EXECUTION COPY

NOTE PURCHASE AGREEMENT

NOTE PURCHASE AGREEMENT, dated as of April 19, 2007 (this “Agreement”), by and
among SDS Capital Group SPC, Ltd. (“SDS”, or a “Seller”), BayStar Capital II,
L.P. (“BayStar”, or a “Seller,” together with SDS, the “Sellers”), and Universal
Property Development & Acquisition Corporation (the “Purchaser”).

WHEREAS, the Sellers are the holders of the outstanding promissory notes of
Heartland Oil and Gas, Inc. (the “Company”) set forth on Schedule 2.1 hereto
(the “Notes”); and

WHEREAS, the each Seller desires to sell and transfer to the Purchaser, and the
Purchaser desires to purchase from each Seller, the outstanding promissory notes
of the Company set forth on Schedule 1.4 (the “Purchased Notes”), upon the terms
and conditions set forth herein.

NOW THEREFORE, the parties hereto agree as follows:

ARTICLE 1

 
PURCHASE AND SALE OF PURCHASED NOTES
 
Section 1.1 Purchase and Sale of Purchased Notes; Assignment of Rights. Upon the
following terms and conditions, and in consideration of and in express reliance
upon such terms and conditions and the representations, warranties and covenants
of this Agreement, each Seller shall, for the purchase price set forth below
(the “Purchase Price”), (a) sell to the Purchaser, and the Purchaser shall
purchase from each Seller, the Purchased Notes, (b) assign to Purchaser all of
each Seller’s rights, claims, and causes of actions arising out of or relating
to such Seller’s purchase of the Purchased Notes (including, without limitation,
those relating to such Seller’s purchase and ownership of the Purchased Notes
and each Seller’s right to receive any accrued but unpaid interest on the
Purchased Notes), (c) with respect to SDS, assign to Purchaser all of SDS’
rights under the Security Agreement dated September 29, 2006 by and between SDS
Capital Group SPC, Ltd., Heartland Oil and Gas Corp. and the Company’s
subsidiaries (the “SDS Security Agreement”), and (d) with respect to BayStar,
assign to Purchaser all of BayStar’s rights under that certain Security
Agreement dated September 29, 2006 by and between BayStar Capital II, L.P.,
BayStar Capital II, L.P., Heartland Oil and Gas Corp. and the Company’s
subsidiaries (the “BayStar Security Agreement”).
 
Section 1.2 Purchase Price. The aggregate consideration to be paid by the
Purchaser to the Sellers (or their designees) in exchange for the sale, transfer
and delivery of the Purchased Notes to the Purchaser and other obligations and
covenants of Seller made herein shall be (i) $1,500,000 payable in cash (the
“Cash Payment”) plus (ii) a number of shares of the Purchaser’s common stock
calculated by dividing $1,250,000 by the volume weighted average price of a
share of the Purchaser’s common stock as reported on the OTC Bulletin Board for
the ten trading day period ending on the trading day immediately prior to the
Closing Date minus $0.01 (the “Initial VWAP”) as set forth in Schedule 1.4 (the
“Purchaser Stock”) plus (iii) five percent (5%) of the outstanding common stock
or membership interests, as applicable (in each case calculated on a
post-issuance basis), of the Company and certain subsidiaries of the Company
(each, a “Subsidiary”) as set forth on Schedule 1.2 (the “Company Stock”) . The
Purchase Price shall be allocated between the respective Purchased Notes held by
SDS and BayStar as set forth on Schedule 1.2 and Schedule 1.4.
 
 

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Section 1.3 Make Whole Provision.
 
(a) Make Whole Calculation. If on any day between the 12-month anniversary and
the 28-month anniversary of the Closing (as defined below) (the “Make Whole
Date”), (i) the volume weighted average price of a share of the Purchaser’s
common stock as reported on the OTC Bulletin Board (or any other exchange or
automated quotation system on which the Purchaser’s common stock may then be
trading) for the 20 trading day period ending on the trading day immediately
prior to the Make Whole Date minus $0.01 (the “Make Whole VWAP”) is less than
the Adjusted Initial VWAP (as defined in 1.3(b) below) and (ii) a Seller
continues to hold all or any portion of the Purchaser Stock, such Seller has the
option (the “Make Whole Option”) to cause the Purchaser to issue to such Seller
an additional number of shares of Purchaser’s common stock (the “Additional
Stock”) calculated pursuant to the following formula:
 
