Document:

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EXHIBIT 10.2

SECURED PROMISSORY NOTE

	 	 	 
	$1,254,497.30

	 	June 30, 2006

     FOR VALUE RECEIVED, the undersigned, MBI Mortgage, Inc., a Texas corporation (“Maker”), hereby
promise to pay to the order of New Horizons Financial, Inc., a California corporation (“Payee”), at
100 Chaparral Ct. Suite 100, Anaheim Hills, California 92808, or at such other location as directed
by Payee, in lawful money of the United States of America, the principal sum of ONE MILLION TWO
HUNDRED FIFTY FOUR THOUSAND FOUR HUNDRED NINETY SEVEN and 30/100 Dollars ($1,254,497.30) (“Note”)
or as much as may be outstanding hereunder. This Note is given in conjunction with the Agreement
for Sale and Purchase of Assets (“Agreement”) among MBI Mortgage, New Horizons Financial, Inc. and
Brett Faryniarz dated June 30, 2006.

     The principal balance hereunder shall not bear interest prior to default or maturity. Payments
will be made as follows: TWO-HUNDRED THOUSAND and NO/100 Dollars ($200,000.00) on December 1,
2006, April 5, 2007, July 5, 2007, October 5, 2007, January 5, 2008 and April 5 2008; one payment
of THREE THOUSAND TWO HUNDRED FIVE and 73/100 Dollars ($3,205.73) to be paid on June 30, 2006; and
monthly payments of SIX THOUSAND FOUR HUNDRED ELEVEN and 45/100 Dollars ($6,411.45) to be paid on
or before the sixteenth day of each month commencing upon July 16, 2006 to and including February
16, 2007. If Maker, or Maker’s parent or any affiliate, closes on any “funding transaction”, or
series of transactions within a rolling 12 month period, equal to or in excess of $10,000,000 prior
to April 5, 2008, any remaining balance on above obligation shall be paid upon the demand of the
Payee. Upon April 5, 2008, in the event Maker, or Maker’s parent or any affiliate, fails to close
on any funding transaction, or series of transactions within a rolling 12 month period, equal to or
in excess of $10,000,000, then Maker shall pay a prorated portion (based on the difference between
$10,000,000 and the amount acquired pursuant to such funding transactions) of the remaining balance
on the above obligation upon the demand of Payee. For purposes of this Note, “funding transaction”
shall mean any debt or equity placement, and/or proceeds from any asset or stock sale, as well as
any recapitalization. Maker must provide holder five (5) business days notice prior to the close
of any funding transaction that will cause this threshold to be met, along with information as to
when to submit an escrow demand if desired by the holder.

     The outstanding principal balance hereof shall bear interest after default or maturity at the
Default Rate (hereinafter defined).

     Interest on the indebtedness evidenced by this Note shall be computed on the basis of a year
of 360 days and the actual number of days elapsed (including the first day but excluding the last
day) unless such calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be.

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     As used in this Note, the following terms shall have the respective meanings indicated
below:

     “Default Rate” means the rate per annum equal to the lesser of (i) the Wall Street
Journal prime rate as quoted in the money rates section of the Wall Street Journal which is
also the base rate on corporate loans at large United States money center commercial banks
as its prime commercial or similar reference interest rate plus eight percent, with
adjustments to be made on the same date as any change in the rate and (ii) the Maximum
Rate.

     “Maximum Rate” means the maximum rate of nonusurious interest permitted from day to
day by applicable law, and as the same may be amended hereafter, but otherwise without
limitation, that rate based upon the “indicated rate ceiling” and calculated after taking
into account any and all relevant fees, payments, and other charges in respect of this Note
which are deemed to be interest under applicable law.

