SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Urban Television Network Corporation
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
917068 20 7
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(CUSIP Number)
Randy Moseley
Executive Vice President
2707 South Cooper Suite 119
Arlington, Texas 76015
(817) 303-7449
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 29, 2005
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 917068 20 7
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Miles Investment Group, LLC
20-3238135
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
WC/OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
69,000,000
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
69,000,000
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
69,000,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.9%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 917068 20 7
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Jacob R. Miles III
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
WC
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
71,600,000*
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
71,600,000*
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,600,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
53.8%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
*Through his ownership of Miles Investment Group, LLC, Mr. Miles has the power
to dispose of or direct the disposition of the shares of common stock held by
Miles Investment Group, LLC. As a result, Mr. Miles may under the rules of the
Securities and Exchange Commission, be deemed to be the beneficial owner of the
shares of Common Stock. The shares of Common Stock reported as beneficially
owned by Mr. Miles consist of (i) 2,600,000 shares he owns directly and (ii)
69,000,000 shares owned by Miles Investment Group, LLC.
CUSIP No. 917068 20 7
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Item 1. Security and Issuer.
This Schedule 13D dated August 10, 2005, of Urban Televison Network
Corporation, a Nevada corporation (the "Issuer"), is filed to reflect the
Information required pursuant to Rule 13d-2 of the Securities and Exchange Act
Of 1934, as amended (the "Act"), relating to common shares, $0.0001 par value
Per share (the "Common Stock"), of the Issuer.
The principal executive offices of the Issuer are located at 2707 South
Cooper, Suite 119, Arlington, Texas 76015.
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Item 2. Identity and Background.
(I) Miles Investment Group, LLC
This statement is being filed on behalf of Miles Investment Group, LLC, a Texas
limited liability company. Miles Investment Group, LLC is engaged in Investment
holdings in media, including television. The address of Miles Investment Group,
LLC's principal office is 2707 South Cooper, Suite 119, Arlington, Texas 76015.
(d) - (e) During the last five years, no executive officer, director, or control
person of Miles Investment Group, LLC has (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); or (ii) has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
(f) Schedule A hereto sets forth the citizenship of each director and officer of
the Reporting Person.
(II) Jacob R. Miles III
(a) This statement is being filed on behalf of Jacob R. Miles III, an individual
and majority owner of Miles Investment Group, LLC.
(b) The business address of Mr. Miles is c/o Urban Television Network
Corporation, 2707 South Cooper, Suite 119, Arlington, Texas 76015.
(c) Mr. Miles principal occupation is Chief Executive Officer of Urban Televison
Network Corporation.
(d)-(e) During the last five years Mr. Miles has not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction where a result of such proceeding was or is subject to a
judgment, decree, or final order enjoining future violations of, or prohibiting
any violation with respect to such laws.
(f) Mr. Miles holds a United States of America citizenship.
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Item 3. Source and Amount of Funds or Other Consideration.
On July 29, 2005, Miles Investment Group, LLC purchased 69,000,000
Shares of Common Stock of Issue for six million nine hundred thousand dollars
($6,900,000) or Ten ($0.10) Cents per share for 69,000,000 shares. The stock
purchase by Miles Investment Group, LLC was structured as an installment
purchase. The terms of the stock purchase are as follows: $100,000 down, the
$6,800,000 balance payable on a no interest promissory note at $250,000 Dollars
every thirty days with the first payment due September 15, 2005. All of the
shares have been pledged as security for the promissory note and will be
physically held by the Company.
Additionally, Reporting Person has been issued warrants for 30,000,000
shares of common stock that can be exercised for $.01 per share on the following
basis: (1) two million shares at any time after the Company's stock bid price on
the OTCBB exchange has maintained a $.40 price for 10 consecutive trading days,
(2) two million shares at any time after the Company's stock bid price on the
OTCBB exchange has maintained a $.75 price for 10 consecutive trading days,(3)
three million shares at any time after the Company's stock bid price on the
CUSIP No. 917068 20 7
OTCBB exchange has maintained a $1.05 price for 10 consecutive trading days, (4)
three million shares at any time after the Company's stock bid price on the
OTCBB exchange has maintained a $1.30 price for 10 consecutive trading days, (5)
ten million shares at any time after the Company's stock bid price on the OTCBB
exchange has maintained a $4.50 price for 10 consecutive trading days and (6)
ten million shares at any time after the Company's stock bid price on the OTCBB
exchange has maintained a $6.00 price for 10 consecutive trading days.
