Exhibit 10.4 - Warrant Agreement
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of the 6th day of August, 2004, is entered
into by and between Aztec Communications Group, Inc., a Nevada corporation
(the "Company"), and Cottonwood Stock Transfer Corporation, as warrant
agent (the "Warrant Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has authorized the issuance of a maximum of 12,000,000
warrants ("Warrants");
WHEREAS, 3000,000 of such Warrants shall be designated as Class A Warrants,
each entitling the holder to purchase one share (subject to adjustment as
provided in Section 8) of the Company's common stock, $.001 par value
(the "Shares");
WHEREAS, 3,000,000 of such Warrants shall be designated as Class B
Warrants, each entitling the holder to purchase one of the Shares (subject
to adjustment as provided in Section 8);
WHEREAS, 3,000,000 of such Warrants shall be designated as Class C
Warrants, each entitling the holder to purchase one of the Shares (subject
to adjustment as provided in Section 8);
WHEREAS, 3,000,000 of such Warrants shall be designated as Class D
Warrants, each entitling the holder to purchase one of the Shares (subject
to adjustment as provided in Section 8);
WHEREAS, the Warrants and the Shares issuable upon their exercise are to
be issued pursuant to the Company's directors, officers and consultants
stock option, stock warrant and stock award plan covered by a registration
statement filed with and declared effective by the Securities and
Exchange Commission;
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act in connection with
the issuance, registration, transfer and exchange of Warrants and the
exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and
obligations hereunder of the Company, the Registered Holders of
Warrants, and the Warrant Agent, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
In addition to those terms defined above, as used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:
"Corporate Office"
The office of the Warrant Agent (or its successor) at which its
principal business shall be administered, which office is located at
the date hereof at Cottonwood Stock Transfer Corporation, 0000 Xxxxx
Xxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx, 00000.
"Exercise Date"
As to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant,
with the notice of exercise form therefor duly executed by the
Registered Holder thereof or his duly authorized attorney (in writing),
and (ii) instructions for delivery as provided in paragraph 4.3.
"Exercise Price"
The dollar amount to be paid for one fully paid and nonassessable Share.
The initial Exercise Price for each Class A Warrant, subject to
adjustment in the events specified in Section 8, is $0.75 per share.
The initial Exercise Price for each Class B Warrant, subject to
adjustment in the events specified in Section 8, is $1.00 per share.
The initial Exercise Price for each Class C Warrant, subject to
adjustment in the events specified in Section 8, is $1.25 per share.
The initial Exercise Price for each Class D Warrant, subject to
adjustment in the events specified in Section 8, is $1.65 per share.
"Expiration Date"
The Expiration Date of the Warrants shall be 5:00 p.m. (New York time)
or the earlier of (i)(A) the date which is the last day of the 60
month period commencing on the Initial Warrant Exercise Date, or
(B) such later date as the Company may at its option determine; or
(ii) the Redemption Date as defined in Section 9 hereof.
If such Expiration Date shall be a holiday in the State of Texas or
shall be a day on which banks are authorized to close in Houston,
then Expiration Date shall mean 5:00 p.m. (Houston time) on the next
following day that in the State of Texas is not a holiday or a day
on which banks are authorized to close.
"Initial Warrant Exercise Date"
The first to occur of: (i) the effective date of a Recapitalization
Event (as defined in Section 5.1), or (ii) the effective date of
the Registration Statement (as defined in Section 5.2), or (iii)
30 days from the date hereof.
"Purchase Price"
The dollar amount derived by multiplying the Exercise Price by the
number of Shares issuable upon the exercise.
"Registered Holder"
The person in whose name any certificate representing Warrants shall
be registered on the books maintained by the Warrant Agent pursuant
to Section 6.
"Settlement Date"
The third business day following delivery of the Shares in accordance
with the instructions contained in the notice of exercise form, free
and clear of any legend, restriction or stop order. Electronic
delivery shall be for the account specified in the notice of exercise
form. Certificates shall be registered in the name specified in the
notice of exercise form.
"Shares"
The shares of the Company's common stock, $.001 par value (the
"Common Stock"), issuable upon exercise of the Warrants.
"Stock"
The shares of the Company's capital stock of any class, whether now
or thereafter authorized, that has the right to participate in the
distribution of earnings and assets of the Company without limit as
to amount or percentage, which at the date hereof consists of
100,000,000 shares of common stock, par value $.001 per share and
20,000,000 shares of preferred stock, $.001 par value per share.
SECTION 2
Warrants and Issuance of Warrants
2.1. Warrant
Each Warrant shall entitle the Registered Holder of the Warrant
representing such Warrant to purchase one Share upon the exercise
thereof, subject to modification and adjustment as provided in
Section 8.
2.2. Execution of Warrants
Upon execution of this Agreement, Warrants representing an aggregate
of 12,000,000 Warrants shall be executed by the Company and
delivered to the Warrant Agent. At its request, additional Warrant
Certificates shall be executed by the Company and delivered to the
Warrant Agent. After certificates representing an aggregate of such
number of Shares as shall be required in connection with the
distribution of the Warrants, shall have been duly countersigned by
the Company (or by the Transfer Agent, if one then be acting) and
upon written order of the Company signed by its Chairman & CEO and
by its Secretary, the Warrants shall be countersigned, issued, and
delivered by the Warrant Agent.
2.3. Delivery of Additional Warrants
From time to time, up to the Expiration Date, the Company (or the
Transfer Agent if then acting) shall countersign and deliver stock
certificates in required whole number denominations upon the
exercise of Warrants in accordance with this Agreement. From time
to time, up to the Expiration Date, the Warrant Agent shall
countersign and deliver Warrants in required whole number
denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement. No
Warrants shall be issued except (i) those initially issued
hereunder, (ii) those issued on or after the Initial Warrant Exercise
Date, upon the exercise of any Warrants pursuant to Section 4, to
evidence any unexercised Warrants held by the exercising Registered
Holder, (iii) those issued upon any transfer or exchange pursuant
to Section 6, and (iv) those issued pursuant to Section 7.
SECTION 3
Form and Execution of Warrant Certificates
3.1. Form of Warrants
The Warrants shall be substantially in the form annexed hereto as
Exhibit "A" (the provisions of which are hereby incorporated herein)
and may have such letters, numbers, or other marks of identification
or designation and such legends, summaries, or endorsements printed,
lithographed, or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The Warrants shall be dated the
date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed
Warrants). The Warrants shall be numbered serially.
3.2. Validity of Signatures
Warrants shall be executed on behalf of the Company by its Chairman
& CEO and by its Secretary, by manual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a
facsimile of the Company's seal. Warrants shall be manually
countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who signed a Warrant ceases to be such officer of the
Company before issuance of such Warrant, or before countersignature
by the Warrant Agent and issuance and delivery thereof, such
Warrant may nevertheless be countersigned by the Warrant Agent, and
issued and delivered with the same force and effect as though the
person who signed such Warrant had not ceased to be such officer
of the Company.
SECTION 4
Exercise
4.1. Exercise Procedures
Each Warrant may be exercised at any time on or after the Initial
Warrant Exercise Date, but not after the Expiration Date, as
appropriate, upon the terms and subject to the conditions set
forth herein and in the applicable Warrant. A Warrant shall be
deemed to have been exercised immediately prior to the close of
business on the Exercise Date, and the person entitled to receive
the Shares deliverable upon such exercise shall be treated for all
purposes as the Registered Holder thereof with respect to such
number of Shares as shall equal the aggregate number of full Shares
issuable upon such exercise. As soon as practicable on or after
the Exercise Date, and in conformity with usual practices respecting
such conduct, the Warrant Agent (on behalf of the Company) shall
cause to be issued and delivered to or for the account of the person
designated by the Registered Holder in the notice of exercise a
certificate or certificates for the Shares deliverable upon such
exercise free and clear of any legend, restriction or stop order.
The certificate or certificates shall be registered in the name
specified in the notice of exercise, in proper form for transfer.
