Exhibit 10.2 - Revolving Note


    REVOLVING
      NOTE

     

    US    $10,000,000.00                                                                            

     

    December
      29, 2006

     

    FOR
      VALUE
      RECEIVED, the undersigned, UNITED DEVELOPMENT FUNDING III, L.P., a Delaware
      limited partnership, (hereinafter, together with its successors and assigns,
      “Borrower””),
      hereby promises to pay to the order of PREMIER BANK, a Missouri banking
      association, d/b/a Premier Bank Texas (hereinafter, together with its successors
      and assigns, “Lender”),
      at
      the office of Lender, in immediately available funds, the principal sum of
      Ten
      Million and NO/100 DOLLARS ($10,000,000.00) of United States funds, or, if
      less,
      so much thereof as may from time to time be advanced as Revolving Loan Advances
      by Lender to Borrower hereunder, plus interest as hereinafter provided.


     

    This
      Note
      is the Revolving Note referred to in that certain Loan and Security Agreement
      dated as of December 29, 2006 between Borrower and Lender (as amended, restated,
      supplemented or otherwise modified from time to time, the “Loan
      Agreement”).
      All
      capitalized terms used herein shall have the meanings ascribed to such terms
      in
      the Loan Agreement except to the extent such capitalized terms are otherwise
      defined or limited herein.

     

    All
      principal amounts and other Obligations then outstanding hereunder shall be
      due
      and payable in full on the Termination Date, or such earlier date as the
      Revolving Loan Advances shall be due and payable in full, whether by
      acceleration or otherwise, pursuant to the Loan Agreement. Borrower also shall
      repay the principal outstanding hereunder from time to time as provided in
      the
      Loan Agreement.

     

    Borrower
      shall be entitled to borrow, repay and re-borrow funds hereunder pursuant to
      the
      terms and conditions of the Loan Agreement. Prepayment of the principal amount
      of any Revolving Loan Advance may be made only as provided in the Loan
      Agreement.

     

    Borrower
      hereby promises to pay interest on the unpaid principal amount hereof as
      provided in Section
      1.3
      of the
      Loan Agreement. Interest under this Revolving Note also shall be due and payable
      when this Revolving Note shall become due (whether at maturity, by reason of
      acceleration or otherwise). The Obligations shall bear interest payable at
      the
      default rate in the manner and at the times provided in the Loan
      Agreement.

     

    In
      no
      event shall the amount of interest due or payable hereunder exceed the maximum
      rate of interest allowed by applicable law, and in the event any such payment
      is
      inadvertently made by Borrower or inadvertently received by Lender, then such
      excess sum shall be credited as a payment of principal, unless Borrower shall
      notify Lender in writing that it elects to have such excess sum returned
      forthwith. It is the express intent hereof that Borrower not pay, and Lender
      not
      receive, directly or indirectly, in any manner whatsoever, interest in excess
      of
      that which may legally be paid by Borrower under Applicable Law.

     

    All
      parties now or hereafter liable with respect to this Revolving Note, whether
      Borrower, any guarantor, endorser or any other Person, hereby waive presentment
      for payment, demand, notice of non-payment or dishonor, protest, notice of
      protest and notice of any other kind whatsoever.

     

    No
      delay
      or omission on the part of Lender or any holder hereof in exercising its rights
      under this Revolving Note, or delay or omission on the part of Lender in
      exercising its rights under the Loan Agreement or under any other Loan Document,
      or course of conduct relating thereto, shall operate as a waiver of such rights
      or any other right of Lender or any holder hereof, nor shall any waiver by
      Lender or any holder hereof, of any such right or rights on any one occasion
      be
      deemed a bar to, or waiver of, the same right or rights on any future
      occasion.

     

    Borrower
      hereby promises to pay all costs of collection, including, without limitation,
      reasonable attorneys’ fees, should this Revolving Note be collected by or
      through an attorney-at-law or under advice therefrom.

     

    Time
      is
      of the essence in this Revolving Note.

     

    This
      Revolving Note evidences the Revolving Loan Advances under, and is subject
      to
      the terms of, the Loan Agreement, which contains provisions with respect to
      the
      acceleration of the maturity of this Revolving Note upon the happening of
      certain stated events, and provisions for prepayment and repayment. This
      Revolving Note is secured by and is also entitled to the benefits of the Loan
      Documents to the extent provided therein and any other agreement or instrument
      providing collateral for the Revolving Loan Advances, whether now or hereafter
      in existence, and any filings, instruments, agreements and documents relating
      thereto and providing collateral for the Revolving Loan Advances.

     

    This
      Revolving Note shall be construed in accordance with and governed by the laws
      of
      the State of Texas, without regard to the conflict of laws principles
      thereof.

     

     

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      remainder of this page is left blank intentionally.]

    


    



    
      
        
          36382.02/263517v2 C-

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    IN
      WITNESS WHEREOF, the duly authorized officer of Borrower as an authorized
      signatory has executed this Revolving Note as of the day and year first above
      written.

     

    


    Very
      truly yours,

     

    

      
        	
                 

              	
                United
                  Development Funding III, L.P.

                a
                  Delaware limited partnership

                 

              
	
                 

              	
                By:  

              	
                UMTH
                  Land Development, L.P.  

              
	
                 

              	
                 

              	
                Its
                  General Partner 

              
	
                 

              	
                 

              	
                 

              
	 	
                By:  

              	
                UMT
                  Services Inc.

              
	
                
                   

                

              
	 	 
	
                 

              	
                By:  

              	
                /s/
                  Jeff W. Shirley  

              
	
                 

              	
                 

              	
                Name: 
                  Jeff W. Shirley 

              
	
                 

              	
                 

              	
                Its: 
                  Executive Vice President