     This Note is a secured obligation as set forth in that certain Security Agreement (the
“Security Agreement”) between Payee and Maker, incorporated herein by this reference and
concurrently executed and delivered herewith, or in any related agreements (collectively with this
Note, the “Agreements”). The security for this Note, upon written request by Maker to Payee, shall
be reasonably subordinated to the secured obligations of certain third-party investors, which
provide acquisition financing that shall be used by Maker, in part, to satisfy the obligations set
forth herein. For purposes of this paragraph, the security for this Note shall be reasonably
subordinated to the secured obligations of certain third-party investors providing acquisition
financing to Maker if such financing provides payment to Payee, as partial satisfaction of the
obligations set forth herein, on a pro rata basis (based on the difference between $10,000,000 and
the amount acquired pursuant to such financing).

     Notwithstanding anything to the contrary contained herein, no provisions of this Note shall
require the payment or permit the collection of interest in excess of the Maximum Rate. If any
excess of interest in such respect is herein provided for, or shall be adjudicated to be so
provided, in this Note or otherwise in connection with this loan transaction, the provisions of
this paragraph shall govern and prevail, and neither Maker nor the sureties, guarantors,
successors, or assigns of Maker shall be obligated to pay the excess amount of such interest, or
any other excess sum paid for the use, forbearance or detention of sums loaned pursuant hereto. If
for any reason interest in excess of the Maximum Rate shall be deemed charged, required or
permitted by any court of competent jurisdiction, any such excess shall be applied as a payment and
reduction of the principal of indebtedness evidenced by this Note; and, if the principal amount
hereof has been paid in full, any remaining excess shall forthwith be paid to Maker. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, Maker and Payee shall, to the
extent permitted by applicable law, (i) characterize any non-principal payment as an expense, fee,
or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the entire contemplated term of the indebtedness evidenced by this Note so that
the interest for the entire term does not exceed the Maximum Rate.

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     If default occurs in the payment of principal or interest under this Note, or if Maker
breaches, defaults or refuses to perform fully on Maker’s obligations or liabilities under the
Agreements, the holder hereof may, at its option, declare the entire unpaid principal of and
accrued interest on this Note immediately due and payable without notice, demand or presentment,
including, without limitation, notice of intention to accelerate, all of which are hereby waived,
and upon such declaration, the same shall become and shall be immediately due and payable, and the
holder hereof shall have the right to foreclose or otherwise enforce all liens or security
interests securing payment hereof, or any part hereof, and offset against this Note any sum or sums
owed by the holder hereof to Maker. The holder shall also have the right to rescind as described in
the Agreement (the “Rescission Right”). The failure to exercise the option to accelerate the
maturity of this Note upon the happening of any one or more of the Events of Default hereunder
shall not constitute a waiver of the right of the holder of this Note to exercise the same or any
other remedy option, including but not limited to the Rescission Right or security interests, at
that time or at any subsequent time with respect to such uncured default or any other event of
default hereunder or under any instrument securing, governing, guaranteeing or evidenced by this
Note. The remedies of the holder hereof, as provided in this Note and in any instrument securing,
governing, guaranteeing or evidencing the loan evidenced hereby, shall be cumulative and concurrent
and may be pursued separately, successively or together as often as occasion therefor shall arise,
at the sole discretion of the holder hereof. The acceptance by the holder hereof of any payment
under this Note which is less than the payment in full of all amounts due and payable at the time
of such payment shall not (i) constitute waiver of or impair, reduce, release or extinguish any
remedy of the holder hereof or the rights of the holder hereof to exercise the foregoing remedy
option or any other options granted to the holder or any other party in this Note or under any
other instrument securing, governing, guaranteeing, or evidencing the loan evidenced hereby, at
that time or at any subsequent time, or nullify any prior exercise of any such option, or (ii)
impair, reduce, release, extinguish or adversely affect the obligations of any party liable under
such documents as originally provided therein.

     If the holder hereof expends any effort in any attempt to enforce payment of all or any part
or installment of any sum due the holder hereunder, or if this Note is placed in the hands of an
attorney for collection, or if it is collected through any legal proceedings, Maker agree to pay
all collection costs and fees incurred by the holder, including all reasonable attorneys’ fees.

     This Note shall be governed by and construed in accordance with the laws of the State of
California and the applicable laws of the United States of America.

     Maker and each surety, guarantor, endorser, and other party ever liable for payment of any
sums of money payable on this Note jointly and severally waive notice, presentment, demand for
payment, protest, notice of protest and non-payment or dishonor, notice of acceleration, notice of
intent to accelerate, notice of intent to demand, diligence in collecting, grace, and all other
formalities of any kind, and consent to all extensions without notice for any period or periods of
time and partial payments, before or after maturity, and any impairment of any collateral securing
this Note, all without prejudice to the holder. The holder shall similarly have the right to deal
in any way, at any time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of said indebtedness,
or to release or substitute part or all of the collateral securing this Note, or to grant any other
indulgences or forbearances whatsoever, without notice to any other party and without in any way
affecting the personal liability of any party hereunder.

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     Notwithstanding any other provision of this Note, Payee shall be entitled to avail itself of
any and all remedies set forth in the Agreement, in addition to all remedies set forth in this
Note. All remedies are cumulative, provided, however, that if Payee elects the Rescission Right,
this shall be Payee’s sole and exclusive remedy.

     NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS
RELATING TO THE INDEBTEDNESS EVIDENCED BY THIS NOTICE
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH 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 ORAL AGREEMENTS OF THE PARTIES RELATING TO THE INDEBTEDNESS EVIDENCED BY THIS
NOTE.

	 	 	 	 	 
	MBI Mortgage, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ John M Farkas	 	 
	 

	 	 	 	 
	Name:

	 	John M Farkas	 	 
	Title:

	 	President	 	 

4exv10w3

 

EXHIBIT 10.3

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the “Agreement”) is entered into as of the 30th day of June, 2006 by and
between MBI Mortgage, Inc., a Texas corporation (“Debtor”) and New Horizons Financial, Inc., a
California corporation (“Secured Party”).

RECITALS

     WHEREAS, concurrently herewith, Debtor and Secured Party have entered into those Certain
Agreements and Notes (collectively “Note”), pursuant to which Secured Party agrees to provide to
Debtor financing secured by Debtor’s items of personal property to the benefit of Secured Party.

     WHEREAS, the loan and performance requirements provided to Debtor through the Note and
Agreements will provide significant benefit to Debtor, and Debtor has agreed to pledge the items of
personal property purchased with the proceeds and performance requirements, as well as other
property, as collateral for all amounts outstanding from time to time under the Note and
performance required under the Agreements.

     WHEREAS, Debtor has entered into this Agreement to pledge to Secured Party as collateral
certain items of personal property and revenues from said personal property as the terms and
conditions of such pledge.

     NOW, THEREFORE, the parties hereto agree as follows:

1. Security Interest.

     (a) Debtor hereby grants to and creates in favor of the Secured Party, a security interest in,
and hereby assigns and pledges to the Secured Party, all of Debtor’s right, title and interest in
and to the following:

	 	(i)	 	all personal property of the business acquired from Secured
Party pursuant to the Agreement for Sale and Purchase of Assets, dated June 30,
2006, by and among Debtor, Secured Party, and Brett Faryniarz (the “Acquired
Business”);
	 
	 	(ii)	 	any and all revenues relating to or arising from the use of the
personal property mentioned in (i) above, including but not limited to any and
all payments from Secured Party to any of Debtors; and
	 
	 	(iii)	 	along with all additions, substitutions, attachments,
replacements, and accessions thereof, plus the proceeds of all the foregoing
including amounts payable under any insurance policy.

     (b) The above listed items, and all their fixtures, features, and/or accessories whether now
present or hereafter acquired are hereby pledged and collectively referred to hereafter as the
“Collateral.”

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2. Security for Obligations. The security interest granted to the Secured Party in the
Collateral and the assignment of the Collateral to the Secured Party have been made herein for
purposes of securing the performance of all obligations of the Debtor under the Note and this
Agreement, hereinafter referred to as the “Obligations”.

