exh10-1.htm


    Exhibit
      10.1

    


    ESCROW,
      SERVICING AND CONSIGNMENT SALES AGREEMENT

    


    THIS
      ESCROW, SERVICING AND CONSIGNMENT SALES AGREEMENT (this “Agreement”) is
      made this 19th day of July, 2007 (the “Escrow Closing Date”) by and among
      AUTO UNDERWRITERS PORTFOLIO ACQUISITION COMPANY, INC., a Texas corporation
      (“Buyer/Borrower”), AUTO UNDERWRITERS FINANCE COMPANY, INC., a Texas
      corporation (“Servicer”), AGM, LLC, a Delaware limited liability company
      (“Seller”), AGM, LLC, a Delaware limited liability company, in its
      capacity as administrative agent (in such capacity, “Administrative
      Agent”) on behalf of itself and the Lenders from time to time party to the
      Loan Agreement referred to below, AUTO UNDERWRITERS OF AMERICA, INC., a
      California corporation (“AUA”), WILLIAM KELLAGHER (“Kellagher”)
      and DEAN ANTONIS (“Antonis”). Each of AUA, Servicer, Kellagher and
      Antonis are sometimes individually referred to herein as a “Guarantor”
and collectively as the “Guarantors”.  Capitalized terms
      referred to in this Agreement and not otherwise defined shall have the
      respective meanings ascribed to such terms in the Loan and Security Agreement
      dated as of July 19, 2007 (the “Loan Agreement”) between Buyer/Borrower,
      Administrative Agent and the lenders from time to time party thereto
      (collectively, the “Lenders”).

    


    RECITALS

    


    WHEREAS,
      Seller and Buyer/Borrower have
      executed that certain Receivables and Motor Vehicle Purchase Agreement dated
      as
      of July 19, 2007 (the “Purchase Agreement”), pursuant to which the
      Buyer/Borrower has agreed to purchase from Seller, and Seller has agreed to
      sell
      to Buyer/Borrower, the Loans and Motor Vehicle Inventory (as such terms are
      defined in the Purchase Agreement) set forth in the Purchase Agreement pursuant
      to the terms of such Purchase Agreement (such purchase, the “Purchase”)
      for a purchase price of $16,357,376.03 (the “Purchase Price”);
      and

    


    WHEREAS,
      Buyer/Borrower intends to pay
      to Seller the Purchase Price with an amount of cash on hand equal to $964,000
      (the “Cash Purchase Price”) and the remainder of the Purchase Price (such
      amount, the “Financed Purchase Price”) with the proceeds of loans under
      the Loan Agreement; and

    


    WHEREAS,
      in order to finance a portion
      of the Purchase Price and facility the acquisition of the Loans and Motor
      Vehicle Inventory by Buyer/Borrower, Buyer/Borrower, Administrative Agent and
      the Lenders have executed the Loan Agreement, pursuant to which the
      Buyer/Borrower has agreed to borrower and the Lenders have agreed to provide
      certain loans and other financial accommodations pursuant to the terms of such
      Loan Agreement, including, without limitation, Term Loans in an amount equal
      to
      $14,719,897.03 and an Inventory Loan Advance in an amount equal to $673,479.00
      (the aggregate amount of such loans to be used to pay the Financed Purchase
      Price, hereinafter, the “Initial Loans”); and


    
      
         

      

      
        1

        
          

        

      

      
         

      

    


    WHEREAS,
      in order to operate a used
      automobile dealership, collect accounts receivable under consumer auto loans
      and
      finance the sale of automobiles to consumers, the Buyer/Borrower is required
      under applicable law to have obtained a Texas auto dealer’s license (a
“Dealer License”) and a Texas finance license (a “Finance
      License”; the Finance License and the Dealer License, collectively, the
“­Required Permits”); and

    


    WHEREAS,
      the Buyer/Borrower has made
      application to the relevant governmental authorities for the issuance of the
      Required Permits, but, as of the Escrow Closing Date, has not yet received
      same;
      and

    


    WHEREAS,
      Servicer, an affiliate of
      Buyer Borrower and wholly-owned subsidiary of Buyer/Borrower’s one hundred
      percent parent, has all applicable permits under applicable law necessary to
      operate a used automobile dealership, collect accounts receivable under consumer
      auto loans and finance the sale automobiles to consumers; and

    


    WHEREAS,
      the parties hereto have agreed
      to execute and deliver the Purchase Agreement and all related Sale Documents
      (as
      defined in the Purchase Agreement) and the Loan Agreement and all related Loan
      Documents, to be held in escrow pending the Buyer/Borrower’s receipt of the
      Required Permits, at which point the Purchase Agreement, Sale Documents, Loan
      Agreement and Loan Documents may be released from escrow pursuant to the terms
      hereof and spring into full force and effect, which release and effectiveness
      shall be deemed to have occurred on the Escrow Closing Date in accordance with
      Section 3 of Article I hereof; and

    


    WHEREAS,
      the Seller and Servicer have
      agreed that, from the Escrow Closing Date through the Escrow Release, the
      Servicer shall service the Loans for and on behalf of the Seller pursuant to
      the
      terms hereof; and

    


    WHEREAS,
      the Seller and Servicer have further agreed that, on the Escrow Closing Date,
      the Seller shall consign and deliver to Servicer, and the Servicer shall accept
      and receive from Seller, the Motor Vehicle Inventory, and that from the Escrow
      Closing Date through the Escrow Release, the Servicer shall seek to sell the
      Motor Vehicle Inventory to consumers in accordance with the terms
      hereof.

    


    NOW
      THEREFORE, the parties hereto
      hereby  agree as follows.

    


    I.           ESCROW
      ARRANGEMENTS.

     

    
      	
              1.

            	
              Delivery
                of Escrow Documents.  The parties hereto hereby acknowledge
                and agree that, on or before the Escrow Closing Date, the Buyer/Borrower,
                Seller, Administrative Agent, Servicer and Guarantors (as applicable)
                have
                executed and delivered the Purchase Agreement, the Loan Agreement
                and the
                additional Sale Documents and Loan Documents described on Exhibit
                A hereto
                (each dated as of the Escrow Closing Date, collectively, the “Escrow
                Documents”) to the Seller to be held in escrow pursuant to the terms
                hereof, and that, in consideration of the mutual promises and covenants
                contained herein, Seller shall hold the Escrow Documents in escrow
                and
                release the Escrow Documents from escrow in accordance with and subject
                to
                the terms and conditions

            


    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              hereof.  Until
                such time as the Escrow Documents are released in accordance with
                Section
                3 of this Article I, the Escrow Documents shall not be binding against
                any
                party hereto. The parties hereto acknowledge and agree that the Custodial
                Agreement between Administrative Agent and Buyer/Borrower is in full
                force
                and effect, and is not subject to the escrow arrangements set forth
                herein.  

            


    

     

    
      	
              2.

            	
              Delivery
                of Cash Purchase Price; Term Loan A and Term Loan B
                Payments.   The Seller hereby acknowledges and agrees
                that, on or before the Escrow Closing Date, the Buyer/Borrower has
                transferred to Seller an amount equal to the Cash Purchase
                Price.  Buyer/Borrower hereby acknowledges and agrees that it
                shall (i) on or before the thirtieth (45th)
                day
                following the date hereof, pay an amount equal to $1,036,000 (the
“TL-A
                Payment”) to the Portfolio Collection Account, and (ii) on or before
                the seventy-fifth (90th)
                day
                following the date hereof, pay an amount equal to $1,000,000 (the
“TL-B
                Payment”) to the Portfolio Collection Account, in each case, to the
                extent the neither the Escrow Release or Escrow Termination shall
                have
                occurred as of such date.

            


    

     

    
      	
              3.

