Exhibit 10.1
SECURED PROMISSORY NOTE

         
U.S. $2,454,625.00
  Dallas, Texas   July 14, 2006

     FOR VALUE RECEIVED, CENTURION ACQUISITIONS, L.P., a Texas limited
partnership (“Borrower”) hereby makes and issues this Secured Promissory Note
(this “Note”), and promises to pay to the order of UNITED DEVELOPMENT FUNDING
III, L.P., a Delaware limited partnership (together with its successors and
assigns, “Lender”) the principal sum of U.S. Two Million Four Hundred Fifty-Four
Thousand Six Hundred Twenty-Five and NO/100 ($2,454,625.00) or, if greater or
less, the aggregate amount of all funds advanced to Borrower under this Note,
together with accrued, unpaid interest thereon, and all other amounts due to
Lender hereunder. Pars Investments, Inc., a Texas corporation (the “General
Partner”) is executing this Note on behalf of Borrower in its capacity as the
general partner of Borrower, as well as on its own behalf for certain limited
purposes described on the signature page to this Note. Lender, Borrower and the
General Partner hereby agree to the terms and conditions of this Note, as
further set forth below.
     1. Certain Definitions. Certain capitalized terms which are defined in the
text of this Note shall have the respective meanings given to such terms herein.
The following capitalized terms shall have the following meanings:
     (a) “Accrued Interest Payments” shall mean payments equal to the amount of
accrued interest on the outstanding principal balance of this Note, calculated
at the applicable rate of interest provided herein.
     (b) “Base Rate” shall mean the lesser of (i) fifteen percent (15%) accrued
and compounded monthly, or (ii) the Highest Lawful Rate.
     (c) “Commitment” shall mean the aggregate amount of U.S. One Million Nine
Hundred Fifty Thousand and NO/100 Dollars ($1,950,000.00).
     (d) “Commitment Advance” shall mean full or partial advance of the
Commitment to Borrower pursuant to the terms hereof.
     (e) “Commitment Fee” shall mean a fee paid by Borrower to Lender or its
assigns, in consideration of services rendered in originating the loan made
pursuant to this Note, in the amount set forth in Section 2(c) of this Note.
     (f) “Default Rate” shall mean the lesser of (i) eighteen percent (18%),
accrued and compounded monthly, or (ii) the Highest Lawful Rate.
     (g) “Effective Date” shall mean July 14, 2006.
     (h) “Event of Default” shall have the meaning given to such term in
Section 10 of this Note.

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     (i) “Highest Lawful Rate” shall mean the maximum lawful rate of interest
which may be contracted for, charged, taken, received or reserved by Lender in
accordance with the applicable laws of the State of Texas (or applicable United
States federal law, to the extent that it permits Lender to contract or charge,
take, receive or reserve a greater amount of interest than under Texas law),
taking into account all fees and expenses contracted for, charged, received,
taken or reserved by Lender in connection with the transaction relating to this
Note and the indebtedness evidenced hereby or by the other Loan Documents which
are treated as interest under applicable law.
     (j) “Interest Reserve” shall mean an aggregate of up to $425,000.00 to be
advanced by Lender hereunder and to be applied against Accrued Interest
Payments, subject to the provisions of Section 4(b) of this Note.
     (j) “Interest Reserve Advance” means an advance under this Note in the
amount of an Accrued Interest Payment pursuant to Section 4(b) of this Note.
     (l) “Lien” shall mean any lien, security interest, charge, tax lien,
pledge, encumbrance, conditional sales or other title retention arrangement or
any other interest in property designed to secure the repayment of indebtedness
or the satisfaction of any other obligation, whether arising by agreement or
under any statute or law, or otherwise.
     (m) “Loan Documents” shall mean this Note, the Pledge Agreement, the error
and omissions letter and all other documents, certificates, instruments, and
agreements executed, entered into or delivered by Borrower, the General Partner,
or any of their respective affiliates in connection with the loan made pursuant
to this Note, as each such document may be amended from time to time.
     (n) “Loan Administration Fee” shall mean a fee charged by Lender in
consideration of administrative costs and expenses incurred by Lender in
connection with each Commitment Advance hereunder.
     (o) “Loan Expenses” shall mean all fees and expenses incurred by Lender in
connection with the loan made pursuant to this Note and the preparation of the
Note and the other Loan Documents, including, without limitation, attorneys
fees, accountants fees, closing costs, due diligence costs and expenses,
recording fees, courier and delivery fees, document preparation fees, wire
transfer and bank fees, title company fees, and all other fees and costs
incurred by Lender.
     (p) “Maturity Date” means January 31, 2008.
     (q) “Partnership Agreement” means the Agreement of Limited Partnership of
Shale-114, L.P., as it may be amended from time to time.

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     (r) “Pledge Agreement” shall mean that certain Pledge Agreement executed by
the Pledgors in favor of Lender dated as of the date of this Note, pursuant to
which (i) Borrower and the General Partner pledge and grants a security interest
to Lender in their respective partnership interests in Shale-114, and
(ii) Mehrdad Moayedi pledges and grants a security interest to lender in all of
the capital stock of the General Partner, as security for the prompt payment and
performance of Borrower’s obligations to Lender under this Note, as such
agreement may be amended from time to time.
     (s) “Pledgors” mean, collectively, Mehrdad Moayedi, Borrower, and the
General Partner.
     (t) “Property” shall mean all real property now owned or hereinafter
acquired by Borrower.
     (u) “Senior Lender” shall mean, collectively, (i) that certain
$5,400,000.00 loan from First United Bank & Trust to Shale-114 pursuant to a
promissory note executed by Shale-114 in favor of First United Bank & Trust on
or about March 24, 2006, and (ii) any other loan from a bank, financial
institution or other lender having a senior position ahead of Lender with
respect to the payment of Borrower indebtedness and/or the priority of security
interests and/or Liens on the Property and any other collateral granted or
pledged as security for the loan made pursuant to this Note; provided, that
Lender has agreed in writing to be subordinate thereto.
     (v) “Senior Indebtedness” shall mean the amount of indebtedness owed to the
Senior Lender that Lender has agreed in writing will have priority over the
indebtedness evidenced by this Note.
     (w) “Shale-114” shall mean Shale-114, L.P., a Texas limited partnership, in
which the General Partner owns a 0.1% general partner interest, and in which
Borrower owns a 99.9% limited partnership interest.
     2. Loan Expenses; Fees.
     (a) Loan Expenses. Borrower shall pay Lender, the full amount of all Loan
Expenses incurred by Lender upon Lender’s demand therefor.
     (b) Loan Administration Fee. In consideration of administrative costs and
expenses incurred by Lender in connection with Commitment Advances, Borrower
agrees to pay Lender a Loan Administration Fee at the time of each Commitment
Advance equal to one-quarter percent (0.25%) of such Commitment Advance. The
Loan Administration Fee with respect to each Commitment Advance made hereunder
is fully earned by Lender at the time such Commitment Advance is funded and, if
not otherwise paid, shall be funded by Lender at the time of the Commitment
Advance and upon disbursement shall automatically constitute principal
outstanding hereunder and cause a corresponding increase in the aggregate amount
of Borrower’s obligations hereunder

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     (even if such disbursement causes the aggregate amount outstanding
hereunder to exceed the face amount of this Note).
     (c) Commitment Fee. In consideration of assistance in the origination of
the loan made pursuant to this Note, Borrower agrees to pay Lender a Commitment
Fee equal to three percent (3.0%) of the sum of (i) Commitment, and (ii) the
Interest Reserve (which Commitment Fee is equal to $71,250.00), which shall be
due at the closing hereof. Pursuant to Borrower’s request, the Commitment Fee
shall be funded by Lender under this Note and upon disbursement shall
automatically constitute principal outstanding hereunder and cause a
corresponding increase in the aggregate outstanding amount of Borrower’s
obligations hereunder.
     (d) Usury Savings Clause Applies. Borrower, the General Partner and Lender
agree that Lender has provided, and shall provide, separate and distinct
consideration for the fees and expenses described in Sections 2(a), (b) and (c)
above and/or that such fees and expenses represent bona fide fees and expenses
incurred by Lender. Borrower, the General Partner and Lender further agree that
such fees and expenses are not, are not intended to be, and shall not be
characterized as, interest or as compensation for the use, forbearance or
detention of money. Despite the foregoing and notwithstanding anything else in
this Note and the other Loan Documents to the contrary, if any fees or expenses
charged or chargeable to Borrower hereunder are determined to constitutes
interest and such fees or expenses, when added to the interest charged
hereunder, would cause the aggregate interest charged hereunder to exceed the
Highest Lawful Rate, then Section 11 of this Note shall automatically apply to
reduce the interest charged hereunder so as not to exceed the Highest Lawful
Rate.
     (e) Assignment. The Loan Administration Fee and all Loan Expenses are
assignable by the payee to any affiliate or third party.
     3. Commitment Advances; Borrowing Procedures; etc.
     (a) Commitment Advances. Subject to the terms and conditions of this Note,
Lender agrees to make Commitment Advances to Borrower from time to time prior to
the Maturity Date in an aggregate amount not to exceed the Commitment. It is
anticipated that $1,300,000.00 of the Commitment shall be advanced at closing of
this Note and the remaining $650,000.00 of the Commitment shall be advanced
approximately ninety (90) days thereafter. Lender shall have no obligation to
make any Commitment Advance hereunder to the extent such Commitment Advance
would cause the aggregate principal amount of all outstanding Commitment
Advances to exceed the Commitment. This Note is not a revolver and thus, the
portion of the Commitment borrowed may not be repaid to Lender and subsequently
reborrowed under this Note.
     (b) Procedure for Borrowing. Each Commitment Advance shall be made by
Borrower’s delivery of a written request to Lender. Such notice must be received
by Lender no less than five (5) business days prior to the date that is the
requested funding

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date, and shall specify (i) the amount of the Commitment Advance so requested,
and (ii) the requested funding date.
     (c) Making of Commitment Advances. Subject to the terms and conditions of
this Note, after receipt of a request for an Commitment Advance pursuant to
Section 2(b), Lender shall make the amount of the requested Commitment Advance
available to Borrower on the applicable funding date; provided, however, that
Lender shall have no obligation to make any Commitment Advance unless each of
the conditions precedent in Section 7 have been satisfied.
     (d) Discretionary Advances. Lender hereby is authorized by Borrower to make
advances hereunder that Lender, in its sole discretion, deems necessary or
desirable to pay any Loan Expense or other amount chargeable to Borrower or the
General Partner pursuant to the terms of this Note or any other Loan Document
(such advances made for the foregoing purposes are referred to herein as the
“Discretionary Advances”). Each Discretionary Advance shall, upon disbursement,
automatically constitute principal outstanding hereunder and cause a
corresponding increase in the aggregate amount of Borrower’s obligations
hereunder (even if such Discretionary Advance causes the aggregate amount
outstanding hereunder to exceed the face amount of this Note). The making by
Lender of any Discretionary Advance shall not cure any Event of Default
hereunder, unless Lender provides Borrower with a written waiver of such Event
of Default.
     4. Interest; Payments.
     (a) Interest Rate. The outstanding principal amount of this Note shall bear
interest on each day outstanding at the Base Rate in effect on such day, accrued
and compounded monthly, unless the Default Rate shall apply. Upon the occurrence
and during the continuation of an Event of Default, the outstanding principal
amount of this Note shall, automatically and without the necessity of notice,
bear interest from the date of such Event of Default at the Default Rate,
accrued and compounded monthly, until all such delinquent amounts are paid or
such breach or Event of Default is otherwise cured to the satisfaction of Lender
or waived by Lender in writing.
     (b) Interest Payments; Interest Reserve Advances. Accrued Interest Payments
shall be due and payable on the first day of each month while this Note is
outstanding. Notwithstanding the foregoing sentence and subject to the other
provisions hereof, on each date that an Accrued Interest Payment becomes due and
payable hereunder, Lender shall make an Interest Reserve Advance hereunder in
the amount of such Accrued Interest Payment, which shall be applied to the
Accrued Interest Payment then due and payable, until the Interest Reserve has
been fully exhausted. Subject to the other provisions of this Note, each time
Lender funds an Interest Reserve Advance hereunder, (i) Borrower’s requirement
to make the Accrued Interest Payment for such month shall be satisfied, (ii) the
amount of remaining Interest Reserve shall be reduced by the amount of such
Interest Reserve Advance, and (ii) such Interest Reserve Advance funded by
Lender hereunder shall automatically become principal outstanding under this
Note upon

