Exhibit 10.5
STOCK PURCHASE AGREEMENT

    This Stock Purchase Agreement (“Agreement”) is made effective as of
March 31, 2008 by and between FirstPlus Enterprises, Inc., a Texas corporation,
with an address of 122 West John Carpenter Freeway, Suite 450, Irving, Texas
75039 (“Seller”) and Stalwart Enterprises, Inc., a Texas corporation with an
address of 8409 Pickwick Lane #383, Dallas, Texas 75225 (“Purchaser”).

BACKGROUND

 

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A. Seller owns one thousand (1,000) shares of the capital stock of Ole´ Auto
Group, Inc., a Texas corporation (“Company”), which shares represent one hundred
percent (100%) of the outstanding shares of the capital stock of the Company
(“Stock”).
B. Seller wishes to sell and Purchaser wishes to purchase the Stock on the terms
and conditions set forth herein.
          NOW THEREFORE, in consideration of the premises and the mutual and
several covenants, conditions, representations, warranties and indemnities set
forth herein, intending to be legally bound, the parties hereto hereby agree as
follows:
      1. Sale and Purchase of the Stock.
          1.1 Transfer at Closing. At the Closing, Seller shall sell, transfer,
assign and convey to Purchaser the Stock
          1.2 Purchase Price for the Stock. The purchase price for the Stock
shall be Three Million Two Hundred Thousand Dollars ($3,200,000.00) (“Purchase
Price”) which shall be payable pursuant to the terms of the Promissory Note (as
defined in Section 1.3 hereof).
          1.3 Note Payable for the Stock. At the Closing, Purchaser shall
execute and deliver or cause to be delivered to Seller: (i) a Promissory Note
from Purchaser in the principal sum of Three Million Two Hundred Thousand
Dollars ($3,200,000.00) in the form attached hereto as Exhibit “A” (“Promissory
Note”); (ii) a Pledge Agreement from Purchaser in the form attached hereto as
Exhibit “B” (“Pledge Agreement”); (iii) a Guaranty from the Company in the form
attached hereto as Exhibit “C” (“Guaranty”); and (iv) a Security Agreement from
the Company in the form attached hereto as Exhibit “D” (“Security Agreement”).
      2. Closing; Transfer Procedures.
          2.1 Closing. The consummation of the transactions resulting in the
sale and purchase of the Stock (“Closing”) shall be effective as of March 31,
2008.
          2.2 Minute Books, Corporate Seal and Stock Records. At the Closing,
Seller shall deliver or cause the Company to deliver to Purchaser all minute
books, corporate seals, stock certificate books and other stock records of the
Company.

 

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          2.3 Delivery of the Stock. At the Closing, Seller shall deliver to
Purchaser all certificates representing the Stock, duly endorsed in blank or
with appropriate stock powers duly endorsed in blank.
          2.4 Resignation of Officers and Directors; Bank Account Signatures. At
the Closing, Seller shall deliver or cause the Company to deliver to Purchaser
(a) resignations of the officers and directors set forth on Schedule “1”, and
(b) all necessary documents required by any banks or other depository
institutions for the Company to remove the authorized signatories and replace
them with the Purchaser’s designees.
          2.5 Certain Assets.
          (a) At the Closing, the Company shall transfer to Seller all rights,
title and interest in and to those assets listed on Schedule “2” which assets
shall be transferred to Seller free and clear of any and all liens, pledges,
encumbrances, security interests and claims of any nature or kind whatsoever. In
furtherance of the foregoing transfer, the Company shall execute and deliver to
Seller a Bill of Sale in the form attached hereto as Exhibit “E” (“Bill of
Sale”).
          (b) The Company currently occupies property located at 3363 West
Northwest Highway, Dallas, Texas 75220 as a subtenant of Seller’s affiliate,
FirstPlus Acquisitions-1, Inc. (“Affiliate”). Affiliate leases said property
from BV NWH, LP, pursuant to that certain Lease Agreement entered into by and
between Affiliate, as tenant, and BV NWH, LP, as landlord, dated as of
February 29, 2008 (“Bachman Lake Lease Agreement”). The Bachman Lake Lease
Agreement is guaranteed by Seller pursuant to that certain Lease Guaranty dated
February 28, 2008 (“Lease Guaranty”). Immediately following Closing, Purchaser
and the Company shall collectively use their best efforts to cause BV NWH, LP to
assign and transfer the Bachman Lake Lease Agreement to Company and/or Purchaser
and to simultaneously release and discharge Seller and Affiliate from any and
all obligations arising under or pursuant to the Bachman Lake Lease Agreement
and the Lease Guaranty. From and after Closing, the Company and Purchaser shall
jointly and severally indemnify and hold harmless Seller and Affiliate from any
and all claims, damages, obligations and the like, including, without
limitation, any attorneys’ fees and costs incurred by Seller, of, relating to,
or arising under or pursuant to the Bachman Lake Lease Agreement and/or the
Lease Guaranty.
          (c) As to the premises known as the “ReConn Center” located at 9400
Hargrove Drive, Dallas, Texas, Purchaser and Company shall have ninety (90) days
from the date hereof to negotiate an assumption and release agreement with II
C.B., L.P. (“ReConn Lender”) pursuant to which the Company and Purchaser will
assume all of the obligations of Affiliate of or arising under that certain
$550,000 loan made by ReConn Lender to Affiliate as evidenced inter alia by that
certain Deed of Trust and Security Agreement dated March 10, 2008, which loan is
secured by a mortgage on the ReConn Center. In furtherance thereof, the Company
and Purchaser shall cause Affiliate to be absolutely and completely released
from any and all obligations arising under or pursuant to such loan. In the
event that such assumption and release is consummated within such 90-day period
and provided that Purchaser pays or causes to be paid all closing costs and
fees, including any fees required by ReConn Lender, Seller agrees to cause
Affiliate to quit claim the ReConn Center premises to the Company or its
nominee, concurrently with the consummation of such assumption and release, in
consideration for such assumption and

 

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release. Within forty-five (45) days of the filing of the quit claim deed,
Seller shall cause Affiliate to execute and deliver a special warranty deed for
the ReConn Center premises to the Company or its nominee.
          2.6 Certain Liabilities.
          (a) Seller covenants and agrees to pay that certain debt owed by the
Company to ADESA Dallas, 1224 Big Town Blvd., Mesquite, Texas 75149 in the
amount of $111,000 within ninety (90) days of Closing.
          (b) Seller does hereby release the Company from any obligation under
that certain sublease of the premises known as 122 West John Carpenter Freeway,
Suite 430, Irving, Texas 75035.
          (c) Seller and Purchaser acknowledge the existence of certain
litigation matters described on Schedule “3” (“Litigation”). Seller has, with
the consent of Purchaser and the Company, assumed the defense of the Litigation
and, in furtherance thereof, has engaged William P. Maxwell, Esquire as defense
counsel (“Defense Counsel”) and has agreed to be responsible for all liabilities
in connection therewith, including any liability to E.K. & J. Arledge or Cynthia
Arledge, and to pay all legal fees in connection therewith. Purchaser and the
Company agree to cooperate with Seller and Defense Counsel in such defense and,
in furtherance thereof, shall provide any and all documents, witnesses,
consents, approvals and other information as, from time to time, may be
requested by Seller and/or Defense Counsel. In the event that Purchaser and the
Company withdraw their consent to Seller’s assumption of the defense of the
Litigation and/or fail to cooperate with Seller or Defense Counsel in connection
with the defense of the Litigation, Seller shall be relieved of any and all
liabilities with respect thereto, including, but not limited to, all costs and
attorneys’ fees. In the event any amounts are recovered by way of counterclaim
or otherwise, including without limitation, damages, awards, attorneys’ fees,
costs and the like (“Damage Awards”), such Damage Awards shall belong to and be
paid to Seller. Purchaser and Company do hereby irrevocably assign and transfer
to Seller any and all rights, titles and interest in and to any Damage Awards
and shall, if requested by Seller, execute and deliver any assignments and/or
other documents requested by Seller, from time to time, to evidence such
assignment and transfer.
          (d) Seller shall indemnify, defend and hold harmless Purchaser from
and against all claims, demands, liabilities, damages, losses, costs and
expenses, including reasonable attorneys’ fees, caused by or arising out of
(i) that certain Executive Employment Agreement dated November 3, 2006 between
FirstPlus Auto Group, Inc., a Texas corporation (“FPAG”), and Eddie Perkins
(“Perkins”); and (ii) that certain Asset Purchase Agreement dated as of
November 3, 2006 between FPAG and Perkins regarding the sale of certain
receivables.
     3. Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchaser as of the date hereof and at the Closing as follows:

 

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          3.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas.
          3.2 No Subsidiaries. The Company has no interest in any other
corporation, partnership, joint venture or other legal entity.
          3.3 Capitalization. The issued, authorized and outstanding capital
stock of the Company consists of the Stock, of which Seller owns one hundred
percent (100%). Each share of such capital stock issued and outstanding is
validly issued, fully paid and non-assessable. There are no outstanding options,
warrants, puts, calls, contracts, commitments, preemptive rights, cumulative
voting rights, assignments, pledges or demands of any character relating to any
of the capital stock of the Company.
          3.4 Stock Ownership. Seller owns the Stock free and clear of all
liens, encumbrances, pledges, mortgages, security interests, conditional sales
contracts, claims and other charges of every kind (“Liens”). Seller has the full
right to transfer the Stock to Purchaser free and clear of all Liens, and
without violating any agreement or understanding to which the Company or Seller
is a party or by which either of them is bound.
     4. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to Seller as of the date hereof and at the Closing, as follows:
          4.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas.
          4.2 Authorization of Transaction. Purchaser has the legal capacity,
power and authority to execute and deliver this Agreement and each agreement,
document, instrument or certificate executed by it in connection with this
Agreement, including, without limitation, the Promissory Note and the Pledge
Agreement (collectively, the “Transaction Documents”) and to perform its
obligations hereunder and thereunder. All corporate and other actions or
proceedings to be taken by or on the part of Purchaser to authorize and permit
the execution and delivery by it of the Transaction Documents to which it is a
party, the instruments required to be executed and delivered by it pursuant
thereto, the performance by Purchaser of its obligations under the Transaction
Documents, and the consummation by it of the transactions contemplated therein,
have been duly and properly taken. The Transaction Documents have been duly
executed and delivered by Purchaser and constitute the legal, valid and binding
obligation of Purchaser enforceable in accordance with their terms and
conditions. At the Closing, Purchaser shall deliver to Seller copies of
Purchaser’s and the Company’s corporate resolutions authorizing the matters set
forth in this Agreement and the other Transaction Documents. Any individual
executing this Agreement on behalf of Purchaser represents and warrants that he
is duly to act in the name of Purchaser to bind Purchaser to this Agreement. If
any such individual shall not be so authorized then such individual shall be
personally liable

 

