exv10w3





Exhibit 10.3



ADVISORY AGREEMENT




     This ADVISORY AGREEMENT (this “Agreement”) is entered into on this the                      day of
                                        , 2008; by and between UNITED DEVELOPMENT FUNDING IV, a Maryland real estate
investment trust (the “Trust”), and UMTH GENERAL SERVICES, L.P., a Delaware limited partnership
(the “Advisor”).



WITNESSETH




     WHEREAS, the Trust intends to issue common shares of beneficial interest, par value $.01, to
the public, upon registration of such shares with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended and may subsequently issue additional securities;



     WHEREAS, the Trust has been formed to originate, acquire, hold, manage, administer and operate
a portfolio of loans secured by real estate and interests in entities that own real estate, as well
as direct investments in real estate and other real estate-related assets;



     WHEREAS, the Trust intends to qualify as a real estate investment trust and to invest its
funds in investments permitted by the terms of the Trust’s Declaration of Trust and Sections 856
through 860 of the Internal Revenue Code;



     WHEREAS, the Trust desires to avail itself of the experience, sources of information, advice,
assistance and certain facilities available to the Advisor and to have the Advisor undertake the
duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of,
the Board of Trustees (the “Board”) of the Trust, all as provided herein; and



     WHEREAS, the Advisor is willing to undertake to render such services, subject to the
supervision of the Board, on the terms and conditions hereinafter set forth.



     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:



ARTICLE I




DEFINITIONS




     The following defined terms used in this Agreement shall have the meanings specified below:


Acquisition Expenses. Any and all expenses incurred by the Trust, the Advisor, or any
Affiliate of either in connection with the selection, acquisition or development of any Asset,
whether or not acquired, including, without limitation, legal fees and expenses, travel and
communications expenses, costs of appraisals, nonrefundable option payments on property not
acquired, accounting fees and expenses, title insurance premiums and other closing costs.



Acquisition and Origination Fees. Any and all fees and commissions, exclusive of
Acquisition Expenses, paid by any Person to any other duly qualified and licensed Person (including
any fees or commissions paid by or to any duly qualified and licensed Affiliate of the Trust or the
Advisor) in connection with origination, making or investing in Secured Loans or the purchase,
development or construction of an Asset, including, without limitation, real estate commissions,
selection fees, non-recurring management fees, loan fees, points or any other fees of a similar
nature.




 









 







Advisor. UMTH General Services, L.P., a Delaware limited partnership, any successor
advisor to the Trust, or any Person to which UMTH General Services, L.P. or any successor advisor
subcontracts all or substantially all of its functions.



Advisory Fees. The fees payable to the Advisor for day-to-day professional management
services in connection with the Trust and its investment in Assets as set forth in Section 3.01(b)
of this Agreement.



Affiliate or Affiliated. As to any Person, (i) any Person directly or indirectly
owning, controlling, or holding, with the power to vote, 10% or more of the outstanding voting
securities of such Person; (ii) any Person 10% or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held, with power to vote, by such other Person; (iii)
any Person, directly or indirectly, controlling, controlled by, or under common control with such
Person; (iv) any executive officer, director, trustee or general partner of such Person; and (v)
any legal entity for which such Person acts as an executive officer, director, trustee or general
partner.



Appraised Value. Value according to an appraisal made by an Independent Appraiser.



Assets. Properties, Secured Loans and other direct or indirect investments in securities
or equity interests in Real Property (other than investments in bank accounts, money market funds
or other current assets, whether of the proceeds from an Offering or the sale of an Asset or
otherwise) owned by the Trust, directly or indirectly through one or more of its Affiliates or
Joint Ventures or through other investment interests.



Average Invested Assets. For a specified period, the average of the aggregate book value
of the Assets, before deducting depreciation, bad debts or other similar non-cash reserves,
computed by taking the average of such values at the end of each month during such period;
provided, however, that during such periods in which the Board is determining on a regular basis
the current value of the Trust’s net assets for purposes of enabling fiduciaries of employee
benefit plan shareholders to comply with applicable Department of Labor reporting requirements,
“Average Invested Assets” will equal the greater of (i) the amount determined pursuant to the
foregoing or (ii) the most recent Assets’ aggregate valuation established by the Board without
reduction for depreciation, bad debts or other non-cash reserves and without reduction for any debt
secured by or relating to the Assets.



Board. The Board of Trustees of the Trust.



Bylaws. The bylaws of the Trust, as the same are in effect as amended from time to time.



Change of Control. Any (i) event (including, without limitation, issue, transfer or other
disposition of Shares of beneficial interest of the Trust or equity interests in the Partnership,
merger, share exchange or consolidation) after which any “person” (as that term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial
owner” (as defined in Rule 13d-j of the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Trust or the Partnership representing greater than 50% of the
combined voting power of the Trust’s or the Partnership’s then outstanding securities,
respectively; provided, that, a Change of Control shall not be deemed to occur as a result of any
widely distributed public offering of the Shares or (ii) direct or indirect sale, transfer,
conveyance or other disposition (other than pursuant to clause (i)) in one or a series of related
transactions, of all or substantially all of the assets of the Company or the Partnership, taken as
a whole, to any “person” (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended).




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Code. Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto. Reference to any provision of the Code shall mean such provision as in effect from
time to time, as the same may be amended, and any successor provision thereto, as interpreted by
any applicable regulations as in effect from time to time.



Contract Purchase Price. The amount (i) actually paid and/or budgeted in respect of the
purchase, development, construction or improvement of a Property, (ii) of funds advanced with
respect to a Secured Loan or (iii) actually paid and/or budgeted in respect to the purchase of
other Assets, in each case exclusive of Acquisition and Origination Fees and Acquisition Expenses
but including any debt attributable to such acquired Assets.



Contract Sales Price. The total consideration provided for in the sales contract for the
Sale of a Property.



Debt Financing Fee. The fees payable to the Advisor pursuant to Section 3.01(c) of this
Agreement.



Declaration of Trust. The Declaration of Trust of the Trust filed with the Maryland State
Department of Assessments and Taxation in accordance with the Maryland REIT Law, as amended from
time to time.



