Document:

T Elliott Employment Agreement

    EXHIBIT
      10.2

     

    EMPLOYMENT
      AGREEMENT

     

    

    This
      Employment Agreement (“Agreement”)
      is
      executed on this 17TH day of November, 2006, by and between
      RESOURCE AMERICA, INC., a Delaware corporation having its principal place of
      business at 1845 Walnut Street, Philadelphia, Pennsylvania 19103 (“RAI”),
      and
      THOMAS C. ELLIOTT (“Elliott”).

    

    BACKGROUND

    

    A. Since
      2001, Elliott has been an officer of RAI and currently he serves as the Senior
      Vice President-Finance and Operations of RAI. From 1997 to 2001, Elliott was
      an
      officer of Fidelity Leasing, Inc., a former subsidiary of RAI.

    

    B. Elliott
      and RAI desire to formally set forth the terms, conditions and agreements
      regarding Elliott’s employment as Senior Vice President-Finance and Operations
      of RAI.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the premises and the mutual promises and
      covenants set forth herein, and intending to be legally bound hereby, RAI and
      Elliott hereby agree as follows:

    

    1) Employment.
      During
      the term of this Agreement, Elliott shall be employed as the Senior Vice
      President-Finance and Operations of RAI.

    

    2) Duties.
      Elliott
      shall report to, and accept direction from, the Chief Financial Officer of
      RAI
      and from the Board of Directors of RAI (the “Board”).
      Elliott shall serve RAI diligently, competently and to the best of his
      abilities. Elliott shall devote substantially all of his time and attention
      to
      the business of RAI and its affiliates, and shall not undertake any other duties
      which conflict with these responsibilities. Elliott shall render such services
      as may reasonably be required of him to accomplish the business purposes of
      RAI,
      and such duties as may be assigned to him from time to time and which are
      appropriate for his position at RAI.

    

    3) Term.
      Elliott’s employment hereunder shall commence on the date hereof and continue in
      full force and effect for a period of one (1) year, unless sooner terminated
      in
      accordance with the provisions hereof (the “Term”).
      The
      Term shall automatically extend each day so that on any day that this Agreement
      is in effect, there shall be one (1) year remaining in the Term. Notwithstanding
      the foregoing, such automatic extensions shall cease upon RAI’s written notice
      to Elliott of its election to terminate this Agreement at the end of the one
      (1)
      year period then in effect.

    

    4) Compensation.

    

    a) Base
      Compensation.
      Elliott’s compensation during the Term shall be determined by the Board, subject
      to the next sentence and Section 4b).
      During
      the initial year 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      of
        the
        Term, RAI shall pay to Elliott “Base
        Compensation”
        initially in an amount equal to Two Hundred Thousand Dollars ($200,000.00)
        per
        annum (the “Initial
        Level”).
        Elliott’s Base Compensation will be payable in accordance with the general
        payroll practices by which RAI pays its executive officers, and the historical
        practice of RAI’s compensation of Elliott. It is understood that RAI, through
        the compensation committee of the Board of RAI, will review Elliott’s
        performance on an annual basis and increase or decrease (but in no event
        below
        the Initial Level) his Base Compensation based upon his
        performance.

    

    

    (b) Incentive
      Compensation.
      During
      the Term, Elliott may receive incentive compensation in the form of cash bonus
      payments, stock option grants, restricted stock grants and other forms of
      incentive compensation, based upon Elliott’s performance.

    

    5) Benefits.

    

    Elliott
      shall be entitled to receive the following benefits from RAI:

    

    a) Participation
      in Plans.
      Elliott
      shall be entitled to participate in all applicable incentive, savings, and
      retirement plans, practices, policies, and programs of RAI and in any group
      life, hospitalization or disability insurance plans, and health programs, in
      each case to the extent Elliott is eligible under the terms of such plans or
      programs.

    

    b) Disability.
      Elliott
      shall be eligible for any short and long term disability and any life insurance
      plans or programs that are available to other Senior Vice Presidents of RAI
      in
      each case to the extent Elliott is eligible under the terms of such plans or
      programs.

    

    c) Reimbursement
      of Expenses.
      RAI
      shall reimburse Elliott for all reasonable expenses incurred by Elliott in
      the
      performance of his duties, including without limitation expenses incurred during
      business-related travel. Elliott shall present to RAI, from time to time, an
      itemized account of such expenses in such form as may be required by
      RAI.

    

    d) Personal
      Time Off.
      Elliott
      shall be entitled to a number of days of personal time off work during each
      calendar year which shall be no less than the amount set forth in RAI’s company
      policies. This includes days used for vacation, illness or other personal
      matters but is exclusive of such office holidays as may be designated by
      RAI.

    

    6) Termination.

    

    Anything
      herein contained to the contrary notwithstanding, Elliott’s employment hereunder
      shall terminate as a result of any of the following events:

    

    a) Elliott’s
      death;

    

    b) Termination
      by RAI, for Cause. “Cause”
shall
      encompass the following: (i) Elliott has committed any act of fraud;
      (ii)
      illegal
      conduct or gross misconduct by Elliott,
      in
      either case that is willful and results in material and demonstrable damage
      to
      the business or reputation of RAI or any of its affiliates;
      (iii)
      Elliott is
      charged with a felony;
      (iv)
      the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    continued
      failure of Elliott
      substantially to perform Elliott’s
      duties
      under this Agreement (other than as a result of physical or mental illness
      or
      injury), after RAI delivers to Elliott
      a
      written demand for substantial performance that specifically identifies, with
      reasonable opportunity to cure, the manner in which RAI believes that
Elliott
      has not
      substantially performed his duties; or (v) Elliott has failed to follow
      reasonable written directions of RAI which are consistent with his duties
      hereunder and not in violation of applicable law, provided Elliott shall have
      ten business days after written notice to cure such failure;

    

    c) Termination
      by RAI without Cause, upon thirty (30) days prior written notice to
      Elliott;

    

    d) Elliott
      becomes disabled by reason of physical or mental disability for more than one
      hundred eighty (180) days in the aggregate or a period of ninety (90)
      consecutive days during any 365-day period and the Board determines, in good
      faith and in writing, that Elliott, by reason of such physical or mental
      disability, is rendered unable to perform his duties and services hereunder
      (a
“Disability”).
      A
      termination of Elliott’s employment by RAI for Disability shall be communicated
      to Elliott by written notice, and shall be effective on the thirtieth
      (30th)
      day
      after receipt of such notice by Elliott (the “Disability
      Effective Date”),
      unless Elliott returns to full-time performance of his duties before the
      Disability Effective Date.