4.2 Relinquishment of Options.
(a) The warrantholder in lieu of purchasing the entire number
of shares subject to purchase hereunder, shall have the right to
relinquish all or any part of the then unexercised portion of this
Warrant (to the extent then exercisable) for a number of shares of
common stock to be determined in accordance with the following
provisions of this clause (a):
(i) The number of shares of common stock, if any,
issuable pursuant to such relinquishment shall be the number of such
shares, rounded to the next greater number of full shares, as shall
be equal to the quotient obtained by dividing (A) the Appreciated
Value by (B) the purchase price per share of common stock specified
in this Warrant;
(ii) For the purpose of this clause (a), "Appreciated
Value" means the excess of (x) the aggregate current market value
of the shares of common stock covered by the option or the portion
thereof to be relinquished over (y) the aggregate purchase price
for such shares specified in this Warrant;
(b) Such right of relinquishment may be exercised only upon
receipt by the Company of a written notice of such relinquishment
which shall be dated the date of election to make such
relinquishment; and that, for the purposes of this Warrant, such
date of election shall be deemed to be the date when such notice
is sent by registered or certified mail, or when receipt is
acknowledged by the Company, if mailed by other than registered or
certified mail or if delivered by hand or by any telegraphic
communications equipment of the sender or otherwise delivered;
provided, that, in the event the method just described for
determining such date of election shall not be or remain consistent
with the provisions of Section 16(b) of the Exchange Act or the
rules and regulations adopted by the Commission thereunder, as
presently existing or as may be hereafter amended, which
regulations exempt from the operation of Section 16(b) of the
Exchange Act in whole or in part any such relinquishment
transaction, then such date of election shall be determined by
such other method consistent with Section 16(b) of the Exchange
Act or the rules and regulations thereunder as the Company shall
in its discretion select and apply;
(c) The "current market value" of a share of common stock
on a particular date shall be deemed to be the closing price of
shares in the open market the day prior to the date of election;
and
(d) The Warrant, or any portion thereof, may be relinquished
only to the extent that (A) it is exercisable on the date written
notice of relinquishment is received by the Company, (B) the Holder
pays, or makes provision satisfactory to the Company for the payment
of, any taxes which the Company is obligated to collect with respect
to such relinquishment.
(e) If a Warrant is relinquished, such Warrant shall be deemed
to have been exercised to the extent of the number of shares of
common stock covered by the Warrant or part thereof which is
relinquished, and no further Warrants will be isssued covering such
shares of common stock.
4.3 Payment of Purchase Price
Upon the exercise of any Warrant, the Warrant Agent shall promptly
notify the Company in writing of such fact and of the number of Shares
delivered upon such exercise, and shall promptly either (i) make
payment to the Company the dollar amount of the Purchase Price in the
manner specified by the Company in writing to the Warrant Agent, or
(ii) provide instructions for such payment against delivery of the
Shares. The Purchase Price shall be, derived by multiplying the
Exercise Price by the number of Shares issuable upon the exercise and
shall be paid on or before the Settlement Date by certified or bank
check, bank or federal reserve wire transfer as specified in written
instructions from the Company to the Registered Holder. In the event
the Company does not specify the method of payment, payment shall be
by bank check deposited on the Settlement Date with a commercial
carrier for overnight delivery to the Company at the address specified
in Section 12 of this Agreement, or per section 4.2 hereof.
4.4 Limitation on Right and Power to Exercise
Any provision in the Warrant, this Agreement or any other document to
the contrary not withstanding, the Registered Holder shall not have the
right or power to exercise this warrant, either in whole or in part, if,
and any attempt to do so shall be void, after having given effect to
such exercise, the Registered Holder shall be or shall be deemed to be
the beneficial owner of 95% or more of the then outstanding Common Stock
within the meaning or for the purposes of the U.S. Securities Exchange
Act of 1934, as amended, or as the term "beneficial owner" is defined
in Rule 13d-3 of the U.S. Securities and Exchange Commission or
otherwise. Any attempt to exercise the Warrant shall also be
ineffective prior to the Initial Exercise Date or to the extent that
the Company does not have sufficient authorized, unissued and
unreserved Common Stock to issue the Shares.