Disposition Fees. The fees payable to the Advisor for services provided in connection with
the Sale of one or more Assets pursuant to Section 3.01(f) of this Agreement.



Distributions. Any dividends or other distributions of money or other property by the
Trust to owners of Shares, including distributions that may constitute a return of capital for
federal income tax purposes.



Gross Proceeds. The aggregate purchase price of all Shares sold for the account of the
Trust through an Offering, without deduction for Selling Commissions, wholesaling fees, marketing
support fees, marketing reallowances, due diligence expense reimbursement, volume discounts, or
Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase
price of any Share for which reduced Selling Commissions are paid to a Soliciting Dealer (where net
proceeds to the Trust are not reduced) shall be deemed to be the full amount of the Offering price
per Share pursuant to the Prospectus for such Offering without reduction.



Independent Appraiser. A Person with no material current or prior business or personal
relationship with the Advisor or the Trustees and who is a qualified appraiser of Real Property of
the type held by the Trust or of other Assets as determined by the Board. Membership in a
nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or
the Society of Real Estate Appraisers shall be conclusive evidence of such qualification as to Real
Property.



Independent Trustee. A Trustee who is not, on the date of determination and within the
last two years from the date of determination has not been, directly or indirectly associated with
the Sponsor, or the Advisor by virtue of (i) ownership of an interest in the Sponsor, the Advisor
or any of their Affiliates, other than the Trust, (ii) employment by the Sponsor, the Advisor or
any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any
of their Affiliates, other than as a Trustee of the Trust or of any other real estate investment
trust organized by the Sponsor or advised by the Advisor, (iv) performance of services, other than
as a Trustee, for the Trust, (v) service as a director or trustee of more than three real estate
investment trusts organized by the Sponsor or advised by the Advisor, or (vi) maintenance of a
material business or professional relationship with the Sponsor, the Advisor or any of their
Affiliates. A business or professional relationship is considered “material” per se if the
aggregate gross revenue derived by the Trustee from the Sponsor, the Advisor and their Affiliates
exceeds 5.0% of either the Trustee’s annual gross revenue during either of the last two years or
the Trustee’s net worth on


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a fair market value basis. An indirect association with the Sponsor or the Advisor shall include
circumstances in which a Trustee’s spouse, parent, child, sibling, mother- or father-in-law, son-
or daughter-in-law, or brother- or sister-in-law is or has been associated with the Sponsor, the
Advisor, any of their Affiliates or the Trust.



Invested Capital. The amount calculated by multiplying the total number of Shares
purchased by Shareholders by the issue price at the time of such purchase, reduced by the portion
of any Distribution that is attributable to Net Sales Proceeds and by any amounts paid by the Trust
to repurchase Shares pursuant to the Trust’s plan for repurchase of Shares.



Joint Ventures. The joint venture or partnership arrangements in which the Trust or the
Partnership is a co-venturer or general partner which are established to acquire or hold Assets.



Listing or Listed. The approval of the Trust’s application to list the Shares by a
national securities exchange and the commencement of trading in the Shares on the respective
national securities exchange.



Market Value. Upon Listing, the market value of the outstanding Shares, measured by taking
the average closing price for a single Share, over a period of 30 consecutive trading days, with
such period beginning 180 days after Listing, and multiplying that number by the number of Shares
outstanding on the date of measurement.



NASAA Guidelines. The Statement of Policy Regarding Real Estate Investment Trusts
published by the North American Securities Administrators Association, Inc. on May 7, 2007, and in
effect on the date hereof.



Net Income. For any period, the Trust’s total revenues applicable to such period, less the
total expenses applicable to such period other than additions to reserves for depreciation, bad
debts or other similar non-cash reserves and excluding any gain from the sale of the Assets. If
the Advisor is paid a Subordinated Incentive Fee or a Subordinated Incentive Listing Fee, “Net
Income,” for purposes of calculating Total Operating Expenses shall exclude the gain from the Sale
of any Assets.



Net Sales Proceeds. In the case of a transaction described in clause (i)(A) of the
definition of Sale, the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the Trust, including all real estate commissions, closing costs and
legal fees and expenses. In the case of a transaction described in clause (i)(B) of such
definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Trust, including any legal fees and expenses and
other selling expenses incurred in connection with such transaction. In the case of a transaction
described in clause (i)(C) of such definition, Net Sales Proceeds means the proceeds of any such
transaction actually distributed to the Trust or the Operating Partnership from the Joint Venture
less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf
of the Trust (other than those paid by the Joint Venture). In the case of a transaction or series
of transactions described in clause (i)(D) of the definition of Sale, Net Sales Proceeds means the
proceeds of any such transaction (including the aggregate of all payments under a Secured Loan on
or in satisfaction thereof other than regularly scheduled interest payments) less the amount of
selling expenses incurred by or on behalf of the Trust, including all commissions, closing costs
and legal fees and expenses. In the case of a transaction described in clause (i)(E) of such
definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Trust, including any legal fees and expenses and
other selling expenses incurred in connection with such transaction. In the case of a transaction
described in clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such
transaction or series of transactions less all amounts generated thereby which are reinvested in
one or more Assets within 180 days thereafter and less the amount of any


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real estate commissions, closing costs, and legal fees and expenses and other selling expenses
incurred by or allocated to the Trust or the Operating Partnership in connection with such
transaction or series of transactions. Net Sales Proceeds shall also include any amounts that the
Trust determines, in its discretion, to be economically equivalent to proceeds of a Sale. Net
Sales Proceeds shall not include any reserves established by the Trust in its sole discretion.



Offering. Any public offering and sale of Shares pursuant to an effective registration
statement filed under the Securities Act, other than a public offering of shares under a
distribution reinvestment plan.



Organization and Offering Expenses. Any and all costs and expenses incurred by and to be
paid from the assets of the Trust in connection with the formation of the Trust and the
qualification and registration of an Offering, and the marketing and distribution of Shares,
including, without limitation, total underwriting and brokerage discounts and commissions
(including fees of the underwriters’ attorneys); expenses for printing, engraving and amending
registration statements or supplementing prospectuses; mailing and distribution costs; salaries of
employees while engaged in sales activity; telephone and other telecommunications costs; all
advertising and marketing expenses (including the costs related to investor and broker-dealer sales
meetings); charges of transfer agents, registrars, trustees, escrow holders, depositaries and
experts; and fees, expenses and taxes related to the filing, registration and qualification of the
sale of the Shares under federal and state laws; and accountants’ and attorneys’ fees.