    

    e) A
      termination by Elliott for Good Reason upon thirty (30) days’ prior written
      notice to RAI. “Good
      Reason”
shall
      mean: (i)
      any
      action by RAI that results in a material diminution in Elliott’s position,
      authority, duties, or responsibilities, other than an isolated, insubstantial,
      and inadvertent action that is not taken in bad faith and is remedied by RAI
      promptly after receipt of notice thereof from Elliott; (ii) any purported
      termination of Elliott’s employment by RAI for a reason or in a manner not
      expressly permitted by this Agreement; (iii) any failure by RAI to comply
      with Section 11(c) of this Agreement; or (iv)   any other substantial
      breach of this Agreement by RAI that either is not taken in good faith or is
      not
      remedied by RAI promptly after receipt of notice thereof from
      Elliott;
      provided, however, that termination by Elliott for Good Reason shall be
      effective only if such failure has not been cured within thirty (30) days after
      notice of such failure has been given to RAI. Except as provided in the
      following sentence, a
      termination of employment by Elliott for Good Reason shall be effectuated by
      giving RAI written notice of the termination within two (2) months of the event
      constituting Good Reason, setting forth in reasonable detail the specific
      conduct of RAI that constitutes Good Reason and the specific provision(s) of
      this Agreement on which Elliott relies. In the event of a Change of Control,
      Elliott may terminate his employment by providing such written notice to RAI
      for
      a period of time commencing on the date such Change of Control occurs and ending
      on the date six (6) months thereafter.

    

    (f) A
      termination by Elliott following a Change of Control (as defined below) of
      RAI.

    

    (g) Termination
      by Elliott for any reason other than those set forth in Section 6(e) (other
      than by such Elliott’s death or disability) upon 180 day’s prior written notice
      to RAI.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h) The
      “Date
      of Termination”
means
      the date of Elliott’s death, the Disability Effective Date, the date on which
      the termination of Elliott’s employment by RAI for Cause or without Cause or by
      Elliott for Good Reason is effective, or the date on which Elliott gives RAI
      notice of a termination of employment without Good Reason, as the case may
      be;

    

    (i) A
      “Change
      in Control”
means
      the occurrence of any of the following events:

    

    (1) RAI’s
      shareholders approve (or, in the event no approval of RAI’s shareholders is
      required, RAI consummates) a merger, consolidation, share exchange, division
      or
      other reorganization or transaction of RAI (a “Fundamental Transaction”) with
      any other corporation, other than a Fundamental Transaction which would result
      in the voting securities of RAI outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) at least sixty percent (60%) of the combined
      voting power immediately after such Fundamental Transaction of (i) RAI’s
      outstanding securities, (ii) the surviving entity’s outstanding securities, or
      (iii) in the case of a division, the outstanding securities of each entity
      resulting from the division;

    

    (2) the
      shareholders of RAI approve a plan of complete, liquidation or winding-up of
      RAI
      or an agreement for the sale or disposition (in one transaction or a series
      of
      transactions) of all or substantially all of RAI’s assets;

    

    (3) during
      any period of twenty-four consecutive months, less than one-third of the
      individuals who at the beginning of such period constituted the Board (including
      for this purpose any new director whose election or nomination for election
      by
      RAI’s shareholders was approved by a vote of at least two-thirds (2/3) of the
      directors then still in office who were directors at the beginning of such
      period) are on the Board at the end of such period.

     

    (4)     
      neither Edward E. Cohen nor Jonathan Cohen are on the Board; or

     

    (5)  Jonathan
      Cohen is no longer Chief Executive Officer of the Company. 

     

    7. Effect
      of Termination.

    

    a. Death.
      If
      Elliott’s employment is terminated by reason of Elliott’s death during the Term,
      RAI shall pay to Elliott’s designated beneficiaries (or, if there is no such
      beneficiary, to Elliott’s estate or legal representative), in a lump sum in cash
      within sixty (60) days after the Date of Termination, the sum of the following
      amounts: (1) any portion of Elliott’s Base Compensation through the Date of
      Termination that has been earned but not yet been paid; (2) any accrued but
      unpaid vacation pay through the Date of Termination; (3) an amount equal to
      one
      (1) year’s Base Compensation as of the Date of Termination; and (4) an amount
      equal to the value of all compensation (excluding stock option grants) received
      by Elliott pursuant to Section 4(b) during the prior year ending on the Date
      of
      Termination. In the event of termination under this Section 7(a), all other
      benefits, payments or 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    compensation
      to be provided to Elliott hereunder shall terminate and Elliott’s rights in any
      stock option or incentive plans shall be governed solely by the terms of the
      applicable plan and grant.

    

    b. Disability.
      Upon
      the termination of Elliott’s employment pursuant to Section 6(d) hereof due to
      Elliott’s disability, Elliott shall be entitled to receive his Base Compensation
      and any incentive compensation (excluding stock option grants) pursuant to
      Section 4(b) until the expiration of the Term, payable on the dates Elliott
      would have been paid if he was still working for RAI. If Elliott is terminated
      by reason of Disability, Elliott shall assign to RAI any benefits received
      on
      account of RAI provided disability insurance for the period in which he is
      receiving payments pursuant to this Section 7(b).

    

    c. By
      RAI for Cause; By Elliott Other than for Good Reason.
      If
      Elliott’s employment is terminated by RAI for Cause during the Term, RAI shall
      pay Elliott his Base Compensation through the Date of Termination to the extent
      earned but not yet paid. If Elliott voluntarily terminates employment during
      the
      Term, other than for Good Reason, RAI shall pay Elliott his Base Compensation
      through the Date of Termination to the extent earned but not yet paid. In the
      event of termination under this Section 7(c), all other benefits, payments
      or
      compensation to be provided to Elliott hereunder shall terminate and the rights
      of Elliott in any stock option or incentive plans shall be governed solely
      by
      the terms of the applicable plan and grant.

    

    d. By
      RAI Other than for Cause, Death or Disability; by Elliott for Good
      Reason.
      If,
      during the Term, RAI terminates Elliott’s employment, other than for Cause,
      Death or Disability, or Elliott terminates employment for Good Reason, RAI
      shall
      pay to Elliott amounts
      equal to Base Compensation as set forth in Section 4(a) as if he had remained
      employed by the Company pursuant to this Agreement, for a period of one
      year,
      payable
      at the time when the same would have become due and payable if such termination
      had not occurred. The payments and benefits provided pursuant to this Section
      7(d) are intended as liquidated damages for a termination of Elliott’s
      employment by RAI other than for Cause or for the actions of RAI leading to
      a
      termination of Elliott’s employment by Elliott for Good Reason, and shall be the
      sole and exclusive remedy therefor.

    

    e. Following
      a Change of Control.
      If,
      during the Term, Elliott terminates his employment following a Change of
      Control, or Elliott’s employment is terminated by RAI’s successor following a
      Change of Control, RAI shall pay to Elliott amounts
      equal to compensation and benefits set forth in Sections 4 and 5 as if he had
      remained employed by the Company pursuant to this Agreement, through the end
      of
      the Term,
      payable
      at the time when the same would have become due and payable if such termination
      had not occurred. The incentive compensation paid to Elliott pursuant to the
      foregoing sentence shall be an amount which is not less than the amount of
      incentive compensation (excluding stock option grants) Elliott received in
      the
      year immediately prior to the Date of Termination. In addition to the foregoing,
      any restricted stock of RAI or its affiliates outstanding on the Date of
      Termination shall be fully vested as of the Date of Termination and all options
      outstanding on the Date of Termination shall be fully vested and exercisable
      in
      accordance with the terms of the applicable plan and grant. The payments and
      benefits provided pursuant to this Section 7(e) are intended as liquidated
      damages for a termination of Elliott’s employment by RAI 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    other
      than for Cause or for the actions of RAI leading to a termination of Elliott’s
      employment by Elliott for Good Reason, and shall be the sole and exclusive
      remedy therefor.

    

    8. Confidential
      Information.
      All
      confidential information or trade secrets which Elliott may obtain during the
      period of employment relating to the business of RAI and its affiliates shall
      not be published, disclosed, or made accessible by him to any other person,
      firm, or corporation except in the business and for the benefit of RAI and
      its
      affiliates. The provisions of this Section 8 shall survive the termination
      of
      this Agreement, but shall not apply to any information which is or becomes
      publicly available otherwise than by any breach of this Section 8.

    

    9. Covenant
      Not to Solicit.
      Elliott
      shall not, during the Term and for a period ending on the date one (1) year
      from
      the Date of Termination, directly or indirectly through another person or entity
      (i) induce or attempt to induce any officer or employee of RAI or its
      affiliates to leave the employ of RAI or such affiliate, or in any way interfere
      with the relationship between RAI and any of its affiliates and any officer
      or
      employee thereof, (ii) hire any person who was an officer or employee of
      RAI or any of its affiliates within 180 days after such person ceased to be
      an
      officer or employee of RAI or any of its affiliates or (iii) induce or
      attempt to induce any customer, supplier, vendor, licensee, issuer, originator,
      investor or other business relation of RAI or any of its affiliates to cease
      doing business with RAI or such affiliate or in any way interfere with the
      relationship between any such customer, supplier, vendor, licensee, issuer,
      originator, investor or business relation and RAI or any of its
      affiliates.

    

    10. Remedies
      in Case of Breach of Certain Covenants or Termination.
      RAI and
      Elliott agree that the damages that may result to RAI from misappropriation
      of
      confidential information or solicitation as prohibited by Sections 8 and 9
      could
      be estimated only by conjecture and not by any accurate standard, and,
      therefore, any breach by Elliott of the provisions of such Sections, in addition
      to giving rise to monetary damages, will be enjoined.

    

    11. Assignment.

    

    e. This
      Agreement is personal to Elliott and, without the prior written consent of
      RAI,
      shall not be assignable by Elliott. This Agreement shall inure to the benefit
      of
      and be enforceable by Elliott’s legal representatives.

    

    f. This
      Agreement shall inure to the benefit of and be binding upon RAI and its
      successors and assigns, and RAI may assign this Agreement to any company in
      which RAI has an interest. Elliott acknowledges and agrees that, if this
      Agreement is assigned pursuant to the previous sentence, he will also, if
      requested by any affiliate of RAI perform the reasonable duties of a vice
      president of finance and operations of any such affiliate.

    

    g. RAI
      shall
      require any successor (whether direct or indirect, by purchase, merger,
      consolidation, or otherwise) to all or substantially all of the business and/or
      assets of RAI expressly to assume and agree to perform this Agreement in the
      same manner and to the same extent that RAI would have been required to perform
      it if no such succession had taken place. As used in this Agreement, “RAI” shall
      mean both RAI as defined above and any such successor that assumes and agrees
      to
      perform this Agreement, by operation of law or otherwise.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    12. Miscellaneous.

    

    h. Severability.
      In case
      any one or more of the provisions contained herein shall, for any reason, be
      held to be invalid, illegal, or unenforceable in any respect such validity,
      illegality or unenforceability shall not affect any other provisions of this
      Agreement, and this Agreement shall be construed as if such invalid, illegal
      or
      unenforceable provision(s) had never been contained herein, provided that such
      invalid, illegal or unenforceable provision(s) shall first be curtailed, limited
      or eliminated only to the extent necessary to remove such invalidity, illegality
      or unenforceability with respect to the applicable law as it shall then be
      applied.

    

    i. Modification
      of Agreement.
      This
      Agreement shall not be modified by any oral agreement, either expressed or
      implied, and all modifications thereof shall be in writing and signed by the
      parties hereto.

    

    j. Waiver.
      The
      waiver of any right under this Agreement by any of the parties hereto shall
      not
      be construed as a waiver of the same right at a future time or as a waiver
      of
      any other rights under this Agreement.

    

    k. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the Commonwealth of Pennsylvania, without giving affect to the
      principles of conflicts of laws.

    

    l. Notices.
      Any
      notice to be given pursuant to this Agreement shall be sufficient if in writing
      and mailed by certified or registered mail, postage-prepaid, to the addresses
      listed below, or to such other address as either party may notify the other
      of
      in accordance with this Section.

    

    If
      to RAI:

    

    Resource
      America, Inc.

    
      	 	 	
              1845
                Walnut Street

            

    

    
      	 	 	
              Suite
                1000

            

    

    
      	 	 	
              Philadelphia,
                PA 19103

            

    

    
      	 	 	
              Attn:
                Michael S. Yecies

            

    

    

    If
      to Elliott:

     

    Thomas
      C.
      Elliott

    1845
      Walnut Street

    Suite
      1000

    Philadelphia,
      PA 19103

    

    (f) Duplicate
      Originals and Counterparts.
      This
      Agreement may be executed in any number of duplicate originals or counterparts
      or facsimile counterparts, each of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such
      duplicate original or counterpart or facsimile counterpart shall be deemed
      to be
      an original and all taken together shall constitute but one and the same
      instrument.

    

    

    IN
      WITNESS WHEREOF, the parties hereto have executed or caused to be executed
      this
      Agreement as of the date first above written.

    

    

    RESOURCE
      AMERICA, INC.

    

    

    By:____________________________

    Name:

    Title:

    

    

    THOMAS
      C.
      ELLIOTT

    

    ________________________________Secured Promissory Note by Centurion Acquisitions, L.P.

    

      

        SECURED
          PROMISSORY NOTE

        

        U.S. $5,272,250.00   
          Dallas, Texas  
          November
          16, 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. Five Million Two Hundred Seventy-Two Thousand Two
          Hundred
          Fifty and NO/100 Dollars ($5,272,250.00) 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.
          