In summary, Reporting Person has acquired a total of Sixty Nine Million
(69,000,000) common shares of the Issuer's common stock directly from the
company. With this purchase, the Issuer's total issued and outstanding common
stock is 132,928,379 shares. Reporting Person has acquired a 51.9% majority
interest in the Issuer's common stock. These shares issued above were issued in
a private transaction pursuant to Section 4(1) and 4(2) of the Securities Act of
1933, as amended. These shares are considered restricted securities and may not
be publicly resold unless registered for resale with appropriate governmental
agencies or unless exempt from any applicable registration requirements.
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Item 4. Purpose of Transaction.
(I) Miles Investment Group, LLC has no present intention to engage or cause the
Issuer to engage in any transactions or activities specified in paragraphs (a)
through (j) of this Item 4. Miles Investment Group, LLC has acquired the
securities of the Issuer for general investment purposes. Miles Investment
Group, LLC is not a party to any agreement to acquire any additional securities
at this time. Notwithstanding the foregoing, Miles Investment Group, LLC retains
the right to change its investment intent, to propose one or more possible
transactions to the Issuer's Board of Directors, to acquire additional
securities from time to time or to sell or otherwise dispose of all or a part of
the securities beneficially owned by it in any manner permitted by law. In
addition, Miles Investment Group, LLC, by virtue of its majority ownership of
Issuer's Common Stock, has the right to elect members of the Issuer's Board of
Directors.
(II) Jacob R. Miles III has no present intention to engage or cause the Issuer
to engage in any transactions or activities specified in paragraphs (a) through
(j) of this Item 4. Mr. Miles LLC has acquired the securities of the Issuer for
general investment purposes. Mr. Miles is not a party to any agreement to
acquire any additional securities at this time. Notwithstanding the foregoing,
Mr. Miles retains the right to change his investment intent, to propose one or
more possible transactions to the Issuer's Board of Directors, to acquire
additional securities from time to time or to sell or otherwise dispose of all
or a part of the securities beneficially owned by him in any manner permitted by
law. In addition, Mr. Miles, by virtue of his beneficial owner ship of the
majority ownership of Issuer's Common Stock, has the right to elect members of
the Issuer's Board of Directors.
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Item 5. Interest in Securities of the Issuer.
(I) Miles Investment Group, LLC
(a) As of the date of this report, Miles Investment Group, LLC beneficially owns
an aggregate of 69,0000,000 shares of Common Stock, which represents 51.9% of
the Issuer's Common Stock. Miles Investment Group, LLC intends to acquire such
shares In accordance with the terms and conditions of a stock subscription
agreement, the Form of which is attached hereto as Exhibit 1.
(b) As of the date of this report, Miles Investment Group, LLC has the sole
power to vote or direct the voting of, or dispose or direct the disposition of
69,000,000 shares of the Issuer's Common Stock.
(c) Miles Investment Group, LLC has not effected any transactions in the class
of securities described in the past 60 days.
(d) Not applicable.
(e) Miles Investment Group, LLC is the beneficial owner of 51.9% of the Issuer's
Common Stock which represents more than a 5% ownership position.
CUSIP No. 917068 20 7
(II) Jacob R. Miles III
(a) As of the date of this report, Mr. Miles, through his majority ownership of
Miles Investment Group, LLC, beneficially owns an aggregate of 71,600,000 shares
of Common Stock of Issuer, which represents 53.8% of the Issuer's Common Stock.
(b) As of the date of this report, Mr. Miles has the sole power to vote or
direct the voting of, or dispose or direct the disposition of 71,600,000 shares
of the Issuer's Common Stock.