Partnership. United Development Funding IV Operating Partnership, L.P., a Delaware limited
partnership, through which the Trust may own Assets.



Person. An individual, corporation, business trust, estate, trust, partnership, limited
liability company or other legal entity.



Property or Properties. As the context requires, any, or all, respectively, of the
Real Property acquired by the Trust, either directly or indirectly (whether through joint venture
arrangements or other partnership or investment interests).



Prospectus. Prospectus has the meaning set forth in Section 2(10) of the Securities Act,
including a preliminary prospectus, an offering circular as described in Rule 253 of the General
Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any
document by whatever name known, utilized for the purpose of offering and selling securities of the
Trust to the public.



Real Property. Land, rights in land (including leasehold interests), land under
development, developed lots, and any buildings, structures, improvements, furnishings, fixtures and
equipment located on or used in connection with land and rights or interests in land.



REIT. A corporation, trust, association or other legal entity (other than a real estate
syndication) that is engaged primarily in investing in equity interests in real estate (including
fee ownership and leasehold interests) or in loans secured by real estate or both in accordance
with Sections 856 through 860 of the Code.



Sale or Sales. (i) Any transaction or series of transactions whereby: (A) the
Trust or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or
portion thereof, including the lease of any Property consisting of a building only, and including
any event with respect to any Property which gives rise to a significant amount of insurance
proceeds or condemnation awards; (B) the Trust or the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the Trust or the


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Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this definition) in which the
Trust or the Partnership as a co-venturer or partner sells, grants, transfers, conveys, or
relinquishes its ownership of any Property or portion thereof, including any event with respect to
any Property which gives rise to insurance claims or condemnation awards; (D) the Trust or the
Partnership directly or indirectly (except as described in other subsections of this definition)
sells, grants, conveys or relinquishes its interest in any Secured Loan or portion thereof
(including with respect to any Secured Loan, all repayments thereunder or in satisfaction thereof
other than regularly scheduled interest payments) and any event with respect to a Secured Loan
which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Trust
or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not
previously described in this definition or any portion thereof. (ii) Notwithstanding the
foregoing, “Sale” or “Sales” shall not include any transaction or series of transactions specified
in clause (i)(A) through (E) above in which the proceeds of such transaction or series of
transactions are reinvested in one or more Assets within 180 days thereafter.



Secured Loans. In connection with financing provided, invested in, participated in or
purchased by the Trust, all of the notes, deeds of trust, security interests or other evidences of
indebtedness or obligations, which are secured or collateralized by Real Property owned by the
borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness
or obligations or pledges of equity interests in entities owning Real Property.



Securities Act. The Securities Act of 1933, as amended from time to time, or any successor
statute thereto. Reference to any provision of the Securities Act shall mean such provision as in
effect from time to time, as the same may be amended, and any successor provision thereto, as
interpreted by any applicable regulations as in effect from time to time.



Selling Commissions. Any and all commissions payable to underwriters or other
broker-dealers in connection with the sale of the Shares, including, without limitation,
commissions payable to the Soliciting Dealers.



Shareholders. The record holders of the Shares as maintained in the books and records of
the Trust or its transfer agent.



Shareholders’ 10.0% Return. As of any date, an aggregate amount equal to a 10.0%
cumulative, non-compounded, annual return on Invested Capital.



Shares. Any Shares of the Trust’s common shares of beneficial interest, par value $.01 per
share.



Soliciting Dealers. Broker-dealers who are members of the Financial Industry Regulatory
Authority, or that are exempt from broker-dealer registration, and who, in either case, have
executed participating broker or other agreements with the Trust to sell Shares.



Sponsor. UMT Holdings, L.P.



Subordinated Incentive Fee. The fee payable to the Advisor under certain circumstances if
certain performance standards have been met pursuant to Section 3.01(d) of this Agreement.



Subordinated Incentive Listing Fee. The fee payable to the Advisor under certain
circumstances if the Shares are Listed pursuant to Section 3.01(g).




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Termination Date. The date of termination of this Agreement.



Total Operating Expenses. All costs and expenses paid or incurred by the Trust, as
determined under generally accepted accounting principles, which are in any way related to the
operation of the Trust or to Trust business, including Advisory Fees, but excluding (i) the
expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting,
underwriting, brokerage, listing, registration, and other fees, printing and other such expenses
and tax incurred in connection with the issuance, distribution, transfer, registration and Listing
of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as
depreciation, amortization and bad debt reserves, (v) the Subordinated Incentive Fee, (vi) the
Subordinated Incentive Listing Fee, (vii) Acquisition and Origination Fees and Acquisition
Expenses, (viii) Debt Financing Fees, (ix) real estate commissions on the Sale of Assets (including
Disposition Fees and Securitized Loan Pool Placement Fees), and (x) other fees and expenses
connected with the acquisition, disposition, management and ownership of real estate interests,
mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal
services, maintenance, repair and improvement of property).



Trust. United Development Funding IV, a real estate investment trust organized under the
laws of the State of Maryland.



Trustee. A member of the Board.




ARTICLE II




THE ADVISOR



2.01 Appointment. The Trust hereby appoints the Advisor to serve as its advisor on the
terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.
The Advisor shall be deemed to be in a fiduciary relationship to the Trust and its Shareholders.