         

        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, and payable as provided herein.

        

        (b)  “Base
          Rate”
shall
          mean the lesser of (i) sixteen and one-half percent (16.5%), accrued and
          compounded monthly, or (ii) the Highest Lawful Rate.

        

        (c)  “Collateral”
shall
          have the meaning given to such term in the Security Agreement.

        

        (d)  “Commitment”
shall
          mean the aggregate amount of U.S. Four Million Five Hundred Thousand and
          NO/100
          Dollars ($4,500,000.00).

        

        (e)  “Commitment
          Advance”
shall
          mean full or partial advance of the Commitment to Borrower pursuant to
          the terms
          hereof. 

        

        (f)  “Commitment
          Fee”
shall
          mean the fee paid by Borrower to Lender or its assigns pursuant to that
          certain
          Commitment Letter dated September 18, 2006, in consideration of Lender’s
          commitment to make the Loan, subject to the terms and conditions hereof.
          

        

        (g)  “Default
          Rate”
shall
          mean the lesser of (i) eighteen percent (18%), accrued and compounded annually,
          or (ii) the Highest Lawful Rate.

        

        (h)  “Effective
          Date”
shall
          mean November 16, 2006.

        

        (i)  “Event
          of Default”
shall
          have the meaning given to such term in Section
          10
          of this
          Note.

        

        (j)  “General
          Partner”
means
          Pars Investments, Inc., a Texas corporation and the general partner of
          Borrower.

        

        (k)  “Guaranty”
shall
          mean that certain Continuing Unconditional Guaranty executed by the General
          Partner in favor of Lender dated the Effective Date, as such Guaranty may
          be
          amended from time to time.

        

        (l)  “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. 

        

        (m)  “Interest
          Reserve”
shall
          mean an aggregate of up to U.S. Six Hundred and No/100 Dollars ($600,000.00)
          to
          be advanced by Lender hereunder and to be applied against Accrued Interest
          Payments, subject to the provisions of Sections
          4(b)
          and
4(c)
          of this
          Note.

        

        (n)  “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.

        

        (o)  “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.

        

        (p)  “Loan”
shall
          mean the loan made to Borrower pursuant to this Note.

        

        (q)  “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.

        

        (r)  “Loan
          Documents”
shall
          mean, collectively, this Note, the Pledge Agreement, the Security Agreement,
          the
          Guaranty, the error and omissions letter and all other documents, certificates,
          instruments, and agreements executed, entered into or delivered by Borrower,
          Millennium, the General Partner, or any of their respective affiliates
          in
          connection with the Loan, as each such document may be amended from time
          to
          time. 

        

        (s)  “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 this 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.

        

        (t)  “Millennium”
means
          Millennium NTX Properties, L.L.C., a Texas limited liability
          company.

        

        (u)  “Maturity
          Date”
means
          December 31, 2010.

        

        (v)  “Partnership
          Agreement”
means
          the Agreement of Limited Partnership of Centurion Acquisitions, L.P., as
          it may
          be amended from time to time.

        

        (w)  “Pledge
          Agreement”
shall
          mean that certain Pledge Agreement executed by the Pledgors in favor of
          Lender
          dated as of the Effective Date, pursuant to which the Pledgors pledge their
          respective interests in the Pledged Securities to Lender, as such agreement
          may
          be amended from time to time.

        

        (x)  “Pledged
          Securities”
shall
          have the meaning given to such term in the Pledge Agreement.

        

        (y)  “Pledgors”
mean,
          collectively, Borrower and Millennium. 

        

        (z)  “Properties”
shall
          mean, collectively, all real properties now owned or hereinafter acquired
          by
          those corporations, partnerships and limited liability companies, the equity
          interests of which are Pledged Securities under the Pledge
          Agreement.

        

        (aa)  “Security
          Agreement”
shall
          mean that certain Security Agreement executed by Borrower in favor of Lender
          dated as of the Effective Date, as it may be amended from time to
          time.

        

        (bb)  “Senior
          Indebtedness”,
          if
          any, shall mean the amount of indebtedness owed to a Senior Lender that
          Lender
          has agreed in writing will have (i) priority in payment over the indebtedness
          evidenced by this Note, and/or (ii) priority over the Liens created by
          the
          Pledge Agreement and/or the Security Agreement.

        

        (cc)  “Senior
          Lender”
shall
          mean any bank, financial institution or other lender having made a loan
          to any
          Borrower and/or Pledgor that has a senior position ahead of Lender with
          respect
          to the payment of Borrower is indebtedness under this Note and/or the priority
          of Liens against the Pledged Securities or the Collateral, or any other
          granted
          or pledged as security for the Loan; provided, that Lender has agreed in
          writing
          to be subordinate thereto. 

        

        2. Loan
          Expenses; Fees.

         

        (a) Loan
          Expenses.
          Upon
          Lender’s demand from time to time, Borrower shall pay Lender, the full amount
          of
          all Loan Expenses incurred by Lender.

        

        (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 (even if such disbursement causes the aggregate amount outstanding
          hereunder to exceed the face amount of this Note). 

        

        (c) Commitment
          Fee.
          Pursuant to the terms and conditions of that certain Commitment Letter
          between
          Borrower and lender dated September 18, 2006, Borrower agreed to pay Lender
          a
          Commitment Fee in the amount of $153,000.00 in consideration of Lender’s
          commitment to make the Loan to Borrower. 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, Millennium 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, Millennium 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 constitute
          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. Closings;
          Commitment Advances; Borrowing Procedures; etc.

        

        (a) Closings;
          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 at
          the
          closing of the Loan, the following amounts shall be funded: $900,000.000
          of the
          Commitment, the Commitment Fee, a $2,250.00 Loan Administration Fee and
          $8,000.00 in anticipated Loan Expenses. It is anticipated that the remainder
          of
          the Commitment shall be funded through one or more Commitment Advances
          in the
          first year this Note is outstanding. 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 after the initial closing hereof 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 date, and shall specify the amount of the Commitment Advance so
          requested, and 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
          is authorized 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 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. 

        

        (e) Face
          Amount of Note.
          The
          $5,272,250.00 face amount of the Note consists of the sum of (i) the Commitment
          ($4,500,000.00), plus
          (ii) the
          Interest Reserve ($600,000.00), plus
          (iii)
          the Commitment Fee, ($153,000.00), plus
          (iv) an
          aggregate of $19,250.00 in anticipated Loan Expenses and Loan Administration
          Fees. 

