Document:

Exhibit 10.3

                             SECURED PROMISSORY NOTE

$4,900,000.00                                                  Las Vegas, Nevada
                                                                   July 31, 2001

1.   FUNDAMENTAL PROVISIONS.

     The following terms will be used as defined
terms in this Note:

     Payee and Holder:          Las Vegas Golf Center, L.L.C., a Nevada limited
                                liability company

     Maker:                     VCA Nevada Incorporated, an Arizona corporation

     Principal Amount:          Four Million Nine Hundred Thousand Dollars
                                ($4,900,000.00)

     Interest Accrual Date:     February 1, 2002

     Interest Rate:             As stated in Paragraph 3 of this Note

     Default Interest Rate:     Fifteen percent (15%) per annum

     Maturity Date:             August 1, 2011

     Business Day:              Any day of the year other than Saturdays,
                                Sundays, or legal holidays.

     Loan Documents:            The Secured  Promissory Note and a Deed of Trust
                                and  Assignment of Rents  executed in connection
                                with this Note. The Loan  Documents  reflect the
                                payment  remaining  due on the purchase by Maker
                                from Holder of the tenant's  leasehold  interest
                                in a  44-acre  parcel  of  land  (Property)  now
                                developed  with the Las Vegas Golf Center,  with
                                Clark  County,  Nevada as the landlord  (Lease).
                                The Lease has been  amended in full by the First
                                Amendment in Total dated November, 2000 (Amended
                                Lease).

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    Loan:                       The loan  from  Payee to Maker in the  Principal
                                Amount and evidenced by this Note.

2.   PROMISE TO PAY.

     For value  received,  Maker promises to pay to the order of Holder,  at the
office of Holder at 13924 Weddington Street,  Sherman Oaks, CA 91401, or at such
other place as the Holder hereof may from time to time designate in writing, the
Principal Amount, together with accrued interest on the unpaid principal balance
at the Interest Rate.

3.   INTEREST; PAYMENTS.

     (a)  Absent an Event of Default  hereunder,  the principal  balance  hereof
          shall bear interest at the Interest Rate stated.  Throughout  the term
          of this Note,  interest  shall be  calculated on a 365-day year on the
          unpaid  balance of the  Principal  amount and, in all cases,  shall be
          computed  for  the  actual  number  of days in the  period  for  which
          interest  is charged,  which  period  shall  consist of 365 days on an
          annual basis.

     (b)  All payments due hereunder shall be made (i) without  deduction of any
          present and future taxes, levies, deductions,  charges or withholdings
          which amounts  shall be paid by Maker,  and (ii) without any other set
          off. Maker will pay the amounts  necessary such that the amount of the
          principal and interest  received by the Holder hereof is not less than
          that required by this Note.

     (c)  No interest  shall accrue or be paid on this Note through  January 31,
          2002.  Commencing on February 1, 2002 and  continuing on the first day
          of each calendar month thereafter until the Maturity Date, Maker shall
          make monthly installments in the amounts as set forth in 3(f) below.

     (d)  One (1) final "balloon" payment of all unpaid principal, interest, and
          any  other  amounts  due  hereunder  shall be due and  payable  on the
          Maturity Date.

     (e)  If any  payment  to be made by maker  hereunder  becomes  due on a day
          which is not a Business  Day,  such payment  shall be made on the next
          succeeding Business Day.

     (f)  Payments shall be paid on the Note in the following amounts.

          1.   From February 1, 2002 through  August 1, 2003,  an  interest-only
               monthly payment,  calculated at six percent (6%) annual interest,
               of $24,500.00 per month.

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          2.   From September 1, 2003 through  August 1, 2004, an  interest-only
               monthly   payment,   calculated  at  seven  percent  (7%)  annual
               interest, of $28,583.33 per month.

          3.   From September 1, 2004 through  August 1, 2006, an  interest-only
               monthly   payment,   calculated  at  eight  percent  (8%)  annual
               interest, of $32,666.67 per month.

          4.   From  September  1, 2006  through  July 1, 2011 a  principal  and
               interest  payment,  calculated  at twelve  percent  (12%)  annual
               interest  and  based  on a  constant  payment  twenty  (20)  year
               amortization, of $53,953.22 per month.

          5.   All of the remaining balance due on the Note on August 1, 2011.

4.   PREPAYMENT.

     Maker shall have the right to prepay the Principal  Amount,  or any portion
thereof,  without  premium or penalty,  provided  that Maker  shall  provide the
Holder  with at least five (5) days prior  written  notice of Maker's  intent to
make any prepayment.

5.   LAWFUL MONEY.

     Principal  and interest are payable in lawful money of the United States of
America.

6.   APPLICATION OF PAYMENTS/LATE CHARGE.

     (a)  Absent the  occurrence  of an Event of Default  hereunder any payments
          received  by the  Holder  shall be applied  first to sums,  other than
          principal  and  interest,  due the Holder,  next to the payment of all
          interest accrued to the date of such payment, and the balance, if any,
          to the payment of principal. Any payments received by the Holder after
          the  occurrence of an Event of Default shall be applied to the amounts
          specified in this  Paragraph 6 (a) in such order as the Holder may, in
          its sole discretion, elect.

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     (b)  If any payment of interest  and/or  principal  is not  received by the
          Holder when such  payment is due,  then in  addition  to the  remedies
          conferred  upon the Holder  pursuant to Paragraph 9, (i) a late charge
          of two percent  (2%) of the amount of the  installment  due and unpaid
          will be added to the  delinquent  amount to compensate  the Holder for
          the expense of handling the  delinquency but only for any payment past
          due in excess of fifteen days (15) days,  regardless of any notice and
          cure periods,  and (ii) the amount due and unpaid (including,  without
          limitation,  the late  charge)  shall  bear  interest  at the  Default
          Interest Rate,  computed from the date on which the amount was due and
          payable until paid unless Section 9 is applicable.

7.   SECURITY.

     This Note is secured by a Deed of Trust and  Assignment  of Rents  (Deed of
Trust) between Holder and Maker of this date.

8.   EVENT OF DEFAULT.

     The  occurrence of any of the  following  shall be deemed to be an event of
default (Event of Default) hereunder:

     (a)  default in the payment of principal  or interest  when due and failure
          to cure such default within the applicable grace period; or

     (b)  the occurrence of a default under the Deed of Trust.

9.   REMEDIES.

     Upon the  occurrence  of an  Event of  Default  then at the  option  of the
Holder,  the entire  balance of  principal  together  with all accrued  interest
thereon,  and all other amounts  payable by Maker under the Note shall,  without
demand or notice,  immediately become due and payable. Upon the occurrence of an
Event of Default,  (and so long as such Event of Default  shall  continue),  the
entire balance of principal hereof,  together with all accrued interest thereon,
all other  amounts  due  under the Loan  Documents,  and any  judgment  for such
principal,  interest,  and other  amounts  shall bear  interest  at the  Default
Interest  Rate  from the  date of the  last  interest  payment,  subject  to the
limitations  contained in paragraph 14 hereof.  No delay or omission on the part
of the Holder  hereof in  exercising  any right under this Note or Deed of Trust
shall operate as a waiver of such right.

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10.  WAIVER.

     Maker hereby waives diligence, demand for payment, presentment for payment,
protest,  notice of  nonpayment,  and all other  notices  or demands of any kind
(except  notices  specifically  provided for in the Deed of Trust) and expressly
agrees that,  without in any way affecting  the  liability of Maker,  the Holder
hereof may extend any maturity  date or the time for payment of any  installment
due hereunder or otherwise modify the Note or Deed of Trust.

11.  CHANGE, DISCHARGE, TERMINATION, OR WAIVER.

     No provision of this Note may be changed, discharged, terminated, or waived
except in writing  signed by the party against whom  enforcement  of the change,
discharge, termination or waiver is sought. No failure on the part of the Holder
hereof to exercise and no delay by the Holder hereof in exercising  any right or
remedy under this Note or under the law shall operate as a waiver thereof.

12.  ATTORNEYS' FEES.

     If this Note is not paid when due or if any Event of Default occurs,  Maker
promises  to pay all costs of  enforcement  and  collection,  including  but not
limited to, reasonable attorneys' fees.

13.  SEVERABILITY.

     If any provision of this Note is unenforceable,  the  enforceability of the
other  provisions  shall not be affected and they shall remain in full force and
effect.

