Document:

exv10w1

 

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (herein called the “Amendment”) made as of November
14, 2005 by and among Encore Acquisition Company, a Delaware corporation (“Borrower”), Encore
Operating, L.P., a Texas limited partnership (“Operating”), Bank of America, N.A., as
Administrative Agent (“Administrative Agent”) and L/C Issuer, and the Lenders party to the Original
Agreement defined below (“Lenders”).

W I T N E S S E T H:

     WHEREAS, Borrower, Operating, Administrative Agent, L/C Issuer and Lenders entered into that
certain Credit Agreement dated as of August 19, 2004, as amended by that certain First Amendment to
Credit Agreement dated as of April 29, 2005 (as so amended, the “Original Agreement”), for the
purpose and consideration therein expressed, whereby L/C Issuer became obligated to issue Letters
of Credit to Borrower and Lenders became obligated to make loans to Borrower as therein provided;
and

     WHEREAS, Borrower, Operating, Administrative Agent, L/C Issuer and Lenders desire to amend the
Original Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and in the Original Agreement, in consideration of the loans and other credit
which may hereafter be made by Lenders and L/C Issuer to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:

ARTICLE I.

DEFINITIONS AND REFERENCES

     Section 1.1. Terms Defined in the Original Agreement. Unless the context otherwise
requires or unless otherwise expressly defined herein, the terms defined in the Original Agreement
shall have the same meanings whenever used in this Amendment.

     Section 1.2. Other Defined Terms. Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to them in this
Section 1.2.

     “Amendment” means this Second Amendment to Credit Agreement.

     “Amendment Documents” means this Amendment, the Consent and Agreement of the
Guarantors relating to this Amendment and all other documents or instruments delivered in
connection herewith or therewith.

[Second Amendment to Credit Agreement]

 

 

     “Credit Agreement” means the Original Agreement as amended hereby.

ARTICLE II.

AMENDMENTS TO ORIGINAL AGREEMENT

     Section 2.1. Defined Terms.

     (a) The definition of “Permitted Subordinate Debt” in Section 1.01 of Original
Agreement is hereby amended in its entirety to read as follows:

          “‘Permitted Subordinate Debt’ means, collectively, (a) Debt of the Borrower,
and Debt constituting Guarantees thereof by Restricted Subsidiaries, resulting from the
issuance of the Borrower’s 6.25% Senior Subordinated Notes Due 2014 in an outstanding
principal balance of $150,000,000 (the “Original Issuance”), (b) Debt of the Borrower, and
Debt constituting Guarantees thereof by Restricted Subsidiaries, resulting from the issue of
the Borrower’s 6.00% Senior Subordinated Notes Due July 15, 2015 in an aggregate outstanding
principal balance of $300,000,000 (c) Debt of the Borrower, and Debt constituting Guarantees
thereof by Restricted Subsidiaries, resulting from the issue of the Borrower’s senior
subordinated unsecured notes, which (1) is fully subordinated to the Obligations to the same
extent set forth in the Original Issuance, unless otherwise approved by Required Lenders,
(2) is not subject to negative covenants or events of default (or other provisions which
have the same effect as negative covenants or events of default) which, taken as a whole,
are materially more restrictive on the Borrower than those set forth in the Original
Issuance, unless otherwise approved by Required Lenders, and (3) does not have a maturity
date prior to the maturity date relative to the Original Issuance, and any Permitted
Refinancing of any Debt incurred under this clause (c), provided that the aggregate
principal amount of any Debt at any time outstanding under this clause (c) plus all
Permitted Refinancings thereof pursuant to the following clause (d) (or, if such
Debt is issued at a discount, the initial issuance price thereof) shall not exceed
$300,000,000 in the aggregate (plus, in the case of such Permitted Refinancing, the amount
of any premiums paid and reasonable expenses incurred in connection with any such Permitted
Refinancing), and (d) any Permitted Refinancing of items (a), (b) and (c).”

     (b) The definition of “Letter of Credit Sublimit” in Section 1.01 of Original Agreement
is hereby amended in its entirety to read as follows:

          “‘Letter of Credit Sublimit’ means, at any time, an amount equal to 25% of the
Borrowing Base then in effect. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Commitments.

     Section 2.2. Borrowing Base. Clause (e) of Section 2.13 of the Original Agreement is
hereby amended in its entirety to read as follows:

     “(e) Permitted Subordinate Debt Adjustment. In addition to Scheduled
Redeterminations, Special Redeterminations and Asset Disposition adjustments, as set forth
above in subsection 2.13(d), if (i) Debt described in clause (b) of the definition
of

[Second Amendment to Credit Agreement]

2

 

Permitted Subordinate Debt is issued, the Borrowing Base then in effect pursuant to the
terms of this Section 2.13 shall be automatically reduced by $50,000,000 (in
addition to any reduction pursuant to the following clause (ii)), or (ii) Debt described in
clause (c) of the definition of Permitted Subordinate Debt is issued in any amount, the
Borrowing Base then if effect pursuant to the terms of this Section 2.13 shall be
automatically reduced by $50,000,000 (in addition to any reduction pursuant to the preceding
clause (i)). Each determination of the Borrowing Base after such a reduction shall be
determined and stated taking such Permitted Subordinate Debt into account in lieu of such
automatic reduction.”

ARTICLE III.

CONDITIONS OF EFFECTIVENESS

     Section 3.1. Effective Date. This Amendment shall become effective as of the date
first above written when and only when:

     (a) Administrative Agent shall have received all of the following, at Administrative Agent’s
office, duly executed and delivered and in form and substance satisfactory to Administrative Agent,
all of the following:

     (i) this Amendment executed by the Borrower, Operating and Majority Lenders;

     (ii) the Consent and Agreement relating to this Amendment executed by each
Guarantor; and

     (iii) such other supporting documents as Administrative Agent may reasonably
request.

     (b) Borrower shall have paid, in connection with this Amendment and the Loan Documents, all
other fees and reimbursements to be paid to Administrative Agent pursuant to this Amendment or any
Loan Documents, or otherwise due Administrative Agent and including fees and disbursements of
Administrative Agent’s attorneys.

     (c) Borrower has issued Debt described in clause (c) of the definition of Permitted
Subordinate Debt as set forth in this Amendment on or prior to December 31, 2005.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

     Section 4.1. Representations and Warranties. In order to induce L/C Issuer and each
Lender to enter into this Amendment, Borrower and Operating represent and warrant to L/C Issuer and
each Lender that:

[Second Amendment to Credit Agreement]

3

 

     (a) The representations and warranties contained in Article V of the Original Agreement are
true and correct at and as of the time of the effectiveness hereof, except to the extent such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except for purposes of this Amendment, the representations
and warranties contained in subsections (a) and (b) of Section 5.04 of the Credit Agreement shall
be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Credit Agreement.

     (b) Each Credit Party is duly authorized to execute and deliver this Amendment and the other
Amendment Documents (to the extent such Credit Party is a party to this Amendment and the other
Amendment Documents) and is and will continue to be duly authorized to borrow monies and to perform
its obligations under the Credit Agreement. Each Credit Party has duly taken all company action
necessary to authorize the execution and delivery of this Amendment and the other Amendment
Documents (to the extent that such Credit Party is a party to this Amendment and the other
Amendment Documents) and to authorize the performance of its obligations hereunder and thereunder.

     (c) The execution and delivery by each Credit Party of this Amendment and the other Amendment
Documents (to the extent that such Credit Party is a party to this Amendment and the other
Amendment Documents), the performance each Credit Party of its obligations hereunder and thereunder
and the consummation of the transactions contemplated hereby and thereby do not and will not
conflict with any provision of Law or of the Organization Documents of such Credit Party, or of any
material agreement, judgment, license, order or permit applicable to or binding upon such Credit
Party, or result in the creation of any Lien upon any assets or properties of such Credit Party.
Except for those which have been obtained, no consent, approval, authorization or order of any
court or Governmental Authority or third party is required in connection with the execution and
delivery by any Credit Party of this Amendment and the other Amendment Documents (to the extent
that such Credit Party is a party to this Amendment and the other Amendment Documents) or to
consummate the transactions contemplated hereby and thereby.

     (d) When duly executed and delivered, each of this Amendment, the Amendment Documents and the
Credit Agreement will be a legal and binding obligation of each Credit Party (to the extent that
such Credit Party is a party to this Amendment and the other Amendment Documents), enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors’ rights and by equitable principles of general
application.

     (e) The audited annual consolidated and consolidating financial statements of Borrower dated
as of December 31, 2004 fairly present the financial position at such dates and the statement of
operations and the changes in financial position for the periods ending on such dates for the
Borrower-Related Parties. Copies of such financial statements have heretofore been delivered to
L/C Issuer and each Lender. Since such date no material adverse change has occurred in the
financial condition or businesses of the Borrower-Related Parties.

[Second Amendment to Credit Agreement]

4

 

ARTICLE V.

MISCELLANEOUS

     Section 5.1. Ratification of Agreements. The Original Agreement as hereby amended is
hereby ratified and confirmed in all respects. The Loan Documents, as they may be amended or
affected by the various Amendment Documents, are hereby ratified and confirmed in all respects. Any
reference to the Credit Agreement in any Loan Document shall be deemed to be a reference to the
Original Agreement as hereby amended. The execution, delivery and effectiveness of this Amendment
and the other Amendment Documents shall not, except as expressly provided herein or therein,
operate as a waiver of any right, power or remedy of L/C Issuer or Lenders under the Credit
Agreement, the Notes, or any other Loan Document nor constitute a waiver of any provision of the
Credit Agreement, the Notes or any other Loan Document.

     Section 5.2. Ratification of Security Documents. Borrower, Operating, Administrative
Agent, L/C Issuer and Lenders each acknowledge and agree that any and all indebtedness, liabilities
or obligations, arising under or in connection with the L/C Obligations or the Notes, are
Obligations and are secured indebtedness under, and are secured by, the Pledge Agreement and the
Mortgages. Borrower and Operating hereby re-pledges, re-grants and re-assigns a security interest
in and lien on every asset of Borrower and Operating described as Collateral in the Pledge
Agreement and as Mortgaged Property or in Section 2.2 of the Mortgages.

     Section 5.3. Survival of Agreements. All representations, warranties, covenants and
agreements of any Credit Party herein shall survive the execution and delivery of this Amendment
and the performance hereof, including without limitation the making or granting of the Loans, and
shall further survive until all of the Obligations are paid in full. All statements and agreements
contained in any certificate or instrument delivered by any Credit Party hereunder or under the
Credit Agreement to L/C Issuer or any Lender shall be deemed to constitute representations and
warranties by, and/or agreements and covenants of, Borrower and Operating under this Amendment and
under the Credit Agreement.

     Section 5.4. Loan Documents. This Amendment and the other Amendment Documents are
each a Loan Document, and all provisions in the Credit Agreement pertaining to Loan Documents apply
hereto and thereto.

     Section 5.5. Governing Law. This Amendment shall be governed by and construed in
accordance the Laws applicable to the Credit Agreement.

     Section 5.6. Counterparts; Fax. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same Amendment. This Amendment and the other
Amendment Documents may be validly executed by facsimile or other electronic transmission.

     THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE

[Second Amendment to Credit Agreement]

5

 

CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.

[The remainder of this page has been intentionally left blank.]

[Second Amendment to Credit Agreement]

6

 

     IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	 	 	 	 	 
	 	ENCORE ACQUISITION COMPANY

 	 
	 	By:  	/s/  Louie B. Nivens, Jr.
 	 
	 	 	Louie B. Nivens, Jr.  	 
	 	 	Senior Vice President, Chief Financial Officer
Treasurer and Corporate Secretary 	 
	 
	 	ENCORE OPERATING, L.P.

By: EAP Operating, Inc., its sole general partner

 	 
	 	 	By:  	/s/  Louie B. Nivens, Jr.
 	 
	 	 	 	Louie B. Nivens, Jr.  	 
	 	 	 	Senior Vice President, Chief Financial
Officer, Treasurer and Corporate
Secretary 	 
	 

[Second Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A.,

as Administrative Agent

 	 
	 	By:  	/s/ Mathew C. Correia
 	 
	 	 	Name:  	Mathew C. Correia  	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	BANK OF AMERICA, N.A.,

as L/C Issuer and a Lender

 	 
	 	By:  	/s/  Jeffrey H. Rathkamp
 	 
	 	 	Name:  	Jeffrey H. Rathkamp 	 
	 	 	Title:  	Director 	 
	 

[Second Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as a Lender

 	 
	 	By:  	/s/  Michele Jones
 	 
	 	 	Name:  	Michele Jones  	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	 	 
	 	By:  	                                              /s/  Darrell Holley
 	 
	 	 	Name:  	Darrell Holley 	 
	 	 	Title:  	Managing Director 	 
	 

[Second Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	 	WACHOVIA BANK, N.A., as a Lender

 	 
	 	By:  	/s/  Dwight Battle
 	 
	 	 	Name:  	Dwight Battle  	 
	 	 	Title:  	Vice President 	 
	 

[Second Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	 	CITICORP NORTH AMERICA, INC., as a Lender

 	 
	 	By:  	/s/  John F. Miller
 	 
	 	 	Name:  	John F. Miller 	 
	 	 	Title:  	Attorney-In-Fact 	 
	 

[Second Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	 	BNP PARIBAS, as a Lender

 	 
	 	By:  	/s/  Betsy Jocher
 	 
	 	 	Name:  	Betsy Jocher 	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	
/s/  Polly Schott
 	 
	 	 	Name:  	Polly Schott 	 
	 	 	Title:  	Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/  V. Mark Fuqua
 	 
	 	 	Name:  	V. Mark Fuqua 	 
	 	 	Title:  	Senior Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	THE FROST NATIONAL BANK, as a Lender

 	 
	 	By:  	/s/ John S. Warren
 	 
	 	 	Name:  	John S. Warren 	 
	 	 	Title:  	Senior Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	SUNTRUST BANK, as a Lender

 	 
	 	By:  	/s/  Sean M. Roche
 	 
	 	 	Name:  	Sean M. Roche 	 
	 	 	Title:  	Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	COMPASS BANK, as a Lender

 	 
	 	By:  	/s/  Murray E. Brasseux
 	 
	 	 	Name:  	Murray E. Brasseux 	 
	 	 	Title:  	Executive Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	UNION BANK OF CALIFORNIA, N.A., as a Lender

 	 
	 	By:  	/s/  Allison Fuqua
 	 
	 	 	Name:  	Allison Fuqua 	 
	 	 	Title:  	Investment Banking Officer 	 
	 
	 	 	 
	 	By:  	                                              /s/  Randall Osterberg
 	 
	 	 	Name:  	Randall Osterberg 	 
	 	 	Title:  	Senior Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	BANK OF SCOTLAND, as a Lender

 	 
	 	By:  	/s/  Karen Weich
 	 
	 	 	Name:  	Karen Weich 	 
	 	 	Title:  	Assistant Vice President 	 
	 

[Second Amendment To Credit Agreement]

 

 

[Second Amendment]

CONSENT AND AGREEMENT

     Each of the undersigned hereby consents to the provisions of this Amendment and the
transactions contemplated herein and hereby, with respect to each Loan Document executed by it, (a)
ratifies and confirms the Guaranty, the Pledge Agreement, the Mortgages and all other Loan
Documents, each as amended, supplemented, modified or restated hereby, (b) agrees that all of its
respective obligations and covenants under the Guaranty, the Pledge Agreement, the Mortgages and
all other Loan Documents, each as amended, supplemented, modified or restated hereby, shall remain
unimpaired by the execution and delivery of this Amendment and the other documents and instruments
executed in connection therewith, (c) agrees there are no offsets, claims or defenses of the
undersigned with respect to the Guaranty, the Pledge Agreement or the Mortgages nor, to the
knowledge of the undersigned, with respect to the Loans, (d) agrees the Guaranty, the Pledge
Agreement and the Mortgages are not released, diminished or impaired in any way by the transactions
contemplated in connection with this Amendment, (e) agrees that any and all indebtedness,
liabilities or obligations, arising under or in connection with the L/C Obligations or the Notes,
are Obligations and are secured indebtedness under, and are secured by, the Pledge Agreement and
the Mortgages and hereby re-pledges, re-grants and re-assigns a security interest in and lien on
each of its assets described as Collateral in the Pledge Agreement and as Mortgaged Property or in
Section 2.2 of the Mortgages, and (f) agrees that the Guaranty, the Pledge Agreement, the Mortgages
and all other Loan Documents, each as amended, supplemented, modified or restated hereby, shall
remain in full force and effect.

	 	 	 	 	 
	 	EAP OPERATING, INC.

 	 
	 	By:  	/s/  Louie B. Nivens, Jr.
 	 
	 	 	Louie B. Nivens, Jr. 	 
	 	 	Senior Vice President, Chief Financial Officer,
Treasurer and Corporate Secretary 	 
	 
	 	ENCORE OPERATING LOUISIANA, LLC

 	 
	 	By:  	/s/  Thomas H. Olle
 	 
	 	 	Thomas H. Olle, Manager 	 
	 	 	 	 
	 
	 	EAP ENERGY, INC.

 	 
	 	By:  	/s/  Louie B. Nivens, Jr.
 	 
	 	 	Louie B. Nivens, Jr. 	 
	 	 	Senior Vice President, Chief Financial
Officer, Treasurer and Corporate Secretary 	 
	 

[Second Amendment To Credit Agreement]

 

 

	 	 	 	 	 
	 	EAP ENERGY SERVICES, L.P.

 	 
	 	By:  	EAP Energy, Inc., its sole general partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                     /s/  Louie B. Nivens, Jr.
 	 
	 	 	Louie B. Nivens, Jr. 	 
	 	 	Senior Vice President, Chief Financial Officer
Treasurer and Corporate Secretary 	 
	 
	 	EAP PROPERTIES, INC.

 	 
	 	By:  	/s/  Robert A. Sagedy, Jr.
 	 
	 	 	Robert A. Sagedy, Vice President and 	 
	 	 	Assistant Corporate Secretary 	 
	 

[Second Amendment To Credit Agreement]exv10w3

 

EXHIBIT 10.3

PARTICIPATION AGREEMENT

BY AND AMONG

UNITED DEVELOPMENT FUNDING, L.P.,

UNITED DEVELOPMENT FUNDING II, L.P.,

UNITED DEVELOPMENT FUNDING III, L.P. AND

UMTH LAND DEVELOPMENT, L.P.

     This Participation Agreement (the “Agreement”) is executed this       day of                     , 2005,
by and among United Development Funding, L.P., a Nevada limited partnership, (“UDF I”), United
Development Funding II, L.P., a Nevada limited partnership (“UDF II”), United Development Funding
III, L.P., a Delaware limited partnership (“UDF III”), and UMTH Land Development, L.P., a Delaware
limited partnership (“UMTH”).

     WHEREAS, UDF I and UDF II invest in land acquisition and development loans and participation
agreements, provide equity as an investment in entities that acquire and develop single family
residential properties, and provide credit enhancements to developers and entities in connection
with third-party financing of land acquisition and development loans;

     WHEREAS, UDF III expects to invest in mortgage loans made to persons and entities for the
acquisition of parcels of real property to be developed as single-family residential lots that will
be marketed and sold to home builders, and that such mortgage loans will be secured by either a
first lien or a second lien on real property (or, in some instances, wraparound loans or, in rare
instances, third liens), and provide credit enhancements to developers and entities in connection
with third-party financing of land acquisition and development loans;

     WHEREAS, UMTH is asset manager of UDF I and UDF II and the general partner of UDF III;

     WHEREAS, there will be certain opportunity transactions in which each of UDF I, UDF II and UDF
III may invest capital; and

     WHEREAS, each of UDF I, UDF II, UDF III and UMTH seek to equitably apportion such opportunity
among and between such entities;

     NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the
parties hereto agree as follows:

     1. In each case in which there is an opportunity to participate in a transaction that
qualifies for the investment criteria of any two or more of UDF I, UDF II or UDF III, the amount
that each respective entity will invest in such shall be determined as follows:

     A. First, each respective entity will be allocated a percentage of the opportunity
transaction determined as the ratio of the total amount of Equity Invested in such entity
over the Total Combined Equity Invested, such percentage being the “Investment Percentage.”
For purposes of this Agreement, “Equity Invested” shall include both direct investment and
retained earnings as determined by the Most Recent Financial Statements, and the “Most
Recent Financial Statements” shall mean the most recently available unaudited financial
statements prepared by the respective entities as completed with respect to the most recent
calendar quarter. For purposes of

 

 

this paragraph 1. A., “Total Combined Equity Invested” shall mean the sum of the Equity
Invested in each of UDF I, UDF II and UDF III.

     Each of the respective entities will invest in such opportunity transaction an amount
equal to the Investment Percentage multiplied by the amount of Available Cash, as defined in
paragraph 1. D. below, of the respective entity.

     B. Second, if, after allocating Available Cash pursuant to paragraph 1. A., there are
still monies available to be invested in the opportunity transaction, the remaining
investment opportunity shall be allocated amongst and between the entities with remaining
Available Cash by allocating to each respective entity a percentage of the remaining
opportunity transaction determined as the ratio of the total amount of Equity Invested in
such fund over the Total Combined Equity Invested, such percentage being the “Remaining
Investment Percentage.” For the purposes of this paragraph 1. B., “Total Combined Equity
Invested” shall mean the sum of the Equity Invested in each of entities with remaining
Available Cash.

     C. Third, if, after allocating Available Cash pursuant to paragraphs 1. A. and 1. B.,
there are still monies available to be invested in the opportunity transaction, the
remaining investment opportunity shall be allocated to the entity with remaining Available
Cash.

     D. “Available Cash” shall mean all cash of the respective entity available for
investment, not including lines of credit or other borrowing facilities, as determined by
UMTH taking into consideration the projected sources and uses of cash for that respective
entity.

     2. Notwithstanding anything contained herein to the contrary, UMTH shall exercise its best
efforts to or to cause the above allocation amongst and between UDF I, UDF II and UDF III to occur
as set forth herein, provided, however, that UMTH may use approximations and rounding. Further,
notwithstanding anything contained herein to the contrary, UMTH and its agents cannot assure that
it will invest in all investment opportunities of which it or its agents become aware that are
suitable for each of UDF I, UDF II and UDF III on an equal allocation amongst such entities.

     3. This Agreement shall be governed and construed under the laws of the State of Texas.

-2-

 

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

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	UMTH Land Development, L.P.,
	 	 	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Jeff W. Shirley, President
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	United Development Funding, L.P.,
	 	 	 	 	a Nevada limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	United Development Funding, Inc.,
	 	 	 	 	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Hollis M. Greenlaw
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	United Development Funding II, L.P.,
	 	 	 	 	a Nevada limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	United Development Funding II, Inc.,
	 	 	 	 	 	 	its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Hollis M. Greenlaw
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	United Development Funding III, L.P.,
	 	 	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	UMTH Land Development, L.P.,
	 	 	 	 	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Jeff W. Shirley, President

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