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hereunder until Purchaser ratifies, approves and adopts this Agreement as a
binding obligation of Purchaser, enforceable in accordance with its terms.
     5. Representations, Warranties and Indemnities.
          5.1 Survival. All representations, warranties and agreements made by
Seller individually and collectively in this Agreement or in any exhibit, list,
certificate or document delivered pursuant hereto shall survive the Closing for
a period of one (1) year. All representations, warranties and agreements made by
Purchaser in this Agreement or any other of the Transaction Documents or in any
exhibit, list, certificate or document delivered pursuant hereto or thereto
shall survive for a period of one (1) year following the date on which Purchaser
shall have paid in full the Promissory Note.
          5.2 Indemnification by Seller. Seller shall indemnify, defend and hold
harmless Purchaser from and against all claims, demands, liabilities, damages,
losses, costs and expenses, including reasonable attorneys’ fees, caused by or
arising out of the breach of any agreement of or any representation or warranty
made by Seller in this Agreement or in any exhibit, list, certificate or
document delivered by them pursuant hereto, this obligation of Seller to survive
the Closing.
          5.3 Indemnification by Purchaser. Purchaser shall indemnify, defend
and hold harmless Seller from and against all claims, demands, liabilities,
damages, losses, costs and expenses, including reasonable attorneys’ fees,
caused by or arising out of the breach of any agreement of or any representation
or warranty made by Purchaser in this Agreement or any other of the Transaction
Documents to which it is a party, this obligation of Purchaser to survive the
Closing.
          5.4 Defense of Claims. Promptly after any service of process by any
third person in any litigation in respect of which indemnity may be sought from
the other party pursuant to this Section 8, the party so served shall notify the
indemnifying party of the commencement of such litigation, and the indemnifying
party shall be entitled to assume the defense thereof at its expense with
counsel of its own choosing.
          5.5 Limitation of Liability. Purchaser hereby acknowledges and agrees
that except as expressly set forth herein, Seller has not made any
representations, warranties or covenants to Purchaser, including without
limitation, any warranties, representations or covenants of or relating to the
Company, its business, assets, liabilities, financial condition and/or the
transaction contemplated herein. Purchaser acknowledges that the sale
contemplated herein is on an “as is” basis. Purchaser and Company, each jointly
and severally, for and on behalf of itself and on behalf of their respective
past, present, and future officers, directors, stockholders, attorneys, agents,
servants, representatives, employees, subsidiaries, parent corporations,
affiliates, predecessors, assigns, and insurers, does hereby release, remise and
forever discharge Seller and Seller’s past, present, and future officers,
directors, stockholders, attorneys, agents, servants, representatives,
employees, subsidiaries, parent corporations, affiliates, predecessors, assigns,
insurers, and all other persons, firms, or corporations with whom any of the
former have been, are now, or may hereafter be affiliated (collectively the

 

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“Released Parties”), of and from any and all actions, causes of action, claims,
demands, damages, and liability of any nature whatsoever, in law or in equity,
known or unknown, whether asserted or unasserted, which Purchaser and/or Company
ever had, now have, or in the future may have against the Released Parties on
account of any matter or thing whatsoever from the beginning of the world to the
date of these presents.
     6. Miscellaneous.
          6.1 Further Assurances. Seller will, at the request of Purchaser from
time to time, execute and deliver such further documents and instruments and
will take such other action reasonably required to consummate the transactions
contemplated by this Agreement.
          6.2 No Brokers. Each party hereby represents and warrants to the other
that it has not engaged or dealt with any broker or other person who may be
entitled to any brokerage fee or commission in respect of the execution of this
Agreement or the consummation of the transactions contemplated hereby. Each of
the parties hereto shall indemnify and hold the other harmless against any and
all claims, losses, liabilities or expenses which may be asserted against a
party as a result of such other party’s dealings, arrangements or agreements
with any such broker or person.
          6.3 Press Releases and Public Announcements. No party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior approval of the other
party.
          6.4 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.
          6.5 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the parties and supersedes
any prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they related in any way to the subject
matter hereof.
          6.6 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other party.
          6.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
          6.8 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

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          6.9 Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without giving effect to any choice or conflict of law provision or rule
(thereof or any other jurisdiction) that would cause the application of the laws
of any other jurisdiction. Purchaser hereby: (a) consents to the exclusive
jurisdiction of any state or federal court located within the State of Texas,
County of Cameron; (b) irrevocably agrees that, subject to Seller’s election,
all actions or proceedings relating to this Agreement or the transactions
contemplated hereunder shall be litigated in such courts; (c) irrevocably
consents and submits to the jurisdiction and venue of any such court; and
(d) waives any objection it may have based on improper venue or forum non
conveniens to the conduct of any proceeding in any such court.
          6.10 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the parties. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
          6.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
          6.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement and the other Transaction Documents.
In the event an ambiguity or question of intent or interpretation arises, the
Transaction Documents shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provision thereof. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. The word “including” shall mean including without limitation. Nothing
in any Schedule hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless it identifies the exception with
particularity and describes the relevant facts in detail. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty made herein (unless the representation or warranty
has to do with the existence of the document or other item itself). The parties
intend that each representation, warranty, and covenant contained herein shall
have independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant. Time is
of the essence with respect to any obligation of Purchaser to pay any sums to
Seller under any of the Transaction Documents.
          6.13 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
          6.14 Specific Performance. Each of the parties acknowledges and agrees
that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.

 

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     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the day and year first above written.

            SELLER:

FIRSTPLUS ENTERPRISES, INC.,

a Texas corporation
      BY:   /s/ William L. Handley         NAME: William L. Handley       
TITLE: CFO        PURCHASER:

STALWART ENTERPRISES, INC.,

a Texas corporation
      BY:   /s/ Martin K. Ward its President         NAME: Martin K. Ward       
TITLE: President   

 

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STOCK PURCHASE AGREEMENT
LIST OF EXHIBITS AND SCHEDULES TO STOCK PURCHASE AGREEMENT

     
Exhibit “A”
  Promissory Note
 
   
Exhibit “B”
  Pledge Agreement
 
   
Exhibit “C”
  Guaranty
 
   
Exhibit “D”
  Security Agreement
 
   
Exhibit “E”
  Bill of Sale
 
   
Schedule “1”
  Officers and Directors
 
   
Schedule “2”
  Assets to be Transferred to Seller
 
   
Schedule “3”
  Litigation

 

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EXHIBIT “A”
PROMISSORY NOTE
PROMISSORY NOTE
March 31, 2008
$3,200,000.00
 
FOR VALUE RECEIVED, Stalwart Enterprises, Inc., a Texas corporation with an
address of 8409 Pickwick Lane #383, Dallas, Texas 75225 (“Maker”), promises to
pay to the order of FirstPlus Enterprises, Inc., a Texas corporation with an
address of 122 West John Carpenter Freeway, Suite 450, Irving, Texas 75039
(“Payee”), the principal sum of Three Million Two Hundred Thousand Dollars
($3,200,000.00), together with interest thereon at the Interest Rate (as defined
below) or the Default Rate (as defined below), as applicable, in lawful money of
the United States, by wire transfer to an account designated by Payee or, in the
absence of such designation, by certified or bank cashier’s checks payable to
Payee delivered to Payee at such address, in immediately available funds,
without counterclaim or setoff and free and clear of, and without deduction or
withholding for, any taxes or other payments. Time is of the essence of this
Promissory Note (this “Note”).
     1. Security. This Note is executed and delivered in connection that certain
Stock Purchase Agreement of even date herewith, pursuant to which Payee sold to
Maker one hundred percent (100%) of the issued and outstanding stock of Olé Auto
Group, Inc. (“Company”). This Note is secured by that certain Pledge Agreement
from Maker of even date herewith and guaranteed by Company and secured by its
assets pursuant to that certain Guaranty and Security Agreement of even date
herewith (hereinafter the aforementioned documents, to wit: the Stock Purchase
Agreement, Pledge Agreement, Guaranty and Security Agreement are collectively
referred to as the “Transaction Documents”).
     2. Interest. Interest (calculated on the basis of a 365-day or 366-day year
and the actual number of days elapsed, as applicable) on the unpaid principal
balance of this Note shall accrue from the date hereof at the rate of interest
of six percent (6%) per annum (the “Interest Rate”). If Maker shall fail to pay
when due any sum payable hereunder, all sums payable hereunder shall be
accelerated and shall be immediately due and payable in full without notice,
demand or other action by Payee, and interest shall commence to accrue and be
payable hereunder on all such sums at an annual interest rate equal to twelve
percent (12%) per annum (the “Default Rate”). The Default Rate shall continue to
apply whether or not judgment shall be entered on this Note. Maker acknowledges
that: (i) such additional rate is a material inducement to Payee to make the
loan hereby evidenced (the “Loan”); (ii) Payee would not have made the Loan in
the absence of the agreement of Maker to pay such additional rate; (iii) such
additional rate represents compensation for increased risk to Payee that the
Loan will not be repaid; and (iv) such rate is not a penalty and represents a
reasonable estimate of compensation to Payee for losses that are difficult to
ascertain.

  3.   Payments; Prepayment.

 

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          3.1 No payments shall be due hereunder until April 1, 2009. Commencing
April 1, 2009, Maker shall pay to Payee the original principal balance of this
Note, together with all accrued and unpaid interest for the period April 1, 2008
to March 31, 2009, in seventy-one (71) monthly installments of principal and
interest of $21,854.70 each and a seventy-second (72nd) installment of principal
and interest of $2,990,909.27, (which amounts were determined on the basis of a
twenty-five (25) year principal amortization schedule), which installments shall
be due and payable on the first (1st) day of each calendar month commencing
April 1, 2009 and continuing on the first (1st) day of each consecutive calendar
month thereafter until April 1, 2015, at which time all principal and accrued
interest and other sums hereunder shall be immediately due and payable in full.
Notwithstanding the foregoing, and provided that no Event of Default shall have
occurred, Maker shall have a onetime option, exercisable by giving written
notice to Payee at least sixty (60) days, but no more than one hundred and
eighty days (180) prior to April 1, 2015, to extend the Final Payment Date to
March 31, 2020. Notwithstanding such extension, Maker shall continue to make
regular monthly installments of principal and interest pursuant to Section 3.1.
          3.2 At any time and from time to time hereafter, Maker may prepay all
or any part of the principal balance without penalty or premium, provided that
any such prepayment of principal shall be accompanied by the payment of all
accrued and unpaid interest thereon to the date of such prepayment.
     3.3 Maker shall provide to Payee, within sixty (60) days after the end of
each fiscal year of Ole´ Auto Group, Inc., a Texas corporation (“OAG”),
financial statements reflecting, in reasonable detail, a balance sheet for the
operation of OAG, a fully itemized statement of the gross income and expenses of
OAG for such fiscal year, and a profit and loss statement for OAG, all in form
reasonably acceptable to Payee (collectively, “Financials”). Maker agrees to
make or cause to be made available to Payee, the books and accounts relating to
OAG’s operations, upon written request at any reasonable time and further agrees
to furnish Payee with such additional financial statements or information as may
be reasonably requested from time to time by Payee. In the event that the
Financials indicate that OAG is operating at a negative cash flow position,
Maker may request that the commencement of monthly payments pursuant to
Section 3.1 hereof be postponed until April 1, 2010 by making a written request
to Payee at least ninety (90) days prior to April 1, 2009. Payee shall submit
the Financials to Payee’s independent auditor for an analysis of the cash flow
position of OAG and if such independent auditor confirms the cash flow position
as reflected in the Financials, Payee shall grant such postponement. If Payee’s
independent auditor does not confirm the cash flow position as reflected in the
Financials, Payee shall not grant such postponement and monthly payments shall
commence on April 1, 2009. The opinion of Payee’s independent auditor shall be
conclusive regarding the cash flow position of OAG.
     4. Post-Judgment Interest; Usury. Any judgment obtained for sums due under
this Note shall accrue interest at the Default Rate until paid. Notwithstanding
any provision contained herein, Maker’s liability for the payment of interest
under this Note shall not exceed any limits imposed by any applicable usury law.
If any provision of this Note requires interest payments in excess of the
highest rate permitted by law, the provision in question shall be deemed to
require only the highest such payment permitted by law. Any amounts theretofore
received by Payee hereunder in excess of the maximum amount of interest so
permitted shall be applied by Payee in reduction of the outstanding principal
balance hereof or, if this Note shall have theretofore been paid in full, the
amount of such excess shall be promptly returned by Payee to the Maker.
     5. Representations and Warranties. Maker represents and warrants to Payee
that: (a) Maker’s execution and delivery of this Note and the enforceability
against Maker of the transactions hereby contemplated have been duly authorized
by all requisite corporate action; (b) this Note has been duly and validly
executed and delivered by Maker and constitutes a legal, valid and binding
obligation of Maker; (c) the execution and delivery of this Note by Maker does
not, and the performance by it of the transactions hereby contemplated will not
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any terms, conditions or provisions of any
note, debenture, security agreement, lien, mortgage or other agreement,
instrument or obligation, oral or written, to which Maker is a

