Document:

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PROMISSORY NOTE

					
	 	 	 	 	 
	$368,000.00
	 	Dallas, Texas
	 	March ___, 2007

     FOR VALUE RECEIVED, the undersigned, BRETT FARYNIARZ, an individual (“Maker”), promises to pay
to the order of MBI Financial, Inc., a Nevada corporation (“Payee”), the sum of THREE HUNDRED
SIXTY-EIGHT THOUSAND AND NO/00 DOLLARS ($368,000.00).

     The principal on this note shall be due and payable on March ___, 2008 (the “Maturity Date”).

	1.	 	Payment of the Note. Maker shall pay this note in either cash or by transferring all
or a portion of the Pledged Shares (as defined hereinafter) to Payee, as elected by Maker in a
written notice to Payee given on or before the Maturity Date. For purposes of making payment
with the Pledged Shares pursuant to this subparagraph, each Pledged Share shall be deemed to
have a value of $1.25. If Maker elects to pay this note by transferring all or a portion of
the Pledged Shares, title to the transferred Pledged Shares shall be deemed automatically
transferred to Payee on the Maturity Date, without any act on the part of either Maker or
Payee.
	 
	2.	 	Prepayments. The unpaid principal balance on this note may be prepaid in whole or in
part in cash at any time without premium or penalty.
	 
	3.	 	Security. This note is secured by the shares of the common stock of Payee (the
“Pledged Shares”) described in that certain Pledge Agreement (herein so called) dated as of
even date herewith executed by Maker in favor of Payee.
	 
	4.	 	Events of Default and Remedies. Without notice or demand (which are hereby waived),
the entire unpaid principal balance on this note shall immediately become due and payable in
cash at the option of the holder hereof upon the occurrence of any one or more of the
following events of default (individually or collectively, herein called an “Event of
Default”):

     (a) The failure or refusal of Maker to pay all or any part of the principal on this
note as and when same becomes due and payable in accordance with the terms hereof; or

     (b) Maker shall (i) become insolvent within the meaning of the Bankruptcy Code of the
United States, as amended, (ii) admit in writing his inability to pay or otherwise fail to
pay his debts generally as they become due, (iii) voluntarily seek consent to, or acquiesce
in the benefit or benefits of any Debtor Relief Law, or (iv) be made the subject of any
proceeding provided for by any Debtor Relief Law that could suspend or otherwise affect any
of the rights of the holder hereof. As used herein, “Debtor Relief Laws” means the
Bankruptcy Code of the United States, as amended, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization or similar debtor relief laws from time to time in effect affecting the
rights of creditors generally; or

     (c) The occurrence of a default or event of default under the Pledge Agreement.

     Upon the occurrence of an Event of Default, the holder of this note may (a) offset against
this note any sum or sums owed (whether or not then due) by the holder or its affiliates to Maker
or his affiliates, including, without limitation, the sums owed by MBI Mortgage, Inc., a Texas
corporation and a wholly-owned subsidiary of Payee, to New Horizon Financial, Inc., a California
corporation of which

Promissory Note

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Maker is the sole shareholder, under that certain Secured Promissory Note dated as of July 5,
2006, or any amendment, restatement, modifications, extensions or renewals thereof, (b) foreclose
any or all liens or security interests given to secure the repayment of the indebtedness evidenced
by this note, and (c) proceed to protect and enforce its rights either by suit in equity and/or by
action at law, or by other appropriate proceedings, whether for the specific performance of any
covenant or agreement contained in this note or any document or instrument executed and delivered
by Maker in connection with this note or in aid of the exercise of any power or right granted by
this note or any document or instrument executed and delivered by Maker in connection with this
note or to enforce any other legal or equitable right of the holder of this note. Holder’s act of
foreclosure on the Stock pledged hereunder shall satisfy Maker’s Obligations in full.

	5.	 	Cumulative Rights. No delay on the part of the holder of this note in the exercise
of any power or right under this note, or under any document or instrument executed in
connection herewith, shall operate as a waiver thereof, nor shall a single or partial exercise
of any other power or right. Enforcement by the holder of this note of any security for the
payment hereof shall not constitute any election by it of remedies so as to preclude the
exercise of any other remedy available to it.
	 
	6.	 	Waiver. Maker, and each surety, endorser, guarantor, and other party ever liable for
the payment of any sum of money payable on this note jointly and severally waive demand,
presentment, protest, notice of nonpayment, notice of intention to accelerate, notice of
acceleration, notice of protest, and any and all lack of diligence or delay in collection or
the filing of suit hereon which may occur, and agree that their liability on this note shall
not be affected by any renewal or extension in the time of payment hereof, by any indulgences,
or by any release or change in any security for the payment of this note, and hereby consent
to any and all renewals, extensions, indulgences, releases, or changes, regardless of the
number of such renewals, extensions, indulgences, releases, or changes.
	 
	7.	 	Attorneys’ Fees and Costs. In the event an Event of Default shall occur, and in the
event that thereafter this note is placed in the hands of an attorney for collection, or in
the event this note is collected in whole or in part through legal proceedings of any nature,
then and in any such case Maker promises to pay all costs of collection, including, but not
limited to, reasonable attorneys’ fees incurred by the holder hereof on account of such
collection, whether or not suit is filed.
	 