3. Representations and Warranties. Debtor hereby represents and warrants as follows:

     (a) Debtor has the requisite authority to grant the security interest in, and assign, the
Collateral to the Secured Party in the manner provided herein; Debtor has taken all necessary
action to authorize the execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Debtor, enforceable in accordance with its
terms;

     (b) Upon due filing or recording of financing statements in the appropriate jurisdiction and
filing records or taking possession of such portions of the Collateral as shall be required to
perfect security interest therein according to applicable law, this Agreement creates a valid and
perfected first priority security interest in all of the Collateral and secures the performance of
the Obligations; all filings, notices and other actions necessary or desirable to perfect and
protect such security interests have been duly taken. Secured Party shall retain a first position
lien against all of the Collateral, but Secured Party hereby agrees to reasonably subordinate its
lien to second position in the event that Debtor provides written notice that a potential
third-party investor or commercial lender of Debtor requires first position against the Collateral
in order to secure Debtor’s obligations associated with acquisition financing that shall be used by
Debtor, in part, to satisfy the Obligations. For purposes of this Section 3(b), Secured Party
agrees to execute any and all documents necessary to subordinate its lien to that of a potential
third-party investor or commercial lender providing Debtor with acquisition financing, if such
financing provides Secured Party with payment, on a pro rata basis (based on the difference between
$10,000,000 and the amount acquired pursuant to such financing), as partial satisfaction of the
Obligations;

     (c) No financing statement or other security instrument is on file in any jurisdiction
covering any of the Collateral, other than such instruments filed in favor of the Secured Party
relating to this Agreement;

     (d) Debtor’s grant of a security interest in, and assignment of, the Collateral to the Secured
Party herein will not violate any other material agreement to which Debtor is a party or result in
the creation or imposition of any lien, encumbrance, or claim upon any Collateral;

     (e) No authorization, approval or another action by, and no notice to or filing with, any
governmental authority or regulatory body is required, except (i) such authorization or approval as
has already been obtained and (ii) filing or recording of financing statements or other filings as
required by applicable law, either (A) for the grant by Debtor of the security interest granted
hereby or for the execution, delivery or performance of this Agreement by Debtor or (B) for the
perfection of or the exercise by the Secured Party of its rights and remedies hereunder.

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4. Insurance. Debtor agrees to do the following:

     (a) Insurance Covering Collateral. To maintain all risk property damage insurance, including
but not limited to general liability insurance covering the Collateral. Each insurance policy must
be in an amount acceptable to Secured Party.

     (b) General Business Insurance. To maintain insurance satisfactory to Secured Party as to
amount, nature and carrier covering property damage to any of Debtor’s property, public liability
insurance including coverage for contractual liability, worker’s compensation, and any other
insurance which is usual for Debtor’s business.

     (c) Evidence of Insurance. Upon the request of Secured Party to deliver to Secured Party a
copy of each insurance policy, or, if permitted by Secured Party, a certificate of insurance
listing all insurance in force.

5. Further Assurances.

     (a) Debtor agrees that from time to time, at its expense, Debtor will promptly execute and
deliver all further instruments and documents, and take all further action, that may be required,
necessary or desirable, or that Secured Party may reasonably request, in order to perfect,
continue, renew and protect the security interest granted or purported to be granted herein in the
Collateral or to enable the Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the foregoing, Debtor shall
execute and deliver or file or record, as the case may be, and obtain the execution and delivery by
third parties, of such financing or continuation statements, affidavits, instruments or notices, as
may be required, necessary or desirable, or as the Secured Party may reasonably request, to perfect
and preserve the security interest granted or purported to be granted hereby.

     (b) Debtor hereby authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the Collateral, without the
signature of Debtor where permitted by law.

     (c) Debtor will furnish to the Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other reports in connection with its
Collateral as the Secured Party may request, all in reasonable detail satisfactory to the Secured
Party.

6. Location; Records. Debtor shall not change the location of its chief place of business
or chief executive office, unless it has given to the Secured Party thirty (30) days prior written
notice of such intended change and prior thereto all action required by, or requested by the
Secured Party pursuant to Section 5 in connection with such change shall have been taken. Debtor
will keep and preserve all records evidencing or relating to the Collateral at its chief place of
business and will permit representatives of the Secured Party at any time during normal business
hours to inspect and make abstracts from such records.

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7. Actions Affecting the Collateral.

     (a) Debtor shall, at its expense:

          (i) Keep all Collateral at 100 Chapparal Court, Suite 100, Anaheim Hills, California 92808,
and shall not change the location of any such Collateral, or Debtor’s name, unless it has given
thirty (30) days prior written notice to the Secured Party and all action required by or requested
pursuant to Section 5 in connection with such change shall have been taken;

          (ii) Promptly give notice to the Secured Party of any material loss or damage to any of its
Collateral;

          (iii) Defend title to the Collateral against all Persons and against all claims whatsoever;

          (iv) Pay promptly when due all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including claims for labor, material and supplies) against
the Collateral, except to the extent the validity thereof is being contested in good faith and
appropriate reserves therefor;

          (v) Keep accurate records of the Collateral, including the location thereof, and permit the
Secured Party to inspect and have access to any of the Collateral and any Collateral and to furnish
to the Secured Party at its request any and all information which Debtor may have with respect to
the Collateral.

     (b) Debtor shall not without the prior written consent of the Secured Party, (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of any of the Collateral, or (ii) create or
suffer to exist any lien upon or with respect to any of the Collateral, except for the assignment
and security interest created by this Agreement.

     (c) Debtor agrees that the Collateral consists of tangible property and is now and shall
remain personal property, notwithstanding the manner in which such Collateral or any part thereof
shall now or hereafter be affixed or annexed to real estate.

8. Secured Party May Perform. If Debtor fails to perform any provision contained herein,
the Secured Party may itself perform, or cause performance of such provision, and the expense of
the Secured Party incurred in connection therewith shall be payable by Debtor under Section 12.

9. The Secured Party’s Duties. The powers conferred on the Secured Party hereunder are
solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Secured Party shall not have any duty as to the
Collateral or as to the taking of any necessary steps to preserve its rights against other parties
or any other rights pertaining to the Collateral.

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10. Events of Default. Debtor shall be in default under this Agreement upon the happening
of any of the following:

     (a) The Debtor fails to pay when due any amount owed to the Secured Party or to perform any
obligation of the Debtors under the Note or this Agreement;

     (b) Any of the Collateral deteriorates, is impaired or declines in character or value such
that the Secured Party in its reasonable judgment determines that the Collateral does not
adequately secure the Obligations;

     (c) There shall be any execution or levy on, or any seizure or attachment of, or the
institution of any proceeding for foreclosure of any lien against or for any forced sale or
forfeiture of, all or any part of the Collateral and shall not be vacated, discharged, satisfied or
stayed or bonded pending appeal within thirty (30) days after such issuance;

     (d) Subject to the terms and conditions set forth in Section 3(b) herein, Secured Party shall
fail to have a first priority perfected security interest in any of the Collateral;

11. Consequences of Default. Whenever Debtor is in default under this Agreement pursuant
to Section 10 hereof, the Secured Party shall have the right to exercise any or all of the
following rights and shall be the Debtor’s attorney-in-fact when necessary to enforce those rights:

     (a) The Secured Party shall have the right to declare the entire unpaid amount of any
indebtedness owed by Debtor to the Secured Party to be immediately due and payable without notice
or demand on Debtor, which notice or demand are hereby expressly waived by Debtor, and upon the
making of any such declaration, the entire unpaid amount shall become immediately due and payable.

     (b) Upon the Secured Party’s request, Debtor shall immediately assign and transfer to the
Secured Party any portion or all of the Collateral that has not already been assigned to it. Such
assignment shall be in writing and in such form as the Secured Party may prescribe.

     (c) Upon the Secured Party’s request, Debtor shall immediately cause all future revenues
generated from the Acquired Business to be placed in an escrow account, approved by Secured Party.
Such revenues shall be released from the escrow account, pursuant to Secured Party’s instructions,
in the following order: (i) to payment of the Note; (ii) to the compensation of Brett Faryniarz
under that certain Employment Agreement, of even date herewith, by and between Brett Faryniarz and
Debtor; (iii) to the operating expenses of the Acquired Business; (iv) to Debtor.

     (d) Upon receipt of notice from the Secured Party, Debtor shall hold all payments received by
it in respect to any proceeds from the Collateral in trust for the benefit of the Secured Party,
shall segregate such payments from other funds of Debtor and shall forthwith pay over such payments
to the Secured Party in the same form as received (with any necessary endorsement). Should debtor
refuse, Secured Party shall have the right as attorney-in-fact to undertake these responsibilities
for Debtor, including but not limited to endorsement in Debtor’s name(s).

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     (e) The Secured Party shall have the right to enter into or upon any premises where the
Collateral is located and take possession of the Collateral, or render it unusable, without demand
or notice and without prior judicial hearing or legal proceedings, which Debtor hereby expressly
waives. Secured Party may take such measures as the Secured Party may deem necessary or advisable
to preserve, process, develop, maintain, protect and care for the Collateral or any portion
thereof. If Secured Party shall so require, Debtor shall assemble any and all Collateral to the
extent possible (and books, documents and other records evidencing or relating to any of the
Collateral) as directed by the Secured Party and make them available to the Secured Party at a
place or places to be designated by the Secured Party that is reasonably convenient to Secured
Party and Debtor.

     (f) The Secured Party shall have the right, and is hereby expressly authorized by Debtor, to
sell or make any other reasonable disposition of all or any part of the Collateral without the use
of any judicial process or proceeding. Collateral may be sold by the Secured Party at any public or
private sale, without prior notice to Debtor except as specified below, in any commercially
reasonable manner at any time. The Secured Party and Debtor hereby agree that, to the extent notice
of sale shall be required by law, notice to the Debtor of the time and place of any public sale or
the time after which any private sale is to be made, is mailed postage prepaid to the address of
Debtors set forth in Section 16 not later than five (5) calendar days before the time of sale or
disposition, such notice shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having been given. The
Secured Party may adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at the time and place
to which it was so adjourned.

     (g) The Secured Party may exercise, in addition to any rights and remedies provided for herein
or otherwise available to it as a secured party under applicable statutes and laws, all of the
rights and remedies of a secured party upon default under the California Uniform Commercial Code
or, to the extent required by applicable law, the Uniform Commercial Code as in effect in the
jurisdiction where the Secured Party enforces such rights and remedies.

     (h) All cash proceeds received by the Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral, and all payments made in respect
of the Collateral and received by the Secured Party may, in the discretion of the Secured Party, be
held by the Secured Party as collateral for the Obligations or may be applied (after payment to the
Secured Party of the reasonable expenses, including attorneys’ fees and expenses and expert
witnesses’ fees and expenses, incurred by the Secured Party in retaking, collection, selling or
disposing the Collateral and other amounts payable under Section 12) at any time in whole or in
part by the Secured Party against all or any part of the Obligations in such order as the Secured
Party shall elect. Debtors shall remain liable for any Obligations remaining unpaid.

     (i) Secured Party shall have the right to become the purchaser at any public sale made
pursuant to the provision of this Section 11 and shall have the right to credit against the amount
of the bid made therefor the amount payable to Secured Party out of the net proceeds of such sale.
Debtors shall remain liable for any Obligations remaining unpaid.

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     (j) Any sale of the Collateral or any part thereof pursuant to the provisions of this Section
11 shall operate to divest all right, title, interest, claim, and demand of Debtor in and to the
Collateral sold and shall be a perpetual bar against Debtor. Nevertheless, if requested by the
Secured Party so to do, Debtor shall join in the execution, acknowledgment, and delivery of all
proper conveyances, assignments, and transfers of the Collateral so sold.