Amount of Purchaser * (1-(Make Whole VWAP / Initial VWAP)) = Shares of
Additional Stock
Stock held by Seller        
exercising Make
Whole Option

; provided, however, that in lieu of issuing the Additional Shares to the Seller
exercising the Make Whole Option, Purchaser may, at its option, pay to such
Seller an equivalent amount in cash, which amount shall be calculated by
multiplying the number of Additional Stock otherwise issuable by the Make Whole
VWAP. Each Seller may exercise its Make Whole Option one time only.

(b) Initial VWAP Adjustment. For purposes of Section 1.3(a), the Initial VWAP
shall be adjusted (the “Adjusted Initial VWAP”) as follows: (i) the Initial VWAP
per share shall be reduced by the amount of any cash dividend paid to the
holders between the Closing and the Make Whole Date; (ii) the Initial VWAP per
share shall be adjusted as appropriate to reflect any stock split, stock
combination or dividend of Purchaser’s common stock occurring between the
Closing and the Make Whole Date; and (iii) in the event a dividend or
distribution of securities of any entity other than the Purchaser is declared on
the Purchaser’s common stock, the Initial VWAP per share shall be reduced by an
amount equal to the volume weighted average price of a share of such security as
reported on the primary national securities exchange or automatic quotation
system on which such securities are listed or quoted for the 30 trading day
period ending on the trading day immediately prior to the date of such dividend
on distribution; provided, however, that no adjustment to the Initial VWAP shall
be made pursuant to this Section 1.3(b)(iii) unless (x) a registration statement
under the Securities Act of 1933, as amended (the “Act”)shall be effective and
available for the resale by Sellers of all of the securities issued in the
dividend or distribution declared on Purchaser’s common stock, (y) such
securities will not be “restricted securities” in the hands of the Sellers as
defined in Rule 144(a)(3) under the Act, and (z) such securities are, and have
been for each day of the period beginning 60 trading days prior to the date of
such dividend, listed or quoted on the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market, the New York Stock Exchange, the
American Stock Exchange or any other national securities exchange or automated
quotation.
 
 
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Section 1.4 Purchased Note Exchange and Transfer. At the Closing, each Seller
shall instruct the Company to accept certain of the Notes listed on Schedule
2.1, reissue new promissory notes in the aggregate amount listed on Schedule 1.4
and transfer the Purchased Notes to the Purchaser in exchange for the amount of
consideration set forth on Schedule 1.2 and Schedule 1.4. A form of the letter
directing the Company to exchange and transfer the Purchased Notes (the “Letter
of Direction”) is attached as Exhibit A.
 
Section 1.5 Closing.
 
(a) The closing (the “Closing”) of the purchase and sale of the Purchased Notes
to be acquired by the Purchaser from the Sellers under this Agreement and the
assignment of rights described in Section 1.1 shall take place at the offices of
Drinker Biddle & Reath LLP at 10:00 a.m., New York time on the date hereof or at
such other time and place or on such date as the Purchaser and the Sellers may
agree upon (such date on which the Closing occurs, the “Closing Date”).
 
(b) At the Closing, the Purchaser shall deliver (or cause to be delivered) to
each Seller:
 
(i) the Cash Payment by wire transfer of immediately available funds to such
account or accounts designated by each Seller; and
 
(ii) share certificates representing the Purchaser Stock to be issued to such
Seller.
 
(c) Within ten (10) business days following the Closing, the Purchaser shall
cause the Company and each Subsidiary to issue and deliver certificates
representing the Company Stock in the amounts set forth on Schedule 1.2.
 
(d) At the Closing, each Seller shall deliver (or cause to be delivered) to the
Purchaser:
 
(i) all of the original documentation evidencing each Purchased Note being sold
by such Seller;
 
(ii) an assignment of all of each Seller’s rights, interests and title in the
Purchased Notes and under the Security Agreement in the form attached hereto as
Exhibit B;
 
(iii) any and all consents of the Company, or other third parties, necessary for
the valid assignment of the Purchased Notes by each Seller to Purchaser; and
 
(iv) any and all consents of the Company, or other third parties, necessary for
the valid assignment of the Security Agreement by each Seller to Purchaser.
 
