Document:

SUBORDINATION
      AGREEMENT

     

    THIS
      SUBORDINATION AGREEMENT, dated as of April 6, 2007 (this “Subordination
      Agreement”)
      is by
      and among Kamal
      Abdallah,
      a US
      citizen and resident of the state of Texas, whose primary residence is 8 Links
      Green, San Antonio, TX 78257, (the
      “Junior
      Subordinated Obligation
      Holder”),
      Universal
      Property Development and Acquisition Corporation,
      a Nevada
      corporation (the “Borrower”),
      and
Sheridan
      Asset Management, LLC,
      a
      Delaware limited liability company (the “Lender”).

     

    WITNESSETH:

     

    WHEREAS,
      the Lender and Borrower have entered into a Loan Agreement dated as of April
      6,
      2007 (as the same may be modified or amended from time to time, the
“Loan
      Agreement”)
      the
      indebtedness pursuant to which shall be evidenced by the a Senior Secured
      Promissory Note due April 6, 2008 in the original aggregate principal amount
      of
      $3,635,000 (the “Senior
      Note”);
      and

     

    WHEREAS,
      the Junior Subordinated Obligation Holder has provided a loan to the Borrower
      pursuant to a promissory note as described on Schedule
      A
      (the
“Subordinated
      Note”)
      that
      sets forth the Borrower’s indebtedness to the Junior Subordinated Obligation
      Holder (“Junior
      Subordinated Obligation”).

     

    NOW,
      THEREFORE, in consideration of the premises, the Lender, Borrower and the
      Subordinated Holder are entering into this Subordination Agreement in order
      to
      fully set forth the provisions by which all obligations or indebtedness of
      the
      Borrower under or pursuant to the Junior Subordinated Obligation is subordinate
      and junior in right of payment, and as to any security interest in the
      Borrower’s assets, to all Superior Indebtedness (as hereinafter
      defined).

     

    1.  Subordination.
      The
      Junior Subordinated Obligation shall be subordinate and junior in right of
      payment, and as to any security interest in the Borrower’s assets, to all
      Superior Indebtedness to the extent provided in this §1.

     

    (a)  Agreement
      to Subordinate.(i)
      The
      Junior Subordinated Obligation Holder hereby acknowledges and agrees that the
      indebtedness created by, and other obligations of any nature payable in respect
      of, the Junior Subordinated Obligation, including without limitation any
      renewals, rearrangements, or modifications thereof, are at all times, and in
      all
      respects, subordinate and junior in right of payment, and as to any security
      interest in the Borrower’s assets, to all Superior Indebtedness (as defined
      herein) on the following terms and conditions:

     

    (1)  The
      Junior Subordinated Obligation Holder postpones and subordinates the Junior
      Subordinated Obligation and any and all other indebtedness, now or hereafter
      existing from Borrower to any Junior Subordinated Obligation Holder, including,
      but not limited to, all rights to receive payments, management fees or
      distributions, whether in cash or property or otherwise, to any and all
      obligation of the Borrower pursuant to the Superior Indebtedness. The Junior
      Subordinated Obligation Holder agrees that, so long as Borrower is indebted
      in
      any way pursuant to the Superior Indebtedness, Borrower shall not make any
      payment, whether in cash, property or otherwise, or grant any security interest,
      with respect to the Junior Subordinated Obligation Holder or the Junior
      Subordinated Obligation. If any payment or distribution, whether in cash,
      property or otherwise, is made by Borrower in violation of this Section
      1(a)(i)(1), the Junior Subordinated Obligation Holder shall hold such payment
      in
      trust for the holder of the Superior Indebtedness and pay it over to such
      holder, or its representative, to the extent necessary to pay in full all
      Superior Indebtedness then remaining unpaid. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    In
      the
      event of any proceedings relative to the Borrower or its property under any
      Debtor Relief Laws (as defined below), or in the event of any voluntary or
      involuntary liquidation, winding up or dissolution of the Borrower,
      or
      assignment for the benefit of creditors, the Holder of Superior Indebtedness
      shall be entitled to receive payment in full of the Superior Indebtedness
      (including, without limitation, post-petition interest, regardless of whether
      such interest is allowable under Section 506 of the United States Bankruptcy
      Code) before any of the Junior Subordinated Obligation Holder is entitled to
      receive any payment or distribution (whether in cash, property or securities)
      on
      account of the Junior Subordinated Obligation and, in the event any such payment
      or distribution is made upon or in respect of the Junior Subordinated Obligation
      from and after the commencement of any such proceedings, liquidation, winding-up
      or dissolution, the Junior Subordinated Obligation Holder shall hold such
      payment in trust for the holder of the Superior Indebtedness and pay it over
      to
      such holder, or its representative, on
      demand, to the extent necessary to pay in full all Superior Indebtedness then
      remaining unpaid;

     

    (2)  In
      the
event
      of
      any dissolution, winding
      up, liquidation, or reorganization of the Borrower under any Debtor Relief
      Law (as
      defined below) (whether voluntary or involuntary and whether in bankruptcy,
      insolvency, or receivership proceedings, or upon an assignment for the benefit
      of creditors or any other marshaling of the assets and liabilities of the
      Borrower or otherwise), Borrower, by its acceptance of this Subordination
      Agreement, and all Junior Subordinated Obligation Holder,
      by their acceptance thereof,
      covenant and agree as follows:

     

    (A)  all
      Superior Indebtedness shall first be paid in full before any payment or
      distribution is made in respect of the Junior Subordinated
      Obligations;

     