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party (whether as an original party or as an assignee or successor) or by which
it or any of its properties is bound; (d) no approval or consent by any third
party is required in connection with Maker’s execution and delivery of this Note
and the transactions hereby contemplated.
     6. Default; Remedies.
          6.1 Default. Each of the following shall constitute an Event of
Default (“Event of Default”) hereunder:
               (a) Maker shall fail to pay in full all sums due and payable
hereunder on the date such sums first become due and payable hereunder or Maker
shall fail to pay in full, within five (5) days following written demand, any
other sum due and payable hereunder;
               (b) Maker shall violate or fail to perform or otherwise breaches
any agreement, term, covenant or condition herein contained other than as
specified in Section 6.1(a) above, and does not cure such default within twenty
(20) days following written notice of such default, or, if such default cannot
reasonably be cured during such period, commenced to cure such default prior to
the expiration of such period and diligently continues to cure such default
within a reasonable time;
               (c) Maker and/or Company shall default in the performance of any
obligations, agreements or covenants of Maker or Company, as the case may be,
under any of the other Transaction Documents, after the expiration of any and
all applicable periods of notice, grace and opportunity to cure, and provided
that such default is not cured within the applicable period of grace and
opportunity to cure;
               (d) Any representation or warranty made by Maker and/or Company
hereunder or under any of the other Transaction Documents is untrue in any
material respect;
               (e) Maker and/or Company shall become insolvent or bankrupt in
any sense, commit an act of bankruptcy, make an assignment for the benefit of
creditors or offer a composition or settlement to creditors, or if a petition in
bankruptcy or for reorganization or for an arrangement with creditors under any
federal or state law is filed by or against Maker and/or Company, or a bill in
equity or other proceeding for the appointment of a receiver, trustee,
liquidator, conservator or similar official for any of Maker’s or Company’s
assets is commenced, or if any of the real or personal property of Maker or
Company shall be levied upon by any sheriff, marshal or constable; provided,
however, that any proceeding brought by anyone other than Maker, Company or
Payee under any bankruptcy, reorganization arrangement, insolvency,
readjustment, receivership or similar law shall not constitute a default until
such proceeding, decree, judgment or order has continued unstayed for more than
twenty (20) consecutive days;

-27-

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               (f) The entry of a judgment or judgments against Maker and/or
Company in excess of $50,000.00 in the aggregate and the failure of Maker or
Company, as the case may be, to discharge or bond over the judgment(s) within
twenty (20) days of the entry thereof; or
               (g) The dissolution or termination of existence of Maker, Company
or any guarantor of any of Maker’s obligations hereunder or under any of the
other Transaction Documents including, without limitation, by operation of law
as a result of a merger (in which it does not survive), consolidation or other
form of reorganization, or the sale, transfer, exchange, pledge, mortgage,
encumbrance or other disposition, liquidation or hypothecation of substantially
all of Maker’s or Company’s assets.
          6.2 Remedies. Upon the occurrence of an Event of Default, Payee may
enforce payment of this Note in whole or in part at any time and by any remedy
available to Payee hereunder, at law or in equity.
     7. Miscellaneous.
          7.1 Waiver of Defenses. Maker and all endorsers and guarantors of this
Note severally waive presentment, demand, protest, and notice of nonpayment.
Maker and all endorsers and guarantors hereof consent to any number of renewals
or extensions of the time of payment hereof without notice to any of those
parties. The granting, without notice, of any extension of time for the payment
of any sum due under this Note or for the performance of any covenant,
condition, or agreement hereof, or the taking or release of other or additional
security shall in no way release or discharge the liability of Maker or of any
such endorsers or guarantors.
          7.2 Remedies Cumulative. All remedies, and the warrants of attorney
herein contained, shall be cumulative and concurrent, may be pursued singly,
successively or concurrently at Payee’s discretion and exercised as often as
occasion therefor shall occur. The failure to exercise any right or remedy shall
in no event be construed as a waiver or release thereof. No delay on the part of
Payee in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by Payee of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
          7.3 Enforcement Costs. In addition to all other sums due and payable
hereunder, Maker shall fail to pay when due all sums payable hereunder, if Payee
at any time retains one or more attorneys to enforce any obligation of Maker
hereunder and Payee is wholly or partially successful, then, upon written notice
from Payee, Maker shall pay Payee’s reasonable attorney’s fees, expenses and
litigation costs, if any. Any such attorney’s fees, expenses and litigation
costs payable by Maker to Payee shall be added to the principal balance hereof.
          7.4 Binding Effect; Assignment. This Note and all rights, obligations
and powers granted hereby will bind and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors and
assigns. The words “Payee” and “Maker” whenever occurring herein shall be deemed
and construed to include their respective successors and assigns. If more than
one person signs this Note, notwithstanding the failure by any other person to
execute this Note, each such person shall be jointly and severally obligated
hereunder. Payee may transfer, assign or pledge this Note and the transferee,
assignee, or pledgee shall become vested with all of Payee’s rights and remedies
with respect to this Note. Maker shall not assign any of its rights, duties,
liabilities and obligations hereunder without Payee’s written consent.
          7.5 Construction of Terms; Headings. Whenever used, the singular shall
include the plural, the plural the singular, and the use of any gender shall be
applicable to all genders. The headings preceding the text of the sections and
paragraphs hereof are inserted solely for convenience of reference and shall not
constitute a part of this Note nor shall they affect its meaning, construction
or effect. The word “Maker” whenever used herein is intended to and shall be
construed to mean each of the persons or entities who have executed this Note
and their respective heirs, legal representatives, successors and assigns, and
the liability of each person or entity named as Maker shall be joint and
several. The word “Payee” whenever used herein is intended to and shall be
construed to mean the Payee or its successors and assigns. This Note and all
rights and powers granted hereby shall bind Maker and its respective heirs,
executors, administrators, successors and assigns and inure to the benefit of
Payee and their respective heirs, executors, administrators, successors and
assigns. The word “person” shall mean individual,

-28-

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corporation, partnership, limited liability company, joint venture or
unincorporated association. The use of any gender shall include all genders. The
singular number shall include the plural and the plural the singular as the
context may require. If Maker is more than one person, all obligations,
agreements, covenants, conditions, provisions, stipulations, warrants of
attorney, authorizations, waivers, releases, options, undertaking, rights and
benefit made or given by Maker shall be joint and several, and shall bind and
affect all persons who are defined as “Maker” as fully as though all of them
were specifically named herein wherever the word “Maker” is used. If Payee is
more than one person, all obligations, agreements, covenants, conditions,
provisions, stipulations, warrants of attorney, authorizations, waivers,
releases, options, undertaking, rights and benefit made or given by Payee shall
be deemed made or given to each Payee, and to all of them, as fully as though
all of them were specifically named herein wherever the word “Payee” is used.
          7.6 Severability; Modification. The provisions of this Note are deemed
severable. The invalidity or unenforceability of any provision shall not affect
or impair the remaining provisions, which shall continue in full force and
effect. No modification of this Note shall be binding or enforceable unless in
writing and signed by or on behalf of the person against whom enforcement is
sought.
          7.7 Replacement of Promissory Note. Upon receipt of an affidavit of an
officer of Payee as to the loss, theft, destruction or mutilation of this Note
or any other Transaction Documents, Maker will issue in lieu thereof, a
replacement note or other security document in the same principal amount thereof
and otherwise of like tenor.
          7.8 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) one business day following the date sent when
sent by overnight delivery and (iii) three (3) business days following the date
mailed when mailed by registered or certified mail return receipt requested and
postage prepaid, at the address for the recipient listed in the introductory
paragraph of this Note. Maker or Payee may send any notice, request, demand,
claim, or other communication hereunder to the intended recipient at the address
set forth above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic mail),
but no such notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it actually is received by the
intended recipient. Maker or Payee may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other at least five (5) business days’ notice in the
manner herein set forth.
          7.9 Governing Law; Jurisdiction and Venue. This Note shall be governed
by and construed in accordance with the laws of the State of Texas without
giving effect to any choice or conflict of law provision or rule (thereof or any
other jurisdiction) that would cause the application of the laws of any other
jurisdiction. Maker hereby: (a) consents to the exclusive jurisdiction of any
state or federal court located within the State of Texas, County of Cameron;
(b) irrevocably agrees that, subject to Payee’s election, all actions or
proceedings relating to this Agreement or the transactions contemplated
hereunder shall be litigated in such courts; (c) irrevocably consents and
submits to the jurisdiction and venue of any such court; and (d) waives any
objection it may have based on improper venue or forum non conveniens to the
conduct of any proceeding in any such court.

-29-

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SIGNATURES APPEAR ON THE FOLLOWING PAGE

-30-

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          IN WITNESS WHEREOF, intending to be legally bound hereby, Maker has
caused the execution and delivery of this Note by its duly authorized manager as
of the date first above written.

            MAKER:

STALWART ENTERPRISES, INC.,

a Texas corporation
      BY:           Name:           Title:        

-31-

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

 

AMORTIZATION SCHEDULE
Principal borrowed: $3,392,000.00
Annual Payments: 12 Total Payments: 72
Annual interest rate: 6.00% Periodic interest rate: 0.5000%
Regular Payment amount: $21,854.70 Final Balloon Payment: $2,990,909.27

                                          Pmt   Principal     Interest     Cum
Prin     Cum Int     Prin Bal  
 
                                       
1
    4894.70       16960.00       4894.70       16960.00       3387105.30  
2
    4919.17       16935.53       9813.87       33895.53       3382186.13  
3
    4943.77       16910.93       14757.64       50806.46       3377242.36  
4
    4968.49       16886.21       19726.13       67692.67       3372273.87  
5
    4993.33       16861.37       24719.46       84554.04       3367280.54  
6
    5018.30       16836.40       29737.76       101390.44       3362262.24  
7
    5043.39       16811.31       34781.15       118201.75       3357218.85  
8
    5068.61       16786.09       39849.76       134987.84       3352150.24  
9
    5093.95       16760.75       44943.71       151748.59       3347056.29  
10
    5119.42       16735.28       50063.13       168483.87       3341936.87  
11
    5145.02       16709.68       55208.15       185193.55       3336791.85  
12
    5170.74       16683.96       60378.89       201877.51       3331621.11  
 
                                       
13
    5196.59       16658.11       65575.48       218535.62       3326424.52  
14
    5222.58       16632.12       70798.06       235167.74       3321201.94  
15
    5248.69       16606.01       76046.75       251773.75       3315953.25  
16
    5274.93       16579.77       81321.68       268353.52       3310678.32  
17
    5301.31       16553.39       86622.99       284906.91       3305377.01  

 

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

 

                                          Pmt   Principal     Interest     Cum
Prin     Cum Int     Prin Bal  
18
    5327.81       16526.89       91950.80       301433.80       3300049.20  
19
    5354.45       16500.25       97305.25       317934.05       3294694.75  
20
    5381.23       16473.47       102686.48       334407.52       3289313.52  
21
    5408.13       16446.57       108094.61       350854.09       3283905.39  
22
    5435.17       16419.53       113529.78       367273.62       3278470.22  
23
    5462.35       16392.35       118992.13       383665.97       3273007.87  
24
    5489.66       16365.04       124481.79       400031.01       3267518.21  
 
                                       
25
    5517.11       16337.59       129998.90       416368.60       3262001.10  
26
    5544.69       16310.01       135543.59       432678.61       3256456.41  
27
    5572.42       16282.28       141116.01       448960.89       3250883.99  
28
    5600.28       16254.42       146716.29       465215.31       3245283.71  
29
    5628.28       16226.42       152344.57       481441.73       3239655.43  
30
    5656.42       16198.28       158000.99       497640.01       3233999.01  
31
    5684.70       16170.00       163685.69       513810.01       3228314.31  
32
    5713.13       16141.57       169398.82       529951.58       3222601.18  
33
    5741.69       16113.01       175140.51       546064.59       3216859.49  
34
    5770.40       16084.30       180910.91       562148.89       3211089.09  
35
    5799.25       16055.45       186710.16       578204.34       3205289.84  
36
    5828.25       16026.45       192538.41       594230.79       3199461.59  
 
                                       
37
    5857.39       15997.31       198395.80       610228.10       3193604.20  
38
    5886.68       15968.02       204282.48       626196.12       3187717.52  
39
    5916.11       15938.59       210198.59       642134.71       3181801.41  
40
    5945.69       15909.01       216144.28       658043.72       3175855.72  
41
    5975.42       15879.28       222119.70       673923.00       3169880.30  
42
    6005.30       15849.40       228125.00       689772.40       3163875.00  

2

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

 

                                          Pmt   Principal     Interest     Cum
Prin     Cum Int     Prin Bal  
43
    6035.32       15819.38       234160.32       705591.78       3157839.68  
44
    6065.50       15789.20       240225.82       721380.98       3151774.18  
45
    6095.83       15758.87       246321.65       737139.85       3145678.35  
46
    6126.31       15728.39       252447.96       752868.24       3139552.04  
47
    6156.94       15697.76       258604.90       768566.00       3133395.10  
48
    6187.72       15666.98       264792.62       784232.98       3127207.38  
 
                                       
49
    6218.66       15636.04       271011.28       799869.02       3120988.72  
50
    6249.76       15604.94       277261.04       815473.96       3114738.96  
51
    6281.01       15573.69       283542.05       831047.65       3108457.95  
52
    6312.41       15542.29       289854.46       846589.94       3102145.54  
53
    6343.97       15510.73       296198.43       862100.67       3095801.57  
54
    6375.69       15479.01       302574.12       877579.68       3089425.88  
55
    6407.57       15447.13       308981.69       893026.81       3083018.31  
56
    6439.61       15415.09       315421.30       908441.90       3076578.70  
57
    6471.81       15382.89       321893.11       923824.79       3070106.89  
58
    6504.17       15350.53       328397.28       939175.32       3063602.72  
59
    6536.69       15318.01       334933.97       954493.33       3057066.03  
60
    6569.37       15285.33       341503.34       969778.66       3050496.66  
 
                                       
61
    6602.22       15252.48       348105.56       985031.14       3043894.44  
62
    6635.23       15219.47       354740.79       1000250.61       3037259.21  
63
    6668.40       15186.30       361409.19       1015436.91       3030590.81  
64
    6701.75       15152.95       368110.94       1030589.86       3023889.06  
65
    6735.25       15119.45       374846.19       1045709.31       3017153.81  
66
    6768.93       15085.77       381615.12       1060795.08       3010384.88  
67
    6802.78       15051.92       388417.90       1075847.00       3003582.10  

3

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

 

                                          Pmt   Principal     Interest     Cum
Prin     Cum Int     Prin Bal  
68
    6836.79       15017.91       395254.69       1090864.91       2996745.31  
69
    6870.97       14983.73       402125.66       1105848.64       2989874.34  
70
    6905.33       14949.37       409030.99       1120798.01       2982969.01  
71
    6939.85       14914.85       415970.84       1135712.86       2976029.16  
72
    *2976029.16       14880.15       3392000.00       1150593.01       0.00  

 

*   The final payment has been adjusted to account for payments having been
rounded to the nearest cent.

4

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

 

EXHIBIT “B”
PLEDGE AGREEMENT
     This Pledge Agreement (this “Agreement”) made effective as of March 31,
2008, is made by Stalwart Enterprises, Inc., a Texas corporation (“Pledgor”) in
favor FirstPlus Enterprises, Inc., a Texas corporation (“Secured Party”).
Background
     A. To induce Secured Party to extend credit to Pledgor pursuant to that
certain Promissory Note dated of even herewith from Pledgor to Secured Party (as
may be amended, restated, supplemented, or replaced from time to time, the
“Note”), Pledgor executes and delivers this Agreement to Secured Party. All
capitalized terms used herein and not otherwise defined shall have the same
meanings assigned to such terms in the Note.
     B. This Agreement is given and is intended to provide additional security
for the Note.
     NOW THEREFORE, for other good and sufficient consideration, the receipt of
which is hereby acknowledged, Pledgor, intending to be legally bound, hereby
covenants and agrees as follows:
     Pledgor, for the purpose of granting a continuing lien and security
interest, does hereby assign, pledge, hypothecate, deliver and set over to
Secured Party, its successors and assigns, for the benefit of Secured Party, the
stock described on Schedule I attached hereto and made part hereof, together
with any additions, exchanges, replacements, and substitutions therefore, and
distributions with respect thereto, and the proceeds thereof (collectively, the
“Pledged Collateral”).
     The pledge and security interest described herein shall continue in effect
to secure the Note until the Note has been indefeasibly paid and satisfied in
full.
     Pledgor hereby represents and warrants that:
          Except as pledged herein, Pledgor has not sold, assigned, transferred,
pledged or granted any option or security interest in or otherwise hypothecated
the Pledged Collateral in any manner whatsoever and the Pledged Collateral is
pledged herewith free and clear of any and all liens, security interests,
encumbrances, claims, pledges, restrictions, legends, and options;
          Pledgor has the full power and authority to execute, deliver, and
perform under this Agreement and to pledge the Pledged Collateral hereunder;
          This Agreement constitutes the valid and binding obligation of
Pledgor, enforceable in accordance with its terms, and the pledge of the Pledged
Collateral referred to herein is not in violation of and shall not create any
default under any agreement, undertaking or obligation of Pledgor;
          The Pledged Collateral has been duly and validly authorized and issued
by the issuer thereof;
          Contemporaneously with the execution hereof, Pledgor is delivering to
Secured Party all stock certificates, representing or evidencing the Pledged
Collateral, accompanied by duly executed instruments of transfer or assignments
in blank, to be held by Secured Party in accordance with the terms hereof;
          Pledgor hereby confirms that Secured Party is authorized to file all
UCC-1 financing statements that are required under the UCC (as defined below) to
perfect any security interest granted hereunder;

5

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

 

     If an Event of Default occurs under the Note then Secured Party may, at its
sole option, exercise from time to time with respect to the Pledged Collateral
any and/or all rights and remedies available to it hereunder, under the Note
and/or under the Uniform Commercial Code as adopted from time to time in the
State of Texas (“UCC”), or otherwise available to it, at law or in equity,
including, without limitation, the right to dispose of the Pledged Collateral at
public or private sale(s) or other proceedings, and Pledgor agrees that, if
permitted by law, Secured Party or its nominee may become the purchaser at any
such sale(s). Any such sale shall be conducted on not less than ten (10) days
prior written notice to Pledgor.
     In addition to all other rights granted to Secured Party herein or
otherwise available at law or in equity, Secured Party shall have the following
rights, each of which may be exercised at Secured Party’s sole discretion (but
without any obligation to do so), at any time following the occurrence of an
Event of Default under the Note, without further consent of Pledgor:
(i) transfer the whole or any part of the Pledged Collateral into the name of
itself or its nominee or to conduct a sale of the Pledged Collateral in
accordance with Section 4 hereof, pursuant to the UCC or pursuant to any other
applicable law; (ii) vote the Pledged Collateral; (iii) notify the persons
obligated on any of the Pledged Collateral to make payment to Secured Party of
any amounts due or to become due thereon; and (iv) release, surrender or
exchange any of the Pledged Collateral at any time, or to compromise any dispute
with respect to the same. Secured Party may proceed against the Pledged
Collateral, or any other collateral securing the Note, in any order, and against
Pledgor and any other obligor, jointly and/or severally, in any order to satisfy
the Note. Pledgor waives and releases any right to require Secured Party to
first collect any of the obligations secured hereby from any other collateral or
any other party under any theory of marshalling of assets, or otherwise. All
rights and remedies of Secured Party are cumulative, not alternative.
          Pledgor hereby irrevocably appoints Secured Party its
attorney-in-fact, subject to the terms hereof, following the occurrence of an
Event of Default under the Note at Secured Party’s option: (i) to effectuate the
transfer of the Pledged Collateral on the books of the issuer thereof to the
name of Secured Party for the purpose set forth in Section 5(a)(i) above or to
the name of Secured Party’s nominee, designee or assignee for the purpose of a
sale conducted in accordance with Section 4 hereof; (ii) to endorse and collect
checks payable to Pledgor representing distributions or other payments on the
Pledged Collateral; and (iii) to exercise any other rights of Secured Party
hereunder or as permitted by law.
     The proceeds of any Pledged Collateral received by Secured Party at any
time, whether from the sale of Pledged Collateral or otherwise, may be applied
to or on account of the obligations under the Note and in such order as Secured
Party may elect. In addition, Secured Party may, in its discretion, apply any
such proceeds to or on account of the payment of all costs, fees and expenses
(including, without limitation, attorneys’ fees) which may be incurred by
Secured Party.
     Pledgor recognizes that Secured Party may be unable to effect, or may
effect only after such delay which would adversely affect the value that might
be realized from the Pledged Collateral, a public sale of all or part of the
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended, and applicable state securities laws (collectively, the
“Securities Act”) and may be compelled to resort to one or more private sales to
a restricted group of purchasers, all of whom qualify as accredited investors
(as defined in the Securities Act) who will be obliged to agree, among other
things, to acquire such securities for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor agrees that any such
private sale may be at prices and on terms less favorable to Secured Party or
the seller than if sold at public sales, and therefore recognizes and confirms
that such private sales shall not be deemed to have been made in a commercially
unreasonable manner solely because they were made privately. Pledgor agrees that
Secured Party has no obligation to delay the sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act. Secured Party shall
not sell or cause the sale of any of the Pledged Collateral in violation of the
Securities Act or other law.
     In the event that any reclassification, readjustment or other change is
made or declared in the Pledged Collateral or Pledgor acquires or in any other
manner receives additional shares, or any option included within the Pledged
Collateral is exercised, any and all new, substituted or additional interest, or
other securities, issued by reason of any such change or exercise, shall be
delivered to and held by Secured Party under the terms hereof in the same manner
as the Pledged Collateral originally pledged hereunder. No distribution may be
paid to or retained by

