Document:

Exhibit 10.52

                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of February 27, 2003, to
be effective as of October 1, 2002 (the "Effective  Date") by and between VODAVI
TECHNOLOGY,  INC.,  a Delaware  corporation  ("Employer")  and GREGORY K. ROEPER
("Employee").

                              W I T N E S S E T H:

     Employer  desires to employ  Employee and  Employee  desires to accept such
employment, all on the terms and conditions hereinafter set forth.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants set forth in this Agreement, the parties hereto agree as follows:

     1.  EMPLOYMENT.  Employer  hereby  employs  Employee,  and Employee  hereby
accepts such  employment,  as President and Chief Executive  Officer of Employer
and in such other executive  capacities and for such other executive  duties and
services  as shall from time to time be mutually  agreed  upon by  Employer  and
Employee.

     2. FULL TIME OCCUPATION.  Employee shall devote  Employee's entire business
time, attention,  and efforts to the performance of Employee's duties under this
Agreement,  and shall serve  Employer  faithfully  and  diligently and shall not
engage in any other employment while employed by Employer.

     3. COMPENSATION AND OTHER BENEFITS.

          (a) SALARY.  Employer shall pay to Employee,  as compensation  for the
services rendered by Employee during Employee's employment under this Agreement,
a base salary at a rate of $182,500  per annum for the  remainder of the term of
this  Agreement  (the  "Base  Salary").  Employer  shall pay the Base  Salary in
accordance with Employer's established payroll procedures.

          (b) BONUS. In addition to the Base Salary,  Employee shall be eligible
to receive annual bonus compensation (the "Bonus") in an amount to be set by the
Compensation Committee of Employer's Board of Directors, at the committee's sole
and exclusive discretion.

          (c)  REIMBURSEMENT.  Employer shall reimburse  Employee for all travel
and  entertainment  expenses and other ordinary and necessary  business expenses
incurred by Employee in connection  with the business of Employer and Employee's
duties under this Agreement.  The term "business expenses" shall not include any
item not at least  partially  deductible  by  Employer  for  federal  income tax
purposes. Reimbursements shall be made by Employer in accordance with Employer's
normal expense policies and procedures.

          (d) FRINGE BENEFITS.  Employee shall be entitled to participate in any
group insurance, pension, retirement, vacation, expense reimbursement, and other
plans,  programs,  and  benefits  approved  by the Board of  Directors  and made
available from time to time to executive  employees of Employer generally during
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the term of Employee's  employment  hereunder.  The foregoing shall not obligate
Employer to adopt or maintain any particular plan, program, or benefit.

     4. TERM OF EMPLOYMENT.

          (a) EMPLOYMENT TERM. The term of Employee's employment hereunder shall
commence on the Effective Date and shall continue until  September 30, 2003. The
term of Employee's employment hereunder shall automatically renew for successive
one-year  terms,  unless and until  terminated  by either party  giving  written
notice to the other not less than 30 days  prior to the end of the  then-current
term or as otherwise set forth in SECTION 4(B).

          (b) TERMINATION UNDER CERTAIN CIRCUMSTANCES.  Notwithstanding anything
to the contrary herein contained:

               (i) DEATH.  Employee's  employment  and this  Agreement  shall be
automatically terminated,  without notice, effective upon the date of Employee's
death.

               (ii)  DISABILITY.  If  Employee  shall  fail  to  perform  any of
Employee's essential job duties under this Agreement as the result of illness or
other incapacity, with or without reasonable accommodation, for a period of more
than 12 consecutive weeks, or for more than 12 weeks within any 12-month period,
as determined by Employer for purposes of compliance with the Family and Medical
Leave Act, Employer may, at its option,  and upon notice to Employee,  terminate
Employee's employment and this Agreement effective on the date of that notice.

               (iii)  UNILATERAL  DECISION  OF  EMPLOYER.  Employer  may, at its
option,  upon  notice to  Employee,  terminate  Employee's  employment  and this
Agreement  effective  on the date of that  notice.  A  reduction  in  Employee's
responsibilities,  as such  responsibilities  are described in SECTION 1 of this
Agreement,  by  Employer  shall  constitute  a  termination  under this  SECTION
4(b)(iii).  Employer's  failure to renew this Agreement  upon  expiration of the
term shall constitute a termination under this SECTION 4(b)(iii).

