exv10w5



 






	 	 	 	 	 



Exhibit 10.5




THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE. NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH STATE SECURITIES LAWS.




FIRST AVENUE NETWORKS, INC.




WARRANT TO PURCHASE SHARES OF COMMON STOCK










 




			
	Warrant Number: WT-1
	 	December 14, 2004






     This Warrant (the “Warrant”) between First Avenue Networks, Inc., a Delaware corporation (the
“Company”) and Tejas Securities Group, Inc. (“Tejas”) is the warrant referred to in and issued
pursuant to that certain Master Private Placement Engagement Letter (the “Letter Agreement”), dated
November 24, 2004 between the Company and Tejas.



     This Warrant certifies that, for good and valuable consideration, the Company grants to Tejas
(the “Warrantholder”), the right to subscribe for and purchase from the Company, at any time during
the Exercise Period (as defined herein), 2,574,000 shares of Common Stock (such shares and/or any
other securities that may be deliverable on exercise hereof, the “Warrant Shares”), at the exercise
price per share of Seven Dollars and Twenty-Five Cents ($7.25) (the “Exercise Price”), all subject
to the terms, conditions and adjustments herein set forth. The number of Warrant Shares is subject
to adjustment as provided in Article III.



1. DEFINITIONS




     1.1. Definitions. As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:



     “Affiliate” with respect to any Person, shall mean any other Person that directly or
indirectly, controls, is controlled by, or is under common control with, such Person.



     “Business Day” means any day other than a Saturday, Sunday or a day on which national banks
are authorized by law to close in the State of New York.



     “Closing Price” of a share of Common Stock for any day shall mean the last reported sales
price, regular way, or, in the event that no sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in either case as reported on the principal
national securities exchange on which such Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq National Market
System or the Nasdaq SmallCap Market or, if such security is not quoted on the Nasdaq National
Market System or the Nasdaq SmallCap Market, the average of the closing bid and asked prices on
each such day in the over-the-counter market as reported by Nasdaq or, if bid and asked prices for
such security on each such day shall not have been reported by Nasdaq, the average of the bid and
asked prices for such day as furnished by any reputable investment banking firm regularly making a
market in such security selected for such purpose by the Board of Directors of the Company or a
committee thereof. If the Closing Price cannot be calculated on such date on any of the foregoing
bases, the Closing Price of such security on such date shall be the fair market value as reasonably
determined by an Independent Financial Expert selected for such purpose by the Board of Directors
of the Company or a committee thereof.



     “Common Stock” means the common stock, par value $0.001 per share, of the Company.



     “Fair Market Value” shall mean on any date (i) if the Common Stock is quoted on Nasdaq or
listed on a national securities exchange, then the last reported sale price per share of Common
Stock on Nasdaq or any national securities exchange in which such Common Stock is quoted or listed,
as the case may be, on such date or, if no such sale price is reported on such date, such price on
the next preceding business day in which such price was reported, (ii) if the Common Stock is
actively traded over-the-counter, then the last sales price quoted, if determinable, or, if not
determinable, the average of the closing bid and asked prices quoted on the OTC Bulletin Board (or
similar system) on such date or (iii) if such Common Stock is not traded, quoted or listed on
Nasdaq or any national securities exchange or over-the-counter market, then the fair market value
of a share of Common Stock, as determined in good faith by the Board of Directors of the Company.



 









 





     “Governmental Authority” means any foreign, federal, state, local or other governmental
authority or regulatory body having jurisdiction over the Company, its Affiliates or the
Warrantholder.



     “Independent Financial Expert” means a nationally recognized investment banking firm that does
not (and whose directors, officers, employees and Affiliates do not) have a direct or indirect
financial interest in the Company or any of its Affiliates, that has not been and at the time it is
called upon to give independent financial advice to the Company is not (and none of whose
directors, officers, employees or Affiliates is) a promoter, director or officer of the Company or
any of its Affiliates, and that does not provide any advice or opinions to the Company or any of
its Affiliates.