2.02 Duties of the Advisor. Subject to Section 2.07, the Advisor undertakes to use its
commercially reasonable best efforts to present to the Trust potential investment opportunities
consistent with the investment objectives and policies of the Trust as determined and adopted from
time to time by the Board. In performance of this undertaking, subject to the supervision of the
Board and consistent with the provisions of the Trust’s most recent Prospectus for Shares,
Declaration of Trust and Bylaws, the Advisor shall, either directly or by engaging a duly qualified
and licensed Affiliate of the Advisor or other duly qualified and licensed Person:




     (a) manage the formation of the Trust and the Partnership, including the preparation and
filing of all necessary documentation and ancillary agreements;



     (b) structure, qualify and register the initial Offering;



     (c) coordinate marketing and distribution of the Trust’s Shares in connection with the initial
Offering;



     (d) structure, qualify, register and oversee the distribution of Shares pursuant to the
Trust’s distribution reinvestment plan;



     (e) structure, qualify and administer the repurchase of Shares pursuant to the Trust’s
redemption program;



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     (f) serve as the Trust’s investment and financial advisor and provide research and economic
and statistical data in connection with the Assets and the Trust’s investment policies;



     (g) provide the daily management of the Trust and perform and supervise the various
administrative functions reasonably necessary for the management and operations of the Trust;



     (h) maintain and preserve the books and records of the Trust, including share books and
records reflecting a record of the Shareholders and their ownership of the Trust’s Shares;



     (i) investigate, select, and, on behalf of the Trust, engage and conduct business with such
Persons as the Advisor deems necessary to the proper performance of its obligations hereunder,
including but not limited to consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians,
agents for collection, insurers, insurance agents, banks, builders, developers, property owners,
mortgagors, asset managers; property management companies, transfer agents and any and all agents
for any of the foregoing, including Affiliates of the Advisor, and Persons acting in any other
capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of the Trust with any of
the foregoing;



     (j) consult with the officers and the Board and assist the Board in the formulation and
implementation of the Trust’s financial policies and, as necessary, furnish the Board with advice
and recommendations with respect to the making of investments consistent with the investment
objectives and policies of the Trust and in connection with any borrowings proposed to be
undertaken by the Trust;



     (k) subject to the provisions of Sections 2.02(i) and 2.03 hereof, (i) locate, analyze and
select potential investments in Assets; (ii) structure and negotiate the terms and conditions of
transactions pursuant to which investment in Assets will be made; (iii) make investments in Assets
on behalf of the Trust or the Partnership in compliance with the investment objectives and policies
of the Trust; (iv) arrange for financing and refinancing and make other changes in the asset or
capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal
with the investments in, Assets; and (v) enter into leases of Property and service contracts for
Assets and, to the extent necessary, perform all other operational functions for the maintenance
and administration of such Assets, including the servicing of Secured Loans;



     (l) provide the Board with periodic reports regarding prospective investments in Assets;



     (m) if a transaction requires approval by the Board, deliver to the Board all documents
required by them to properly evaluate the proposed transaction;



     (n) obtain the prior approval of the Board (including a majority of all Independent Trustees)
for any and all investments in Assets;



     (o) obtain the prior approval of a majority of the Independent Trustees and a majority of the
Board not otherwise interested in any transaction with the Advisor or its Affiliates;



     (p) negotiate on behalf of the Trust with banks or lenders for loans to be made to the Trust,
negotiate on behalf of the Trust with investment banking firms and broker-dealers, and negotiate
private sales of Shares and other securities of the Trust or obtain loans for the Trust, as and
when appropriate, but in no event in such a way so that the Advisor shall be acting as
broker-dealer or underwriter; and provided further that any fees and costs payable to third parties
incurred by the Advisor in connection with the foregoing shall be the responsibility of the Trust;



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     (q) obtain reports (which may be prepared by or for the Advisor or its Affiliates), where
appropriate, concerning the value of investments or contemplated investments of the Trust in
Assets;



     (r) from time to time, or at any time reasonably requested by the Board, make reports to the
Board of its performance of services to the Trust under this Agreement;



     (s) provide the Trust with, or assist the Trust in arranging for, all necessary cash
management services;



     (t) deliver to or maintain on behalf of the Trust copies of all appraisals obtained in
connection with the investments in Assets;



     (u) upon request of the Trust, act, or obtain the services of others to act, as
attorney-in-fact or agent of the Trust in making, acquiring and disposing of Assets, disbursing,
and collecting the funds, paying the debts and fulfilling the obligations of the Trust and
handling, prosecuting and settling any claims of the Trust, including foreclosing and otherwise
enforcing mortgage and other liens and security interests comprising any of the Assets;



     (v) supervise the preparation and filing and distribution of returns and reports to
governmental agencies and to Shareholders and other investors and act on behalf of the Trust in
connection with investor relations;



     (w) provide office space, equipment and personnel as required for the performance of the
foregoing services as Advisor;



     (x) assist the Trust in preparing all reports and returns required by the Securities and
Exchange Commission, Internal Revenue Service and other state or federal governmental agencies; and



     (y) do all things necessary to assure its ability to render the services described in this
Agreement.


2.03 Authority of Advisor. Pursuant to the terms of this Agreement (including the duties
set forth in Section 2.02, and the restrictions included in this Section 2.03 and in Section 2.06),
and subject to the continuing and exclusive authority of the Board over the management of the
Trust, the Board hereby delegates to the Advisor the authority to (i) locate, analyze and select
investment opportunities, (ii) structure the terms and conditions of transactions pursuant to which
investments will be made or acquired for the Trust or the Partnership, (iii) make and acquire
Secured Loans, acquire Properties and invest in other Assets in compliance with the investment
objectives and policies of the Trust, (iv) arrange for financing or refinancing of Assets, (v)
enter into leases for the Properties and service contracts for the Assets with duly qualified and
licensed non-affiliated and Affiliated Persons, including oversight of non-affiliated and
Affiliated Persons that perform management, acquisition, advisory, disposition or other services
for the Trust, and (vi) arrange for, or provide, accounting and other record-keeping functions at
the Asset level.




     The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the
authority set forth in this Section 2.03, provided however, that such modification or revocation
shall be effective upon receipt by the Advisor or such later date as is specified by the Board and
included in the notice provided to the Trust and such modification or revocation shall not be
applicable to investment transactions to which the Advisor has committed the Trust prior to the
date of receipt by the Advisor of such notification, or, if later, the effective date of such
modification or revocation specified by the Board.



