FORBEARANCE AGREEMENT

       This Forbearance Agreement (this "Agreement") is dated and effective as
of May 1, 2008 among Universal Property Development and
Acquisition Corporation ("Borrower"), Kamal Abdallah and Christopher 1. McCauley
(Messrs. Abdallah and McCauley, collectively the
"Guarantors") and Sheridan Asset Management, LLC (including any
successor-by-assignment, "Lender").

R E C I T A L S:

A.

Borrower and Lender, among others, entered into that certain Loan Agreement
dated as of April 6, 2007 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement") and that certain Senior Secured Promissory
Note dated as of April 6, 2007 (as amended, supplemented or otherwise modified
from time to time, the "Promissory Note," and, together with the Credit
Agreement, the "Credit Documents");

 

B.

As of the date hereof, an Event of Default has occurred under Section 7(a)(i) of
the Promissory Note.

 

C.

Borrower has requested that Lender forbear from exercising remedies under the
Credit Documents and the other Transaction Documents (as defined in the Credit
Agreement) in respect of such Event of Default, and Lender is willing to do so,
subject to and on the terms and conditions set forth in this Agreement.

   

NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the receipt and sufficiency of which are acknowledged, the parties hereto agree
as follows:

 

1.  

Capitalized Terms. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Credit Agreement when used in
this Agreement.

 

2.  

Event of Default. The parties hereto acknowledge and agree that an Event of
Default has occurred under Section 7(a)(i) of the Promissory Note (the "Existing
Default"). The parties hereto further acknowledge and agree, for the avoidance
of doubt, that Lender shall be deemed to have delivered any and all notices
required to establish the Existing Default and that any applicable cure periods
in respect of the Existing Default have expired. The parties hereto further
acknowledge and agree that the referencing of the Events of Default referenced
in this Section 2 does not waive any other defaults or Events of Default that
may now or hereafter exist under the Transaction Documents.

 

3,  

Forbearance.

   

3.1

Subject to the terms and conditions of this Agreement, and provided that no
Forbearance Default (as defined below) has occurred, Lender agrees that during
the period commencing on the date of this Agreement and ending on and including
November 1, 2008 (the "Forbearance Period"), Lender will not file suit or take
any other action to foreclose on the Collateral (as defined in the Promissory
Note) or file suit or take any other action to enforce its rights under the
Credit Documents or the other Transaction Documents. This limited forbearance
does not extend to any other default or Events of Default under any other
provision of the Transaction Documents or any of the other rights and remedies
available to Lender under the Transaction Documents with respect to Sheridan and
UPDA Forbearance Agreement the Existing Default. Upon the earlier of (i) the
occurrence of a Forbearance Default and (ii) the expiration of the Forbearance
Period, Lender’s agreement to forbear shall automatically be deemed terminated
and Lender shall be entitled to immediately and without notice exercise all of
its rights and remedies under the Credit Agreement and all Transaction
Documents.

   

3.2

Notwithstanding anything to the contrary contained herein, the effectiveness of
the agreement made by Lender pursuant to Section 3.1, and Lender’s agreement to
forbear as described in Section 2 above, is subject to the fulfillment, to the
exclusive satisfaction of Lender in its sole and absolute discretion, of each of
the following conditions:

   

(i) Borrower shall have paid to Lender all accrued and unpaid interest on the
outstanding principal balance of the Promissory Note, in accordance with
paragraph (vi) of this Section 3.2, below, from and including April 6, 2008
through and including April 30, 2008 in the amount of Fifty Thousand Three
Hundred Forty Seven and Twenty Two One Hundredths Dollars ($50,347.22) on the
date hereof;

   

(ii) Borrower shall pay to Lender all accrued and unpaid interest on the then
outstanding principal balance of the Promissory Note, in accordance with
paragraph (vi) of this Section 3.2, below, on the first day of each calendar
month during the Forbearance Term commencing on June 1, 2008;

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(iii)Borrower shall pay Lender the principal amount of One Hundred Thousand
Dollars ($100,000), on the first day of each calendar month during the
Forbearance Term commencing on July 1, 2008;

   

(iv) Borrower shall pay Lender a forbearance fee in the amount of Five Hundred
Thousand Dollars ($500,000) on November 1, 2008;

   

(v) Borrower shall demonstrate to Lender timely fulfillment of each oil and gas
production milestone set forth on Schedule 1 attached hereto; and

   

(vi) All payments hereunder shall be made by wire transfer of immediately
available funds in United States Dollars. Interest hereunder shall accrue at the
rate of twenty percent (20%) per annum. All interest hereunder shall be paid in
arrears and shall accrue daily based on a year of three hundred and sixty (360)
days and the actual number of days elapsed.

