AMENDMENT NO. 1 TO NOTE AND SECURITY AGREEMENT DATED AUGUST 11, DELAWARE CORPORATION December 29, 2006
AMENDMENT
NO. 1 TO NOTE AND SECURITY AGREEMENT DATED AUGUST 11,
2005
AND
NOTE DATED DECEMBER 14, 2005, OF OBLIO TELECOM, INC., A
DELAWARE
CORPORATION
December
29, 2006
Reference
is made to that certain Note and Security Agreement dated August 11, 2005,
made
by Oblio Telecom, Inc., a Delaware corporation (the "Borrower")
in
favor F&L LLP (the "Lender")
in the
original principal amount of Two Million Five Hundred Thousand Dollars
($2,500,000) (the “Original Note”), and that certain Note dated December 14,
2005, made by Borrower in favor the Lender in the original principal amount
of
Two Million Three Hundred Twenty Two Thousand Eight Hundred and Fifty Dollars
($2,322,850) (the “Second Note”, and together with the Original Note, the
“Notes”).
WHEREAS
the Borrower and Lender wish to amend certain terms of the Notes;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the parties hereto agree as follows:
| 1. |
The
Maturity Date (as defined in the Notes) of each of the Notes shall
be
March 31, 2009.
|
| 2. |
The
interest rate for each of the Notes is hereby amended to 5% per
annum.
|
| 3. |
The
Borrower shall make an aggregate amortized payment with respect to
the
Notes of $178,930 per month (based upon a 27 month amortization schedule),
commencing January 31, 2007 and the last day of each month thereafter
until the Maturity Date. Such payments shall be apportioned among the
Notes relative to the principal amount outstanding. All remaining amounts
due for principal or interest shall be due and payable on the Maturity
Date.
|
| 4. |
In
consideration for Lender’s agreements herein and as payment in full for
all interest due, owing or accrued with respect to the Notes through
and
including the date hereof, Borrower’s parent company, Titan Global
Holdings, Inc., a Utah corporation (“Parent”), hereby agrees to issue
250,000 shares of Parent’s common stock to Lender (the “Shares”). Such
Shares shall be delivered to Lender within five (5) business days of
the
date of this Agreement. In the event the Shares are not delivered to
the
Lender within five (5) business days of the date of this Agreement,
it
shall constitute an Event of Default under the Notes, thereby permitting
acceleration of all obligations due to the
Lender.
|
| 5. |
The
Notes shall be subordinate to the obligations of the Borrower to Greystone
Business Credit II LLC (“Greystone”), as set forth in the Subordination
Agreement between the Lender and Greystone of even date
herewith.
|
| 6. |
Payment
of the obligations due under the Notes shall be guaranteed by Parent
pursuant to the Guaranty Agreement attached hereto as Exhibit
A.
|
| 7. |
In
connection herewith, the Amended and Restated Certificate of Designation
of Series A Preferred Stock in the form attached hereto as Exhibit
B (the
“Designation”) shall be filed with the Secretary of State of the State of
Delaware within five (5) business days of the date of this Agreement
and
with evidence of such filing to be provided to the Lender within such
five
day period. In the event the Designation is not filed with the Secretary
of State of the State of Delaware within five (5) business days of
the
date of this Agreement, with evidence of such filing to be provided
to the
Lender within such five day period, it shall constitute an Event of
Default under the Notes, thereby permitting acceleration of all
obligations due to the Lender.
|
| 8. |
The
Company shall reimburse Lender for all out of pocket expenses (including
reasonable legal fees) directly incurred by Lender in connection with
the
review, negotiation and documentation of this agreement and all related
matters. Payment of such amounts shall be made within 15 days of
submission to the Company of a written request and documentation
reasonably sufficient to evidence the expense. If payment is not made
within such 15 day period, it shall constitute an Event of Default
under
the Notes, thereby permitting acceleration of all obligations due to
the
Lender.
|
| 9. |
The
foregoing amendment shall be effective as of the date hereof.
|
| 10. |
There
are no other amendments to the Notes.
|
[Intentionally
Blank]
IN
WITNESS WHEREOF,
each of
the Borrower and Lender has caused this Amendment No. 1 to the Notes to be
signed in its name this 29th
day of
December, 2006.
OBLIO
TELECOM, INC.
By:
/s/
XXXX
XXXXXX
Xxxx
Xxxxxx, President
F&L
LLP
By:
/s/
XXXXX
XXXXXX
Agreed
and Accepted
As
to
Section 4:
By:
/s/
XXXXX CHANCE
Xxxxx
Chance, President