               (iv) UNILATERAL DECISION BY EMPLOYEE. Employee may, at his option
and upon notice to Employer,  terminate Employee's employment and this Agreement
effective on the date of that notice.

               (v) TERMINATION  "FOR CAUSE".  Employer may terminate  Employee's
employment  and this  Agreement,  and the rights and  obligations of the parties
hereunder  at any  time,  effective  upon  written  notice to  Employee,  if the
termination  of  Employee's  employment  is "for  cause."  For  purposes of this
SECTION 4(b)(v), "for cause" shall mean discharge resulting from a determination
by  Employer  that  Employee  (A)  has  been  convicted  of a  felony  involving
dishonesty, fraud, theft, or embezzlement, (B) has performed an act or failed to
act,  which if he were  prosecuted and  convicted,  would  constitute a crime or
offense  involving  money or property of Employer,  or which would  constitute a
felony  in any  jurisdiction  involved,  (C) has  violated  Employer's  policies
prohibiting  sexual harassment or discrimination or harassment or discrimination
of any other  protected  basis under  federal,  state,  or local law, or (D) has
willfully and  persistently  breached or violated any of the  provisions of this

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Agreement,  and such breach or violation shall have continued for a period of 10
days after  Employer shall have given  Employee  written  notice  specifying the
nature thereof in reasonable detail.

               (vi) CHANGE OF  CONTROL.  In the event of a Change of Control (as
defined  below),  Employer or Employee  may, at their  respective  option,  upon
notice to the other,  terminate  Employee's  employment  by providing  the other
party with 30 days'  written  notice after the  effective  date of the Change of
Control. For the purposes of this Agreement,  the term "Change of Control" shall
mean

                    (1) the  approval  by a  majority  of  Employer's  Board  of
Directors  of (A) any  merger  or  consolidation  in which  Employer  is not the
surviving  entity;  (B) any reverse merger in which the Company is the surviving
entity; or (C) any transaction involving the sale of all or substantially all of
Employer's  assets to any person other than a wholly or majority owned direct or
indirect subsidiary of Employer; or

                    (2) Individuals  who, as of the Effective  Date,  constitute
the Board of  Directors  of the Company (the  "Incumbent  Board")  cease for any
reason to constitute at least a majority of the Board,  provided that any person
becoming  a  director  subsequent  to the  Effective  Date  whose  election,  or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then  comprising the Incumbent Board (other
than an election or  nomination of an  individual  whose  initial  assumption of
office is in connection with an actual or threatened  election  contest relating
to the election of the directors of the Company)  shall be, for purposes of this
Agreement,  considered  as though  such  person  were a member of the  Incumbent
Board.

          (c)  RESULT  OF  TERMINATION.  In  the  event  of the  termination  of
Employee's  employment pursuant to SECTIONS 4(b)(i) (iv) or (v) above,  Employee
shall receive no further compensation under this Agreement and all of Employee's
unvested  Options  shall  be  cancelled.  In the  event  of the  termination  of
Employee's employment pursuant to SECTION 4(b)(ii) or (iii) above,

               (i) Employee  shall receive (1) his Base Salary plus benefits for
a one-year  period  following the date of termination  of Employee's  employment
pursuant to this  Agreement.  Such Base Salary  payments  will be payable in one
lump-sum  amount  within 10 days of the event of  termination.  Should  Employee
become  eligible  for  benefits in  connection  with a new  employer  during the
one-year period, Employers obligation for benefits shall cease;

               (ii)  Employee's  vested  options  as of the date of  termination
shall remain  outstanding  through the 120-day period following the then-current
term of this  Agreement.  All of Employee's  unvested  options as of the date of
termination shall be cancelled; and

               (iii)  Employer  shall  forgive  any  balance  owed  by  Employee
pursuant to Employer's funding of Employee's Group Life Insurance policy.

          (d) RESULT OF CHANGE OF CONTROL. As incentive for Employee to actively
pursue the best interests of Employer's  stockholders,  in the event of a Change
of Control (as that term is defined in SECTION 4(b)(vi) of this Agreement), then

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(i) Employee shall earn a minimum bonus of $100,000,  which shall be paid in one
lump sum payment  within ten business days from the effective date of the Change
of Control in the event of a Change of  Control,  and (ii) any  options  held by
Employee that remain  unvested as of the effective date of the Change of Control
shall become fully vested and exercisable as of such effective date.

In addition,  in the event of the termination of Employee's  employment pursuant
to SECTION 4(b)(vi) above Employee shall continue to receive his Base Salary and
benefits for a one-year  period  following the date of termination of Employee's
employment pursuant to this Agreement. Such Base Salary payments will be payable
in one  lump-sum  amount  within  10 days of the  event of  termination.  Should
Employee  become  eligible for benefits in connection with a new employer during
the one-year period, Employers obligation for benefits shall cease.

     5. COMPETITION AND CONFIDENTIAL INFORMATION.

          (a)  INTERESTS  TO BE  PROTECTED.  For purposes of this SECTION 5, the
term "Employer" shall include Vodavi  Technology,  Inc. and any entity that is a
direct or indirect subsidiary of Vodavi Technology, Inc. during the term of this
Agreement. The parties acknowledge that Employee will perform essential services
for Employer during the term of Employee's  employment  with Employer.  Employee
will be exposed to, have access to, and be required to work with a  considerable
amount  of  Confidential  Information  (as  defined  below).  The  parties  also
expressly  recognize  and  acknowledge  that the personnel of Employer have been
trained by and are valuable to Employer and that Employer will incur substantial
expense in  recruiting  and training  personnel if it must hire new personnel or
retrain  existing  personnel  to fill  vacancies.  The  parties  also  expressly
recognize that it could seriously  impair the goodwill and diminish the value of
Employer's  business  should  Employee  compete  with  Employer  in  any  manner
whatsoever. The parties acknowledge that this covenant has an extended duration;
however,  they agree that this covenant is  reasonable,  and it is necessary for
the protection of Employer, its stockholders, and employees. For these and other
reasons,  and the fact  that  there  are  many  other  employment  opportunities
available to Employee if his employment with Employer is terminated, the parties
are in full and complete agreement that the following  restrictive covenants are
fair and  reasonable  and are entered into freely,  voluntarily,  and knowingly.
Furthermore,  each party was given the  opportunity to consult with  independent
legal counsel before entering into this Agreement.

          (b)  NON-COMPETITION.  During the term of Employee's  employment  with
Employer and for the period ending 12 months after the termination of Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
(whether  directly  or  indirectly,  as owner,  principal,  agent,  stockholder,
director,  officer, manager,  employee,  partner,  participant,  or in any other
capacity) engage in or become financially interested in any competitive business
conducted  within the Restricted  Territory (as defined below).  As used herein,
the term "competitive business" shall mean any business that designs,  develops,
markets, or supports commercial telephone systems,  commercial grade telephones,
voice processing systems  (including,  but not limited to, automated  attendant,
voice mail, or fax mail),  computer-telephony  integration products, and related
computer software products;  and the term "Restricted  Territory" shall mean any
area in which  Employer  conducts  its  business  during  Employee's  employment
hereunder.

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          (c)  NON-SOLICITATION  OF  EMPLOYEES.  During  the term of  Employee's
employment  and for a period of 12 months after the  termination  of  Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
directly or indirectly,  for himself,  or on behalf of, or in conjunction  with,
any other person, company,  partnership,  corporation,  or other entity, seek to
hire or hire any of Employer's personnel or employees, with the exception of his
Executive Assistant,  for the purpose of having such employee engage in services
that are the same,  similar,  or  related  to the  services  that such  employee
provided for Employer.

          (d)  CONFIDENTIAL  INFORMATION.  Employee  shall  maintain  in  strict
secrecy all confidential or trade secret information, whether patentable or not,
relating to the business of Employer (the "Confidential  Information")  obtained
by Employee in the course of  Employee's  employment,  and  Employee  shall not,
unless  first  authorized  in  writing  by  Employer,  disclose  to,  or use for
Employee's benefit or for the benefit of any person, firm, or entity at any time
either  during  or  subsequent  to  the  term  of  Employee's  employment,   any
Confidential  Information,  except as required in the  performance of Employee's
duties on behalf of Employer.  For  purposes  hereof,  Confidential  Information
shall  include  without  limitation  any  technical  plans and drawings or other
reproductions  or materials of any kind; any financial  information with respect
to Employer or its business; any trade secrets,  knowledge,  or information with
respect to products,  processes,  inventions,  formulae, software, source codes,
object codes,  algorithms,  and services  provided;  any  operating  procedures,
techniques, or know-how; any business methods or forms; any names, addresses, or
data on suppliers or customers;  and any business  policies or other information
relating to or dealing with the purchasing, sales, advertising,  promotional, or
distribution policies or practices of Employer.

          (e) RETURN OF BOOKS AND PAPERS.  Upon the  termination  of  Employee's
employment  with Employer for any reason,  Employee  shall  deliver  promptly to
Employer all samples or demonstration models,  catalogues,  manuals,  memoranda,
drawings,  software,  source or object code, formulae,  and specifications,  and
operating procedures;  all cost, pricing, and other financial data; all supplier
and customer  information;  all other written or printed  materials that are the
property of Employer (and any copies of them); and all other materials which may
contain  Confidential  Information  relating to the business of Employer,  which
Employee may then have in his possession whether prepared by Employee or not.

          (f) DISCLOSURE OF  INFORMATION.  Employee  shall disclose  promptly to
Employer,  or  its  nominee,  any  and  all  ideas,  designs,   processes,   and
improvements  of  any  kind  relating  to  the  business  of  Employer,  whether
patentable or not,  conceived or made by Employee,  either alone or jointly with
others,  during  working  hours  or  otherwise,  during  the  entire  period  of
Employee's employment with Employer, or within six months thereafter.

          (g) ASSIGNMENT. Employee hereby assigns to Employer or its nominee the
entire right,  title,  and interest in and to all inventions,  discoveries,  and
improvements,  whether  patentable  or not,  that  Employee may conceive or make
during Employee's employment with Employer, or within six months thereafter, and
which  relate  to the  business  of  Employer.  Whenever  requested  to do so by
Employer,  whether  during the period of Employee's  employment  or  thereafter,
Employee  shall  execute  any  and  all  applications,  assignments,  and  other
instruments  that Employer  shall deem  necessary or  appropriate  to apply for,

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obtain,  or  maintain  Letters  Patent of the  United  States or of any  foreign
country, or to protect otherwise the interest of Employer therein.

          (h)  EQUITABLE  RELIEF.  In  the  event  a  violation  of  any  of the
restrictions  contained  in this  Section  is  established,  Employer  shall  be
entitled to preliminary and permanent  injunctive  relief as well as damages and
an equitable  accounting of all earnings,  profits,  and other benefits  arising
from such  violation,  which  right shall be  cumulative  and in addition to any
other rights or remedies to which  Employer  may be entitled.  In the event of a
violation  of any  provision  of  SECTIONS  5(b),  5(c),  5(f),  or 5(g) of this
Agreement, the period for which those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation
commenced and ending when the activities  constituting such violation shall have
been finally terminated in good faith.

          (i)  RESTRICTIONS  SEPARABLE.  If the scope of any  provision  of this
SECTION 5 is found by a Court to be too broad to permit  enforcement to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law. The parties  agree that the scope of any provision of this SECTION 5 may be
modified by a judge in any  proceeding to enforce this  Agreement,  so that such
provision can be enforced to the maximum extent permitted by law. Each and every
restriction  set forth in this SECTION 5 is  independent  and severable from the
others, and no such restriction shall be rendered unenforceable by virtue of the
fact that, for any reason,  any other or others of them may be  unenforceable in
whole or in part.

          (j)  SURVIVAL.  Employer and Employee  acknowledge  and agree that the
obligations and rights set forth in this SECTION 5 shall survive the termination
of this Agreement and Employee's employment by either Employer or Employee under
SECTION 4 of this Agreement.

     6. MISCELLANEOUS.

          (a) NOTICES. All notices, requests,  demands, and other communications
required  or  permitted  under this  Agreement  shall be in writing and shall be
deemed to have been duly given, made, and received (i) if personally  delivered,
on the date of  delivery,  (ii) if by  facsimile  transmission,  24 hours  after
transmitter's confirmation of the receipt of such transmission, (iii) if mailed,
three days after  deposit in the United  States mail,  registered  or certified,
return receipt  requested,  postage  prepaid and addressed as provided below, or
(iv)  if  by a  courier  delivery  service  providing  overnight  or  "next-day"
delivery,  on the next business day after deposit with such service addressed as
follows:

                    (1) If to Employer:

                        Vodavi Technology, Inc.
                        4717 East Hilton Avenue
                        Suite 400
                        Phoenix, Arizona 85034
                        Attention: Chairman of the Board
                        Fax: (480) 483-0144

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                        with a copy given in the manner
                        prescribed above, to:

                        Greenberg Traurig, LLP
                        2375 E. Camelback Road, Suite 700
                        Phoenix, Arizona 85016
                        Attention: Robert S. Kant, Esq.
                        Fax: (602) 445-8100

                    (2) If to Employee:

                        Gregory K. Roeper
                        6249 N. 78th Street, Unit 21
                        Scottsdale, Arizona 85250

Either party may alter the address to which  communications  or copies are to be
sent by  giving  notice  of such  change  of  address  in  conformity  with  the
provisions of this paragraph for the giving of notice.

          (b)  INDULGENCES;  WAIVERS.  Neither  any failure nor any delay on the
part of either party to exercise any right,  remedy,  power,  or privilege under
this  Agreement  shall  operate  as a waiver  thereof,  nor shall any  single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy, power, or privilege,
nor shall any waiver of any right,  remedy,  power, or privilege with respect to
any  occurrence  be  construed  as a waiver of such  right,  remedy,  power,  or
privilege  with  respect  to any other  occurrence.  No waiver  shall be binding
unless executed in writing by the party making the waiver.

          (c) CONTROLLING LAW. This Agreement and all questions  relating to its
validity, interpretation,  performance and enforcement, shall be governed by and
construed in accordance  with the laws of the state of Arizona,  notwithstanding
any Arizona or other conflict-of-interest provisions to the contrary.

          (d)  BINDING  NATURE  OF  AGREEMENT;   SUCCESSORS  AND  ASSIGNS.  This
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective heirs, personal representatives,  successors,  and assigns;
provided  that  because  the  obligations  of  Employee  hereunder  involve  the
performance of personal  services,  such  obligations  shall not be delegated by
Employee. For purposes of this Agreement,  successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity  that  acquires a majority  of the stock or assets of  Employer  by sale,
merger,  consolidation,  liquidation,  or other form of transfer.  Employer will
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 Employer to expressly  assume and agree to perform  this  Agreement in
the same  manner and to the same  extent  that  Employer  would be  required  to
perform it if no such succession had taken place.

          (e) EXECUTION IN  COUNTERPARTS.  This Agreement may be executed in any
number of  counterparts,  each of which  shall be deemed  to be an  original  as

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against  any party  whose  signature  appears  thereon,  and all of which  shall
together  constitute one and the same  instrument.  This Agreement  shall become
binding when one or more  counterparts  hereof,  individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.

          (f)  PROVISIONS  SEPARABLE.  The  provisions  of  this  Agreement  are
independent of and separable from each other, and no provision shall be affected
or rendered  invalid or  unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

          (g) ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof   and   supersedes   all  prior  and   contemporaneous   agreements   and
understandings, inducements and conditions, express or implied, oral or written,
except as herein  contained.  The express terms hereof control and supersede any
course of  performance  and/or usage of the trade  inconsistent  with any of the
terms  hereof.  This  Agreement  may not be modified or amended other than by an
agreement in writing.

          (h) PARAGRAPH  HEADINGS.  The paragraph headings in this Agreement are
for  convenience  only; they form no part of this Agreement and shall not affect
its interpretation.

          (i) NUMBER OF DAYS.  In  computing  the number of days for purposes of
this Agreement,  all days shall be counted,  including  Saturdays,  Sundays, and
holidays; provided, however, that if the final day of any time period falls on a
Saturday,  Sunday, or holiday, then the final day shall be deemed to be the next
day that is not a Saturday, Sunday, or holiday.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                        VODAVI TECHNOLOGY, INC.

                                        By: /s/ William J. Hinz
                                            ------------------------------------
                                            Name: William J. Hinz
                                            Its:  Chairman of the Board

                                        EMPLOYEE

                                        /s/ Gregory K. Roeper
                                        ----------------------------------------
                                        Gregory K. Roeper

                                        9Exhibit 4.3.1

     FIRST  SUPPLEMENTAL  INDENTURE,  dated as of September 20, 2001 (the "FIRST
SUPPLEMENTAL  INDENTURE") between Meritage Corporation,  a corporation organized
under the laws of the State of Maryland (the  "ISSUER"),  the  Guarantors  named
therein,  Hulen Park Venture,  LLC, a Texas limited liability company,  Meritage
Holdings,  L.L.C., a Texas Limited Liability Company  ("ADDITIONAL  Guarantors")
and Wells Fargo Bank, National  Association,  as trustee (the "TRUSTEE"),  under
the Indenture (as defined below).  Capitalized terms used and not defined herein
shall have the same meanings given in the Indenture unless otherwise indicated.

     WHEREAS,  the Issuer, the Guarantors thereto and the Trustee are parties to
that certain  Indenture dated as of May 30, 2001 (the  "INDENTURE")  pursuant to
which the Company  issued its 9 3/4%  Senior  Notes 2011 (the  "NOTES")  and the
Guarantors  guaranteed the obligations of the Issuer under the Indenture and the
Notes;

     WHEREAS,  pursuant to Section 4.13 of the Indenture, if the Issuer acquires
or creates any additional subsidiary which is a Restricted Subsidiary, each such
subsidiary shall execute and deliver a supplemental  indenture pursuant to which
such subsidiary shall  unconditionally  guaranty the Issuer's  obligations under
the Notes;

     WHEREAS,  the  Additional  Guarantors are  Restricted  Subsidiaries  of the
Issuer;

     WHEREAS,  the  Issuer  and  the  Trustee  desire  to  have  the  Additional
Guarantors  enter into this First  Supplemental  Indenture and agree to guaranty
the  obligations  of the  Issuer  under  the  Indenture  and the  Notes  and the
Additional Guarantors desire to enter into this First Supplemental Indenture and
to guaranty the  obligations  of the Issuer under the Indenture and the Notes as
of such date;

     WHEREAS,  Section  8.01 of the  Indenture  provides  that the  Issuer,  the
Guarantors  and the Trustee may,  without the written  consent of the Holders of
the outstanding Notes, amend the Indenture as provided herein;

     WHEREAS, by entering into this First Supplemental Indenture, the Issuer and
the Trustee have  consented to amend the Indenture in accordance  with the terms
and conditions herein;

     WHEREAS,  each  Guarantor  hereby  acknowledges  and  consents to amend the
Indenture in accordance with the terms and conditions herein; and

     WHEREAS, all acts and things prescribed by the Articles of Organization (as
now in  effect)  of the  Additional  Guarantors  necessary  to make  this  First
Supplemental  Indenture a valid  instrument  legally  binding on the  Additional
Guarantors for the purposes herein expressed, in accordance with its terms, have
been duly done and performed.

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Issuer,
the  Additional  Guarantors and the Trustee hereby agree for the benefit of each
other and the equal and ratable benefit of the Holders of the Notes as follows:
<PAGE>
     1. ADDITIONAL  GUARANTORS AS GUARANTOR.  As of the date hereof and pursuant
to this First  Supplemental  Indenture,  the Additional  Guarantors shall become
Guarantors under the definition of Guarantor in the Indenture in accordance with
the terms and  conditions  of the  Indenture  and shall  assume  all  rights and
obligations of a Guarantor thereunder.