   

3.3

The following events shall constitute "Forbearance Defaults:"

   

(i) Any default or Event of Default under the Transaction Documents, other than
the Existing Default, shall have occurred and by continuing;.

   

(ii) Borrower shall fail to comply with any provision of this Agreement; or

   

(iii)Borrower shall fail to provide to Lender within two Business Days’ request
therefore, such information as Lender may reasonably request with respect to
Borrower and the Collateral.

   

 

4.

  Discussions. Any future discussions among Borrower, the Guarantors and Lender
shall not cause a modification of the Credit Agreement or any other Transaction
Document (except as expressly set forth herein), establish a custom or waive,
limit or condition the rights and remedies of Lender under the Credit Agreement
or the other Transaction Documents, all of which rights and remedies are
expressly reserved. No such discussions, if any, shall in any way be used by
Borrower or Guarantors as a defense to the performance of any of its or their
obligations under this Agreement or the Transaction Documents.

 

5.

  Lender’s Expenses. Without limiting any provisions of the Credit Agreement,
immediately upon demand of Lender, Borrower shall pay all of the fees, costs and
expenses (including, without limitation, attorneys fees) incurred in connection
with this Agreement and the Existing Default (and the exercise of Lender’s
rights and remedies in connection therewith).

 

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  Authorization, Waiver and Release. Each of Borrower and each Guarantor hereby
warrant and represent that: (i) Borrower and each Guarantor has been duly
authorized to execute and deliver this Agreement; (ii) Borrower and each
Guarantor do not have any right of claim, offset, set-off, counter-claim or
other defense to the performance of its obligations under, or against
enforcement of, the Transaction Documents or this Agreement, in accordance with
each of their respective terms, conditions and provisions; and (iii) Lender, on
and as of the date hereof, has fully performed all obligations to Borrower and
Guarantors that Lender may have had or may have on and as of the date hereof.
Without limiting the generality of the foregoing, Borrower, on its own behalf
and on behalf of its respective past, present and future representatives,
partners, operators, members, shareholders, officers, directors, agents,
employees, servants, affiliates and related companies, successors and assigns,
and each Guarantor, on his own behalf and on behalf of his respective past,
present and future representatives, heirs, successors and assignors (hereinafter
referred to collectively as the "Borrowing Group"), hereby waives, releases and
forever discharges Lender, and Lender’s respective past, present and future
officers, directors, subsidiary and affiliated entities or companies, agents,
servants, employees, shareholders, partners, members, operators,
representatives, successors, assigns, attorneys, accountants, assets and
properties, as the case may be (hereinafter referred to collectively as the
"Lender Group"), from and against all manner of actions, cause and causes of
action, suits, debts, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
obligations, liabilities, costs, expenses, losses, damages, judgments,
executions, claims and demands, of whatever kind and nature, in law or in
equity, whether known or unknown, whether or not concealed or hidden, arising
out of or relating to any matter, cause or thing whatsoever, that any of the
Borrowing Group, jointly or severally, may have had, or now have or that may
subsequently accrue against the Lender Group by reason of any matter or thing
whatsoever through the date hereof arising out of or in any way connected to the
loan evidenced by the Credit Documents or any Transaction Document. It is
acknowledged and agreed that Lender is specifically relying upon the
representations, warranties, covenants and agreements contained herein and that
such representations, warranties, covenants, and agreements constitute a
material inducement to enter into this Agreement.

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7.

  Certain Representations. Borrower and each Guarantor hereby certify, represent
and warrant to Lender as follows:

   

7.1

No Default or Event of Default has occurred and is continuing under any
Transaction Document, except for the Existing Default.

   

7.2

Each of the representations and warranties that any of Borrower or either
Guarantor made in the Transaction Documents are true and correct as of the date
of this Agreement as if made on and as of the date of this Agreement other than
representations made with specific reference to a particular date, which
representations were true as of such date.

   

7.3

Neither Borrower nor either Guarantor has received any notice from any
governmental authority of any claimed violations of any applicable laws which
have not been cured, and neither Borrower nor either Guarantor is aware of any
circumstances that could give rise to the issuance of any such notice of claimed
violation.

   

7.4

The concepts embodied in this Agreement have been voluntarily and independently
negotiated by and between the parties and Borrower and each Guarantor has had
the opportunity to confer with its legal counsel with respect hereto.

   

7.5

Each of Borrower and each Guarantor is solvent and able to meet and pay its
obligations as they mature. Each of Borrower and each Guarantor agrees that if
any of them makes application for or seeks relief or protection under any
provision of the United States Bankruptcy Code (the "Code"), or if any
involuntary petition is filed against any of them under any provision of the
Code, Lender shall thereupon be entitled, subject to court approval, to
immediate relief from any automatic stay imposed by Section 362 of the Code, or
otherwise, on or against the exercise of the rights and remedies otherwise
available to Lender as provided herein or in the Transaction Documents or
otherwise provided at law or in equity.

 

8.

   Ratification of Transaction Documents. Borrower and Guarantors hereby agree
that (i) the terms, conditions and provisions of the Transaction Documents
remain unmodified and in full force and effect except as expressly set forth
herein, and (ii) the terms, conditions and provisions of the Transaction
Documents are hereby ratified, affirmed and confirmed. Each Guarantor confirms
that its obligation pursuant to its Guaranty shall apply to all obligations of
the Borrower hereunder as well as all obligations of the Borrower pursuant to
the Transaction Documents, as such documents may be modified by the terms of
this Agreement.

 

9.

   Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York without giving
effect to its conflicts of law principles. Borrower and Guarantors hereby
irrevocably submit to the non-exclusive jurisdiction of any New York State or
United States Federal Court sitting in New York County over any action or
proceeding arising out of or relating to this Agreement or any of the
Transaction Documents, and Borrower and Guarantors hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal Court. Borrower and Guarantors irrevocably
consent to the service of any and all process in any such action or proceeding
by the serving of copies of such process to the Borrower at its address
specified in the Credit Agreement or the applicable Guaranty. Borrower and
Guarantors agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Borrower and Guarantors further waive any
objection to venue in such state and any objection to an action or proceeding in
such state on the basis of forum non-conveniens. Borrower and Guarantors further
agree that any action or proceeding brought against the Lender shall be brought
only in New York State or United States Federal Court sitting in New York
County. BORROWER AND GUARANTORS WANE ANY RIGHT IT MAY HAVE TO JURY TRIAL.

 

10.

   Successors and Assigns. Each and every one of the terms, conditions and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors, personal
representatives and assigns.

 

11.

   Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when taken together, shall together constitute one and the same
instrument.

 

12.

   Illegality. If any term, covenant or condition of this Agreement is held to
be invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.

 

13.

Further Assurances. Borrower and Guarantors hereby covenant and agree to execute
and deliver, or cause to be executed and delivered, to Lender all other
instruments, certificates, agreements, consents and other writings and to
provide such other acts and assurances, as Lender may reasonably require for the
better and more effective carrying out the intent and purposes of this
Agreement.

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14.

   No Further Obligation to Forbear, Amend or Modify. Borrower and Guarantors
hereby acknowledge and agree that Lender is entering into this Agreement as a
courtesy to Borrower and Guarantors and without any obligation to do so and that
Lender shall have no obligation to enter into any further forbearance agreements
or any amendments or modifications of any of the Transaction Documents.

           [End of text. Signatures appear on the following pages.]

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       IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the Effective Date.

 

BORROWER:

   

UNIVERSAL PROPERTY DEVELOPMENT AND ACQUISITION CORPORATION

   

By:"

__________________________

 

Name:

 

Title:

     

GUARANTOR:

   

________________________________

 

 Kamal Abdallah

       

GUARANTOR:

   

________________________________

 

 Christopher J. McCauley

         

LENDER:

   

SHERIDAN ASSET MANAGEMENT, LLC

   

By: _____________________________

 

 Name:

 

 Title:

 

Schedule 1

 

Plan of Oil and Gas Well Production

 

STATEOF_____

)

 

) ss.:

COUNTY OF

)

On the _ day of ___________, 2008, before me, the undersigned, a notary public
in and for said state, personally appeared _______________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

Notary Public
My Commission Expires:

 

STATEOF_____

)

 

) ss.:

COUNTY OF

)

On the ___day of ___________, 2008, before me, the undersigned, a notary public
in and for---------------------------said state, personally appeared
____________________, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

Notary Public
My Commission Expires:

 

STATEOF_____

)

 

) ss.:

COUNTY OF

)

On the ___ day of __________-, 2008, before me, the undersigned, a notary public
in and for said state, personally appeared ________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

Notary Public
My Commission Expires: