ex10-3.htm


    Exhibit
      10.3


    CONTINUING
      UNCONDITIONAL GUARANTY

    


    This
      Continuing Unconditional Guaranty
      (this “Guaranty”) dated as of the 12th
      day of November,
      2007 (the “Effective Date”), is made by UMT Holdings,
      L.P., a Delaware limited partnership (the
“Guarantor”), for the benefit of United Development
      Funding III, L.P., a Delaware limited partnership and its affiliates,
      subsidiaries, successors and assigns
      (“Lender”).

    


    


    R
      E C I T A L S:

    


    A.           Lender
      has committed to make a loan (the “Loan”) to United
      Development Funding X, L.P., a Delaware limited partnership
      (“Borrower”), pursuant to the terms and conditions of
      that certain Secured Line of Credit Promissory Note (the
“Note”) issued by Borrower and payable to the order of
      Lender dated the Effective Date in the principal amount of U.S. Seventy Million
      and NO/100 Dollars ($70,000,000.00), the proceeds of which shall be used by
      Borrower for business purposes.

    


    B.           Guarantor
      is an affiliate of Borrower and shall benefit, directly and indirectly, from
      the
      Loan made to Borrower pursuant to the Note.

    


    C.           Guarantor
      is willing to execute this Guaranty in favor of Lender and hereby agrees to
      be
      bound by its terms and conditions.

    


    A
      G R E E M E N T:

    


    NOW,
      THEREFORE, for good and valuable
      consideration, and intending to be legally bound hereby, Guarantor agrees and
      covenants with Lender as follows:

    


    1.           Definitions.  Capitalized
      terms not defined in this Guaranty shall have the respective meanings given
      to
      such terms in the Note.

    


    2.           Guaranty
      and Surety.  Guarantor hereby absolutely and unconditionally
      guarantees, and becomes surety for, the full, timely and complete payment when
      due, whether by lapse of time, by acceleration of payment, or otherwise, of
      all
      indebtedness, liabilities and obligations of every kind and nature of Borrower
      to Lender, whether now existing or hereinafter arising, including, without
      limitation, all indebtedness, liabilities and obligations arising under or
      related to (a) the Note, and the other Loan Documents and all amounts due
      thereunder, pursuant to or in connection therewith, (b) all costs reasonably
      incurred by Lender to obtain, preserve, perfect and enforce the security
      interests granted by the Loan Documents and to maintain, preserve and collect
      any 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 related thereto, and
      (c) all renewals, extensions, modifications and substitutions of all or any
      part of the indebtedness and obligations described in the foregoing clauses
      (a)
      through (b) (collectively, the “Guaranteed
      Obligations”).  Guarantor’s obligation under this
      Guaranty is unconditional, absolute and enforceable, irrespective of (a) the
      validity or enforceability of the Guaranteed Obligations in whole or in part
      or
      of the Note and the other Loan Documents or any provision thereof,
      (b) whether recovery against Borrower with respect to the Guaranteed
      Obligations in whole or in part is prevented by bankruptcy, the operation of
      law, or otherwise, and (c) any other circumstance that might otherwise cause
      a
      legal or equitable discharge or defense of Guarantor.

    


    
      
        
        

      

      
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    3.           Subsequent
      Acts by Lender.  Lender may, in its sole discretion and without
      notice, take or refrain from taking any action that might otherwise be deemed
      a
      legal or equitable release or discharge of Guarantor’s obligations under this
      Guaranty, without either impairing or affecting the liability of Guarantor
      for
      the full, timely and complete payment of the Guaranteed Obligations, which
      actions might include, by way of illustration and not limitation:

    


    (a)           the
      renewal or extension of any of the Guaranteed Obligations or any payments
      thereunder, or the acceleration or change of time for payment of the Guaranteed
      Obligations any increase in the principal amount of any promissory note or
      other
      instrument comprising a part of the Guaranteed Obligations and/or any additional
      funds advanced under the Guaranteed Obligations;

    


    (b)           the
      modification, amendment or change in any of the terms relating to any promissory
      note or other agreement, document or instrument now or hereafter executed by
      Borrower in favor of Lender, including, without limitation, the Note and the
      other Loan Documents;

    


    (c)           the
      absence of any attempt to collect the Guaranteed Obligations from Borrower
      or
      any other person or entity primarily or secondarily liable for the Guaranteed
      Obligations or any other action to enforce Lender’s rights with respect to the
      Guaranteed Obligations;

    


    (d)           the
      waiver, consent, or delay in enforcement by Lender with respect to any provision
      of any instrument evidencing the Guaranteed Obligations, including, without
      limitation, the Note and the other Loan Documents;

    


    (e)           any
      failure by Lender to take any steps to perfect and maintain its security
      interest in, or to preserve its rights to, any security or collateral given
      for
      the Guaranteed Obligations, or the release or compromise of any lien or security
      held by Lender as security for the Guaranteed Obligations;

    


    (f)           the
      compounding, rearrangement or consolidation by Lender of all or any part of
      the
      Guaranteed Obligations;

    


    (g)           the
      release from liability of Borrower or any other guarantor or person or entity
      primarily or secondary liable for the Guaranteed Obligations who may guarantee
      or provide security for the Guaranteed Obligations in whole or in part;
      or

    


    (h)           the
      settlement, release, compromise or cancellation of all or any part of the
      Guaranteed Obligations, or the acceptance of partial payment of all or any
      part
      of the Guaranteed Obligations.

    


    
      
        
        

      

      
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    4.           Expenses.  Guarantor
      agrees to pay all costs and expenses, including, without limitation, all court
      costs and reasonable attorneys’ fees paid or incurred by Lender in endeavoring
      to collect all or any part of the Guaranteed Obligations, or in enforcing or
      pursuing its remedies with respect to the Guaranteed Obligations.

    


    5.           Payment
      by Guarantor.  In the event of any failure to pay with respect to
      the Guaranteed Obligations or any Event of Default under the Note, Guarantor
      agrees to pay on demand, all of the Guaranteed Obligations and all other costs,
      expenses and other amounts payable under this Guaranty.  Lender shall
      not be required to liquidate any lien or any other form of security, instrument,
      or note held by Lender prior to making such demand.  THIS IS A
      GUARANTY OF PAYMENT AND NOT OF COLLECTION, and Guarantor specifically agrees
      that Lender shall not be required to assert any claim, file suit, or proceed
      to
      obtain a judgment against Borrower or any other guarantor, endorser or surety
      for the Guaranteed Obligations, or make any effort at collection of the
      Guaranteed Obligations, or foreclose against or seek to realize upon any
      security or collateral now or hereafter existing for the Guaranteed Obligations,
      or exercise or assert any other right or remedy to which Lender is or may be
      entitled in connection with the Guaranteed Obligations, before or as a condition
      of enforcing the liability of Guarantor under this Guaranty or requiring payment
      of the Guaranteed  Obligations under this
      Guaranty.  Guarantor agrees, to the full extent it may legally do so,
      that suit may be brought against Guarantor with or without making Borrower
      or
      any other person or entity a party to such suit, as Lender may
      elect.  Guarantor agrees that Guarantor shall remain fully liable
      under this Guaranty regardless of whether Borrower is held to be not liable
      on
      the Guaranteed Obligations and regardless of whether all or any portion of
      the
      Guaranteed Obligations are “non-recourse” or “limited recourse” to
      Borrower.

    


    6.           Application
      of Payments.  Lender shall have the exclusive right to determine
      the time and manner of application of any payments or credits to the Guaranteed
      Obligations, whether received from Borrower or any other source, and such
      determination shall be binding on Guarantor.  All such payments and
      credits may be applied, reversed and reapplied, in whole or in part, to any
      of
      the Guaranteed Obligations as Lender shall determine in its sole discretion
      without affecting the validity or enforceability of this Guaranty.

    


    7.           Guarantor’
      Responsibilities.  Guarantor hereby assumes responsibility for
      keeping itself informed of the financial condition of Borrower, and any and
      all
      endorsers and/or other Guarantor of any instrument or document evidencing all
      or
      any part of the Guaranteed Obligations and of all other circumstances bearing
      upon the risk of nonpayment of the Guaranteed Obligations.  Guarantor
      further agrees that Lender shall have no duty to advise Guarantor of any
      information known to Lender regarding such condition or such circumstances
      or to
      undertake any investigation.  If Lender, in its sole discretion,
      undertakes at any time or from time to time to provide any information to
      Guarantor, Lender shall be under no obligation to update any such information
      or
      to provide any such information to Guarantor on any subsequent
      occasion.

    


    8.           Reinstatement.  Guarantor
      agrees that, to the extent any payment or payments are made to Lender or Lender
      receives any proceeds of collateral, which payments or proceeds are subsequently
      invalidated, declared to be fraudulent or preferential, set aside and/or
      required to be repaid to Borrower or any other party, then Guarantor’s
      obligations under this Guaranty to the extent of such repayment, shall
      immediately and automatically be reinstated and continued in full force and
      effect.

     

    
      
        
        

      

      
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    9.           RESERVED.

    


    10.           Waivers
      by Guarantor.  Guarantor hereby waives to the extent permissible
      by law: (a) notice of acceptance of this Guaranty and of creation of the
      Guaranteed Obligations, (b) presentment, notice of non-payment, and demand
      for
      payment of the Guaranteed Obligations, (c) protest, notice of protest, and
      notice of dishonor or default to Guarantor or to any other party with respect
      to
      any of the Guaranteed Obligations, and (d) all other notices to which Guarantor
      might otherwise be entitled.

    


    11.           Continuation.  This
      Guaranty shall continue in full force and effect with respect to Guarantor,
      and
      Lender shall be entitled to make loans and advances and extend financial
      accommodations to Borrower on the faith of this Guaranty, until Lender delivers
      to Guarantor, a written revocation of this Guaranty executed by
      Lender.

    


    12.           Mutual
      Understanding.  Guarantor represents and warrants to Lender that
      Guarantor has read and fully understands the terms and provisions hereof, has
      had an opportunity to review this Guaranty with legal counsel and has executed
      this Guaranty based on Guarantor’s own judgment and advice of
      counsel.  If an ambiguity or question of intent or interpretation
      arises, this Guaranty will be construed as if drafted jointly by the Guarantor
      and Lender and no presumption or burden of proof will arise favoring or
      disfavoring any party because of authorship of any provision of this
      Guaranty.

    


    13.           Further
      Assurances.  Guarantor at Guarantor’s expense will promptly (a)
      execute and deliver to Lender on Lender’s request, all such other and further
      documents, agreements and instruments as may be requested by Lender, and (b)
      deliver all such supplementary information as may be requested by Lender, in
      compliance with or accomplishment of the agreements of Guarantor under this
      Guaranty.

    


    14.           Cumulative
      Remedies.  Guarantor hereby agrees that all rights and remedies
      that Lender is afforded by reason of this Guaranty are separate and cumulative
      with respect to Guarantor 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.

    


    15.           Notice.  All
      notices and other communications under this Guaranty will be in writing and
      will
      be mailed by registered or certified mail, postage prepaid, sent by facsimile,
      delivered personally by hand, or delivered by nationally recognized overnight
      delivery service addressed to Guarantor at the address or facsimile number
      for
      notice provided for such party on the signature page hereto, or to such other
      address or facsimile number as Guarantor may have delivered to Lender for
      purposes of notice pursuant to this Guaranty.  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 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.


    
      
        
        

      

      
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    16.           Enforcement
      and Waiver by Lender.  Lender shall have the right at all times to
      enforce the provisions of this Guaranty and the other Loan Documents in strict
      accordance with their respective terms, notwithstanding any conduct or custom
      on
      the part of Lender in refraining from so doing at any time or
      times.  The failure of Lender at any time or times to enforce its
      rights under such provisions strictly in accordance with the same, shall not
      be
      construed as having created a custom or in any way or manner modified or waived
      the same. 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.

    


    17.           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 GUARANTY 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.

    


    18.           JURISDICTION;
      VENUE.  GUARANTOR IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING IN
      RESPECT OF THIS GUARANTY 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”).  GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
      JURISDICTION OF THE SPECIFIED COURTS.  GUARANTOR HEREBY IRREVOCABLY
      WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH GUARANTOR
      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 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  ANY GUARANTOR IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
      MANNER PERMITTED BY APPLICABLE LAW.

    


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

    


    
      
        
        

      

      
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    20.           Amendments;
      Waivers.  No amendment or waiver of any provision of this Guaranty
      nor consent to any departure by Guarantor herefrom shall in any event be
      effective unless the same shall be in writing and signed by Lender, and then
      such waiver or consent shall be effective only in the specific instance and
      for
      the specific purpose for which given.

    


    21.           Binding
      Effect; Assignment. This Guaranty shall be binding on Guarantor and
      Guarantor’s administrators, legal representatives, successors, heirs and/or
      assigns, including, without limitation, any receiver, trustee or debtor in
      possession of or for Guarantor, and shall inure to the benefit of Lender and
      its
      successors and assigns.  Guarantor shall not be entitled to transfer
      or assign this Guaranty in whole or in part without the prior written consent
      of
      Lender. This Guaranty is freely assignable and transferable by Lender without
      the consent of Guarantor.  Should the status, composition, structure
      or name of Guarantor change, this Guaranty shall continue and also cover the
      Guaranteed Obligations under the new status composition, structure or name
      according to the terms of this Guaranty.

    


    22.           RESERVED.

    


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

    


    24.           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.

    


    25.           WAIVER
      OF JURY TRIAL, PUNITIVE DAMAGES, ETC.  GUARANTOR HEREBY KNOWINGLY,
      VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT
      NOT PROHIBITED BY LAW, ANY RIGHT GUARANTOR 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 GUARANTY OR THE LOAN DOCUMENTS
      OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR ASSOCIATED HEREWITH OR
      THEREWITH, BEFORE OR AFTER MATURITY OF THE NOTE; (B) WAIVES, TO THE MAXIMUM
      EXTENT NOT PROHIBITED BY LAW, ANY RIGHT GUARANTOR 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 MAKE THE LOAN AND ACCEPT THE NOTE
      BASED UPON, 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.

    


    
      
        
        

      

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

    


               27.           ENTIRE
      AGREEMENT.  THIS GUARANTY TOGETHER WITH 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
      GUARANTY, THE NOTE AND THE OTHER LOAN DOCUMENTS.  THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.  THIS GUARANTY, THE NOTE
      AND THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.


    


    


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    IN
      WITNESS WHEREOF, Guarantor has duly executed this Guaranty on this the 12th
      day
      of November, 2007, effective for all purposes as of the Effective
      Date.

    


    


    GUARANTOR:

    


    
      	
               

            	
              UMT
                HOLDINGS, L.P.,

            


    

    a
      Delaware limited
      partnership

    


    By:  UMT
      Services,
      Inc.

    Its:  General
      Partner

    


    


    By:           /s/
      Hollis M. Greenlaw

    Name:      Hollis
      M. Greenlaw

    Its:           President
      and Chief ExecutiveOfficer

    


    


    


    


    


    


    


    Signature
      page to
      Guaranty