 
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(e) At the Closing, each Seller shall deliver (or cause to be delivered) to the
Company the Letter of Direction.

ARTICLE 2

 
REPRESENTATIONS AND WARRANTIES
 
Section 2.1 Representations and Warranties of the Sellers. Each of the Sellers
hereby represents and warrants to the Purchaser, severally as to such Seller and
not as to any other Seller, as follows:
 
(a) Valid Title. Schedule 2.1 sets forth the outstanding principal balance of
each Note held by such Seller as of the date of this Agreement. Such Seller has
the right to transfer good, valid and marketable title in and to the Notes held
by such Seller, free and clear of any mortgages, pledges, charges, liens,
security interests or other encumbrances. Upon transfer from such Seller in
accordance with this Agreement, Purchaser shall have good, valid and marketable
title in and to the Purchased Notes held by such Seller, free and clear of any
mortgages, pledges, charges, liens, security interests or other encumbrances.
 
(b) Other Claims. Each Seller warrants and represents that, other than the Notes
held by such Seller, the security interests evidenced by the SDS Security
Agreement with respect to SDS and the security interests evidenced by the
BayStar Security Agreement with respect to BayStar, there are no other
promissory notes, security interests or other evidence of debt that such Seller
owns or holds directly or beneficially relative to the Company or any of its
affiliates, subsidiaries, officers or directors.
 
(c) Enforceability; Authorization. This Agreement has been duly executed and
delivered by such Seller and this Agreement constitutes a legal, valid and
binding obligation of such Seller enforceable against it in accordance with the
terms hereof, subject to: (i) judicial principles limiting the availability of
specific performance, injunctive relief, and other equitable remedies; and (ii)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect generally relating to or affecting creditors’ rights
generally. Such Seller has the power, authority and capacity to execute this
Agreement and any other documentation relating to this Agreement, including to
deliver this Agreement and any other documentation relating to this Agreement
that it is required by this Agreement to deliver, and to perform its obligations
under this Agreement.
 
(d) No Violations of Laws or Agreements, Consents or Defaults.
 
(i) The execution and delivery of this Agreement by such Seller and the
consummation by it of the transactions contemplated by this Agreement will not
result in any breach or violation of any of the terms or provisions of, or
constitute a default under, (A) the certificate of incorporation or bylaws of
such Seller or (B) any statute, order, decree, proceeding, rule, or regulation
of any court or governmental agency or body, United States or foreign, having
jurisdiction over such Seller or any assets of such Seller.
 
 
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(ii) The delivery by such Seller of this Agreement and the consummation by such
Seller of the transactions contemplated hereby will not result in a breach or
violation of the term of, or constitute a default under, or require notice to
any third party under, any agreement, instrument, or commitment to which such
Seller is party or by which such Seller is bound, and no consent or approval is
required from any third party for the transactions contemplated by this
Agreement other than such consents or approvals that the failure to receive
which are not reasonably expected to have a material adverse effect on the
transactions contemplated by this Agreement.
 
(iii) Such Seller is not in default under, or in violation of any provision of,
its certificate of incorporation, bylaws, any promissory note, indenture or any
evidence of indebtedness or security thereto, lease, purchase contract or other
commitment, or any other agreement that is material to the business of such
Seller.
 
(e) Status of Investor. Such Seller is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D promulgated under the Act and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of its purchase of the Purchaser Stock and the
Company Stock and, after having been furnished with or having the opportunity to
access such information concerning the Company as it has considered necessary,
has concluded that it is able to bear those risks associated with the Purchaser
Stock and the Company Stock and an investment in the Company. Such Seller is not
a broker-dealer.
 
(f) Investment Purpose. Such Seller is acquiring the Purchaser Stock and Company
Stock in the ordinary course of its business and for its own account and not
with a view to or for distributing or reselling any of such Purchaser Stock or
Company Stock or any arrangement or understanding with any other persons
regarding the distribution of such Purchaser Stock or Company Stock. Such Seller
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Purchaser Stock or the Company Stock except in
compliance with the Act, applicable state securities laws, blue sky laws and the
respective rules and regulations promulgated thereunder or an exemption from
such registration is available. By making the representations in this Section
2.1(d), such Seller does not agree to hold either the Purchaser Stock or the
Company Stock for any minimum or other specific term and reserves the right,
subject to the terms of this Agreement and any other documents or agreements
executed by the such Seller in connection with this Agreement, to dispose of
either the Purchaser Stock or the Company Stock at any time pursuant to an
exemption under the Act, or an interpretation thereof, or a registration
statement filed pursuant to the Act registering such transfer.
 
