Exhibit 10.1
STOCK SUBSCRIPTION AGREEMENT
FOR PURCHASE OF STOCK
Urban Television Network Corporation
2707 South Cooper, Suite 119
Arlington, Texas 76015
Dear Sir or Madam:
It is understood that, upon the acceptance of this subscription by the
Company, the undersigned will receive an executed counterpart of this Stock
Subscription Agreement.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned Shareholder hereby irrevocably offers to purchase and subscribes for
and agrees to purchase Sixty Nine Million (69,000,000) Shares of Urban
Television Network Corporation, a Nevada corporation, common stock at Ten Cents
($0.10) per Share for a total purchase price of Six Million Nine Hundred
Thousand $6,900,000) Dollars. The purchase price will be paid as follows:
(a) $100,000, as a down payment due on August 5, 2005) with the
$6,800,000 balance payable on a promissory note at $250,000 Dollars every thirty
(30) days, beginning thirty (30) days after the date of the down payment,
including Zero (0%) percent interest on the declining balance, until paid in
full. The first payment after the down payment will be due on, or before
September 15, 2005 with successive payments due every thirty (30) days
thereafter, until paid in full, including accrued interest.
(b) The stock certificate evidencing the 69,000,000 shares of Urban
Television Network Corporation shall be delivered to the undersigned immediately
upon the full payment of $6,900,000.00.
2. Conditions of Subscription. The undersigned understands and agrees
that:
(a) The Company will have no obligation to accept subscriptions for
Shares in the order received; and
(b) The stock certificate to be issued and delivered on account of this
subscription will only be issued in the name of, and delivered to, the
undersigned.
2. Representations and Warranties of the Undersigned. The undersigned
represents, warrants, and agrees as follows:
a. The undersigned understands that the Shares are being offered And
sold under the exemption from registration provided for in Section 4(2) of the
Securities Act of 1933, as amended, and Section 90.530(11) of the Nevada Revised
Statutes, as amended, that it is purchasing the Shares without being furnished
any offering literature or, that this transaction has not been scrutinized by
the United States Securities and Exchange Commission or by any administrative
agency charged with the administration of the securities laws of any state
because of the private aspects of the offering, that all documents, records, and
books pertaining to this investment, have been made available to the undersigned
and its representatives, if any, and that the books and records of the Company
are and will be available upon reasonable notice for inspection by investors
during reasonable business hours at its principal place of business. This offer
to purchase securities originated with the subscriber and the subscriber was not
solicited by the company. The subscriber has reviewed the Company's annual and
quarterly periodic reports filed with the Securities and Exchange Commission.
b. The undersigned is a Limited Liability Company organized in the
State of Texas.
c. The undersigned is an "accredited investor" as defined in the By
federal and state securities laws; and if not then the purchaser represents that
By virtue of its business and financial experience or financial experience of
its professional advisors who are unaffiliated with and who are not compensated,
to the best of its knowledge, by the issuer or any affiliate or selling agent of
the issuer, directly or indirectly, can be reasonably assumed to have the
capacity to protect its own interests in connection with this transaction.
d. The undersigned understands and has fully considered for purposes Of
this investment the associated risks and the restricted transferability of
1
Shares, and that (i) the Shares are a speculative investment which involve a
high degree of risk of loss by the undersigned of its investment therein, and
(ii) there are substantial restrictions on the transferability of, and there
will be no public market for the Shares, and accordingly, it may not be possible
for him or her to liquidate its investment in the Shares in case of emergency;
e. The undersigned is able (i) to bear the economic risk of this
investment for an indefinite period, and (ii) to afford a complete loss of the
investment;
f. The undersigned, in making its investment decision to purchase the
Shares, the Subscriber has relied solely upon independent investigations made by
it and/or it's representative(s) and advisors, and the undersigned and any such
witnesses have been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of the Company concerning the Company and
the terms and conditions of this offering, and to obtain any additional
information, to the extent such persons possess such information or can acquire
it without unreasonable effort or expense.
