Exhibit 10.2
SECURITY AGREEMENT

This Security Agreement (this “Agreement”) dated as of the 12th day of November,
2007 (the “Effective Date”), is made by United Development Funding X, L.P., a
Delaware limited partnership (“Borrower” or the “Debtor”), in favor of United
Development Funding III, L.P., a Delaware limited partnership (“Lender”).

R E C I T A L S:

A.           Lender has committed to loan up to U.S. SEVENTY MILLION and NO/100
Dollars ($70,000,000.00) (the “Loan”) to Borrower pursuant to the terms and
conditions of that certain Secured Line of Credit Promissory Note (the “Note”)
executed by Borrower and payable to the order of Lender dated the Effective
Date, the proceeds of which shall be used by Borrower for business purposes.

B.           It is a condition precedent to Lender’s willingness to accept the
Note and advance funds to Borrower thereunder that Debtor enter into this
Agreement with Lender, pursuant to which Debtor grants Lender a security
interest in and lien on all of its assets, and Debtor is willing to enter into
this Agreement and agree to be bound by its terms and conditions.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing premises and in order to
induce Lender to accept the Note and advance funds to Borrower thereunder, and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, Debtor covenants and agrees with Lender as follows:

1.           Definitions.  All capitalized terms used but not defined in this
Agreement shall have the respective meanings given to such terms in the
Note.  Notwithstanding the foregoing sentence, terms used in Article 9 of the
Uniform Commercial Code (the “Code”) in the State of Texas, when used in this
Agreement, have the definitions given to such terms as therein defined.

2.           Grant of Security Interest.  Debtor hereby assigns, pledges and
grants to Lender for its benefit, a continuing security interest in all of
Debtor’s right, title and interest in and to all of its assets, whether now
owned or hereafter acquired, and including, without limitation, all full and
partial interests in the following (collectively, the “Collateral”):

(a)           all promissory notes payable to the order of Borrower issued by
clients of Borrower (“Client Notes”) and all mortgages, deeds of trust to secure
debt and deeds of trust on real or personal property, and contracts for deed
and/or installment contracts, and all full or partial interests therein, and all
related loan documents, guarantees, security agreements, leases, pledge
agreements, assignments of interests, assignments of proceeds, assignments of
securities, and all title policies, insurance policies, and security interests
related to any of the foregoing and the rights to receive payment thereon and
other agreements and property which secure or relate to any receivable or other
asset (all such interests and documents evidencing such interests are referred
to herein collectively as the “Client Loan Documents”);

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(b)           all accounts receivable, receivables, rights to payment,
promissory notes, and all guarantees, security agreements, insurance policies,
and security interests and the rights to receive payment thereon, including,
without limitation, all rights to payment under the Client Notes and the Client
Loan  Documents;

(c)           all cash on hand, including, without limitation, cash held in bank
accounts, brokerage accounts, certificates of deposit, and other depositories,
all accounts receivable owing by any person or entity, including all such
amounts due thereunder, and all security for payment thereof, and in and to all
the proceeds, monies, income, instruments, securities, accounts, benefit,
collections, tax refunds, insurance proceeds, and products thereof and thereon
and attributable or accruing thereto;

(d)           all equipment, inventory, materials, computer software and
records, goods, and other personal property, and all documents and receipts
covering such property, and all licenses and permits used or held for use in
connection with such property;

(e)           all patents, trademarks, service marks, copyrights, licenses, and
all other intellectual property (collectively, the “Intellectual Property”), and
all agreements and contracts regarding the use and exploitation of any of the
Intellectual Property and applications therefor;

(f)           all contract rights and other general intangibles, including,
without limitation, all contract and other rights to receive proceeds and
reimbursements, and all license agreements;

(g)           all interests in all subsidiaries, and all capital stock, equity
interests, partnership interests, and membership interests and all warrants,
options and other rights to purchase any such capital stock, equity interests,
partnership interests, and membership interests, in any corporation,
partnership, limited liability company or other entity;

(h)           all books and records (including electronic records, computer
disks, tapes, printouts and other storage media) relating to any of the
foregoing; and

(i)           any and all products and proceeds of the foregoing (including, but
not limited to, any claim to any item referred to in this definition, and any
claim against any third party for loss of, damage to or destruction of any or
all of, the Collateral or for proceeds payable under, or unearned premiums with
respect to, policies of insurance) in whatever form, including, but not limited
to, cash, negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.

Debtor shall be deemed to have possession of any of the Collateral in transit to
it or set apart for it or for any of its agents, affiliates or correspondents.

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3.           Security for Obligations.  This Agreement and the security interest
created and evidenced hereby secures the following obligations and liabilities
(all such obligations and liabilities are referred to herein as the
“Obligations”):

(a)           the prompt and complete payment, observance and performance of all
duties, liabilities, obligations and indebtedness of Borrower arising under the
Note and the other Loan Documents;

(b)           all costs reasonably incurred by Lender to obtain, preserve,
perfect and enforce the security interest evidenced hereby and by the other Loan
Documents and to maintain, preserve and collect the Collateral, and all taxes,
assessments, insurance premiums, repairs, reasonable attorneys’ fees and legal
expenses, rent, storage charges, advertising costs, brokerage fees and expenses
of sale; and

(c)           and all modifications, extensions, renewals, replacements, and
increases of each of the foregoing described in clauses (a) through (b), or any
part thereof.

4.           Debtor Remains Liable.  Notwithstanding anything to the contrary
contained in this Agreement: (a) Debtor shall remain liable under the contracts
and agreements included in the Collateral and obligated to perform all duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Lender of any of its rights hereunder shall not
release Debtor from any duties or obligations under the contracts and agreements
included in the Collateral, and (c) Lender shall have no obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Lender be obligated to perform any of the obligations or
duties of either Debtor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.

5.           Representations and Warranties.  Debtor represents and warrants as
follows:

(a)           Debtor owns the Collateral free and clear of any lien, security
interest, charge or encumbrance of any kind whatsoever (collectively, “Liens”)
except for (i) the security interest created hereby in favor of Lender, (ii)
Liens in favor of any person or entity that Lender has agreed in writing shall
have priority over the Collateral (the “Senior Liens”), (iii) Liens approved by
Lender pursuant to a written consent or agreement executed by Lender, (iv) Liens
explicitly permitted by the Loan Documents, and (v) Liens for taxes not yet due
and payable (collectively, the Liens described in clauses (i) through (v) above
are referred to herein as the “Permitted Liens”).  A schedule of the Senior
Liens shall be attached hereto as Schedule 1.  No effective financing statement,
continuation statement or amendment thereto promulgated under the Uniform
Commercial Code of any state (collectively, “Financing Statements”) or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of
Lender or in favor of the holder(s) of the Permitted Liens.  The validity of the
Collateral in whole or in part, and Debtor’s title thereto is not currently
being questioned in any litigation or regulatory proceeding to which either
Debtor is a party, nor is any such litigation or proceeding threatened.

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(b)           This Agreement creates and evidences a valid and perfected
security interest in the Collateral, securing the payment of the Obligations,
second in priority only to any Senior Liens, and all filings and other actions
of either Debtor necessary or desirable to perfect and protect such security
interest have been, or will be upon request, duly taken by Debtor.

(c)           No authorization, approval or other action by, and no notice to or
other filing with, any governmental authority or regulatory body is required,
either (i) for the grant by Debtor of the security interest granted hereby or
for the execution, delivery or performance of this Agreement by Debtor, or (ii)
for the perfection of or the exercise by Lender of its rights and remedies
hereunder (other than the filing of Financing Statements by Lender).

(d)           Debtor’s principal place of business is at the address for
Borrower set forth in Section 1 of the Note (the “Principal Place of
Business”).  All Collateral and books of account and records relating to the
Collateral are located at Debtor’ Principal Place of Business.

6.           Covenants and Further Assurances.

(a)           Debtor agrees that from time to time, at its own expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be reasonably necessary or desirable, or that Lender
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Lender to exercise and
enforce rights and remedies hereunder with respect to any Collateral.  Without
limiting the generality of the foregoing, Debtor will, subject to the priority
rights, if any, of the holders of the Senior Liens:  (i) mark conspicuously each
document included in the Collateral and each of its records pertaining to the
Collateral, with a legend, in form and substance satisfactory to Lender,
indicating that such document or Collateral is subject to the security interest
granted hereby; (ii) transfer, register or otherwise put any of the Collateral
in the name of Lender or its nominee; and (iii) execute and file such Financing
Statements, and such other instruments or notices, as may be necessary or
desirable, or as Lender may request, in order to perfect and preserve the
security interest granted or purported to be granted hereby.

(b)           Debtor hereby authorizes Lender to file one or more Financing
Statements relative to all or any part of the Collateral without the signature
of Debtor where permitted by law.  A carbon, photographic or other reproduction
of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a Financing Statement where permitted by
law.  Debtor acknowledges and agrees that any Financing Statement filed by or on
behalf of Lender against Debtor, whether such filing is or was made prior to or
after the date of this Agreement, is hereby deemed to include the security
interest granted by this Agreement, regardless of whether such Financing
Statement is or was filed in connection with the Loan or some other indebtedness
owed to Lender.

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(c)           Debtor will take all actions and pay all costs to keep and
maintain the validity, enforceability, security, priority and collectibility of
the Client Notes and the Client Loan Documents and will pay all other amounts
which may be necessary or desirable to preserve, maintain and protect Lender's
interest in the Client Notes and the Client Loan Documents.

(d)           Debtor shall at all times maintain the Collateral and its books of
account and records relating to the Collateral at its Principal Place of
Business, and shall not relocate such books of account and records and
Collateral unless it delivers to Lender, prior written notice of such relocation
and the new location thereof (which must be within the United States).  Debtor
will furnish to Lender from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as Lender may reasonably request, all in reasonable detail.

(e)           Promptly, but in any event, within three (3) business days
following the closing of any Client Note, Borrower agrees to execute and deliver
to Lender, for each such Client Note, (i) an allonge duly endorsing the Client
Note to Lender, in the form attached to this Agreement as Exhibit “A”, together
with the original Client Note, which shall be held by Lender for so long as the
Note is outstanding or Lender has any obligation to Borrower thereunder, and
(ii) a Collateral Assignment of Note and Liens, assigning the Client Notes and
the related Client Loan Documents to Lender, in the form attached to this
Agreement as Exhibit “B”.

7.           Insurance.

(a)           Debtor shall, at Debtor’s own expense, maintain insurance with
respect to the Collateral in such amounts, against such risks, in such form and
with such insurers, as shall be reasonably satisfactory to Lender from time to
time.  Debtor shall ensure that the Collateral and the real properties securing
the Client Notes and the Client Loan Documents are, and remain, insured against
loss by fire and other casualty.  Each policy for property damage insurance
shall provide for all losses to be paid to Lender as holder of the security
interest created hereby, subject to the priority rights, if any, of the holders
of the Senior Liens.  Each such policy shall in addition (i) contain the
agreement (if available) by the insurer that any loss thereunder shall be
payable to Lender notwithstanding any action, inaction or breach of
representation or warranty by Debtor, subject to the priority rights, if any, of
the holders of the Senior Liens, (ii) provide that there shall be no recourse
against Lender for payment of premiums or other amounts with respect thereto,
and (iii) provide that at least ten (10) days prior written notice of
cancellation or of lapse shall be given to Lender by the insurer.  Debtor shall,
if so requested by Lender, deliver to Lender original or duplicate policies of
such insurance and, as often as Lender may reasonably request, a report of a
reputable insurance broker selected by Debtor with respect to such
insurance.  Further, Debtor shall, at the request of Lender, duly execute and
deliver instruments of assignment of such insurance policies to comply with the
foregoing requirements and cause the respective insurers to acknowledge notice
of such assignment.

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(b)           Reimbursement under any liability insurance maintained by Debtor
may be paid directly to the person who shall have incurred liability covered by
such insurance.  All insurance payments to Lender in respect of Collateral shall
be applied by Lender to reduce the indebtedness evidenced by the Note.

8.           Transfers and Other Liens.  Debtor shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
other than the sale or assignment of Client Notes and Client Loan Documents in
the ordinary course of business if (i) Lender has provided its prior written
consent to such sale or assignment, or (ii) the proceeds of the sale or
assignment are used to pay down the Note.  Debtor shall not create or suffer to
exist any Lien upon or with respect to any of the Collateral to secure debt of
any person, except for Permitted Liens.

9.           Lender Appointed Attorney-in-Fact.  Debtor hereby irrevocably
appoints Lender as its attorney-in-fact, with full authority in the place and
stead of Debtor, as applicable, and in the name of Debtor, as applicable, or
otherwise, from time to time in Lender's discretion at any time after the
occurrence of an Event of Default (as such term is defined in the Note), to take
any action and to execute any instrument which Lender may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:

(a)           to obtain insurance required to be maintained by Debtor and to
settle and adjust claims under any insurance policy including, without
limitation, any such policy related to a Client Note;

(b)           to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due, under or in
respect of any of the Collateral including, without limitation, moneys due and
to become due under the Client Notes and the Client Loan  Documents or
otherwise;

(c)           to file any claims or take any action or institute any proceedings
which Lender may deem necessary or desirable to enforce the rights of Lender
with respect to any of the Collateral including, without limitation, the Client
Notes and the Client Loan Documents;

(d)           to commence and prosecute any actions in any court for the
purposes of collecting amounts owed to Debtor under the Client Notes and Client
Loan Documents, and otherwise, and enforcing any other rights in respect
thereof, and to defend, settle or compromise any action brought and, in
connection therewith, and to give such discharge or release as Lender may deem
appropriate;

(e)           to receive, open and dispose of mail addressed to Debtor and
endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment made on
account of or funds paid on behalf of and in the name of Debtor including,
without limitation, payment of Client Notes;

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(f)           sell, assign, transfer, make any agreement in respect of, or
otherwise deal with or exercise rights in respect of, any Collateral as fully
and completely as though Lender were the absolute owner thereof for all
purposes;

(g)           to execute Financing Statements or any other documents or writing
deemed necessary by Lender to evidence or perfect Lender's  security interest in
the Collateral including, without limitation, the Client Notes and the Client
Loan Documents; provided that Lender agrees to furnish copies of any document
executed hereunder to Debtor;

(h)           to enter on the premises of Debtor in order to exercise any of
Lender's rights and remedies;

(i)           to receive, endorse, and collect any drafts or other instruments,
documents, assignments, and chattel paper; and

(j)           to file any claims or take any action or institute any proceedings
which Lender may deem necessary or desirable to enforce the rights of Lender
with respect to any of the Collateral.

The foregoing appointment of Lender as attorney-in-fact is coupled with an
interest and is irrevocable.

10.           Rights Prior to Event of Default; Termination.

(a)           Rights Prior to Event of Default.  So long as no Event of Default
shall have occurred and be continuing, Debtor shall be entitled to exercise any
and all rights and powers relating or pertaining to the Collateral for any
purpose not inconsistent with the terms of this Agreement.

(b)           Termination of Rights. Debtor understands and agrees that during
any period when an Event of Default shall have occurred and be continuing, and
after Lender has given written notice to Debtor that Lender has exercised its
rights hereunder, all rights of Debtor to exercise power with respect to the
Collateral, which Debtor was previously entitled to exercise shall cease and all
such rights shall become vested in Lender, which shall have the sole and
exclusive right and authority to exercise such power immediately upon such
written notice.  All amounts, if any, representing principal prepayment or
payoffs and all amounts, if any, collected by Debtor after the occurrence of any
Event of Default represents trust funds which are assigned and belong to Lender
and which are to be immediately delivered to Lender, and any retention of such
funds by Lender before and after the occurrence of an Event of Default shall be
deemed to be a conversion of Lender's property, ipsofacto.  Further, Lender
shall have the right, during the continuance of any Event of Default, to notify
and direct the obligors on the Client Notes to make all payments in respect
thereof directly to Lender.  The obligor making any payment to Lender under this
Agreement shall be fully protected in relying on the written statement of Lender
that it then holds a security interest which entitles Lender to receive such
payments.  Any and all money and other property paid over to or received by
Lender pursuant to the provisions hereof shall be retained by Lender as
additional Collateral under this Agreement.

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11.           Lender May Perform.  If Debtor fails to perform any covenant or
agreement contained in this Agreement, Lender may itself perform, or cause
performance of, such covenant or agreement, and the expenses of Lender incurred
in connection therewith shall be payable by Debtor and/or payable under the Note
as a Discretionary Advance.

12.           Events of Default.  Each of the following events constitutes an
Event of Default (herein so called) under this Agreement:

(a)           Borrower fails to timely pay any amount due and owing it under the
Note when due and payable, whether at a date for the payment of a fixed
installment or as a contingent or other payment becomes due and payable or as a
result of acceleration or otherwise; or

(b)           Any “Default”, “default”, “Event of Default” or “event of default”
occurs under any Loan Document that defines any such term, and the same is not
remedied within the applicable period of grace (if any) provided in such Loan
Document; or

(c)           the entry of a decree or order for relief by a court having
jurisdiction in respect of Borrower in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, which is not
vacated or dismissed within thirty (30) days, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Borrower for any substantial part of Borrower’s property, or
ordering the winding up or liquidation of such person's affairs; or

(d)           the commencement by Borrower of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or the
consent by it to the appointment to or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Borrower for any substantial part of its property, or the making by
Borrower of any assignment for the benefit of creditors, or the admission by
Borrower in writing of Borrower’s inability to pay its debts generally as they
become due; or

(e)           the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of all or a
substantial part of its assets or of any part of the Collateral in a proceeding
brought against or initiated by Borrower.

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Upon the occurrence of an Event of Default described in subsection (c), (d) or
(e) of this Section 12, all of the Obligations shall thereupon be immediately
due and payable, without demand, presentment, notice of demand or of dishonor
and nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower.  During the
continuance of any other Event of Default, Lender at any time and from time to
time may, without notice to Borrower, declare any or all of the Obligations
immediately due and payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower.

13.           Remedies.  If any Event of Default shall occur and be continuing,
subject to the priority rights, if any, of the holders of the Senior Liens,
Lender may protect and enforce its rights under this Agreement and the other
Loan Documents by any appropriate proceedings, including proceedings for
specific performance of any covenant or agreement contained in any Loan
Document, and Lender may enforce the payment of any Obligations due it or
enforce any other legal or equitable right which it may have.  All rights,
remedies and powers conferred upon Lender under the Loan Documents shall be
deemed cumulative and not exclusive of any other rights, remedies or powers
available under the Loan Documents or at law or in equity.  Lender's authority
and rights shall include, without limitation, the following:

(a)           Lender may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Code (whether or
not the Code applies to the affected Collateral) and also may (i)
require  Debtor to, and Debtor hereby agrees that it will at its expense and
upon request of Lender forthwith, assemble all or part of the Collateral as
directed by Lender and make it available to Lender at a place to be designated
by Lender which is reasonably convenient to it, and (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Lender's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as Lender may
deem commercially reasonable.  Debtor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) business days' notice to Debtor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification.  Lender shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

(b)           All cash proceeds received by Lender in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Lender, be held by Lender as Collateral for, and/or
then or at any time thereafter applied in whole or in part by Lender against all
or any part of the Obligations in such order as Lender shall elect, subject to
any mandatory provisions of this Agreement or applicable law.  Any surplus of
such cash or cash proceeds held by Lender and remaining after payment in full of
all the Obligations shall be paid over to Debtor or to whomsoever may be
lawfully entitled to receive such surplus.
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14.           Lender's Duties.  The powers conferred on Lender under this
Agreement are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Lender shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or  any other rights pertaining to any Collateral.

15.           No Impairment.  The execution and delivery of this Agreement in no
manner shall impair or affect any other security (by endorsement or otherwise)
for the payment of the Obligations and no security taken hereafter as security
for payment of the Obligations shall impair in any manner or affect this
Agreement, all such present and further additional security to be considered as
cumulative security.  Any of the Collateral for, or any obligor on, any of the
Obligations may be released without altering, varying or diminishing in any way
the force, effect, lien, security interest, or charge of this Agreement as to
the Collateral not expressly released, and this Agreement shall continue as a
security interest and charge on all of the Collateral not expressly released
until all the Obligations secured hereby have been paid in full.  This Agreement
shall not be construed as relieving Debtor from full recourse liability on the
Obligations and any and all further and other indebtedness secured hereby and
for any deficiency thereon.

16.           Indemnity and Expenses.

(a)            Debtor agrees to indemnify Lender from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from Lender's gross negligence or willful
misconduct.

(b)           Debtor agrees that it will, upon demand, pay to Lender the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of Lender’s counsel and of any experts and agents, which Lender
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of Lender hereunder, or (iv) the failure by Debtor to
perform or observe any of the provisions hereof.

17.           Security Interest Absolute.  All rights of Lender and security
interests hereunder, and all obligations of Debtor hereunder, shall be absolute
and unconditional, irrespective of:

(a)           any lack of validity or enforceability of the Note or any other
Loan Document or instrument relating thereto;

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(b)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or waiver of
or any consent to any departure from the Note or any other Loan Document;

(c)           any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or

(d)           any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Debtor, or a third party holder of a security
interest.

18.           Notice.  Any notice, request, demand or other communication
required or permitted hereunder, will be in writing and will be mailed by
registered or certified mail, postage prepaid, sent by facsimile, delivered
personally by hand, or delivered by nationally recognized overnight delivery
service addressed at the addresses provided in the Note for purposes of notice
or with respect to any party, to such other address or facsimile number as a
party may have delivered to the other parties for purposes of notice pursuant to
the provisions of the Note.  Each notice or other communication will be treated
as effective and as having been given and received (a) if sent by mail, at the
earlier of its receipt or three (3) business days after such notice or other
communication has been deposited in a regularly maintained receptacle for
deposit of United States mail, (b) if sent by facsimile, upon electronic or
written confirmation of facsimile transfer, (c) if delivered personally by hand,
upon electronic or written confirmation of delivery from the person delivering
such notice or other communication, or (d) if sent by nationally recognized
overnight delivery service, upon electronic or written confirmation of delivery
from such service.

19.           Continuing Security Interest.  This Agreement shall create a
continuing security interest in the Collateral.  Upon the payment in full of the
Obligations and termination of the Note as determined by Lender in its sole
discretion, the security interest granted hereby shall terminate.  Upon any such
termination, Lender will, at Debtor’s expense, execute and deliver to Debtor
such documents as Debtor shall reasonably request to evidence such termination.

20.           Further Assurances.  Debtor at Debtor’s expense will promptly
execute and deliver to Lender on Lender’s request, all such other and further
documents, agreements and instruments, and shall deliver all such supplementary
information, including, without limitation, with respect to the Client Notes,
the Client Loan Documents and the loans made pursuant thereto, and the
Collateral, as Lender may request from time to time.

21.           Cumulative Remedies.  Debtor hereby agrees that all rights and
remedies that Lender is afforded by reason of the Loan Documents are separate
and cumulative with respect to Debtor and otherwise and may be pursued
separately, successively, or concurrently, as Lender deems advisable.  In
addition, all such rights and remedies of Lender are non-exclusive and shall in
no way limit or prejudice Lender’s ability to pursue any other legal or
equitable rights or remedies that may be available to Lender.

22.           Enforcement and Waiver by Lender.  Lender shall have the right at
all times to enforce the provisions of this Agreement in strict accordance with
their respective terms, notwithstanding any conduct or custom on the part of
Lender in refraining from so doing at any time or times.  The failure of Lender
at any time or times to enforce its rights under such provisions, strictly in
accordance with the same, shall not be construed as having created a custom or
in any way or manner modified or waived the same. All rights and remedies of
Lender are cumulative and concurrent and the exercise of one right or remedy
shall not be deemed a waiver or release of any other right or remedy.

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23.    CHOICE OF LAW.  EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
SECURITY INTERESTS OR REMEDIES IN RESPECT OF ANY PARTICULAR COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS
CONFLICTS OF LAWS PROVISIONS.  

24.    JURISDICTION; VENUE.  DEBTOR IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING
IN RESPECT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT IN
THE DISTRICT COURTS OF TARRANT COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION (THE “SPECIFIED
COURTS”).  DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE SPECIFIED COURTS.  EACH DEBTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH DEBTOR MAY NOW OR HEREAFTER HAVE
THAT THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
SPECIFIED COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND SUCH DEBTOR HEREBY
IRREVOCABLY AGREES TO A TRANSFER OF ALL SUCH PROCEEDINGS TO THE SPECIFIED
COURTS.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST EITHER DEBTOR IN ANY JURISDICTION OR TO
SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW.  

25.           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of them
together shall constitute one and the same agreement.

26.           Severability.  If any provision of this Agreement shall be held
invalid under any applicable laws, then all other terms and provisions of this
Agreement shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by applicable law.

27.           Amendments; Waivers.  No amendment or waiver of any provision of
this Agreement nor consent to any departure herefrom, shall in any event be
effective unless the same shall be in writing and signed by the affected party,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.  Debtor will not be released from
its obligations hereunder, except pursuant to a written instrument executed by
Lender.

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28.           Binding Effect; Assignment. This Agreement shall be binding on
Debtor and its successors and assigns, including, without limitation, any
receiver, trustee or debtor in possession of or for Debtor, and shall inure to
the benefit of Lender and its successors and assigns.  Debtor shall not be
entitled to transfer or assign this Agreement in whole or in part without the
prior written consent of Lender. This Agreement is freely assignable and
transferable by Lender without the consent of Debtor.  Should the status,
composition, structure or name of either Debtor change, this Agreement shall
continue and also cover Debtor under the new status composition, structure or
name according to the terms of this Agreement.

29.           Captions.  The captions in this Agreement are for the convenience
of reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.

30.           Number or Gender of Words.  Except where the context indicates
otherwise, words in the singular number will include the plural and words in the
masculine gender will include the feminine and neutral, and vice versa, when
they should so apply.

31.           WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.  DEBTOR HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT DEBTOR MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY
TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE LOAN
DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR ASSOCIATED
HEREWITH OR THEREWITH; (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT SUCH DEBTOR MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
“SPECIAL DAMAGES”, AS DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OF LENDER OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT
LENDER HAS BEEN INDUCED TO ENTER INTO THE NOTE AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION. AS
USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL,
EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE
ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR
DELIVER TO ANY OTHER PARTY HERETO.

32.           ACKNOWLEDGEMENT AND CONSENT TO PLEDGE.  THIS AGREEMENT IS SUBJECT
TO A SECURITY INTEREST IN FAVOR OF, AND PLEDGED AS COLLATERAL TO, PREMIER BANK
AND ITS ASSIGNS (“PREMIER”).  BY EXECUTION HEREOF, DEBTOR HEREBY CONSENTS TO
SUCH SECURITY INTEREST AND PLEDGE OF THIS AGREEMENT TO PREMIER, AND CONSENTS TO
THE ASSIGNMENT OF THIS AGREEMENT TO PREMIER IN ACCORDANCE THEREWITH.

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33.           ENTIRE AGREEMENT.  THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS TOGETHER CONSTITUTE THE ENTIRE AGREEMENT AMONG THE PARTIES CONCERNING
THE SUBJECT MATTER HEREOF, AND ALL PRIOR DISCUSSIONS, AGREEMENTS AND STATEMENTS,
WHETHER ORAL OR WRITTEN, ARE MERGED INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES AND THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

[The remainder of this page is left blank intentionally.]

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IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly executed and
delivered on the 12th day of November, 2007, effective for all purposes as of
the Effective Date.

DEBTOR:

UNITED DEVELOPMENT FUNDING X, L.P.
a Delaware limited partnership

By:         United Development Funding X, Inc.
Its:         General Partner

By:        /s/ Hollis M. Greenlaw
Name:   Hollis M. Greenlaw
Its:        President and Chief Executive Officer

Signature page to Security Agreement

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SCHEDULE 1

SENIOR LIENS

NONE.

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EXHIBIT A

ALLONGE

(see attached)

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EXHIBIT B

COLLATERAL ASSIGNMENT OF NOTE AND LIENS

(see attached)