	8.	 	Notices. Any notice or demand given hereunder shall be deemed to have been given and
received (a) when actually received by the addressee, if delivered in person or by courier or
messenger, or (b) two Business Days (hereinafter defined) after a letter containing such
notice, certified or registered, with postage prepaid, addressed to the addressee, is
deposited in the United States Mail. The address of Maker is 100 Chapparal Court, Suite 100,
Anaheim Hills, California 92808 or such other address as Maker shall advise the holder hereof
by written notice. The address for Payee is 1845 Woodall Rogers, Suite 1225, Dallas, Texas,
75203 or such other address as Payee shall advise Maker hereof by written notice.
	 
	9.	 	Governing Law. This note is being executed and delivered and is intended to be
performed, in the State of Texas, and the laws of such state shall govern the construction,
validity, enforcement and interpretation hereof, except to the extent federal laws otherwise
govern the validity, construction, enforcement and interpretation hereof.
	 
	10.	 	Headings. The headings of the sections of this note are inserted for convenience
only and shall not be deemed to constitute a part hereof.

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	11.	 	Successors and Assigns. All of the covenants, stipulations, promises and agreements
in this note contained by or on behalf of Maker shall bind his heirs, successors and assigns,
whether so expressed or not; provided, however, that Maker may not, without the prior written
consent of the holder hereof, assign any rights, duties, or obligations under this note.
	 
	12.	 	Maximum Interest Rate. Regardless of any provision contained herein, or in any other
document executed in connection herewith, the holder hereof shall never be entitled to
receive, collect or apply, as interest hereon, any amount in excess of the maximum rate of
interest permitted to be charged from time to time by applicable law, and in the event the
holder hereof ever receives, collects or applies, as interest, any such excess, such amount
which would be excessive interest shall be deemed a partial prepayment of the principal hereof
and treated hereunder as such; and, if the principal hereof is paid in full, any remaining
excess shall forthwith be paid to Maker. In determining whether or not the interest paid or
payable, under any specified contingency, exceeds the highest lawful rate, Maker and the
holder hereof shall, to the maximum extent permitted under applicable law, (a) characterize
any nonprincipal payment as an expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) spread the total amount of interest
throughout the entire contemplated term hereof; provided that if the indebtedness evidenced
hereby is paid and performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual period of existence thereof exceeds the maximum
lawful rate, the holder hereof shall refund to Maker the amount of such excess or credit the
amount of such excess against the principal hereof, and in such event, the holder hereof shall
not be subject to any penalties provided by any laws for contracting for, charging, or
receiving interest in excess of the maximum lawful rate.
	 
	13.	 	Business Day; Payments. As used herein, the expression (a) “Business Day” means
every day on which Payee is open for business, and (b) “Nonbusiness Day” means every day which
is not a Business Day. Each payment of the principal on this note shall be due and payable in
lawful money of the United States of America, if paid in cash, in Dallas County, Texas at the
office of Payee, at 1845 Woodall Rogers, Suite 1225, Dallas, Texas 75203, in funds which are
or will be available for immediate use by Payee at such office at or before 1:00 p.m., Dallas
time on the day each payment thereof is due. In any case where a payment of principal is due
on a Nonbusiness Day, Maker shall be entitled to delay such payment until the next succeeding
Business Day.

     THIS NOTE, TOGETHER WITH THE OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED IN
CONNECTION HEREWITH, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

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     IN WITNESS WHEREOF, the undersigned has executed this note as of the day and year first above
written.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Brett Faryniarz
	 	 

Consented and Agreed to:

	 	 	 	 	 
	New Horizon Financial, Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Accepted:	 	 
	 
	 	 	 	 
	MBI Financial, Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

Promissory Note

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PLEDGE AGREEMENT

     THIS PLEDGE AGREEMENT (herein so called) is entered into on March  , 2007 by BRETT
FARYNIARZ (“Pledgor”), in favor of MBI FINANCIAL, INC., a Nevada corporation (“Pledgee”).

W I T N E S E T H

     1. Pledgor is the owner of the capital stock or other ownership interests of the corporation
(the “Issuer”) set forth on Exhibit A attached hereto (all such shares being herein referred to as
the “Pledged Shares”).

     2. Pledgor, as maker, and Pledgee, as payee, have entered into that certain Promissory Note
dated of even date herewith (as amended, supplemented, restated, renewed, or extended from
time-to-time, the “Note”), in which Pledgor promises to pay to the order of Pledgee the original
principal amount of $368,000.00 (the “Loan”).

     3. Pledgor wishes to provide collateral security for the Secured Indebtedness (as hereinafter
defined) in the form of a pledge of the Pledged Collateral (as hereinafter defined), as required by
the Note.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

     SECTION
1. Defined Terms. Capitalized terms used herein which are defined in the Note
shall have the same meanings when used herein unless the context hereof shall otherwise require or
provide. In addition, for the purposes of this Pledge Agreement, the following terms shall have
the respective meanings assigned to them in this Section 1:

     “Code” hall have the meaning assigned to it in Section 7(a) hereof.

     “Collateral Documents” means this Pledge Agreement, UCC-1 Financing Statements, if any, and
other collateral agreements executed in connection herewith and securing payment of the Note.

     “Loan Documents” means the Note, the Collateral Documents, and any agreements, documents (and
with respect to the Note, any modifications, amendments, renewals, extensions, or restatements
thereof), or certificates at any time executed or delivered pursuant to the terms of the Note.

     “Note” shall have the meaning assigned to it in the recitals.