            	
              Notification
                of Receipt of Required Permits; Distribution and Release of the Escrow
                Documents.  Buyer/Borrower shall promptly notify
                Administrative Agent of its receipt of any of the Required Permits,
                and
                provide copies of same to Administrative Agent for
                review.   The parties hereby direct the Seller to hold the
                Escrow Documents until such time as Administrative Agent shall have
                notified the Seller in writing (with copies to be delivered to
                Buyer/Borrower and AUA), to release the Escrow Documents (a “Release
                Notice”), which Release Notice the Administrative Agent shall provide
                promptly following Administrative Agent’s receipt of (i)
                a landlord’s waiver and consent, in form and substance reasonably
                satisfactory to Administrative Agent, with respect to the Servicer
                Location and AUP’s principal executive office (provided, that to the
                extent Buyer/Borrower is unable to obtain either such landlord’s waiver
                and consent after exercising commercially reasonable efforts to obtain
                same, delivery of such landlord’s waivers and consents shall not be a
                condition to Administrative Agent’s required delivery of a Release Notice
                hereunder (or otherwise constitute one of the Release Conditions
                as
                defined below)) and (ii) either (A) evidence reasonably
                acceptable to Administrative Agent of the Buyer/Borrower’s receipt of each
                the Required Permits or (B) a fully executed Consignment Agreement
                and
                evidence reasonable acceptable to Administrative Agent of the
                Buyer/Borrower’s receipt of the Finance License (the foregoing conditions,
                collectively, the “Release Conditions”).  For the
                purposes hereof, the term “Consignment Agreement” shall mean a consignment
                agreement between Buyer/Borrower and AUF, pursuant to which Buyer/Borrower
                shall consign motor vehicle inventory owned by the Buyer/Borrower
                to AUF
                for retail sale, and the terms of which consignment agreement shall
                expressly provide, amongst other things, (w) that there shall be
                no fee
                payable to AUF in respect of such consignment arrangement, (x) title
                to
                the consigned motor vehicle inventory shall not pass to AUF and shall
                remain vested in Buyer/Borrower, (y) all proceeds received from the
                sale
                of consigned inventory shall be for the benefit of and held in trust
                for
                Buyer/Borrower (including without limitation any down payments or
                loans to
                purchaser, which loans shall be originated in the name of Buyer/Borrower),
                and (z)  AUF shall acknowledge that it is aware that such
                consigned vehicles are subject to a lien in favor of Administrative
                Agent
                and that rights of Administrative Agent
                with

            


    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              respect
                to such consigned vehicles take precedence over AUF’s rights in such
                consigned vehicles.   Each of the parties hereto hereby
                irrevocably acknowledge and agree that, contemporaneous with the
                release
                of the Escrow Documents by Seller in accordance with the preceding
                sentence (the “Escrow Release”), (i) the signatures of such party
                to the Escrow Documents to which such party shall automatically be
                released and effective, and (ii) such Escrow Documents shall be deemed
                to
                have been executed and delivered and to have entered into full force
                and
                effect as of the Escrow Closing
                Date.

            


    

     

    
      	
              4.

            	
              Effect
                of Escrow Release, Consummation of the Purchase and deemed making
                of the
                Initial Loans.   Upon the release of the Escrow
                Documents in connection with the Escrow Release, and without any
                further
                act or agreement of the parties, the parties acknowledge and agree
                that
                (i) the Purchase shall automatically be consummated according to
                the terms
                of the Purchase Agreement (with such Purchase being deemed to have
                been
                made and effective as of the Escrow Closing Date), (ii) the Initial
                Loans
                shall be automatically made by the Lenders to Seller (at the direction
                of
                and on behalf of the Borrower) pursuant to the terms of the Loan
                Agreement
                (with such Initial Loans being deemed to have been made and effective
                as
                of (and interest accruing from) the Escrow Closing Date.  Any
                proceeds of the Loans collected by Seller pursuant to the terms of
                Article
                II hereof from the Escrow Closing Date through the date of the Escrow
                Release (the “Escrow Release Date”) shall be deemed to have been
                received by Administrative Agent and applied to the Initial Loans
                in
                accordance with the terms of Section 3.6 of the Loan Agreement, and
                any
                proceeds of Servicer Loans received by Seller pursuant to the terms
                of
                Article III hereof from the Escrow Closing Date through the date
                of the
                Escrow Release (the “Escrow Release Date”) shall be deemed to have
                been received by Administrative Agent and applied to the Initial
                Loans in
                accordance with the terms of Section 3.6 of the Loan
                Agreement.  Any Servicer Loan and Servicer Loan Documents
                originated by Servicer pursuant to the sale of Consigned Inventory
                pursuant to Article III hereof shall automatically be deemed transferred
                to Buyer/Borrower, and Servicer and/or Buyer/Borrower shall executed
                such
                bills of sale or other documentation as Administrative Agent shall
                reasonably request to evidence such sale.  The obligation of
                Seller under this Agreement to pay any Sale Fees, Labor Costs or
                other
                expense reimbursements payable to Servicer hereunder (other than
                Parts
                Costs) shall be deemed void and of no force or effect, provided,
                however,
                that all such obligations of Seller and Administrative Agent under
                the
                Escrow Documents shall survive the Escrow Release and remain in full
                force
                and effect.

            


    

     

    
      	
              5.

            	
              Termination
                of Escrow Prior to Escrow Release.  In the event that the
                Release Conditions are not satisfied on or before August 19, 2007
                (as such
                date may be extended by the written agreement of Seller, Administrative
                Agent and Buyer/Borrower, the “Outside Date”), the Seller shall
                have the option to, by written notice to Administrative Agent,
                Buyer/Borrower and AUA (a “Termination Notice”), terminate the
                escrow arrangements set forth in this Article I (an “Escrow
                Termination”), after which the signature pages of the parties to the
                Escrow Documents shall promptly be returned by Seller to the applicable
                parties or destroyed by the Seller, and such signature pages and
                the
                Escrow Documents themselves shall be of no force or effect.  In
                the Event of an Escrow Termination, Seller shall promptly pay to
                Buyer/Borrower an amount equal to the
                Cash

            


    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              Down
                Payment and the amounts TL-A Payment and TL-B Payments paid to the
                Portfolio Collection Account (if any) to Buyer/Borrower, provided
                that Seller shall not be obligated to make such payment in the event
                that
                the Release Conditions are not satisfied due to (i) the applicable
                Texas
                licensing authority having rejected Buyer/Borrower’s application for a
                Finance License at a time when such applicable Texas licensing authority
                is issuing such Finance Licenses to any other applicable or (ii)
                the
                Buyer/Borrower shall have failed to deliver a fully executed Consignment
                Agreement.

            


    

     

    
      	
              6.

            	
              Efforts
                to Obtain Required Permits. The Buyer/Borrower agrees to use its
                commercially reasonable efforts to obtain the Required
                Permits.  Notwithstanding the occurrence of an Escrow Release
                pursuant to Section 3 above prior to the Buyer/Borrower’s receipt of
                Dealer License, the Buyer/Borrower hereby agrees to continue to use
                its
                commercially reasonable efforts to obtain the Dealer License (which
                agreement shall expressly survive the occurrence of the Escrow
                Release).

            


    

     

    II.           SERVICING
      ARRANGEMENTS.

     

    
      	
              1.

            	
              Designation
                of the Servicer.  Seller hereby appoints the Servicer as its
                agent to service the Loans and enforce its respective rights in and
                under
                such Loans and any collateral security therefor until the Seller
                delivers
                a Termination Notice.  Servicer hereby accepts such appointment
                and agrees to perform the duties and obligations with respect thereto
                as
                set forth herein.  The parties hereto acknowledge that Servicer,
                as the ‘servicer’ of the Loans under this Agreement, possesses only such
                rights with respect to the enforcement of rights and remedies with
                respect
                to the Loans and collateral security therefor as are possessed by
                Seller.  Upon the Servicer’s receipt of a Termination Notice
                from the Seller, Servicer agrees that it will terminate its activities
                as
                ‘servicer’ of the Loans hereunder in a manner that the Seller reasonably
                believes will facilitate the transition of the performance of such
                activities to such successor ‘servicer’ as Seller may select, and the
                Servicer shall use its reasonable efforts to assist the Seller in
                transitioning such ‘servicing’ arrangements to such successor
                ‘servicer’.

            


    

     

    
      	
              2.

