Exhibit 10.1
FIRST AMENDMENT TO SUBSCRIPTION
AGREEMENT
THIS FIRST AMENDMENT TO SUBSCRIPTION AND LOAN AGREEMENT (herein called the
"Amendment") is dated as of February 9, 2004, by and among Xxxxxx Entertainment,
LLC., a Nevada Limited Liability Company ("Borrower") and Urban Television
Network Corporation ("Lender"), a Nevada corporation.
WITNESSETH:
WHEREAS, Borrower and Lender entered into that certain Subscription Agreement
and Promissory Note dated as of September 24, 2003(as amended, supplemented or
modified to the date hereof, the "Original Loan Agreement"), for the purpose and
consideration therein expressed, whereby Lender made a Loan to Borrower as
therein provided and pursuant to which Borrower issued certain a Promissory Note
to the Lender in the amount of $6,500,000 (collectively, the "Original
Promissory Note");
WHEREAS, Borrower and Lender desire to amend the Original Subscription Agreement
and the Original Promissory Note for the purpose set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, in the Original Loan Agreement and in the Original
Promissory Note, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
Section 1.1. TERMS DEFINED IN THE ORIGINAL LOAN AGREEMENT. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Loan Agreement shall have the same meanings whenever
used in this Amendment.
Section 1.2. OTHER DEFINED TERMS. Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to
them in this Section 1.2.
"AMENDMENT" means this First Amendment to the Subscription Agreement.
"SUBSCRIPTION AGREEMENT" means the Original Subscription Agreement as
amended hereby.
"PROMISSORY NOTE" means the Original Promissory Note as amended hereby.
ARTICLE II.
AMENDMENTS TO ORIGINAL LOAN AGREEMENT
Section 2.1. DEFINITIONS. The payment schedule set forth in the Original
Subscription Agreement and the Original Promissory Note are hereby amended and
replaced with the following:
"First Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before April 30,
2004, in an amount which is greater than or equal to $437,500.00"
"Second Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before July 30, 2004,
in an amount which is greater than or equal to $437,500."
"Third Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before October 30,
2004, in an amount which is greater than or equal to $437,500."
"Fourth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before December 31,
2004, in an amount which is greater than or equal to $437,500."
"Fifth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before March 31,
2005, in an amount which is greater than or equal to $875,000."
"Sixth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before June 30, 2005,
in an amount which is greater than or equal to $875,000."
"Seventh Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before September 30,
2005, in an amount which is greater than or equal to $875,000."
"Eighth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before December 31,
2005, in an amount which is greater than or equal to $875,000."
"Ninth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before March 31,
2006, in an amount which is greater than or equal to $875,000."
"Tenth Installment Payment" shall mean the payment on the Promissory Note
made by Borrower or Borrower's Assigns to the Lender on or before June 30, 2006,
in an amount which shall equal the remaining principal owed on the Promissory
Note plus all accrued interest accumulated on the Promissory Note to the date of
this Tenth Installment Payment."
Section 2.2 OTHER AMENDMENTS
(a) If as and when upon resignation and/or termination of Xxxxxx Xxxxxxx,
Xxxxxxx X. Xxxxxxxx, and Xxxx Olivireri as officers/directors of Lender,
Borrower shall have the right to appoint three new directors/officers, who are
qualified and satisfy the Lender's criteria during the pendancy of the debt. (b)
As the President of Lender, Xxxxxx X. Xxxxxx shall receive $5,000 per month
compensation, starting when the Lender becomes certified as a minority owned
company by the National Minority Suppliers Development Council and qualifies to
receive diversity money from advertisers and program sponsors.
ARTICLE III.
CONDITIONS OF EFFECTIVENESS
Section 3.1. EFFECTIVE DATE. This Amendment shall become effective when, and
only when:
(a) Lender shall have received, at Lender' office, a counterpart of this
Amendment, executed and delivered by Borrower. (b) Lender shall have received
such other supporting documents as Lender may reasonably request.
Section 3.2. EXPENSES OF COUNSEL. In connection with this Amendment, Borrower
shall have the obligation to reimburse the Lender for the fees and expenses of
their counsel when revenue from sale of Borrowers equity exceeds the debt
related to this transaction.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to induce
Lender to enter into this Amendment, Borrower represents and warrants to Lender
to the best knowledge of Borrower that:
(a) The Borrower has heretofore made a full disclosure to Lender of its
financial position, including full disclosure (either in writing or orally) of
all monetary and covenant defaults to the Promissory Note which exist on the
date hereof. Furthermore, the Borrower hereby represents and warrants that all
representations and warranties contained in Article 3 of the Original
Subscription Agreement shall be true and correct at and as of February 9, 2004,
except to the extent that the facts on which such representations and warranties
are based have been changed by the extension of credit under the Loan Agreement.
(b) Borrower is duly authorized to execute and deliver this Amendment and
is and will continue to be duly authorized to borrow monies and to perform its
obligations under the Promissory Note. Borrower has duly taken all corporate
action necessary to authorize the execution and delivery of this Amendment and
to authorize the performance of the obligations of Borrower hereunder and there
under.
