AGREEMENT
AGREEMENT
AGREEMENT,
dated
as of August 12,
2005
(the
“Agreement”), between VENTURES NATIONAL INCORPORATED D/B/A TITAN GENERAL
HOLDINGS, INC., a Utah (the "Borrower"),
and
LAURUS MASTER FUND, LTD., c/o Ironshore Corporate Services Ltd., X.X. Xxx 0000
G.T., Queensgate House, South Church Street, Grand Cayman, Cayman Islands (the
"Laurus”").
WITNESSETH
WHEREAS,
the
Borrower has executed and delivered that certain secured revolving note dated
November 20, 2003 in favor of Laurus (the “November 2003 Revolving Note”), and
the Borrower and Laurus are parties to that certain registration rights
agreement dated as of November 20, 2003 (the “November 2003 Registration Rights
Agreement”); and
WHEREAS,
the
Borrower has executed and delivered that certain minimum borrowing note dated
November 20, 2003 in favor of Laurus (the “November 2003 MB Note”);
and
WHEREAS,
the
Borrower has executed and delivered that certain convertible term note dated
November 20, 2003 in favor of Laurus (the “November 2003 Term Note”);
and
WHEREAS,
the
Borrower has executed and delivered that certain convertible term note dated
March 30, 2004 in favor of Laurus (the “March 2004 Term Note”, and together with
the November 2003 Revolving Note, the November 2003 MB Note and the November
2003 Term Note, the “Notes”), and the Borrower and Laurus are parties to that
certain registration rights agreement dated as of March 30, 2004 (together
with
the November 2003 Registration Rights Agreement, the “Registration Rights
Agreements”); and
WHEREAS,
the
Borrower has issued certain common stock purchase warrants to Laurus in
connection with the November 20, 2003 and March 30, 2004 financings (the
“Warrants”); and
WHEREAS,
the
Borrower intends to acquire all of the outstanding capital stock of Oblio
Telecom, Inc., a Delaware corporation (“Oblio”) from Xxxxxxx Equity Partners,
LLC, its affiliate, in exchange for the issuance of 66,000,000 common shares
and
upon completion of the acquisition, Borrower will have approximately 101,000,000
common shares outstanding; and
WHEREAS,
in
connection with the acquisition of Oblio (the “Acquisition”), the Borrower and
Laurus wish to enter into certain agreements related to Notes and the Warrants,
which agreements shall be negotiated and executed by the parties subsequent
to
the date of the Acquisition of Oblio (the “Definitive Agreement”);
NOW
THEREFORE in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto hereby agree as follows:
ARTICLE
1.
THE
AGREEMENTS
Subject
to the terms and conditions set forth in this Agreement and subject to the
negotiation and execution of the Definitive Agreement, the Borrower and Laurus
hereby agree to execute the Definitive Agreement containing the following
provisions which shall be effective as of the date of the Oblio
Acquisition:
1.1
The
Fixed Conversion Price (as defined in the Notes), shall be increased from $0.40
per share to $1.50 per share.
1.2
Until
March 1, 2006, Borrower’s prepayment penalties under the Notes shall equal 5% of
any principal amount prepaid; after March 1, 2006, Borrower’s prepayment
penalties shall equal the amounts called for under the Notes.
1.3
The
maturity date of the November 2003 Revolving Note and the November 2003 MB
Note,
together with the loan and security agreement related thereto, shall be extended
until August , 2008.
1.4
The
minimum monthly principal payment pursuant to the March 2004 Term Note shall
be
$25,000 per month from October 1, 2005, together with accrued interest thereon,
from September 1, 2005 through February 1, 2006, and $215,000 per month,
together with accrued interest thereon, from March 1, 2006 through March 1,
2007, with any balance paid with the final payment.
1.5
The
minimum monthly principal payment pursuant to the November 2003 Term Note shall
be $25,000 per month from October 1, 2005, together with accrued interest
thereon, from September 1, 2005 through February 1, 2006, and $150,000 per
month, together with accrued interest thereon, from March 1, 2006 through
November 1, 2006, with any balance paid with the final payment.
1.6
The
Borrower shall be permitted to immediately borrow all funds available pursuant
to the loan and security agreement between the Borrower and Laurus dated as
of
November 20, 2003 and the over-advance amendment thereto dated as of April
4,
2005. The collateral pledged by Xxxxxxx Equity Partners, LLC, a Delaware limited
liability corporation in support of such over-advance facility shall continue
to
be pledged to Laurus until such time as the over-advance facility is
indefeasibly repaid in full.
1.7
Laurus
holds 3,500,000 Warrants of various maturities and conversion prices. All
Warrants issued to Laurus prior to the date hereof shall be cancelled and of
no
further force or effect.
1.8
The
Borrower shall issue 2,500,000 shares of its common stock to Laurus (the
“Shares”).
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1.9
Section
2(b) of the Registration Rights Agreements shall be amended to provide that
a
registration statement covering the resale of the securities issuable upon
conversion of the Notes, together with the Shares, shall be declared effective
by the Securities and Exchange Commission no later than 90 days following the
closing date of the Acquisition of Oblio by the Borrower. Such registration
statement shall also be permitted to include: (i) the shares of common stock
issuable to the sellers of assets to Oblio from Oblio Telecom, LLP, a Texas
limited liability company (the “Sellers”), upon conversion of Oblio series A
preferred stock pursuant to Oblio’s Certificate of Designation of Series A
Cumulative Convertible Preferred Stock filed with the Secretary of State of
Delaware on August , 2005; (ii) 375,000 shares of common stock issued to the
Sellers; (iii)1,250,000 shares of common stock issued to CS Equity LLC, and;
(iv) 500,000 shares of common stock issued to Xxxx Xxxxxx.
ARTICLE
2.
GENERAL
PROVISIONS
2.1 Specific
Performance. The
parties hereto acknowledge and agree that the breach of this Agreement would
cause irreparable damage to the non-breaching parties and that the non-breaching
parties will not have an adequate remedy at law. Therefore, the obligations
of
each of the parties under this Agreement, shall be enforceable by a decree
of
specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
2.2 Further
Assurances. The
parties hereto each agree to execute and deliver such other documents or
agreements and to take such other action as may be reasonably necessary or
desirable for the implementation of this Agreement and the consummation of
the
transactions contemplated hereby.
2.3 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
2.4 Headings. Section
headings of this Agreement are for reference purposes only and are to be given
no effect in the construction or interpretation of this Agreement.
2.5 Binding
Effect. This
Agreement is irrevocable and shall be binding upon and inure to the benefit
of
the parties and their respective successors and permitted assigns.
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2.6 Counterparts.
This
Agreement may be executed in counterparts, each of which when executed by any
party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies
of
this Agreement by telecopier will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.
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of page intentionally left blank.]
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IN
WITNESS WHEREOF,
each of
the Borrower and Laurus has caused this Agreement to be signed in its name
this
12th 10th day
of
August, 2005.
|
VENTURES
NATIONAL INCORPORATED D/B/A TITAN GENERAL HOLDINGS, INC.
|
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| |
|
|
| By: | /s/ | |
|
Xxxxx Xxxxx |
||
| Chairman | ||
| LAURUS MASTERS FUND, LTD. | ||
| |
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| By: | /s/ | |
|
Xxxxx Grin |
||
| Fund Manager | ||
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