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such funding. The Interest Reserve Advances may be funded by Lender even if such
funding causes the outstanding principal balance of this Note to exceed its face
amount. Notwithstanding anything else to the contrary contained herein, (i) if
at any time an Event of Default has occurred and is continuing under this Note,
Lender shall not be obligated to make any further Interest Reserve Advances, and
thereafter, shall do so only in its sole discretion, unless and until the Event
of Default is cured to Lender’s satisfaction as evidenced in writing, and
(ii) in no event shall Lender be obligated to make any Interest Reserve Advance
that would cause the aggregate amount of Interest Reserve Advances made
hereunder to exceed the remaining Interest Reserve.
     (c) Payments. Subject to the other provisions of this Note:
     (i) Accrued Interest Payments shall be due and payable as provided in
Section 4(b) of this Note;
     (ii) concurrently with the sale and closing of any Property, Borrower shall
pay Lender the amount of full amount of such proceeds received by or due to
Borrower from such sale, after payment to the Senior Lender of any amount due to
the Senior Lender upon such sale under the terms of the loan documents
evidencing the Senior Indebtedness; and
     (ii) the outstanding principal balance of this Note, together with all
accrued, unpaid interest thereon, unpaid Loan Expenses and other unpaid amounts
due hereunder, shall be due and payable on the Maturity Date.
     5. Terms and Conditions of Payment.
     (a) Application of Payments. Subject to the application of Interest Reserve
Advances to Accrued Interest Payments as provided in Section 4(b) of the Note,
all payments on this Note shall be applied first, to unpaid Loan Expenses due
hereunder, next, to unpaid accrued interest, and last, to principal outstanding
under this Note. Notwithstanding the foregoing sentence, if any Event of Default
occurs and is existing under this Note or any other Loan Document, Lender shall
have the right to apply payments toward amounts due under this Note as Lender
determines in its sole discretion.
     (b) General. All amounts are payable to Lender in lawful money of the
United States of America at the address for Lender provided in this Note, or at
such other address as from time to time may be designated by Lender. Borrower
will make each payment which it owes under this Note and the other Loan
Documents to Lender in full and in lawful money of the United States, without
set-off, deduction or counterclaim. Under no circumstance may Borrower offset
any amount owed by Borrower to Lender under this Note with an amount owed by
Lender to Borrower under any other arrangement. All payments shall be made by
cashier’s check or wire transfer of immediately available funds. Should any such
payment become due and payable on a day other than a business day, the date for
such payment shall be extended to the next succeeding business day, and, in the
case of a required payment of principal, interest or

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Loan Expenses or other amounts then due, interest shall accrue and be payable on
such amount for the period of such extension. Each such payment must be received
by Lender not later than 3:00 p.m., Dallas, Texas time on the date such payment
becomes due and payable. Any payment received by Lender after such time will be
deemed to have been made on the next succeeding business day.
     (c) Prepayment. Borrower may prepay this Note in whole or in part at any
time and from time to time without incurring any prepayment fee or penalty;
provided, that interest shall accrue on the portion of this Note so prepaid
through the date of such prepayment.
     6. Loan Deliveries. At or prior to the closing of the loan made pursuant to
this Note, Borrower shall deliver or cause to be delivered to Lender, the
following items, each of which shall be satisfactory in form and substance to
Lender:
     (a) this Note and each other Loan Document, duly executed by Borrower, the
General Partner and Mehrdad Moayedi, as applicable;
     (b) Borrower’s most recent consolidated financial statements, in the form
specified in Section 9(f) hereof, and accompanied by the certification required
by Section 9(f) of this Note hereof;
     (c) a certified copy of the formation documents and all amendments thereto
for each of Borrower and the General Partner;
     (d) a certificate of existence for Borrower, and certificates of existence
and good standing for the General Partner, issued by the appropriate state
authorities;
     (e) resolutions of the board of directors of the General Partner
authorizing Borrower’s and the General Partner’s execution, delivery, and
performance of this Note and the other Loan Documents, and the transactions
contemplated hereby and thereby;
     (f) resolutions of the board of directors, managers, or other governing
body which has authority to act on behalf of each Pledgor that is an entity,
authorizing the execution, delivery and performance of the Pledge Agreement and
the transactions contemplated thereby;
     (g) a the written consent of the partners of Shale-114 authorizing the
Pledge Agreement and the transactions contemplated thereby, including Lender’s
remedies thereunder;
     (h) a certificate of Borrower’s and the General Partner’s general liability
policies, and evidence of payment of the premium through at least one year;
     (i) a certificate (the “Officer’s Certificate”) executed by the Chief
Executive Officer or President of the General Partner, acting on behalf of the
General Partner and

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on behalf of Borrower, in its capacity as the general partner of Borrower
certifying that (i) no Event of Default has occurred and is continuing under the
Note, (ii) all representations and warranties made by Borrower and the General
Partner, respectively, in this Note and the other Loan Documents are true and
correct in all respects, and (iii) Borrower and the General Partner have
complied with and performed, in all respects, all covenants, conditions and
agreements which are then required by this Note and the other Loan Documents to
have been complied with or performed;
     (j) the Partnership Agreement and all amendments thereto in effect as of
the Effective Date;
     (k) copies of the loan documents evidencing any Senior Indebtedness and all
amendments thereto as of the Effective Date;
     (l) an opinion of counsel for Borrower and the General Partner satisfactory
in all respects to Lender and its counsel; and
     (m) such other and further documents, agreements and certificates as are
reasonably required by Lender.
     7. Conditions Precedent to Commitment Advances. Borrower and the General
Partner agree that, notwithstanding anything to the contrary contained herein or
in the other Loan Documents, Lender’s obligation to fund each Commitment Advance
shall be conditioned upon the satisfaction of each of the following conditions,
on and as of the funding date for the applicable Commitment Advance:
     (a) Borrower and the General Partner shall have executed and delivered to
Lender, an Officer’s Certificate dated as of the funding date, and all matters
certified in the Officer’s Certificate shall be true and correct in all
respects;
     (b) the requested Commitment Advance, if made, would not cause the
aggregate amount of all outstanding Commitment Advances to exceed the
Commitment; and
     (c) Borrower shall have complied with each other reasonable request of
Lender made in connection with the Commitment Advance.
     8. Representations and Warranties. Each of Borrower and the General Partner
jointly and severally represents and warrants to Lender that:
     (a) Organization and Good Standing; Authorization. Each of Borrower and the
General Partner (i) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and (ii) has full power and
authority to own its properties, carry on its business and to perform the
transactions contemplated by this Note and the other Loan Documents. All
necessary partnership, limited liability company, partnership, member, partner
and other actions required to be taken on behalf

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of the General Partner and Borrower to approve this Note and the other Loan
Documents and the transactions contemplated hereby and thereby, have been duly
taken. Each of Borrower and the General Partner is in compliance in all material
respects with all laws applicable to it in each jurisdiction within and without
outside the United States where it owns or leases any properties or conducts any
business, except for any such non-compliance that would not have a material
adverse effect, individually or in the aggregate, on Borrower’s or the General
Partner’s financial condition or operations.
     (b) Authority; Validity. Each of Borrower and the General Partner has the
power, authority and legal right to execute, deliver and perform its obligations
under this Note and the other Loan Documents. The execution and delivery by
Borrower and the General Partner of the Note and the other Loan Documents, and
the performance of their respective obligations thereunder, will not (i) violate
the certificate of formation of Borrower or the General Partner, the partnership
agreement of the Borrower, or the General Partner’s bylaws, (ii) violate any law
or result in a default under any contract, agreement, or instrument to which
Borrower or the General Partner is a party or by which Borrower or the General
Partner or any of their respective assets and properties are bound, or
(iii) result in the creation or imposition of any Lien upon any of their
respective assets. The Loan Documents constitute the legal, valid and binding
obligations of Borrower and the General Partner and are enforceable against
Borrower and the General Partner in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally.
     (c) Litigation. There is no pending order, notice, claim, litigation,
proceeding or investigation against or affecting Borrower or the General Partner
or any of their respective assets or properties, whether or not covered by
insurance, that could materially and adversely affect either the financial
condition or business prospects or Borrower or the General Partner, if adversely
determined.
     (d) Indebtedness. Neither Borrower nor the General Partner has any material
indebtedness of any nature, to the extent disclosed in the latest financial
statements delivered to Lender or otherwise disclosed in writing to Lender and
approved by Lender.
     (e) Environmental Liability. To the best of Borrower’s and the General
Partner’s knowledge, no hazardous substances or solid wastes have been disposed
of or otherwise released on or to any real property owned or operated by
Borrower or the General Partner, except as may have been otherwise disclosed to
Lender in a Phase I environmental report delivered to Lender. The terms
“hazardous substance” and release” shall have the meanings specified in the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, (“CERCLA”), and the terms “solid waste” and “disposal” (or “disposed”)
shall have the meanings specified in the Resource Conservation and Recovery Act
of 1976, as amended, (“RCRA”); provided, to the extent that the laws of the
State of Texas establish a meaning for “hazardous substance”, “release”, “solid
waste”, or “disposal” or “disposed”) that is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply.

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     (f) Tax Liabilities. Each of Borrower and the General Partner has filed all
federal, state, county, local, and foreign tax returns and reports required to
have been filed by them (or has obtained valid extensions with respect to such
returns and reports), including but not limited to such returns and reports with
respect to income, payroll, property, employee withholding, social security,
unemployment, franchise, excise, use and sales taxes. Each of Borrower and the
General Partner has paid in full all taxes that have become due as reflected on
all such returns and reports (including any interest and penalties) and has
established adequate reserves for all taxes payable but not yet due. No
governmental claim for additional taxes, interest, or penalties is pending or,
to Borrower’s and the General Partner’s knowledge, threatened against Borrower
or the General Partner or any of their respective properties or assets.
     9. Covenants. Each of Borrower and the General Partner jointly and
severally covenants and agrees with Lender that they will comply with each of
the following covenants below:
     (a) Payment; Performance. Borrower shall promptly pay all amounts due and
owing to Lender under this Note. Borrower and the General Partner shall timely
perform and comply with each agreement and covenant made under this Note and the
other Loan Documents.
     (b) Use of Proceeds. The proceeds of this Note shall be used solely to
acquire partnership interests in Downtown Vistas Development Company, L.P. held
by The Hartnett Group, Ltd. and Condovestors GP. In no event shall the proceeds
of this Note be used, directly or indirectly, by any person for personal,
family, household or agricultural purposes or for the purpose, whether
immediate, incidental or ultimate, of purchasing, acquiring or carrying any
“margin stock” (as such term is defined in Regulation U promulgated by the Board
of Governors of the Federal Reserve System).
     (c) Other Loans. Borrower shall not enter into any promissory note, loan
documents, or other agreement for borrowed money without the prior written
consent of Lender, including, without limitation, any loan documents evidencing
Senior Indebtedness. Unless otherwise agreed by Lender in writing, the loan
documents evidencing any Senior Indebtedness shall provide that (i) the Senior
Lender shall give Lender written notice of any default or event of default
occurring under the loan documents evidencing the Senior Indebtedness, and
(ii) upon any default by Borrower, Lender shall have the right, but not the
obligation, to cure Borrower’s default thereunder and to purchase the loan and
the loan documents evidencing the Senior Indebtedness from the Senior Lender.
     (d) Termination of Existence. Nether Borrower nor the General Partner shall
cause, or enter into any agreement to cause, the dissolution or termination of
the existence of Borrower or the General Partner or the merger, consolidation,
or reorganization of Borrower or the General Partner with or into any other
entity, whether or not such person would be the surviving entity.

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     (e) Notice of Certain Events. Borrower and the General Partner shall
promptly notify Lender in writing of the occurrence of any event or series of
events of which Borrower or the General Partner have actual knowledge causing,
or that could be expected to cause or has caused (i) a material adverse effect
on the operations or financial condition of Borrower or the General Partner,
(ii) the occurrence of any Event of Default (without giving effect to any cure
period applicable thereto), or (iii) any default by Borrower or the General
Partner or the acceleration of the maturity of any indebtedness owed by Borrower
or the General Partner under the Senior Indebtedness or any indenture, mortgage,
agreement, promissory note, contract or other instrument to which Borrower or
the General Partner is a party or by which any material asset or property of
Borrower or the General Partner is bound. In addition, each of Borrower and the
General Partner agrees to notify Lender in writing at least twenty (20) business
days prior to the date that it changes its name, address, the location of its
chief executive office or principal place of business, and the place where it
keeps its books and records.
     (f) Financial Statements. Borrower and the General Partner shall deliver to
Lender, the following financial statements: (i) within sixty (60) days after the
end of each fiscal quarter, the unaudited financial statements of Borrower and
the General Partner, prepared in accordance with GAAP and combined or
consolidated as appropriate, including all notes related thereto; and
(ii) within one hundred twenty (120) days after the end of each fiscal year, the
unaudited financial statements of Borrower and the General Partner, prepared in
accordance with GAAP and combined or consolidated as appropriate, including all
notes related thereto. All financial statements provided to Lender shall be
certified as to accuracy and completeness by an officer of the General Partner.
     (g) Taxes. Borrower and the General Partner shall pay all federal, state
and local taxes levied against them and their respective properties and assets
as they become due and payable and before the same become delinquent. Borrower
and the General Partner shall have the right to pay such tax under protest or to
otherwise contest any such tax or assessment, but only if (i) such contest has
the effect of preventing the collection of such taxes so contested and also of
preventing the sale or forfeiture of any property subject thereto, (ii) Borrower
and the General Partner have notified Lender of their intent to contest such
taxes, and (iii) adequate reserves for the liability associated with such tax
have been established in accordance with GAAP. Borrower and the General Partner
shall furnish to Lender evidence that all such taxes are paid at least five
(5) days prior to the last date for payment of such taxes.
     (h) Certain Liens. Borrower shall not create, incur, assume, or suffer to
exist, directly or indirectly, any Lien on or with respect to any of its assets,
of any kind, whether now owned or hereafter acquired, or an income or profits
therefrom, except for (i) Liens in favor of Lender, (ii) Liens in favor of the
Senior Lender that secure the Senior Lender that secure Senior Indebtedness,
(iii) Liens in favor of United Development Funding, L.P., a Nevada limited
partnership, and (iv) other Liens approved by Lender’s prior written consent.

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     (i) Indebtedness. Borrower shall not incur any indebtedness for borrowed
money, other than Senior Indebtedness, the loan made pursuant to this Note or as
otherwise approved by Lender’s prior written consent.
     (j) Distributions. At any time when any amounts are due to Lender
hereunder, Borrower shall not declare, pay, make, or authorize any
distributions, whether in cash or in property, to its partners. Subject to
Borrower’s timely fulfillment of its payment obligations under Senior
Indebtedness, all cash distributed to Borrower from Shale-114 shall be applied
to repayment of this Note, until it is repaid in full.
     (k) Shale-114 Documents. Borrower and the General Partner shall, promptly
upon receipt, furnish to Lender all documents that Borrower receives in its
capacity as a partner of Shale-114 and all documents that the General Partner
receives its capacity as the general of Shale-114, including without limitation,
all of the following:
     (i) all financial statements, pro formas, projections, budgets, capital
expenditure and expense reports, and other financial information, and all
information related to the operations of Shale-114;
     (ii) minutes of the meetings of the General Partner acting in its capacity
as the general partner of Shale-114, and all written consents of the General
Partner acting in its capacity as the general partner of Shale-114;
     (iii) all loan documents evidencing indebtedness for borrowed money of
Shale-114 and the General Partner acting in its capacity as the general partner
of Shale-114, and all amendments thereto;
     (iv) the title commitment for each Property, the title exception documents
and, upon issuance, the title policy for each Property;
     (v) for each Property, all due diligence documents related to such
Property, including, without limitation, a Phase I Environmental Report, survey,
plat, appraisal, and engineering due diligence report, land use, zoning,
subdivision, grading, municipal district, environmental, and other governmental
permits, approvals, authorizations and maps necessary to develop such Property
in compliance with applicable Governmental Regulations;
     (vi) certificates of general liability and hazard insurance for Shale-114
and builder’s liability insurance covering each Property;
     (vii) for each Property, all project updates, development reports, sales
reports, budgets, pro formas, and similar information.
     (l) Audit. Borrower and the General Partner shall permit Lender and its
employees, representatives, auditors, collateral verification agents, attorneys
and