            	
              Duties
                of the Servicer.  The Servicer shall take or cause to be
                taken all such actions as may be necessary or advisable to collect
                on the
                Loans from time to time, all in accordance with (i) applicable laws,
                Servicer’s (a) Underwriting Guidelines and (b) Collections and Account
                Liquidations Policies and Procedures Manual (in each case, as delivered
                by
                Servicer to Seller prior to the date hereof) and (iii) Seller and
                Seller
                Agent’s reasonable directions to Servicer from time to time
                 (the preceding clauses (ii) and (iii),
                collectively, the “Credit and Collection
                Policy”).  Without limiting the foregoing, the duties of the
                Servicer shall include the following:


            


    

     

    preparing
      and submitting of claims to,
      and post-billing liaison with, the obligors in respect of the Loans (the
“Obligors”);

     

    maintaining
      all necessary servicing
      records with respect to the Loans and the collateral security therefore
      (the

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Loan
      Collateral”), and
      providing such reports to the Seller in respect of the servicing of the Loans
      and Loan Collateral (including information relating to its performance under
      this Agreement) as may be required hereunder or as the Seller may reasonably
      request;

     

    maintaining
      and implementing
      administrative and operating procedures (including, without limitation, an
      ability to recreate servicing records in the event of the destruction of the
      originals thereof) and keeping and maintaining all documents, books, records
      and
      other information reasonably necessary or advisable for the collection of the
      Loans and Loan Collateral;

     

    promptly
      delivering to the Seller,
      from time to time, such information and servicing records (including information
      relating to its performance under this Agreement) as the Seller may from time
      to
      time reasonably request;

     

    notifying
      the Seller of any action,
      suit, proceeding, dispute, offset, deduction, defense or counterclaim that
      exists or is threatened in writing by an Obligor with respect to any Loan (or
      portion thereof) of which the Servicer has knowledge or has received
      notice;

     

    maintaining
      the perfected security
      interest of the Seller in the automobiles or light truck sold to the applicable
      Obligors in connection the generation of the Loans; and

     

    collecting
      all amounts due under any
      and all Loans, including, without limitation, by endorsing all checks and other
      instruments representing collections thereon (which amounts Servicer shall
      deposit into the Portfolio Collection Account), executing and delivering any
      and
      all instruments of satisfaction or cancellation, or of partial or full release
      or discharge, and all other comparable instruments with respect to the Loan
      Collateral upon the payment in full of the underlying Loans; and

     

    after
      the delinquency of any Loans and
      to the extent permitted under and in compliance with applicable law, to commence
      proceedings with respect to enforcing payment thereof.

     

    Servicer
      acknowledges and agrees that Seller may locate a third party agent determined
      by
      Seller (the “Seller Agent”) on-site at the Servicer Location (as
      hereinafter defined) to monitor the Servicer’s day to day operations, servicing
      of the Loans and sale of Consigned Inventory in

     


    
      
         

      

      
        6

        
          

        

      

      
         

      

    


    accordance
      with the terms of this agreement.  Servicer agrees that it will
      cooperate with the Seller Agent and comply with the directions and approvals
      of
      the Seller Agent in connection with its performance of its servicing and
      consignment sales obligations under this Agreement.

     

    
      	
              3.

            	
              Authorization
                of the Servicer.

            


    

     

    (a)           The
      Seller hereby authorizes the Servicer to collect all amounts due under any
      and
      all Loans (but only to the extent such collections are made in accordance with
      applicable law), including, without limitation, by endorsing all checks and
      other instruments representing collections thereon, executing and delivering
      any
      and all instruments of satisfaction or cancellation, or of partial or full
      release or discharge, and all other comparable instruments with respect to
      the
      Loan Collateral and, after the delinquency of any Loans and to the extent
      permitted under and in compliance with applicable law, to commence proceedings
      with respect to enforcing payment thereof.  The Seller hereby agrees
      to cooperate with the Servicer to the fullest extent in order to ensure the
      collectibility of the Loans and Loan Collateral.  In no event shall
      the Servicer be entitled to make the Seller or any affiliate thereof a party
      to
      any litigation without such party’s express prior written consent.

     

    After
      the Escrow Termination has
      occurred, at the direction of the Seller, the Servicer shall take such action
      as
      the Seller may deem necessary or advisable to enforce collection of the Loans
      and Loan Collateral, including, without limitation. notifying any Obligor with
      respect to any Loans directing such Obligor to make payments of all amounts
      due
      or to become due directly to the Seller or any servicer, collection agent or
      lock-box or other account designated by the Seller.  If the Servicer
      or any other party hereto receives any payments or other amounts in respect
      of
      the Loans in connection with the actions described above or otherwise following
      the Escrow Termination, it shall promptly remit such amounts in accordance
      with
      the directions of the Seller.

     

    
      	
              4.

            	
              Collection
                of Payments.

            


    

     

    (a)           Collection
      Efforts; Modification of Loans and Loan Collateral.  The Servicer
      will collect, or cause to be collected, all payments called for under the terms
      and provisions of the Loans, as and when the same become due in accordance
      with
      the Credit and Collection Policy.  The Servicer may not waive, modify
      or otherwise vary any provision of a Loan or any Loan Collateral in a manner
      that would impair in any material respect the collectibility of such Loan or
      Loan Collateral or in any manner contrary to the Credit and Collection
      Policy.

     

    Acceleration.  If
      required by the Credit and Collection Policy, the Servicer shall, in accordance
      with the Credit and Collection Policy, accelerate the maturity of the schedule
      principal payments and other amounts due under any Loan if a default under
      the
      terms thereof has occurred and is continuing.

     

    Taxes
      and other
      Amounts.  The Servicer will use its best efforts to collect all
      payments with respect to amounts due for taxes, insurance premiums and
      other

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    amounts
      relating to each Loan to the extent required to be paid by the applicable
      Obligor and remit such amounts to the Seller as provided herein.

     

    Payments
      to Portfolio Collection
      Account.  The Servicer shall notify all Obligors to make payments
      in respect of the Loans to Ace Cash Express and MoneyGram pursuant to and in
      accordance with the form of notice attached hereto as Exhibit B, which
      payments shall then be transferred to the Portfolio Collection
      Account.  Notwithstanding the foregoing, in the event any payment is
      made by an Obligor or any Person in respect of the Loans to Servicer or any
      affiliate of Servicer, Servicer shall cash any such payments to be transferred
      to the Portfolio Collection Account within one (1) Business Day of Servicer
      or
      such affiliate’s receipt thereof, in the same form received, and with any
      necessary endorsement.

     

    
      	
              5.

            	
              Autostar.  In
                connection with its servicing of the Loans hereunder, Servicer shall
                utilize an Autostar Solutions, Inc., a Texas corporation
                ("Autostar") software based internet based payment system that
                includes Accountmate functionality, and Servicer shall grant (or
                cause any
                applicable affiliate license holder to grant) to Seller full access
                rights
                to such software and payment system, including but not limited to
                passwords and login information.  Servicer shall (or shall cause
                any applicable affiliated license holder to) authorize and instruct
                Autostar to provide Seller, at its request, with all back-up materials
                and
                information for such payment system.  Servicer shall send Seller
                copies of (and Autostar back-up reports with respect to) any of Texas
                Motor Vehicle Seller-Financed Sales Tax and/or Surcharge Reports
                within
                two (2) Business Days of its filing and payment of same.  In the
                event that Autostar becomes unable to provide such service to Servicer,
                Servicer will immediately obtain another such internet-based payment
                service that provides equivalent software and access rights to Servicer,
                and Seller as provided  by Autostar, including but not limited
                to full access rights to Seller and back-up materials and information
                as
                requested by Seller.

            


    

     

    
      	
              6.

            	
              Realization
                upon Loan Collateral in respect of defaulted Loans.  Subject
                to the terms of the Credit and Collection Policy, the Servicer will
                use
                reasonable efforts to foreclose upon or repossess, as applicable,
                or
                otherwise comparably convert the ownership of any Loan Collateral
                relating
                to a defaulted Loan as to which no satisfactory arrangements can
                be made
                for collection of delinquent payments.  The Servicer will comply
                with the Credit and Collection Policy and applicable Law in realizing
                upon
                such Loan Collateral, which practices and procedures may include
                reasonable efforts to enforce all obligations of Obligors foreclosed
                upon,
                repossessing and causing the sale of such Loan Collateral at public
                or
                private sale in circumstances other than those described in the preceding
                sentence (including, without limitation, sale of such Loan Collateral
                as
                “Repossessed Inventory” pursuant to Article III
                hereof).  Without limiting the generality of the foregoing,
                unless the Seller has specifically given instruction to the contrary,
                the
                Servicer may not cause the sale of any such Loan Collateral for a
                purchase
                price less than eighty percent (80%) of the then current Black Book
                retail
                value thereof, provided, that in the event the such Loan Collateral
                requires repair work which would cost (based on Parts Costs and Labor
                Costs in accordance with the repair cost calculations set forth in
                Section
                7 below) in excess of 25% of the then current Black Book wholesale
                value
                thereof, Seller

            


    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              shall,
                upon the request of Servicer, shall determine an alterative minimum
                applicable purchase price with respect to such vehicle and/or authorize
                Servicer to make applicable repairs to such Vehicle (with such repairs
                to
                be at Seller’s expense and authorized and paid for in accordance with the
                provisions of Section 7 below).  In any case in which any such
                Loan Collateral has suffered damage, the Servicer will not expend
                funds in
                connection with any repair or toward the foreclosure or repossession
                of
                such Loan Collateral unless it reasonably determines that such repair
                and/or foreclosure or repossession will increase the sale price thereof
                by
                an amount greater than the amount of such expenses and such repair
                is
                approved by Seller in accordance with Section 7 below.  The
                Servicer will remit to the Portfolio Collection Account any amounts
                received in connection with the sale or disposition of Loan Collateral
                relating to a defaulted Loan.  The Servicer shall notify the
                Servicer of the need for any expenditure of funds under this section
                for
                the purpose of repairing Loan Collateral, and if such expenditure
                is
                approved by Seller, shall be entitled to receive reimbursement for
                its
                costs and expenses relating to any such
                actions.