        

        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, unless the Default
          Rate
          shall apply. Subject to the other provisions of this Note, upon the occurrence
          and during the continuation of an Event of Default, the outstanding principal
          amount of this Note shall, at Lender’s option, automatically and without the
          necessity of notice, bear interest from the date of such Event of Default
          at the
          Default Rate, 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 last day of each month
          for
          interest accrued during that month. 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 (iii) such Interest Reserve
          Advance
          funded by Lender hereunder shall automatically become principal outstanding
          under this Note upon 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 agreed by Lender 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) Replenishment
          of Interest Reserve.
          To the
          extent Borrower makes any prepayment of the Loan and such prepayment is
          applied
          to accrued interest in accordance with Section
          5(a)
          of this
          Note, the Interest Reserve shall be replenished in an amount equal to the
          prepayment of accrued interest; provided,
          however,
          that no
          replenishment shall be made or required in the event that the Interest
          Reserve
          equals $600,000.00; provided
          further, however,
          that
          the Interest Reserve will be replenished only to the extent of, and in
          an amount
          not greater than, the mathematical difference of $600,000.00 minus the
          then
          current balance of the Interest Reserve calculated as of the date of the
          prepayment.

        

        (d) 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 any sale and of any Property, Borrower shall pay or cause to be paid
          to
          Lender, the amount of full amount of such proceeds received or due therefrom
          resulting from such sale, remaining after payment of any applicable Senior
          Indebtedness; 

        

        (iii) concurrently
          with any distribution from any Pledged Security to any Pledgor, Borrower
          shall
          pay or cause to be paid to Lender, the amount of full amount of such proceeds
          received or due therefrom resulting from such sale, remaining after payment
          of
          any applicable Senior Indebtedness; and

        

        (iv) 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 this
          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 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 (except as set forth below), 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 Millennium, as applicable;

        

        (b) the
          most
          recent financial statements of Borrower and the General Partner, Millennium
          and
          the Pledged Securities, in the form specified in Section
          9(f),
          and
          accompanied by the certification required by Section
          9(f);
          

        

        (c) a
          certified copy of Borrower’s, the General Partner’s, Millennium’s and the
          Pledged Securities’ formation documents and all amendments thereto;

        

        (d) certificates
          of existence and good standing for Borrower, the General Partner, Millennium
          and
          the Pledged Securities, issued by the appropriate state
          authorities;

        

        (e) resolutions
          of the General Partner and Millennium authorizing Borrower’s, the General
          Partner’s and Millennium’s execution, delivery, and performance of this Note and
          the other Loan Documents, and the transactions contemplated hereby and
          thereby;

        

        (f) an
          opinion of counsel for Borrower, the General Partner and Millennium,
          satisfactory in all respects to Lender and its counsel, including, without
          limitation, an opinion that the Loan Documents and the Loan made pursuant
          thereto are not usurious, which shall be delivered to Lender within thirty
          (30)
          days following the initial closing of the Loan; 

        

        (g) a
          certificate of Borrower’s and the General Partner’s general liability policies,
          evidence of payment of the premium through at least one year and endorsements
          of
          such policies to Lender; 

        

        (h) a
          certificate (the “Officer’s
          Certificate”)
          executed by the President of the General Partner certifying that (i) no
          Event of
          Default has occurred and is continuing under this Note, (ii) all
          representations and warranties made by Borrower, the General Partner and
          Millennium, respectively, in this Note and the other Loan Documents are
          true and
          correct in all respects, and (iii) Borrower, the General Partner and
          Millennium 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; 

        

        (i) the
          Partnership Agreement and all amendments thereto, the bylaws of the General
          Partner and all amendments thereto, and the regulations, operating agreement
          and/or limited liability company agreement; 

         

        (j) copies
          of
          all loan documents evidencing any Senior Indebtedness in effect as of the
          Effective Date, and all amendments thereto;

         

        (k) all
          written consents that are required with respect to the Note and the other
          Loan
          Documents and the transactions contemplated thereby, including, without
          limitation, any consents that are required in respect to the pledge of
          the
          Pledged Securities to Lender pursuant to the Pledge Agreement; and 

        

        (l) 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 Commitment Advances made hereunder to exceed the Commitment;
          and

        

        (c) No
          Event
          of Default shall have occurred and be continuing, and no event that would
          be an
          Event of Default, but for the passage of time, shall have occurred and
          be
          continuing. 

         

        8. Representations
          and Warranties.
          Each of
          Borrower, the General Partner and Millennium jointly and severally represents
          and warrants to Lender that: 

        

        (a) Organization
          and Good Standing; Authorization.
          Each of
          Borrower, the General Partner and Millennium (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 of
          Borrower, the General Partner and Millennium to approve this Note and the
          other
          Loan Documents and the transactions contemplated hereby and thereby, have
          been
          duly taken. Borrower, the General Partner and Millennium are 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 aggregately, on their respective
          financial condition or operations. 

        

        (b) Authority;
          Validity.
          Borrower, the General Partner and Millennium have 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, the General
          Partner and Millennium of this Note and the other Loan Documents, and the
          performance of their respective obligations thereunder, will not (i) violate
          the
          certificate of formation of Borrower, the General Partner or Millennium,
          the
          partnership agreement of Borrower, the General Partner’s bylaws,
          or the
          operating agreement, regulations and or limited liability company agreement
          of
          Millennium, (ii) violate any law or result in a default under any contract,
          agreement, or instrument to which Borrower, Millennium or the General Partner
          is
          a party or by which Borrower, Millennium 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, Millennium
          and
          the General Partner and are enforceable against Borrower, Millennium 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.
          To the
          knowledge of each of Borrower, Millennium, and/or the General Partner,
          there is
          no pending order, notice, claim, litigation, proceeding or investigation
          against
          or affecting Borrower, Millennium or the General Partner or any of their
          respective assets or properties, or any Property or Pledged Security, whether
          or
          not covered by insurance, that could materially and adversely affect either
          the
          financial condition or business prospects or Borrower, Millennium or the
          General
          Partner, if adversely determined.

        

        (d) Indebtedness.
          Borrower, the General Partner, Millennium and the Pledged Securities have
          no
          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’s prior written consent.

        

        (e) Environmental
          Liability.
          To the
          best of Borrower’s, the General Partner’s and Millennium’s knowledge, no
          hazardous substances or solid wastes have been disposed of or otherwise
          released
          on any Property, 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. 

        

        (f) Tax
          Liabilities.
          Each of
          Borrower, the General Partner and Millennium have filed, or caused to be
          filed,
          all federal, state, county, local, and foreign tax returns and reports
          required
          to have been filed by them or with respect to any Property or Pledged Security
          (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, personal property, real property, employee withholding, social
          security, unemployment, franchise, excise, use and sales taxes. Each of
          Borrower, the General Partner and Millennium has paid, or cause to be 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, the General Partner’s and
          Millennium’s knowledge, threatened against any Property or Pledged Security, or
          against Borrower, the General Partner or Millennium or any of their respective
          properties or assets.

