Exhibit 10
LOAN AND STOCK PURCHASE AGREEMENT
This Agreement is between Xxxxx X. Little ("Little") with offices at 000
Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxx, and United National Film Corporation (Film), a
Colorado corporation, for the purpose of providing the terms and conditions for
the purchase by Little of 18,818,017 restricted shares of the common stock of
Film at par value for a cash consideration of $18,818.02 and the extension of a
loan from Little to Film for the sum of $88,181.98. The loan shall bear interest
at 6% and be convertible at any time during the two year loan period into common
stock of Film at par value, subject to there then being sufficient authorized
but unissued common shares.
In consideration of the mutual covenants and conditions herein contained,
the parties hereto agree as follows:
1. The parties to this Agreement are aware that FILM is an illiquid public
entity that is delinquent in filing reports to the Securities and Exchange
Commission. It is understood by all signing parties that the intent of
Little is to reorganize and recapitalize the company.
2. FILM represents that its total authorized capital stock consists of
30,000,000 shares of Common Stock par value $.0001 of which no more than
3,500,000 shares, exclusive off the shares being purchased by Little
hereunder, will be issued and outstanding when Little's stock purchase is
completed, and 3,000,000 shares of preferred stock par value $.001 of which
21,500 shares are issued and outstanding.
3. Little agrees to purchase 18,818,017 shares of restricted Film common stock
for $18,818.02 and to lend to Film the sum of $88,181.98 to be evidenced by
a promissory note in that amount bearing interest at the rate of 6% per
annum. The Promissory Note shall be convertible at any time prior to
maturity, at Little's option, into restricted common stock of FILM at par
value subject to there then being sufficient authorized but unissued shares
of common stock.
4. Little's obligations to purchase said shares and make such loan are subject
to the completion of the following conditions:
a. Receipt of a Good Standing Certificate from the State of Colorado for
FILM;
b. Completion and delivery of GAAP audits of FILM for Fiscal years 2003
2004 and 2005 with signed Certifications pursuant to Section 302 of
Xxxxxxxx-Xxxxx Act of 2002 and pursuant to Section 302 of
Xxxxxxxx-Xxxxx and pursuant to 18U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Xxxxxxxx-Xxxxx Act of 2002;
d. Receipt of a tax lien and judgment search on FILM showing no liens or
judgments;
e. Receipt of resignations from the Board of Directors and all officers
of FILM and the appointment of Xxxxx Xxxxxx to the Board of Directors;
f. Repurchase of all the issued and outstanding Preferred stock ($.01 par
value) of Film and issuance of common stock to existing Preferred;
shareholders, payment of which by Film shall be made out of the
proceeds from the purchase of stock and Little loan released at the
close of the escrow provided in Paragraph 5 hereof.
g. Repayment of (or provision for repayment out of proceed from purchase
of stock and Little loan released at the close of the escrow provided
in Paragraph 5 hereof) all outstanding and unpaid liabilities noted on
previous Financial statements with documentation
h. Execution by FILM of the promissory note evidencing the loan referred
to in Paragraph 3 above
i. Representation by President and CEO of FILM that there are no
undisclosed liabilities of FILM from and after the date of the 2005
audit.
j. Consent to and signature of all present management on outstanding and
delinquent regulatory filings with the Securities and Exchange
Commission.
5. Little agrees to place $107,000 in escrow with Xxxxxx Xxxxxxx, Esq., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxxx"), within 5 (five) days of
the execution of this Agreement, of which $25,000.00 shall be released and
paid to FILM by wire transfer to Xxxxxx X. Xxxxxxxxx Client's Trust
Account, City National Bank, ABA No. 000000000, Account No. 030 108515
within two (2) business days after delivery to Xxxxxxx of the GAAP Audits
referred to in Paragraph 4.b. hereof. If the remaining items in Paragraph 4
are not completed by February 15, 2006 all remaining funds held in escrow
will be returned to Little with no further obligations owed by either party
under this Agreement. Upon completion of delivery of the items provided in
paragraph 4 hereof all remaining sums shall also be wire transferred to the
Xxxxxx X. Xxxxxxxxx Client's Trust Account to be disbursed to complete
payment of all of FILM'S obligations, provided, however, that FILM hereby
agrees that prior to the release of the $25,000 as provided above it will
deliver to Xxxxxx X. Xxxxxxx, as Escrow Agent, 18,818, 017 shares of
restricted FILM common stock registered in Little's name, which shall be
held in escrow pending the parties respective completion of their
obligations under paragraph 4 above. In the event of FILM's failure to
complete its obligations under Paragraph 4 above, the said shares and the
balance of the escrow funds shall be delivered to Little. In the event of
Little's failure to complete the actions required of him to complete the
remaining items of Paragraph 4 above, the said shares shall be returned to
FILM.
6. It is understood and agreed by all parties to this Agreement that when the
Little stock purchase and loan payments have been have been made, current
Management resigns and Little is appointed to the Board of Directors that
the Balance Sheet will reflect no assets and the only liabilities
outstanding being loans from Little.
7. FILM and Little further agree that by their signatures below, they agree to
and accept the terms of the escrow.
EXECUTED to be effective as of October 19, 2005.
/s/ Xxxxx X. Little
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XXXXX X. LITTLE
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United National Film Corporation
a Colorado corporation
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx as an Officer and Director
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx as an Officer and Director
The undersigned Xxxxxx X. Xxxxxxx, Esq. hereby agrees to serve as escrow holder
and comply with all of the escrow terms provided in the above agreement,
provided however, that in the event I receive a notice from either party
directing me to refrain from any activity, I shall have the right to either
continue to hold the funds in escrow pending my receipt of (a) a notice signed
by FILM and Little, directing disposition of the Escrow, or (b) a final non
appealable judgment or order of a Court of competent jurisdiction, or (c) I may
pay the Escrow funds into Court pursuant to relevant statute and provided
further that I shall not be liable for any error in judgment or for any act done
or step taken or omitted in good faith or for any mistake of fact or law, except
for my own gross negligence or willful misconduct. The parties acknowledge that
I am merely a stake holder and upon delivery of the Escrow funds, to FILM, or to
Little, as may be required pursuant to the Loan and Stock Purchase Agreement, I
shall be fully released from all liability and obligations with respect to this
escrow.
/s/ Xxxxxx X. Xxxxxxx, Esq.
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Xxxxxx X. Xxxxxxx, Esq.
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