            


    

     

    
      	
              7.

            	
              Warranty
                Claims; Repair of Loan Collateral.    Seller
                acknowledges that certain of the automobiles and lights trucks
                constituting Loan Collateral (such vehicles, the “Warranty
                Vehicles”) were sold be a prior owner of the Loans with certain
                limited service contracts covering the repair of certain components
                of
                such vehicles (the “Service Contracts”).  Seller agrees
                that, to the extent any Obligor owning a Warranty Vehicle makes demand
                for
                performance under an applicable Service Contract, then, subject to
                the
                terms, conditions and procedures set forth hereof, Servicer shall
                perform
                (or cause to be performed) required repair work thereon and Seller
                shall,
                subject to the terms, conditions and procedures set forth herein,
                reimburse Servicer for its actual costs and expenses in respect of
                any
                such repair work undertaken by Servicer on such Warranty Vehicles
                under
                such Service Contract (“Warranty Repairs”) as
                follows:

            


    

     

    1.           Seller
      shall reimburse Servicer for the actual out-of-pocket costs incurred by Servicer
      in respect of parts purchased in connection with Warranty Repairs (net of any
      discounts or other incentives obtained by Servicer) (“Parts Costs”);
      and

     

    2.           Seller
      shall reimburse Servicer for the actual out-of-pocket  labor costs
      incurred directly incurred by Servicer in connection with Warranty Repairs
      (such
      labor costs to be billed at Servicer’s actual cost, and shall exclude any
      charges or allocations in respect of overhead or general corporate expense)
      (“Labor Costs”).

     

    In
      order to obtain reimbursement of Parts Costs and Labor Costs, the Servicer
      must:  (i) promptly upon being presented with a claim by an Obligor
      for warranty coverage, determine whether such Obligor’s vehicle is a Warranty
      Vehicle, and (ii) send Seller written notice, which notice shall be in a form
      reasonably satisfactory to Seller, (A) indicating such vehicle is a Warranty
      Vehicle, (B) indicating that the required repairs are covered by the terms
      of
      the applicable Service Contract and that the Obligor and Warranty Vehicle comply
      with all applicable conditions set forth in the applicable Service Contract
      (including mileage and time period requirements), (C) indicating a
      firm

     


    
      
         

      

      
        9

        
          

        

      

      
         

      

    


    estimate
      of the Parts Costs and Labor Costs applicable to the required repair and (D)
      requesting Seller’s authorization of such Warranty Repairs in accordance with
      this Section 7 of this Article II.  Seller will endeavor to respond to
      such notice within one (1) Business Day of its receipt of
      same.   Servicer shall provide Seller, not more frequently than
      weekly, an itemized report of all Parts Costs and Labor Costs incurred in
      connection with authorized Warranty Repairs, which report shall be in form
      and
      substance reasonably satisfactory to Seller.  Seller shall, within ten
      (10) Business Days of its receipt of such invoice report, pay the amount of
      such
      Parts Costs and Labor Costs to Servicer as follows:

     

    1.           Seller
      shall deposit the amount of actual Parts Costs to such deposit account of
      Servicer as Servicer shall designate in writing to Seller from time to
      time

     

    2.           Seller
      shall deposit the amount of Labor Costs to the Portfolio Collection
      Account.

     

    Seller
      shall have no obligation to reimburse the Servicer for any Parts Costs or Labor
      Costs under this Agreement (whether pursuant to Section 6 or 7 of this Article
      II or Section 1 of Article III) to the extent the Servicer fails to comply
      with
      the procedures set forth in this Section 7 or any such repair is not authorized
      by Seller.  Upon the release of the Escrow Documents in connection
      with the Escrow Release, and without any further act or agreement of the
      parties, the parties acknowledge and agree that the aggregate amount of all
      Labor Costs paid to the Portfolio Collection Account (i) shall be deemed to
      have
      been made in accordance with the terms of Section 24 of the Purchase Agreement
      and (ii) shall be deemed to have been received by Administrative Agent and
      applied to the Initial Loans in accordance with the terms of Section 3.6 of
      the
      Loan Agreement.   In the event of the occurrence of an Escrow
      Termination (other than as a result of (i) the failure of the Buyer/Borrower
      to
      acquire the Finance License on account of the Buyer/Borrower’s negligence,
      willful misconduct or failure to exercise its commercially reasonable efforts
      to
      obtain such Required Permits or (ii) the failure of the Buyer/Borrower to
      deliver a fully executed Consignment Agreement, in which case, the Seller shall
      be entitled to retain the aggregate amount of all Labor Costs), the Seller
      shall
      promptly transfer an amount to Servicer equal to the aggregate Labor
      Costs.

     

    
      	
              8.

            	
              Maintenance
                of Insurance Policies.  With respect to each Loan, the
                Servicer shall use its best efforts to cause each Obligor required
                to do
                so pursuant to the underlying consumer loan documents applicable
                to such
                Loan to maintain in respect of the related Loan Collateral all insurance
                coverage as is required under the related consumer loan
                documents.  If an Obligor fails to maintain such insurance, the
                Servicer shall (to the extent available at commercially reasonable
                terms
                as reasonably determined by the Servicer, which shall be entitled
                to rely
                on insurance consultants in making such determination) obtain such
                insurance (which may be through a master or single interest policy)
                and
                the cost (including any deductible relating to such insurance and
                any
                out-of-pocket cost incurred by the Servicer in obtaining advice of
                insurance consultants) of such insurance (or in the case of a master
                or
                single interest policy, the incremental
                cost

            


    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (including
                any deductible relating to such insurance) of such insurance relating
                to
                the specific Loan Collateral), shall be paid by the Servicer and
                shall be
                reimbursable to the Servicer by Seller.  All Insurance Policies
                maintained by the Servicer in connection with the Loans and Loan
                Collateral shall contain “standard” mortgagee / loss payable clause, with
                loss payable to the Seller.  Notwithstanding the foregoing, the
                Servicer agrees to deposit into the Portfolio Collection Account,
                within
                one (1) Business Day of its receipt thereof, any amounts collected
                by the
                Servicer under any such policies (other than amounts to be applied
                to the
                restoration or repair of the related Loan
                Collateral).

            


    

     

    
      	
              9.

            	
              Audits;
                Books and Records and Inspections.  Periodically at the
                discretion of the Seller, the Seller may review the Servicer’s collection
                and administration of the Loans in order to assess compliance by
                the
                Servicer with the Credit and Collection Policy, as well as with this
                Agreement and may conduct an audit of the Loans and Loan Collateral
                in
                conjunction with such a review.  Such review shall be reasonable
                in scope and shall be completed in a reasonable period of
                time.  To the extent that the Seller requires access to the
                Servicer’s books and records, the Servicer shall arrange such access with
                the upon reasonable prior written notice, and Seller shall be permitted
                to
                make extractions or copies the Servicer’s books, records, journals,
                orders, receipts, or other correspondence.  Without limiting the
                foregoing, from time to time on request of the Seller and at Seller’s
                expense, the Servicer shall permit, and shall arrange with the Seller
                to
                permit certified public accountants or other independent auditors
                acceptable to the Seller to conduct, at the Servicer’s expense, a review
                of the Servicer's books and records and all other documentation regarding
                the Loans.  Seller, by or through any of its officers, agents,
                employees, attorneys or accountants, shall have the right to enter
                any of
                Servicer or AUA’s officers and other locations, upon reasonable prior
                written notice, to inspect the Loans, Loan Collateral, Consigned
                Inventory
                (as hereinafter defined) and otherwise inspect Servicer and AUA’s
                operations. 

            


    

     

    
      	
              10.

            	
              Payment
                of Certain Expenses by Servicer.  The Servicer will be
                required to pay all expenses incurred by it in connection with its
                servicing activities under this Agreement, including fees and
                disbursements of its independent accountants, taxes imposed on the
                Servicer, and expenses incurred by the Servicer in connection with
                payments and reports pursuant to this
                Agreement.

            


    

     

    
      	
              11.