     “Pledged Collateral” shall have the meaning assigned to it in Section 2 hereof.

     “Pledged Shares” shall have the meaning assigned to it in the recitals.

     “Secured Indebtedness” shall mean all indebtedness, obligations, and liabilities described or
referred to in clauses (a) through (d) below:

	 	(a)	 	the Loan;
	 
	 	(b)	 	other obligations of Pledgor under the Note;

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     (c) all fees and expenses, including, without limitation, all reasonable attorneys’ fees and
legal expenses incurred by Pledgee to preserve and maintain the Pledged Collateral, collect the
obligations herein described, and enforce any of the Loan Documents; and

     (d) all extensions, renewals, amendments, and modifications of any of the foregoing.

     SECTION 2. Pledge. As collateral security for the payment and performance of the
Secured Indebtedness, Pledgor hereby pledges, hypothecates, assigns, transfers, sets over, and
delivers unto Pledgee, and hereby grants Pledgee a lien and security interest in, the following:

     (a) the Pledged Shares and the certificates representing the Pledged Shares, and all
cash, securities, dividends, increases, distributions, and profits received therefrom or in
connection therewith, including distributions or payments in partial or complete liquidation
or redemption, or as a result of reclassifications, readjustments, reorganizations, or
changes in the capital structure of the Issuer thereof (provided, however, that, without the
prior written consent of Pledgee, Pledgor shall not participate in any vote authorizing any
such change in the capital structure of the Issuer), and any other property at any time and
from time-to-time received, receivable, or otherwise distributed or delivered to Pledgee,
and all rights and privileges pertaining thereto;

     (b) all securities hereafter delivered to Pledgee in substitution for, or in addition
to, any of the foregoing, all certificates representing or evidencing such securities, and
all cash, securities, instruments, documents, dividends, increases, distributions, and
profits received therefrom, and any other property at any time and from time-to-time
received by, receivable by, or otherwise distributed or delivered to Pledgee in respect of
or in exchange for any or all of the property described;

     (c) all subscriptions, warrants, options, and any other rights issued now or hereafter
by the Issuer of the Pledged Shares or any other person whatsoever upon or in connection
with the Pledged Shares and any part of the Pledged Collateral; and

     (d) all products and proceeds of the foregoing and all general intangibles and contract
rights related thereto, including without limitation, all revenues, distributions,
dividends, property, registration rights, contract rights, and other rights and interests
that Pledgor is, or may hereafter become, entitled to receive on account of any collateral
described in subsections 2(a) through (d);

(all such Pledged Shares, certificates, securities, instruments, documents, dividends, increases,
distributions, profits, intangibles, contract rights, and other property being herein collectively
called the “Pledged Collateral”). Pledgor shall forthwith deliver to Pledgee all subscriptions,
warrants, options, and all such other rights, and upon delivery to Pledgee, Pledgee shall hold such
subscriptions, warrants, options and other rights as additional collateral pledged to secure the
Secured Indebtedness; provided, however, that if Pledgee determines, in its sole discretion, that
the value of any such subscriptions, warrants, options, or other rights shall terminate, expire, or
be materially reduced in value by holding the same as Pledged Collateral, Pledgee shall have the
right (but not the obligation), in its sole discretion after sending written notice to Pledgor, to
sell or exercise the same, and if exercised, then the monies disbursed by Pledgee in connection
therewith shall become part of the Secured Indebtedness and all of the stock, securities, evidences
of indebtedness, and other items so acquired shall become part of the Pledged Collateral;

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     TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles, interests,
privileges, and preferences appertaining to or incidental thereto, unto Pledgee, its successors,
and assigns, forever subject, however, to the terms, covenants, and conditions hereafter set forth.

     SECTION 3. Pledgee as Custodian. Pledgee (or an agent designated by Pledgee) shall
have physical possession of the certificates or instruments representing or evidencing the Pledged
Collateral. Pledgor agrees that either (a) all certificates representing Pledged Shares shall be
registered in the appropriate stock record books in the name of Pledgee or a nominee or nominees of
Pledgee and, in either such case, such registration shall reflect that the registered owner is
acting as agent on behalf of Pledgee, or (b) in lieu of or, at Pledgee’s option, in addition to
presently registering the Pledged Collateral in the name of Pledgee or its nominee as provided in
clause (a) above, Pledgor will deposit with Pledgee, along with the certificates or instruments
representing or evidencing the Pledged Collateral, duly executed stock powers in favor of Pledgee
or its nominee. In addition, Pledgee shall at all times have the right to exchange certificates or
instruments representing or evidencing the Pledged Collateral for certificates or instruments of
smaller or larger denominations for any purpose consistent with its performance of this Pledge
Agreement.

     SECTION 4. Representations and Warranties. Pledgor hereby represents and warrants
that: (a) Pledgor is the sole legal and beneficial owner of the Pledged Collateral free and clear
of all liens, charges, pledges, encumbrances, and security interests of every kind and nature,
other than liens and security interests in favor of Pledgee; (b) each Pledged Share has been
validly authorized, issued, and is fully paid and nonassessable; (c) Pledgor has good right and
lawful authority to pledge the Pledged Collateral in the manner hereby done or contemplated; (d) no
consent or approval of any governmental authority, or of any securities exchange, is necessary to
effect the validity of the rights created hereunder which have not been obtained; (e) except for
any financing statement which may have been filed by Pledgee, no financing statement covering the
Pledged Collateral, or any part thereof, has been filed with any filing officer or office; (f) no
security agreement covering the Pledged Collateral, or any part thereof, has been made and no
security interest, other than the one herein created, has attached or been perfected in the Pledged
Collateral or any part thereof; (g) the execution, delivery, and consummation of this Pledge
Agreement will not violate any law, regulation, mortgage, contract, instrument, judgment, or decree
applicable to or binding on Pledgor; and (h) the information or statements given to Pledgee by
Pledgor in the Loan Documents is true, complete, and accurate in all material respects, and Pledgor
will immediately notify Pledgee of any change in such information. The delivery at any time by
Pledgor to Pledgee of additional Pledged Collateral shall constitute a representation and warranty
by Pledgor that, with respect to such Pledged Collateral and each item thereof, the matters
heretofore warranted in clauses (a) through (h) immediately above are true and correct in all
material respects at, and as if they were made at, the date of such delivery.

     SECTION 5. Covenants.

     (a) Additional Documents and Information. Pledgor covenants and agrees to: (i)
from time-to-time promptly execute and deliver to Pledgee all such stock powers,
assignments, certificates, supplemental writings, financing statements, and other items and
do all other acts or things as Pledgee may reasonably request in order more fully to
evidence and perfect the interest of Pledgee in the Pledged Collateral; (ii) punctually and
properly perform all of Pledgor’s covenants and duties under any other contract of any kind
now or hereafter existing as security for or in connection with payment of the Secured
Indebtedness (to the extent liable thereon) in accordance with the terms hereof; (iii)
promptly furnish Pledgee with any information or writings which Pledgee may reasonably
request concerning the Pledged Collateral, including, without limitation, all material
non-public information; (iv) allow Pledgee to inspect all records of Pledgor relating to the
Pledged Collateral or to the Secured Indebtedness, and to make and take away copies of such
records; (v) promptly notify Pledgee of any material change in any fact or

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circumstance warranted or represented by Pledgor in this Pledge Agreement or in any
other writing furnished by Pledgor to Pledgee in connection with the Pledged Collateral or
the Secured Indebtedness; (vi) promptly notify Pledgee of any claim, action, or proceeding
affecting title to the Pledged Collateral, or any part thereof, or the security interest
therein, and, at the request of Pledgee, appear in and defend, at Pledgor’s expense, any
such action or proceeding; and (vii) promptly, after being requested by Pledgee, pay to
Pledgee the amount of all reasonable expenses, including reasonable attorneys’ fees and
other legal expenses, incurred by Pledgee in perfecting, maintaining, and enforcing the
security interest.

     (b) Proceeds. Should the Pledged Collateral, or any part thereof, ever be in
any manner converted by the Issuer into another type of property, or any money or other
proceeds ever be paid or delivered to Pledgor as a result of Pledgor’s rights in the Pledged
Collateral, then, in any such event, all such property, money, and other proceeds, except
only ordinary cash dividends (unless and until payable to Pledgee pursuant to Section 6(c)
hereof), shall become part of the Pledged Collateral and shall be delivered to Pledgee by
Pledgor.

     (c) Performance by Pledgee. Should any covenant, duty, or agreement of Pledgor
fail to be performed in accordance with its terms hereunder, Pledgee may, but shall never be
obligated to, perform or attempt to perform such covenant, duty, or agreement on behalf of
Pledgor, and any amount expended by Pledgee in such performance or attempted performance
shall become a part of the Secured Indebtedness. At the request of Pledgee, Pledgor agrees
to pay such amount promptly to Pledgee at Pledgee’s office in Dallas, Texas.

     (d) Negative Covenants. Pledgor covenants and agrees that, without the prior
written consent of Pledgee, Pledgor will not: (i) sell, assign, or transfer any rights of
Pledgor in the Pledged Collateral; (ii) grant any options or other rights in the Pledged
Collateral; or (iii) create any other lien or security interest in, mortgage, or otherwise
encumber the Pledged Collateral, or any part thereof, or permit the same to be or become
subject to any lien, attachment, execution, sequestration, other legal or equitable process,
or any encumbrance of any kind or character, except the security interest herein created.

     SECTION 6. Voting Rights, Dividends, Etc., Prior to Default.

     (a) Rights Prior to Default. So long as no Event of Default shall have
occurred after the date hereof and be continuing, and Pledgee shall not have given written
notice to Pledgor of its intention to foreclose upon or otherwise dispose of the Pledged
Collateral, or to exercise its voting rights, if any, pertaining to the Pledged Collateral:

     (i) Pledgor shall be entitled to exercise any and all voting and/or consensual rights
and powers relating or pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement; provided, however, that
Pledgor shall not exercise or refrain from exercising any such right or power if such action
would have a material adverse effect on the value of the Pledged Collateral or any part
thereof.

     (ii) Pledgee shall execute and deliver (or cause to be executed and delivered) to
Pledgor all such proxies, powers of attorney, dividend orders, and other instruments as
Pledgor may request for the purpose of enabling Pledgor to exercise the voting and/or
consensual rights and powers which it is entitled to exercise pursuant to subsection (i)
above.