14.  INTEREST RATE LIMITATION.

     Maker hereby agrees to pay an effective rate of interest that is the sum of
the interest rate  provided for herein,  together  with any  additional  rate of
interest  resulting  from any other  charges  of  interest  or in the  nature of
interest paid or to be paid in connection with the Note.  Holder and Maker agree
that  none of the terms and  provisions  contained  herein or in any of the Loan
Documents  shall be construed to create a contract for the use,  forbearance  or
detention  of money  requiring  payment of  interest  at a rate in excess of the
maximum  interest  rate  permitted  to be  charged  by the laws of the  State of
Nevada. In such event, if any Holder of this Note shall collect monies which are
deemed to  constitute  interest  which would  otherwise  increase the  effective
interest rate on this Note to a rate in excess of the maximum rate  permitted to
be  charged  by the  laws of the  State  of  Nevada,  all such  sums  deemed  to
constitute  interest in excess of such maximum rate shall,  at the option of the
Holder,  be  credited  to the payment of other  amounts  payable  under the Loan
Documents or returned to Maker.

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15.  NUMBER AND GENDER.

     In this Note the singular shall include the plural and the masculine  shall
include the feminine and neuter gender, and vice versa.

16.  HEADINGS.

     Headings  at the  beginning  of each  numbered  section  of this  Note  are
intended solely for convenience and are not part of this Note.

17.  CHOICE OF LAW.

     This Note shall be governed by and construed in accordance with the laws of
the State of  Nevada  without  giving  effect to  conflict  of laws  principles.
Exclusive  jurisdiction on all litigation will be in the Superior Court of Clark
County, Nevada.

18.  INTEGRATION.

     The Note and Deed of Trust contain the complete understanding and agreement
of the Holder and Maker and  supersede  all prior  representations,  warranties,
agreements, arrangements, understandings, and negotiations.

19.  BINDING EFFECT.

     The Loan  Documents  will be binding upon, and inure to the benefit of, the
Holder, Maker, and their respective successors and assigns.

20.  TIME IS OF THE ESSENCE.

     Time is of the essence with regard to each  provision of the Loan Documents
as to which time is a factor.

                                        MAKER

                                        VCA NEVADA INCORPORATED, a
                                        Nevada corporation

                                        By:
                                           -------------------------------------
                                           Joseph P. Martori
                                        Its: Chairman

                                       6Exhibit 10.1

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 1st day of
October, 2001 by and between MERITAGE CORORATION, a Maryland corporation (the
"Company") and Larry W. Seay, an individual ("Executive"). If Executive is
presently or subsequently becomes employed by a subsidiary of Company, the term
"Company" shall be deemed to refer collectively to Meritage Corporation and the
subsidiary or subsidiaries which employs Executive.

                                    RECITALS

     A. COMPANY BUSINESS. The Company's principal business is homebuilding.

     B. EXECUTIVE EXPERIENCE. Since April 1, 1996, Executive has served as Vice
President - Finance, Chief Financial Officer ("CFO"), Treasurer and Secretary of
the Company.

     C. AGREEMENT PURPOSE. The Company desires to employ Executive, and
Executive desires to be employed by Company, on the terms and condition set
forth herein.

     NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

     1. DEFINITIONS. As used herein:

          (a) "CAUSE" shall include the following:

               i) Employee's wrongful misappropriation of any money or other
     assets or properties of the Company;

               ii) Executive is convicted of committing a felony, or engages in
     conduct involving fraud, moral turpitude, dishonesty, gross misconduct,
     embezzlement, theft, or similar matters that are detrimental to Company;

               iii) Employee's willful disregard of his primary duties to the
     Company or policies of the Company.

          (b) "CHANGE OF CONTROL". A Change of Control of the Company shall
     mean: (a) the purchase or other acquisition by any person, entity, or group
     of persons, within the meaning of section 13 (d) or 14 (d) of the
     Securities Exchange Act of 1934 as amended (the "Act") of beneficial
     ownership (within the meaning of Rule 13d-3 promulgated under the Act) of
     more than 50% of either the outstanding share of common stock of the
     Company or the combined voting power of the Company's then outstanding
     voting securities entitled to vote generally; (b) the approval by the
     stockholders of the Company of a reorganization, merger, or consolidation,

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     in each case with respect to which persons who were stockholders of the
     Company immediately prior to such reorganization, merger, or consolidation
     do not, immediately thereafter, own more than 50% of the combined voting
     power entitled to vote generally in the election of directors of the
     reorganized, merged, or consolidated company's then outstanding securities;
     or (c) a liquidation or dissolution of the Company or the sale of all or
     substantially all of the Company's assets.

