**Exhibit 10.5**
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANYSTATE. NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATESECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THESECURITIES 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 issuedpursuant to that certain Master Private Placement Engagement Letter (the “Letter Agreement”), datedNovember 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 duringthe Exercise Period (as defined herein), 2,574,000 shares of Common Stock (such shares and/or anyother securities that may be deliverable on exercise hereof, the “Warrant Shares”), at the exerciseprice per share of Seven Dollars and Twenty-Five Cents ($7.25) (the “Exercise Price”), all subjectto the terms, conditions and adjustments herein set forth. The number of Warrant Shares is subjectto adjustment as provided in Article III.
1. DEFINITIONS
     1.1. Definitions. As used herein, unless the context otherwise requires, the followingterms have the following respective meanings:
     “Affiliate” with respect to any Person, shall mean any other Person that directly orindirectly, 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 banksare 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 salesprice, regular way, or, in the event that no sale takes place on such day, the average of thereported closing bid and asked prices, regular way, in either case as reported on the principalnational securities exchange on which such Common Stock is listed or admitted to trading or, if notlisted or admitted to trading on any national securities exchange, on the Nasdaq National MarketSystem or the Nasdaq SmallCap Market or, if such security is not quoted on the Nasdaq NationalMarket System or the Nasdaq SmallCap Market, the average of the closing bid and asked prices oneach such day in the over-the-counter market as reported by Nasdaq or, if bid and asked prices forsuch security on each such day shall not have been reported by Nasdaq, the average of the bid andasked prices for such day as furnished by any reputable investment banking firm regularly making amarket in such security selected for such purpose by the Board of Directors of the Company or acommittee thereof. If the Closing Price cannot be calculated on such date on any of the foregoingbases, the Closing Price of such security on such date shall be the fair market value as reasonablydetermined by an Independent Financial Expert selected for such purpose by the Board of Directorsof 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 orlisted on a national securities exchange, then the last reported sale price per share of CommonStock 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 onthe next preceding business day in which such price was reported, (ii) if the Common Stock isactively traded over-the-counter, then the last sales price quoted, if determinable, or, if notdeterminable, the average of the closing bid and asked prices quoted on the OTC Bulletin Board (orsimilar system) on such date or (iii) if such Common Stock is not traded, quoted or listed onNasdaq or any national securities exchange or over-the-counter market, then the fair market valueof 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 governmentalauthority or regulatory body having jurisdiction over the Company, its Affiliates or theWarrantholder.
     “Independent Financial Expert” means a nationally recognized investment banking firm that doesnot (and whose directors, officers, employees and Affiliates do not) have a direct or indirectfinancial interest in the Company or any of its Affiliates, that has not been and at the time it iscalled upon to give independent financial advice to the Company is not (and none of whosedirectors, officers, employees or Affiliates is) a promoter, director or officer of the Company orany of its Affiliates, and that does not provide any advice or opinions to the Company or any ofits Affiliates.
     “Majority Warrantholders” means the holders of more than 50% of the aggregate number ofWarrant Shares issuable upon the exercise of (a) this Warrant and (b) any warrants issued upon thetransfer 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, GovernmentalAuthority or other entity of any kind, and shall include any successor (by merger or otherwise) ofsuch 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, theWarrantholder may exercise this Warrant on any Business Day starting on the date hereof and endingat 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 beexercised, in whole or in part, by surrender of this Warrant to the Company at its principaloffice, accompanied by a Notice of Exercise substantially in the form attached hereto, executed bythe holder and accompanied by (a) wire transfer of immediately available funds or (b) certified orofficial bank check payable to the order of the Company, in each case in the amount obtained bymultiplying (i) the number of Warrant Shares for which the Warrant is being exercised, asdesignated in such subscription, by (ii) the Exercise Price. Thereupon, the holder shall beentitled to receive the number of duly authorized, validly issued, fully paid and nonassessableWarrant 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 thisWarrant to the Company at its principal office, accompanied by a Notice of Exercise substantiallyin the form attached hereto, executed by the holder. Thereupon, the holder shall be entitled toreceive a number of duly authorized, validly issued, fully paid and nonassessable Warrant Sharesequal to:
     (i) (A) (x) the number of Warrant Shares (subject to adjustment as provided inArticle III hereof) which such holder would be entitled to receive upon exercise of suchWarrant for the number of Warrant Shares designated in such Notice of Exercise (withoutgiving 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 3hereof which such holder would be entitled to receive upon exercise of such Warrant forthe number of Warrant Shares designated in such Notice of Exercise (without giving effectto any adjustment thereof pursuant to this subsection), *multiplied by*(y) the ExercisePrice
*divided by*
(ii) the Fair Market Value per Warrant Share.