     (b) Termination of Rights. Upon (i) the occurrence of an Event of Default, and
(ii) the giving of written notice by Pledgee to Pledgor of its intention to (A) foreclose
upon or otherwise dispose of the Pledged Collateral or (B) exercise its voting rights, if
any, pertaining to

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the Pledged Collateral, all rights of Pledgor to exercise the voting and/or consensual
rights and powers which it may be entitled to exercise pursuant to Section 6(a)(i) hereof
shall cease, at the option of Pledgee, and all such rights shall thereupon become vested in
Pledgee, who shall have the sole and exclusive right and authority to exercise such voting
and/or consensual rights. Further, Pledgee shall have the right, at any time after the
occurrence of an Event of Default, to notify and direct the Issuer of the Pledged Collateral
to thereafter make all payments, dividends, and any other distributions payable in respect
thereof directly to Pledgee. The Issuer of the Pledged Collateral making any such payment
or distribution to Pledgee hereunder shall be fully protected in relying on the written
statement of Pledgee that it then holds a security interest which entitles it to receive
such payments and distributions. Any and all money and other property paid over to or
received by Pledgee pursuant to the provisions of this subsection (b) shall be retained by
Pledgee as additional collateral hereunder and may be applied (and upon Pledgor’s written
request all cash shall promptly be applied) in accordance with the provisions hereof.

     (c) Dividends. Upon the occurrence and during the continuance of an Event of
Default, all cash dividends, returns of capital, or other distributions made on or in
respect of the Pledged Collateral, whether resulting from a subdivision, combination, or
reclassification of the outstanding capital stock or other ownership interests of the Issuer
thereof, received in exchange for the Pledged Collateral or any part thereof, or as a result
of any merger, consolidation, acquisition, or other exchange of assets to which the Issuer
may be a party or otherwise, and any and all cash and other property received in exchange
for the Pledged Collateral, or received in payment of the principal of or in redemption of
the Pledged Collateral, shall be paid or delivered to Pledgee.

     SECTION 7. Rights and Remedies of Pledgee Upon and After Default.

     (a) Remedies. Upon the occurrence of an Event of Default, in addition to any
and all other rights and remedies which Pledgee may then have hereunder, under the Note,
under other contracts or agreements between Pledgor and Pledgee, under applicable law, or
under the Uniform Commercial Code as in effect in the State of Texas (hereinafter called
“Code”), or otherwise, Pledgee may, at its option: (i) declare the entire unpaid balance of
principal on the Secured Indebtedness immediately due and payable, without written notice of
demand, notice of intent to accelerate, notice of acceleration, or presentment, all of which
are hereby waived; (ii) reduce its claim to judgment, foreclose, or otherwise enforce its
security interest in all or any part of the Pledged Collateral by any available judicial
procedure; (iii) after notification, if any, expressly provided for herein, sell or
otherwise dispose of, at the office of Pledgee or elsewhere, as chosen by Pledgee, all or
any part of the Pledged Collateral, and any such sale or other disposition may be as a unit
or in parcels, by public or private proceedings, and by way of one or more contracts (it
being agreed that the sale of any part of the Pledged Collateral shall not exhaust Pledgee’s
power of sale, but sales may be made from time to time until all of the Pledged Collateral
has been sold or until the Secured Indebtedness has been paid in full; provided, however
that Pledgee shall have no obligation to sell the Pledged Collateral piecemeal, it being
specifically acknowledged that a sale of all of the Pledged Collateral to one purchaser in a
single transaction shall be conclusively presumed to be commercially reasonable), and at any
such sale it shall not be necessary to exhibit the Pledged Collateral; (iv) at its
discretion, retain the Pledged Collateral in satisfaction of the Secured Indebtedness
whenever the circumstances are such that Pledgee is entitled to do so under the Code; (v)
purchase the Pledged Collateral at any public sale in accordance with the Code; (vi)
purchase the Pledged Collateral at any private sale in accordance with the Code; and (vii)
exercise the rights set forth in Section 7 hereof in accordance with the Code.

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     (b) Sale of Pledged Collateral. Pledgee is authorized at any sale of the
Pledged Collateral, if it deems it advisable, to restrict the prospective bidders or
purchasers to those persons who will represent and agree that they are purchasing for their
own account, for investment, and not with a view to distribution or sale of any of the
Pledged Collateral. Upon any such sale, Pledgee shall have the right to deliver, assign,
and transfer to the purchaser thereof the Pledged Collateral so sold. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right of whatsoever
kind, including any equity or right of redemption of Pledgor which hereby specifically
waives, to the fullest extent permitted by applicable law, all rights of redemption, stay,
or appraisal which it has or may have under any rule of law or statute now existing or
hereafter adopted, and such waiver shall be deemed to have been made after default. Pledgee
shall give Pledgor ten (10) days’ written notice of its intention to make any such public or
private sale or sale at broker’s board or on a securities exchange. Such notice, in case of
sale at broker’s board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Pledged Collateral, or that portion
thereof so being sold, which will first be offered for sale at such board or exchange.
Pledgee shall have no obligation to disclose or provide any information concerning the
Issuer or the Pledged Collateral to prospective purchasers of the Pledged Collateral other
than information in its possession at such time, and Pledgor agrees and acknowledges that it
shall be commercially reasonable for any notices of any such sale, published or otherwise,
to specifically so state. At any such sale the Pledged Collateral may be sold in one lot as
an entirety or in separate parcels, as Pledgee may elect, and any such election shall be
presumed to be commercially reasonable. Pledgee shall not be obligated to make any such
sale pursuant to any such notice. Pledgee may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned. In case of any sale of all or any part of the Pledged
Collateral on credit or for future delivery, the Pledged Collateral so sold may be retained
by Pledgee until the selling price is paid by the purchaser thereof, but Pledgee shall not
incur any liability in case of the failure of such purchaser to take and pay for the Pledged
Collateral so sold, and, in case of any such failure, such Pledged Collateral may again be
sold upon like notice. Pledgee may also, at its discretion, proceed by a suit or suits at
law or in equity to foreclose the pledge and sell the Pledged Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent jurisdiction. If any
consent, approval, or authorization of any state, municipal, or other governmental
department, agency, or authority should be necessary to effectuate any sale or other
disposition of the Pledged Collateral, or any partial disposition of the Pledged Collateral,
Pledgor will execute all such applications and other instruments as may be required in
connection with securing any such consent, approval, or authorization, and will otherwise
use his best efforts to secure the same.