          (c) "COMPANY CONFIDENTIAL INFORMATION" shall mean confidential,
     proprietary information or trade secrets of Company and its subsidiaries,
     including, without limitation, the following: (1) customer and vendor lists
     and customer and vendor information as complied by Company and its
     subsidiaries, including pricing, sale and contract terms and conditions,
     contract expirations, and other compiled customer and vendor information;
     Company's and its subsidiaries' internal practices and procedures; (3)
     Company's and its subsidiaries' financial condition and financial results
     of operation; (4) information relating to Company's and its subsidiaries'
     real estate holding or commitments, lot positions, strategic planning,
     sales, financing, insurance, purchasing, marketing, promotion,
     distribution, and selling activities, whether now existing, or acquired,
     developed, or made available anytime in the future to or by Company or its
     subsidiaries; (5) all information which Executive has a reasonable basis to
     consider confidential or which is treated by Company or its subsidiaries as
     confidential; and (6) any and all information having independent economic
     value to Company or its subsidiaries that is not generally known to, and
     not readily ascertainable by proper means by, persons who can obtain
     economic value from its disclosure or use. Executive acknowledges that such
     information is Company Confidential Information whether disclosed to or
     learned by Executive or originated by Executive during his employment by
     Company or any of its subsidiaries. In the event that information is not
     clearly and obviously publicly available, all information about Company or
     its subsidiaries shall be presumed to be confidential. In the event of a
     dispute or litigation, Executive will have the burden of proof by clear and
     convincing evidence that such information is not confidential.

          (d) "DEMOTION EVENT" shall include a demotion or relocation of
     Executive, a material chance in Executive's duties without Executive's
     consent, a reduction from the previous year in Executive's base salary
     without Executive's consent, or any action taken by the Company
     specifically to limit Executive's ability to earn a bonus comparable to his
     prior year's bonus. Notwithstanding the foregoing, the assignment of
     certain controller and treasury duties to a corporate controller who shall
     report to Executive shall not be considered a Demotion Event.

          (e) "TERMINATION" shall mean termination of Executive's employment
     with Company pursuant to Sections 17 through 21 hereof.

     2. TERM OF AGREEMENT. This Agreement will commence as of October 1, 2001,
and shall terminate on December 31, 2003, unless earlier terminated in
accordance with, and subject to, the other provision hereof (the "Term"). This
Agreement will automatically renew for successive one-year terms unless one of
the parties hereto gives notice of non-renewal at least ninety (90) days before
the scheduled renewal date.

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     3. POSITION WITH COMPANY. During the Term, Executive shall serve as Vice
President - Finance, CFO, Treasurer and Secretary of Company, shall devote his
full time and efforts to the affairs of Company, and shall faithfully and
diligently perform all duties commensurate with such position, including,
without limitation, those duties reasonably requested by Company's Board of
Directors. Without limitation of the foregoing, Executive shall: (i) manage
financing and capital arrangements; (ii) supervise controller function; (iii)
supervise treasury function; (iv) supervise public reporting and stockholder
relations; (v) supervise information and data processing systems, and (vi)
support merger and acquisition efforts. Executive shall be subject to and comply
with all of Company's policies and procedures.

     4. SALARY. Executive shall be entitled to receive a minimum base salary
from Company in the amount of $200,000 annually, payable in equal installments
in accordance with Company's general salary payment policies in effect during
the Term hereof (the "Minimum Base Salary"). The Minimum Base Salary may be
increased at such times and in such amounts as Company's Board of Directors
shall determine in its sole discretion.

     5. BONUS AND STOCK OPTION. The Board of Directors may, from time to time,
at its discretion, pay performance bonuses to Executive, which shall based on a
target ranging from 75 percent to 100 percent of base salary. Any such
performance bonus may be paid in cash or Company stock, in the discretion of the
Board of Directors. In addition, the Board of Directors may, form time to time,
at its discretion, grant Executive options under the Company's stock option
plan.

     6. VACATION AND SICK LEAVE. Executive shall be entitled to take reasonable
vacation, holiday and sick leave, subject to the Company's reasonable limits and
policies.

     7. BENEFIT PLANS. Executive shall be eligible to participate in all benefit
plans made available to Company employees from time to time. Nothing herein
shall restrict Company's ability to terminate or modify any benefit plan or
arrangement.

     8. EXPENSES. Company shall pay for or reimburse Executive for all ordinary
and necessary business expenses incurred or paid by Executive in furtherance of
Company's business, subject to and in accordance with Company's policies and
procedures of general application. The Company shall provide Executive a car
allowance of $500 per month.

     9. STAFF MANUAL. All other terms of Executives employment shall be governed
by the Company employee manual (the "Employee Manual"). The Company reserves the
right to amend the Employee Manual, from time to time, and Executive shall be
subject to changes made so long as such changes are applied to all Company
employees.

     10. COVENANTS OF EXECUTIVE. (a) Executive hereby covenants and agrees that,
during the term of this Agreement, Executive will not engage, directly or
indirectly, either as principal, partner, joint venturer, consultant or

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independent contractor, agent, or proprietor or in any other manner participate
in the ownership, management, operation, or control of any person, firm,
partnership, limited liability company, corporation, or other entity which
engages in the business or providing any products or services, including,
without limitation, home building products or services, which are competitive
with those products or services offered or sold by Company or its subsidiaries
within any jurisdiction in which Company or its subsidiaries does or proposes to
do business. The covenants set forth in this paragraph 10(a) shall expire upon
cessation of Executive's employment for any reason.

          (b) Executive hereby covenants and agrees that, during the term of the
Agreement, and for a period of one year after the last date on which the
Executive is employed by the Company, Executive will not:

               (i) Directly or indirectly solicit for employment (whether as an
     employee, consultant, independent contractor, or otherwise) any person who
     is any employee, independent contractor or the like of Company or any of
     its subsidiaries, unless Company gives its written consent to such
     employment or offer of employment.

               (ii) Call on or directly or indirectly solicit or divert or take
     away from Company or any of its subsidiaries (including, without
     limitation, by divulging to any competitor or potential competitor or
     company or its subsidiaries) any person, firm, corporation, or other entity
     who was a customer of prospective customer of the Company during
     Executive's term of Employment.

     11. CONFIDENTIALITY AND NONDISCLOSURE. It is understood that in the course
of Executive's employment with Company, Executive will become acquainted with
Company Confidential Information. Executive recognizes that Company Confidential
Information has been developed or acquired at great expense, is proprietary to
Company or its subsidiaries, and is an shall remain the exclusive property of
Company. Accordingly, Executive hereby covenants and agrees that he will not,
without the express written consent of Company, during Executive's employment
with Company or its subsidiaries and thereafter or until such time as Company
Confidential Information becomes generally known, or readily ascertainable by
proper means, by persons unrelated to Company or its subsidiaries, disclose to
others, copy, make any use of, or remove from Company's or its subsidiaries'
premises any Company Confidential Information, except as Executive's duties for
Company or its subsidiaries may specifically require. In the event of dispute or
litigation, Executive shall have the burden of proof by clear and convincing
evidence that the Company Confidential Information has become generally known,
or readily ascertainable by proper means, by persons unrelated to Company or its
subsidiaries.

     12. ACKNOWLEDGMENT; RELIEF FOR VIOLATION. Executive hereby agrees that the
period of time provided for in Sections 10 and 11 and the territorial
restrictions and other provisions and restrictions set forth therein are
reasonable and necessary to protect Company, its subsidiaries and its and their
successors and assigns in the use and employment of the good will of the
business conducted by Company and its subsidiaries. Executive further agrees
that damages cannot compensate Company in the event of a violation of Section 10
or 11, and than, if such violation should occur, injunctive relief shall be

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essential for the protection of Company, its subsidiaries, and its and their
successors and assigns. Accordingly, Executive hereby covenants and agrees that,
in the event any of the provisions of Sections 10 and 11 shall be violated or
breached, Company shall be entitled to obtain injunctive relief against
Executive, without bond but upon due notice, in addition to such further or
other relief as may appertain at equity or law. Obtainment of such an injunction
by Company shall not be considered an election of remedies or a waiver of any
right to assert any other remedies which Company has at law or in equity. No
waiver of any breach or violation hereof shall be implied from forbearance or
failure by Company to take action thereon. Executive hereby agrees that he has
such skills and abilities that the provisions of Sections 10 and 11 will not
prevent him from earning a living. Each party agrees to pay its own costs and
expenses in enforcing any provision of this Agreement.

     13. EXTENSION DURING BREACH. Executive agrees that the time period
described in Sections 10 and 11 shall be extended for a period equal to the
duration of any breach of such provisions by Executive.

     14. NO CONFLICTS OF INTEREST.

          (a) During the period of Executive's employment with Company,
Executive will not independently engage in the same or a similar line of
business as Company or its subsidiaries, or, directly or indirectly, serve,
advise, or be employed by any individual, firm, partnership, association,
corporation, or other entity engaged in the same or similar line or lines of
business.

          (b) Executive is not a promoter, director, employee, or officer of, or
consultant or independent contractor to, a business organized for profit, nor
will Executive become a promoter, director, employee, or officer of, or
consultant to, such a business while employed by Company or its subsidiaries
without first obtaining the prior written approval of Company. Executive
disclaims any such relationship or position with any such business. Should
Executive become a promoter, director, employee, or officer of, or a consultant
to, a business organized for profit upon obtaining such prior written approval,
Executive understands that Executive has a continuing obligation to advise
Company at such time of any activity of Company, or such other business that
presents Executive with a conflict of interest as an employee of Company.

          (c) Should any matter of dealing in which Executive is involved, or
hereafter becomes involved, on his own behalf or as an employee of Company,
appear to present a possible conflict of interest under any Company policy then
in effect, Executive will promptly disclose the facts to Company's Board of
Directors so that a determination can be made as to whether a conflict of
interest does exist. Executive will take whatever action is requested of
Executive by Company or its Board of Directors to resolve any conflict which it
finds to exist, including severing the relationship which creates the conflict.

          (d) Notwithstanding anything herein to the contrary, Executive may
make investments in commercial properties or land development ventures provided
they are not competitive with the business of the Company, and may own less than
1% of stock in publicly traded homebuilders.

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     15. RETURN OF COMPANY MATERIAL AND COMPANY CONFIDENTIAL INFORMATION. Upon
Termination, Executive shall promptly deliver to Company the originals and all
copies of any and all materials, documents, notes, manuals, or lists containing
or embodying Company Confidential Information or relating directly or indirectly
to the business of Company in the possession or control of Executive.

     16. NO AGREEMENT WITH OTHERS. Executive represents, warrants, and agrees
that Executive is not a party to any agreement with any other person or business
entity, including former employers, that in any way affects Executive's
employment by Company or relates to the same subject matter of this Agreement or
conflicts with his obligations under this Agreement, or restricts Executive's
services to Company.

     17. TERMINATION FOR CAUSE. The Company may terminate this Agreement for
Cause by giving written notice of Termination and, with respect to a purported
violation of Section 1 (a)(i), (ii) or (iii) of this Agreement that is curable
in such time period, shall afford Executive an opportunity to cure or disprove
the purported violation for the thirty-day period following such notice. Upon
Termination of Executive for Cause, Executive shall be entitled to receive only
the Minimum Base Salary, the amount of any unpaid performance bonus earned in
any complete fiscal year of the Company preceding the date of termination, and
any benefits as are due Executive through the effective date of such
Termination. No prorated bonus shall be paid to Executive upon a Termination for
Cause.

     18. TERMINATION BY COMPANY WITHOUT CAUSE. If Executive is terminated
without Cause, Executive shall be entitled to receive an amount equal to 75% of
Executive's base salary and 75% of Executive's average bonus for the previous
three fiscal years and the vesting of Executive's stock options shall be
accelerated, as if Executive had held them through the end of the following
fiscal year. Executive may terminate his employment upon the occurrence of a
Demotion Event and such termination shall be deemed a Termination without Cause.
Any amounts due to Executive under this paragraph shall be paid to Executive in
six (6) equal monthly payments or in a lump sum (to be paid within twenty (20)
days after Termination), at the Executive's discretion, following Termination.
If the Executive elects to take the payments due under this paragraph over a six
month period, he shall be entitled, to the extent permitted by law and the
plans, to continued participation in the Company's benefit plans for such
period. If the Executive elects to take a lump sum payment, his participation in
the Company's benefit plans shall terminate upon receipt of the lump sum
payment.

     19. TERMINATION UPON CHANGE OF CONTROL. If, within twelve (12) months
following a Change of Control of the Company, Executive voluntarily terminates
his employment as a result of a Demotion Event, Executive shall be entitled to
receive an amount equal to 100% of Executive's base salary and 100% of
Executive's average bonus for the previous three fiscal years and all of
Executive's stock options shall vest in full and be immediately exercisable. Any
amount due to Executive under this paragraph shall be paid to Executive in
twelve (12) equal monthly payments or in a lump sum (to be paid within twenty

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<PAGE>
(20) days after Termination), at the Executive's discretion, following
Termination. If the Executive elects to take the payments due under this
paragraph over a twelve month period, he shall be entitled, to the extent
permitted by law and the plans, to continued participation in the Company's
benefit plans for such period. If the Executive elects to take a lump sum
payment, his participation in the Company's benefit plans shall terminate upon
receipt of the lump sum payment.

     20. TERMINATION UPON DEATH OF EXECUTIVE. If during the term of this
Agreement Executive dies, then this Agreement shall terminate and Company shall
pay to the estate of Executive only the Minimum Base Salary, the amount of any
unpaid bonus earned in any complete fiscal year of the Company preceding the
date of Termination, the prorated portion of any objectively determined current
year bonus, and any benefits (including any life insurance benefits provided to
Executive's estate under Company's standard policies as in effect) as are due
through the date of his death. In addition, the vesting of Executive's stock
options shall be accelerated, as if the executive has served through the end of
the fiscal year of his Termination.

     21. TERMINATION UPON DISABILITY OF EXECUTIVE. If during the term of the
Agreement Executive is unable to perform the services required of Executive
pursuant to this Agreement for a continuous period of ninety (90) days due to
disability or incapacity by reason of any physical or mental illness (as
reasonable determined by Company by its Board of Directors), then Company shall
have the right to terminate this Agreement at the end of such ninety-day period
by giving written notice to Executive. Executive shall be entitled to receive
only such Minimum Base Salary, the amount of any unpaid bonus earned in any
complete fiscal year of the Company preceding the date of termination, the
prorated portion of any objectively determined current year bonus, and any
benefits as are due Executive through the effective date of such Termination. In
addition, the vesting of Executive's stock options shall be accelerated, as if
the Executive had served through the end of the fiscal year of his Termination.

     22. INDEMNITY. The Company shall indemnify Executive to the fullest extent
permitted by the Company's Bylaws. Such indemnification shall survive the
termination of this Agreement.

     23. ARBITRATION. Any dispute, controversy, or claim, whether contractual or
non-contractual, between the parties hereto arising directly or indirectly out
of or connected with this Agreement, relating to the breach or alleged breach of
any representation, warranty, agreement, or covenant under this Agreement,
unless mutually settled by the parties hereto, shall be resolved by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). Any arbitration shall be conducted by
arbitrators approved by the AAA and mutually acceptable to Company and
Executive. All such disputes, controversies, or claims shall be conducted by a
single arbitrator, unless the dispute involves more than $50,000 in the
aggregate in which case the arbitration shall be conducted by a panel of three
arbitrators. If the parties hereto are unable to agree on the arbitrator(s),
then the AAA shall select the arbitrator(s). The resolution of the dispute by
the arbitrator(s) shall be final, binding, nonappealable, and fully enforceable
by a court of competent jurisdiction under the Federal Arbitration Act. The
arbitrator(s) shall award compensatory damages to the prevailing party. The

                                       -7-
<PAGE>
arbitrator(s) shall have no authority to award consequential or punitive or
statutory damages, and the parties hereby waive any claim to those damages to
the fullest extent allowed by law. The arbitration award shall be in writing and
shall include a statement of the reasons for the award. The arbitration shall be
held in Phoenix, Arizona. The arbitrator(s) shall award reasonable attorney's
fees and costs to the prevailing party.

     24. SEVERABILITY; REFORMATION. In the event any court or arbiter determines
that any of the restrictive covenants in this Agreement, or any part thereof, is
or are invalid or unenforceable, the reminder of the restrictive covenants shall
not thereby be affected and shall be given full effect, without regard to
invalid portions. If any of the provisions of this Agreement should ever be
deemed to exceed the temporal, geographic, or occupational limitations permitted
by applicable laws, those provisions shall be and are hereby reformed to the
maximum temporal, geographic, or occupational limitations permitted by law. In
the event any court or arbiter refuses to reform this Agreement as provided
above, the parties hereto agree to modify the provisions held to be
unenforceable to preserve each party's anticipated benefits thereunder.

     25. NOTICES. All notices and other communication hereunder shall be in
writing and shall be sufficiently given if made by hand delivery, by telecopier,
or by registered or certified mail (postage prepaid and return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by it by like notice):

          If to Company:      Meritage Corporation
                              6613 N. Scottsdale Road
                              Suite 200
                              Scottsdale, Arizona 85250
                              Phone: (602) 998-8700
                              Fax: (602) 998-9162
                              Attn: Co-Chairman and Co-CEO

          With a copy to:     Snell & Wilmer L.L.P.
                              One Arizona Center
                              Phoenix, Arizona 85004-0001
                              Phone: (602) 382-6252
                              Fax: (602) 382-6070
                              Attn: Steven D. Pidgeon, Esq.

          If to Executive:    Larry W. Seay
                              802 W. El Caminito Drive
                              Phoenix, Arizona 85021

     All such notices and other communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if delivered by mail: and
when receipt is acknowledged, if telecopied.

                                       -8-
<PAGE>
     26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original instrument, but
all such separate counterparts shall constitute one and the same Agreement.

     27. GOVERNING LAW. The validity, construction, and enforceability of this
Agreement shall be governed in all respects by the laws of the State of Arizona,
without regard to its conflict of laws rules.

     28. ASSIGNMENT. This Agreement shall not be assigned by operation of law or
otherwise, except that Company may assign all or any portion of its rights under
this Agreement to any Company entity, but no such assignment shall relieve
Company of its obligations hereunder, and except that this Agreement may be
assigned to any corporation or entity with or into which Company may be merged
or consolidated or to which Company transfers all or substantially all of its
assets, and such corporation or entity assumes this Agreement and all
obligations and undertakings of Company hereunder.

     29. FURTHER ASSURANCES. At any time on or after the date hereof, the
parties hereto shall each perform such acts, execute and deliver such
instruments, assignments, endorsements and other documents and do all such other
things consistent with the terms of this Agreement as may be reasonably
necessary to accomplish the transaction contemplated in this Agreement or
otherwise carryout the purpose of this Agreement.

     30. GENDER, NUMBER AND HEADINGS. The masculine, feminine, or neuter
pronouns used herein shall be interpreted without regard to gender, and the use
of the singular or plural shall be deemed to include the other whenever the
context so requires.

     31. WAIVER OF PROVISION. The terms, covenants, representations, warranties,
and conditions of this Agreement may be waived only by a written instrument
executed by the party waiving compliance. The failure of any party at any time
to require performance of any provisions hereof shall, in no manner, affect the
right at a later date to enforce the same. No waiver by any party of any
condition, or breach of any provision, term, covenant, representation, or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation, or warranty of this Agreement.

     32. ATTORNEYS' FEES AND COSTS. If any legal action or any arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, accounting
fees, and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled.

                                       -9-
<PAGE>
     33. SECTION AND PARAGRAPH HEADINGS. The Article and Section headings in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

     34. AMENDMENT. This Agreement may be amended only by an instrument in
writing executed by all parties hereto.

     35. EXPENSES. Except as otherwise provided herein, each party shall bear
its own expenses incident to this Agreement and the transactions contemplated
hereby, including without limitation, all fees of counsel, consultants, and
accountants.

     36. ENTIRE AGREEMENT. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior understandings or agreements,
whether oral or in writing.

     37. WITHHOLDING. Executive acknowledges and agrees that payments made to
Executive by Company pursuant to the terms of this Agreement may be subject to
tax withholding and that Company may withhold against payments due Executive any
such amounts as well as any other amounts payable by Executive to Company.

     38. RELEASE. Receipt by Executive of any of the severance benefits noted in
paragraphs 18, 19, 20 and 21 hereof following termination of Executive's
employment hereunder shall be subject to Executive's compliance with any
reasonable and lawful policies or procedures of Company relating to employee
severance including the execution and delivery by Executive of a release
reasonably satisfactory to Company and Executive of any and all claims that
Executive may have against Company or any related person, except for the
continuing obligations provided herein, and an agreement that Executive shall
not disparage Company or any of its directors, officers, employees or agents.
Concurrent with the termination of Executive's employment hereunder pursuant to
paragraphs 18, 19, 20 or 21 hereof, and receipt of a release reasonably
satisfactory to the Company and Executive, the Company shall execute and deliver
to Executive a release, reasonably satisfactory to Company and Executive, of any
and all claims that Company may have against Executive, except for any claims
arising out of Executive's fraudulent or criminal conduct, and an agreement the
Company shall not disparage Executive.

                                      -10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or
caused this Agreement to be duly executed on their respective behalf, by their
respective officers thereunto duly authorized, all as of the day and year first
above written.

MERITAGE CORPORATION, a
Maryland corporation

By:                                     By:
    --------------------------------        ------------------------------------
    Name: Steven J. Hilton                  Name: John R. Landon
    Its: Co-Chairman and Co-CEO             Its: Co-Chairman and Co-CEO

---------------------------------
Larry W. Seay

                                      -11-

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