    (B)  any
      payment or distribution of assets of the Borrower or from the estate created
      by
      the commencement of any such proceedings, whether in cash, property, or
      securities, to which any of the Junior Subordinated Obligation Holder would
      be
      entitled in respect of the Junior Subordinated Obligation except for the
      provisions of this Section 1 (including any such payments or distributions
      which
      may
      be payable
      or deliverable by reason of the payment
      of any
      other
      indebtedness of the Borrower being subordinated to the payments due in respect
      of the Junior Subordinated Obligations), shall be paid or delivered by the
      Borrower,
      as the
      case may be, or any
      receiver, trustee in bankruptcy, liquidation trustee, agent, or other person
      making such payment or distribution directly to the holder of Superior
      Indebtedness or its representative, to the extent necessary to pay in full
      all
      Superior Indebtedness remaining unpaid, before any payment or distribution
      is
made
      to
      any of the
      Junior Subordinated Obligation Holder in respect of Junior Subordinated
      Obligations; and

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (C)  in
      the
      event that any payment or distribution of cash, property, or securities shall
      be
      received by any of the Junior Subordinated Obligation Holder in contravention
      of
      subsection (A) or (B) of this subsection (3) (including any such payments or
      distributions which may be payable or deliverable by reason of the payment
      of
      any other indebtedness of the Borrower being subordinated to the payments due
      in
      respect of the Junior Subordinated Obligation), before all Superior Indebtedness
      is paid in full, such payment or distribution shall
      be
segregated
      and held in trust for the benefit of, and shall be paid over to, the holder
      of
      such Superior Indebtedness or its representative, to the extent necessary to
      pay
      in full all Superior Indebtedness then remaining unpaid, after giving effect
      to
      any concurrent payment or distribution to the holder of Superior
      Indebtedness;

     

    The
      consolidation of the Borrower with, or the merger of the Borrower into, another
      corporation or the liquidation or dissolution of the Borrower following the
      sale, conveyance
      or
      lease
      of all or substantially all of its property to another corporation shall not
      be
      deemed a dissolution, winding up, liquidation or reorganization for the purposes
      of this subsection (3) if such other corporation shall, as a part of such
      consolidation, merger, sale, conveyance or lease, expressly assume in writing
      all
      of
      the Borrower’s,
      as the case may be, obligations under this Subordination Agreement.

     

    (3)  If
      the
      Borrower or the Lender notifies the Junior Subordinated Obligation
      Holder that a Default
      or Event of Default (as defined in the Loan Agreement) in
      respect
      of any Superior Indebtedness shall have occurred (whether as a consequence
      of a
      failure to make a payment or otherwise), the Junior Subordinated Obligation
      Holder shall not take or receive any payment or distribution (whether in cash,
      property or securities) upon or in respect of all or any part of the Junior
      Subordinated Obligation unless and until
      such Default
      or Event of Default shall have been fully cured or waived and,
      in
      the
      event that
      the
      Junior Subordinated
      Obligation Holder receives any such payment or distribution, it shall hold
      such
      payment or distribution in trust for the Holder of Superior Indebtedness and
      pay
      it over to the holder or its representative, on demand;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (4)  Junior
      Subordinated Obligation Holder shall not demand, sue for, take, or receive
      by
      set-off or otherwise, any payment, whether in cash, property or otherwise with
      respect to the Junior Subordinated Obligations. Junior Subordinated Obligation
      Holder shall not proceed against Borrower if Borrower fails to make any payments
      of the Junior Subordinated Obligations, and will take no action to levy,
      execute, seize, or otherwise acquire any assets or property of the Borrower.
      The
      Junior Subordinated Obligation Holder specifically covenants and agrees that
      the
      position and security of the Lender with respect to all assets of the Borrower
      shall remain in all situations prior and superior to any rights of Junior
      Subordinated Obligation Holder in such assets or property. 

     

    (5)  If
      and so
      long as (i) the payment of the principal in respect of the Senior Note has
      not
      been accelerated by the Holder thereof, and (ii) no Event of Default described
      in Section 12 of the Loan Agreement shall then exist, the Junior Subordinated
      Obligation Holder shall not demand, sue for, or commence (or join in the
      commencement of) any action or proceeding against the Borrower under any Debtor
      Relief Laws unless and until the Superior Indebtedness shall have been paid
      in
      full;

     

    (ii)  As
      used
      herein, “Superior
      Indebtedness” means
      the
      principal of, premium, if any, and interest on the Senior Note, and all fees,
      expenses, reimbursements, indemnities, premiums and other amounts payable under
      the
      Loan
      Documents (as defined in the Loan Agreement). 

     

    (iii)  As
      used
      herein, “Debtor Relief Laws” shall mean the Bankruptcy Code of the United States
      of America, and all other applicable federal and state liquidation,
      conservatorship, bankruptcy, moratorium, rearrangement, receivership,
      insolvency, reorganization, suspension of payments, or similar debtor relief
      laws from time to time in effect affecting the rights of creditors
      generally.

     

    (b)  Proofs
      of Claim.
      The
      Junior Subordinated Obligation Holder undertakes and agrees for the benefit
      of
      each holder of Superior Indebtedness to execute, verify, deliver and file any
      proofs of claim in order to prove and realize upon any rights or claims
      pertaining to the Junior Subordinated Obligation and to effectuate the full
      benefit of the subordination contained herein.

     

    (c)  Further
      Rights.
      No
      right
      of the
      holder
      of any Superior Indebtedness to enforce subordination as herein provided shall
      at any time in any way be prejudiced or impaired by any act or failure to act
      on
      the part of the Borrower or by any act or failure to act by any such holder,
      or
      by any noncompliance by the Borrower with the terms and provisions and covenants
      hereof, regardless of any knowledge thereof with which any such holder may
      have
      to be otherwise charged. The holder of Superior Indebtedness may extend, renew,
      modify, supplement or amend the terms of the Superior Indebtedness or any
      security therefor or guaranty thereof and
      release, sell, exchange
      or enforce such security or guaranty or elect any right or remedy, or delay
      in
      enforcing or release any right or remedy and otherwise deal freely with the
      Borrower, all without notice to the Junior Subordinated Obligation Holder and
      all without affecting the liabilities and obligations of the Borrower or the
      Junior Subordinated Obligation Holder under this Subordination Agreement. The
      Junior Subordinated Obligation Holder shall not, so long as any Superior
      Indebtedness shall
      be
      outstanding, obtain a security interest in any property of the Borrower in
      order
      to secure the payment of the Junior Subordinated Obligations.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (d)  Defaults.
      The
      failure to make any payment due by reason of any provision of this §1 shall not
      be construed as preventing the occurrence of a default under such Junior
      Subordinated Obligation.