            	
              Servicing
                Reports.  By no later than 12:00 noon on the last Business
                Day of each calendar week, the Servicer will provide to the Seller,
                a
                statement determined as of the First Business Day of such calendar
                week (a
                “Servicing Report”), signed by a responsible officer of the
                Servicer including (i) an detailed aging report of the Loans, (ii)
                a
                detailed payment summary in respect of payments collected on the
                Loans
                during the preceding calendar week, (iii) the outstanding principal
                and
                accrued by unpaid interest on each Loan, (iv) a report of all sales
                tax
                obligations incurred and sales tax returns required to be filed in
                connection with Loan payments received during the preceding week
                (which
                sales tax report shall be in form and substance and include such
                information as Seller shall reasonably require) and (v) a reconciliation
                to the immediately preceding Servicing Report, and shall be in form
                and
                substance reasonably satisfactory to
                Seller.  

            


    

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              The
                Seller may, at its option, cause an amount equal to applicable sales
                tax
                payment obligations incurred in connection with the receipt of Loan
                payments remitted to Servicer (to such deposit account as Servicer
                may
                designate from time to time), which amounts  shall be held in
                trust by Servicer for the benefit of Seller and promptly paid over
                to the
                applicable taxing authority. The failure of Servicer to promptly
                remit any
                such amounts to the applicable taxing authority shall be breach of
                this
                Agreement.

            


    

     

    
      	
              12.

            	
              Financial
                Statements.  The Servicer shall deliver to the Seller, (i)
                within twenty (20) days after the end of each fiscal month, the
                consolidated and consolidating unaudited financial statements of
                the AUA
                and its subsidiaries for such fiscal month (including a balance sheet,
                statement of income, retained earnings and cash flows), certified
                by a
                responsible officer of the Servicer as complete and correct and prepared
                in accordance with GAAP, consistently
                applied.

            


    

     

    
      	
              13.

            	
              Additional
                Information.  Promptly upon request by Seller, the Servicer
                shall provide to the Seller, for each Loan, the name and number of
                the
                related Obligor, collection status, loan status, the date of each
                scheduled payment and the outstanding principal balance, and such
                other
                items as may reasonably be expected in connection with the transactions
                contemplated by this Agreement.

            


    

     

    
      	
              14.

            	
              Resignation
                of the Servicer.  The Servicer may not resign from the
                obligations and duties hereby imposed on it except upon the Servicer’s and
                Seller’s reasonable determination that (i) the performance of its duties
                hereunder is or becomes impermissible under applicable law and (ii)
                there
                is no reasonable action that the Servicer could take to make the
                performance of its duties hereunder permissible under applicable
                law.  No such resignation shall become effective until the
                Seller has appointed a successor servicer and such successor servicer
                shall have assumed all of the Servicer’s servicing obligations in respect
                of the Loans.

            


    

     

    III.           CONSIGNMENT
      SALE ARRANGEMENTS.

     

    
      	
              1.

            	
              Seller
                hereby agrees to consign to Servicer for sale, and Servicer hereby
                agrees
                to accept from Seller on consignment in accordance with the terms
                hereof,
                the Motor Vehicle Inventory together with any automobile or light
                truck
                repossessed by Seller pursuant to the Seller’s exercise of remedies in
                respect of Loans pursuant to Article II hereof (such repossessed
                vehicles,
                “Repossessed Inventory”, Repossessed Vehicles and Motor Vehicle
                Inventory, collectively, “Consigned
                Inventory”).  Servicer acknowledges and agrees that, except
                as expressly set forth in this Article III, all right, title and
                interest
                on the Consigned Inventory shall remain with Seller, and that Servicer
                shall mark its books and records accordingly to reflect that fact
                that
                such Consigned Inventory is the property of the Seller and not
                Servicer.  Servicer further authorizes Seller to filing such
                uniform commercial code financing statements in such filing offices
                as
                Seller shall deem appropriate to evidence such consignment
                arrangement.  Although Servicer and Seller acknowledge that all
                right, title and interest in the Consigned Inventory shall remain
                with
                Seller during the term of the consignment arrangement evidenced hereto,
                Servicer shall have the right to sell items of Consigned Inventory
                to
                Servicer’s consumer customers free

            


    

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              and
                clear of any right, title, interest, lien or encumbrance of Seller,
                provided that such sale conforms to the following terms and
                conditions:

            


    

     

    Conditions
      to Permitted Consignment Sales:

     

    a.           The
      purchase price for applicable Consigned Inventory (the “Inventory Purchase
      Price”) shall not be less than eighty percent (80%) of
      the then applicable Black Book average retail value of such Consigned Inventory,
      in each case, without the prior written consent of Seller.  Without
      limiting the generality of the foregoing, in the event the such Consigned
      Inventory requires repair work which would cost (based on Parts Costs and Labor
      Costs determined in accordance with Section 7 of Article II hereof) in excess
      of
      25% of the then current Black Book wholesale value thereof, Seller may, upon
      the
      request of Servicer, determine an alterative minimum applicable purchase price
      with respect to such vehicle and/or authorize Servicer to make applicable
      repairs to such Vehicle (with such repairs to be at Seller’s expense and
      authorized and paid for in accordance with the provisions of Section 7 of
      Article II hereof).  In any case, the Servicer will not expend funds
      in connection with any repair such Consigned Inventory unless it reasonably
      determines that such repair will increase the sale price thereof by an amount
      greater than the amount of such expenses and such repair is approved by Seller
      in accordance with the provisions of Section 7 of Article II
      hereof.  Seller shall have no obligation to reimburse the Servicer for
      any Parts Costs or Labor Costs under this Section 1 to the extent the Servicer
      fails to comply with the procedures set forth in Section 7 of Article II
      hereof.

     

    b.           Not
      less than ten percent (10%) of the Inventory Purchase Price in respect of such
      Motor Vehicle Inventory shall be paid by the Obligor in cash at the time of
      sale
      (any amount paid at the time of sale, a “Down Payment”), without the
      prior written consent of Seller.

     

    c.           Such
      sale shall be without any representation or warranty on the part of Seller,
      other than any representations and warranties required by applicable law, and
      on
      an ‘as is where is’ basis.  

     

    Notwithstanding
      the parties intention that the consignment arrangement evidenced hereby
      constitute a consignment and not a secured transaction, in the event that such
      arrangement is determined to be a secured transaction, the Consigned Inventory
      shall be subject to the lien and security interest set forth in Article IV
      hereof.

     

    
      	
              2.

            	
              Any
                sale of Consigned Inventory by Servicer shall be made for Cash, or
                a
                combination of Cash and the making by Servicer of a retain installment
                loan (a “Servicer Loan”) by Servicer to the applicable purchaser,
                which Servicer Loan must satisfy the following
                conditions:

            


    

     

    a.   The
      maximum term of such Servicer Loan shall not exceed thirty-six (36)
      months.

     


    
      
         

      

      
        13

        
          

        

      

      
         

      

    


    b.   The
      Servicer Loan Documents shall provide for regularly scheduled semi-monthly
      payments, and require that such payments be made (i) at Ace Cash Express or
      MoneyGram (which payments shall then be paid by Ace Cash Express or MoneyGram
      pursuant to and in accordance with the form of notice attached hereto as
Exhibits B) or (ii) in person at one or more of the Servicer’s
“Affordable Cars and Trucks” retail locations in the greater Houston, Texas
      area.

     

    c.           The
      Servicer Loan Documents shall provide for a minimum interest rate of 17.99%
      per
      annum.

     

    The
      Consumer Loan Document evidencing Servicer Loans are hereinafter referred to
      as
“Servicer Loan Documents.”

     

    
      	
              3.

            	
              Servicer
                shall, within five (5) Business Day’s of the sale of Consigned Inventory
                financed by Servicer pursuant to a Servicer Loan, deliver the originally
                executed Servicer Loan Documents to the Existing Custodian (as defined
                in
                the Purchase Agreement) for the benefit of Seller, and shall deliver
                the
                original Auto Title in respect of such sold Consigned Inventory (such
                Auto
                Title naming the purchaser as the owner and Servicer as the Lienholder)
                within five (5) Business Days of Servicer’s receipt of such Auto Title
                from the Texas Department of Transportation.  Servicer
                acknowledges and agrees that Servicer shall not permit any of the
                Loans,
                Consigned Inventory, Down Payments, Servicer Loan Documents or any
                proceeds of the foregoing to be subject to any lien or security interest
                other than the lien and security interest of Seller provided for
                herein.

            


    

     

    
      	
              4.

            	
              Servicer
                shall, within one (1) Business Day of its receipt of any payment
                in
                respect of (i) the sale of Motor Vehicle Inventory or (ii) any Servicer
                Loan, deposit such payment, in the form received, to the Portfolio
                Collection Account.

