay or impede the Lender in any manner in its
collection and enforcement of the Accounts.

         5.       Preservation and Protection of Security  Interest.  Each of
the  Borrower and the  Stockholders  represents  and  warrants  that it has, and
covenants  and agrees that at all times  during the term of this  Agreement,  it
will have,  good and marketable  title to the Collateral from time to time owned
or  acquired by it free and clear of all  mortgages,  pledges,  liens,  security
interests,  charges or other  encumbrances,  except for the Permitted  Liens and
those  junior in right of payment  and  enforcement  to that of the Lender or in
favor of the  Lender,  and shall  defend the  Collateral  against the claims and
demands of all persons, firms and entities whomsoever. Assuming Lender has taken
all required action to perfect a security interest in the Collateral as provided
by the Code, each of the Borrower and the  Stockholders  represents and warrants
that as of the date of this  Agreement the Lender has, and that all times in the
future the Lender will have, a first priority perfected security interest in the
Collateral,  prior  and  superior  to the  rights of all  third  parties  in the
Collateral  existing on the date of this  Agreement or arising after the date of
this  Agreement,  subject to the  Permitted  Liens.  Except as permitted by this
Agreement, each of the Borrower and the Stockholder covenants and agrees that it
shall not,  without the prior written  consent of the Lender (i) borrow  against
the Collateral or any portion of the Collateral  from any other person,  firm or
entity, except for borrowings which are subordinate to the rights of the Lender,
(ii) grant or create or permit to attach or exist any  mortgage,  pledge,  lien,
charge  or other  encumbrance,  or  security  interest  on,  of or in any of the
Collateral or any portion of the Collateral  except those in favor of the Lender
or the Permitted  Liens,  (iii) permit any levy or attachment to be made against
the  Collateral  or any portion of the  Collateral,  except those subject to the
Permitted  Liens,  or (iv) permit any  financing  statements  to be on file with
respect to any of the Collateral,  except  financing  statements in favor of the
Lender or those with  respect  to the  Permitted  Liens.  The  Borrower  and the
Stockholders  shall  faithfully  preserve  and  protect  the  Lender's  security
interest in the Collateral and shall,  at their own cost and expense,  cause, or
assist the Lender to cause that  security  interest to be perfected and continue
perfected so long as the Debt or any portion of the Debt is outstanding,  unpaid
or executory.  For purposes of the perfection of the Lender's  security interest
in the Collateral in accordance with the  requirements  of this  Agreement,  the
Borrower  and the  Stockholders  shall  from time to time at the  request of the
Lender  file or  record,  or cause to be filed or  recorded,  such  instruments,
documents  and  notices,   including   assignments,   financing  statements  and
continuation  statements,  as  the  Lender  may  reasonably  deem  necessary  or
advisable  from time to time in order to perfect  and  continue  perfected  such
security  interest.  The Borrower and the  Stockholders  shall do all such other
acts and things and shall  execute and deliver  all such other  instruments  and
documents,   including  further  security  agreements,   pledges,  endorsements,
assignments  and notices,  as the Lender in its discretion  may reasonably  deem
necessary  or  advisable  from time to time in order to perfect and preserve the

                                       9
<page>

priority  of such  security  interest as a first lien  security  interest in the
Collateral prior to the rights of all third persons, firms and entities, subject
to the  Permitted  Liens  and  except  as  may be  otherwise  provided  in  this
Agreement.  The Borrower and the Stockholders agree that a carbon,  photographic
or other  reproduction of this Agreement or a financing  statement is sufficient
as a financing statement and may be filed instead of the original.