     (c) Possible Restrictions on Sale of Pledged Collateral. Because of the
Securities Act of 1933, as amended (the “Securities Act”), or any other applicable laws or
regulations, there may be legal restrictions or limitations affecting Pledgee in any
attempts to dispose of certain portions of the Pledged Collateral in the enforcement of its
rights and remedies hereunder. For these reasons Pledgee is hereby authorized by Pledgor,
but not obligated, in the event of any Event of Default hereunder giving rise to Pledgee’s
rights, to sell or otherwise dispose of the Pledged Collateral, and after the giving of any
notices required herein, to sell all or any part of the Pledged Collateral at a private
sale, subject to an investment letter or in any other manner which will not require the
Pledged Collateral, or any part thereof, to be registered in accordance with the Securities
Act, , or other applicable rules and regulations promulgated thereunder, or any other law or
regulation, at the best price reasonably obtainable by Pledgee at any such private sale or
other disposition in the manner mentioned above, and Pledgor specifically acknowledges that
any such disposition shall be commercially reasonable under the Code. Pledgee is also
hereby

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6

 

authorized by Pledgor, but not obligated, to take such actions, give such notices,
obtain such consents, and do such other things as Pledgor may deem required or appropriate
in the event of a sale or disposition of any of the Pledged Collateral. Pledgor clearly
understands that Pledgee may at its discretion approach a restricted number of potential
purchasers and that a sale under such circumstances may yield a lower price for the Pledged
Collateral, or any part or parts thereof, than would otherwise be obtainable if same were
registered and sold in the open market. Pledgor agrees (i) in the event Pledgee shall, upon
an Event of Default hereunder, sell the Pledged Collateral, or any portion thereof, at such
private sale or sales, Pledgee shall have the right to rely upon the advice and opinion of
any member firm of a National Security Exchange (as defined in the Securities Exchange Act
of 1934) or other business or stock valuation company as to the best price reasonably
obtainable upon such private sale thereof, and (ii) that such reliance shall be conclusive
evidence that Pledgee handled such matter in a commercially reasonable manner under the
Code.

     (d) Notification. Reasonable notification of the time and place of any public
sale of the Pledged Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Pledged Collateral is to be made, shall be
sent to Pledgor and to any other person entitled under the Code to notice; provided, that if
the Pledged Collateral threatens to decline quickly in value or is of a type customarily
sold on a recognized market, Pledgee may sell or otherwise dispose of the Pledged Collateral
without notification, advertisement, or other notice of any kind. It is agreed that notice
sent or given not less than ten calendar days prior to the taking of the action to which the
notice relates is reasonable notification and notice for the purpose of this Pledge
Agreement.

     (e) Application of Proceeds; No Deficiency. Upon the maturity of any
instrument evidencing the Secured Indebtedness or any part thereof, whether such maturity be
by such terms of such instruments or through the exercise of any power of acceleration,
Pledgee is authorized and empowered to apply any and all funds realized from the sale of the
Pledged Collateral not previously credited against the Secured Indebtedness first, toward
the payment of the costs, charges, and expenses, if any, incurred in the collection of such
funds hereunder, and then, toward the payment (in such order as Pledgee shall elect) of the
Secured Indebtedness, and shall pay any balance remaining to Pledgor or as prescribed by the
Code. However, in no case shall there be a deficiency held against Pledgor under Pledgee’s
power of sale hereunder because foreclosure on the Pledged Collateral shall satisfy the
Secured Indebtedness in full.

     (f) Notices. In the event that any notice is required to be given to Pledgor
with respect to any sale or liquidation of the Pledged Collateral, any notice addressed to
Pledgor at the address set forth in Section 12(g) below, postage prepaid, deposited in the
United States mail ten (10) days prior to the date of any such intended action shall be
deemed to be a sufficient and commercially reasonable notice. Nothing contained herein shall
prevent Pledgee from giving notice in any other manner which is considered reasonable.

