SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 30, 2011
United Development Funding IV
(Exact Name of Registrant as Specified in Its
|(State or other jurisdiction of
incorporation or organization)
||(Commission File Number)
1301 Municipal Way, Suite 100, Grapevine,
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(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:
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry
into a Material Definitive Agreement.
On December 30, 2011, United
Development Funding IV, a Maryland real estate investment trust (“UDF IV”), entered into guaranty and indemnity agreements
(the “Guaranties”) on behalf of Maple Wolf Stoneleigh, LLC, an affiliated Delaware limited liability company (the “Borrower”),
in order to support the Borrower’s maximum $25,340,000 construction loan (the “Loan”) provided by Babson Mezzanine
Realty Investors II LP, an indirect subsidiary of Massachusetts Mutual Life Insurance Company (the “Lender”), for the
Borrower’s construction of a 22-story condominium project located in Dallas, Texas known as the Tower Residences at the Stoneleigh
Hotel. In addition to the Guaranties, the Loan is secured by a first priority deed of trust against the project, construction bonds,
and a $2,000,000 letter of credit, and is guaranteed by the principal of an owner of the Borrower.
The Guaranties provide
that UDF IV shall guaranty the completion of the construction of the condominium project and the full repayment of the Loan upon
default by the Borrower, and shall indemnify the Lender for environmental liabilities associated with the project if the Borrower
defaults on its obligation to indemnify the Lender for such liabilities. However, provided that no default has occurred under the
Loan, UDF IV’s liability for payment of the Loan would terminate when the project is substantially complete and the outstanding
Loan balance is equal to or less than $13,000,000. In consideration of UDF IV providing the Guaranties to the Lender, the Borrower
agreed to pay UDF IV an annual credit enhancement fee equal to one percent of the outstanding Loan balance measured on the last
day of each month, which is payable monthly while the Guaranties are outstanding.
If the Borrower defaults
under the Loan, the Lender may exercise its rights and remedies including pursuit of UDF IV’s Guaranties. If UDF IV pays
any amount to the Lender under the Guaranties, UDF IV is entitled to recover those amounts from United Development Funding Land
Opportunity Fund, L.P., an affiliated Delaware limited partnership (“UDFLOF”), and the principal of an owner of the
Borrower or, if the Loan is paid off in full, UDF IV may recover those amounts directly from the Borrower.
The Borrower is a consolidated
subsidiary of UDFLOF. UMTH Land Development, L.P., a Delaware limited partnership, is the asset manager of UDFLOF and is also the
asset manager of UDF IV.
Item 2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information required
by Item 2.03 is reported in Item 1.01 of this Current Report on Form 8-K, and is hereby incorporated into this Item 2.03 by reference.
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
||United Development Funding IV|
|Dated: January 6, 2012
||/s/ Hollis M. Greenlaw|
||Hollis M. Greenlaw|
Chief Executive Officer