         6.  Insurance.  Risk of loss of, damage to or destruction of the
Equipment,  Inventory and Fixtures is on the Borrower. The Borrower shall insure
the Equipment,  Inventory and Fixtures  against such risks and casualties and in
such  amounts and with such  insurance  companies  as is  ordinarily  carried by
corporations  or other  entities  engaged in the same or similar  businesses and
similarly situated or as otherwise reasonably required by the Lender in its sole
discretion.  In the event of loss of, damage to or destruction of the Equipment,
Inventory or Fixtures  during the term of this  Agreement,  the  Borrower  shall
promptly notify Lender of such loss,  damage or  destruction.  At the reasonable
request of the  Lender,  each of the  Borrower's  policies  of  insurance  shall
contain  loss  payable  clauses in favor of the Borrower and the Lender as their
respective  interests may appear and shall contain provision for notification of
the Lender  thirty (30) days prior to the  termination  of such  policy.  At the
request of the Lender, copies of all such policies,  or certificates  evidencing
the same,  shall be deposited  with the Lender.  If the Borrower fails to effect
and keep in full force and effect such  insurance  or fails to pay the  premiums
when due, the Lender may (but shall not be  obligated  to) do so for the account
of the Borrower and add the cost thereof to the Debt.  The Lender is irrevocably
appointed  attorney-in-fact  of the Borrower to endorse any draft or check which
may be  payable  to the  Borrower  in  order to  collect  the  proceeds  of such
insurance. Unless an Event of Default has occurred and is continuing, the Lender
will turn over to the Borrower the proceeds of any such  insurance  collected by
it on the  condition  that the Borrower  apply such  proceeds  either (i) to the
repair of damaged Equipment,  Inventory or Fixtures,  or (ii) to the replacement
of destroyed  Equipment,  Inventory  or Fixtures  with  Equipment,  Inventory or
Fixtures of the same or similar  type and  function  and of at least  equivalent
value (in the sole judgment of the Lender), provided such replacement Equipment,
Fixtures or Inventory is made subject to the security  interest  created by this
Agreement  and  constitutes  a first lien  security  interest in the  Equipment,
Inventory  and  Fixtures  subject  only to  Permitted  Liens and other  security
interests  permitted  under this  Agreement,  and is  perfected by the filing of

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financing  statements in the  appropriate  public offices and the taking of such
other  action as may be  necessary or desirable in order to perfect and continue
perfected such security interest. Any balance of insurance proceeds remaining in
the  possession  of the Lender  after  payment in full of the Debt shall be paid
over to the Borrower or its order.

         7.          Maintenance  and Repair.  The Borrower  shall  maintain the
Equipment, Inventory and Fixtures, and every portion thereof, in good condition,
repair and working order, reasonable wear and tear alone excepted, and shall pay
and discharge all taxes, levies and other impositions assessed or levied thereon
as well as the cost of repairs to or  maintenance  of the same.  If the Borrower
fails to do so, the Lender may (but shall not be  obligated  to) pay the cost of
such  repairs or  maintenance  and such  taxes,  levies or  impositions  for the
account of the Borrower and add the amount of such payments to the Debt.

         8.          Preservation of Rights Against Third Parties;  Preservation
of Collateral in Lender's Possession. Until such time as the Lender exercise its
right to effect  direct  collection of the Accounts and the Chattel Paper and to
effect the enforcement of the Borrower's  contract  rights,  the Borrower assume
full  responsibility  for taking any and all  commercially  reasonable  steps to
preserve  rights in  respect of the  Accounts  and the  Chattel  Paper and their
contracts  against prior  parties.  The Lender shall be deemed to have exercised
reasonable care in the custody and preservation of such of the Collateral as may
come into its  possession  from time to time if the Lender takes such action for
that  purpose as the  Borrower  shall  request in  writing,  provided  that such
requested  action shall not, in the judgment of the Lender,  impair the Lender's
security  interest  in the  Collateral  or its right  in,  or the value of,  the
Collateral,  and provided  further that the Lender receives such written request
in sufficient time to permit the Lender to take the requested action.

         9.       Events of Default and Remedies.

         (a) If any one or more of the  Events of Default  shall  occur or shall
exist,  the Lender may then or at any time  thereafter,  so long as such default
shall continue, foreclose the lien or security interest in the Collateral in any
way  permitted  by law, or upon fifteen  (15) days prior  written  notice to the
Borrower or the Stockholders,  sell any or all Collateral at private sale at any
time or place in one or more sales, at such price or prices and upon such terms,
either for cash or on credit, as the Lender, in its sole discretion,  may elect,
or sell any or all Collateral at public  auction,  either for cash or on credit,
as the Lender,  in its sole  discretion,  may elect,  and at any such sale,  the
Lender  may bid for and  become  the  purchaser  of any or all such  Collateral.
Pending any such action the Lender may liquidate the Collateral.