(c) In connection with Mr. Miles position of Chief Executive Officer of the
Issuer, Mr. Miles received 1,500,000 shares of the Issuer's Restricted Common
Stock in June 2005.
(d) Not applicable.
(e) Mr. Miles remains the beneficial owner of more than 5% of the class of
Securities described herein.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
As described in Item 3, the Reporting Person has entered into a purchase
agreement for the acquisition of the Shares. Transfer of the Shares is subject
to certain provisions of the purchase agreement included as an exhibit hereto.
As described in Item 4, the board of directors and management positions were
restructured.
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Item 7. Material to be Filed as Exhibits.
Exhibit No. Exhibit
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1. Subscription Agreement for Purchase of Stock between the Reporting
Person and the Company.
2. Promissory Note between Reporting Person and the Company.
3. Warrant Agreement between Reporting Person and the Company.
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Miles Investment Group, LLC
Dated: August 10, 2005 By: /S/ Jacob R. Miles III
----------------------------------
Name: Jacob R. Miles III
Title: Managing Member
/s/ Jacob R. Miles III
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Jacob R. Miles III
Exhibit A
In accordance with Rule 13d-1 (k) under the Securities Exchange Act of 1934, as
amended, the undersigned hereby agree to joint filing on behalf of both of them
of a statement on Schedule 13D (including any additional amendments thereto)
with respect to the Common Stock of Urban Television Network Corporation, and
that this Agreement be included as an Exhibit to such joint filing.
Miles Investment Group, LLC
By: /S/ Jacob R. Miles III
----------------------------------
Name: Jacob R. Miles III
Title: Managing Member
/s/ Jacob R. Miles III
----------------------------------
Jacob R. Miles III
INDEX TO EXHIBITS
Exhibit No. Exhibit
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1. Subscription Agreement for Purchase of Stock between the Reporting
Person and the Company.
2. Promissory Note between Reporting Person and the Company.
3. Warrant Agreement between Reporting Person and the Company.
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Exhibit 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. # 20-3238135
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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
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Exhibit 2
PROMISSORY NOTE
$6,800,000 July 29, 2005
Fort Worth, Texas
Miles Investment Group, LLC, a Texas limited liability company, ("Undersigned")
hereby promises to pay on, or before September 15, 2010, to the order of Urban
Television Network Corporation, a Nevada corporation (the "Payee") the sum of
Six Million Eight Hundred Thousand ($6,800,000) Dollars, at the rate of $250,000
Dollars every thirty days, including zero (0%) percent interest, until paid in
full. The first payment will be due on, or before September 15, 2005 with
successive payments due every thirty (30) days thereafter, until paid in full.
This note is secured by the pledge of 69,000,000 restricted common shares of
Urban Television Network Corporation.
If not so paid as scheduled, all principal and interest, at the option of the
Holder, or its assigns, shall become immediately due and payable.
The Undersigned shall have the privilege of prepaying the principal under this
Note in whole or in part, without penalty or premium at any time. All payments
hereunder shall be applied first to interest, then to principal, then to late
charges.
The Undersigned shall pay upon demand any and all expenses, including reasonable
attorney fees, incurred or paid by Holder without suit or action in attempting
to collect funds due under this Note. In the event an action is instituted to
enforce or interpret any of the terms of this Note including but not limited to
any action or participation by Undersigned in, or in connection with, a case or
proceeding under the Bankruptcy Code or any successor statute, the prevailing
party shall be entitled to recover all expenses reasonably incurred at, before
and after trial, on appeal, and on review whether or not taxable as costs,
including, without limitation, attorney fees, witness fees (expert and
otherwise), deposition costs, copying charges and other expenses.
Miles Investment Group, LLC
a Texas limited liability company
/s/ Jacob R. Miles III
------------------------------
By: Jacob R. Miles III
Title: Managing Member and President
Exhibit 3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN
ACCORDANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
July 29, 2005 Warrant No. 1
WARRANT
to Purchase Common Stock of
Urban Television Network Corporation
a Nevada corporation
This Warrant certifies that Miles Investment Group, LLC, a Texas
limited liability company ("Purchaser"), is entitled to purchase from Urban
Television Network Corporation, a Nevada corporation (the "Company"), the Shares
(as defined herein) in the amounts and at the Exercise Price (as defined
herein), all on the terms and conditions hereinafter provided.
Section 1. Certain Definitions. As used in this Warrant, unless the
context otherwise requires:
"Affiliate" shall mean: (i) any Person directly or indirectly
controlling, controlled by, or under common control with, another Person; (ii)
any Person owning or controlling ten (10%) percent or more of the outstanding
voting securities of another Person; (iii) any officer, director or partner of a
Person; and (iv) if a Person is an officer, director or partner, any such
company for which such Person acts in such capacity.
"Articles" shall mean the Certificate of Incorporation of the Company,
as in effect from time to time.
"Common Stock" shall mean the Company's authorized common stock,
$0.0001 par value per share.
"Exercise Price" shall mean the exercise price of $0.01 per share of
Common Stock as determined as follows, as adjusted from time to time pursuant to
Section 3 hereof.
"Expiration Date" shall mean five (5) years from the date of Closing.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the number of shares of the Company's common stock.
"Warrant" shall mean this Warrant and all additional or new warrants
issued upon division or combination of, or in substitution for, this Warrant.
All such additional or new warrants shall at all times be identical as to terms
and conditions and date, except as to the number of shares of Common Stock for
which they may be exercised.
"Warrant Stock" shall mean the shares of Common Stock purchasable by
the holder of this Warrant upon the exercise of such Warrant.
"Warrantholder" shall mean Purchaser, as the initial holder of this
Warrant, and its nominees, successors or assigns, including any subsequent
holder of this Warrant to whom it has been legally transferred.
Section 2. Amount of Shares and Exercise of Warrant.
(a) Upon signing this Warrant Agreement, the Company has issued
separate warrants to Purchaser, entitling Purchaser to purchase 30,000,000
shares of Company common stock. Subject to the Purchase not being in default on
its Stock Subscription Agreement with the Company, the warrants issued this date
to Purchaser are each fully vested and earned on the following exercise
schedule;
(a.1) Two Million (2,000,000) shares, in whole or in part, at any time
after the date hereof through and including the Expiration Date and after the
OTCBB Exchange bid price per share equals or exceeds $.40 for ten (10)
consecutive business days.
(a.2) Two Million (2,000,000) shares, in whole or in part, at any time
after the date hereof through and including the Expiration Date and after the
OTCBB Exchange bid price per share equals or exceeds $.75 for ten (10)
consecutive business days.
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(a.3) Three Million (3,000,000) shares, in whole or in part, at any
time after the date hereof through and including the Expiration Date and after
the OTCBB Exchange bid price per share equals or exceeds $1.05 for ten (10)
consecutive business days.
(a.4) Three Million (3,000,000) shares, in whole or in part, at any
time after the date hereof through and including the Expiration Date and after
the OTCBB Exchange bid price per share equals or exceeds $1.30 for ten (10)
consecutive business days.
(a.5) Ten Million (10,000,000) shares, in whole or in part, at any time
after the date hereof through and including the Expiration Date and after the
OTCBB Exchange bid price per share equals or exceeds $4.50 for ten (10)
consecutive business days.
(a.6) Ten Million (10,000,000) shares, in whole or in part, at any time
after the date hereof through and including the Expiration Date and after the
OTCBB Exchange bid price per share equals or exceeds $6.00 for ten (10)
consecutive business days.
(b) Warrantholder may exercise this Warrant by means of delivering to
the Company at its principal office: (i) a written notice of exercise, including
the number of Shares of Warrant Stock to be delivered pursuant to such exercise
and identifying whether the exercise is being made by cash purchase or
conversion of shares of common stock; (ii) this Warrant; and (iii) if
applicable, payment equal to the Exercise Price multiplied by the number of
shares exercised. In the event that any exercise shall not be for all Shares of
Warrant Stock purchasable hereunder, the Company shall deliver to Warrantholder
a new Warrant registered in the name of Warrantholder, of like tenor to this
Warrant and for the remaining shares of Warrant Stock purchasable hereunder,
within ten (10) days of any such exercise. The notice of exercise described in
clause (i) shall be in the Subscription Form set out at the end of this Warrant.
Warrantholder shall pay the Exercise Price to the Company by cash,
certified check or wire transfer.
(c) Upon exercise of this Warrant and delivery of the Subscription Form
with proper payment relating thereto, the Company shall cause to be executed and
delivered to Warrantholder as soon as possible, and in no event later than five
business days thereafter, a certificate or certificates representing the
aggregate number of fully-paid and nonassessable shares of Common Stock issuable
upon such exercise.
(d) The stock certificate or certificates for Warrant Stock to be
delivered in accordance with this Section 2 shall be in such denominations as
may be specified in the Subscription Form, and shall be registered in the name
of Warrantholder or such other name or names as shall be designated in said
Subscription Form. Such certificate or certificates shall be deemed to have been
issued, and Warrantholder or any other person so designated to be named therein
shall be deemed to have become the holder of record of such shares, including to
the extent permitted by law the right to vote such shares or to consent or to
receive notice as stockholders, as of the time said Subscription Form is
delivered to the Company as aforesaid.
(e) The Purchaser Company shall pay all expenses payable in connection
with the preparation, issue and delivery of stock certificates under this
Section 2; including any transfer taxes resulting from the exercise of the
Warrant and the issuance of Warrant Stock hereunder.
(f) All shares of Warrant Stock issuable upon the exercise of this
Warrant in accordance with the terms hereof shall be validly issued, fully paid
and nonassessable, and free from all liens and other encumbrances thereon, other
than liens or other encumbrances created by Warrantholder.
(g) In no event shall any fractional share of Common Stock of the
Company be issued upon any exercise of this Warrant. If, upon any exercise of
this Warrant, Warrantholder would, except as provided in this paragraph, be
entitled to receive a fractional share of Common Stock, then the Company shall
deliver in cash to such holder an amount equal to such fractional interest.
Section 3. Adjustment of Exercise Price and Warrant Stock.
(a) If, at any time prior to the Expiration Date, the number of
outstanding shares of Common Stock is: (i) increased by a stock dividend payable
in shares of Common Stock or by a subdivision or split-up of shares of Common
Stock; or (ii) decreased by a combination of shares of Common Stock, then,
following the dividend or effective date of such stock dividend, subdivision,
split-up, or combination, the Exercise Price shall be adjusted to a new amount
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equal to the product of (I) the Exercise Price in effect on such record date,
and (II) the quotient obtained by dividing (x) the number of shares of Common
Stock outstanding on such record date (without giving effect to the event
referred to in the foregoing clause (i) or (ii)), by (y) the number of shares of
Common Stock which would be outstanding immediately after the event referred to
in the foregoing clause (i) or (ii), if such event had occurred immediately
following such record date.
(b) If, after the date of Closing, and at any time prior to the
Expiration Date, the Company issues or sells shares of its Common Stock or any
other shares of its Common Stock or any other securities convertible into or
exchangeable for Common Stock ("Convertible Securities"), or in any manner
grants or re-prices any warrants, options or other rights (collectively,
"Options") to purchase shares of Common Stock or Convertible Securities, after
the date hereof, which entitles the subscriber, or the holder of such Option or
Convertible Security, to purchase any shares of Common Stock at less than the
then current Exercise Price (or the Exercise Price as ultimately determined
pursuant to the definition of Exercise Price), then the Exercise Price in effect
immediately prior to such action by the Company shall be adjusted to equal the
price at which any such subscriber or holder shall be entitled to purchase any
such shares of Common Stock.
(c) In the event that either of the events described in Section 3(a) or
Section 3(b) shall occur prior to the determination of the Exercise Price
(pursuant to the definition of such term), then immediately upon the occurrence
of the event that shall cause the determination of the Exercise Price pursuant
to such definition, such Exercise Price shall immediately be adjusted in
accordance with this Section 3.
