UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF
1934
Date
of Report (Date of earliest event reported): February 5,
2010
United Development Funding
IV
(Exact
Name of Registrant as Specified in Its Charter)
Maryland
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333-152760
(1933 Act)
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26-2775282
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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1301
Municipal Way, Suite 100, Grapevine, Texas
76051
(Address
of principal executive offices)
(Zip
Code)
(214) 370-8960
(Registrant’s
telephone number, including area code)
None
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
1.01
Entry
into a Material Definitive Agreement.
On
February 5, 2010, United Development Funding IV (“UDF IV”) obtained a $8,000,000
revolving credit facility in the maximum principal amount of $8 million (the
“Credit Facility”) from Raley Holdings, LLC (the “Lender”). The interest rate on
the Credit Facility is equal to eight and one-half percent (8.5%) per
annum. Accrued interest on the outstanding principal amount of the
Credit Facility is payable monthly. The Credit Facility matures and
becomes due and payable in full on February 5, 2011. On February 5,
2010, $2 million in principal was outstanding under the Credit
Facility.
The
Credit Facility is secured by a first priority collateral assignment and lien on
certain of UDF IV’s investments. Initially, the Lender has taken
collateral assignment of two of UDF IV’s investment loans as security for the
Credit Facility, which are a finished lot loan secured by a first lien deed of
trust on certain lots in the Indian Springs residential subdivision of San
Antonio, Texas, and a participation in a finished lot loan secured by a first
lien deed of trust on certain finished lots in the Bridges at Bear Creek
residential subdivision in Austin, Texas.
The
Lender may, in its discretion, decide to advance additional principal to UDF IV
under the Credit Facility. The Lender may require UDF IV to provide
additional collateral as a condition of funding additional advances of principal
under the Credit Facility. From time to time, UDF IV may request the
Lender to release collateral, and the Lender may require a release price to be
paid as a condition of granting its release of collateral.
If a
default occurs under the Credit Facility, the Lender may declare the Credit
Facility to be due and payable immediately, after giving effect to any notice
and cure periods provided for in the loan documents. A default may
occur under the Credit Facility in various circumstances including, without
limitation, if (i) UDF IV fails to pay amounts due to the Lender when due, (ii)
UDF IV fails to comply with its representations, warranties, covenants and
agreements with the Lender, (iii) a bankruptcy action is filled with respect to
UDF IV, (iv) UDF IV is liquidated or winds up its affairs, (v) the sale or
liquidation of all or substantially all of the assets of UDF IV occurs without
the Lender’s prior written consent, or (vi) any loan document becomes invalid,
unbinding or unenforceable for any reason other than its release by the
Lender. In such event, the Lender may exercise any rights or remedies
it may have, including, without limitation, increasing the interest rate to
twelve and one-half percent (12.5%) per annum, or a foreclosure of the
collateral. A foreclosure of collateral may materially impair UDF
IV’s ability to conduct its business.
Item
2.03
Creation of a Direct
Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of
Registrant.
The
information required by this Item 2.03 of this Current Report is also being
furnished under Item 1.01 - “Entry into a Material Definitive
Agreement.” The information reported under Item 1.01 of this Current
Report is incorporated in this Item 2.03 by reference.
FORWARD
LOOKING STATEMENTS
This
Current Report on Form 8-K contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 under Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking
statements include statements with respect to our beliefs, plans, objectives,
goals, expectations, anticipations, assumptions, estimates, intentions, and
future performance, and involve known and unknown risks, uncertainties and other
factors, which may be beyond our control, and which may cause our actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may," "will,"
"can" "anticipate," "assume," "should," "indicate," "would," "believe,"
"contemplate," "expect," "seek," "estimate," "continue," "plan," "point to,"
"project," "predict," "could," "intend," "target," "potential," and other
similar words and expressions of the future. Forward-looking statements may not
be realized due to a variety of factors, including, without limitation, future
economic, competitive and market conditions, regulatory framework, and future
business decisions, and the other factors referenced in our Prospectus, which
contains a list of specific risk factors that could cause actual results to
differ materially from those indicated by our forward-looking statements made in
this Current Report on Form 8-K.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
United
Development Funding IV
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Dated:
February 11, 2010
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By:
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/s/
Hollis M. Greenlaw
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Hollis
M. Greenlaw
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Chief
Executive Officer
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