         (b) If any one or more of the  Events of Default  shall  occur or shall
exist, the Lender may then, or at any time  thereafter,  so long as such default
shall continue, grant extensions to, or adjust claims of, or make compromises or
settlements  with,  debtors,  guarantors  or any other  parties  with respect to
Collateral or any securities,  guarantees or insurance applying thereon, without
notice to or the consent of the Borrower or the Stockholders,  without affecting
the Borrower's or the Stockholders' liability under this Agreement or the Notes.
Each of the  Borrower  and the  Stockholders  waives  notice of  acceptance,  of
nonpayment, protest or notice of protest of any Accounts or Chattel Paper or any
of its  contract  rights  and any other  notices  to which the  Borrower  or the
Stockholders may be entitled.

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<page>

         (c) If any one or more of the  Events of Default  shall  occur or shall
exist and be  continuing,  then in any such  event,  the Lender  shall have such
additional  rights and  remedies  in respect of the  Collateral  or any  portion
thereof as are  provided  by the Code and such  other  rights  and  remedies  in
respect  thereof which it may have at law or in equity or under this  Agreement,
including  without  limitation the right to enter any premises where  Equipment,
Inventory  and/or  Fixtures are located and take  possession and control thereof
without  demand  or  notice  and  without  prior   judicial   hearing  or  legal
proceedings, which the Borrower and the Stockholders expressly waive.

         (d) The Lender shall apply the Proceeds of any sale or  liquidation  of
the Collateral,  and, subject to Section 6, any Proceeds  received by the Lender
from  insurance,  first to the  payment  of the  reasonable  costs and  expenses
incurred by the Lender in  connection  with such sale or  collection,  including
without limitation reasonable attorneys' fees and legal expenses,  second to the
payment of the Debt, whether on account of principal or interest or otherwise as
the Lender, in its sole discretion,  may elect, and then to pay the balance,  if
any, to the  Borrower or as  otherwise  required  by law. If such  Proceeds  are
insufficient  to pay the amounts  required by law, the Borrower  shall be liable
for any deficiency.

         (e) Upon the  occurrence  of any Event of Default,  the Borrower  shall
promptly upon written demand by the Lender assemble the Equipment, Inventory and
Fixtures  and make  them  available  to the  Lender  at a place or  places to be
designated by the Lender.  The rights of the Lender under this paragraph to have
the Equipment,  Inventory and Fixtures  assembled and made available to it is of
the essence of this Agreement and the Lender may, at its election,  enforce such
right by an action in equity  for  injunctive  relief or  specific  performance,
without the requirement of a bond.

         10.    Defeasance.   Notwithstanding  anything  to  the  contrary
contained in this  Agreement  upon payment and  performance in full of the Debt,
this  Agreement  shall  terminate  and be of no further force and effect and the
Lender shall thereupon terminate its security interest in the Collateral.  Until
such  time,  however,  this  Agreement  shall be  binding  upon and inure to the
benefit of the parties, their successors and assigns, provided that, without the
prior written consent of the Lender,  the Borrower may not assign this Agreement
or any of its  rights  under this  Agreement  or  delegate  any of its duties or
obligations under this Agreement and any such attempted assignment or delegation
shall  be null and  void.  This  Agreement  is not  intended  and  shall  not be
construed to obligate the Lender to take any action  whatsoever  with respect to
the Collateral or to incur expenses or perform or discharge any obligation, duty
or disability of the Borrower.

                                       12
<page>

         11.      Miscellaneous.
                  -------------

         (a) The provisions of this  Agreement are intended to be severable.  If
any  provision  of this  Agreement  shall  for any  reason  be held  invalid  or
unenforceable in whole or in part in any jurisdiction,  such provision shall, as
to such  jurisdiction,  be  ineffective  to the  extent  of such  invalidity  or
unenforceability  without in any manner affecting the validity or enforceability
of such  provision  in any other  jurisdiction  or any other  provision  of this
Agreement in any jurisdiction.