            


    

     

    
      	
              5.

            	
              In
                consideration for Servicer’s sale of Consigned Inventory hereunder, Seller
                agrees to pay Servicer a consignment sale fee (a “Sale Fee”) equal
                to $1 for each item of Consigned Inventory sold by Servicer pursuant
                to
                the terms hereof.  The aggregate amount of all Sale Fees shall
                be paid by Seller to Servicer on the Escrow Termination upon Seller’s
                receipt of the balance of the aggregate Inventory Purchase Prices
                for all
                sold Consigned Inventory in accordance with Section 6
                below.

            


    

     

    
      	
              6.

            	
              Upon
                the Servicer’s sale of Consigned Inventory, Servicer shall pay the
                Inventory Purchase Price therefor to Seller as
                follows:

            


    

     

    a.           The
      portion of the Inventory Purchase Price consisting of the Down Payment shall
      be
      paid to Seller in accordance with the preceding Section 4 of this Article
      III.

     

    b.           The
      balance of the Inventory Purchase Price shall be paid to Seller upon demand
      by
      Seller upon the Escrow Termination.  Any payments by an Obligor on a
      Servicer Loan shall be paid to Seller in accordance with Section 4 of this
      Article III and credited to Servicer’s obligations to pay the Inventory Purchase
      Price to Seller.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    The
      Servicer’s obligation to pay the Inventory Purchase Price in respect of
      Consigned Inventory (including any interest and other fees paid in respect
      of
      Servicer Loans) is hereinafter referred to as the Seller’s “Inventory
      Purchase Price Obligation”.  In the event that any Servicer Loans
      or any Consigned Inventory shall remain at the Escrow Termination, Servicer
      shall promptly assign and transfer the applicable Servicer Loan Documents and
      Consigned Inventory to Seller to satisfy the Inventory Purchase Price
      Obligation, which transfer and assignment shall be free and clear of all liens,
      security interests and encumbrances pursuant to documentation in form and
      substance reasonably satisfactory to Seller.  Upon Seller’s receipt of
      the Servicer Loan Documents and Consigned Inventory, Seller shall promptly
      pay
      to Servicer an amount equal to the aggregate Sale Fee.

     

    
      	
              7.

            	
              The
                Servicer will be required to pay all expenses incurred by it in connection
                with its consignment sale activities under this Agreement, including
                fees
                and disbursements of its independent accountants, taxes imposed on
                the
                Servicer, and expenses incurred by the Servicer in connection with
                payments and reports pursuant to this
                Agreement.  Notwithstanding the foregoing, the Servicer shall
                file all applicable tax returns and other necessary documentation
                to cause
                any sales taxes due in respect of the sale of Consigned Inventory
                to be
                paid in accordance with applicable provisions of Texas
                law.  Contemporaneous with the delivery of the Servicing Reports
                required to be delivered to Seller pursuant to Article II hereunder,
                Servicer shall provide Seller with a report of all sales tax obligations
                incurred and sales tax returns required to be filed in connection
                with the
                sale of Consigned Inventory since the date of the previous Servicing
                Report, which report shall be in form and substance and include such
                information as Seller shall reasonably require.  The Seller may,
                at its option, cause an amount equal to applicable sales tax payment
                obligations incurred in connection with the sale of consigned inventory
                to
                be remitted to Servicer (to such deposit account as Servicer may
                designate
                from time to time), which amounts shall be held in trust by Servicer
                for
                the benefit of Seller and promptly paid over to the applicable taxing
                authority.  The failure of Servicer to promptly remit any such
                amounts to the applicable taxing authority shall be breach of this
                Agreement.

            


    

     

    
      	
              8.

            	
              On
                the Escrow Closing Date, Seller shall provide Servicer with access
                to
                remove the Motor Vehicle Inventory from Tex Star Motors, in Houston,
                Texas
                (the current location of the Motor Vehicle Inventory, the “Existing
                Location”).  Seller shall be responsible for providing
                Servicer with access to the Motor Vehicle Inventory on the Existing
                Location, however, Servicer acknowledges and agrees that it shall
                be
                solely responsible, at its own cost and expense, to arrange for the
                physical transfer and removal of the Motor Vehicle Inventory from
                the
                Existing Location to Servicer’s retail premises located at 5715 North
                Freeway, Houston, Texas  77076 (the “Servicer
                Location”).  If the Servicer is unable to move any of the
                Motor Vehicle Inventory because the party(ies) in possession of such
                Motor
                Vehicle Inventory refuses to relinquish possession, Seller may take
                such
                legal and other action as Seller deems appropriate to secure Servicer
                access to such Motor Vehicle Inventory, provided, Seller shall have
                no
                liability to Servicer as a result of its failure to provide such
                access.  Notwithstanding the foregoing, the Servicer shall have
                no obligation hereunder to accept on consignment (and the Buyer/Borrower
                shall have no 

            


    

     

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	 	obligation
              under the Purchase Agreement to purchase) (i) any item
              of Motor Vehicle Inventory that cannot be retrieved from the Existing
              Location or (ii) any item of Motor Vehicle Inventory that Servicer
              reasonably determines cannot be sold on a commercial basis (“Rejected
              Vehicles”).  Seller agrees to reimburse Servicer for all
              towing fees incurred by Servicer in connection with the transport of
              Rejected Vehicles to the Servicer
              Location.


      	 	 


      	
              9.

            	
              Seller
                shall maintain the Motor Vehicle Inventory at the Servicer Location,
                however, Seller understands and acknowledges that Servicer may need
                to
                allow prospective buyers to test drive and otherwise inspect the
                Motor
                Vehicle Inventory, which test drives and inspects may result on the
                Motor
                Vehicle Inventory being removed from the Servicer Location on a temporary
                basis.  Servicer agrees to indemnify and hold harmless Seller
                and its affiliates from any claims arising Servicer permitting any
                prospective customer to test drive and/or inspect any Motor Vehicle
                Inventory.

            


    

     

    
      	
              10.

            	
              Servicer
                acknowledges and agrees that Servicer shall be required to maintain
                (i)
                liability insurance coverage in respect of the Motor Vehicle Inventory
                in
                an amount not less than required by applicable law, which liability
                insurance coverage shall name Seller as an “additional insured”, and (ii)
                property insurance coverage in respect of the Motor Vehicle Inventory
                in
                an amount not less than the applicable Black Book retail value of
                the
                Motor Vehicle, which property insurance coverage shall name Seller
                as
                “loss payee”.  Servicer agrees to hold Seller harmless from any
                damage to Motor Vehicle Inventory occurring during the period such
                Motor
                Vehicle Inventory is consigned to
                Servicer.

            


    

     

    
      	
              11.

            	
              Servicer
                shall, at Servicer’s costs and expense, cause each item of Consigned
                Inventory received by Servicer to be equipped with a starter interrupt
                /
                GPS tracking device of the type currently being used by Servicer
                prior to
                such item of Consigned Inventory being sold by
                Servicer.

            


    

     

    


     

    IV.           SECURITY
      INTEREST.

     

    
      	
              1.

            	
              As
                security for the due and punctual performance of any and all of
                Buyer/Borrower and, Servicer’s obligations to Seller and Administrative
                Agent hereunder, including without limitation, the Inventory Purchase
                Price Obligation, each of Buyer/Borrower, Servicer, AUA (each a
                “Secured Obligor” and collectively, the “Secured Obligors”)
                hereby jointly and severally guaranty the obligations of each such
                Secured
                Obligor to Seller and Administrative Agent hereunder, and each Secured
                Obligor hereby pledges, assigns and grant to Seller, for the benefit
                of
                itself, and Administrative Agent, for the benefit of itself and the
                Lenders, a first priority continuing security interest in, and a
                lien on,
                the Loans, the Consigned Inventory, the Servicer Loans, the Servicer
                Loan
                Documents (and each Auto Title related to each Servicer Loan and
                all other
                agreements, documents and instruments related thereto), the Down
                Payments
                and all additions thereto and any proceeds thereof (collectively,
                the
                “Collateral”).  The security interest of Seller and
                Administrative Agent shall at all times be valid, perfected and
                enforceable by Seller

            


    

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	 	against
              Buyer/Borrower, Servicer and AUA and all third parties in
              accordance with the terms of this
              Agreement.


      	 	 


      	
              2.