12. Expenses.

     (a) Debtor agrees to indemnify, protect and defend the Secured Party from and against any and
all claims, losses and liabilities growing out of or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except claims, losses or liabilities resulting
solely from the Secured Party’s negligence, gross negligence or willful misconduct.

     (b) Upon the occurrence of any Event of Default, Secured Party shall be entitled to recover
all costs, expenses, and attorneys’ fees (including any allocated costs of in-house counsel) in
connection with the administering or enforcing of this Agreement, whether or not an action is
filed; provided, that costs and expenses incurred in any judicial action shall be paid to the
prevailing party by the other party.

13. Amendment, Waiver. No amendment or waiver of any provision of this Agreement, nor
consent to any departure by Debtor here from, shall in any event be effective unless the same shall
be in writing and signed by the Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose of which given. No change in the
performance of the Obligations including but not limited to the payment terms under the note shall
change this Agreement, except as permitted above.

14. Notices. All notices, demands and requests to either party must be in writing and may
be delivered by any reasonable commercial means unless delivery method is otherwise specified in
this Agreement. Notices shall be addressed as follows:

	 	 	 	 	 
	 

	 	Secured Party:
	 	New Horizons Financial, Inc.
	 

	 	 	 	Attn: Brett Faryniarz
	 

	 	 	 	100 Chapparal Court, Suite 100
	 

	 	 	 	Anaheim Hills, California 92808
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Cummins & White, LLP
	 

	 	 	 	Attn: Fred M. Whitaker, P.C.
	 

	 	 	 	2424 S.E. Bristol Street, Suite 300
	 

	 	 	 	Newport Beach, California 92660
	 
	 	 	 	 
	 

	 	Debtor:
	 	MBI Mortgage, Inc.
	 

	 	 	 	Attn: President
	 

	 	 	 	1845 Woodall Rogers, Suite 1225
	 

	 	 	 	Dallas, Texas 75203

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	 	With a copy to:
	 	Glast, Phillips & Murray, P.C.
	 

	 	 	 	Attn: Marshal W. Dooley
	 

	 	 	 	13355 Noel Road, Suite 2200
	 

	 	 	 	Dallas, Texas 75240

15. Liability to Third Parties. The Secured Party shall not, in any event, be liable to
any third party for damages of any kind, including but not limited to, direct, indirect, special,
or consequential damages, resulting from the existence, use, operation of the Collateral hereunder,
except as may result from the willful misconduct or gross negligence of the Secured Party. Debtor
hereby indemnifies Secured Party against any such third party claims, and as such, without limiting
said indemnification Debtors shall carry Secured Party as an additional insured on all Debtor’s
insurance policies. Debtor shall provide proof of same upon request.

16. Assignment. The Secured Party shall have the right to assign from time to time all or
any part of its rights under this Agreement. No rights or obligations of Debtor may be assigned or
delegated without the prior written consent of Secured Party. All provision of this Agreement
shall inure to the benefit of and bind the successors and assigns of the Secured Party and Debtor’s
successors and assigns.

17. Governing Law. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California. Unless otherwise defined herein, terms used in the California
Uniform Commercial Code are used herein as therein defined.

18. Severability. If any one or more of the provisions contained in this Agreement shall
be invalid, illegal or unenforceable in any respect under any applicable law, such provision shall
be adjusted rather than voided, if possible, in order to achieve the intent of the parties to the
extent possible. In any event, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired.

19. Term. The term of this Agreement shall be from the date hereof until performance and
payment in full of all of the Obligations.

[ SIGNATURES APPEAR ON FOLLOWING PAGE]

8

 

IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed
and delivered this agreement as of the day and year first written above.

	 	 	 	 	 	 	 
	 

	 	Debtor:
	 	MBI Mortgage, Inc.,

a Texas corporation
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/S/ John Farkas	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John Farkas, President	 	 
	 
	 	 	 	 	 	 
	 

	 	Secured Party:
	 	New Horizons Financial, Inc.,

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Brett Faryniarz	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Brett Faryniarz, President	 	 

9

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