g. The Shares are being acquired by the undersigned in good faith
solely for its own personal account, for investment purposes only, and not with
a view to or for the resale, distribution, subdivision, or fractionalization
thereof; the undersigned has no contract, undertaking, understanding, agreement,
or arrangement, formal or informal, with any person to sell, transfer, or pledge
to any person the Shares, or any part thereof; the undersigned has no present
plans to enter into any such contract, undertaking, agreement, or arrangement;
and he or she understands that the legal consequences of the foregoing
representations and warranties to mean that he or she must bear the economic
risk of the investment for an indefinite period of time because the Shares have
not been registered under applicable securities laws, and, therefore, cannot be
sold unless they are subsequently registered under such laws (which the Company
is not obligated to do) or an exemption from such registration is available;
h. The undersigned understands that the Company is relying on the truth
and accuracy of the representations, declarations, and warranties herein made by
him or her in offering the Shares for sale to him or her without having first
registered the same under the Act;
i. The undersigned consents to the placement of a legend on the
certificate for the Shares, which legend will be in form substantially as
follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
("1933 ACT"), AS AMENDED, OR UNDER THE SECURITIES ACT OF NEVADA, OR
UNDER ANY OTHER STATE OR FOREIGN GOVERNMENT SECURITIES LAWS. THESE
SHARES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT REGISTRATION UNDER THE 1933 ACT, THE SECURITIES ACT OF NEVADA,
AND ANY OTHER APPLICABLE STATE SECURITIES LAWS UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE 1933
ACT, THE SECURITIES ACT OF NEVADA, OR ANY OTHER STATE OR FOREIGN
GOVERNMENT SECURITIES LAWS; AND THESE SHARES HAVE BEEN PURCHASED
PURSUANT TO THE TERMS AND CONDITIONS OF A PROMISSORY NOTE AND WILL BE
HELD IN ESCROW BY THE COMPANY UNTIL THE NOTE IS PAID IN FULL.
j. The undersigned further consents to the placing of a stop transfer
order on the books of the Company, and with any transfer agents, against the
Shares, in accordance with the restrictions set out in the above legend; and
k. If the undersigned is a corporation, partnership, or other entity,
the undersigned and the individual representative of the undersigned who is
executing this Agreement each hereby represent and warrant that the purchase of
the shares of Common Stock pursuant to this Subscription Agreement has been duly
authorized by all necessary corporate, partnership, or other action; that such
individual is duly authorized to bind the undersigned to this Agreement; and
that the undersigned was not organized for the purpose of investing in the
Company.
The foregoing representations, and warranties, and undertakings are
made by the undersigned with the intent that they be relied upon in determining
its suitability as a purchaser of Shares and the undersigned hereby agrees that
such representations and warranties will survive the delivery of the certificate
for such Shares.
2
3. Events of Default. Any one or more of the following shall constitute
an "Event of Default", on the part of the undersigned, as the term is used
herein:
(a) Default shall occur in the observance or performance of any
covenant or agreement contained herein or in the other Loan Documents that are
not remedied within 30 days after notice thereof to the undersigned by the
Company; or
(b) If any representation or warranty made by the undersigned herein or
in any Loan Document, or made by the undersigned in any statement or certificate
furnished by the undersigned pursuant hereto, is untrue or incorrect in any
material respect as of the date of the making thereof or subsequently becomes
untrue or incorrect and such inaccuracy is not immediately disclosed to the
Company; or
(c) The undersigned becomes insolvent or bankrupt or makes an
assignment for the benefit of creditors, or the undersigned causes or suffers an
order for relief to be entered with respect to it under applicable Federal
bankruptcy law or applies for or consents to the appointment of a custodian,
trustee, liquidator, or receiver for the undersigned or for the major part of
the property of either; or
(d) A custodian, trustee, liquidator, or receiver is appointed for the
undersigned Company or for the major part of the property of either and is not
discharged within 30 days after such appointment; or
(e) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or laws for
the relief of debtors, are instituted by or against the undersigned and, if
instituted against the undersigned, are consented to or are not dismissed within
60 days after such institution.
4. Remedies. When any Event of Default described in Section 4 has
occurred and is continuing, the Company's obligation to make the Loans shall
terminate and the principal balance and all accrued interest as well as other
costs, fees and expenses due and owing on the Loans shall immediately become due
and payable, without presentment, demand, notice of acceleration, notice of
intent to accelerate, protest or further notice of any kind or nature
whatsoever, all of which are hereby expressly waived, and the Default Rate shall
commence to accrue. In addition, the Company may pursue any or all of the rights
available to it at law or in equity or as provided herein and in the Notes,
including, without limitation, all rights and remedies of a secured party
including but inclusive of the following:
(a) If the undersigned shall fail to keep or perform any of the
covenants or agreements contained herein or if any statement, representation or
warranty contained herein is false, misleading or erroneous in any material
respect, the undersigned shall be deemed to be in default under the Subscription
Agreement and Promissory Note and the Company shall be entitled at its sole
remedy which is foreclosure of the undersigned's common stock held by the
Company as security for the payment under the Subscription Agreement, Promissory
Note and any other Loan Document. The Company shall forever release the
undersigned, its agents, employees, directors, officers, members, managers,
attorneys and affiliates of all liabilities and they are held harmless from all
causes of action and claims in connection with the transactions between the
Company and the undersigned and the operation of the Company.