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2.04 Bank Accounts. The Advisor may establish and maintain one or more bank accounts in
its own name for the account of the Trust or in the name of the Trust and may collect and deposit
into any such account or accounts, and disburse from any such account or accounts, any money on
behalf of the Trust, under such terms and conditions as the Board may approve, provided that no
funds of the Trust or the Partnership shall be commingled nor shall any such funds be commingled
with the funds of the Advisor; and the Advisor shall from time to time, upon request by the Board,
its Audit Committee or the auditors of the Trust, render appropriate accountings of such
collections and payments to the Board, its Audit Committee and the auditors of the Trust.



2.05 Records; Access. The Advisor shall maintain appropriate records of all its activities
hereunder and make such records available for inspection by the Board and by counsel, auditors and
authorized agents of the Trust, at any time or from time to time during normal business hours. The
Advisor shall at all reasonable times have access to the books and records of the Trust.



2.06 Limitations on Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made
in good faith, would (a) adversely affect the status of the Trust as a REIT, (b) subject the Trust
to regulation under the Investment Company Act of 1940, as amended, (c) violate any law, rule,
regulation or statement of policy of any governmental body or agency having jurisdiction over the
Trust, the Shares or its other securities, or (d) not be permitted by the Declaration of Trust or
Bylaws, except if such action shall be ordered by the Board, in which case the Advisor shall notify
promptly the Board of the Advisor’s judgment of the potential impact of such action and shall
refrain from taking such action until it receives further clarification or instructions from the
Board. In such event, the Advisor shall have no liability for acting in accordance with the
specific instructions of the Board so given. Notwithstanding the foregoing, the Advisor, its
directors, officers, general partners, trustees, employees, limited partners and stockholders, and
the directors, officers, general partners, trustees, employees, limited partners and stockholders
of the Advisor’s Affiliates shall not be liable to the Trust or to the Board or Shareholders for
any act or omission by the Advisor, its directors, officers, general partners, trustees, employees,
limited partners, or stockholders, or for any act or omission of any Affiliate of the Advisor, its
directors, officers, general partners, trustees, employees, limited partners, or stockholders,
except as provided in Section 5.02 of this Agreement.



2.07 Other Activities of the Advisor. Nothing herein contained shall prevent the Advisor
or its Affiliates from engaging in other activities, including, without limitation, the rendering
of advice to other Persons (including other REITs) and the management of other programs advised,
sponsored or organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict
the right of any director, officer, general partner, trustee, employee, limited partner, or
stockholder of the Advisor or its Affiliates to engage in any other business or to render services
of any kind to any other Person. The Advisor may, with respect to any investment in which the
Trust is a participant, also render advice and service to each and every other participant therein.
The Advisor shall report to the Board the existence of any condition or circumstance, existing or
anticipated, of which it has knowledge, which creates or could create a conflict of interest
between the Advisor’s obligations to the Trust and its obligations to or its interest in any other
Person. The Advisor or its Affiliates shall promptly disclose to the Board knowledge of such
condition or circumstance. The Advisor shall inform the Board at least quarterly of the investment
opportunities that have been offered to other programs with similar investment objectives sponsored
by the Sponsor, Advisor, any Trustee or their Affiliates. If the Sponsor, Advisor, any Trustee or
Affiliates thereof have sponsored other investment programs with similar investment objectives
which have investment funds available at the same time as the Trust, it shall be the duty of the
Board (including the Independent Trustees) to adopt the method set forth in the Trust’s most recent
Prospectus for its Shares or another reasonable method by which investments are to be allocated to
the competing investment entities and to use their best efforts to apply such method fairly to the
Trust.




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2.08 Payment of Certain Organization and Offering Expenses. The Trust shall pay directly
all Organization and Offering Expenses considered underwriting compensation by the Financial
Industry Regulatory Authority. Such payments, other than Selling Commissions, bona fide due
diligence expense reimbursements, wholesaling fees, marketing support fees and marketing
reallowances, shall apply toward the limit on Organization and Offering Expenses reimbursable by
the Trust to the Advisor pursuant to Section 3.02(a)(i) below.




ARTICLE III




COMPENSATION AND REIMBURSEMENT OF SPECIFIED COSTS



3.01 Fees.




     (a) Acquisition and Origination Fees and Acquisition Expenses. The Trust shall pay to
the Advisor or an Affiliate of the Advisor Acquisition and Origination Fees, and will reimburse the
Advisor for Acquisition Expenses, in an aggregate amount of 3.0% of the net amount available for
investment in Assets. The total of all Acquisition and Origination Fees, from any source, and any
Acquisition Expenses shall be limited in accordance with the Declaration of Trust and the NASAA
Guidelines.



     (b) Advisory Fees. The Trust shall pay the Advisor Advisory Fees in the amount of
2.0% per annum of the Average Invested Assets, payable monthly in an amount equal to one-twelfth of
2.0% of the Average Invested Assets on the last day of the immediately preceding month. The
Advisor, in its sole discretion, may waive, reduce or defer all or any portion of the Advisory Fees
to which it would otherwise be entitled.



     (c) Debt Financing Fee. In the event of the origination of any debt financing
obtained by the Trust, including the assumption (directly or indirectly) of existing debt, that is
used to acquire properties, to make other permitted investments or is assumed (directly or
indirectly) in connection with the acquisition of properties, and if the Advisor or an Affiliate of
the Advisor provides a substantial amount of services, as determined by the Independent Trustees in
connection therewith, the Trust will pay to the Advisor or an Affiliate of the Advisor a Debt
Financing Fee equal to 1% of the amount available to the Trust under such financing. On each
anniversary date of the origination of such debt financing, the Trust will pay to the Advisor or an
Affiliate of the Advisor an additional fee of 0.25% of the primary loan amount if such financing
continues to be outstanding on such date, or a pro rated portion of such additional fee for the
portion of such year that the financing was outstanding.