     

    (e)  Obligations
      Not Impaired.
      The
      foregoing provisions are solely for the purpose of defining the relative rights
      of the holder of Superior Indebtedness on the one hand, and the Junior
      Subordinated Obligation Holder on the other hand, and nothing therein shall
      between
      the Borrower and Lender, the obligation of the Borrower to pay the Junior
      Subordinated Obligation in accordance with their terms; nor shall anything
      herein prevent the
      Junior Subordinated
      Obligation Holder from exercising all remedies otherwise
      permitted by applicable
      law or hereunder upon default hereunder, subject to the rights of the Holder
      of
      Superior Indebtedness as herein provided for.

     

    (f)  References.
      All
      references herein to the Junior Subordinated Obligation Holder shall refer
      to
      them solely in their capacities as Holder of the Junior Subordinated
      Obligation.

     

    (g)  Assignment
      of Indebtedness.
      No
      Junior Subordinated Obligation Holder shall assign or transfer any of the Junior
      Subordinated Obligation to any third party without Lender’s prior written
      consent.

     

    2.  Acceleration
      of Obligations.
      Should
      Borrower or Junior Subordinated Obligation Holder violate any term or condition
      of this Subordinated Agreement, such violation shall constitute an Event of
      Default (as defined in the Loan Agreement) under the Superior Indebtedness,
      and
      Lender shall have the right to immediately and without notice to Borrower or
      Junior Subordinated Obligation Holder, accelerate the maturity of any Superior
      Indebtedness. 

     

    3.  Legend
      on Instruments.
      Junior
      Subordinated Obligation Holder shall place a legend, in form and substance
      acceptable to Lender, referencing the subordination provided under this
      Subordination Agreement on any paper, document or instrument evidencing any
      of
      the Junior Subordinated Obligations. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4.  Expenses.
      Should
      it be necessary for Lender to initiate legal action in order to enforce and
      protect its rights under this Subordination Agreement, Junior Subordinated
      Obligation Holder shall reimburse Lender for all costs and expenses incurred
      in
      respect to such action, including, but not limited to, reasonable attorney’s
      fees (which may include those allocable to Lender’s in-house
      counsel).

     

    5.  Governing
      Law.
      The
      validity, meaning and effect of this Subordination Agreement shall be determined
      in accordance with the laws of New York applicable to contracts made and to
      be
      performed within that state.

     

    6.  Notices.
      All
      notices, requests, consents and other communications hereunder shall be in
      writing and shall be delivered, or shall be sent by certified or registered
      mail, return receipt requested, postage
      prepaid and addressed (i) if
      to the
      Borrower, as set forth in Section 13 of the Loan Agreement, or to such other
      address as may have been furnished to
      the
      other parties
      to this Subordination Agreement by written notice,
      (ii) if to the Lenders, as set
      forth
      in Section 13 of the Loan Agreement, or to such other address as may have been
      furnished to
      the
      other
      parties to this Subordination Agreement by written notice, and (iii) if to
      any
      of the Junior Subordinated Obligation Holder, as set forth on Schedule A,
      attached hereto, next to such Junior Subordinated Obligation Holder’s name, or
      to such other address as may have been furnished to
      the
      other
      parties to this Subordination Agreement by written notice.

     

    7.  Counterparts.
      This
      Subordination Agreement may be executed in two or more counterparts, each of
      which shall be deemed to be an original, but all of which shall together
      constitute one and the same document.

     

    8.  Headings.
      The
      headings used herein are solely for the convenience of the parties and shall
      not
      serve to modify or interpret the text of the Sections at the beginning of which
      they appear.

     

    9.  Successors
      and Assigns.
      The
      provisions hereof shall be binding upon and shall inure to the benefit of the
      Borrower, Lender and each of the Junior Subordinated Obligation Holder, and
      their respective heirs, legatees, successors and permitted assigns.

     

    10.  Amendments
      and Waivers.
      No
      amendment, modification, supplement, extension, termination or waiver of
      any
provision
      hereof, and no approval or consent hereunder, shall be effective
      unless approved in writing by the Borrower and Lender.

     

    11.  Severability.
      If any
      provision of this Subordination Agreement shall be held by any court of
competent
      jurisdiction to be illegal, void or unenforceable, such provision shall
be
      of no
      force or effect, but the illegality or unenforceability shall have no effect
      upon, and shall not impair the enforceability of, any other provision
of
      this
Subordination
      Agreement.

     

    12.  Attorney’s
      Fees.
      If any
      party shall commence a proceeding to enforce any provisions of this
      Subordination Agreement, then the prevailing party in such proceeding shall
      be
      reimbursed by the other party for its reasonable attorney’s fees and other costs
      and expenses incurred with the investigation, preparation and prosecution of
      such proceeding.

    
       

      [Signature
        Page Follows.]

       

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed this Subordination
      Agreement as
      of the
date
      first above written.

    
      	 	 	 
	 	
            
	 
 	 
 	 
 
	 	  	 
	 	
              
KAMAL
              ABDALLAH
	 	
            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Schedule
      A

     

    1. Promissory
      Note with Confessed Judgment Provisions of $853,696, immediately due and payable
      by the Borrower to Kamal Abdallah.

     

    
      
        
        

      

      
        8SUBSIDIARY
      GUARANTEE

    

    SUBSIDIARY
      GUARANTEE, dated as of April 6, 2007, made by each of the signatories hereto
      (together with any other entity that may become a party hereto as provided
      herein, the “Guarantors”),
      in
      favor of Sheridan
      Asset Management LLC
      (the
      "Lender")
      to
      that certain Loan Agreement, dated as of the date hereof, between Universal
      Property Development and Acquisition Corporation,
      a
      Nevada corporation (the “Company”)
      and
      the Lender. 

    

    WITNESSETH:

    

    WHEREAS,
      pursuant to that certain Loan Agreement, dated as of the date hereof, by and
      between the Company and the Lender (the “Loan
      Agreement”),
      the
      Lender has agreed to make a term loan to the Company evidenced by the Company’s
      Senior Secured Promissory Note, due April
      6,
      2008 (the
      “Note”),
      subject to the terms and conditions set forth therein; and

    

    WHEREAS,
      each
      Guarantor will directly benefit from the extension of credit to the Company
      represented by the issuance of the Note; and

    

    NOW,
      THEREFORE, in consideration of the premises and to induce the Lender to enter
      into the Loan Agreement and to carry out the transactions contemplated thereby,
      each Guarantor hereby agrees with the Lender as follows:

     

    1. Definitions.
      Unless
      otherwise defined herein, terms defined in the Loan Agreement and used herein
      shall have the meanings given to them in the Loan Agreement. The words “hereof,”
“herein,” “hereto” and “hereunder” and words of similar import when used in this
      Guarantee shall refer to this Guarantee as a whole and not to any particular
      provision of this Guarantee, and Section and Schedule references are to this
      Guarantee unless otherwise specified. The meanings given to terms defined herein
      shall be equally applicable to both the singular and plural forms of such terms.
      The following terms shall have the following meanings:

    

    “Guarantee”
means
      this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise
      modified from time to time.

    

    “Obligations”
means
      the collective reference to all obligations and undertakings of the Company
      of
      whatever nature, monetary or otherwise, under the Note,
      the
      Loan Agreement, the Security Agreement, the other Transaction Documents or
      any
      other future agreement or obligations undertaken by the Company to the Lender,
      together with all reasonable attorneys’ fees, disbursements and all other costs
      and expenses of collection incurred by Lender in enforcing any of such
      Obligations and/or this Guarantee. 

     

    2. Guarantee.

    

    (a) Guarantee.

     

    
      	 	
              (i)

            	
              The
                Guarantors hereby, jointly and severally, unconditionally and irrevocably,
                guarantee to the Lender and its respective successors, indorsees,
                transferees and assigns, the prompt and complete payment and performance
                by the Company when due (whether at the stated maturity, by acceleration
                or otherwise) of the Obligations. 

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (ii)

            	
              Anything
                herein or in any other Transaction Document to the contrary
                notwithstanding, the maximum liability of each Guarantor hereunder
                and
                under the other Transaction Documents shall in no event exceed the
                amount
                which can be guaranteed by such Guarantor under applicable federal
                and
                state laws, including laws relating to the insolvency of debtors,
                fraudulent conveyance or transfer or laws affecting the rights of
                creditors generally (after giving effect to the right of contribution
                established in Section 2(b)). 

            

    

    

    
      	 	
              (iii)

            	
              Each
                Guarantor agrees that the Obligations may at any time and from time
                to
                time exceed the amount of the liability of such Guarantor hereunder
                without impairing the guarantee contained in this Section 2 or affecting
                the rights and remedies of the Lender
                hereunder.

            

    

    

    
      	 	
              (iv)

            	
              The
                guarantee contained in this Section 2 shall remain in full force
                and
                effect until all the Obligations and the obligations of each Guarantor
                under the guarantee contained in this Section 2 shall have been satisfied
                by payment in full. 

            

    

    

    
      	 	
              (v)

            	
              No
                payment made by the Company, any of the Guarantors, any other guarantor
                or
                any other Person or received or collected by the Lender from the
                Company,
                any of the Guarantors, any other guarantor or any other Person by
                virtue
                of any action or proceeding or any set-off or appropriation or application
                at any time or from time to time in reduction of or in payment of
                the
                Obligations shall be deemed to modify, reduce, release or otherwise
                affect
                the liability of any Guarantor hereunder which shall, notwithstanding
                any
                such payment (other than any payment made by such Guarantor in respect
                of
                the Obligations or any payment received or collected from such Guarantor
                in respect of the Obligations), remain liable for the Obligations
                up to
                the maximum liability of such Guarantor hereunder until the Obligations
                are paid in full.

            

    

    

    
      	 	
              (vi)

            	
              Notwithstanding
                anything to the contrary in this Agreement, with respect to any defaulted
                non-monetary Obligations the specific performance of which by the
                Guarantors is not reasonably possible (e.g. the issuance of the Company's
                Common Stock), the Guarantors shall only be liable for making the
                Lender
                whole on a monetary basis for the Company's failure to perform such
                Obligations in accordance with the Transaction Documents.
                

            

    

    

    (b) Right
      of Contribution.
      Each
      Guarantor hereby agrees that to the extent that a Guarantor shall have paid
      more
      than its proportionate share of any payment made hereunder, such Guarantor
      shall
      be entitled to seek and receive contribution from and against any other
      Guarantor hereunder which has not paid its proportionate share of such payment.
      Each Guarantor's right of contribution shall be subject to the terms and
      conditions of Section 2(c). The provisions of this Section 2(b) shall in no
      respect limit the obligations and liabilities of any Guarantor to the Lender,
      and each Guarantor shall remain liable to the Lender for the full amount
      guaranteed by such Guarantor hereunder.

     

     

    
      
         

      

      
        2
          of 13

        
          

        

      

      
         

      

    

     

    (c) No
      Subrogation.
      Notwithstanding any payment made by any Guarantor hereunder or any set-off
      or
      application of funds of any Guarantor by the Lender, no Guarantor shall be
      entitled to be subrogated to any of the rights of the Lender against the Company
      or any other Guarantor or any collateral security or guarantee or right of
      offset held by the Lender for the payment of the Obligations, nor shall any
      Guarantor seek or be entitled to seek any contribution or reimbursement from
      the
      Company or any other Guarantor in respect of payments made by such Guarantor
      hereunder, until all amounts owing to the Lender by the Company on account
      of
      the Obligations are paid in full. If any amount shall be paid to any Guarantor
      on account of such subrogation rights at any time when all of the Obligations
      shall not have been paid in full, such amount shall be held by such Guarantor
      in
      trust for the Lender, segregated from other funds of such Guarantor, and shall,
      forthwith upon receipt by such Guarantor, be turned over to the Lender in the
      exact form received by such Guarantor (duly indorsed by such Guarantor to the
      Lender if required), to be applied against the Obligations, whether matured
      or
      unmatured, in such order as the Lender may determine.

     

    (d) Amendments,
      Etc. With Respect to the Obligations.
      Each
      Guarantor shall remain obligated hereunder notwithstanding that, without any
      reservation of rights against any Guarantor and without notice to or further
      assent by any Guarantor, any demand for payment of any of the Obligations made
      by the Lender may be rescinded by the Lender and any of the Obligations
      continued, and the Obligations, or the liability of any other Person upon or
      for
      any part thereof, or any collateral security or guarantee therefor or right
      of
      offset with respect thereto, may, from time to time, in whole or in part, be
      renewed, extended, amended, modified, accelerated, compromised, waived,
      surrendered or released by the Lender, and the Loan Agreement and the other
      Transaction Documents and any other documents executed and delivered in
      connection therewith may be amended, modified, supplemented or terminated,
      in
      whole or in part, as the Lender may deem advisable from time to time, and any
      collateral security, guarantee or right of offset at any time held by the Lender
      for the payment of the Obligations may be sold, exchanged, waived, surrendered
      or released. The Lender shall have no obligation to protect, secure, perfect
      or
      insure any Lien at any time held by them as security for the Obligations or
      for
      the guarantee contained in this Section 2 or any property subject thereto.
      

     

    (e) Guarantee
      Absolute and Unconditional.
      Each
      Guarantor waives any and all notice of the creation, renewal, extension or
      accrual of any of the Obligations and notice of or proof of reliance by the
      Lender upon the guarantee contained in this Section 2 or acceptance of the
      guarantee contained in this Section 2; the Obligations, and any of them, shall
      conclusively be deemed to have been created, contracted or incurred, or renewed,
      extended, amended or waived, in reliance upon the guarantee contained in this
      Section 2; and all dealings between the Company and any of the Guarantors,
      on
      the one hand, and the Lender, on the other hand, likewise shall be conclusively
      presumed to have been had or consummated in reliance upon the guarantee
      contained in this Section 2. Each Guarantor waives to the extent permitted
      by
      law diligence, presentment,
      protest, demand for payment and notice of default or nonpayment to or upon
      the
      Company or any of the Guarantors with respect to the Obligations. Each Guarantor
      understands and agrees that the guarantee contained in this Section 2 shall
      be
      construed as a continuing, absolute and unconditional guarantee of payment
      without regard to (a) the validity or enforceability of the Loan Agreement
      or
      any other Transaction Document, any of the Obligations or any other collateral
      security therefor or guarantee or right of offset with respect thereto at any
      time or from time to time held by the Lender, (b) any defense, set-off or
      counterclaim (other than a defense of payment or performance or fraud or
      misconduct by Lender) which may at any time be available to or be asserted
      by
      the Company or any other Person against the Lender, or (c) any other
      circumstance whatsoever (with or without notice to or knowledge of the Company
      or such Guarantor) which constitutes, or might be construed to constitute,
      an
      equitable or legal discharge of the Company for the Obligations, or of such
      Guarantor under the guarantee contained in this Section 2, in bankruptcy or
      in
      any other instance. When making any demand hereunder or otherwise pursuing
      its
      rights and remedies hereunder against any Guarantor, the Lender may, but shall
      be under no obligation to, make a similar demand on or otherwise pursue such
      rights and remedies as it may have against the Company, any other Guarantor
      or
      any other Person or against any collateral security or guarantee for the
      Obligations or any right of offset with respect thereto, and any failure by
      the
      Lender to make any such demand, to pursue such other rights or remedies or
      to
      collect any payments from the Company, any other Guarantor or any other Person
      or to realize upon any such collateral security or guarantee or to exercise
      any
      such right of offset, or any release of the Company, any other Guarantor or
      any
      other Person or any such collateral security, guarantee or right of offset,
      shall not relieve any Guarantor of any obligation or liability hereunder, and
      shall not impair or affect the rights and remedies, whether express, implied
      or
      available as a matter of law, of the Lender against any Guarantor. For the
      purposes hereof, "demand" shall include the commencement and continuance of
      any
      legal proceedings.

     

     

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

     

    (f) Reinstatement.
      The
      guarantee contained in this Section 2 shall continue to be effective, or be
      reinstated, as the case may be, if at any time payment, or any part thereof,
      of
      any of the Obligations is rescinded or must otherwise be restored or returned
      by
      the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
      reorganization of the Company or any Guarantor, or upon or as a result of the
      appointment of a receiver, intervenor or conservator of, or trustee or similar
      officer for, the Company or any Guarantor or any substantial part of its
      property, or otherwise, all as though such payments had not been
      made.

    

    (g) Payments.
      Each
      Guarantor hereby guarantees that payments hereunder will be paid to the Lender
      without set-off or counterclaim in U.S. dollars at the address set forth or
      referred to in the Loan Agreement.