4.5 No Fractional Shares
Notwithstanding that the number of Shares purchasable upon the exercise
of a Warrant is adjusted pursuant to Section 8 of this Agreement, the
Company shall nonetheless not be required to issue fractions of Shares
upon exercise of the Warrants or to distribute Shares certificates that
evidence fractional Shares. In lieu of fractional Shares, there shall
be returned to exercising Registered Holders of the Warrants upon such
exercise an amount in cash, in United States dollars, equal to the
amount in excess of that required to purchase the largest number of
full Shares.
The Registered Holder of a Warrant by the acceptance thereof expressly
waives his right to receive any fractional Warrant or any fractional
Shares upon exercise of a Warrant.
4.6 Partial Exercise
In case the Registered Holder of any Warrant shall exercise fewer than
all of the Warrants evidenced thereby, a new Warrant evidencing
Warrants equivalent to the Warrants remaining unexercised shall be
issued by the Warrant Agent to the Registered Holder of such Warrant
or to his duly authorized assign, subject to the provisions of this
Agreement.
SECTION 5
Reservation of Shares; Listing; Payment of Taxes
5.1 Recapitalization
A "Recapitalization Event" shall be deemed to occur upon either (i)
effectiveness of a filing in the office of the Secretary of State of
Nevada, or such other state in which the Company is legally domiciled,
of an amendment to (or amendment and restatement of) the Articles of
Incorporation or other charter document of the Company that increases
the number of authorized shares of Common Stock to a sufficient number
(after taking into account all shares reserved for issuance by the
board of directors) so as to enable the exercise of all outstanding
Warrants and the issuance of the total number of Shares issuable upon
such exercise then in effect, (ii) a change in the number of authorized
shares of capital stock that the Company is authorized to issue by any
means, including a reduction in the number of outstanding shares, a
merger for the principal purpose of a change of corporate domicile, or
(iii) the effective date of any other corporate action that enables
the exercise of all outstanding Warrants.
5.2. Registration Statement
In connection with the formation of a strategic plan for 2004, the
Company has adopted a directors and officers stock option and stock
award plan (the "Plan"). The Company covenants that it has, in good
faith, filed a registration statement on Form S-8 or other appropriate
form (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") that registers the issuance of shares of common
stock, preferred stock, options and warrants under the terms of the
Plan. The Company shall issue the Warrants and the Shares pursuant to
and in accordance with the Plan. The certificates representing the
Warrants and the Shares shall be free and clear of any legends or
restrictions; provided, however, that the Company shall not be
required to issue Shares to any person, pursuant to exercise of the
Warrants, who shall be resident in any state in which such exercise
would be unlawful or if such qualification, registration or approval
shall require the Company to file a general consent of service of
process or qualify to do business as a foreign corporation in such
state. Any Warrants or shares not registered or qualified on Form
S-8 shall be registered in the other first registration of shares
by the Company.
5.3. Reservation of Shares
After, and only after, the Initial Exercise Date and the Company has
a sufficient number of shares of authorized but unissued and unreserved
Common Stock available to issue upon exercise, the Company covenants
that it will at all times reserve and keep available out of its
authorized Shares, solely for the purpose of issuance upon exercise of
Warrants, such number of Shares as shall then be issuable upon the
exercise of all outstanding Warrants. Provided the shares are covered
by an effective registration, the Company covenants that all Shares that
shall be issuable upon exercise of the Warrants shall be free and clear
of any legend, restriction or stop order, duly and validly issued,
fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issue thereof, and that upon issuance the Company
shall use its best efforts to cause such Shares to be listed on each
national securities exchange, if any, on which the Company's outstanding
Stock is then listed.
5.4. Payment of Taxes
The Company shall pay all documentary, stamp, or similar taxes and other
governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any Shares upon exercise of the
Warrants, provided, however, that if Shares are to be delivered in a
name other than the name of the Registered Holder of the Warrant
representing any Warrant being exercised, then no such delivery shall
be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
5.5. Requisition of Shares
The Warrant Agent is hereby irrevocably authorized by the Company to
requisition, from time to time, certificates representing Shares
required to be delivered upon exercise of the Warrants.