(g) No Registration. Such Seller understands and agrees that the Purchaser Stock
and Company Stock have not been registered under the Act pursuant to an
exemption under the Act, or an interpretation thereof, and cannot be offered for
sale, sold or otherwise transferred unless the Purchaser Stock or Company Stock,
as applicable, are transferred pursuant to an exemption under the Act, or an
interpretation thereof, or a registration statement filed pursuant to the Act
registering such transfer. Such Seller acknowledges that if it transfers any of
the Purchaser Stock or Company Stock, as applicable, pursuant to an exemption
under the Act, or an interpretation thereof, the Purchaser may require an
opinion of counsel for such Seller satisfactory to it that any such transfer is
being made pursuant to an exemption from registration.
 
 
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(h) General Solicitation. Such Seller is neither acquiring the Purchaser Stock
nor the Company Stock as a result of or subsequent to any advertisement,
article, notice or other communication regarding the Purchaser Stock or the
Company Stock published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
 
(i) Brokers and Finders. Such Seller has no knowledge of any person who will be
entitled to or make a claim for payment of any finder fee or other compensation
as a result of the consummation of the transactions contemplated by this
Agreement.
 
(j) Legend. Such Seller understands and agrees that until such time as (i) it
provides to the Purchaser or its transfer agent, as required, an opinion of
counsel to the effect that a transfer of all or some of the Purchaser Stock or
all or some of the Subsidiary Stock, as applicable, may be made without
registration under the Act, (ii) the Purchaser Stock or the Subsidiary Stock, as
applicable, may be transferred by the Purchaser pursuant to Rule 144(k) of the
Act, or (iii) the resale of the Purchaser Stock or the Subsidiary Stock, as
applicable, is registered under the Act, the certificate for the Purchaser Stock
and the Subsidiary Stock, as applicable, or any substitution therefor, will bear
a restrictive legend (the “Legend”) in substantially the following form:
 
THIS COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE
144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION.

Section 2.2 Representations and Warranties of the Purchaser.
 
(a) Enforceability; Authorization. This Agreement has been duly executed and
delivered by the Purchaser and this Agreement constitutes a legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with the terms hereof, subject to: (i) judicial principles limiting
the availability of specific performance, injunctive relief, and other equitable
remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect generally relating to or affecting
creditors’ rights generally. The Purchaser has the power, authority and capacity
to execute this Agreement and any other documentation relating to this
Agreement, including to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement to deliver, and
to perform its obligations under this Agreement, including issuing the Purchaser
Stock and causing the issuance of the Company Stock, and has taken all necessary
action to authorize such execution, delivery and performance.
 
 
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(b) No Violations of Laws or Agreements, Consents or Defaults.
 
(i) The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated by this Agreement
will not result in any breach or violation of any of the terms or provisions of,
or constitute a default under, (A) the certificate of incorporation or bylaws of
Purchaser or (B) any statute, order, decree, proceeding, rule, or regulation of
any court or governmental agency or body, United States or foreign, having
jurisdiction over Purchaser or any assets of Purchaser.
 
(ii) The delivery by Purchaser of this Agreement and the consummation by
Purchaser of the transactions contemplated hereby will not result in a breach or
violation of the term of, or constitute a default under, or require notice to
any third party under, any agreement, instrument, or commitment to which
Purchaser is party, by which Purchaser is bound, or to which any of Purchaser’s
assets are subject, and no consent or approval is required from any third party
for the transactions contemplated by this Agreement other than such consents or
approvals that the failure to receive which are not reasonably expected to have
a material adverse effect on the transactions contemplated by this Agreement or
the Purchaser’s business, or the assets of Purchaser.
 
(iii) Purchaser is not in default under, or in violation of any provision of,
its certificate of incorporation, bylaws, any promissory note, indenture or any
evidence of indebtedness or security thereto, lease, purchase contract or other
commitment, or any other agreement that is material to the business of
Purchaser.
 
(c) Status of Investor. The Purchaser is an “accredited investor” as such term
is defined in Rule 501(a) of Regulation D promulgated under the Act and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of its purchase of the Purchased Notes and,
after having been furnished with or having the opportunity to access such
information concerning the Company as it has considered necessary, has concluded
that it is able to bear those risks associated with the Purchased Notes and an
investment in the Company. The Purchaser is not a broker-dealer.
 
(d) Investment Purpose. The Purchaser is acquiring the Purchased Notes in the
ordinary course of its business and for its own account and not with a view to
or for distributing or reselling any of such Purchased Notes or any arrangement
or understanding with any other persons regarding the distribution of such
Purchased Notes. The Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Purchased Notes except in
compliance with the Act, applicable state securities laws, blue sky laws and the
respective rules and regulations promulgated thereunder or an exemption from
such registration is available. By making the representations in this Section
2.2(c), the Purchaser does not agree to hold the Purchased Notes for any minimum
or other specific term and reserves the right, subject to the terms of this
Agreement and any other documents or agreements executed by the Purchaser in
connection with this Agreement, to dispose of the Purchased Notes at any time
pursuant to an exemption under the Act, or an interpretation thereof, or a
Registration Statement filed pursuant to the Act registering such transfer.
 
 
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(e) No Registration. The Purchaser understands and agrees that the Purchased
Notes have not been registered under the Act pursuant to an exemption under the
Act, or an interpretation thereof, and cannot be offered for sale, sold or
otherwise transferred unless the Purchased Notes are transferred pursuant to an
exemption under the Act, or an interpretation thereof, or a registration
statement filed pursuant to the Act registering such transfer. The Purchaser
acknowledges that if it transfers any of the Purchased Notes pursuant to an
exemption under the Act, or an interpretation thereof, the Company may require
an opinion of counsel for the Purchaser satisfactory to it that any such
transfer is being made pursuant to an exemption from registration.
 
(f) General Solicitation. The Purchaser is not acquiring the Purchased Notes as
a result of or subsequent to any advertisement, article, notice or other
communication regarding the Purchased Notes published in any newspaper, magazine
or similar media or broadcast over television or radio or presented at any
seminar or any other general solicitation or general advertisement.
 
(g) Brokers and Finders. The Purchaser has no knowledge of any person who will
be entitled to or make a claim for payment of any finder fee or other
compensation as a result of the consummation of the transactions contemplated by
this Agreement.
 
(h) Legend. The Purchaser understands and agrees that until such time as (i) the
Purchaser provides to Company, as required, an opinion of counsel to the effect
that a transfer of all or some or all of the Purchased Notes may be made without
registration under the Act, (ii) the Purchased Notes may be transferred by the
Purchaser pursuant to Rule 144(k) of the Act, or (iii) the resale of the
Purchased Notes is registered under the Act, the certificate for the Purchased
Notes or any substitution therefor, will bear a restrictive legend (the “Notes
Legend”) in substantially the following form:
 
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER
SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL FOR THE HOLDER SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.

(i) No Seller Representation. Purchaser agrees and acknowledges that the Sellers
have not made and make no representation regarding the Company, the Company’s
business, the Company’s assets (including the assets subject to the SDS Security
Agreement and the BayStar Security Agreement) or the ability of the Company to
satisfy any of its obligations under the Purchased Notes.
 
 
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ARTICLE 3
 
COVENANTS OF THE PARTIES

Section 3.1 Mutual Covenants. The parties hereto hereby covenant with each other
as follows, which covenants are for the benefit of such parties and their
respective permitted assigns:
 
(a) Further Assurances. From and after the Closing Date, upon the request the
Purchaser or either Seller, the Sellers and the Purchaser shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
 
(b) Commercially Reasonable Efforts. Each party hereto will use commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable, consistent with
applicable law, to consummate and make effective in the most expeditious manner
practicable the transactions contemplated hereby, including without limitation,
making all regulatory and other filings required by applicable law as promptly
as practicable after the date hereof.
 
Section 3.2 Covenants of Purchaser.
 
(a) Piggy-Back Registrations. If, at any time prior to the fifth anniversary of
the Closing, the Purchaser shall file with the SEC a registration statement
relating to an offering for its own account or the account of others under the
Act of any of its equity securities (other than on Form S-4 or Form S-8 or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans) (a “Registration
Statement”), the Purchaser shall send to the Sellers written notice of such
filing, and if, within 15 days after the date of such notice, either Seller
shall so request in writing, the Purchaser shall include in such Registration
Statement all or any part of the Purchaser Stock that such Seller requests to be
registered. Notwithstanding the foregoing, in the event that, in connection with
any underwritten public offering, the managing underwriter(s) thereof shall
impose a limitation on the number of shares of Purchaser Stock that may be
included in the Registration Statement because, in such underwriter(s)’
judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Purchaser shall be obligated to include
in such Registration Statement only such limited portion of the Purchaser Stock
with respect to which either Seller has requested inclusion hereunder as the
underwriter shall permit; provided, however, that (i) the Purchaser shall not
exclude any Purchaser Stock unless the Purchaser has first excluded all
outstanding securities the holders of which are not contractually entitled to
inclusion of such securities in such Registration Statement or are not
contractually entitled to pro rata inclusion with the Purchaser Stock (ii) after
giving effect to the immediately preceding proviso, any such exclusion of
Purchaser Stock shall be made pro rata among the Sellers seeking to include
Purchaser Stock and the holders of other securities having the contractual right
to inclusion of their securities in such Registration Statement by reason of
demand registration rights, in proportion to the number of shares of Purchaser
Stock or other securities, as applicable, sought to be included by the Sellers
or each such other holder, and (iii) no such reduction shall reduce the amount
of Purchaser Stock included in the registration below twenty-five (25%) of the
total amount of securities included in such registration. No right to
registration of Purchaser Stock under this Section 3.2(a) shall be construed to
limit any registration required under Section 3.2(a) hereof. If an offering in
connection with which the Sellers are entitled to registration under this
Section 3.2(a) is an underwritten offering, then if any of the Purchaser Stock
owned by the Sellers is included in such Registration Statement, each Seller
shall, unless otherwise agreed by the Purchaser, offer and sell such Purchaser
Stock in an underwritten offering using the same underwriter or underwriters
and, subject to the provisions of this Agreement, on the same terms and
conditions as other shares of Purchaser Stock included in such underwritten
offering.
 
 
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(b) Indemnification Relating to Registration Statement. In the event any
Purchaser Stock is included in a Registration Statement pursuant to Section 3(a)
of this Agreement:
 
(i) To the extent permitted by law, the Purchaser shall indemnify, hold harmless
and defend (A) each Seller and (B) the directors, officers, partners, members,
employees and agents of each Seller and each person, if any, who controls each
Seller within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, an
“Seller Indemnified Person”), against any joint or several losses, claims,
damages, liabilities or expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, in respect thereof, “Claims”) to which any of
them may become subject insofar as such Claims arise out of or are based upon:
(1) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, (2) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Purchaser files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, or (3) any violation or alleged violation by the Purchaser
of the Act, the Exchange Act or any other law (including, without limitation,
any state securities law), rule or regulation relating to the offer or sale of
the Purchaser Stock (the matters in the foregoing clauses (1) through (3),
collectively, “Violations”). Subject to the restrictions set forth in Section
3.2(b)(ii) with respect to the number of legal counsel, the Purchaser shall
reimburse Seller and each other Seller Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 3.2(b)(i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in express conformity with information furnished in writing to
the Purchaser by such Seller Indemnified Person expressly for use in the
Registration Statement or any such amendment thereof or supplement thereto. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Seller Indemnified Person and shall survive the
transfer of the Purchaser Stock by the Sellers.
 
 
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(ii) Promptly after receipt by any party entitled to indemnification under this
Section 3.2(b) of notice of the commencement of any action (including any
governmental action), such Seller Indemnified Person shall, if a Claim in
respect thereof is made against Purchaser under this Section 3.2(b), deliver to
the Purchaser a written notice of the commencement thereof, and the Purchaser
shall have the right to participate in, and, to the extent the Purchaser so
desires, to assume control of the defense thereof with counsel mutually
satisfactory to the Purchaser and the Seller Indemnified Person; provided,
however, that Purchaser shall not be entitled to assume such defense and an
Seller Indemnified Person shall have the right to retain its own counsel with
the fees and expenses to be paid by the Purchaser, if, in the reasonable opinion
of counsel retained by the Purchaser, the representation by such counsel of the
Seller Indemnified Person and the Purchaser would be inappropriate due to actual
or potential conflicts of interest between such Seller Indemnified Person and
any other party represented by such counsel in such proceeding or the actual or
potential defendants in, or targets of, any such action include both the Seller
Indemnified Person and the Purchaser and any such Seller Indemnified Person
reasonably determines that there may be legal defenses available to such Seller
Indemnified Person that are in conflict with those available to Purchaser. The
Purchaser shall pay for only one separate legal counsel selected by such Seller
Indemnified Person. The failure to deliver written notice to the Purchaser
within a reasonable time of the commencement of any such action shall not
relieve such Purchaser of any liability to the Seller Indemnified Person under
this Section 3.2(b), except to the extent that the Purchaser is actually
prejudiced in its ability to defend such action. The indemnification required by
this Section 3.2(b) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense, loss, damage
or liability is incurred and is due and payable.
 
(iii) If and to the extent the indemnification provided for in this Section
3.2(b) is held by a court of competent jurisdiction to be unavailable to a
Seller Indemnified Person with respect to any losses, claims, damages or
liabilities referred to herein, the Purchaser, in lieu of indemnifying such
Seller Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Seller Indemnified Person as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative
fault of the Purchaser on the one hand and of the Seller Indemnified Person on
the other in connection with the circumstances that resulted in such loss,
claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the Purchaser and of the Seller
Indemnified Person shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Purchaser or by the Seller Indemnified Person and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, however, that (a) the relative fault of the
Company and any Seller Indemnified Person shall be determined without regard to
(i) any duty or alleged duty of any Seller Indemnified Person to identify or
describe any Seller Indemnified Person as an underwriter with respect to the
registration for sale, offer for sale or sale of the Purchaser Stock or Company
Stock, as applicable, (ii) any allegation or determination that any Seller
Indemnified Person acted as an underwriter (within the meaning of Section
2(a)(11) of the Act) or (iii) any duty or alleged duty of any of the Seller
Indemnified Person to investigate or otherwise verify the accuracy or
sufficiency of information relating to the Company in the Registration Statement
(or in any preliminary or final prospectus included therein) or any amendment
thereof or supplement thereto, and (b) in no event shall the aggregate
contribution obligation by any Seller hereunder exceed the net proceeds from the
offering received by such Seller. The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 3.2(b)(iii) were
determined by pro rata allocation or any other method of allocation that does
not take into account the equitable considerations referred to in this Section
3.2(b)(iii).
 
 
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(c) Registrable Securities. Purchaser hereby acknowledges and agrees that the
common stock of the Company included in the Company Stock shall be “Registrable
Securities” pursuant to that certain Registration Rights Agreement dated April
6, 2007 (the “UPDA Registration Rights Agreement”) between Universal Property
Development and Acquisition Corporation and Sheridan Asset Management, LLC
(“Sheridan”). Following the Closing, each Seller shall be entitled to all the
same rights and privileges granted to Sheridan as a holder of Registrable
Securities under the UPDA Registration Rights Agreement.
 
(d) No Transfer of Subsidiary Assets. Following the Closing, the Purchaser shall
not, and shall not permit any Subsidiary to, without the prior written consent
of each of the Sellers, sell, transfer or otherwise dispose of any of the assets
of such Subsidiary.
 
ARTICLE 4
 
MISCELLANEOUS
 
Section 4.1 Fees and Expenses. Each party hereto shall pay the fees and expenses
of its advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
 
Section 4.2 Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement (written or oral) of the parties hereto with respect
to the subject matter hereof and, except as specifically set forth herein,
neither the Sellers nor the Purchaser make any representation, warranty,
covenant or undertaking with respect to such matters, and they supersede all
prior understandings and agreements with respect to said subject matter, all of
which are merged herein. No provision of this Agreement may be waived or amended
other than by a written instrument signed by each party hereto. Any amendment or
waiver effected in accordance with this Section 4.2 shall be binding upon each
such party and its permitted assigns.
 
