exv10w3



 







Exhibit 10.3




PROMISSORY NOTE




	 	 	 	 	 
	$325,000.00
	 	Dallas, Texas
	 	March 22, 2006






     FOR VALUE RECEIVED, the undersigned, MBI Mortgage, Inc., a Texas corporation (“Maker”), whose
address is 1845 Woodall Rodgers Freeway, Suite 1225, Dallas, Texas 75201, promises to pay to the
order of CHARTER PRIVATE EQUITY, L.P., a Texas limited partnership (“Payee”) at 1845 Woodall
Rodgers Freeway, Suite 1700, Dallas, Texas 75201, or such other location as Payee may direct, in
lawful money of the United States of America, the principal sum of Three Hundred Twenty-Five
Thousand And No/100 ($325,000.00) with interest on the outstanding principal balance at the rate of
eighteen percent (18%) per annum until paid.



     All sums, principal and interest shall be due and payable on or before June 20, 2006
(“Maturity Date”) through a payment cashier’s check or other immediately available funds at the
above address or, at Payee’s option, by wire transfer to an account designated by Payee or such
other method of payment as Payee shall direct. This Note may be prepaid at any time, in full or in
part, without premium or penalty. This Note is being executed pursuant to a Loan Agreement
executed by the Payee and Maker as of the date hereof.



     Maker and any and all co-makers, endorsers, guarantors and sureties severally waive
presentment for payment, notice of nonpayment, protest, demand, notice of protest, notice of
intention to accelerate, notice of acceleration and dishonor, diligence in enforcement and
indulgences of every kind, and hereby agree that this Note and the liens securing its payment may
be extended and re-extended and the time for payment extended and re-extended from time to time
without notice to them or any of them, and they severally agree that their liability on or with
respect to this Note shall not be affected by any release or change in any security at any time
existing or by any failure to perfect or maintain perfection of any security interest in such
security.



     It is agreed that time is of the essence of this Note, and if the Note is not paid on the
Maturity Date, or, if a default occurs under any instrument now or hereafter executed in
connection with or as security for this Note, thereupon, after the passage of applicable notice and
cure periods, at the option of Payee, the entire unpaid principal balance due and owing on this
Note shall become and be due and payable forthwith without demand, notice of default or of intent
to accelerate the maturity hereof, notice of nonpayment, presentment, protest or notice of
dishonor, all of which are hereby expressly waived by Maker and each other liable party. Failure
to exercise this option upon any such default shall not constitute a waiver of the right to
exercise such option in the event of any subsequent default.



     If the entire unpaid principal balance plus all accrued and unpaid interest due and owing on
this Note is not paid at maturity whether by acceleration or otherwise and is placed in the hands
of an attorney for collection, or suit is filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collection



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hereof, Maker and each other liable party agree to pay Payee its reasonable collection costs,
including a reasonable amount for attorneys’ fees, but in no event to exceed the maximum amount
permitted by law. Maker and each other liable party are and shall be directly and primarily,
jointly and severally, liable for the payment of all sums called for hereunder, and Maker and each
other liable party hereby expressly waive bringing of suit and diligence in taking any action to
collect any sums owing hereon and in the handling of any security hereunder, and Maker and each
other liable party hereby consent to and agree to remain liable hereon regardless of any renewals,
extensions for any period or rearrangements hereof, or any release or substitution of security
herefor, in whole or in part, with or without notice, from time to time, before or after maturity.




     It is the intent of Maker and Payee in the execution of this Note and all other loan documents
to contract in strict compliance with applicable usury law. In furtherance thereof, Maker and Payee
stipulate and agree that none of the terms and provisions contained in this Note, or in any other
instrument executed in connection herewith, shall ever be construed to create a contract to pay for
the use, forbearance or detention of money, interest at a rate or in an amount in excess of the
maximum rate or amount allowed by law (“Maximum Interest”). Neither Maker nor any guarantors,
endorsers or other parties now or hereafter becoming liable for payment of this Note shall ever be
obligated or required to pay interest on this Note at a rate in excess of the Maximum Interest, and
the provisions of this paragraph shall control over all other provisions of this Note and any other
loan documents now or hereafter executed which may be in apparent conflict herewith. Payee
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 the maturity of this Note shall
be accelerated for any reason or if the principal of this Note is paid prior to the end of the term
of this Note, and as a result thereof the interest received for the actual period of existence of
the loan evidenced by this Note exceeds the applicable maximum lawful rate, the holder of this
Note shall credit the amount of such excess against the principal balance of this Note then
outstanding and thereby shall render inapplicable any and all penalties of any kind provided by
applicable law as a result of such excess interest; provided, however, that if the principal
hereof has been paid in full, such excess shall be refunded to Maker. If the holder of this Note
shall receive money (or anything else) which is determined to constitute interest and which would
increase the effective interest rate on this Note or any other indebtedness which Maker or a
guarantor is obligated to pay to holder to a rate in excess of that permitted by applicable law,
the amount determined to constitute interest in excess of the lawful rate shall be credited
against the principal balance of this Note then outstanding or, if the principal balance has been
paid in full, refunded to Maker, in which event any and all penalties of any kind under applicable
law as a result of such excess interest shall be inapplicable. If the holder of this Note shall
not actually receive, but shall contract for, request or demand, a payment of money (or anything
else) which is determined to constitute interest and which would increase the effective interest
rate contracted for or charged on this Note or the other indebtedness evidenced or secured by the
Loan Documents to a rate in excess of that permitted by applicable law, the holder of this Note
shall be entitled, following such determination, to waive or rescind the contractual claim,
request or demand for the amount determined to constitute interest in excess of the lawful rate,
in which event any and all penalties of any kind under applicable law as a result of such excess
interest shall be inapplicable. By execution of this Note Maker acknowledges that Maker believes
the loan evidenced by this Note to be non-usurious and



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agrees that if, at any time, Maker should have reason to believe that such loan is in fact
usurious, Maker will give the holder of this Note notice of such condition and Maker agrees that
the holder shall have sixty (60) days in which to make appropriate refund or other adjustment in
order to correct such condition if in fact such exists.




     Additionally, if, from any circumstance whatsoever, fulfillment of any provision hereof or of
the Loan Agreement or any other loan documents shall, at the time fulfillment of such provision
be due, involve transcending the Maximum Interest then, ipso facto, the obligation to be fulfilled
shall be reduced to the Maximum Interest. The term “applicable law” as used in this Note shall
mean the laws of the State of Texas or the laws of the United States, whichever laws allow the
greater rate or amount of interest, as such laws now exist or may be changed or amended or come
into effect in the future.



     This Note is secured by a security agreement covering all of Maker’s assets, now owned or
hereinafter acquired, executed by Maker in favor of Payee, or any other holder of this Note,
executed simultaneously herewith.



     This Note has been executed and delivered in and shall be construed in accordance with and
governed by the laws of the State of Texas.



	 	 	 	 	 
	 	MAKER:



MBI Mortgage, Inc.

 	 
	 	BY:	/s/ John M. Farkas
 	 
	 	Name:  	John M. Farkas 	 
	 	Title:  	President/Secretary 	 
	 



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