     “Majority Warrantholders” means the holders of more than 50% of the aggregate number of
Warrant Shares issuable upon the exercise of (a) this Warrant and (b) any warrants issued upon the
transfer of portions of this Warrant by the Warrantholder to other holders.



     “Person” means any individual, firm, corporation, partnership, limited liability company,
trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental
Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.



     “Securities Act” means the Securities Act of 1933, as amended from time to time.



2. EXERCISE OF WARRANT




     2.1. Exercise Period. On the terms and subject to the conditions contained herein, the
Warrantholder may exercise this Warrant on any Business Day starting on the date hereof and ending
at 5:00 p.m., Eastern Standard Time, on December 14, 2014 (the “Exercise Period”).



     2.2. Method of Exercise; Payment




          (a) Cash Exercise. Subject all of the terms and conditions hereof, this Warrant may be
exercised, in whole or in part, by surrender of this Warrant to the Company at its principal
office, accompanied by a Notice of Exercise substantially in the form attached hereto, executed by
the holder and accompanied by (a) wire transfer of immediately available funds or (b) certified or
official bank check payable to the order of the Company, in each case in the amount obtained by
multiplying (i) the number of Warrant Shares for which the Warrant is being exercised, as
designated in such subscription, by (ii) the Exercise Price. Thereupon, the holder shall be
entitled to receive the number of duly authorized, validly issued, fully paid and nonassessable
Warrant Shares determined as provided for herein.




          (b) Cashless Exercise/Conversion. Subject to all of the terms and conditions hereof,
the holder shall have the right to convert this Warrant, in whole or in part, by surrender of this
Warrant to the Company at its principal office, accompanied by a Notice of Exercise substantially
in the form attached hereto, executed by the holder. Thereupon, the holder shall be entitled to
receive a number of duly authorized, validly issued, fully paid and nonassessable Warrant Shares
equal to:





     (i) (A) (x) the number of Warrant Shares (subject to adjustment as provided in
Article III hereof) which such holder would be entitled to receive upon exercise of such
Warrant for the number of Warrant Shares designated in such Notice of Exercise (without
giving effect to any adjustment thereof pursuant to this subsection), multiplied by (y)
the Fair Market Value of each such Warrant Share so receivable upon such exercise




minus




          (B) (x) the number of Warrant Shares subject to adjustment as provided in Section 3
hereof which such holder would be entitled to receive upon exercise of such Warrant for
the number of Warrant Shares designated in such Notice of Exercise (without giving effect
to any adjustment thereof pursuant to this subsection), multiplied by (y) the Exercise
Price




divided by




(ii) the Fair Market Value per Warrant Share.



     2.3. Delivery of Stock Certificates on Exercise. As soon as practicable after the
exercise of this Warrant, and in any event within three (3) business days thereafter, the Company,
at its expense, and in accordance with applicable securities laws, will cause to be issued in the
name of and delivered to the holder, or as the holder may direct (subject in all cases, to the
provisions of Article IV hereof), a certificate or certificates for the number of Warrant Shares
purchased by the holder on such exercise, plus, in lieu of any fractional share to which
the holder would otherwise be entitled, cash equal to such fraction multiplied by the Fair Market
Value. All Warrant Shares issued upon the exercise of this Warrant shall be duly authorized,



 









 





validly issued, fully paid and nonassessable, free of all liens, taxes, charges and other
encumbrances or restrictions on sale (other than those set forth herein). Upon any partial exercise
of this Warrant, the Company, as its expense, will forthwith and, in any event within three (3)
business days, issue and deliver to the holder a new warrant or warrants of like tenor, registered
in the name of the holder, exercisable, in the aggregate, for the balance of the Warrant Shares.




     2.4. Restrictions. The Company shall not be required to issue any Warrant Shares under
this Warrant if the issuance of such shares would constitute a violation by the Company of any
provision of any law, rule or regulation of (i) any Governmental Authority, including without
limitation, compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “HSR Act”), and compliance with registration or qualification requirements of applicable
federal and state securities laws or (ii) any applicable self governing organization or stock
exchange, including without limitation, the rules, regulations or listing requirements of any such
organization or stock exchange. If at any time the Company shall determine, based upon the advice
of counsel, that the registration, qualification or listing of any shares subject to this Warrant
under any applicable state or federal law or other applicable rules or regulations (including those
of any applicable stock exchange), or any filing or expiration of any waiting period under the HSR
Act, is necessary as a condition of, or in connection with, the issuance of shares, the Company
shall not be required to issue any Warrant Shares of under this Warrant unless and until the
Company has received evidence reasonably satisfactory to it that such laws, rules or regulations
have been complied with and/or such filing has been made and the applicable waiting period has
expired under the HSR Act.



     2.5. Payment of Taxes. The Company shall pay all stamp taxes and other similar charges
with respect to the issue or delivery of Warrant Shares hereunder. The Company shall not be
required to pay any transfer tax or other similar charge imposed in connection with the issue of
any stock certificate in any name other than that of the Warrantholder, and in such case the
Company shall not be required to issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the reasonable satisfaction of the Company that
no such tax or other charge is due.



3. ADJUSTMENTS




     3.1. Subdivision or Combination of Common Stock. If the Company at any time subdivides
(by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of
Common Stock into a greater number of shares, then as of the record date for effecting such
subdivision the number of Warrant Shares issuable upon exercise of this Warrant will be
proportionately increased and the Exercise Price in effect immediately prior to such subdivision
shall be proportionately decreased. If the Company at any time combines (by reverse stock split,
recapitalization or otherwise) its outstanding shares of Common Stock into a smaller number of
shares, then as of the record date for effecting such combination the number of Warrant Shares
issuable upon exercise of this Warrant will be proportionately decreased and the Exercise Price in
effect immediately prior to such combination shall be proportionately increased.



     3.2. Consolidation, Merger, etc. In case of any consolidation or merger of the Company
with or into any other Person, or (a) any other corporate reorganization, in which the Company
shall not be the continuing or surviving entity of such consolidation, merger or reorganization or
in connection with which the Common Stock (or other securities issuable upon exercise of this
Warrant) shall be changed into or exchanged for stock of any other entity or cash or other
property, (b) any transaction in which in excess of 50% of the Company’s voting power is
transferred to a Person not a stockholder immediately prior to the consummation of such
transaction, (c) any sale of all or substantially all of the assets of the Company or (d) a capital
reorganization or reclassification of the Common Stock (or other securities issuable upon exercise
of this Warrant) that does not result in an adjustment pursuant to Section 3.1 (any such
transaction being hereinafter referred to as a “Reorganization”), then, in each case, the
Warrantholder, on exercise hereof at any time after the consummation or effective date of such
Reorganization, shall receive, in lieu of the Warrant Shares issuable on such exercise prior to the
date of such Reorganization, the stock, other securities, cash or other property to which such
holder would have been entitled upon the date of such Reorganization if such holder had exercised
this Warrant immediately prior thereto.



     3.3. Adjustment on Other Events. If the Common Stock issuable upon the conversion of
this Warrant shall be changed into the same or a different number of shares of any class(es) or
series of stock, whether by reclassification or otherwise (other than an adjustment under Section
3.1 or a merger, consolidation, or sale of assets provided for under Section 3.2), then and in each
such event, the holder hereof shall have the right thereafter to convert each Warrant Share into
the kind and amount of shares of stock and other securities and property receivable upon such
reclassification, or other change by holders of the number of shares of Common Stock into which
such Warrant Shares would have been convertible immediately prior to such reclassification or
change, all subject to successive adjustments thereafter from time to time pursuant to and in
accordance with, the provisions of this Article III.



     3.4. Notice of Adjustment. Whenever an event necessitating an adjustment to this
Warrant pursuant to this Article III occurs, the Company shall promptly deliver written notice
thereof, by first class mail, postage prepaid, addressed to the Warrantholder in accordance with
Section 8.5, which notice shall state the increase or decrease in the number or other



 









 





denominations of securities purchasable and exercise price payable upon the exercise of this
Warrant setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based.




4. RESTRICTIONS ON TRANSFER OF WARRANT AND WARRANT SHARES




     4.1. Restrictions on Transfer. The Warrantholder, by its acceptance of this Warrant,
agrees to be bound by the provisions of this Article IV and acknowledges and confirms that this
Warrant and any Warrant Shares issued upon exercise of this Warrant have not been registered under
the Securities Act or any applicable state securities laws, and may not be sold or transferred
except in compliance with and subject to the Securities Act and such state securities laws. Unless
and until this Warrant and such Warrant Shares have been registered under the Securities Act and
such state securities laws, the Company may require, as a condition to effecting any sale or
transfer of this Warrant or such Warrant Shares on the books of the Company, an opinion of counsel
reasonably satisfactory to the Company to the effect that an exemption from registration under the
Securities Act and such state securities laws is available for the proposed transfer or assignment.
Any purported sale or transfer of this Warrant and/or such Warrant Shares shall be null and void
unless made in compliance with the conditions set forth in this Article IV. Except as provided in
Section 4.2, (a) this Warrant and any warrant of the Company issued in exchange or replacement for
this Warrant shall be stamped or otherwise imprinted with a legend in substantially the form set
forth on the cover of this Warrant, (b) each certificate for Warrant Shares issued upon the
exercise of this Warrant and each certificate issued upon the transfer of any such Warrant Shares
shall be stamped or otherwise imprinted with a legend substantially to the same effect.



     4.2. Termination of Restrictions. The restrictions imposed by Section 4.1 upon the
transferability of this Warrant and the Warrant Shares shall terminate: (a) when and so long as
this Warrant or any such Warrant Shares shall have been effectively registered under the Securities
Act and transferred in compliance therewith; or (b) when the Company shall have received an opinion
of counsel reasonably satisfactory to it that this Warrant or such Warrant Shares may be
transferred without registration thereof under the Securities Act; provided, however, that if the
Warrant or the Warrant Shares have been held (both legally and beneficially) by the Warrantholder
for at least two (2) years and is proposed to be sold in compliance with Rule 144(k) under the
Securities Act, no such opinion of counsel shall be required if the Warrantholder is not, and
represents to the Company that is it not, an affiliate of the Company as defined in Rule 144.
Whenever the legend requirements imposed by Section 4.1 shall terminate as to this Warrant or the
Warrant Shares, the holder of this Warrant or any Warrant Shares shall be entitled to receive from
the Company, upon request, at the Company’s expense, a new warrant or a new certificate
representing the Warrant Shares, as the case may be, not bearing the restrictive legend described
in Section 4.1.



     4.3. Compliance with Securities Laws. The Warrantholder, by acceptance hereof,
represents to the Company that this Warrant and any Warrant Shares purchased upon exercise of this
Warrant are being acquired solely for the Warrantholder’s own account and not as a nominee for any
other party, and for investment, and that the Warrantholder will not offer, sell or otherwise
dispose of this Warrant or any such Warrant Shares except under circumstances that will not result
in a violation of the Securities Act or any applicable state securities laws. The Warrantholder has
such knowledge and experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment in this Warrant and any Warrant Shares purchased on exercise
hereof and has the ability to bear the economic risks of such investment. The Warrantholder
certifies and represents to the Company that it is an “accredited investor” as defined in Rule 501
of Regulation D promulgated under the Securities Act and, if not an individual, was not organized
for the purpose of acquiring the Warrants.



     4.4. Transfer Procedure. Subject to compliance with the other provisions of this
Article IV, transfer of this Warrant, in whole or in part, shall occur upon surrender of this
Warrant at the principal executive offices of the Company, together with a duly executed written
assignment agreement in substantially the form attached hereto as Annex II and funds sufficient to
pay any transfer taxes payable upon the making of such transfer and, if required, an opinion of
counsel reasonably acceptable to counsel of the Company in its professional determination
concerning the compliance of such transfer with the Securities Act and applicable state securities
laws. Upon receipt of such items, the Company shall execute and deliver a new warrant or warrants
in the name of the assignee or assignees and in the denomination(s) specified in such instrument of
assignment, and shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled.



     4.5. Maintenance of Transfer Books. The Company agrees to maintain, at the principal
executive office of the Company, books or records for the registration and the registration of
transfer of this Warrant or any warrant of the Company issued in exchange for this Warrant.



     4.6. Registration Rights. Upon the written request of the Majority Warrantholders, the
Company shall use commercially reasonable efforts to, within 90 days, file a registration statement
registering the Common Stock issuable on exercise of the Warrant, and shall use commercially
reasonable efforts to cause such registration statement to remain effective until the date that is
two years from the date first written above. After the expiration of such two-year period, the



 









 





Company shall provide instructions to its transfer agents that certificates representing the
Warrant Shares shall be issued without a legend if such Warrant Shares are to be issued pursuant to
a net cashless exercise/conversion pursuant to Section 2.3(ii) hereof; provided that the
Warrantholder is not, and represents that it is not, then an “affiliate” of the Company as such
term is defined under Rule 144.




5. RESTRICTIONS ON TRANSFER OF WARRANTS




     5.1. Notwithstanding anything to the contrary contained in Article IV, the Warrantholder, by
its acceptance of this Warrant, agrees that it will not directly, or indirectly, offer to sell,
sell, contract to sell, grant or sell to any other person any option, right or warrant to purchase,
lend, assign, pledge, transfer, hypothecate or otherwise dispose of or encumber any of the
Warrants, or dispose of any beneficial interest therein, except to (i) successors to Warrantholder
in a merger or consolidation, (ii) officers, directors, employees or agents of Warrantholder, (iii)
purchasers of all or substantially all of the assets of Warrantholder or (iv) shareholders of
Warrantholder or shareholders or partners of its transferees in the event of liquidation or
dissolution.



6. NECESSARY ACTIONS




     6.1. The Company will: (a) use its commercially reasonable efforts to obtain all such
authorizations, approvals, exemptions or consents from any Governmental Authority having
jurisdiction thereof as may be necessary to enable the Company to perform its obligations under
this Warrant (including, without limitation, making all necessary filings with such Governmental
Authorities); (b) take all necessary steps (including, without limitation, making appropriate
amendments to its certificate of incorporation) to ensure that the Company has authorized a
sufficient number of authorized but unissued shares of its Common Stock to provide for the issuance
of the Warrant Shares; (c) reserve from its authorized but unissued shares of Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of
this Warrant; and (d) take all actions as may be necessary or appropriate to ensure that the
Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the
exercise of this Warrant that are not subject to any preemptive rights and are free from all taxes,
liens, security interests, charges and other encumbrances, in each case, with respect to the
issuance thereof, other than taxes in respect of any transfer occurring contemporaneously with such
issuance and restrictions provided by applicable law.



7. LOSS OR MUTILATION




     7.1. On receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (a) in the case of loss, theft or destruction, on
delivery of an indemnity agreement or bond reasonably satisfactory in form and substance to the
Company; or (b) in the case of mutilation, on surrender and cancellation of this Warrant, the
Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.



8. MISCELLANEOUS




     8.1. Entire Agreement. This Warrant constitutes the entire agreement between the
Company and the Warrantholder with respect to the Warrant.



     8.2. Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of the Warrantholder shall operate as a waiver of such right or otherwise
prejudice the Warrantholder’s rights, powers or remedies.



     8.3. Effect; No Third-Party Beneficiaries. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Warrantholder and their respective successors and
permitted assigns. Nothing in this Warrant, expressed or implied, is intended to or shall confer on
any Person other than the Company and the Warrantholder, or their respective successors or
permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this
Warrant.



     8.4. Section and Other Headings. The section and other headings contained in this
Warrant are for reference purposes only and shall not be deemed to be a part of this Warrant or to
affect the meaning or interpretation of this Warrant.



     8.5. Notices. Except as otherwise expressly provided herein, all notices and
deliveries referred to in this Warrant shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party at its address or facsimile number set forth on
the signature pages hereof. Each such notice, request or other communication shall be deemed
received by the other party (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is received, (ii) if given
by mail, 72 hours after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address
specified in this Section.



 









 





     8.6. Severability. Whenever possible, each provision of this Warrant will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision of this Warrant or the validity,
legality or enforceability of this Warrant in any other jurisdiction. In such event, this Warrant
will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.



     8.7. Governing Law. All questions concerning the construction, validity and
interpretation of this warrant and the issuance of securities hereunder will be governed by and
construed in accordance with the internal laws of the State of Delaware, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware.



     8.8. Rights or Liabilities as Stockholder. The Warrantholder shall be deemed to have
become a holder of record of the Warrant Shares issuable under Section 2.2 only as of the date on
which all required deliverables pursuant to Section 2.2 have been received by the Company. Until
such time the Warrantholder shall not have any voting rights or other rights or liabilities of a
stockholder of the Company with respect to the Warrant Shares issuable hereunder.



     8.9. Amendment. Any provision of this Warrant may be amended or waived with the prior
written consent of the Company and the Majority Warrantholders, which amendment or waiver will be
effective on holders of this Warrant or any warrant issued on transfer hereof. Any amendment or
waiver must be in writing to be effective.



     8.10. Notices of Record Date. Upon any establishment by the Company of a record date
of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right or any voluntary dissolution, liquidation or winding
up of the Company, the Company shall use reasonable efforts to mail to the holder at least ten (10)
days prior to the record date specified therein and at least ten (10) days prior to the effective
date specified in clause (ii) or (iii) hereof, a notice specifying (i) the date established as the
record date for the purpose of such dividend, distribution, option or right and a description of
such dividend, distribution, option or right, (ii) the date on which any such dissolution,
liquidation or winding up is expected to become effective and (iii) the date, if any, fixed as to
when the holders of record of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such dissolution, liquidation or winding
up. Nothing herein shall prohibit the holder from exercising this Warrant during the ten (10) day
period commencing on the date of such notice.



     IN WITNESS WHEREOF, the parties hereto have executed this Warrant on the date first above
written.



	 	 	 	 	 
	COMPANY:	 	FIRST AVENUE NETWORKS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	WARRANTHOLDER:	 	TEJAS SECURITIES GROUP, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 






 









 








Annex I




NOTICE OF EXERCISE




(To be executed upon exercise of this Warrant)




     The undersigned hereby irrevocably elects to exercise the right represented by this Warrant to
purchase                     shares of Common Stock, and herewith (a) tenders to the
Company as payment for such shares the amount of $                      in accordance with
Section 2.2(a) of this Warrant or (b) elects to convert in accordance with Section 2.2(b) of this
Warrant. The undersigned requests that a certificate for such shares be registered in the name of
each of the following:


	 	 	 	 	 
	 	Name:
 	 
	 	 
 	 
	 
	 	
Address:  	 
	 	 	 
	 	 	 
	 	 	 
	 





     and that each certificate be delivered to the above at the address indicated.



     The undersigned represents that it is an accredited investor (as defined in applicable rules
and regulations under the Securities Act of 1933, as amended), and that it is acquiring such shares
of Common Stock for its own account for investment and not with a view to or for sale in connection
with any distribution thereof.



Dated:                                        




	 	 	 	 	 
	

	 	Signature:	 	 
	

	 	 	 	 
	

	 	(Print Name):	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	(Street Address):	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	

	 	 	 	(City) (State) (Zip Code)






 









 






Annex II




FORM OF ASSIGNMENT AGREEMENT




     This Assignment Agreement is entered into as of                                          ,
                    between                                          (the “Transferor”) and 
 (the “Transferee”).



     WHEREAS the Transferor is the owner of a warrant (the “Warrant”) to purchase                    shares of common stock, par value $0.001 per share (the “Common Stock”), of First Avenue
Networks, Inc. (the “Company”)



     WHEREAS the Transferor desires to transfer to the Transferee a portion of the Warrant covering
                                         Warrant Shares (as defined in the Warrant) (the “Transferred
Warrant”);



     WHEREAS, it is a condition to such transfer that the Transferor and the Transferee execute
this Assignment;



     NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants herein contained, the parties hereto agree as follows:



     1. Transfer. Subject to the terms and conditions contained herein, the Transferor
hereby sells, assigns, and transfers unto the Transferor the Transferred Warrant, together with all
right, title and interest therein, and does hereby irrevocably constitute and appoint the Company
as attorney, to transfer the Transferred Warrant on the books of the Company.



     2. Representations, Warranties and Covenants. The Transferor and the Transferee each
represents, warrants and agrees as follows:



          2.1 Status: The Transferee is an “accredited investor” as that term is defined in Rule
501(a) under the Securities Act of 1933, as amended (the “Securities Act”).



          2.2 Experience: The Transferee has sufficient knowledge and experience in investing in
companies similar to the Company so as to be able to evaluate the risks and merits of its
investment in the Company and is able financially to bear the risks thereof.



          2.3 Investment: The Transferee is acquiring the Transferred Warrant for its own
account for investment and not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the same; and the Transferee has
no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof, except pursuant to a registration statement under
the Securities Act.



          2.4 Transferability:



               (a) The Transferee acknowledges and understands and agrees that (i) the Transferred Warrant
and the Warrant Shares may not have been registered under the Securities Act and have not been
registered under any act applicable to the registration of securities in any state and (ii) the
Transferred Warrant and the Warrant Shares must be held indefinitely unless a registration
statement covering such securities is effective under the Securities Act and applicable state
securities laws or unless an exemption from registration under the Securities Act and such laws is
available.



               (b) The Transferred Warrant and the Warrant Shares may not be sold, assigned, transferred or
pledged except in compliance with the terms of the Transferred Warrant, in which case an assignment
agreement substantially similar to the Assignment Agreement is executed and delivered to the
Company.



               (c) The Transferor has not offered the Transferred Warrant by way of a general solicitation or
otherwise in a manner that would require registration under Section 5 of the Securities Act.



     3. Other.



          3.1 This Agreement shall be binding upon the Transferor and the Transferee, and their
respective heirs, executors, administrators and assigns, and upon the Company, its successors and
assigns.



          3.2 This Agreement may be executed in more than one counterpart, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument, and in
pleading or proving any provision of this Assignment Agreement, it shall not be necessary to
produce more than one of such counterparts.



          3.3 This Assignment Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware.



 









 





          3.4 This Agreement contains the entire agreement between the parties with respect to the
matters referred to herein and supersedes all prior negotiations, commitments or understandings.



          3.5 The Transferee hereby requests the Company to transfer the Transferred Warrant to him in
accordance with the foregoing. The Transferred Warrant will be issued in the name set forth below
and will be delivered to the address set forth below, which address shall be considered the
Transferee’s record address for purposes of notices and other communications by the Company to the
record addresses of its stockholders, unless the Transferee otherwise notifies the Company in
writing. THE TRANSFEROR AND THE TRANSFEREE HEREBY JOINTLY INDEMNIFY AND WILL HOLD THE COMPANY, ITS
OFFICERS, DIRECTORS AND AGENTS AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS HARMLESS FROM ANY
AND ALL LIABILITY, COST, EXPENSE AND DAMAGES WHICH ANY OF THEM MAY INCUR AS A RESULT OF OR ARISING
OUT OF THE UNDERTAKING BY ANY OF THEM OF THE FOREGOING INSTRUCTIONS OR WHICH RESULT FROM OR ARISE
OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.



[Remainder of Page Intentionally Left Blank]




     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have executed
or caused this Agreement to be executed on the date first above written.



	 	 	 	 	 
	THE TRANSFEROR:	 	[Transferor]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	THE TRANSFEREE:	 	[Transferee]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 
	Agreed and Accepted:
	 	 	 	 
	 
	 	 	 	 
	THE COMPANY:	 	FIRST AVENUE NETWORKS, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title: