AMENDED AND RESTATED
VARIABLE AMOUNT PROMISSORY NOTE

$17,613,338.85                                                                                                           July
1, 2010
Current Principal
Balance                                                                                                                     Dallas,
Texas

FOR VALUE RECEIVED, the undersigned, UMTH LENDING COMPANY, L.P., a Delaware
limited partnership whose address is 1702 1301 Municipal Way, Suite 110,
Grapevine, Texas 76051, (the “Borrower”), hereby makes this Amended and Restated
Variable Amount Promissory Note (this “Note”) and promises to pay to the order
of UNITED MORTGAGE TRUST, a real estate investment trust organized under the
laws of the State of Maryland or its assigns whose address is 1301 Municipal
Way, Grapevine, Texas 76051 (the “Lender”), the sum of up to Twenty-Five Million
Dollars ($25,000,000.00) in principal, or, if greater or less, the aggregate
unpaid principal amount outstanding under this Note, together with accrued,
unpaid interest thereon, pursuant to the terms and conditions set forth in this
Note.  All amounts are payable to Lender in lawful money of the United States of
America at the address for Lender provided in this Note, or at such other
address as from time to time may be designated by Lender.

This Note supercedes and replaces, and amends and restates in its entirety, that
certain Variable Amount Promissory Note dated December 31, 2007, in the initial
principal amount of $1,848,000 (the “Original Note”).

1.           Purpose and Nature of Obligations

Borrower and Lender are presently parties to a certain recourse agreement which
is described in Exhibit A hereto and which is hereby affirmed by Borrower,
including all amendments, renewals and extensions thereof, pursuant to which the
Borrower is directly liable to pay to Lender any deficiency arising under any
interim mortgage loans sold by the Borrower to the Lender (each a “Deficiency
Obligation”).

The purpose of this Note is to evidence Borrower’s obligations to the Lender for
existing and future Deficiency Obligations under the agreement referenced above.

The principal balance of this Note shall be increased on a monthly basis by a)
the amount of any Deficiency Obligations arising during the prior month; and b)
the amount of any accrued and unpaid interest on the outstanding principal
balance.

The amounts owing to Lender shall fluctuate from time to time and the
indebtedness evidenced by this Note is a revolving loan. The amount of
Borrower’s obligations under this Note shall be as conclusively indicated in the
Lender’s records.

 

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2.           Payment
 
Borrower shall repay the principal balance of this Note that is outstanding from
time to time in equal quarterly payments of principal and interest commencing on
July 1, 2010 and on the first day of September 2010 and the first day of
January, April, July and October of 2011 and of each succeeding year based upon
a fifteen (15) year amortization of the principal balance as reflected on the
books and records of the Lender from time to time, plus accrued interest, until
paid in full in accordance with the terms of this Note.
 
Notwithstanding anything to the contrary, subject to the above provisions of
this Note requiring scheduled payments during the term hereof and further
subject to any permitted acceleration of this Note, this Note shall mature, and
all outstanding principal and unpaid accrued interest under this Note shall be
due and payable in full, on or before 5:00 P.M., Dallas, Texas time on June 30,
2015 (the “Maturity Date”).
 
 
Borrower shall pay all amounts owing hereunder for principal and interest
promptly on the date due for each such payment as herein required (time being of
the essence), at the address of Lender designated for such payment whether or
not Lender has authorized payment by mail or any other manner.  Any payment made
by mail will be deemed tendered and received only upon actual receipt.  Borrower
hereby expressly assumes all risk of loss or liability resulting from
non-delivery or delay in delivery of any payment transmitted by mail or in any
other manner.
 
 
Borrower may prepay this Note, or any portion of this Note, at any time and from
time to time, without the payment of any fee or penalty.  Any prepayments shall
be applied to the next scheduled payments hereunder.
 
3.           Interest
 
Prior to the Maturity Date, interest will accrue on the unpaid balance of
principal outstanding at any time and from time to time at a rate of interest of
six percent (6%) per annum.
 
All interest shall be calculated on the basis of a 360-day year for the actual
number of days the principal or any part thereof remains unpaid.  The amount of
any payment shall first be applied to the payment of any interest which is due.
 
4.           Default
 
 
The occurrence of any of the following shall constitute a default hereunder by
Borrower:  (a) the nonpayment, within ten (10) business days after the date when
due, of any principal or interest payment on this Note; or (b) any act of
bankruptcy is committed, general assignment for the benefit of creditors is
made, or any proceeding under any insolvency or bankruptcy law is filed by or
against the Borrower.
 