(b) The undersigned further agrees that should it fail to meet the
required installment payments as to dates and amounts set forth in this Stock
Subscription Agreement and the Promissory Note, that the Company shall be free
to enter into a stock subscription agreement with a third party of its choosing
to complete the purchase of any remaining shares of the undersigned's common
stock that the undersigned has not purchased under the Stock Subscription
Agreement and Promissory Note at the date the undersigned becomes delinquent on
the required installment payments set forth in this agreement.
(c) The undersigned further agrees that should the Company take action
to complete the Stock Subscription Agreement with a third party of its choosing,
the undersigned shall have no rights whatsoever to contest the action of the
Company and shall not bring any legal action whatsoever against the Company, its
directors, officers, assigns, successors, agents. The undersigned shall forever
release the Company, its agents, employees, directors, officers, members,
managers, attorneys and affiliates of all liabilities and they are held harmless
from all causes of action and claims in connection with the transactions between
the undersigned and the Company and the operation of the Company.
3
(d) Undersigned further agrees that should the Company take action to
complete the Stock Subscription Agreement with a third party of its choosing,
the undersigned shall instruct the officers and directors it brought to the
Company to immediately resign (within two business days of notice by the
Company) from the Company's board of directors and as officers of the Company.
5. Costs of Remedies. Any and all costs and expenses (including
reasonable attorney's fees) incurred by the Company in pursuing its remedies
hereunder shall be an additional indebtedness due and owing by the undersigned
to the Company and shall be governed by this Agreement, the Notes and the other
Loan Documents.
6. Transferability. The undersigned agrees not to transfer or assign
this Agreement, or any of his interest herein, and any such transfer will be
void.
7. Revocation. The undersigned agrees that he or she may not cancel,
terminate, or revoke this Agreement or any agreement of the undersigned made
hereunder and that this Agreement will survive the death or disability of the
undersigned and will be binding upon the undersigned's heirs, executors,
administrators, successors, and assigns.
8. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by the undersigned, the undersigned
does not waive any right granted to him or her under federal or state securities
laws.
10. Miscellaneous
a. All notices or other communications given or made hereunder will be
sufficiently given if hand-delivered or mailed by registered or certified mail
return receipt requested, postage prepaid, to the undersigned or to the Company
at the respective addresses set forth herein, or such other addresses as the
undersigned or the Company will designate to the other by notice in writing.
b. This Agreement will be governed by and construed in accordance with
the internal laws of the State of Texas.
c. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed by all parties.
d. If more than one person is signing this Agreement, each
representation, and warranty, and undertaking made herein will be a joint and
several representation, warranty, or undertaking of each person.
11. Continuing Effect of Representations and Warranties. The
representations and warranties of Paragraph 3 are true and accurate as of the
date of this Subscription Agreement and will be true and accurate as of the date
of delivery of the Funds, and will survive such delivery. If in any respect,
such representations and warranties will not be true and accurate prior to the
issuance of Shares to the undersigned, the undersigned will give immediate
written notice of such fact to the Company specifying which representations and
warranties are not true and accurate and in what respects they are not accurate.
12. Indemnification. The undersigned acknowledges that he or she
understands the meaning and legal consequences of the representations and
warranties contained in Paragraph 3 and he or she hereby agrees to defend,
indemnify, and hold harmless the Company and its officers, directors, employees,
and agents, and their successors and assigns, from and against any and all loss,
damage, liability, or expense, including without limitation attorneys' fees, due
to or arising out of the inaccuracy of any representation or acknowledgment, or
the breach of any agreement, warranty, or undertaking of the undersigned
contained in this Subscription Agreement.
13. Signatures. The "undersigned" will mean each entity whose
representative's signature appears below. I have read this Subscription
Agreement and agree to be bound by its terms.
MILES INVESTMENT GROUP, LLC
/s/ Jacob R. Miles III
- -----------------------
By: Jacob R. Miles III
Title: Managing Member
Mailing Address: 2707 South Cooper, Suite 119, Arlington, Texas 76015
Fed Tax I.D. # ________________________
4
Urban Television Network Corporation, a Nevada corporation, hereby
accepts the foregoing subscription subject to the terms and conditions hereof
this 29th day of July, 2005.
Urban Television Network Corporation
/s/ Randy Moseley
------------------
By: Randy Moseley
Title: Chief Financial Officer
5