SECTION 6
Exchange and Registration of Transfer
6.1. Exchanges and Transfers
Warrants may be exchanged for other Warrants representing an equal
aggregate number of Warrants or may be transferred, in whole or part,
under the terms of this Agreement. Warrants to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office, and the
Company shall execute and the Warrant Agent shall countersign, issue
and deliver in exchange therefor the Warrant or Warrants that the
Registered Holder making the exchange shall be entitled to receive.
6.2. Books and Records
The Warrant Agent shall keep at such office books and records in
which it shall register Warrants and the transfer thereof. Upon due
presentment at such office of any Warrant for registration of
transfer, the Company shall execute and the Warrant Agent shall
issue and deliver to the transferee(s) a new Warrant or Warrants
representing an equal aggregate number of Warrants.
6.3. Procedures of Transfers, etc.
With respect to all Warrants presented for registration of transfer,
or for exchange or exercise, the subscription form on the reverse
thereof shall be duly endorsed, or be accompanied by a written
instrument or instruments of transfer and subscription, in form
satisfactory to the Company and the Warrant Agent. Such
documentation shall be duly executed by the Registered Holder or
his duly authorized attorney.
The Company may require payment by the Registered Holders of
Warrants of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with exchange or
registration of transfer of Warrants.
All Warrants so surrendered for exchange or transfer shall be promptly
canceled by the Warrant Agent in accordance with previous instructions
pertaining to the Company's Shares.
6.4. Registered Holders
Prior to due presentment for registration of transfer, the Company
and the Warrant Agent may deem and treat the Registered Holder of
any Warrant as the absolute owner thereof and of each Warrant
represented thereby, for all purposes (notwithstanding any notations
of ownership or writing thereon made by anyone other than the Company
or the Warrant Agent), and shall not be affected by any notice to
the contrary.
SECTION 7
Loss or Mutilation
Upon receipt by the Company and the Warrant Agent of satisfactory
evidence of the ownership of and the loss, theft, destruction, or
mutilation of any Warrant, and (i) in the case of loss, theft or
destruction, upon receipt by the Company and the Warrant Agent of
indemnity satisfactory to them, or (ii) in the case of mutilation,
upon surrender and cancellation upon receipt of such Warrant, the
Company shall execute and the Warrant Agent shall countersign and
deliver in lieu thereof a new Warrant representing an equal aggregate
number of warrants. Applicants for a substitute Warrant shall comply
with such other reasonable regulations and pay such other reasonable
charges as the Warrant Agent may prescribe.
SECTION 8
Adjustment of Exercise Price
and
Number of Shares Deliverable
8.1. Adjustment of Exercise Price
The Exercise Price and the number of Shares issuable upon the exercise
of each Warrant, respectively, shall be subject to adjustment from time
to time as set forth in this Section 8. The Company shall give each
Registered Holder notice of any event described below which requires
an adjustment pursuant to this Section 8 at the time of such event.
8.2. Stock Dividends and Subdivisions. If at any time after the
Initial Warrant Exercise Date the Company shall:
(a) pay a dividend, or make any other distribution of, shares of
Common Stock to all holders of its Common Stock, or
(b) subdivide its outstanding shares of Common Stock into a larger
number of shares of Common Stock, then (i) the number of Shares issuable
upon the exercise of each Warrant immediately after the occurrence of
any such event shall be adjusted to equal the number of Shares which a
record holder of the same number of shares of Common Stock for which
one Warrant is exercisable immediately prior to the occurrence of such
event would own or be entitled to receive after the happening of such
event, and (ii) the Exercise Price shall be adjusted to equal (A) the
Exercise Price prior to the adjustment multiplied by the number of
Shares issuable upon the exercise of each Warrant immediately prior
to such adjustment divided by (B) the number of Shares issuable upon
the exercise of each Warrant immediately after such adjustment.
8.3 Stock Combinations and Merger. If at any time before or after
the Initial Warrant Exercise Date the Company shall:
(a) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock,
(b) merge or consolidate with or into another corporation for the
purpose of changing the corporate domicile; or
(c) The occurrence of a Recapitalization Event.
then, as a result of such consolidation, merger or Recapitalization
Event, the Company, or such successor, as the case may be, shall make
lawful and adequate provision whereby the Registered Holder of each
Warrant then outstanding shall receive, on exercise of such Warrant,
the kind and amount of securities at the same price receivable
immediately prior to such consolidation, merger or Recapitalization
Event without the necessity of any further action on the part of
either the Company or the Registered Holder of the Warrants.
8.4. Notices of Adjustment
Whenever the number of Shares issuable upon exercise of the Warrants
or whenever the Exercise Price shall be adjusted pursuant to this
Section 8, the Company shall forthwith prepare a certificate to be
executed by the chief financial officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment and the
facts, computations, and method by which such adjustment was
calculated, specifying the number of Shares issuable upon exercise
of the Warrants and any change in the Exercise Price. The Company
shall promptly cause a signed copy of such certificate to be
delivered to the Warrant Agent and to each Registered Holder in
accordance with Section 12.2. The Company shall keep at its office
or agency designated pursuant to Section 12 copies of all such
certificates and cause the same to be available for inspection at
said office during normal business hours by any Registered Holder
or any prospective purchaser of Warrants designated by a Registered
Holder thereof.
8.5. No Impairment
The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant Agreement, but will at all times
in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate
to protect the rights of Registered Holders against impairment.
Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Shares issuable upon the
exercise of a Warrant above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take
all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of a Warrant,
and (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant Agreement.
SECTION 9
Redemption
9.1. General
At any time on or after the Initial Warrant Exercise Date the Company
may redeem the Warrants, at its option, upon thirty days' notice at a
price of the actual difference between the average closing bid price
on the over-the-counter market for the Shares for 10 consecutive
trading days immediately prior to the date of notice of redemption and
the Exercise Price of each Warrant.
9.2. Notice of Redemption
If the Company exercises its right to redeem the Warrants, it shall
mail a notice of redemption to Registered Holders of the Warrants
proposed for redemption, first class, postage prepaid, not later than
thirty days before the date fixed for redemption, at the Registered
Holders' last addresses as shall appear on the records of the Warrant
Agent. Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not the
Registered Holder receives such notice.
9.3. Contents of Notice
The notice of redemption shall specify the redemption price, date
fixed for redemption, the place where the Warrant shall be delivered
and the redemption price shall be paid, and that the right to exercise
the Warrant shall terminate at 5:00 p.m. (Houston time) on the
business day immediately preceding the date fixed for redemption. The
date fixed for the redemption of the Warrants shall be the Redemption
Date.
9.4. Early Redemption
The Warrants may be called for redemption prior to the redemption date
with respect to an entire class or classes, or in the alternative, with
respect to any portion of a class or classes (and if called with
respect to a portion of a class, such call shall be on a pro rata basis
as to the holdings of each Registered Holder within such class).
9.5. Effect of Redemption
Any right to exercise a Warrant shall terminate at 5:00 p.m. (Houston
time) on the business day immediately preceding the Redemption Date.
On and after the Redemption Date, Holders of the Warrants shall have
no further rights except to receive, upon surrender of the Warrant,
the redemption price as calculated per Section 9.1 above, without
interest, per Warrant.
SECTION 10
Concerning the Warrant Agent
10.1. Capacity
The Warrant Agent acts hereunder as agent and in a ministerial capacity
for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and
delivering Warrants or by any other act hereunder, be deemed to make
any representations as to (i) the validity or value or authorization
of (A) the Warrant or the Warrants represented thereby, or (B) any
securities or other property delivered upon exercise of any Warrant;
or (ii) whether any Shares of capital stock issued upon exercise of
any Warrant is fully paid and nonassessable.
10.2. Limitations of Responsibility
The Warrant Agent shall not, at any time, be under any duty or
responsibility to any Registered Holder of Warrants (i) to make or
cause to be made any adjustment of the Exercise Price provided in
this Agreement; (ii) to determine whether any fact exists that may
require any such adjustments; (iii) to determine the nature or
extent of any such adjustment, when made; or (iv) to determine the
method employed in making any such adjustment.
The Warrant Agent shall not be (i) liable for any recital or
statement of fact contained herein or for any action taken, suffered,
or omitted by it in reliance on any Warrant or other document or
instrument believed by it in good faith to be genuine, and to have
been signed or presented by the proper party or parties, (ii)
responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this Agreement
or in any Warrant, or (iii) liable for any act or omission in
connection with this Agreement except for its own negligence or
willful misconduct.
10.3. Advice of Counsel
The Warrant Agent, may, at any time, consult with counsel satisfactory
to it (who may be counsel for the Company) and shall incur no liability
or responsibility for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.
10.4. Effect of Order of the Company
Any notice, statement, instruction, request, direction, order, or
demand of the Company shall be sufficiently evidenced by an instrument
signed by any of the Chairman of the Board, Chairman & CEO, Secretary,
or Assistant Secretary (unless other evidence in respect thereof is
herein specifically prescribed). The Warrant Agent shall not be
liable for any action taken, suffered, or omitted by it in accordance
with such notice, statement, instruction, request, direction, order,
or demand.
10.5. Compensation and Fees
The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable
expenses hereunder, which compensation for the first year during which
this Agreement is in force, exclusive of expenses and such amount
as shall be mutually agreed upon by the parties hereto during
subsequent years; it further agrees to indemnify the Warrant Agent
and save it harmless against any and all losses, expenses and
liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of its
duties and powers hereunder except losses, expenses, and liabilities
arising as a result of the Warrant Agent's negligence or willful
misconduct.
10.6. Resignation
The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising
as a result of the Warrant Agent's own negligence or willful
misconduct), after giving 30 days' prior written notice to the Company.
At least 15 days' prior to the date such resignation is to become
effective, the Warrant Agent shall cause a copy of such notice of
resignation to be mailed to the Registered Holder of each Warrant at
the Company's expense. Upon such resignation the Company shall
appoint a new warrant agent in writing. If the Company shall fail
to make such appointment within a period of 30 days after it has been
notified in writing of such resignation by the resigning Warrant
Agent, then the Registered Holder of any Warrant may apply to any
court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or
by such court, shall be (i) a bank or trust company having a capital
and surplus, as shown by its last published report to its
stockholders, of not less than $10,000,000 or (ii) a stock transfer
company. After acceptance of such appointment by the new warrant
agent is received by the Company, such new warrant agent shall be
vested with the same powers, duties, rights, and responsibilities
as if it had been originally named herein as Warrant Agent, without
any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver
any further assurance, conveyance, act, or deed, the same shall be
done at the expense of the Company and shall be legally and validly
executed and delivered by the resigning warrant agent. No later
than the effective date of any such appointment, the Company shall
file notice thereof with the resigning warrant agent and shall
forthwith cause a copy of such notice to be mailed to the
Registered Holder of each Warrant.
10.7. Termination
The Company may terminate the Warrant Agent hereunder and be
discharged from all further duties and liabilities hereunder
(except liabilities for the Warrant Agent's then-due compensation
and expenses), after giving 90 days' prior written notice to the
Warrant Agent.
10.8. Successors
Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, or any corporation resulting from
any consolidation to which the Warrant Agent (or any new warrant
agent) shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent shall be a successor
warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as
successor to the Warrant Agent under the provisions of the
preceding paragraph 10.6. Any such successor warrant agent shall
promptly cause notice of its succession as warrant agent to be
mailed to the Company and to the Registered Holder of each Warrant.
10.9. Permitted Transactions
The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants
or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent as though the
Warrant Agent were not the warrant agent hereunder. Nothing
herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 11
Rights of the Registered Holder
No Registered Holder shall, by virtue hereof, be entitled to any
rights of a shareholder in the company, either at law or equity.
The rights of the Registered Holder are limited to those expressed
in the Warrant and are not enforceable against the Company except to
the extent set forth in this Agreement and in the Warrant Certificates.