     2.  COMPLIANCE  WITH AND  FULFILLMENT  OF  CONDITION OF SECTION  4.13.  The
execution and delivery of this First  Supplemental  Indenture by the  Additional
Guarantors (along with such documentation  relating thereto as the Trustee shall
require  fulfills  the  obligations  of the  Issuer  under  Section  4.13 of the
Indenture.

     3.  CONSTRUCTION.  For all purposes of this First  Supplemental  Indenture,
except as otherwise  herein expressly  provided or unless the context  otherwise
requires:  (i) the defined terms and expressions used herein shall have the same
meanings as corresponding terms and expressions used in the Indenture;  and (ii)
the words "herein," "hereof" and "hereby" and other words of similar import used
in this First Supplemental  Indenture refer to this First Supplemental Indenture
as a whole and not to any particular Section hereof.

     4. TRUSTEE  ACCEPTANCE.  The Trustee accepts the amendment of the Indenture
effected by this First Supplemental  Indenture, as hereby amended, but only upon
the  terms  and  conditions  set  forth in the  Indenture,  as  hereby  amended,
including the terms and  provisions  defining and limiting the  liabilities  and
responsibilities of the Trustee in the performance of its duties and obligations
under the Indenture,  as hereby amended.  Without limiting the generality of the
foregoing, the Trustee has no responsibility for the correctness of the recitals
of fact herein  contained  which shall be taken as the statements of each of the
Issuer and the Additional Guarantors, respectively, and makes no representations
as to the validity or enforceability against any of the Issuer or the Additional
Guarantors.

     5. INDENTURE RATIFIED. Except as expressly amended hereby, the Indenture is
in all  respects  ratified  and  confirmed  and all the  terms,  conditions  and
provisions thereof shall remain in full force and effect.

     6. HOLDERS BOUND.  This First  Supplemental  Indenture shall form a part of
the  Indenture  for all  purposes,  and every Holder of the Notes  heretofore or
hereafter authenticated and delivered shall be bound hereby.

     7.  SUCCESSORS  AND ASSIGNS.  This First  Supplemental  Indenture  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

     8. COUNTERPARTS.  This First Supplemental  Indenture may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original,  and all of such  counterparts  shall together  constitute one and the
same instrument.

     9. GOVERNING LAW. This First  Supplemental  Indenture  shall be governed by
and  construed in  accordance  with the  internal  laws of the State of New York
without giving effect to principles of conflicts of laws.

                                       2
<PAGE>
     IN WITNESS WHEREOF,  the Issuer, the Additional  Guarantors and the Trustee
have caused this First Supplemental Indenture to be duly executed as of the date
first above written.

                                    ISSUER:

                                    MERITAGE CORPORATION

                                    By:  /s/ Steven J. Hilton
                                         ---------------------------------------
                                         Steven J. Hilton
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ John R. Landon
                                         ---------------------------------------
                                         John R. Landon
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Larry W. Seay
                                    Its: Chief Executive Officer,
                                         Vice President-Finance,
                                         Secretary and Treasurer

                                    ADDITIONAL GUARANTORS:

                                    HULEN PARK VENTURE, LLC

                                    By: Legacy/Monterey Homes, L.P.,
                                        its Sole Member

                                    By: MTH-Texas GP, Inc., its General Partner

                                    By:  /s/ John R. Landon
                                         ---------------------------------------
                                         John R. Landon
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Steven J. Hilton
                                         ---------------------------------------
                                         Steven J. Hilton
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Richard T. Morgan
                                         ---------------------------------------
                                         Richard T. Morgan
                                    Its: Vice President of Finance,
                                         Texas Division, Chief Financial Officer
                                         and Assistant Secretary

                                       3
<PAGE>
                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Larry W. Seay
                                    Its: Vice-President, Treasurer and Secretary

                                    MERITAGE HOLDINGS, L.L.C.