            	
              Each
                Secured Obligor hereby confirms and agrees that each of Seller and
                the
                Administrative Agent (or any designee thereof), following an default
                by
                any Secured Obligor or Guarantor of the payment or performance of
                its
                obligations hereunder (including, without limitation, any servicing
                obligation under Article II hereof or any consignment sale obligation
                under Article III hereof), or the breach of any of its representations
                or
                warranties hereunder (an “Event of Default”), shall, at its option,
                have the sole right to enforce Servicer’s rights and remedies under each
                Servicer Loan Document, but without any obligation on the part of
                the
                Seller or Administrative Agent or any of their respective affiliates
                to
                perform any of the obligations of Servicer under any such Servicer
                Loan
                Document.

            


    

     

    
      	
              3.

            	
              Each
                Secured Obligor Borrower hereby authorizes Seller and Administrative
                Agent
                to file UCC-1 Financing Statements with respect to the Collateral,
                and any
                amendments or continuations relating thereto, which UCC-1 Financing
                Statements may describe the Collateral as “all present and future assets
                of the Debtor” or words of similar effect, regardless of whether any
                particular asset comprised in the Collateral falls within the scope
                of
                Article 9 of the Uniform Commercial Code.  The Secured Obligors
                shall not allow any financing statement or notice of assignment of
                any
                Collateral, other than those filed in favor of Seller and Administrative
                Agent to be on file in any public office covering any Collateral,
                proceeds
                thereof or other matters subject to the security interest granted
                to
                Seller and Administrative Agent
                hereunder.

            


    

     

    
      	
              4.

            	
              Secured
                Obligors hereby agree to deliver to Seller and Administrative Agent,
                at
                such places as Seller and Administrative Agent may reasonably designate,
                (i) schedules executed by Secured Obligors listing the Servicer Loans
                and
                fully and correctly specifying in adequate detail the aggregate unmatured
                unpaid face amount of each Servicer Loan and the amount of the deferred
                installments thereof falling due each month and (ii) schedules executed
                by
                the Secured Obligors listing the Consigned Inventory and specifying
                in
                adequate detail the current NADA trade in value with respect
                thereto.  These schedules shall be in form and tenor
                satisfactory to or supplied by
                Seller.

            


    

     

    
      	
              5.

            	
              Secured
                Obligors shall, from time to time, at their cost and expense, promptly
                execute and deliver all further instruments, documents and notices
                and
                take all further action that may be necessary, or that Seller or
                Administrative Agent may reasonably request in order to create, perfect
                and protect the liens of Seller and Administrative Agent in the
                Collateral, or to enable Seller and Administrative Agent to exercise
                and
                enforce its rights and remedies hereunder with respect to any Collateral,
                including, without limitation, (i) delivering to Seller (for the
                benefit
                of itself and Administrative Agent) all original instruments, certificated
                securities and other assets, perfection of a lien with respect to
                which
                may be perfected by possession under applicable law, together with
                any
                assignments separate from certificates and allonges ancillary thereto
                and
                (iii) providing Administrative Agent with “control” (as such term is
                defined in any applicable uniform commercial code) over any Collateral,
                a
                lien with respect to which may be perfected
                by

            


    

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	 	“control”,
              pursuant to documentation in form and substance
              reasonably satisfactory to Seller and Administrative
              Agent.


      	 	 


      	
              6.

            	
              If
                any Event of Default shall occur and be continuing, Seller and/or
                Administrative Agent may protect and enforce their rights hereunder
                by any
                appropriate proceedings, including proceedings for specific performance
                of
                any covenant or agreement contained herein and the following rights
                and
                remedies:

            


    

     

    (a)           All
      of the rights and remedies of a secured party under the Uniform Commercial
      Code,
      as amended, or other applicable law.

     

    (b)           The
      right, to the fullest extent permissible by applicable law, to: (i) enter upon
      the premises of any Secured Obligor, or any other place or places where the
      Collateral is located and kept, without any obligation to pay rent to any
      Secured Obligor, through self-help and without judicial process, without first
      obtaining a final judgment or giving any Secured Obligor notice and opportunity
      for a hearing on the validity of Seller or Administrative Agent's claim, and
      remove the Collateral therefrom to the premises of Seller or Administrative
      Agent or any agent of Seller or Administrative Agent, for such time as Seller
      or
      Administrative Agent may desire, in order to effectively collect and liquidate
      the Collateral; and/or (ii) require any Secured Obligor to assemble the
      Collateral and make it available to Seller and/or Administrative Agent at a
      place to be designated by Seller and/or Administrative Agent, in Seller and/or
      Administrative Agent's reasonable discretion.

     

    (c)           The
      right to sell or otherwise dispose of any or all Collateral in its then
      condition at public or private sale or sales, in lots or in bulk, for cash
      or on
      credit, all as Seller and/or Administrative Agent, in its discretion, may deem
      advisable; provided that such sales may be adjourned from time to time with
      or
      without notice.  The parties hereby agree that Seller and/or
      Administrative Agent shall give reasonable notice (such reasonable notice to
      be
      determined by Seller and/or Administrative Agent in its sole and absolute
      discretion) to the Secured Obligors of the time and place of any public sale
      of
      the Collateral or of the time after which any private sale either by Seller
      and/or Administrative Agent or at their option, a broker, or any other intended
      disposition thereof is to be made.  Such notice shall be mailed,
      postage prepaid, to Secured Obligors at the address of such Persons set forth
      herein.

     

    V.           MISCELLANEOUS.

     

    
      	
              1.

            	
              Notices.  All
                notices, demands, requests and other written communications hereunder
                shall be deemed to have been properly given:  (i) upon personal
                delivery; (ii) on the third Business Day following the day sent,
                if sent
                by registered or certified mail; (iii) on the next Business Day following
                the day sent, if sent by overnight express courier; or (iv) on the
                day
                sent or if such day is not a Business Day on the next Business Day
                after
                the day sent if sent by telecopy providing the receiving party has
                acknowledged receipt by return telecopy, in each case, to each party
                hereto at its address and/or

            


    

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	 	telecopy
              number as set forth below the signature block of such
              party hereto, or at such other address and/or telecopy number as any
              party
              hereto may designate for such purpose in a written notice given to
              the
              other parties.


      	 	 


      	
              2.

            	
              This
                Agreement is for the exclusive benefit of the parties hereto and
                their
                respective successors hereunder, and shall not be deemed to give,
                either
                express or implied, any legal or equitable right, remedy, or claim
                to any
                other entity or person whatsoever.

            


    

     

    
      	
              3.

            	
              If
                at any time Seller is served with any judicial or administrative
                order,
                judgment, decree, writ or other form of judicial or administrative
                process
                which in any way affects the Escrow Documents, Seller is authorized
                to
                comply therewith in any manner as it or its legal counsel of its
                own
                choosing deems appropriate; and if Seller complies with any such
                judicial
                or administrative order, judgment, decree, writ or other form of
                judicial
                or administrative process, Seller shall not be liable to any of the
                parties hereto or to any other person or entity even though such
                order,
                judgment, decree, writ or process may be subsequently modified or
                vacated
                or otherwise determined to have been without legal force or
                effect.

            


    

     

    
      	
              4.

            	
              Each
                of the parties hereto hereby irrevocably appoints Seller as escrow
                agent
                to perform the escrow duties set forth by the terms of this
                Agreement.  Upon an Escrow Termination and the return or
                destruction of the signature pages of the parties in accordance with
                Section 5 of Article I hereof, Seller shall have no further duties,
                responsibilities or obligations hereunder with respect to the Escrow
                Documents.

            


    

     

    
      	
              5.

            	
              EACH
                OF THE PARTIES HERETO ACKNOWLEDGES THAT IT HAS BEEN (OR HAS HAD THE
                OPPORTUNITY TO BE) REPRESENTED AND ADVISED BY INDEPENDENT LEGAL COUNSEL
                WITH RESPECT TO THE NEGOTIATION, EXECUTION AND ACCEPTANCE OF THIS
                AGREEMENT AND THE TRANSACTIONS GOVERNED BY THIS AGREEMENT AND HAVE
                RELIED
                UPON (OR HAVE HAD THE OPPORTUNITY TO RELY UPON) THE ADVICE OF ITS
                INDEPENDENT LEGAL COUNSEL IN AGREEING TO THE TERMS AND CONDITIONS
                HEREIN
                AND IN EXECUTING AND DELIVERING THIS AGREEMENT, AND THAT THEY HAVE
                FREELY
                AND VOLUNTARILY ENTERED INTO THIS AGREEMENT AS THE PRODUCT OF ARMS'
                LENGTH
                NEGOTIATIONS.

            


    

     

    
      	
              6.