SECTION 12
General Provisions
12.1. Entire Agreement; Modification; Waivers
This Agreement contains the entire agreement of the parties, and
supersedes any prior agreements with respect to its subject matter.
Except for the provisions of subsection 4.2, the Warrant Agent and
the Company, by supplemental agreement, may make any changes in
this Agreement (i) that they shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent provision or
manifest mistake or error herein contained; or (ii) that they may
deem necessary or desirable and that shall not adversely affect the
interests of the Registered Holders of Warrant Certificates (this
provision, for instance, shall permit the Exercise Price to be
decreased at the Company's option).
12.2. Notices
All notices given under this Agreement shall be in writing, addressed
to the parties as set forth below, and shall be effective on the
earliest of (i) the date received, or (ii) on the second business day
after delivery to a major international air delivery or air courier
service (such as Federal Express or Network Couriers):
If to the Company:
Aztec Communications Group, Inc.
000 Xxxxx Xxxx Xxx Xxxx, # 000
Xxxxxxx, Xxxxx 00000
If to the Registered Holder
At the address of such holder as shown on the registry books
maintained by the Warrant Agent
If to the Warrant Agent:
Cottonwood Stock Transfer Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
12.3. Governing Law
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nevada; provided, however, that if any
provision of this Agreement is unenforceable under such law but is
enforceable under the laws of the State of Delaware, then Delaware
law shall govern the construction and enforcement of that provision.
12.4. Jurisdiction and Venue
The courts of the State of Delaware, (the "Delaware Courts") shall
have exclusive jurisdiction to hear, adjudicate, decide, determine
and enter final judgment in any action, suit, proceeding, case,
controversy or dispute, whether at law or in equity or both, and
whether in contract or tort or both, arising out of or related to
this Agreement, or the construction or enforcement hereof or thereof
(any such action, suit, proceeding, case, controversy or dispute, a
"Related Action"). The Company and the Registered Holder hereby
irrevocably consent and submit to the exclusive personal jurisdiction
of the Delaware Courts to hear, adjudicate, decide, determine and
enter final judgment in any Related Action. The Company and the
Registered Holder hereby irrevocably waive and agree not to assert
any right or claim that it is not personally subject to the
jurisdiction of the Delaware Courts in any Related Action, including
any claim of forum non conveniens or that the Delaware Courts are not
the proper venue or form to adjudicate any Related Action. If any
Related Action is brought or maintained in any court other than the
Delaware Courts, then that court shall, at the request of the
Company or the Registered Holder, dismiss that action.
12.5. Specific Performance
The Company hereby acknowledges and agrees that it is difficult, if
not impossible to measure in money the damages that will accrue to
the Registered Holder by reason of a failure to issue the Shares
under this Agreement, and that the Registered Holder may seek to
specifically enforce the Company's obligation to issue the Shares.
Therefore, if the Registered Holder shall institute any action or
proceeding to enforce the provisions hereof, the Company hereby
waives all claims or defenses therein that the Registered Holder
has an adequate remedy at law, and hereby agrees not to assert or
otherwise raise any such claim or defense.
12.6. Waiver of Jury Trial
The Company and the Registered Holder hereby waive trial by jury
in any Related Action.
12.7. Attorney's Fees
The prevailing party in any Related Action shall be entitled to
recover that party's costs of suit, including reasonable attorney's
fees.
12.8. Binding Effect
This Agreement shall be binding on, and shall inure to the benefit
of the parties and their respective successors in interest.
12.9. Construction, Counterparts
This Agreement shall be construed as a whole and in favor of the
validity and enforceability of each of its provisions, so as to
carry out the intent of the parties as expressed herein. Heading
are for the convenience of reference, and the meaning and
interpretation of the text of any provision shall take precedence
over its heading. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original, but all
of which, taken together shall constitute one agreement. A faxed
copy or photocopy of a party's signature shall be deemed an original
for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
The Company:
Aztec Communications Group, Inc.
By:
----------------------------
L. Xxxxxx Xxxxxxxxx, XX, CEO
The Warrant Agent:
Cottonwood Stock Transfer Corporation
By ________________________________
Name______________________________
Title_______________________________