                                    By: Legacy/Monterey Homes, L.P., its
                                        Sole Member

                                    By: MTH-Texas GP, Inc., its General Partner

                                    By:  /s/ John R. Landon
                                         ---------------------------------------
                                         John R. Landon
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Steven J. Hilton
                                         ---------------------------------------
                                         Steven J. Hilton
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Richard T. Morgan
                                         ---------------------------------------
                                         Richard T. Morgan
                                    Its: Vice President of Finance,
                                         Texas Division, Chief Financial Officer
                                         and Assistant Secretary

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Larry W. Seay
                                    Its: Vice-President, Treasurer and Secretary

                                    TRUSTEE:

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                    as Trustee

                                    By:  /s/ Jeanie Mar
                                         ---------------------------------------
                                         Jeanie Mar
                                    Its: Vice President

                                    MONTEREY HOMES ARIZONA, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President
                                                --------------------------------

                                       4
<PAGE>
                                    By:  /s/ Steven J. Hilton
                                         ---------------------------------------
                                         Name: Steven J. Hilton
                                         Title: Co-CEO

                                    MERITAGE PASEO CROSSING, LLC

                                    By: Monterey Homes Arizona, Inc.,
                                        its Sole Member

                                    By: /s/ Larry W. Seay
                                        ----------------------------------------
                                        Name: Larry W. Seay
                                        Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    MONTEREY HOMES CONSTRUCTION, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    MERITAGE PASEO CONSTRUCTION, LLC

                                    By: Monterey Homes Construction, Inc.,
                                        its Sole Member

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                       5
<PAGE>
                                    MERITAGE HOMES OF ARIZONA, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    MERITAGE HOMES CONSTRUCTION, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    MTH-TEXAS GP, INC.

                                    By: /s/ Larry W. Seay
                                        ----------------------------------------
                                        Name: Larry W. Seay
                                        Title: Vice President

                                    By: /s/ John R. Landon
                                        ----------------------------------------
                                        Name: John R. Landon
                                        Title: Co-CEO

                                    MTH-TEXAS LP, INC.

                                    By: /s/ Larry W. Seay
                                        ----------------------------------------
                                        Name: Larry W. Seay
                                        Title: Vice President

                                    By: /s/ John R. Landon
                                        ----------------------------------------
                                        Name: John R. Landon
                                        Title: Co-CEO

                                    LEGACY/MONTEREY HOMES L.P.

                                    By: MTH-Texas GP, Inc., its General Partner

                                    By: /s/ Larry W. Seay
                                        ----------------------------------------
                                        Name: Larry W. Seay
                                        Title: Vice-President

                                       6
<PAGE>
                                    By: /s/ John R. Landon
                                        ----------------------------------------
                                        Name: John R. Landon
                                        Title: Co-CEO

                                    MERITAGE HOMES OF NORTHERN CALIFORNIA, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    HANCOCK-MTH BUILDERS, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                    HANCOCK-MTH COMMUNITIES, INC.

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Name: Larry W. Seay
                                         Title: Vice President

                                    By: /s/ Steven J. Hilton
                                        ----------------------------------------
                                        Name: Steven J. Hilton
                                        Title: Co-CEO

                                       7
<PAGE>
                                    LEGACY OPERATING COMPANY, L.P.

                                    By: Meritage Holdings, L.L.C.,
                                        its General Partner

                                    By: Legacy/Monterey Homes L.P.,
                                        its Sole Member

                                    By: MTH-Texas GP, Inc., its General Partner

                                    By:  /s/ John R. Landon
                                         ---------------------------------------
                                         John R. Landon
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Steven J. Hilton
                                         ---------------------------------------
                                         Steven J. Hilton
                                    Its: Co-Chairman and Chief Executive Officer

                                    By:  /s/ Richard T. Morgan
                                         ---------------------------------------
                                         Richard T. Morgan
                                    Its: Vice President of Finance,
                                         Texas Division, Chief Financial Officer
                                         and Assistant Secretary

                                    By:  /s/ Larry W. Seay
                                         ---------------------------------------
                                         Larry W. Seay
                                    Its: Vice-President, Treasurer and Secretary

                                       8

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