        

        (g) Commercial
          Loan.
           

        

        (i) Borrower,
          the General Partner and Millennium hereby acknowledge and agree that Lender
          has
          previously advised, and again hereby advises prior to the execution of
          this Note
          and the other Loan Documents, that they may and should seek the advice
          of an
          attorney and an accountant in connection with the Loan, this Note and the
          other
          Loan Documents.

        

        (ii) Borrower,
          the General Partner and Millennium hereby jointly and severally confirm
          that
          they have had the opportunity to seek the advice of an attorney and an
          accountant of their choice in connection with the Loan, this Note and the
          other
          Loan Documents.

        

        9. Covenants.
          Borrower, the General Partner and Millennium jointly and severally covenant
          and
          agree 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, the General Partner and Millennium 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 for such business purposes as
          are
          approved in writing by Lender. 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.
          Except
          for any Senior Indebtedness in existence as of the Effective Date and any
          other
          indebtedness in existence on the Effective Date that is shown on the financial
          statements delivered to Lender prior to the closing of this Note, 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, all loan documents evidencing any Senior
          Indebtedness entered into after the Effective Date 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 permit, or enter into any
          agreement to cause or permit, the dissolution or termination of the existence
          of
          Borrower, Millennium or the General Partner or the merger, consolidation,
          or
          reorganization of Borrower, Millennium or the General Partner with or into
          any
          other entity, whether or not such party would be the surviving entity.
          

        

        (e) Notice
          of Certain Events.
          Borrower shall promptly notify Lender in writing of the occurrence of any
          event
          or series of events of which Borrower, Millennium 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,
          Millennium, the General Partner, the Pledged Securities or any Property,
          (ii)
          the occurrence of any Event of Default (without giving effect to any cure
          period
          applicable thereto), or (iii) any default by Borrower, Millennium, the
          General
          Partner or the Pledged Securities, the acceleration of the maturity of
          any
          indebtedness owed by Borrower, Millennium, the General Partner or the Pledged
          Securities under the Senior Indebtedness or any indenture, mortgage, agreement,
          promissory note, contract or other instrument to which Borrower, Millennium
          or
          the General Partner is a party or by which any material asset or property
          of
          Borrower, Millennium or the General Partner, or any Pledged Security or
          any
          Property, is bound. In addition, Borrower agrees to notify Lender in writing
          at
          least twenty (20) business days prior to the date that Borrower, the General
          Partner, Millennium or any Pledged Security 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, Millennium 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, the
          General
          Partner, Millennium and each Pledged Security, 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, the General
          Partner, Millennium and each Pledged Security prepared in accordance with
          accepted accounting principles 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, Millennium or the Pledged Security, as applicable.

        

        (g) Taxes.
          Borrower, the General Partner and Millennium shall pay, and shall cause
          all
          Pledged Securities to pay, all federal, state and local taxes levied against
          them and their respective properties and assets, including all Properties,
          as
          they become due and payable and before the same become delinquent. Borrower
          or
          such other person owing such tax 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 has notified Lender of the intent to contest such taxes, and
          (iii) adequate reserves for the liability associated with such tax have
          been
          established in accordance with GAAP. Borrower 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, the General Partner and Millennium shall not create, incur, assume,
          or
          suffer to exist, directly or indirectly, or permit any Pledged Security
          to
          create, incur, assume or suffer to exist, any Lien on, against or with
          respect
          to the Pledged Securities or the Collateral, 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 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; provided,
          however,
          notwithstanding any other provision contained in this Note, in the event
          that
          any one (1) or more of  Borrower, the General Partner and Millennium
          incurs, assumes, or suffers to exist, directly or indirectly, any Lien
          that is a
          mechanic’s or materialman’s lien (either one of which, a “Mechanic’s
          Lien”)
          on,
          against or with respect to the Pledged Securities or the Collateral (or
          permits
          any Pledged Security to do so), and one (1) or more of Borrower, the General
          Partner and Millenium diligently, and in good faith, contests (or causes
          a
          Pledged Security to contest) the validity of such Mechanic’s Lien by any one (1)
          or more of a legal, equitable, and administrative proceeding, then none
          of the
 Borrower, the General Partner and Millenium shall be deemed to have fully
          complied with this Section
          9(h)
          of this
          Note for a period of ninety (90) days from the earlier of (x) the date
          on which
          any one (1) or more of Borrower, the General Partner and Millennium became
          actually aware, or (y) through the exercise of commercially reasonable
          monitoring of its business, should have become aware, of the creation,
          incurrence, assumption, or sufferance of the Mechanic’s Lien (but as to the
          certain contested Mechanic’s Lien only), provided that the one (1) or more of
          the contesting Borrower, the General Partner and Millenium have set aside
          adequate reserve for satisfaction of such Mechanic’s Lien in accordance with
          GAAP.

        

        (i) Indebtedness.
          Borrower shall not incur any indebtedness for borrowed money after the
          Effective
          Date, other than Senior Indebtedness or other indebtedness for borrowed
          money
          approved by Lender’s prior written consent. 

        

        (j) Distributions.
          At any
          time when any amounts are due to Lender hereunder, without Lender’s prior
          written consent, (i) Borrower shall not declare, pay, make, or authorize
          any
          dividends or distributions of any kind to its partners or any other person
          or
          entity, and (ii) neither Borrower nor the General Partner nor Millennium
          shall
          permit or cause any Pledged Security to declare, pay, make or authorize
          any
          dividends or distributions of any kinds to its owners or any other person
          or
          entity. If Lender approves any such dividend or distribution, Lender may,
          in its
          sole discretion, require that the full amount of such dividend or distribution
          (or any portion thereof) to be paid to Lender to reduce any indebtedness
          outstanding under this Note.

        

        (k) Borrower
          and Pledgor Documents.
          In
          addition to the information otherwise required to be provided to Lender
          pursuant
          to this Note, Borrower shall, promptly (but in any event within seven (7)
          days)
          upon request, furnish to Lender, all of the following documents:

        

        (i) all
          financial statements, pro formas, projections, budgets, capital expenditure
          and
          expense reports, and other material financial and operational information
          related to Borrower, the General Partner, Millennium and the Pledged Securities;
          

        

        (ii) minutes
          of the meetings and all written consents of the board of directors, shareholders
          and partners (or other governing authorities and owners) of Borrower, the
          General Partner, Millennium and each Pledged Security; 

        

        (iii) all
          loan
          documents evidencing indebtedness for borrowed money of all Borrower, the
          General Partner, Millennium and the Pledged Securities, and all amendments
          thereto;

        

        (iv) the
          survey and/or plat for each Property, a copy of the owner’s title commitment for
          each Property, the title exception documents and, upon issuance, a copy
          of the
          owner’s title policy for each Property; 

        

        (v) all
          due
          diligence documents related to each 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 of Borrower and the General Partner
          and endorsements of such policies to Lender, in accordance with and meeting
          the
          requirement of Section
          9(n)
          hereof,
          and copies of certificates of builder’s liability insurance covering each
          Property; and

        

        (vii) all
          project updates, development reports, sales reports, budgets, pro formas,
          and
          similar information with respect to each Property.