(d) Upon each adjustment of the Exercise Price as provided in Section
3(a) or Section 3(b), Warrantholder shall thereafter be entitled to subscribe
for and purchase, at the Exercise Price resulting from such adjustment, the
number of shares of Warrant Stock equal to the product of: (i) the number of
shares of Warrant Stock existing prior to such adjustment; and (ii) the quotient
obtained by dividing (I) the Exercise Price existing prior to such adjustment by
(II) the new Exercise Price resulting from such adjustment.
(e) If, at any time prior to the Expiration Date, there occurs an event
which would cause the automatic conversion ("Automatic Conversion") of the
Warrant Stock into shares of the Company's common stock ("Common Stock") in
accordance with the Articles, then any Warrant shall thereafter be exercisable,
prior to the Expiration Date, into the number of shares of Common Stock into
which the Warrant Stock would have been convertible pursuant to the Articles if
the Automatic Conversion had not taken place.
Section 4. Division and Combination. This Warrant may be divided or
combined with other Warrants upon presentation at the office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by Warrantholder or its agent or attorney.
The Company shall pay all expenses in connection with the preparation, issue and
delivery of Warrants under this Section 4, including any transfer taxes
resulting from the division or combination hereunder. The Company agrees to
maintain at its office books for the registration of the Warrants.
Section 5. Reclassification, Etc. In case of any reclassification or
change of the outstanding Common Stock of the Company (other than as a result of
a subdivision, combination or stock dividend), or in case of any consolidation
of the Company with, or merger of the Company into, another corporation or other
business organization (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification
or change of the outstanding Common Stock of the Company), at any time prior to
the Expiration Date, then, as a condition of such reclassification,
reorganization, change, consolidation or merger, lawful provision shall be made,
and duly executed documents evidencing the same from the Company or its
successor shall be delivered to Warrantholder, so that Warrantholder shall have
the right prior to the Expiration Date to purchase, at a total price not to
exceed that payable upon the exercise of this Warrant, the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, reorganization, change, consolidation or merger by a holder of
the number of shares of Common Stock of the Company which might have been
purchased by Warrantholder immediately prior to such reclassification,
reorganization, change, consolidation or merger, and in any such case
appropriate provisions shall be made with respect to the rights and interest of
Warrantholder to the end that the provisions hereof (including provisions for
the adjustment of the Exercise Price and of the number of shares purchasable
upon exercise of this Warrant) shall thereafter be applicable in relation to any
shares of stock and other securities and property thereafter deliverable upon
the exercise of this Warrant.
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Section 6. Reservation and Authorization of Capital Stock. The Company
shall at all times reserve and keep available for issuance such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants.
Section 7. Stock and Warrant Books. The Company will not at any time,
except upon dissolution, liquidation or winding up, close its stock books or
Warrant books so as to result in preventing or delaying the exercise of any
Warrant.
Section 8. Limitation of Liabil ity. No provisions hereof, in the
absence of affirmative action by Warrantholder to purchase Warrant Stock
hereunder, shall give rise to any liability of Warrantholder to pay the Exercise
Price or as a stockholder of the Company (whether such liability is asserted by
the Company or creditors of the Company).
Section 9. Registration Rights. The Warrant Stock issuable upon
exercise of this Warrant is subject to the provisions of a certain Registration
Rights Agreement, dated the same date as this Warrant, by and among the Company,
Purchaser and the other Lenders.
Section 10. Transfer. Subject to compliance with the Securities Act and
the applicable rules and regulations promulgated thereunder, this Warrant and
all rights hereunder shall be transferable in whole or in part. Any such
transfer shall be made at the offices of the Company at which this Warrant is
exercisable by Warrantholder or its duly authorized attorney upon surrender of
this Warrant together with an assignment hereof properly endorsed. Promptly
thereafter a new warrant shall be issued and delivered by the Company,
registered in the name of the assignee. Until registration of the transfer of
this Warrant on the books of the Company, the Company may treat Purchaser as the
owner hereof for all purposes.