(c) The execution and delivery by Borrower of this Amendment, the
performance by Borrower of its obligations hereunder and the consummation of the
transactions contemplated hereby do not and will not conflict with any provision
of law, statute, rule or regulation or of the certificate of incorporation and
bylaws of Borrower, or of any material agreement, judgment, license, order or
permit applicable to or binding upon Borrower, or result in the creation of any
lien, charge or encumbrance upon any assets or properties of Borrower. Except
for those that have been obtained, no consent, approval, authorization or order
of any court or governmental authority or third party is required in connection
with the execution and delivery by Borrower of this Amendment or to consummate
the transactions contemplated hereby.
(d) When duly executed and delivered, this Amendment will be a legal and
binding obligation of Borrower, enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights and by equitable principles of
general application.
(e) That the Borrower discloses that it is desperate for cash, that the
loan is critical and necessary to conclude the transaction.
(f) That the Borrower instructed Xxxxxxx Keplyn Xxxxxxxx and or his
Designee to arrange for the funds necessary to complete the down payment
requirements of its stock subscription agreement with Lender.
(g)That the Borrower represented that as soon as the subscription Agreement
was executed, and Xx. Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxx, and
Xxxx Olivireri were installed as officers and directors of Urban Television
Network Corporation the following would transpire:
(1) The lender would become a certified and qualified minority
business enterprise;
(2) The Borrower would raise funds from Borrower's sources to pay off
the remaining balance of the Subscription Agreement;
(3) The Company had the ability to bring in new programming for
distribution on the Lender network and affiliate stations free of
any copyright claims, which would result in claims and or
litigation.
(h) The Company has been and continues to be unable to fulfill its
obligations under the Subscription Agreement and requests an extension of the
payment terms under the Subscription Agreement and Promissory Note.
(i) Borrower, upon request from Lender, agrees to execute such other and
further documents as may be reasonably necessary or appropriate to consummate
the transactions contemplated herein or to perfect the liens and security
interests intended to secure the payment of the loan evidenced by the Promissory
Note.
(j) If Borrower 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,
Borrower shall be deemed to be in default under the Subscription Agreement and
Promissory Note and Lender shall be entitled at its sole remedy which is
foreclosure of Borrower's stock of URBT held by Lender as security for the
payment under the Subscription Agreement, Promissory Note and any other Loan
Document. Lender shall forever release the Borrower, 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 Lender and the Borrower and the
operation of the Lender.
(k) Borrower further agrees that should it fail to meet the required
installments payments as to dates and amounts set forth in the Loan Documents,
that Lender shall be free to enter into a subscription agreement with a third
party of its choosing to complete the purchase of any remaining shares of
Lender's common stock that Borrower has not purchased under the Subscription
Agreement and Promissory Note at the date Borrower becomes delinquent on the
required installment payments set forth in this agreement.
(l) Borrower further agrees that should Lender take action to complete the
Subscription Agreement with a third party of its choosing, Borrower shall have
no rights whatsoever to contest the action of Lender and shall not bring any
legal action whatsoever against Lender, its directors, officers, assigns,
successors, agents. Borrower shall forever release the Lender, 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 Borrower and the Lender and the
operation of the Lender.
(m) Borrower further agrees that should Lender take action to complete the
Subscription Agreement with a third party of its choosing, Borrower shall
instruct its directors, officers and members to immediately resign from the
Lender's board of directors and as officers of Lender.
ARTICLE V.
MISCELLANEOUS
Section 5.1. RATIFICATION OF AGREEMENTS. The Original Subscription Agreement, as
hereby amended is hereby ratified and confirmed in all respects. The Loan
Documents as they may be amended or affected by this Amendment, are hereby
ratified and confirmed m all respects. Any reference to the Promissory Note in
any Loan Document shall be deemed to be a reference to the Original Promissory
Note as hereby amended.
The execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
Lender under the Promissory Note or any other Loan Document nor constitute a
waiver of any provision of the Promissory Note or any other Loan Document.
Section 5.2. SURVIVAL OF AGREEMENTS. All representations, warranties, covenants
and agreements of Borrower herein shall survive the execution and delivery of
this Amendment and the performance hereof, including without limitation the
making or granting of the Loans, and shall further survive until all of the
Obligations are paid in full. All statements and agreements contained in any
certificate or instrument delivered by Borrower hereunder or under the
Subscription Agreement and Promissory Note to Lender shall be deemed to
constitute representations and warranties by, and/or agreements and covenants
of, Borrower under this Amendment and under the Subscription Agreement and
Promissory Note.
Section 5.3. LOAN DOCUMENTS. This Amendment is a Loan Document, and all
provisions in the Subscription Agreement and Promissory Note pertaining to Loan
Documents apply hereto and thereto.
Section 5.4. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance the laws of the State of Texas and any applicable laws of the United
States of America in all respects, including construction, validity and
performance.
Section 5.5. COUNTERPARTS: FAX. This Amendment may be separately executed in
counterparts And by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment. This Amendment may be validly executed by facsimile or other
electronic transmission.
Section 5.6. MISCELLANEOUS. Borrower hereby warrants and Lender hereby
acknowledge that a signatory for Borrower, Xxxxxx X. Xxxxxx, is the President
and Managing Member of Borrower and that full disclosure of this has been made
to Lender, that Lender and their assigns acknowledge such disclosure.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRIITEN ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
BORROWER:
XXXXXX ENTERTAINMENT, LLC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and Managing Member
LENDER:
URBAN TELEVISION NETWORK CORPORTION
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, Executive Vice President
and Chief Financial Officer