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accountants (collectively, the “Lender Representatives”), at any time and from
time to time, at Borrower’s and the General Partner’s expense, to (i) audit all
books and records related to Borrower or the General Partner and their
respective properties and assets, and (ii) visit and inspect any of their
respective offices and assets and properties and to inspect and make copies of
all books and records, and to write down and record any information the Lender
Representatives obtain. Each of Borrower and the General Partner agrees to
cooperate fully in connection with such audits and inspections.
     (m) Assignments. Neither Borrower nor the General Partner shall assign,
transfer or convey, any partnership interest, capital stock, or other equity
interest in any partnership, corporation, limited liability company, or other
entity, the equity interests of which are pledged under the Pledge Agreement.
     (n) Insurance. Borrower and the General Partner shall, at all times,
maintain or cause to be maintained, hazard insurance on the Properties with
coverage amounts that are normal and customary for similarly-situated entities
engaged in similar businesses. Each such hazard insurance policy shall provide
that Lender be given at least thirty (30) days written notice as a condition
precedent to any cancellation thereof or material change therein. Borrower shall
obtain or cause to be obtained, an endorsement to each such policy naming Lender
as an additional insured to each such policy, and provide Lender annually with
the insurance certificate, evidencing such coverage, the endorsement of each
such policy to lender, and evidence of payment of the premium for each such
policy.
     (o) Operation of Business. Each of Borrower and the General Partner shall
operate their businesses in compliance with all applicable federal, state and
local laws, rules, regulations, and ordinances. Each of Borrower and the General
Partner shall maintain their existence and good standing in each state where
they operate or do any business. Each of Borrower and the General Partner shall
obtain, maintain and keep current, all consents, licenses, permits,
authorizations, permissions and certificates which may be required or imposed by
any governmental or quasi-governmental agency, authority or body which are
required by applicable federal, state or local laws, regulations and ordinances.
     (p) Alterations. Without the prior written consent of Lender, Borrower
shall not permit the following to occur: any material amendment to the loan
documents evidencing the Senior Indebtedness, any increase in the maximum amount
of the Senior Indebtedness, or any renewal or extension of the loan documents
evidencing the Senior Indebtedness.
     10. Default.
     (a) For purposes of this Note, the following events shall constitute an
“Event of Default”:

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     (i) except for Accrued Interest Payments due during any period when Accrued
Interest Payments are required to be made by Lender pursuant to Section 4(b),
the failure of Borrower to make any payment required by this Note in full on or
before the date such payment is due (or declared due pursuant to the terms of
this Note), whether on or prior to the Maturity Date; or
     (ii) any financial statement, representation, warranty, or certificate made
or furnished by or with respect to Borrower or the General Partner contained in
this Note or any other Loan Document or made in connection herewith or
therewith, shall be materially false, incorrect, or incomplete when made; or
     (iii) Borrower or the General Partner shall fail to perform or observe any
covenant or agreement contained in this Note or any other Loan Document that is
not separately listed in this Section 10(a) as an Event of Default, and the same
remains unremedied for ten (10) days after written notice of such failure is
given by Lender to Borrower; or
     (iv) any “event of default” or “default” occurs under any Loan Document
other than this Note and the same remains unremedied for ten (10) days after
written notice is given by Lender to Borrower; or
     (v) the entry of a decree or order for relief by a court having
jurisdiction in respect of Borrower or the General Partner in an involuntary
case under the federal bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
which is not vacated or dismissed within thirty (30) days, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of Borrower or the General Partner for any substantial part of
their property, or ordering the winding up or liquidation of such person’s
affairs; or
     (vi) the commencement by Borrower or the General Partner of a voluntary
case under the federal bankruptcy laws, as now constituted or hereafter amended,
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or the consent by it to the appointment to or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of Borrower or the General Partner for any substantial part of
its property, or the making by Borrower or the General Partner of any assignment
for the benefit of creditors, or the admission by Borrower or the General
Partner in writing of Borrower or the General Partner’s inability to pay its
debts generally as they become due; or
     (vii) the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of all or a
substantial part of Borrower or the General Partner’s assets or of any part of
any property in a proceeding brought against or initiated by Borrower or the
General Partner; or

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     (viii) if Borrower or the General Partner are liquidated or dissolved or
winds up their affairs, or the sale or liquidation of all or substantially all
of the assets of Borrower or the General Partner; or
     (ix) except as otherwise permitted herein, Borrower or the General Partner
assigns transfers, or conveys any partnership interest, capital stock, or other
equity interest in any partnership, corporation, limited liability company, or
other entity, the equity interests of which are pledged under the Pledge
Agreement without the prior written consent of Lender; or
     (x) any “default” or “event of default” not cured within the grace period,
if any, for such default or event of default, shall occur under (A) the Senior
Indebtedness or any credit agreement, loan agreement, promissory note, or other
document evidencing indebtedness for borrowed money incurred by Borrower, or
(B) any subordination agreement, security agreement, pledge agreement, guaranty,
deed of trust, or other agreement providing security or collateral for
indebtedness, executed by Borrower, or (C) any joint venture agreement, revenue
or profits sharing or participation agreement, partnership agreement,
shareholders agreement, securities purchase agreement or any other agreement
governing to which Borrower is a party, if Lender or any of its affiliates is
also a party to such agreement (the terms “default” and “event of default”
having the meaning given to such terms in any of the agreements described
above).
     (b) Upon the occurrence of an Event of Default described in subsection
(a)(v), (vi) or (vii) above, all obligations under this Note and the other Loan
Documents shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and the General Partner. During the
continuance of any other Event of Default, then and in every such case Lender
may do any or all of the following: (i) declare the principal of this Note
together with all accrued and unpaid interest on the unpaid principal balance,
and Loan Expenses and other amounts due to Lender under this Note or the other
Loan Documents, to be due and payable immediately, and the same shall become and
be due and payable, without notices, demands for payment, presentations for
payment, notices of payment default, notices of intention to accelerate
maturity, protest and notice of protest, and any other notices of any kind, all
of which are expressly waived by Borrower and the General Partner and any and
all sureties, guarantors and endorsers of this Note, (ii) require Borrower to
assign to Lender any contractual right to receipt of proceeds from any city,
state, municipal utility district, public improvement district, or other payee
in connection with the Property, (iii) exercise any its rights under any of the
Loan Documents, and/or (iv) exercise all other rights and remedies available to
Lender at law and at equity, including, without limitation, such rights existing
under the Uniform Commercial Code. No delay on the part of Lender in exercising
any power under this Note shall operate as a