    

    3. Representations
      and Warranties.
      Each
      Guarantor hereby makes the following representations and warranties to Lender
      as
      of the date hereof:

     

    (a) Organization
      and Qualification.
      The
      Guarantor is a corporation or limited liability company, duly incorporated,
      validly existing and in good standing under the laws of the applicable
      jurisdiction set forth on Schedule 1, with the requisite corporate power and
      authority to own and use its properties and assets and to carry on its business
      as currently conducted. The Guarantor has no subsidiaries other than those
      identified as such on the Disclosure Schedules to the Loan Agreement. The
      Guarantor is duly qualified to do business and is in good standing as a foreign
      corporation in each jurisdiction in which the nature of the business conducted
      or property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, could not,
      individually or in the aggregate, (x) adversely affect the legality, validity
      or
      enforceability of any of this Guaranty in any material respect, (y) have a
      material adverse effect on the results of operations, assets, prospects, or
      financial condition of the Guarantor or (z) adversely impair in any material
      respect the Guarantor's ability to perform fully on a timely basis its
      obligations under this Guaranty (a "Material
      Adverse Effect").

     

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

     

    (b) Authorization;
      Enforcement.
      The
      Guarantor has the requisite corporate power and authority to enter into and
      to
      consummate the transactions contemplated by this Guaranty, and otherwise to
      carry out its obligations hereunder. The execution and delivery of this Guaranty
      by the Guarantor and the consummation by it of the transactions contemplated
      hereby have been duly authorized by all requisite corporate action on the part
      of the Guarantor. This Guaranty has been duly executed and delivered by the
      Guarantor and constitutes the valid and binding obligation of the Guarantor
      enforceable against the Guarantor in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors' rights and remedies or by
      other equitable principles of general application.

    

    (c) No
      Conflicts.
      The
      execution, delivery and performance of this Guaranty by the Guarantor and the
      consummation by the Guarantor of the transactions contemplated thereby do not
      and will not (i) conflict with or violate any provision of its Certificate
      of
      Incorporation or By-laws or (ii) conflict with, constitute a default (or an
      event which with notice or lapse of time or both would become a default) under,
      or give to others any rights of termination, amendment, acceleration or
      cancellation of, any agreement, indenture or instrument to which the Guarantor
      is a party, or (iii) result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Guarantor is subject (including Federal and state
      securities laws and regulations), or by which any material property or asset
      of
      the Guarantor is bound or affected, except in the case of each of clauses (ii)
      and (iii), such conflicts, defaults, terminations, amendments, accelerations,
      cancellations and violations as could not, individually or in the aggregate,
      have or result in a Material Adverse Effect. The business of the Guarantor
      is
      not being conducted in violation of any law, ordinance or regulation of any
      governmental authority, except for violations which, individually or in the
      aggregate, do not have a Material Adverse Effect.

     

    (d) Consents
      and Approvals.
      The
      Guarantor is not required to obtain any consent, waiver, authorization or order
      of, or make any filing or registration with, any court or other federal, state,
      local, foreign or other governmental authority or other person in connection
      with the execution, delivery and performance by the Guarantor of this
      Guaranty.

    

    (e) Loan
      Agreement.
      The
      representations and warranties of the Company set forth in the Loan Agreement
      as
      they relate to such Guarantor, each of which is hereby incorporated herein
      by
      reference, are true and correct as of each time such representations are deemed
      to be made pursuant to such Loan Agreement, and the Lender shall be entitled
      to
      rely on each of them as if they were fully set forth herein, provided, that
      each
      reference in each such representation and warranty to the Company's knowledge
      shall, for the purposes of this Section 3, be deemed to be a reference to such
      Guarantor's knowledge. 

     

     

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

     

    (f) Foreign
      Law.
      Each
      Guarantor has consulted with appropriate foreign legal counsel with respect
      to
      any of the above representations for which non-U.S. law is applicable. Such
      foreign counsel have advised each applicable Guarantor that such counsel knows
      of no reason why any of the above representations would not be true and
      accurate. Such foreign counsel were provided with copies of this Subsidiary
      Guarantee and the Transaction Documents prior to rendering their advice.

    

    4. Covenants.
      Each
      Guarantor covenants and agrees with the Lender that, from and after the date
      of
      this Guarantee until the Obligations shall have been paid in full, such
      Guarantor shall take, and/or shall refrain from taking, as the case may be,
      each
      commercially reasonable action that is necessary to be taken or not taken,
      as
      the case may be, so that no Event of Default is caused by the failure to take
      such action or to refrain from taking such action by such Guarantor.

     

    5. Miscellaneous.

    

    (a) Amendments
      in Writing.
      None of
      the terms or provisions of this Guarantee may be waived, amended, supplemented
      or otherwise modified except in writing by the majority in interest (based
      on
      the then-outstanding principal amount of the Note at the time of such
      determination) of the Lender.

     

    (b) Notices.
      All
      notices, requests and demands to or upon the Lender or any Guarantor hereunder
      shall be effected in the manner provided for in the Loan Agreement; provided
      that any
      such notice, request or demand to or upon any Guarantor shall be addressed
      to
      such Guarantor at its notice address set forth on Schedule
      5(b).

    

    (c) No
      Waiver By Course Of Conduct; Cumulative Remedies.
      The
      Lender shall not by any act (except by a written instrument pursuant to Section
      5(a)), delay, indulgence, omission or otherwise be deemed to have waived any
      right or remedy hereunder or to have acquiesced in any default under the
      Transaction Documents or Event of Default. No failure to exercise, nor any
      delay
      in exercising, on the part of the Lender, any right, power or privilege
      hereunder shall operate as a waiver thereof. No single or partial exercise
      of
      any right, power or privilege hereunder shall preclude any other or further
      exercise thereof or the exercise of any other right, power or privilege. A
      waiver by the Lender of any right or remedy hereunder on any one occasion shall
      not be construed as a bar to any right or remedy which the Lender would
      otherwise have on any future occasion. The rights and remedies herein provided
      are cumulative, may be exercised singly or concurrently and are not exclusive
      of
      any other rights or remedies provided by law.

     

    (d) Enforcement
      Expenses;
      Indemnification.

    

    
      	 	
              (i)

            	
              Each
                Guarantor agrees to pay, or reimburse the Lender for, all its costs
                and
                expenses incurred in collecting against such Guarantor under the
                guarantee
                contained in Section 2 or otherwise enforcing or preserving any rights
                under this Guarantee and the other Transaction Documents to which
                such
                Guarantor is a party, including, without limitation, the reasonable
                fees
                and disbursements of counsel to the
                Lender.

            

    

     

     

    
      
         

      

      
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              (ii)

            	
              Each
                Guarantor agrees to pay, and to save the Lender harmless from, any
                and all
                liabilities with respect to, or resulting from any delay in paying,
                any
                and all stamp, excise, sales or other taxes which may be payable
                or
                determined to be payable in connection with any of the transactions
                contemplated by this Guarantee.

            

    

    

    
      	 	
              (iii)

            	
              Each
                Guarantor agrees to pay, and to save the Lender harmless from, any
                and all
                liabilities, obligations, losses, damages, penalties, actions, judgments,
                suits, costs, expenses or disbursements of any kind or nature whatsoever
                with respect to the execution, delivery, enforcement, performance
                and
                administration of this Guarantee to the extent the Company would
                be
                required to do so pursuant to the Loan
                Agreement.

            

    

    

    
      	 	
              (iv)

            	
              The
                agreements in this Section shall survive repayment of the Obligations
                and
                all other amounts payable under the Loan Agreement and the other
                Transaction Documents. 

            

    

    

    (e) Successor
      and Assigns.
      This
      Guarantee shall be binding upon the successors and permitted assigns of each
      Guarantor and shall inure to the benefit of the Lender and its respective
      successors and assigns; provided that no Guarantor may assign, transfer or
      delegate any of its rights or obligations under this Guarantee without the
      prior
      written consent of the Lender.

     

    (f) Set-Off.
      Each
      Guarantor hereby irrevocably authorizes the Lender at any time and from time
      to
      time while an Event of Default under any of the Transaction Documents shall
      have
      occurred and be continuing, without notice to such Guarantor or any other
      Guarantor, any such notice being expressly waived by each Guarantor, to set-off
      and appropriate and apply any and all deposits, credits, indebtedness or claims,
      in any currency, in each case whether direct or indirect, absolute or
      contingent, matured or unmatured, at any time held or owing by the Lender to
      or
      for the credit or the account of such Guarantor, or any part thereof in such
      amounts as the Lender may elect, against and on account of the obligations
      and
      liabilities of such Guarantor to the Lender hereunder and claims of every nature
      and description of the Lender against such Guarantor, in any currency, whether
      arising hereunder, under the Loan Agreement, any other Transaction Document
      or
      otherwise, as the Lender may elect, whether or not the Lender has made any
      demand for payment and although such obligations, liabilities and claims may
      be
      contingent or unmatured. The Lender shall notify such Guarantor promptly of
      any
      such set-off and the application made by the Lender of the proceeds thereof,
      provided that the failure to give such notice shall not affect the validity
      of
      such set-off and application. The rights of the Lender under this Section are
      in
      addition to other rights and remedies (including, without limitation, other
      rights of set-off) which the Lender may have.

     

    (g) Counterparts.
      This
      Guarantee may be executed by one or more of the parties to this Guarantee on
      any
      number of separate counterparts (including by telecopy), and all of said
      counterparts taken together shall be deemed to constitute one and the same
      instrument. 

    

    (h) Severability.
      Any
      provision of this Guarantee which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. 

     

     

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

     

    (i) Section
      Headings.
      The
      Section headings used in this Guarantee are for convenience of reference only
      and are not to affect the construction hereof or be taken into consideration
      in
      the interpretation hereof.

    

    (j) Integration.
      This
      Guarantee and the other Transaction Documents represent the agreement of the
      Guarantors and the Lender with respect to the subject matter hereof and thereof,
      and there are no promises, undertakings, representations or warranties by the
      Lender relative to subject matter hereof and thereof not expressly set forth
      or
      referred to herein or in the other Transaction Documents.

    

    (k) Governing
      Law.
      THIS
      GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
      WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF
      CONFLICTS OF LAWS. 

    

    (l) Submission
      to Jurisdictional; Waiver.
      Each
      Guarantor hereby

    irrevocably
      and unconditionally:

    

    
      	 	
              (i)

            	
              submits
                for itself and its property in any legal action or proceeding relating
                to
                this Guarantee and the other Transaction Documents to which it is
                a party,
                or for recognition and enforcement of any judgment in respect thereof,
                to
                the non-exclusive general jurisdiction of the Courts of the State
                of New
                York, located in New York County, New York, the courts of the United
                States of America for the Southern District of New York, and appellate
                courts from any thereof; 

            

    

     

    
      	 	
              (ii)

            	
              consents
                that any such action or proceeding may be brought in such courts
                and
                waives any objection that it may now or hereafter have to the venue
                of any
                such action or proceeding in any such court or that such action or
                proceeding was brought in an inconvenient court and agrees not to
                plead or
                claim the same; 

            

    

    

    
      	 	
              (iii)

            	
              agrees
                that service of process in any such action or proceeding may be effected
                by mailing a copy thereof by registered or certified mail (or any
                substantially similar form of mail), postage prepaid, to such Guarantor
                at
                its address referred to in the Loan Agreement or at such other address
                of
                which the Lender shall have been notified pursuant
                thereto;

            

    

    

    
      	 	
              (iv)

            	
              agrees
                that nothing herein shall affect the right to effect service of process
                in
                any other manner permitted by law or shall limit the right to sue
                in any
                other jurisdiction; and 

            

    

    

    
      	 	
              (v)

            	
              waives,
                to the maximum extent not prohibited by law, any right it may have
                to
                claim or recover in any legal action or proceeding referred to in
                this
                Section any special, exemplary, punitive or consequential damages.
                

            

    

     

     

    
      
         

      

      
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    (m) Acknowledgements.
      Each
      Guarantor hereby acknowledges that:

    

    
      	 	
              (i)

            	
              it
                has been advised by counsel in the negotiation, execution and delivery
                of
                this Guarantee and the other Transaction Documents to which it is
                a party;
                

            

    

     

    
      	 	
              (ii)

            	
              the
                Lender has no fiduciary relationship with or duty to any Guarantor
                arising
                out of or in connection with this Guarantee or any of the other
                Transaction Documents, and the relationship between the Guarantors,
                on the
                one hand, and the Lender, on the other hand, in connection herewith
                or
                therewith is solely that of debtor and creditor; and
                

            

    

    

    
      	 	
              (iii)

            	
              no
                joint venture is created hereby or by the other Transaction Documents
                or
                otherwise exists by virtue of the transactions contemplated hereby
                among
                the Guarantors and the Lender. 

            

    

    

    (n) [Intentionally
      omitted].

     

    (o) Release
      of Guarantors.
      Subject
      to Section 2(f), each Guarantor will be released from all liability hereunder
      concurrently with the repayment in full of all amounts owed under the Loan
      Agreement, the Note and the other Transaction Documents. 

    

    (p) Seniority.
      The
      Obligations of each of the Guarantors hereunder rank senior in priority to
      any
      other debt of such Guarantor. 

    

    (q) Waiver
      of Jury Trial.
      EACH
      GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE LENDER, HEREBY
      IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
      PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
      THEREIN.

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
      be
      duly executed and delivered as of the date first above written.

    

      

    
      	 	 	 	 
	
              CANYON
                CREEK OIL AND GAS INC.

            	 	 	 
	 	 	 	 
	By:	 	 	 
	
              
                

              

            	 	 	
            
	Name:
Title:	 	 	 

    
      
        	 	 	 	 
	
                CATLIN
                  OIL AND GAS, INC.

              	 	 	 
	 	 	 	 
	By:	 	 	 
	
                
                  

                

              	 	 	
              
	Name:
Title:	 	 	 

        
          
             

          

          
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              of 13

            
              

            

          

          
             

          

        

    

    SCHEDULE
      1

    

    GUARANTORS

    

    The
      following are the names, notice addresses and jurisdiction of organization
      of
      each Guarantor.

    

    
      	
              NAME

            	 	
              ADDRESS

            	 	
              JURISDICTION
                

              OF
                INCORPORATION

            	 	
              COMPANY
                OWNED BY PERCENTAGE

            
	
              CANYON
                CREEK OIL AND GAS, INC.

            	 	
              14255
                US HWY, 

              1
                Suite 209, 

              Juno
                Beach, FL 33408

            	 	
              Nevada

            	 	
              60%

            
	
              CATLIN
                OIL AND GAS INC

            	 	
              14255
                US HWY, 

              1
                Suite 209, 

              Juno
                Beach, FL 33408

            	 	
              Nevada

            	 	
              90%

            

    

    

    
      
         

      

      
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     ANNEX
      1 TO

    SUBSIDIARY
      GUARANTEE

    

    ASSUMPTION
      AGREEMENT, dated as of ____ __, ______ made by ___________________,
      corporation (the "Additional
      Guarantor"),
      in
      favor of the Lender pursuant to the Loan Agreement referred to below. All
      capitalized terms not defined herein shall have the meaning ascribed to them
      in
      such Loan Agreement. 

    

    WITNESSETH
      :

    

      WHEREAS,
      Universal Property Development and Acquisition Corporation, a Nevada corporation
      (the "Company")
      and
      the Lender have entered into a Loan Agreement, dated as of ________ ___, 2007
      (as amended, supplemented or otherwise modified from time to time, the
      "Loan
      Agreement");
      

    

      WHEREAS,
      in connection with the Loan Agreement, the Company and its Subsidiaries (other
      than the Additional Guarantor) have entered into the Subsidiary Guarantee,
      dated
      as of ________ ___, 2007 (as amended, supplemented or otherwise modified from
      time to time, the "Guarantee")
      in
      favor of the Lender; 

    

      WHEREAS,
      the Loan Agreement requires the Additional Guarantor to become a party to the
      Guarantee; and

    

      WHEREAS,
      the Additional Guarantor has agreed to execute and deliver
      this Assumption Agreement in order to become a party to the
      Guarantee;

    

      NOW,
      THEREFORE, IT IS AGREED:

    

    1. Guarantee.
      By
      executing and delivering this Assumption Agreement, the Additional Guarantor,
      as
      provided in Section 5(n) of the Guarantee, hereby becomes a party to the
      Guarantee as a Guarantor thereunder with the same force and effect as if
      originally named therein as a Guarantor and, without limiting the generality
      of
      the foregoing, hereby expressly assumes all obligations and liabilities of
      a
      Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby
      added to the information set forth in Schedule 1 to the Guarantee. The
      Additional Guarantor hereby represents and warrants that each of the
      representations and warranties contained in Section 3 of the Guarantee is true
      and correct on and as the date hereof as to such Additional Guarantor (after
      giving effect to this Assumption Agreement) as if made on and as of such
      date.

     

    2. Governing
      Law.
      THIS
      ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
      ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

    
      
         

      

      
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          of 13

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
      to be duly executed and delivered as of the date first above
      written.

    

    

      
        
          
            	 	 
	 	 
	By:	 
	
                    
                      

                    

                  	 
	Name:
Title:	 

          

        

         

        
          
             

          

          
            13
              of 13

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