     SECTION 8. Authority of Pledgee. Pledgee shall have and be entitled to exercise all
such powers hereunder as are specifically delegated to Pledgee by the terms hereof, together with
such powers as are reasonably incidental thereto. Pledgee may execute any of its duties hereunder
by or through sub-agents or employees and shall be entitled to retain counsel and to act in
reliance upon the advice of such counsel concerning all matters pertaining to said duties. Pledgee
and any affiliate, director, officer, or employee of Pledgee shall not be liable for any action
taken or omitted to be taken by them or any of them hereunder or in connection herewith, except for
their own gross negligence or willful misconduct; nor shall Pledgee be responsible for the
validity, effectiveness, or sufficiency hereof or of any document or security furnished pursuant
hereto or in connection herewith. Pledgee shall be entitled to rely on any communication,
instrument, or document believed by it to be genuine and correct and to have been signed

Pledge Agreement

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or sent by the proper person or persons. Pledgor hereby agrees to reimburse Pledgee, on
demand, for all reasonable expenses incurred by it in connection with the administration and
enforcement of this Pledge Agreement and agrees to indemnify and hold harmless Pledgee from and
against any and all liability incurred by it hereunder or in connection herewith, unless such
liability shall be due to willful misconduct or gross negligence on the part of Pledgee. Other
than the exercise of reasonable care in the physical custody of the Pledged Collateral while held
by Pledgee, Pledgee shall have no responsibility for or obligation or duty with respect to all or
any part of the Pledged Collateral or any matter or proceeding arising out of or relating thereto,
including, without limitation, any obligation or duty to collect any sums due in respect thereof or
to protect or preserve any rights against prior parties or any other rights pertaining thereto, it
being understood and agreed that Pledgor shall be responsible generally for the preservation of all
rights in the Pledged Collateral. Without limiting the generality of the foregoing, Pledgee shall
be conclusively deemed to have exercised reasonable care in the custody of the Pledged Collateral
if Pledgee takes such action, for purposes of preserving rights in the Pledged Collateral, as
Pledgor may reasonably request in writing, but no failure or omission or delay by Pledgee in
complying with any such request by Pledgor, and no refusal by Pledgee to comply with any such
request by Pledgor, shall be deemed to be a failure to exercise reasonable care.

     SECTION 9. Pledgee Appointed Attorney-in-Fact. Pledgor hereby appoints Pledgee
Pledgor’s attorney-in-fact for the purpose of carrying out the provisions of this Pledge Agreement
and taking any action and executing any instrument which Pledgee may deem reasonably necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, upon the occurrence and during the
continuance of an Event of Default, Pledgee shall have the right and power, except and to the
extent otherwise provided in Section 6(a)(ii), to receive, endorse, and collect all checks and
other orders for the payment of money made payable to Pledgor representing any dividend or other
distribution payable or distributable in respect of the Pledged Collateral, or any part thereof,
and to give full discharge for the same.

     SECTION 10. Certain Rights Before and After an Event of Default.

     (a) Pledgee’s Responsibility for Pledged Collateral. Pledgee shall have no
duty to fix or preserve rights against prior parties to the Pledged Collateral, and shall
never be liable (except for its own gross negligence or willful misconduct) for its failure
to use diligence to collect any amount payable with respect to the Pledged Collateral, but
shall be liable only to account to Pledgor for what it may actually collect or receive
thereon.

     (b) Financing Statement. Pledgee shall have the right at any time to execute
and file this Pledge Agreement as a financing statement, but the failure of Pledgee to do so
shall not impair the validity or enforceability of this Pledge Agreement.

     (c) Maximum Interest. Regardless of any provision contained herein, or in any
other document executed in connection herewith, Pledgee shall never be entitled to receive,
collect or apply, as interest, any amount in excess of the maximum rate of interest
permitted to be charged from time to time by applicable law, and in the event Pledgee ever
receives, collects or applies, as interest, any such excess, such amount which would be
excessive interest shall be deemed a partial prepayment of the principal and treated
hereunder as such; and, if the principal is paid in full, any remaining excess shall
forthwith be paid to Pledgor. In determining whether or not the interest paid or payable,
under any specified contingency, exceeds the highest lawful rate, Pledgor and Pledgee shall,
to the maximum extent permitted under applicable law, (a) characterize any nonprincipal
payment as an expense, fee, or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) spread the total amount of interest throughout
the entire contemplated term of the Loan; provided that if the indebtedness is paid and
performed in full prior to the end of the full contemplated term thereof, and if the
interest

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8

 

received for the actual period of existence thereof exceeds the maximum lawful rate,
Pledgor shall refund to Pledgee the amount of such excess or credit the amount of such
excess against the principal, and in such event, Pledgee shall not be subject to any
penalties provided by any laws for contracting for, charging, or receiving interest in
excess of the maximum lawful rate.

     (d) Disclosure. Pledgee is granted the right to discuss Pledgor’s affairs,
finances, and accounts with all parties to such degree as Pledgee deems necessary or
advisable to protect its security interest and/or the repayment of the indebtedness secured
hereby. Pledgor covenants to do all things necessary or appropriate to permit Pledgee to
fully exercise its rights under this paragraph.

     (e) Deposit of Proceeds. Except as expressly prescribed above, all payments
received by Pledgee with respect to the Pledged Collateral shall, at Pledgee’s option, be
deposited in a special interest bearing account at a bank (which may be, but need not be, a
trust account or escrow account maintained at Pledgee) to be designated by Pledgee in the
name of Pledgee styled “Collateral Account.” Funds in said account are hereby assigned to
Pledgee and shall be impressed with a lien to secure the Secured Indebtedness, and shall be
applied by Pledgee as provided for above.

     (f) Payment of Expenses. At Pledgee’s option, Pledgee may (but shall not be
obligated to) discharge taxes, liens, and interest, perform or cause to be performed, for
and on behalf of Pledgor, any actions and conditions, obligations, or covenants which
Pledgor has failed or refused to perform, and may pay for the repair, maintenance, or
preservation of any of the Pledged Collateral, and all sums so expended, including, but not
limited to, reasonable attorneys’ fees, court costs, agents’ fee or commissions, or any
other costs or expenses, shall become part of the Secured Indebtedness, shall bear interest
from the date of payment at the rates provided in the Note, shall be payable at the place
designated for payment of the Secured Indebtedness, and shall be secured by this Pledge
Agreement.

     SECTION 11. Miscellaneous.

     (a) Terms Commercially Reasonable. The terms of this Pledge Agreement shall be
deemed commercially reasonable within the meaning of the Code in effect and applicable
hereto.

     (b) Headings. The headings of articles and sections herein are inserted only
for convenience and shall in no way define, describe, or limit the scope or intent of any
provision of this Pledge Agreement.

     (c) Amendments. No change, amendment, modification, cancellation, or discharge
of any provision of this Pledge Agreement shall be valid unless consented to in writing by
the party or parties against whom enforcement is being sought.

     (d) Assignment of Pledgee’s Rights. Pledgee shall have the right to assign all
or any portion of its rights under this Pledge Agreement to any subsequent holder or holders
of the Secured Indebtedness.

     (e) Parties in Interest. As and when used herein, the term “Pledgor” shall
mean and include Pledgor herein named and his heirs, successors and permitted assigns, and
the term “Pledgee” shall mean and include Pledgee herein named and its successors and
assigns, and all covenants and agreements herein shall be binding upon and inure to the
benefit of Pledgor and

Pledge Agreement

9

 

Pledgee and their respective successors and assigns, provided that Pledgor, without the
prior written consent of Pledgee, shall have no right to assign his rights hereunder to any
other Person.

     (f) Applicable Laws. THIS PLEDGE AGREEMENT AND ALL ISSUES AND CLAIMS ARISING
IN CONNECTION WITH OR RELATING TO THE PLEDGED COLLATERAL OR THE SECURED INDEBTEDNESS,
INCLUDING BUT WITHOUT LIMITATION, ALL CONTRACT, TORT, EQUITY, OR OTHER CLAIMS OR
COUNTERCLAIMS SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS (WITHOUT CONSIDERATION OF ITS CONFLICTS OF LAWS RULES) AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. If any provision of this Pledge Agreement is held to be invalid
or unenforceable, the validity and enforceability of the other provisions of this Pledge
Agreement shall remain unaffected.

     (g) Notices. Any notices or other communications required or permitted to be
given by this Pledge Agreement or any other documents and instruments referred to herein
must be given in accordance with Section 8 of the Note, to the address of such party as
follows:

	 	 	 	 	 
	 

	 	If to Pledgee:
	 	MBI Financial, Inc.
	 

	 	 	 	1845 Woodall Rogers, Suite 1225
	 

	 	 	 	Dallas, Texas 75203
	 

	 	 	 	Attention: President
	 
	 	 	 	 
	 

	 	If to Pledgor:
	 	100 Chapparal Court, Suite 100
	 

	 	 	 	Anaheim Hills, California 92808

     (h) Obligations Absolute. All rights and remedies of Pledgee hereunder, and
all obligations of Pledgor hereunder, shall be absolute and unconditional irrespective of:

     (i) any lack of validity or enforceability of the Note or any of the other Loan
Documents or any other agreement or instrument relating to any of the foregoing;

     (ii) any change in the time, manner, or place of payment of, or in any other term of,
all or any of the Secured Indebtedness, or any other amendment or waiver of or any consent
to any departure from the Note or any of the other Loan Documents; or

     (iii) any exchange, release, or nonperfection of any interest in any Pledged
Collateral, or any release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Secured Indebtedness.

     (i) Counterparts. This Pledge Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument, and in making proof of this Pledge Agreement it
shall not be necessary to produce or account for more than one such counterpart.

     (j) ENTIRETY. THIS PLEDGE AGREEMENT AND THE NOTE EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG PLEDGOR AND PLEDGEE WITH RESPECT TO THE PLEDGE AND ASSIGNMENT OF THE PLEDGED
COLLATERAL AND THE OTHER MATTERS ADDRESSED HEREIN AND THEREIN, AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,

Pledge Agreement

10

 

RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

     (k) WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, PLEDGOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR THE ACTIONS OF PLEDGEE IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.

     (l) Waiver of Certain Claims. Pledgor hereby waives any right or claim to
consequential or punitive damages arising out of or relating to this Pledge Agreement or any
of the other Loan Documents or the transactions contemplated hereby or thereby, or the
actions of Pledgee in the negotiation, administration, or enforcement hereof or thereof.

     (m) WAIVER OF NOTICE AND HEARING. PLEDGOR HEREBY WAIVES ANY AND ALL RIGHTS IT
MAY HAVE TO NOTICE OR HEARING PRIOR TO SEIZURE BY PLEDGEE OF THE PLEDGED COLLATERAL, WHETHER
BY WRIT OF POSSESSION OR OTHERWISE.

     EXECUTED as of the date first above stated.

	 	 	 	 	 
	 

	 	PLEDGOR:	 	 
	 
	 	 	 	 
	 

	 	 

Brett Faryniarz
	 	 

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11

 

EXHIBIT A

PLEDGED SHARES

	 	 	 	 	 	 	 	 	 
	Name of Entity	 	Class	 	Number of Shares
	MBI Financial, Inc.
	 	common stock	 	 	294,400	 

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12

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