     (d) Subordinated Incentive Fee. The Trust shall pay to the Advisor a Subordinated
Incentive Fee equal to 15.0% of the amount by which the Trust’s Net Income for the immediately
preceding year exceeds the Shareholders’ 10.0% Return from inception through the end of the
immediately preceding year. The Subordinated Incentive Fee shall be paid annually and upon
termination of this Agreement in accordance with Section 4.02, unless such termination is by the
Trust because of a material breach of this Agreement by the Advisor. If the Subordinated Incentive
Fee is being paid in accordance with the termination of this Agreement, such fee will be payable
with respect to the period between the end of the immediately preceding year and the Termination
Date only if a Subordinated Incentive Fee was payable with respect to such immediately preceding
year. If the Subordinated Incentive Fee is payable with respect to such period between the end of
the immediately preceding year and the Termination Date, such fee will be based on the Trust’s Net
Income between the end of the immediately preceding year and the Termination Date and the
Shareholders’ 10.0% Return from inception through the Termination Date. Notwithstanding the
foregoing, in the event the Subordinated Incentive Listing Fee is paid to the Advisor following
Listing, no Subordinated Incentive Fee will be paid to the Advisor. The Trust, in its sole
discretion, may pay the Subordinated Incentive Fee with an interest bearing promissory note, cash,



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Shares, or any combination thereof. In no event will the Trust pay a Subordinated Incentive
Fee, including any interest payable in connection with any promissory note issued by the Trust in
payment of the Subordinated Incentive Fee, in excess of the amount that would be presumptively
reasonable under Section 9.7 of the Declaration of Trust.



     (e) Securitized Loan Pool Placement Fees. Upon the successful securitization and
placement of any Secured Loans (or any derivative thereof), the Trust shall pay to the Advisor or
an Affiliate of the Advisor a Securitized Loan Pool Placement Fee equal to 2.0% of the net proceeds
realized by the Trust in connection with such securitization and placement, provided that the
Advisor or an Affiliate of the Advisor has provided a substantial amount of services in connection
with such securitization and placement as determined by a majority of the Independent Trustees. In
no event will the amount of any Securitized Loan Pool Placement Fees paid in connection with a
securitization and placement of any Secured Loans (or any derivative thereof) exceed the limits set
forth in the NASAA Guidelines and Section 9.6 of the Declaration of Trust.



     (f) Disposition Fees. If the Advisor or an Affiliate of the Advisor provides a
substantial amount of services, as determined by a majority of the Independent Trustees, in
connection with the Sale of one or more Assets, the Trust shall pay the Advisor or an Affiliate of
the Advisor a Disposition Fee in an amount equal to 2.0% of the contract sales price of the Asset
or Assets; provided that no Disposition Fees shall be paid in respect of a Sale if the Advisor
and/or an Affiliate of the Advisor would be entitled to Securitized Loan Pool Placement Fees in
connection with the Sale. In no event will the amount of any Disposition Fees paid in connection
with a Sale exceed the limits set forth in the NASAA Guidelines and Section 9.6 of the Declaration
of Trust.



     (g) Subordinated Incentive Listing Fee. Upon Listing, the Advisor shall be entitled
to the Subordinated Incentive Listing Fee in an amount equal to 15.0% of the amount by which (i)
the Market Value of the Trust’s outstanding Shares plus Distributions paid by the Trust prior to
Listing, exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total Distributions
required to be paid to the Shareholders in order to pay the Shareholders’ 10.0% Return from
inception through the date that Market Value is determined. The Trust shall have the option to pay
such fee in the form of cash, Shares, a promissory note, or any combination thereof. If the Trust
pays such fee with a promissory note, interest will accrue at a rate deemed fair and reasonable by
the Board from and after the date of Listing. If the promissory note has not been paid in full
within five years from the date of Listing, then the Advisor, or its successors or assigns, may
elect to convert the unpaid balance, including accrued but unpaid interest, into Shares at a price
per Share equal to the average closing price of the Shares over the ten trading days immediately
preceding the date of such election. If the Shares are no longer Listed at such time as the
promissory note becomes convertible into Shares as provided by this paragraph, then the price per
Share, for purposes of conversion, shall equal the fair market value for the Shares as determined
by the Board based upon the Appraised Value of the Assets as of the date of election.


3.02 Expenses.





(a) In addition to the compensation paid to the Advisor pursuant to Section 3.01 hereof and
except as noted in Section 2.08 above, the Trust shall pay directly or reimburse the Advisor
for all of the costs and expenses paid or incurred by the Advisor that are in any way
related to the operations of the Trust or the business of the Trust or the services the
Advisor provides to the Trust pursuant to this Agreement, including, but not limited to:




(i) Organization and Offering Expenses; provided, however, that within 60 days after
the end of the month in which an Offering terminates, the Advisor shall reimburse
the Trust for any Organization and Offering Expenses (other than Selling
Commissions,



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bona fide due diligence expense reimbursements, wholesaling fees, marketing support
fees and marketing reallowances) to the extent that such Organization and Offering
Expenses incurred by the Trust exceed 3.0% of the Gross Proceeds raised in the
completed Offering;




(ii) the actual cost of goods, services and materials used by the Trust and obtained
from Persons not affiliated with the Advisor, other than Acquisition Expenses,
including brokerage fees paid in connection with the purchase and sale of Shares or
other securities;




(iii) interest and other costs for borrowed money, including discounts, points and
other similar fees;




(iv) taxes and assessments on income or property and taxes as an expense of doing
business;




(v) costs associated with insurance required in connection with the business of the
Trust or by the Board;




(vi) expenses of managing and operating Assets owned by the Trust, whether or not
payable to an Affiliate of the Advisor;




(vii) all expenses in connection with payments to the Board for attendance at
meetings of the Board and Stockholders;




(viii) except as otherwise limited by the Declaration of Trust, expenses associated
with Listing or with the issuance and distribution of Shares and other securities of
the Trust, such as selling commissions and fees, advertising expenses, taxes, legal
and accounting fees and Listing and registration fees, but excluding Organization
and Offering Expenses;




(ix) expenses connected with payments of Distributions in cash or otherwise made or
caused to be made by the Trust to the Stockholders;




(x) expenses of organizing, reorganizing, liquidating or dissolving the Trust and
the expenses of filing or amending the Declaration of Trust;




(xi) expenses of any third party transfer agent for the Shares and of maintaining
communications with Stockholders, including the cost of preparation, printing, and
mailing annual reports and other Stockholder reports, proxy statements and other
reports required by governmental entities;




(xii) personnel and related employment costs incurred by the Advisor or its
Affiliates in performing the services described herein, including but not limited to
reasonable salaries and wages, benefits and overhead of all employees directly
involved in the performance of such services; provided, that no reimbursement shall
be made for costs of such employees of the Advisor or its Affiliates to the extent
that such employees perform services for which the Advisor receives a separate fee;
and




(xiii) audit, accounting and legal fees.



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     (b) Expenses incurred by the Advisor on behalf of the Trust and payable pursuant to this
Section 3.02 shall be reimbursed no less than quarterly to the Advisor within 60 days after the end
of each quarter. The Advisor shall prepare a statement documenting the expenses of the Trust during
each quarter, and shall deliver the statement to the Trust within 45 days after the end of each
quarter.


3.03 Other Services. Should the Board request that the Advisor or any director, officer,
general partner, trustee, or employee thereof render services for the Trust other than set forth in
Section 2.02, such services shall be separately compensated at such rates and in such amounts as
are agreed by the Advisor and the Board, subject to the limitations contained in the Declaration of
Trust, and shall not be deemed to be services pursuant to the terms of this Agreement.



3.04 Reimbursement to the Advisor. The Trust shall not reimburse the Advisor, at the end
of any fiscal quarter, for any Total Operating Expenses to the extent that, in the four consecutive
fiscal quarters then ended (the “Expense Year”) the Total Operating Expenses exceed (the “Excess
Amount”) the greater of (i) 2% of Average Invested Assets or (ii) 25% of Net Income (the “2%/25%
Guidelines”) for that period of four consecutive quarters unless the Independent Trustees determine
that such excess was justified, based on unusual and nonrecurring factors which the Independent
Trustees deem sufficient. If the Independent Trustees do not approve such excess as being so
justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the
Trust. If the Independent Trustees determine such excess was justified, then within 60 days after
the end of any fiscal quarter of the Trust for which reimbursed Total Operating Expenses for the
Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Independent
Trustees, shall cause such fact to be disclosed in the next quarterly report of the Trust or in a
separate writing and sent to the shareholders, together with an explanation of the factors the
Independent Trustees considered in determining that such excess expenses were justified. The Trust
will ensure that such determination will be reflected in the minutes of the meetings of the Board.
All figures used in the foregoing computation shall be determined in accordance with generally
accepted accounting principles applied on a consistent basis. In addition, the Trust shall not
reimburse the Advisor or its Affiliates for services for which the Advisor and/or its Affiliates
are entitled to compensation in the form of a separate fee.




ARTICLE IV




TERM AND TERMINATION



4.01 Term; Renewal. Subject to Section 4.02 hereof, this Agreement has a one-year term and
shall continue in force until the first anniversary of the date hereof. Thereafter, this Agreement
may be renewed for an unlimited number of successive one-year terms upon mutual consent of the
parties. It is the Board’s duty to evaluate the performance of the Advisor annually before
renewing the Agreement, and each such renewal shall be for a term of no more than one year.



4.02 Termination. This Agreement will automatically terminate upon Listing. This
Agreement also may be terminated at the option of either party (i) immediately upon a Change of
Control or (ii) upon 60 days written notice without cause or penalty (in either case, if
termination is by the Trust, then such termination shall be upon the approval of a majority of the
Independent Trustees). Notwithstanding the foregoing, the provisions of this Agreement which
provide for payment to the Advisor of expenses, fees or other compensation following the
Termination Date (i.e., Section 4.03) shall continue in full force and effect until all amounts
payable thereunder to the Advisor are paid in full. The provisions of Sections 4.03 through 5.02
shall survive the termination of this Agreement.




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4.03 Payments to and Duties of Advisor upon Termination.




     (a) After the Termination Date, the Advisor shall not be entitled to compensation for further
services hereunder, except it shall be entitled to and receive from the Trust within 30 days after
the effective date of such termination all unpaid reimbursements of expenses provided for herein,
subject to the provisions of Section 3.04 hereof, and all contingent liabilities related to fees
payable to the Advisor prior to termination of this Agreement, provided that the Subordinated
Incentive Fee, if any, shall be paid in accordance with the provisions of Section 3.01(d) and the
Subordinated Incentive Listing Fee, if any, shall be paid in accordance with the provisions of
Section 3.01(g).



     (b) The Advisor shall promptly upon termination:




(i) pay over to the Trust all money collected and held for the account of the Trust
pursuant to this Agreement, after deducting any accrued compensation and
reimbursement for its expenses to which it is then entitled;




(ii) deliver to the Board a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board;




(iii) deliver to the Board all assets, including the Assets, and documents of the
Trust then in the custody of the Advisor; and




(iv) cooperate with, and take all reasonable actions requested by, the Trust to
provide an orderly management transition.



ARTICLE V




INDEMNIFICATION



5.01 (a) The Trust shall indemnify and hold harmless the Advisor and its Affiliates, including
their respective officers, directors, trustees, partners and employees, from all liability, claims,
damages or losses arising in the performance of their duties hereunder, and related expenses,
including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and
related expenses are not fully reimbursed by insurance, subject to any limitations imposed by the
laws of the State of Maryland, the Declaration of Trust and the NASAA Guidelines under the
Declaration of Trust. The Trust shall not indemnify or hold harmless the Advisor or its Affiliates,
including their respective officers, directors, trustees, partners and employees, for any liability
or loss suffered by the Advisor or its Affiliates, including their respective officers, directors,
trustees, partners and employees, nor shall it provide that the Advisor or its Affiliates,
including their respective officers, directors, trustees, partners and employees, be held harmless
for any loss or liability suffered by the Trust, unless all of the following conditions are met:
(i) the Advisor or its Affiliates, including their respective officers, directors, trustees,
partners and employees, have determined, in good faith, that the course of conduct which caused the
loss or liability was in the best interests of the Trust; (ii) the Advisor or its Affiliates,
including their respective officers, directors, trustees, partners and employees, were acting on
behalf of or performing services of the Trust; (iii) such liability or loss was not the result of
negligence or misconduct by the Advisor or its Affiliates, including their respective officers,
directors, trustees, partners and employees; and (iv) such indemnification or agreement to hold
harmless is recoverable only out of the Trust’s net assets and not from Shareholders.
Notwithstanding the foregoing, the Advisor and its Affiliates, including their respective officers,
directors, trustees, partners and employees, shall not be indemnified by the Trust for any losses,
liability or expenses arising from or out of an alleged violation of federal or state securities




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laws by such party unless one or more of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving alleged securities law violations as
to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by
a court of competent jurisdiction as to the particular indemnitee; and (iii) a court of competent
jurisdiction approves a settlement of the claims against a particular indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the court considering
the request for indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory authority in which
securities of the Trust were offered or sold as to indemnification for violations of securities
laws.




     (b) The Declaration of Trust provides that the advancement of Trust funds to the Advisor or
its Affiliates, including their respective officers, directors, trustees, partners and employees,
for legal expenses and other costs incurred as a result of any legal action for which
indemnification is being sought is permissible only if all of the following conditions are
satisfied: (i) the legal action relates to acts or omissions with respect to the performance of
duties or services on behalf of the Trust; (ii) the legal action is initiated by a third-party who
is not a Shareholder or the legal action is initiated by a Shareholder acting in his or her
capacity as such and a court of competent jurisdiction specifically approves such advancement;
(iii) the Advisor or its Affiliates, including their respective officers, directors, trustees,
partners and employees, undertake to repay the advanced funds to the Trust together with the
applicable legal rate of interest thereon, in cases in which such Advisor or its Affiliates,
including their respective officers, directors, trustees,. partners and employees, are found not to
be entitled to indemnification.



     (c) Notwithstanding the provisions of this Section 5.01, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 5.01 for any activity which the
Advisor shall be required to indemnify or hold harmless the Trust pursuant to Section 5.02.


5.02 Indemnification by Advisor. The Advisor shall indemnify and hold harmless the Trust
from contract or other liability, claims, damages, taxes or losses and related expenses including
attorneys’ fees, to the extent that (i) such liability, claims, damages, taxes or losses and
related expenses are not fully reimbursed by insurance and (ii) are incurred by reason of the
Advisor’s bad faith, fraud, misfeasance, misconduct, negligence or reckless disregard of its
duties. The Advisor shall not be held responsible for any action of the Board in following or
declining to follow any advice or recommendation given by the Advisor.




ARTICLE VI




MISCELLANEOUS



6.01 Assignment to an Affiliate. This Agreement and any rights, duties, liabilities and
obligations hereunder and the fees and compensation related thereto may be assigned by the Advisor,
in whole or in part, to a duly qualified and licensed Affiliate of the Advisor without obtaining
approval of the Board. The Advisor may assign any rights to receive fees or other payments under
this Agreement without obtaining the approval of the Board. Any other assignment shall be made
only with the approval of a majority of the Board (including a majority of the Independent
Trustees). This Agreement shall not be assigned by the Trust without the consent of the Advisor,
except in the case of an assignment by the Trust to a corporation or other organization which is a
successor to all of the assets, rights and obligations of the Trust, in which case such successor
organization shall be bound hereunder and by the terms of said assignment in the same manner as the
Trust is bound by this Agreement. This Agreement shall be binding on successors to the Trust
resulting from a Change of Control or sale of all or substantially all the assets of the Trust or
the Partnership, and shall likewise be binding upon any successor to the Advisor.




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6.02 Relationship of Advisor and Trust. The Trust and the Advisor are not partners or
joint venturers with each other, and nothing in this Agreement shall be construed to make them such
partners or joint venturers or impose any liability as such on either of them.



6.03 Notices. Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Declaration of Trust, the Bylaws, or accepted by the party to whom
it is given, and shall be given by being delivered by hand or by overnight mail or other overnight
delivery service to the addresses set forth herein:




	 	 	 
	To the Trustees and to the Trust:

	 	United Development Funding IV

The United Development Funding Building

Suite 100

1301 Municipal Way

Grapevine, Texas 76051

Attention: Chief Executive Officer
	 
	 	 
	To the Advisor:

	 	UMTH General Services, L.P.

The United Development Funding Building

Suite 100

1301 Municipal Way

Grapevine, Texas 76051

Attention: President





Either party shall, as soon as reasonably practicable, give notice in writing to the other party of
a change in its address for the purposes of this Section 6.03.



6.04 Modification. This Agreement shall not be changed, modified, or amended, in whole or
in part, except by an instrument in writing signed by both parties hereto, or their respective
successors or assignees.



6.05 Severability. The provisions of this Agreement are independent of and severable from
each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of
the fact that for any reason any other or others of them may be invalid or unenforceable in whole
or in part.



6.06 Choice of Law; Venue. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Texas, and venue for any action brought
with respect to any claims arising out of this Agreement shall be brought exclusively in Dallas
County, Texas.



6.07 Entire Agreement. This Agreement contains the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other than by an agreement
in writing signed by each of the parties hereto.



6.08 Waiver. Neither the failure nor any delay on the part of a party to exercise any
right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege


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with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.



6.09 Gender; Number. Words used herein regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.



6.10 Headings. The titles and headings of sections and subsections contained in this
Agreement are for convenience only, and they neither form a part of this Agreement nor are they to
be used in the construction or interpretation hereof.



6.11 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when the counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories.



6.12 Restrictions on Voting. The Sponsor has contributed $200,000 (the “Initial
Investment”) in exchange for the initial issuance of Shares of the Trust. The Sponsor or its
Affiliates may not sell any of the Shares purchased with the Initial Investment while the Advisor
acts in an advisory capacity to the Trust. The restrictions included above shall not apply to any
Shares acquired by the Advisor or its Affiliates other than the Shares acquired through the Initial
Investment. Neither the Advisor nor its Affiliates shall vote any Shares they now own, or
hereafter acquires, in any vote for the election of Trustees or any vote regarding the approval or
termination of any contract with the Advisor or any of its Affiliates.




[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]




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



	 	 	 	 	 
	 	UNITED DEVELOPMENT FUNDING IV

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	UMTH GENERAL SERVICES, L.P.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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