         (b) No  failure or delay on the part of the  Lender in  exercising  any
right,  remedy,  power or  privilege  under  this  Agreement  and the Note shall
operate as a waiver thereof or of any other right, remedy, power or privilege of
the Lender under this  Agreement,  the Notes or any of the other Loan Documents;
nor shall any single or partial  exercise  of any such right,  remedy,  power or
privilege  preclude  any other  right,  remedy,  power or  privilege  or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies,  powers and privileges of the Lender under this Agreement,
the Note and the other Loan  Documents are  cumulative  and not exclusive of any
rights or remedies which they may otherwise have.

         (c) Unless otherwise provided herein, all demands,  notices,  consents,
service of process,  requests  and other  communications  hereunder  shall be in
writing and shall be  delivered in person or by overnight  courier  service,  or
mailed by certified mail, return receipt requested, addressed:

If to Borrower or to the Stockholders:

         Brasada California, Inc.
         P.O. Box 2701
         Bakersfield, CA 93303
         Attn: Dennis B. Tower, Chief Executive Officer
         Facsimile: (541) 595-2484

with a copy to:

         McGuireWoods LLP
         1345 Avenue of the Americas
         New York, NY 10105
         Attn: Louis W. Zehil, Esq.
         Facsimile: (212) 548-2175

and with a copy to:

         W. Kirk Bosche
         14619 Carols Way Drive,
         Houston, Texas 77070
         Facsimile: (281) 376-9367

                                       13
<page>

If to Lender:

         Foothills Resources, Inc.
         Candiana Lodge, Wellfield C1, Coads Green
         Launceston, Cornwall, England
         Attn: J. Earl Terris, President and Chief Executive Officer
         Facsimile: (011) 441566782214

with a copy to:

         Gottbetter & Partners, LLP
         488 Madison Avenue, 12th Floor
         New York, NY 10022
         Attn: Adam S. Gottbetter, Esq.
         Facsimile: (212) 400-6901

Any such notice  shall be  effective  (a) when  delivered,  if delivered by hand
delivery or overnight courier service, or (b) five (5) days after deposit in the
United States mail, as applicable.

         (d) The section headings  contained in this Agreement are for reference
purposes only and shall not control or affect its construction or interpretation
in any respect.

         (e)  Unless  the  context  otherwise  requires,  all terms used in this
Agreement  which are defined by the Code shall have the  meanings  stated in the
Code.

         (f) The Code shall govern the settlement,  perfection and the effect of
attachment and perfection of the Lender's  security  interest in the Collateral,
and the rights,  duties and  obligations  of the Lender,  the  Borrower  and the
Stockholders  with respect to the Collateral.  This Agreement shall be deemed to
be a  contract  under  the laws of the State of New York and the  execution  and
delivery  of this  Agreement  and,  to the  extent  not  inconsistent  with  the
preceding sentence, the terms and provisions of this Agreement shall be governed
by and construed in accordance with the laws of that State.

         (g) This  Agreement  may be executed in several  counterparts,  each of
which shall be deemed an original but all of which shall  constitute one and the
same instrument.  All of such counterparts shall be read as though one, and they
shall  have the same force and  effect as though  all the  signers  had signed a
single page.

                            [SIGNATURE PAGE FOLLOWS]

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<page>

         IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed and delivered this Security  Agreement as of the day and year set forth
at the beginning of this Security Agreement.


FOOTHILLS RESOURCES, INC.                     BRASADA CALIFORNIA, INC.


By:______________________                     By:______________________
Name:    J. Earl Terris                       Name:    Dennis B. Tower
Title:   Chief Executive Officer              Title:   Chief Executive Officer



DENNIS B. TOWER                               JOHN L. MORAN

-----------------------------                 ----------------------------


MMP LLP                                        W. KIRK BOSCHE

By:_________________________                   __________________________
Name:
Title:   Managing Partner

                                       15
<page>

                                    EXHIBIT A

Assets,  rights  and  other  interests  acquired  pursuant  to the  Farmout  and
Participation Agreement dated January 3, 2006 between INNEX California, Inc. and
Brasada Resources LLC.



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