Section 11. Investment Representations; Restrictions on Transfer of
Warrant Stock. Unless a current registration statement under the Securities Act
shall be in effect with respect to the Warrant Stock to be issued upon exercise
of this Warrant, Warrantholder, by accepting this Warrant, covenants and agrees
that, at the time of exercise hereof, and at the time of any proposed transfer
of Warrant Stock acquired upon exercise hereof, Warrantholder will deliver to
the Company a written statement that the Warrant Stock acquired by Warrantholder
upon exercise hereof is for the account of Warrantholder (or is being held by
Warrantholder as trustee, investment manager, investment advisor or as any other
fiduciary for the account of the beneficial owner or owners) for investment, and
is not being acquired with a view to, or for sale in connection with, any
distribution thereof (or any portion thereof), and with no present intention (at
any such time), of offering and distributing such Warrant Stock (or any portion
thereof). The Warrant Stock may contain a standard securities law restrictive
legend reasonably required by the Secretary of the Company.
Section 12. Loss, Destruction of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon receipt of
indemnity and/or security reasonably satisfactory to the Company or, in the case
of any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of identical tenor and representing the right
to purchase the same aggregate number of shares of Common Stock.
Section 13. Accredited Investor. Warrantholder represents that
Warrantholder is an accredited investor in all respects as defined under the
Securities Exchange Act and all other Federal and State Regulations.
Section 14. Amendments. The terms of this Warrant may be amended, and
the observance of any term herein may be waived, but only with the written
consent of the Company and Warrantholder.
Section 15. Notices Generally. Any notice, request, consent, other
communication or delivery pursuant to the provisions hereof shall be in writing
and shall be sent by one of the following means: (i) by registered or certified
first class mail, postage prepaid, return receipt requested; (ii) by facsimile
transmission with confirmation of receipt; (iii) by nationally recognized
courier service guaranteeing overnight delivery; or (iv) by personal delivery;
and shall be properly addressed to Warrantholder at the last known address or
facsimile number appearing on the books of the Company, or, except as herein
otherwise expressly provided, to the Company at its principal executive office,
or such other address or facsimile number as shall have been furnished to the
party giving or making such notice, demand or delivery.
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Section 16. Successors and Assigns. This Warrant shall bind and inure
to the benefit of and be enforceable by the parties hereto and their respective
permitted successors and assigns which shall be limited to Affiliates of the
holder hereof.
Section 17. Arbitration. The parties agree that any dispute arising
hereunder will be subject to Christian mediation. The parties will endeavor to
choose a neutral, third-party Christian mediator who does not have a personal
relationship with either, and on whom they can both agree. If the parties are
unable to reach written agreement on a mediator, then each will choose one
neutral Christian mediator from the list of Christian mediators in any credible
Christian mediation organization, and within fifteen (15) days those chosen
individuals will choose a mediator appropriate for this mediation. If the
parties are unable to reach an agreement through mediation, both agree to submit
their dispute to binding arbitration within ninety (90) days from the selection
of the arbitrator. If after thirty (30) days from the unsuccessful mediation,
the parties are unable to reach a written agreement on an arbitrator, then the
process for choosing a mediator outlined previously in this paragraph will be
instituted to aid in the appointment of an arbitrator. The appointment shall be
binding.
Section 18. Governing Law. In all respects, including all matters of
construction, validity and performance, this Warrant and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas applicable to contracts made and performed in
such State, except with respect to the validity of this Warrant, the issuance of
Warrant Stock upon exercise hereof and the rights and duties of the Company with
respect to registration of transfer, which shall be governed by the General
Corporation Law of the State of Texas, in each case without reference to the
conflicts of laws principles of the State of Texas. The parties agree that Any
dispute arising hereunder will be subject to The exclusive jurisdiction of the
TARRANT county district courts.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by a duly authorized officer.
Dated: July 29, 2005
Urban Television Network Corporation,
a Nevada corporation
By: /s/ Randy Moseley
---------------------------------------
Randy Moseley, Executive Vice President
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