Lender shall be entitled to exercise all rights conferred upon it in this Note
in the event of a default including, without limitation, the option to declare
all or part of this Note immediately due and payable. The acceptance by Lender
of any payment in an amount less than the amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount due shall
be and continue to be an event of default, and at any time thereafter and until
the entire amount due has been paid.
 
 
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In the event Lender shall incur any attorneys’ fees, court costs or other costs
or expenses enforcing the obligations of the Borrower under this Promissory
Note, the Borrower shall pay all such attorneys fees, costs and expenses so
incurred upon demand by Lender.  The remedies of the Lender under this Note are
cumulative, are in addition to any other remedies provided for by law or in
equity, and may, to the extent permitted by law, be exercised concurrently or
separately, and the exercise of any one remedy shall not be deemed an election
of such remedy or to preclude the exercise of any other remedy. All amounts due
under this Note shall be paid without set-off, counterclaims or defenses of any
kind.
 
 
6.           General.
 
Time is of the essence of this Note.  To the fullest extent permitted by
applicable law, Borrower, for itself and its legal representatives, successors
and assigns, expressly waives presentment, demand, protest, notice of dishonor,
notice of non-payment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, diligence in collection, and the benefit
of any exemption or insolvency laws.
 
Wherever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or remaining provisions of this
Note.  No delay or failure on the part of Lender in the exercise of any right or
remedy hereunder shall operate as a waiver thereof, nor as an acquiescence in
any default, nor shall any single or partial exercise by Lender of any right or
remedy preclude any other right or remedy.  Lender, at its option, may enforce
its rights against any collateral securing this Note without enforcing its
rights against Borrower, any guarantor of the indebtedness evidenced hereby
or any other property or indebtedness due or to become due to Borrower.
 
Borrower shall execute, acknowledge and deliver, or cause to be executed,
acknowledged or delivered, any and all such further assurances and other
agreements or instruments, and take or cause to be taken all such other action,
as shall be reasonably necessary from time to time to give full effect to this
Note and the transactions contemplated thereby.

The Original Note shall be returned to Borrower for cancellation in exchange for
this Note.

7.           Governing Law; Jurisdiction and Venue.

THIS NOTE 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.  JURISDICTION FOR ALL MATTERS ARISING OUT OF THIS NOTE AND THE OTHER
LOAN DOCUMENTS SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN
DALLAS COUNTY, TEXAS, AND BORROWER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND AGREES AND CONSENTS NOT TO
ASSERT IN ANY PROCEEDING, THAT ANY SUCH PROCESS IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND FURTHER AGREES TO A TRANSFER OF
SUCH PROCEEDING TO THE COURTS SITTING IN DALLAS COUNTY, TEXAS.

 
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IN WITNESS WHEREOF, the undersigned, being duly authorized, Borrower has
executed this Amended and Restated Variable Amount Promissory Note on behalf of
the Borrower effective as of the day and year first above written.

BORROWER:

UMTH LENDING COMPANY, L.P.

By: /s/__Connie Weaver_________

Its:  Vice President

 
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EXHIBIT A
Description of Recourse Agreements

Borrower has agreed that if any residential mortgage or contract for deed that
Lender acquires from Borrower on which the borrower has made fewer than 12
payments  is in default during the period ending with the 12th payment after
Lender bought that residential mortgage or contract for deed, then Borrower
shall buy that mortgage investment from Lender or its assignee at a price equal
to the total unpaid principal balance due thereon, plus accrued interest to the
date of the purchase, plus insurance premiums, taxes and any other amounts that
Lender spent in the maintenance, protection or defense of its interest therein
or in the real property, including reasonable attorneys' fees.  Borrower may
satisfy its obligations under the foregoing repurchase requirement by either:

(a) Assigning and transferring to Lender a replacement residential mortgage or
contract for deed (the "Replacement Mortgage Investment"), provided: (i) the
real property securing the Replacement Mortgage Investment, the creditworthiness
of the obligor on the Replacement Residential Mortgage Investment and other
general underwriting criteria are reasonably
acceptable to Lender; and (ii) the value of the Replacement Residential Mortgage
Investment at the date of transfer to Lender shall be computed by Lender in
accordance with its then applicable pricing schedule for acquisition of such
residential mortgages or contracts for deed, giving due regard to principal
balance, interest rate, term, amortization and other general factors used by
Lender for acquisition of residential mortgages at that time; or

(b) Payment by Borrower to Lender, on a month to month basis, of all lost
interest, tax and insurance escrow payments, as well as any costs incurred by
Lender related to curing the default or obtaining title to and possession of the
property securing the defaulted obligation, including but not limited to
foreclosure, deed in lieu of foreclosure, bankruptcy claims or motions,
evictions, maintaining and/or securing the property and marketing  costs less
any additional down payments or settlements received by Lender.

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