UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
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FORM 8-K |
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CURRENT REPORT |
Pursuant to Section 13 or 15(d) |
of the Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): May 5, 2008 |
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UNIVERSAL PROPERTY DEVELOPMENT AND ACQUISITION CORPORATION |
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(Exact Name of Registrant as Specified in Charter) |
Nevada | 000-25416 | 20-3014499 |
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(State of Incorporation) | (Commission File No.) | (I.R.S. Employer |
| | | Identification Number) |
14255 U.S. Highway 1, Suite 209 |
Juno Beach, Florida 33408 |
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(Address of Principal Executive Offices) |
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(561) 630-2977 |
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(Registrant’s Telephone Number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
___ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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___ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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___ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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___ | Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 1. Registrant’s Business Operations
Item 1.01 Entry Into a Material Definitive Agreement
Background
On April 20, 2007, the Registrant closed a term loan pursuant to the terms and conditions of a Loan Agreement, dated as of April
6, 2007, between the Registrant and Sheridan Asset Management, LLC, a Delaware limited liability company, as the lender
(“Sheridan” or the “Lender”) (the “Loan Agreement”). Pursuant to the terms and conditions of the Loan Agreement, and the
ancillary Senior Secured Promissory Note (the “Note”), Security Agreement (the “Security Agreement”) and other related
documents (all of which are collectively referred to herein as the “Loan Documents”), UPDA agreed to borrow and Sherid an
agreed to lend the aggregate principal amount of Three Million, Six Hundred and Thirty Five Thousand Dollars ($3,635,000)
cash (the “Term Loan”). The Term Loan did not earn interest and the principal amount was due and payable on April 6, 2008.
Pursuant to the terms of the Forbearance Agreement described below, Sheridan agreed to forbear the exercising of its rights
under the Loan Documents and in effect extended the due date of the Term Loan until November 1, 2008, as long as the
provisions of the Forbearance Agreement are met by the Registrant.
Forbearance Agreement with Sheridan Asset Management LLC
As of May 1, 2008, the Registrant entered into a Forbearance Agreement with Sheridan, pursuant to which Sheridan agreed not
to exercise its rights under the Loan Documents th at would have arisen as a result of the Registrant’s non-payment of the
principal amount on April 6, 2008. Pursuant to the Forbearance Agreement, Sheridan agreed to extend the due date of the Term
Loan to November 1, 2008, as long as the Registrant continues to satisfy the terms and conditions of that agreement. Any
capitalized terms in this Item 1.01 that are not defined herein shall have the definition given them under the terms of the
Forbearance Agreement.
Terms of the Forbearance Agreement
The Forbearance Agreement provides for the extension of the due date of the Principal Amount of the Term Loan from April 6,
2008 to November 1, 2008, provided that the terms of the Forbearance Agreement continue to be satisfied by the Registrant. The
Forbearance Agreement requires that the Re gistrant make an immediate payment of $50,347.22 in interest on the outstanding
Principal Amount for the period April 6, 2008 to April 30, 2008. Going forward, the Registrant is required to: 1) pay all accrued
and unpaid interest on the outstanding Principal Amount on the first day of each month commencing on June 1, 2008; 2) make
monthly principal payments of $100,000 per month on the first day of each month commencing on July 1, 2008, and 3) pay
Sheridan a forbearance fee in the amount of $500,000 on November 1, 2008. In addition to the above payments, the Registrant
is required to meet certain oil and gas production milestones in order to avoid a default under the Forbearance Agreement. Under
the Forbearance Agreement, the Registrant shall pay interest on the unpaid Principal Amount of the Term Loan at the rate of 20%
per an num during the forbearance period. The Term Loan continues to be secured by a lien on all the assets of the Registrant and
the assets of its subsidiaries, and is further secured by the pledges and other security interests set forth in the Security Agreement
and the other Loan Documents.
Events of Default under the Forbearance Agreement include; 1) any Event of Default under the Loan Documents, 2) if the
Registrant fails to comply with any provision of the Forbearance Agreement, and 3) if the Registrant fails, within two business
days, to provide Sheridan with such information as Sheridan may reasonably request with respect to the Registrant or the
Collateral.
The foregoing descriptions of the Forbearance Agreement is not intended to be complete and is qualified in its entirety by the
complete text of that agreement, a form of which is attached as Exhibit 10.1 to this Report.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits.
The following Exhibits are hereby filed as part of this Current Report on Form 8-K:
Exhibit | Description |
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10.1 | Forbearance Agreement, dated as of May 1, 2008, among Universal Property Development and Acquisition Corporation (“Borrower”), Kamal Abdallah and Christopher McCauley (the “Guarantors “) and Sheridan Asset Management, LLC (the “Lender”). # |
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# | Filed Herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, Universal Property Development and Acquisition
Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 9, 2008
| UNIVERSAL PROPERTY DEVELOPMENT AND ACQUISITION CORPORATION |
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By | : /s/ Kamal Abdallah | |
| Kamal Abdallah |
| President and Principal Executive Officer |