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waiver of such power or right nor shall any single or partial exercise of any
power or right preclude further exercise of that power or right.
     (c) If this Note is placed in the hands of an attorney for collection after
an Event of Default or failure to pay under this Note, or if all or any part of
the indebtedness represented hereby is proved, established or collected in any
court or in any bankruptcy, receivership, debtor relief, probate or other court
proceedings, Borrower and the General Partner, and all endorsers, sureties and
guarantors of this Note, jointly and severally, agree to pay reasonable
attorneys’ fees and collection costs to Lender in addition to the principal and
interest payable under this Note.
     11. Usury Laws.
     (a) Notwithstanding anything to the contrary contained in this Note or any
other Loan Document, (i) this Note shall never bear interest in excess of the
Highest Lawful Rate, and (ii) if at any time the rate at which interest is
payable on this Note is limited by the Highest Lawful Rate by the foregoing
clause (i) or by reference to the Highest Lawful Rate in the definitions of Base
Rate and Default Rate, then this Note shall bear interest at the Highest Lawful
Rate and shall continue to bear interest at the Highest Lawful Rate until such
time as the total amount of interest accrued on this Note equals (but does not
exceed) the total amount of interest which would have accrued on this Note, had
there been no Highest Lawful Rate applicable to this Note.
     (b) It is the intention of the parties hereto that all aspects of this Note
and the other Loan Documents, and the transactions contemplated hereby and
thereby, comply with all laws, including, specifically, any applicable usury
laws. In furtherance thereof, Borrower, the General Partner and Lender stipulate
and agree that none of the terms and provisions contained in this Note or the
other Loan Documents shall ever be construed to create a contract to pay for the
use, forbearance, or detention of money, or interest, in excess of the maximum
amount of interest permitted to be charged by applicable law in effect from time
to time. Neither Borrower nor the General Partner nor any present or future
guarantors, endorsers, or other persons or entities hereafter becoming liable
for payment of Borrower’s obligations hereunder and under the other Loan
Documents shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable law from time to time in effect, and the
provisions of this Section 11 shall control over all other provisions of the
Loan Documents that may be in conflict or apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of this Note is
accelerated. If (i) the maturity of this Note is accelerated for any reason,
(ii) this Note is prepaid and as a result any amounts held to constitute
interest are determined to be in excess of the legal maximum, or (iii) Lender or
any other holder of the Note shall otherwise collect moneys which are determined
to constitute interest which would otherwise increase the interest hereon to an
amount in excess of that permitted to be charged by applicable law, then all
sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
this Note or, at

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Lender’s or such holder’s option, promptly returned to Borrower or the other
payor thereof upon such determination. In determining whether or not the
interest paid or payable, under any specific circumstance, exceeds the maximum
amount permitted under applicable law, Lender and Borrower (and any other payors
of this Note) shall to the greatest extent permitted under 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 the total amount of interest
throughout the entire contemplated term of this Note in accordance with the
amounts outstanding from time to time hereunder and the maximum legal rate of
interest from time to time in effect under applicable law in order to lawfully
charge the maximum amount of interest permitted under applicable law. In the
event applicable law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the “Texas Finance Code”) as amended, for that day, the
ceiling shall be the “weekly ceiling” as defined in the Texas Finance Code. As
used in this section the term “applicable law” means the laws of the State of
Texas or the laws of the United States of America, whichever laws allow the
greater interest, as such laws now exist or may be changed or amended or come
into effect in the future.
     12. Indemnity; Release. Each of Borrower and the General Partner, jointly
and severally, agrees to indemnify Lender, upon demand, from and against any and
all liabilities, obligations, claims, losses, damages, penalties, fines,
actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable, documented fees of attorneys, accountants, experts and
advisors) of any kind or nature whatsoever, now existing (in this section,
collectively called “Liabilities and Costs”) to the extent actually imposed on,
incurred by, or asserted against Lender in its capacity as lender hereunder but
not in its capacity as a partner of Borrower growing out of, resulting from or
in any other way associated with (a) this Note and the other Loan Documents or
any of the transactions and events (including the enforcement or defense
thereof) at any time associated therewith or contemplated therein, (b) any claim
that the loan evidenced hereby is contractually usurious, and (c) any use,
handling, storage, transportation, or disposal of hazardous or toxic materials
on or about any Property or any part thereof or any real properties owned,
managed or operated by Borrower or the General Partner.
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED IN WHOLE OR IN PART UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY LENDER;
provided only that Lender shall not be entitled under this section to receive
indemnification for that portion, if any, of any Liabilities and Costs which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment. If any person (including Borrower and the
General Partner) ever alleges such gross negligence or willful misconduct by
Lender, the indemnification provided for in this section shall nonetheless be
paid upon demand, subject to later adjustment or reimbursement, until such time
as a court of competent jurisdiction enters a final judgment as to the extent
and effect of the alleged gross negligence or willful misconduct. As used in
this section, the term “Lender” shall refer not only

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to the person designated as such in this Note but also to each partner,
director, officer, attorney, employee, representative and affiliate of such
person.
     13. Mutual Understanding. Each of Borrower and the General Partner
represents and warrants to Lender that it and its principals have read and fully
understands the terms and provisions hereof, has had an opportunity to review
this Note with legal counsel and has executed this Note based on its own
judgment and advice of counsel. If an ambiguity or question of intent or
interpretation arises, this Note will be construed as if drafted jointly by
Borrower, the General Partner and Lender and no presumption or burden of proof
will arise favoring or disfavoring any party because of authorship of any
provision of this Note.
     14. Further Assurances. Each of Borrower and the General Partner, at
Borrower’s expense, will promptly execute and deliver to Lender on Lender’s
request, all such other and further documents, agreements and instruments, and
shall deliver all such supplementary information, in compliance with or
accomplishment of the agreements of Borrower and the General Partner under this
Note and the other Loan Documents.
     15. Cumulative Remedies. Borrower hereby agree that all rights and remedies
that Lender is afforded by reason of this Note are separate and cumulative with
respect to Borrower and the General Partner and otherwise and may be pursued
separately, successively, or concurrently, as Lender deems advisable. In
addition, all such rights and remedies are non-exclusive and shall in no way
limit or prejudice Lender’s ability to pursue any other legal or equitable
rights or remedies that may be available to Lender.
     16. Notice. All notices and other communications under this Note will be in
writing and will be mailed by registered or certified mail, postage prepaid,
sent by facsimile, delivered personally by hand, or delivered by nationally
recognized overnight delivery service addressed to Borrower or the General
Partner at 3901 Airport Freeway, Suite 200, Bedford, Texas 76021, Facsimile
No. Facsimile No. (817) 391-2501 or, with respect to Lender, to Lender at 1702
N. Collins Boulevard, Suite 100, Richardson, Texas 75080, Facsimile No.
(469) 916-0695 or with respect to any party, to such other address as a party
may have delivered to the other parties for purposes of notice. Each notice or
other communication will be treated as effective and as having been given and
received (a) if sent by mail, at the earlier of its receipt or three
(3) business days after such notice or other communication has been deposited in
a regularly maintained receptacle for deposit of United States mail, (b) if sent
by facsimile, upon confirmation of facsimile transfer, (c) if delivered
personally by hand, upon written confirmation of delivery from the person
delivering such notice or other communication, or (d) if sent by nationally
recognized overnight delivery service, upon written confirmation of delivery
from such service.
     17. Enforcement and Waiver by Lender. Lender shall have the right at all
times to enforce the provisions of this Note and the other Loan Documents in
strict accordance with their respective terms, notwithstanding any conduct or
custom on the part of Lender in refraining from so doing at any time or times.
The failure of Lender at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom or in any way or manner modified or waived the same. All
rights and remedies

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of Lender are cumulative and concurrent and the exercise of one right or remedy
shall not be deemed a waiver or release of any other right or remedy.
     18. CHOICE OF LAW; JURISDICTION; VENUE. EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF SECURITY INTERESTS OR REMEDIES IN RESPECT OF ANY
PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF TEXAS, THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS. JURISDICTION FOR ALL MATTERS
ARISING OUT OF THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE EXCLUSIVELY IN
THE STATE AND FEDERAL COURTS SITTING IN DALLAS COUNTY, TEXAS, AND EACH OF
BORROWER AND THE GENERAL PARTNER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND AGREES AND CONSENTS NOT TO
ASSERT IN ANY PROCEEDING, THAT ANY SUCH PROCESS IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND FURTHER AGREES TO A TRANSFER OF
SUCH PROCEEDING TO THE COURTS SITTING IN DALLAS COUNTY, TEXAS.
     19. Counterparts. This Note and each other Loan Document may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute but one and the same instrument.
     20. Severability. If any provision of this Note or any other Loan Document
shall be held invalid under any applicable laws, then all other terms and
provisions of this Note and the Loan Documents shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
law.
     21. Amendments; Waivers. No amendment or waiver of any provision of this
Note nor consent to any departure herefrom, shall in any event be effective
unless the same shall be in writing and signed by Lender and the affected
person, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
     22. Binding Effect; Assignment. This Note and the other Loan Documents
shall be binding on Borrower and the General Partner and their respective
administrators, other legal representatives, successors, heirs and assigns,
including, without limitation, any receiver, trustee or debtor in possession of
or for Borrower or the General Partner, and shall inure to the benefit of Lender
and its successors and assigns. Neither Borrower nor the General Partner shall
be entitled to transfer or assign this Note and the other Loan Documents in
whole or in part without the prior written consent of Lender. This Note and the
other Loan Documents are freely assignable and transferable by Lender without
the consent of Borrower, the General Partner or any of its affiliates. Should
the status, composition, structure or name of Borrower change, this Note and the
other Loan Documents shall continue and also cover Borrower under the new status
composition, structure or name according to the terms of this Note and the other
Loan Documents.

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     23. Captions. The captions in this Note are for the convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
     24. Number of Gender of Words. Except where the context indicates
otherwise, words in the singular number will include the plural and words in the
masculine gender will include the feminine and neutral, and vice versa, when
they should so apply.
     25. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF BORROWER AND THE
GENERAL PARTNER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY
(A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR
INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR
THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR
ASSOCIATED HEREWITH OR THEREWITH, BEFORE OR AFTER MATURITY OF THIS NOTE;
(B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES”, AS DEFINED
BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OF LENDER OR
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER
INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES
ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.
     26. ENTIRE AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS TOGETHER
CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES CONCERNING THE SUBJECT MATTER
HEREOF, AND ALL PRIOR DISCUSSIONS, AGREEMENTS AND STATEMENTS, WHETHER ORAL OR
WRITTEN, ARE MERGED INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES AND THIS NOTE AND THE OTHER LOAN
DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
[The remainder of this page is left blank intentionally.]

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     This Note has been executed by Borrower, the General Partner and Lender on
this the ___day of July, 2006, effective for all purposes as of the Effective
Date.

              BORROWER:   CENTURION ACQUISITIONS, L.P.
a Texas limited partnership    
 
           
 
      By: Pars Investments, Inc.    
 
      Its: General Partner    
 
           
 
      By: /s/ Mehrdad Moayedi                                           
 
      Name: Mehrdad Moayedi
Its: President    

GENERAL PARTNER:
Pars Investments, Inc., a Texas corporation acting in its own capacity, hereby
(i) agrees with and accepts all of the terms and conditions of this Note which
are applicable to the General Partner (as such term is defined in the Note), and
(ii) makes the representations, warranties, covenants and agreements in the Note
which are, by their terms, applicable to General Partner.

         
 
  PARS INVESTMENTS, INC.
a Texas corporation    
 
       
 
  By: /s/ Mehrdad Moayedi                                            
 
  Name: Mehrdad Moayedi
Its: President    
 
       
LENDER:
  UNITED DEVELOPMENT FUNDING III, L.P.,    
 
  a Delaware limited partnership    
 
       
 
  By: UMTH Land Development, L.P.
Its: General Partner    
 
       
 
  By: UMT Services Inc.    
 
       
 
  By: /s/ Jeff Shirley                                             
 
  Name: Jeff Shirley    
 
  Its: Executive Vice President    

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