            	
              This
                Agreement shall be interpreted, construed, enforced and administered
                in
                accordance with the internal substantive laws (and not the choice
                of law
                rules) of the State of Illinois.  Each of the parties hereto
                hereby submits to the personal jurisdiction of and each agrees that
                all
                proceedings relating hereto shall be brought in courts located within
                the
                County of Cook, State of Illinois, or elsewhere as Seller
                select.  Each of the parties hereto hereby waives the right to
                trial by jury and to assert counterclaims in any such
                proceedings.  To the extent that in any jurisdiction any party
                hereto may be entitled to claim, for itself or its assets, immunity
                from
                suit, execution, attachment (whether before or after judgment) or
                other
                legal process, each hereby irrevocably agrees not to claim, and hereby
                waives, such immunity.  Each party hereto waives personal
                service of process and consents to service of process by certified
                or
                registered mail, return receipt requested, directed to it
                at

            


    

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	 	the
              address last specified for notices hereunder, and such service
              shall be deemed completed ten (10) calendar days after the same is
              so
              mailed.


      	 	 


      	
              7.

            	
              Except
                as otherwise permitted herein, this Agreement may be modified only
                by a
                written amendment signed by all the parties hereto, and no waiver
                of any
                provision hereof shall be effective unless expressed in a writing
                signed
                by the party to be charged.

            


    

     

    
      	
              8.

            	
              The
                rights and remedies conferred upon the parties hereto shall be cumulative,
                and the exercise or waiver of any such right or remedy shall not
                preclude
                or inhibit the exercise of any additional rights or
                remedies.  The waiver of any right or remedy hereunder shall not
                preclude the subsequent exercise of such right or
                remedy.

            


    

     

    
      	
              9.

            	
              Each
                party hereto hereby represents and warrants (a) that this Agreement
                has
                been duly authorized, executed and delivered on its behalf and constitutes
                its legal, valid and binding obligation and (b) that the execution,
                delivery and performance of this Agreement by such party do not and
                will
                not violate any applicable law or
                regulation.

            


    

     

    
      	
              10.

            	
              The
                invalidity, illegality or unenforceability of any provision of this
                Agreement shall in no way affect the validity, legality or enforceability
                of any other provision; and if any provision is held to be enforceable
                as
                a matter of law, the other provisions shall not be affected thereby
                and
                shall remain in full force and
                effect.

            


    

     

    
      	
              11.

            	
              This
                Agreement shall constitute the entire agreement of the parties with
                respect to the subject matter and supersedes all prior oral or written
                agreements in regard thereto.

            


    

     

    
      	
              12.

            	
              The
                headings contained in this Agreement are for convenience of reference
                only
                and shall have no effect on the interpretation or operation
                hereof.

            


    

     

    
      	
              13.

            	
              The
                parties hereto have participated jointly in the negotiation and drafting
                of this Agreement.  In the event an ambiguity or question of
                intent or interpretation arises, this Agreement shall be construed
                as if
                drafted jointly by the parties hereto and no presumption or burden
                of
                proof shall arise favoring or disfavoring any party by virtue of
                the
                authorship of any provisions of this
                Agreement.

            


    

     

    
      	
              14.

            	
              This
                Agreement may be executed by each of the parties hereto in any number
                of
                counterparts, each of which counterpart, when so executed and delivered,
                shall be deemed to be an original and all such counterparts shall
                together
                constitute one and the same agreement.  Signatures delivered by
                facsimile and/or other similar electronically transmitted format
                shall
                bind the parties hereto as though such signatures were
                original.

            


    

     

    
      	
              15.

            	
              Each
                of Borrower and each Guarantor shall from time to time execute and
                deliver, and shall cause each of its subsidiaries to execute and
                deliver,
                all such amendments, supplements and other modifications hereto and
                to the
                other Loan Documents and all such financing statements or continuation
                statements, instruments of further assurance and any other instruments,
                and shall take such other actions, as Administrative Agent reasonably
                requests and deems necessary or advisable in furtherance of the agreements
                contained herein.

            


    

     


    
      
         

      

      
        20

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
      by
      a duly authorized officer as of the day and year first written
      above.

     

    

      
        	
                AGM,
                  LLC, a Delaware limited liability

                company,
                  as the Seller

              	 	
                AUTO
                  UNDERWRITERS PORTFOLIO

                ACQUISITION
                  COMPANY, INC., a  Texas
                  corporation

              
	 	 	 
	
                By:
                  /s/ Greg Bell

              	 	
                By:           /s/
                  William Kellagher

              
	
                Name:
                  Greg Bell

              	 	
                Name:     William
                  Kellagher

              
	
                Its:
                  Manager

              	 	
                Its:           President

              
	 	 	 
	
                AGM,
                  LLC, a Delaware limited liability

                company,
                  as Administrative Agent

              	 	
                AUTO
                  UNDERWRITERS OF

                AMERICA,
                  INC., a California corporation

              
	 	 	 
	
                By:
                  /s/ Greg Bell

              	 	
                By:           /s/
                  Dean Antonis_

              
	
                Name:
                  Greg Bell

              	 	
                Name:     Dean
                  Antonis

              
	
                Its:
                  Manager

              	 	
                Its:           President

              
	 	 	 
	
                 

                Notice
                  Address:

              	 	
                AUTO
                  UNDERWRITERS FINANCE

                COMPANY,
                  INC., a Texas corporation

              
	 	 	 
	
                1033
                  Skokie Boulevard, Suite 620

              	 	
                By:           /s/
                  William Kellagher

              
	
                Northbrook,
                  Illinois  60062

              	 	
                Name:     William
                  Kellagher

              
	
                Attn:  Greg
                  Bell

              	 	
                Its:           President

              
	
                Facsimile:  (847)
                  498-1758

              	 	 
	 	 	
                Notice
                  Address:

              
	
                /s/
                  William Kellagher

              	 	 
	
                William
                  Kellagher

              	 	
                17000
                  Dallas Parkway

              
	 	 	
                Suite
                  202

              
	
                Notice
                  Address:

              	 	
                Dallas,
                  Texas 75248

              
	 	 	
                Attn:  William
                  Kellagher

              
	
                William
                  Kellagher

              	 	
                Telephone:
                  (972) 267-5100

              
	
                6011
                  Club Oaks Rd

              	 	
                Facsimile:  (972)
                  267-6001

              
	
                Dallas,
                  Texas 75248

              	 	 
	 	 	 
	
                /s/
                  Dean Antonis

              	 	 
	
                Dean
                  Antonis

              	 	 
	 	 	 
	
                Notice
                  Address:

              	 	 
	 	 	 
	
                Dean
                  Antonis

              	 	 
	
                1508
                  Cedarwood Drive

              	 	 
	
                San
                  Mateo, CA 94403

              	 	 
	 	 	 




        
          
             

          

          
            21

            
              

            

          

          
             

          

        



    

    Exhibit
      A to Escrow, Servicing and Consignment Sale Agreement

    


    Escrow
      Documents

    


    


    Purchase
      Agreement

    


    Transfer
      Statement by Seller in favor of Buyer/Borrower

    


    Loan
      Agreement

    


    Inventory
      Note by Buyer/Borrower in favor of Administrative Agent in the original
      principal amount of $673,479

    


    Term
      Note A by Buyer/Borrower in favor of Administrative Agent in the original
      principal amount of $1,036,000

    


    Term
      Note B by Buyer/Borrower in favor of Administrative Agent in the original
      principal amount of $1,000,000

    


    Term
      Note C by Buyer/Borrower in favor of Administrative Agent in the original
      principal amount of $2,000,000

    


    Term
      Note D by Buyer/Borrower in favor of Administrative Agent in the original
      principal amount of $10,683,997.03

    


    Validity
      Guaranties by each of William Kellagher and Dean Antonis in favor of
      Administrative Agent

    


    Limited
      Recourse Guaranty and Pledge Agreement by AUA in favor of Administrative Agent,
      together with  Stock Certificate No. -00- evidencing 100,000 shares of
      Buyer/Borrower and Irrevocable Proxy and Assignment Separate from Certificate
      by
      AUA

    


    Officer’s
      Closing Certificate by Buyer/Borrower

    


    Secretary’s
      Certificate by Buyer/Borrower

    


    Secretary’s
      Certificate by AUA

    


    Deposit
      Account Control Agreement between Administrative Agent, Buyer/Borrower and
      Amegy
      Bank National Association

    


    



    
      
         

      

      
        22

        
          

        

      

      
         

      

    


    Exhibit
      B to Escrow, Servicing and Consignment Sale Agreement

    


    Form
      of Ace Cash Express / MoneyGram Payment Notification

    


    See
      Attached.

     

     

     

     

    
23