Section 4.3 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telecopy or facsimile at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day following
such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:
 
 
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If to the SDS:

SDS Capital Group
c/o Ogier Fiduciary Services (Cayman) Ltd.
113 South Church Street, PO Box 1234GT
George Town, Grand Cayman

with a copy to:

SDS Management, LLC
53 Forest Avenue, 2nd Floor
Old Greenwich, CT 0870

If to BayStar:

BayStar Capital II, L.P.
c/o LRG Capital Group, LLC
80 E. Sir Francis Drake Blvd.
Suite 2B
Larkspur, CA 94939
Attention: Mike Randall

If to the Purchaser: 

Universal Property Development & Acquisition Corporation
14255 U.S. Highway 1
Suite 209
Juno Beach, FL 33408

Either party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto.

Section 4.4 Waivers. No waiver by either party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
 
Section 4.5 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
 
Section 4.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
party hereto may assign its rights or obligations under this Agreement (by
operation of law or otherwise) without the prior written consent of each other
party hereto, and any attempted assignment without such consent shall be void ab
initio.
 
 
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Section 4.7 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity.
 
Section 4.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to the choice of law provisions thereof. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.
 
Section 4.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart.
 
Section 4.10 Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.
 
Section 4.11 Survival. The representations and warranties contained herein shall
survive so long as the Purchaser Stock and Purchased Notes are outstanding,
notwithstanding any due diligence investigation conducted by or on behalf of any
Purchaser. The agreements and covenants contained herein shall survive the
Closing.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Share Purchase Agreement
to be duly executed by their respective authorized officers as of the date first
above written.

       
PURCHASER

UNIVERSAL PROPERTY DEVELOPMENT & ACQUISITION CORPORATION
 
   
   
    By:    

--------------------------------------------------------------------------------

Name:
Title:
 

       
SELLERS

SDS CAPITAL GROUP SPC, LTD.
 
   
   
    By:    

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Name:
Title:
 

       
BAYSTAR
 
BAYSTAR CAPITAL II, L.P.
 
   
   
    By:      

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Name:
Title:
 

 

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Schedule 1.2

List of each Subsidiary of the Company

Subsidiary
 
Total Percentage of outstanding stock or outstanding membership interests after
giving effect to any UPDA purchase
     
Heartland Oil and Gas Corporation
 
5%1
     
Heartland Oil and Gas Incorporation
 
5%1
     
Heartland Gas Gathering, LLC
 
5%1
     

 
1  With 26.24% of the shares to be issued in the name of SDS Capital Group SPC,
Ltd. Class B, 42.56% of the shares to be issued in the name of SDS Capital Group
SPC, Ltd. Class D and 31.20% of the shares to be issued in the name of BayStar
Capital II, LP.

 

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Schedule 1.4

Purchased Notes held by SDS Capital Group SPC and Transferred to United Property
Development and Acquisition Corporation Pursuant to this Agreement 

Principal Sum
 
Cash Payment
 
Amount of Purchaser Stock
         
$ 3,272,000.00
 
$ 1,031,935.972 
 
18,066,106 shares3 
         

 
Purchased Notes held by BayStar Capital II, LP and Transferred to United
Property Development and Acquisition Corporation Pursuant to this Agreement

Principal Sum
 
Cash Payment
 
Amount of Purchaser Stock
         
$ 1,484,000.00
 
$ 468,064.03
 
8,194,398 shares
         

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2
With $393,613.98 to be wired to SDS Capital Group SPC, Ltd. Class B and
$638,321.99 to be wired to SDS Capital Group SPC, Ltd. Class D.

 

3
With 6,891,001 shares to be issued in the name of SDS Capital Group SPC, Ltd.
Class B and 11,175,105 shares to be issued in the name of SDS Capital Group SPC,
Ltd. Class D.

 
 

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Schedule 2.1

Heartland Oil and Gas Company Convertible Senior Secured Promissory Notes held
by SDS Capital Group SPC 

Issuance Date
 
Maturity
 
Principal Sum
             
9/29/2006
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
1,653,124.70
                 
9/29/2006
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
2,680,778.90
                 
2/6/2007
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
48,600.00
                 
2/6/2007
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
78,900.00
 

Heartland Oil and Gas Company Convertible Senior Secured Promissory Notes held
by BayStar Capital II, LP

Issuance Date
 
Maturity
 
Principal Sum
             
9/29/2006
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
1,966,097.00
                 
2/6/2007
   
Earlier of 3/28/07 or closing of a subsequent equity financing
 
$
57,500.00
                 

 
 
 

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