        

        (l) Audit.
          Borrower, the General Partner and Millennium shall permit Lender and its
          employees, representatives, auditors, collateral verification agents, attorneys
          and accountants (collectively, the “Lender
          Representatives”),
          at
          any time and from time to time (but not more than once annually), to (i)
          audit
          all books and records related to Borrower, the General Partner, Millennium,
          the
          Pledged Securities and the Properties, and the Collateral, and (ii) visit
          and
          inspect any of the offices of Borrower, the General Partner, Millennium
          and the
          Pledged Securities and to inspect and make copies of all books and records,
          and
          to write down and record any information the Lender Representatives obtain.
          The
          reasonable expenses of any such audit shall be borne by Borrower. Borrower,
          the
          General Partner and Millennium agree to cooperate fully with Lender and
          to cause
          the Pledged Securities to cooperate fully with Lender in connection with
          such
          audits and inspections. Lender shall make commercially reasonable efforts
          to
          preserve any such information and return any such documents to Borrower
          after
          the Loan is paid in full. 

        

        (m) Assignments.
          Borrower, the General Partner and Millennium shall not permit or cause,
          and
          shall not enter into any consent or agreement to permit or cause, any Pledgor
          to
          assign, transfer or convey, any Pledged Security, without Lender’s prior written
          consent. Borrower and the General Partner shall take all actions, and refrain
          from taking all actions, required to cause Pledgors to comply with this
          Section
          9(m).

        

        (n) General
          Liability Insurance.
          Borrower and the General Partner shall, at all times, maintain or cause
          to be
          maintained, general liability insurance with no less than $1,000,000 in
          coverage
          amounts. Each such 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 and the General Partner shall obtain
          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) Property
          Insurance.
          Borrower shall, at all times, maintain or cause to be maintained, hazard
          insurance on each Property with coverage amounts that are normal and customary
          for similarly-situated entities engaged in similar businesses.

        

        (p) Operation
          of Business.
          Borrower, the General Partner and Millennium shall operate their businesses
          in
          compliance with all applicable federal, state and local laws, rules,
          regulations, and ordinances. Borrower, the General Partner and Millennium
          shall
          maintain their existence and good standing in each state where they operate
          or
          do any business, except in any jurisdictions where the failure to maintain
          such
          existence and good standing would not have a material adverse effect,
          individually or in the aggregate, on its financial condition or operations.
          Borrower, the General Partner and Millennium 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.

        

        (q) Alterations.
          Without
          the prior written consent of Lender, Borrower shall not enter into any
          loan
          documents evidencing Senior Indebtedness or any material amendment to any
          loan
          documents evidencing Senior Indebtedness, permit any increase in the maximum
          amount of any Senior Indebtedness, or enter into any renewal or extension
          of the
          loan documents evidencing any Senior Indebtedness.

        

        (r) Reimbursement
          Contract.
          Borrower, the General Partner and Millennium shall obtain Lender’s written
          consent prior to entering into or permitting any affiliate (including any
          Pledgor) to enter into any contract or agreement with any district or city
          related to any Property (each, a “Reimbursement
          Contract”).
          As a
          condition to giving its prior written consent to any such Reimbursement
          Contract, Lender may, in its sole discretion, require that (i) the Reimbursement
          Contract and/or the proceeds therefrom or related thereto be assigned to
          Lender
          to be applied to reduce Borrower’s obligations hereunder, or (ii) the proceeds
          therefrom or related thereto be used for any business purposes specified
          by
          Lender. Borrower, the General Partner and Millennium agree to, and agree
          to
          cause the Pledged Securities and the respective affiliates of Borrower,
          the
          General Partner and Millennium to, execute, enter into and deliver to Lender
          any
          additional agreements or assignments that Lender may request in connection
          with
          the foregoing provisions hereof. 

         

        (s) Opinion
          Letter.
          Borrowers shall deliver the opinion letter required by Section
          6(f),
          which
          shall be satisfactory in form and substance satisfactory to Lender and
          its
          counsel, to Lender within thirty (30) days following the date of the initial
          closing of the Loan. 

        

        10. Default.

        

        (a) For
          purposes of this Note, the following events shall constitute an “Event
          of Default”:

        

        (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, the General Partner or Millennium 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,
          the General Partner or Millennium 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 thirty (30) days
          after
          written notice of such failure is given by Lender; or

        

        (iv) any
          “event of default” or “default” occurs under any Loan Document other than this
          Note and the same remains unremedied for thirty (30) days after written
          notice
          of such “event of default” or “default” is given by Lender; or 

        

        (v) the
          entry
          of a decree or order for relief by a court having jurisdiction in respect
          of
          Borrower, the General Partner or Millennium 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 sixty (60) days, or appointing a receiver,
          liquidator, assignee, custodian, trustee, sequestrator (or other similar
          official) of Borrower, the General Partner or Millennium 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, the General Partner or Millennium 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, the General Partner or Millennium for any
          substantial part of their respective properties, or the making by Borrower,
          the
          General Partner or Millennium of any assignment for the benefit of creditors,
          or
          the admission by Borrower, the General Partner or Millennium in writing
          of its
          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 the assets of Borrower, the General Partner or Millennium, or of
          any
          Pledged Security or Property, in a proceeding brought against or initiated
          by
          Borrower, the General Partner or Millennium; or

        

        (viii) if
          Borrower, the General Partner or Millennium are liquidated or dissolved
          or winds
          up their affairs, or the sale or liquidation of all or substantially all
          of the
          assets of Borrower, the General Partner or Millennium; or

        

        (ix) any
          assignment, transfer, or conveyance of any Pledged Security occurs 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) any Senior Indebtedness
          or any credit agreement, loan agreement, promissory note, or other document
          evidencing indebtedness for borrowed money incurred by Borrower, the General
          Partner or Millennium, 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, the General Partner
          or
          Millennium, 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, the General Partner or Millennium 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);

        

        (xi) the
          death
          or disability of Mehrdad Moayedi; or

        

        (xii) any
          Loan
          Document ceases to become valid and binding for any reason; or

        

        (xiii) Borrower,
          the General Partner or Millennium suffers the entry against it of a final
          judgment for the payment of money in excess of $50,000 which is not covered
          by
          insurance; or

        

        (xiv) Borrower,
          the General Partner or Millennium suffers a writ or warrant of attachment
          or any
          similar process to be issued by any tribunal against all or any substantial
          part
          of its properties, assets or any collateral for this Note, and such writ
          or
          warrant of attachment or any similar process is not stayed or released
          within
          sixty (60) days after the entry or levy thereof or after any stay is vacated
          or
          set aside.

        

        (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,
          the General Partner and Millennium. 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,
          the General Partner and Millennium and any and all sureties, guarantors
          and
          endorsers of this Note, (ii) exercise any its rights under any of the Loan
          Documents, and/or (iii) 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 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, the General Partner and Millennium, 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, Millennium 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 Millennium 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 this 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 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, Borrower, the General Partner and Millennium (and any other
          payors
          of this Note) agree that Lender 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, the General Partner and Millennium, 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 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, Millennium 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, the
          General Partner and Millennium) 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 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, the General Partner and Millennium jointly and severally represents
          and warrants to Lender that it and each of its principals has read and
          fully
          understands the terms and provisions of this Note and the other Loan Documents,
          has had an opportunity to review this Note and the other Loan Documents
          with
          legal counsel and has executed this Note and/or any Loan Document to which
          it is
          a party 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, Millennium 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 and the other Loan
          Documents.

        

        14. Further
          Assurances.
          Each of
          Borrower, the General Partner and Millennium, at their expense, will promptly
          execute and deliver to Lender, and cause the Pledged Securities to execute
          and
          deliver to Lender, 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, the General Partner
          and
          Millennium under this Note and the other Loan Documents, as Lender shall
          request. 

        

        15. Cumulative
          Remedies.
          Each of
          Borrower, the General Partner and Millennium hereby agree that all rights
          and
          remedies that Lender is afforded by reason of this Note are separate and
          cumulative with respect to Borrower, the General Partner and Millennium
          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, the General Partner and Millennium
          at
          3901 Airport Freeway, Suite 200, Bedford, Texas 76021, Facsimile No. (817)
          391-2501 or, with respect to Lender, to Lender at 1812 Cindy Lane, Suite
          200,
          Bedford, Texas 76021, Facsimile No. (817) 835-0383 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 written or
          electronic confirmation of facsimile transfer, (c) if delivered personally
          by
          hand, upon written or electronic confirmation of delivery from the person
          delivering such notice or other communication, or (d) if sent by nationally
          recognized overnight delivery service, upon written or electronic 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. 

        

        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 AND MILLENNIUM
          HEREBY IRREVOCABLY SUBMITS 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 or any other Loan Document
          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, the General
          Partner and Millennium, and their respective successors and assigns, including,
          without limitation, any receiver, trustee or debtor in possession of or
          for
          Borrower, the General Partner or Millennium, and shall inure to the benefit
          of
          Lender and its successors and assigns. Neither Borrower nor the General
          Partner
          nor Millennium 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, Millennium
          or any
          of their respective affiliates. Should the status, composition, structure
          or
          name of Borrower, the General Partner or Millennium change, this Note and
          the
          other Loan Documents shall continue to be binding upon such person or entity
          and
          also cover such person or entity under the new status composition, structure
          or
          name according to the terms hereof and thereof. 

        

        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. Confidentiality.
          Lender
          agrees to keep confidential any information furnished or made available
          to by
          Borrower pursuant to this Agreement; provided
          that
          nothing herein shall prevent Lender from disclosing such information (a)
          to any
          affiliate, officer, director, employee, agent, or advisor of Lender, (b)
          to any
          other person if reasonably incidental to the administration of the Note,
          (c) as
          required by any law, rule, or regulation, including, without limitation,
          the
          federal securities laws, (d) upon the order of any court or administrative
          agency, (e) upon the request or demand of any regulatory agency or authority,
          (f) that is or becomes available to the public or that is or becomes available
          to Lender other than as a result of a disclosure by Lender prohibited by
          this
          Agreement, (g) in connection with any litigation to which Lender or any
          of its
          affiliates may be a party, whether to defend itself, reduce its liability,
          protect or exercise any of its claims, rights, remedies or interests under
          or in
          connection with the Loan Documents or otherwise, (h) to the extent necessary
          in
          connection with the exercise of any remedy under this Note or any other
          Loan
          Document or to any actual or proposed participant or assignee; provided
          that
          such party is informed of the confidential nature of such information and
          that
          by receiving such information it is agreeing to be bound by these provisions,
          (i) to an investor or prospective investor in Lender that also agrees that
          the
          information shall be used solely for the purpose of evaluating an investment
          in
          Lender, or (j) any assignee of or participant in, or potential assignee
          of or
          participant in, any of its rights or obligations under this Agreement;
          provided
          that
          such party is informed of the confidential nature of such information and
          that
          by receiving such information it is agreeing to be bound by these
          provisions.

         

         

        

        26. WAIVER
          OF JURY TRIAL, PUNITIVE DAMAGES, ETC.
          EACH OF BORROWER, THE GENERAL PARTNER AND MILLENNIUM HEREBY KNOWINGLY,
          VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM
          EXTENT NOT PROHIBITED BY LAW, ANY RIGHT SUCH PARTY 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 SUCH PARTY 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 LENDER
          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.

        

        27. 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.]

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        This
          Note
          has been executed by Borrower, the General Partner, Millennium and Lender
          on
          this the ___ day of November, 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 this Note),
          and
          (ii) makes the representations, warranties, covenants and agreements in
          this
          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

        MILLENNIUM:

        

        Millennium
          NTX Properties, L.L.C., a Texas limited liability company acting in its
          own
          capacity, hereby (i) agrees with and accepts all of the terms and conditions
          of
          this Note which are applicable to Millennium (as such term is defined in
          this
          Note), and (ii) makes the representations, warranties, covenants and agreements
          in this Note which are, by their terms, applicable to Millennium. 

        
 

        
          	 	 	 
	 	
                  MILLENNIUM
                    NTX PROPERTIES, L.L.C.

                  a Texas limited liability company

                
	 
 	 
 	 
 
	 	By:  	/s/ Mehrdad
                  Moayedi
	 	
                  

                  Name:  Mehrdad Moayedi
	 	Its: 
Sole
                  Managing Member

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

           

        

        
          	 LENDER:	 	 
	 	
                  UNITED
                    DEVELOPMENT FUNDING III, L.P.

                  a Delaware limited partnership

                   

                  By:  UMTH Land Development, L.P.

                  Its:  General Partner

                   

                  By:  UMT Services Inc.

                
	 
 	 
 	 
 
	Date: 	By:  	/s/ Jeff
                  Shirley
	 	
                  

                  Name:  Jeff Shirley
	 	Its: 
                  Executive Vice President

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