6

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Pledgor unless expressly permitted in the Loan Agreement.
     So long as no Default or Event of Default has occurred under the Note, and,
until Secured Party notifies Pledgor in writing of the exercise of its rights
hereunder, Pledgor shall retain the sole right to vote the Pledged Collateral
and exercise all rights of ownership with respect to all corporate or company
questions for all purposes not inconsistent with the terms hereof. Pledgor shall
execute in favor of Secured Party voting proxies for the Pledged Collateral upon
Secured Party’s request from time to time.
     Secured Party shall have no obligation to take any steps to preserve,
protect or defend the rights of Pledgor or Secured Party in the Pledged
Collateral against other parties. Secured Party shall have no obligation to sell
or otherwise deal with the Pledged Collateral at any time for any reason,
whether or not upon request of Pledgor, and whether or not the value of the
Pledged Collateral, in the opinion of Secured Party or Pledgor, is more or less
than the aggregate amount of the obligations secured hereby, and any such
refusal or inaction by Secured Party shall not be deemed a breach of any duty
which Secured Party may have under law to preserve the Pledged Collateral.
Except as provided by applicable law, no duty, obligation or responsibility of
any kind is intended to be delegated to or assumed by Secured Party at any time
with respect to the Pledged Collateral.
     To the extent Secured Party is required by law to give Pledgor prior notice
of any public or private sale, or other disposition of the Pledged Collateral,
Pledgor agrees that ten (10) days prior written notice to Pledgor shall be a
commercially reasonable and sufficient notice of such sale or other intended
disposition.
     Pledgor shall indemnify, defend and hold harmless Secured Party from and
against any and all claims, losses and liabilities resulting from any breach by
Pledgor of Pledgor’s representations and covenants under this Agreement.
     For purposes hereof, Pledgor hereby waives notice of (a) acceptance of this
Agreement, (b) the existence and incurrence from time to time of any obligations
under the Note, (c) the existence of any Event of Default, the making of demand,
or the taking of any action by Secured Party under the Note and (d) demand and
default hereunder.
     Pledgor hereby consents and agrees that Secured Party may at any time or
from time to time pursuant to the Note (a) extend or change the time of payment
and/or the manner, place or terms of payment of any and all obligations under
the Note, (b) supplement, amend, restate, supersede, or replace the Note,
(c) renew, extend, modify, increase or decrease loans and extensions of credit
under the Note, (d) modify the terms and conditions under which loans and
extensions of credit may be made under the Note, (e) settle, compromise or grant
releases for any obligations under the Note and/or any person or persons liable
for payment of any obligations under the Note, (f) exchange, release, surrender,
sell, subordinate or compromise any collateral of any party now or hereafter
securing any of the obligations under the Note and (g) apply any and all
payments received from any source by Secured Party at any time against the
obligations under the Note in any order as Secured Party may determine; all of
the foregoing in such manner and upon such terms as Secured Party may determine
and without notice to or further consent from Pledgor and without impairing or
modifying the terms and conditions of this Agreement which shall remain in full
force and effect.
     This Agreement shall remain in full force and effect and shall not be
limited, impaired or otherwise affected in any way by reason of (a) any delay in
making demand on Pledgor for, or delay in enforcing or failure to enforce,
performance or payment of Pledgor’s obligations under the Note, (b) any failure,
neglect or omission on Secured Party’s part to perfect any lien upon, protect,
exercise rights against, or realize on, any property of Pledgor or any other
party securing the obligations under the Note, (c) any failure to obtain, retain
or preserve, or the lack of prior enforcement of, any rights against any person
or persons or in any property, (d) the invalidity or unenforceability of any
obligations under the Note, (e) the existence or nonexistence of any defenses
which may be available to Pledgor with respect to the obligations under the
Note, or (f) the commencement of any bankruptcy, reorganization, liquidation,
dissolution or receivership proceeding or case filed by or against any Pledgor.
     Pledgor covenants and agrees that Pledgor shall not, without the prior
written consent of Secured Party, sell, encumber or grant any lien, security
interest or option on or with respect to any of the Pledged Collateral.

7

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     Any failure of or delay by Secured Party to exercise any right or remedy
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right or remedy at any other time.
     This Agreement constitutes the entire agreement between the parties hereto
regarding the subject matter hereof and may be modified only by a written
instrument signed by Pledgor and Secured Party.
     This Agreement, and all matters arising out of or relating to this
Agreement, shall be governed by and construed in accordance with the laws of the
State of Texas applied to contracts to be performed wholly within the State. Any
judicial proceeding brought by or against Pledgor with respect to any of the
obligations secured by the Note, this Agreement, or any related agreement may be
brought in any court of competent jurisdiction in the State of Texas, County of
Cameron, United States of America, and, by execution and delivery of this
Agreement, Pledgor accepts for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. Pledgor hereby waives personal service of any
and all process upon it and consents that all such service of process may be
made by registered mail. Nothing herein shall affect the right to serve process
in any manner permitted by law or shall limit the right of Secured Party to
bring proceedings against Pledgor in the courts of any other jurisdiction.
Pledgor waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Pledgor waives the right to remove any
judicial proceeding brought against Pledgor in any state court to any federal
court. Any judicial proceeding by Pledgor against Secured Party involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a federal or state court located in the County of Cameron, State of
Texas.
     All communications which Secured Party may provide to Pledgor herein shall
be sent to Pledgor at the address set forth in the Note.
     This Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns.
     [INTENTIONALLY OMITTED]
     Notwithstanding anything to the contrary contained herein, Pledgor shall
have the right, with the prior written consent of Secured Party, which consent
shall not be unreasonably withheld or delayed, to grant a security interest in
the Pledged Collateral to one or more lenders as security for a loan or loans to
Pledgor (the “Additional Financing”) and Secured Party agrees to subordinate its
interest in the Pledged Collateral to such lender or lenders; provided, however,
that (a) Pledgor shall give Secured Party at least five (5) days prior written
notice and time to review the details of any such Additional Financing, and
(b) Pledgor shall provide such information and documentation regarding such
Additional Financing as Secured Party shall reasonably request; and provided
further that if Pledgor has provided all such information and documentation and
Secured Party fails to respond within five (5) days of receipt thereof, Secured
Party shall be deemed to have consented to such Additional Financing.
     IN WITNESS WHEREOF, this Pledge Agreement has been executed and delivered
as of the date first set forth above.

8

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            PLEDGOR:

STALWART ENTERPRISES, INC.,
a Texas corporation
      By:           Name:           Title:           SECURED PARTY:

FIRSTPLUS ENTERPRISES, INC.,
a Texas corporation
      By:           Name:           Title:      

9

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SCHEDULE I
Pledged Collateral
     The following Pledged Collateral is hereby pledged by Pledgor to Secured
Party pursuant to the Pledge Agreement to which this Schedule is attached:

              State     Name of Entity   of Formation   Number of Shares Pledged
Olé Auto Group, Inc.
  Texas   1,000

 

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EXHIBIT “C”
GUARANTY
GUARANTY
     THIS GUARANTY is given and made effective the 31st day of March, 2008, by
Olé Auto Group, Inc., a Texas corporation (“Guarantor”), with an address of 122
West John Carpenter Freeway, Suite 455, Irving, Texas 75039 in favor of
FirstPlus Enterprises, Inc., a Texas corporation (“Secured Party”), with an
address of 122 West John Carpenter Freeway, Suite 450, Irving, Texas 75039.
BACKGROUND
     A. Secured Party and Stalwart Enterprises, Inc., a Texas corporation
(“Borrower”), are the parties to that certain Stock Purchase Agreement of even
date herewith (“Agreement”), pursuant to which Secured Party sold to Borrower
one hundred percent (100%) of the issued and outstanding stock of Guarantor
(“Stock”).
     B. Secured Party advanced the sum of Three Million Two Hundred Thousand
Dollars ($3,200,000) to Borrower pursuant to a Demand Promissory Note of even
date herewith (“Note”) to finance the acquisition of the Stock.
     C. Pursuant to the Agreement, Borrower acquired one hundred percent (100%)
of the Stock of Guarantor and Guarantor shall receive substantial direct and
indirect benefits from the Agreement and the Note.
NOW THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound, Guarantor hereby agrees as follows:
     1. Guaranty. Guarantor hereby unconditionally and irrevocably guarantees
the payment and performance when due of Borrower’s duties, liabilities and
obligations to Secured Party under the Note (collectively, the “Guaranteed
Obligations”). Guarantor hereby acknowledges that Secured Party is relying upon
Guarantor’s covenants herein. Guarantor undertakes to perform its duties,
liabilities and obligations hereunder promptly and in good faith. Time is of the
essence with respect to Guarantor’s duties, liabilities and obligations
hereunder.
     2. Guaranty Absolute.

 

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          2.1 Guarantor guarantees that the Guaranteed Obligations will be paid
and performed strictly in accordance with their terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms. The liability of Guarantor hereunder is unlimited. This Guaranty
is a guaranty of payment and performance, not merely collectability. This
Guaranty is an agreement of suretyship as well as of guaranty and without being
required to proceed first against Borrower, or any successor or assign of
Borrower, or any other person or entity, or against any other security for the
Guaranteed Obligations, Secured Party may proceed directly against Guarantor
with respect to the enforcement of any one or more of the Guaranteed
Obligations. Guarantor’s duties, liabilities and obligations hereunder are
primary, absolute, independent, irrevocable and unconditional irrespective of:
(a) any lack of validity or enforceability of any of the Guaranteed Obligations
as against Borrower, or any successor or assign of Borrower; (b) any change in
the time, manner or place of payment of, or in any other term of, all or any of
the Guaranteed Obligations, or any other amendment or waiver of or any consent
to departure from any of the Guaranteed Obligations or any term, covenant,
condition or provision hereof or thereof; (c) any exchange, release or
non-perfection of any collateral for all or any of the Guaranteed Obligations;
(d) any release or partial release of Guarantor; or (e) any other circumstance
which might otherwise constitute a defense available to, or a discharge of,
Guarantor, Borrower, or any of their respective successors or assigns.
Guarantor’s duties, liabilities and obligations hereunder shall remain in full
force and effect until all of the Guaranteed Obligations are fully, finally and
irrevocably paid, complied with and performed. This Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be returned
upon the insolvency, bankruptcy or reorganization of Guarantor, Borrower or any
successor or assign of Borrower, or otherwise, as though such payment had not
been made.
          2.2 Guarantor hereby authorizes Borrower, or any successor or assign
of Borrower, without notice and without affecting Guarantor’s liability
hereunder, from time to time to amend, modify, or supplement any of the
Guaranteed Obligations or any term, covenant, condition or provision thereof.
          2.3 Guarantor hereby waives any right or defense arising by reason of:
(a) the legal disability or incapacity or lack of due organization, valid
existence, good standing under the laws of any jurisdiction, due execution or
delivery of this Guaranty or the Note or any corporate approvals, power or
authority required to enter into this Guaranty or the Note; (b) any statute of
limitations in any action hereunder or otherwise in respect of any of the
Guaranteed Obligations; (c) any statute or rule of law which provides that the
duties, liabilities or obligations of a guarantor must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any
bankruptcy, insolvency, reorganization, arrangement, liquidation, moratorium or
similar laws or equitable principles affecting the enforcement of creditors’
rights or remedies generally, including court decisions, now or hereafter in
effect and as rights to indemnity may be limited by applicable law or equitable
principles; (e) any “one action” or “anti-deficiency” law or any other law which
may prevent Secured Party from bringing any action, including a claim for
deficiency, against Guarantor, before or after Secured Party’s commencement or
completion of any foreclosure action, either judicially or by exercise of a
power of sale; (f) any usury or similar laws; (g) any election of remedies by
Secured Party which terminates or otherwise adversely affects Guarantor’s
subrogation rights or Guarantor’s rights to proceed against Borrower, or any
successor or assign of Borrower, for reimbursement, including, any loss of
rights Guarantor may suffer by reason of any law limiting, qualifying, or
discharging the Guaranteed Obligations; (h) any right to claim discharge of the
Guaranteed Obligations on the basis of unjustified impairment of any collateral
for the Guaranteed Obligations; (i) any defenses available to Borrower, or any
successor or assign of Borrower, or otherwise available to Guarantor, at law or
in equity, other than the full, final and irrevocable actual payment and
performance of the Guaranteed Obligations; or (j) any claim of setoff,
counterclaim, counter demand,

 

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recoupment or similar right, whether such claim, demand or right may be asserted
by Guarantor, Borrower, any successor or assign of Borrower, or any person
claiming by or through any of them.
          2.4 Guarantor will not exercise any rights which it may acquire by way
of subrogation under this Guaranty, by any payment made hereunder or otherwise,
until all the Guaranteed Obligations shall have been indefeasibly paid in full.
If any amount shall be paid to Guarantor on account of such subrogation rights
at any time when all the Guaranteed Obligations shall not have been indefeasibly
paid in full, such amount shall be held in trust for the benefit of Secured
Party and promptly (which in no event shall exceed thirty (30) days) paid to
Secured Party to be applied towards the Guaranteed Obligations, whether matured
or unmatured. If payment is made by Borrower, or any successor or assign of
Borrower, or by any third party, on the Guaranteed Obligations, voluntarily or
otherwise, and thereafter Secured Party is forced to remit the amount of that
payment to a trustee in bankruptcy or to any similar person under any federal or
state bankruptcy law or law for the relief of debtors, the Guaranteed
Obligations shall be considered unpaid for the purpose of enforcement of this
Guaranty. Although the amount of the Guaranteed Obligations may from time to
time be zero dollars ($0.00), so long as any of the Guaranteed Obligations
remain unpaid, this Guaranty shall not thereby terminate.
     3. Security Agreement. This Guaranty is secured by the collateral
referenced in that certain Security Agreement of even date herewith between
Guarantor and Secured Party (“Security Agreement”).
     4. Representations and Warranties. Guarantor hereby represents, warrants
and covenants that: (a) this Guaranty is executed at Borrower’s request and not
at the request of Secured Party; (b) Guarantor has full right, power and
authority to enter into and perform its duties, liabilities and obligations
hereunder, and each agreement, document, instrument or certificate delivered by
Guarantor in connection herewith, and to consummate the transactions
contemplated herein and therein; (c) Guarantor’s execution and delivery of this
Guaranty, and each agreement, document, instrument or certificate delivered by
Guarantor in connection herewith, does not, and the performance by Guarantor of
the transactions contemplated hereunder or thereunder will not, result in a
violation or breach of any agreement to which Guarantor is a party;
(d) Guarantor has obtained any necessary approval or consent of any third party
to Guarantor’s execution and delivery of this Guaranty, and each agreement,
document, instrument or certificate delivered by Guarantor in connection
herewith; (e) this Guaranty, the Security Agreement and each agreement,
document, instrument or certificate delivered by Guarantor in connection
herewith, is binding and enforceable against Guarantor in accordance with its
terms.
     5. Interest. All sums payable hereunder by Guarantor not paid when due
shall bear interest at the highest rate of interest provided in the Note.
     6. Remedies.
          6.1 Secured Party may exercise any right, power or remedy permitted
hereunder, at law or in equity.

 

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          6.2 If Secured Party at any time retains one or more attorneys to
enforce any obligation of Guarantor hereunder, or to defend itself against any
claim by Guarantor, whether or not suit is filed, and Secured Party is wholly or
partially successful, then, upon written demand, Guarantor shall pay Secured
Party’s reasonable attorney’s fees, expenses and litigation costs, if any. Any
such attorney’s fees, expenses and litigation costs payable by Guarantor to
Secured Party shall, until paid, bear interest at the Default Rate (as defined
in the Note). Guarantor shall indemnify, defend and hold Secured Party harmless
from and against any and all liabilities, losses, fees, costs, expenses and
damages (including, without limitation, reasonable attorneys’, accounting,
consulting or other professional fees or expenses) which Secured Party may incur
as a result of or in connection with any default by Guarantor hereunder.
Guarantor shall pay, within five (5) days of written notice or demand from
Secured Party, all reasonable fees, costs and expenses of Secured Party in
connection with the default, collection, waiver or amendment hereof, or in
connection with Secured Party’s exercise, preservation or enforcement of any of
its rights or remedies hereunder, including, without limitation, reasonable
attorneys’, accounting, consulting or other professional fees or expenses, and
the amount of all such expenses shall, until paid, bear interest at the Default
Rate.
          6.3 The rights and remedies of Secured Party as provided herein shall
be cumulative and concurrent, and may be pursued singly, successively or
concurrently at the sole discretion of Secured Party. The failure to exercise
any such right or remedy shall in no event be construed as a waiver or release
of the same. Secured Party shall not by any act or omission be deemed to waive
any of such rights or remedies unless such waiver is in writing and executed by
Secured Party, and then only to the extent specifically set forth therein. A
waiver of one event shall not be construed as continuing or as a bar to or
waiver of such right or remedy upon a subsequent event.

     7. Due Execution and Authorization. Guarantor represents and warrants that
it: (i) is a corporation, incorporated and in good standing under the laws of
the jurisdiction of its legal existence pursuant to the first paragraph hereof;
(ii) has the legal capacity, power and authority to execute and deliver, and
perform its obligations under, this Guaranty; (vi) has taken all actions
necessary to authorize and permit its execution and delivery of, and performance
under, this Guaranty; (v) has duly executed and delivered this Guaranty, which
constitute its legal, valid and binding obligations, enforceable in accordance
with their terms and conditions; and (vi) is not required to give any notice to
any third party in connection with this Guaranty.
     8. Waivers.
          8.1 Guarantor expressly waives presentment for payment, demand, notice
of dishonor, notice of acceptance, protest, notice of protest, promptness,
diligence, and any other notice of any kind.
          8.2 Guarantor hereby waives and releases all procedural errors,
defects and imperfections in any proceedings instituted by Secured Party
hereunder, as well as all benefit that might accrue to Guarantor by virtue of
any present or future laws exempting any property, real, personal or mixed, or
any part of the proceeds arising from any sale of such property, from
attachment, levy or sale under execution, or providing for any stay of

 

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execution, exemption from civil process, or extension of time for payment.
Guarantor agrees that any real estate that may be levied upon pursuant to a
judgment obtained by virtue hereof, or upon any writ of execution issued
thereon, may be sold upon any such writ in whole or in part in any order desired
by Secured Party.
          8.3 [INTENTIONALLY OMITTED]
     9. Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to any
choice or conflict of law provision or rule (thereof or any other jurisdiction)
that would cause the application of the laws of any other jurisdiction.
     10. Jurisdiction and Venue. Guarantor hereby: (a) consents to the exclusive
jurisdiction of any state or federal court located within the State of Texas,
County of Cameron; (b) irrevocably agrees that, subject to Secured Party’s
election, all actions or proceedings relating to the Note or the transactions
contemplated hereunder shall be litigated in such courts; (c) irrevocably
consents and submits to the jurisdiction and venue of any such court and
(d) waives any objection it may have based on improper venue or forum non
conveniens to the conduct of any proceeding in any such court. Nothing contained
in this Section shall affect the right of Secured Party to serve legal process
in any other manner permitted by law or affect the right of Secured Party to
bring any action or proceeding against Guarantor or its property in the courts
of any other jurisdiction.
     11. Notices. All notices, demands or requests required or permitted to be
made pursuant to or under this Guaranty must be in writing and mailed, postage
prepaid and by certified or registered mail, return receipt requested, or
delivered by reputable independent overnight delivery service providing written
evidence of delivery, or by hand delivery by a reputable independent courier
providing written evidence of delivery, addressed to Guarantor or Secured Party
at its respective address first set forth above. Such notices, demands or
requests shall be deemed to have been given and delivered on the earlier of the
date of actual receipt thereof or (i) if by United States certified or
registered mail, as of three (3) business days after the date of mailing, or on
the date of actual receipt, whichever is earlier, (ii) if delivered by reputable
overnight courier or delivery service, on the business day next succeeding the
date on which the same was delivered by the sender to such courier, or (iii) if
delivered by hand delivery by a reputable independent courier providing written
evidence of delivery, on the business day on which the same was delivered by the
sender to such courier. Guarantor or Secured Party may change the address to
which such notices, demands or requests shall be mailed hereunder by written
notice of such new address mailed to the other party hereto in accordance with
the provisions of this Section. Notice given by legal counsel on behalf of any
person shall be deemed to be given by such person.
     12. Succession. This Guaranty shall bind Guarantor and its successors and
assigns and inure to the benefit of Secured Party and its successors and
assigns.
     13. Integration Severability; Construction. This Guaranty is intended by
the parties as the final, complete and exclusive statement of the transactions
evidenced by this Guaranty. All prior or contemporaneous promises, agreements
and understandings, whether oral or written, are deemed to be superseded by this
Guaranty,

 

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and no party is relying on any promise, agreement or understanding not set forth
in this Guaranty. This Guaranty may not be amended or modified except by a
written instrument describing such amendment or modification executed by
Guarantor and Secured Party. The provisions of this Guaranty are deemed to be
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force and
effect. In determining the meaning hereof, no term shall be construed against
the drafter. The word “person” shall mean individual, corporation, partnership,
limited liability company, joint venture or unincorporated association. The
singular shall include the plural, the plural the singular, and the use of any
gender shall be applicable to all genders. The headings preceding the text of
the sections and paragraphs hereof are inserted solely for convenience of
reference and shall not constitute a part of this Guaranty nor shall they affect
its meaning, construction or effect.
     IN WITNESS WHEREOF, intending to be legally bound hereby, Guarantor has
signed or executed and delivered this Guaranty as of the date first above
written.

            OLÉ AUTO GROUP, INC.,
a Texas corporation
      By:           , President           

 

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EXHIBIT “D”
SECURITY AGREEMENT
     THIS SECURITY AGREEMENT (this “Security Agreement”) is made and entered
into effective as of March 31, 2008, by and between Olé Auto Group, Inc., a
Texas corporation (“Guarantor”), with an address of 122 West John Carpenter
Freeway, Suite 455, Irving, Texas 75039, and FirstPlus Enterprises, Inc., a
Texas corporation (the “Secured Party”), with an address of 122 West John
Carpenter Freeway, Suite 450, Irving, Texas 75039.
BACKGROUND
     Stalwart Enterprises, Inc., a Texas corporation (“Borrower”) owns all of
the issued and outstanding shares of stock in Guarantor. Borrower is indebted to
Secured Party under that certain Promissory Note in the principal amount of
$3,200,000 dated of even date herewith (the “Note”). Under that certain Guaranty
of even date herewith (the “Guaranty”), Guarantor guaranteed the obligations of
Borrower under the Note. As security for Guarantor’s performance of its
obligations under the Guaranty, Guarantor has executed and delivered this
Security Agreement to the Secured Party.
     NOW, THEREFORE, in consideration of the mutual promises contained herein
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
     Section 1. Creation of Security Interest.
          1.01 Capitalized terms contained in Section 1 of this Security
Agreement and used hereinafter shall have the meaning ascribed to them in
revised Article 9 of the Uniform Commercial Code as enacted in the State of
Texas and in effect on the date hereof (the “Uniform Commercial Code”), unless
the context requires otherwise. Other capitalized terms which are used herein
without definition shall have the meanings ascribed to them in the Note.

 

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          1.02 Guarantor hereby grants to the Secured Party a lien and security
interest in and to the property hereinafter described, whether now owned or
hereafter acquired or arising and wherever located (“Collateral”):
All tangible and intangible personal property of Guarantor, including but not
limited to: (a) all Accounts; (b) Chattel Paper, including without limitation,
Tangible Chattel Paper and Electronic Chattel Paper; (c) Deposit Accounts;
(d) Documents; (e) General Intangibles, including without limitation, Payment
Intangibles and Software; (f) Goods, including without limitation, Equipment,
Inventory, Fixtures and Accessions; (g) Instruments, including Promissory Notes;
(h) Investment Property; (i) Letter-of-credit rights; (j) motor vehicles;
(k) Supporting Obligations; (l) all monies which at any time Guarantor shall
have or have the right to have in its possession; (m) all books and records
evidencing or relating to the foregoing, including, without limitation, billing
records of every kind and description, customer lists, data storage and
processing media, Software and related material, including computer programs,
computer tapes, cards, disks and printouts, and including any of the foregoing
which are in the possession of any affiliate or any computer service bureau;
(n) Commercial Tort Claims; and (o) Proceeds of the above Collateral.
     Section 2. Secured Obligations. This Security Agreement is executed,
delivered and given by Guarantor as security for the prompt payment,
performance, satisfaction and discharge of the following obligations
(“Obligations”):
          (a) To pay the principal, interest, and any other liabilities of
Guarantor to the Secured Party under the Guaranty in accordance with the terms
thereof;
          (b) To satisfy all of the other liabilities of Guarantor to the
Secured Party, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
          (c) To repay the Secured Party all amounts advanced by the Secured
Party hereunder or otherwise on behalf of Guarantor, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral;
          (d) To reimburse the Secured Party, on demand, for all of the Secured
Party’s expenses and costs, including the reasonable fees and expenses of its
counsel, in connection with the negotiation, preparation, administration,
amendment, modification, or enforcement of the Guaranty or the Note.
     Section 3. Representations and Warranties. Guarantor represents and
warrants as follows:

 

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          3.01 Good Title to Collateral. Guarantor has good and marketable title
to the Collateral free and clear of all liens and encumbrances other than the
security interests granted to the Secured Party hereunder.
          3.02 Organization. Guarantor is a corporation organized under the laws
of the jurisdiction set forth in the first paragraph of this Security Agreement.
Guarantor’s exact legal name is as set forth in the first paragraph of this
Security Agreement.
          3.03 Filings of Record. No financing statement covering any of the
Collateral is on file in any public office, other than the financing statements
filed pursuant to this Security Agreement.
          3.04 Other Representations. Each representation, warranty or other
statement by Guarantor in, or in connection with, the Guaranty is true and
correct and states all material facts necessary to make it not misleading.
     Section 4. Collection, Disposition and Use of Collateral.
          4.01 Accounts. The Secured Party hereby authorizes Guarantor to
collect all Accounts from the account debtors. The Proceeds of Accounts so
collected by Guarantor shall be received and held by Guarantor in trust for the
Secured Party but may be applied by Guarantor in its discretion towards payment
of the Obligations or other corporate purposes. Upon the occurrence of a Default
as set forth in Section 7 hereof, the authority hereby given to Guarantor to
collect the Proceeds of Accounts in trust for the Secured Party may be
terminated by the Secured Party at any time and Secured Party shall have the
right at any time thereafter, acting if it so chooses in Guarantor’s name, to
collect Accounts itself, to sell, assign, compromise, discharge or extend the
time for payment of any Account, and to do all acts and things necessary or
incidental thereto and Guarantor hereby ratifies all such acts. Upon the
occurrence of a Default as set forth in Section 7 hereof, at the Secured Party’s
request, Guarantor will notify account debtors and any guarantor thereof that
the Accounts payable by such account debtors have been assigned to the Secured
Party and shall indicate on all billings to account debtors that payments
thereon are to be made to the Secured Party.
          4.02 Inventory. So long as there has been no Default hereunder,
Guarantor shall be permitted to process and sell its Inventory, but only to the
extent that such processing and sale are conducted in the ordinary course of
business.
          4.03 Equipment. So long as there has been no Default hereunder,
Guarantor shall be permitted to use its Equipment in the ordinary course of its
business.

 

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     Section 5. Covenants and Agreements of Guarantor.
          5.01 Maintenance and Inspection of Books and Records. Guarantor shall
maintain complete and accurate books and records and shall make all necessary
entries therein to reflect the costs, values and locations of its Inventory and
Equipment and the transactions and documents giving rise to its Accounts and all
payments, credits and adjustments thereto. Guarantor shall keep the Secured
Party fully informed as to the location of all such books and records and shall
permit the Secured Party and its authorized agents to have full, complete and
unrestricted access thereto at any reasonable time and to inspect, audit and
make copies of all books and records, data storage and processing media,
software, printouts, journals, orders, receipts, invoices, correspondence and
other documents and written or printed matter related to any of the Collateral.
The Secured Party’s rights hereunder shall be enforceable at law or in equity,
and Guarantor consents to the entry of judicial orders or injunctions enforcing
specific performance of such obligations hereunder.
          5.02 Confirmation of Accounts. Guarantor agrees that the Secured Party
shall at all times have the right to confirm orders and to verify any or all of
Guarantor’s Accounts in the Secured Party’s name, or in any fictitious name used
by the Secured Party for verifications, or through any public accountants.
          5.03 Delivery of Accounts Documentation. At such intervals as the
Secured Party shall reasonably require, Guarantor shall deliver to the Secured
Party copies of purchase orders, invoices, contracts, shipping and delivery
receipts and any other document or instrument which evidences or gives rise to
an Account.
          5.04 Physical Inspection of Inventory and Equipment. Guarantor shall
permit the Secured Party and its authorized agents to inspect any or all
Inventory and Equipment at all reasonable times and upon reasonable notice.
          5.05 Notice of the Secured Party’s Interests. If requested by the
Secured Party, Guarantor shall give notice of the Secured Party’s security
interests in the Collateral to any third person with whom Guarantor has any
actual or prospective contractual relationship or other business dealings.
          5.06 Delivery of Certain Collateral to the Secured Party. Immediately
upon receipt of any Instrument, Tangible Chattel Paper, Document or Investment
Property, Guarantor shall deliver such Collateral to the Secured Party and shall
execute any form of assignment requested by the Secured Party with respect
thereto. All Chattel Paper created by Guarantor must contain a legend indicating
the security interest of the Secured Party.
          5.07 Accounts Agings. Guarantor shall furnish the Secured Party with
agings of its Accounts in such form and detail and at such intervals as the
Secured Party may from time to time require.

 

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          5.08 Government Accounts. Guarantor shall immediately provide written
notice to the Secured Party of any and all Accounts which arise out of contracts
with the United States or any department, agency or instrumentality thereof, and
shall execute and deliver to the Secured Party an assignment of claims for such
Accounts and cooperate with the Secured Party in taking any other steps
required, in the Secured Party’s reasonable judgment, to perfect or continue the
perfected status of the Secured Party’s security interest in such Accounts and
proceeds thereof under the Federal Assignment of Claims Act.
          5.09 Insurance of Collateral. Guarantor shall keep the Collateral
insured against such perils, in such amounts and with such insurance companies
as the Secured Party may require. All insurance policies shall name the Secured
Party as lender loss payee and shall provide for not less than thirty (30) days’
advance notice in writing to the Secured Party of any cancellation thereof. The
Secured Party shall have the right (but shall be under no obligation) to pay any
of the premiums on such insurance. Any premiums paid by the Secured Party shall,
if the Secured Party so elects, be considered an advance at the highest rate of
interest provided in the Note and all such accrued interest shall be payable on
demand. Any credit insurance covering Accounts shall name the Secured Party as
loss payee. Guarantor expressly authorizes its insurance carriers to pay
proceeds of all insurance policies covering any or all of the Collateral
directly to the Secured Party.
          5.10 Perfection of Secured Party’s Interests.
     (a) Guarantor agrees to cooperate and join, at their expense, with the
Secured Party in taking such steps as are necessary, in the Secured Party’s
judgment, to perfect or continue the perfected status of the security interests
granted hereunder, including, without limitation, the execution and delivery of
any financing statements, amendments thereto and continuation statements, the
delivery of Chattel Paper, Documents or Instruments to the Secured Party, the
obtaining of landlords’ and mortgagees’ waivers required by the Secured Party,
the notation of encumbrances in favor of the Secured Party on certificates of
title, and the execution and filing of any collateral assignments and any other
instruments requested by the Secured Party to perfect its security interest in
any and all of Guarantor’s General Intangibles.
     (b) The Secured Party may at any time and from time to time, file financing
statements, continuation statements and amendments thereto that describe the
Collateral in particular or as all assets of Guarantor or words of similar
effect and which contain any other information required by the Uniform
Commercial Code for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether Guarantor is
an organization, the type of organization and any organization identification
number issued to Guarantor. Guarantor agrees to furnish any such information to
the Secured Party promptly upon request. Any such financing statements,
continuation statements or amendments may be signed by the Secured Party on
behalf of Guarantor, and may be filed at any time in any jurisdiction whether or
not Revised Article 9 of the Uniform Commercial Code is then in effect in that
jurisdiction.
     (c) Guarantor shall, at any time and from time to time, take such steps as
the Secured Party may require for the Secured Party, (i) to obtain an
acknowledgment, in form and substance satisfactory to the Secured Party, of any
third party having possession of any of the Collateral that the third party
holds such Collateral for the benefit of the Secured Party, (ii) to obtain
“control” (as described in the Uniform Commercial

 

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Code) of any Investment Property, Deposit Accounts, Letter-of-Credit Rights or
Electronic Chattel Paper, with any agreements, establishing control to be in
form and substance satisfactory to the Secured Party, and (iii) otherwise to
insure the continued perfection and priority of the Secured Party’s security
interest in any of the Collateral and of the preservation of its rights therein.
          5.11 Maintenance of Goods, Inventory and Equipment. Guarantor shall
care for and preserve the Goods, Inventory and Equipment in good condition and
repair, and will pay the cost of all replacement parts, repairs to and
maintenance of the Goods and Equipment. Guarantor will keep complete and
accurate maintenance records with respect to its Equipment.
          5.12 Notification of Adverse Change in Collateral. Guarantor agrees
immediately to notify the Secured Party if any event occurs or is discovered
which would cause any material diminution in the value of any significant item
or type of Collateral.
          5.13 Reimbursement and Indemnification. Guarantor agrees to reimburse
the Secured Party on demand for out-of-pocket expenses incurred in connection
with the Secured Party’s exercise of its rights under this Security Agreement.
Guarantor agrees to indemnify the Secured Party and hold it harmless against any
costs, expenses, losses, damages and liabilities (including reasonable
attorney’s fees) incurred in connection with this Security Agreement, other than
as a direct result of the Secured Party’s gross negligence or willful
misconduct.
     Section 6. Power of Attorney. Guarantor hereby appoints the Secured Party
as its lawful attorney-in-fact to do, at the Secured Party’s option, and at
Guarantor’s expense and liability, all acts and things which the Secured Party
may deem necessary or desirable to effectuate its rights under this Security
Agreement, including without limitation, (a) file financing statements and
otherwise perfect any security interest granted hereby, (b) upon the occurrence
of, and during the continuance of, a Default hereunder, correspond and negotiate
directly with insurance carriers, (c) upon the occurrence of a Default
hereunder, receive, open and dispose of in any reasonable manner all mail
addressed to Guarantor and notify Postal Service authorities to change the
address for mail addressed to Guarantor to an address designated by the Secured
Party, (d) upon the occurrence of a Default hereunder, communicate with account
debtors and other third parties for the purpose of protecting or preserving the
Collateral, and (e) upon the occurrence of a Default hereunder, in Guarantor’s
or the Secured Party’s name, to demand, collect, receive, and receipt for,
compound, compromise, settle and give acquittance for, and prosecute and
discontinue or dismiss, with or without prejudice, any suit or proceeding
respecting any of the Collateral.
     Section 7. Default. The occurrence of any one or more of the following
shall be a default (“Default”) hereunder:
          7.01 Default Under Loan Documents. The occurrence of an Event of
Default under the Guaranty or the Note.

 

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          7.02 Failure to Observe Covenants. The failure of Guarantor to keep,
observe or perform any provisions of this Security Agreement, which failure is
not cured and remedied within fifteen (15) days after notice thereof is given to
Guarantor.
          7.03 Representations, Warranties. If any representation, warranty or
certificate furnished by Guarantor under or in connection with this Security
Agreement shall, at any time, be materially false or incorrect.
     Section 8. Secured Party’s Rights Upon Default. Upon the occurrence of a
Default hereunder, or at any time thereafter, the Secured Party may immediately
and without notice pursue any remedy available at law or in equity to collect,
enforce, or satisfy any Obligations, including any or all of the following,
which rights and remedies are cumulative, may be exercised from time to time,
and are in addition to any rights and remedies available to the Secured Party
under the Guaranty or the Note:
          8.01 Uniform Commercial Code Rights. Exercise any and all of the
rights and remedies of a secured party under the Uniform Commercial Code,
including the right to require Guarantor to assemble the Collateral and make it
available to the Secured Party at a place reasonably convenient to the parties.
          8.02 Operation of Collateral. Operate, utilize, recondition and/or
refurbish (at the Secured Party’s sole option and discretion and in any manner)
any of the Collateral which is Equipment, for the purpose of enhancing or
preserving the value thereof or the value of any other Collateral.
          8.03 Collection Rights. Enforce the obligations of an Account Debtor
or other person obligated on Collateral and exercise the rights of any Guarantor
with respect to the obligation of the Account Debtor or other person obligated
on Collateral to make payment or otherwise render performance to Guarantor.
Notify the Account Debtors or other person obligated on Collateral that payments
are to be made directly to the Secured Party, or to such post office box as the
Secured Party may direct. Guarantor shall not compromise, discharge, extend the
time for payment or otherwise grant any indulgence or allowance with respect to
any Account without the prior written consent of the Secured Party.
          8.04 Sale of Collateral. Upon ten (10) calendar days’ prior written
notice to Guarantor, which Guarantor hereby acknowledges to be sufficient,
commercially reasonable and proper, sell, lease or otherwise dispose of any or
all of the Collateral at any time and from time to time at public or private
sale, with or without advertisement thereof and apply the proceeds of any such
sale first to the Secured Party’s expenses in preparing the Collateral for sale
(including reasonable attorneys’ fees), second to the complete satisfaction of
the Obligations and third, as required by the Uniform Commercial Code. Guarantor
waives the benefit of any marshaling doctrine with respect to the Secured
Party’s exercise of its rights hereunder. Guarantor grants a royalty-free
license to the Secured Party for all patents, service marks, trademarks,
tradenames, copyrights, computer programs and other intellectual property and
proprietary rights sufficient to permit Secured Party to exercise all rights
granted to Secured Party under this Section.

 

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     Section 9. Notices. Any written notices required or permitted by this
Security Agreement shall be effective if delivered in accordance with the
Guaranty.
     Section 10. Miscellaneous.
          10.01 No Waiver. No delay or omission by the Secured Party in
exercising any right or remedy hereunder shall operate as a waiver thereof or of
any other right or remedy, and no single or partial exercise thereof shall
preclude any further exercise thereof or the exercise of any other right or
remedy.
          10.02 Preservation of Rights. The Secured Party shall have no
obligation or responsibility to take any steps to enforce or preserve rights
against any parties to any Account and such obligation and responsibility shall
be those of Guarantor exclusively.
          10.03 Successors. The provisions of this Security Agreement shall
inure to the benefit of and be binding upon the Secured Party and Guarantor and
their respective successors and assigns, provided that Guarantor’s obligations
hereunder may not be assigned without the written consent of the Secured Party.
          10.04 Amendments. No modification, rescission, waiver, release or
amendment of any provisions of this Security Agreement shall be effective unless
set forth in a written agreement signed by Guarantor and an authorized officer
of the Secured Party.
     1.
          10.05 Governing Law; Jurisdiction and Venue. This Security Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas without giving effect to any choice or conflict of law provision or rule
(thereof or any other jurisdiction) that would cause the application of the laws
of any other jurisdiction. Guarantor hereby: (a) consents to the exclusive
jurisdiction of any state or federal court located within the State of Texas,
County of Cameron; (b) irrevocably agrees that, subject to Secured Party’s
election, all actions or proceedings relating to this Security Agreement or the
transactions contemplated hereunder shall be litigated in such courts;
(c) irrevocably consents and submits to the jurisdiction and venue of any such
court and (d) waives any objection it may have based on improper venue or forum
non conveniens to the conduct of any proceeding in any such court. Nothing
contained in this Section shall affect the right of Secured Party to serve legal
process in any other manner permitted by law or affect the right of Secured
Party to bring any action or proceeding against Guarantor or its property in the
courts of any other jurisdiction.
          10.06 Severability; Counterparts. If any provision of this Security
Agreement shall be held invalid or unenforceable under applicable law in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of such provision in any other jurisdiction or the validity or
enforceability of any other provision of this Security Agreement that can be
given effect without such invalid or unenforceable provision.

 

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This Security Agreement may be executed and delivered by facsimile and in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
          10.07 Judicial Proceedings. Each party waives any right it may have to
claim or recover, in any such suit, action or proceeding, any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. GUARANTOR ACKNOWLEDGES AND AGREES THAT THIS
PARAGRAPH IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY AGREEMENT AND THAT
THE SECURED PARTY WOULD NOT EXTEND CREDIT TO GUARANTOR IF THE WAIVER SET FORTH
IN THIS PARAGRAPH WAS NOT A PART OF THIS SECURITY AGREEMENT.
          10.08 Acknowledgment. THIS SECURITY AGREEMENT CONTAINS A POWER OF
ATTORNEY COUPLED WITH AN INTEREST AND IS FOR THE SOLE BENEFIT OF THE SECURED
PARTY. THIS SECURITY AGREEMENT IS BEING EXECUTED IN CONNECTION WITH A LOAN OR
OTHER FINANCIAL TRANSACTION FOR BUSINESS PURPOSES AND NOT PRIMARILY FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. THE SECURED PARTY, AS AGENT FOR
GUARANTOR, UNDER THE POWER OF ATTORNEY, IS NOT A FIDUCIARY FOR GUARANTOR, IN
EXERCISING ANY OF ITS RIGHTS OR POWERS PURSUANT TO THE POWER OF ATTORNEY, MAY DO
SO FOR THE SOLE BENEFIT OF THE SECURED PARTY AND NOT FOR GUARANTOR.
          10.09 Subordination of Secured Party’s Security Interest.
Notwithstanding anything to the contrary contained herein, Guarantor shall have
the right, with the prior written consent of Secured Party, which consent shall
not be unreasonably withheld or delayed, to grant a security interest in the
Collateral to one or more lenders as security for a loan or loans to Guarantor
(the “Additional Financing”) and Secured Party agrees to subordinate its
interest in the Collateral to such lender or lenders; provided, however, that
(a) Guarantor shall give Secured Party at least five (5) days prior written
notice and time to review the details of any such Additional Financing, and
(b) Guarantor shall provide such information and documentation regarding such
Additional Financing as Secured Party shall reasonably request; and provided
further that if Guarantor has provided all such information and documentation
and Secured Party fails to respond within five (5) days of receipt thereof,
Secured Party shall be deemed to have consented to such Additional Financing.
     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be executed and delivered by their authorized officers the day and year first
above written.

 

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            OLÉ AUTO GROUP, INC.,

a Texas corporation
      By:           Name:           Title:           FIRSTPLUS ENTERPRISES,
INC.,

a Texas corporation
      By:           Name:           Title:      

 

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EXHIBIT “E”
BILL OF SALE
 
     KNOW ALL MEN BY THESE PRESENTS that Ole´ Auto Group, Inc., a Texas
corporation (“Seller”), for and in consideration of the sum of One Dollar
($1.00), lawful money of the United States of America, unto it well and truly
paid by FirstPlus Enterprises, Inc., a Texas corporation (“Buyer”), and other
good and valuable consideration, the receipt and sufficiency of which Seller
does hereby acknowledge, intending to be legally bound, does hereby grant,
convey, bargain, sell, transfer, assign, deliver and quitclaim to Buyer, her
heirs, executors, administrators, successors and assigns, all of Seller’s right,
title and interest in and to all of the property identified on Schedule A
attached hereto and made a part hereof (“Property”).
     TO HAVE AND TO HOLD the Property unto Buyer, its successors and assigns, to
and for its own proper use and benefit forever.
     AND Seller, for itself and its heirs, executors, administrators and
assigns, hereby:
          (i) certifies that Seller has full right and lawful authority to sell
and dispose of the Property;
          (ii) represents and warrants that Seller has good and marketable title
to the Property and that the Property is free and clear of all pledges, claims,
security interests, liens and encumbrances;
          (iii) covenants and agrees to warrant and defend title to the Property
unto Buyer, its successors and assigns, against the lawful claims of all other
persons; and
          (iv) constitutes and appoints Buyer, its successors and assigns, the
true and lawful attorney and attorneys for Seller with full power of
substitution in the name and stead of Seller but on behalf and for the benefit
of Buyer, its successors and assigns, to demand and receive the Property and
give receipts and releases therefor and in respect of the same or any part
thereof, and to do all acts or things in relation to the Property which Buyer,
its successors and assigns shall deem desirable, hereby declaring that the
foregoing powers are coupled with an interest and are and shall be irrevocable
by Seller in any manner or for any purpose or cause whatsoever.

 

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     IN WITNESS WHEREOF, Seller has executed this Bill of Sale effective as of
the 31st day of March, 2008.

            SELLER:

OLE´ AUTO GROUP, INC.
      By:           Name:           Title:        

SCHEDULE A
3x Dell Power Edge 2950
3YT17C1
7XT17C1
GTZQHC1
1X Cool Cube Cooling Unit
211VT2574
1X Chatsworth Rack
2x Power Ware 9125
RPDM6K

 

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RPAJ9M
Tripp Lite
95050ALCSM513900828

 

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SCHEDULE 1
OFFICERS AND DIRECTORS
TO RESIGN EFFECTIVE AT CLOSING
John Maxwell
William Handley
Kimberly Grasty

 

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SCHEDULE 2
ASSETS TO BE TRANSFERRED TO SELLER
3x Dell Power Edge 2950
3YT17C1
7XT17C1
GTZQHC1
1X Cool Cube Cooling Unit
211VT2574
1X Chatsworth Rack
2x Power Ware 9125
RPDM6K
RPAJ9M
Tripp Lite
95050ALCSM513900828

 

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SCHEDULE 3
LITIGATION
Daniel Chu v. Ole’ Auto Group, Inc. — Arbitration # 71-166-548-07 under the
Federal AAA Arbitration Rules, Honorable Judge Carlos Lopez, Arbitrator.  This
matter involves an employment agreement and wrongful discharge claim.  
Daniel Chu v. FirstPlus Acquisitions-1, Inc. — Cause No. 08-01660; 101st
District Court of Dallas County, Texas.  This case involves a fraudulent
transfer claim.