     2.3. Delivery of Stock Certificates on Exercise. As soon as practicable after theexercise 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 thename of and delivered to the holder, or as the holder may direct (subject in all cases, to theprovisions of Article IV hereof), a certificate or certificates for the number of Warrant Sharespurchased by the holder on such exercise, plus, in lieu of any fractional share to whichthe holder would otherwise be entitled, cash equal to such fraction multiplied by the Fair MarketValue. 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 otherencumbrances or restrictions on sale (other than those set forth herein). Upon any partial exerciseof 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, registeredin 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 underthis Warrant if the issuance of such shares would constitute a violation by the Company of anyprovision of any law, rule or regulation of (i) any Governmental Authority, including withoutlimitation, compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended(the “HSR Act”), and compliance with registration or qualification requirements of applicablefederal and state securities laws or (ii) any applicable self governing organization or stockexchange, including without limitation, the rules, regulations or listing requirements of any suchorganization or stock exchange. If at any time the Company shall determine, based upon the adviceof counsel, that the registration, qualification or listing of any shares subject to this Warrantunder any applicable state or federal law or other applicable rules or regulations (including thoseof any applicable stock exchange), or any filing or expiration of any waiting period under the HSRAct, is necessary as a condition of, or in connection with, the issuance of shares, the Companyshall not be required to issue any Warrant Shares of under this Warrant unless and until theCompany has received evidence reasonably satisfactory to it that such laws, rules or regulationshave been complied with and/or such filing has been made and the applicable waiting period hasexpired under the HSR Act.
     2.5. Payment of Taxes. The Company shall pay all stamp taxes and other similar chargeswith respect to the issue or delivery of Warrant Shares hereunder. The Company shall not berequired to pay any transfer tax or other similar charge imposed in connection with the issue ofany stock certificate in any name other than that of the Warrantholder, and in such case theCompany shall not be required to issue or deliver any stock certificate until such tax or othercharge has been paid or it has been established to the reasonable satisfaction of the Company thatno 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 ofCommon Stock into a greater number of shares, then as of the record date for effecting suchsubdivision the number of Warrant Shares issuable upon exercise of this Warrant will beproportionately increased and the Exercise Price in effect immediately prior to such subdivisionshall 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 ofshares, then as of the record date for effecting such combination the number of Warrant Sharesissuable upon exercise of this Warrant will be proportionately decreased and the Exercise Price ineffect immediately prior to such combination shall be proportionately increased.
     3.2. Consolidation, Merger, etc. In case of any consolidation or merger of the Companywith or into any other Person, or (a) any other corporate reorganization, in which the Companyshall not be the continuing or surviving entity of such consolidation, merger or reorganization orin connection with which the Common Stock (or other securities issuable upon exercise of thisWarrant) shall be changed into or exchanged for stock of any other entity or cash or otherproperty, (b) any transaction in which in excess of 50% of the Company’s voting power istransferred to a Person not a stockholder immediately prior to the consummation of suchtransaction, (c) any sale of all or substantially all of the assets of the Company or (d) a capitalreorganization or reclassification of the Common Stock (or other securities issuable upon exerciseof this Warrant) that does not result in an adjustment pursuant to Section 3.1 (any suchtransaction being hereinafter referred to as a “Reorganization”), then, in each case, theWarrantholder, on exercise hereof at any time after the consummation or effective date of suchReorganization, shall receive, in lieu of the Warrant Shares issuable on such exercise prior to thedate of such Reorganization, the stock, other securities, cash or other property to which suchholder would have been entitled upon the date of such Reorganization if such holder had exercisedthis Warrant immediately prior thereto.
     3.3. Adjustment on Other Events. If the Common Stock issuable upon the conversion ofthis Warrant shall be changed into the same or a different number of shares of any class(es) orseries of stock, whether by reclassification or otherwise (other than an adjustment under Section3.1 or a merger, consolidation, or sale of assets provided for under Section 3.2), then and in eachsuch event, the holder hereof shall have the right thereafter to convert each Warrant Share intothe kind and amount of shares of stock and other securities and property receivable upon suchreclassification, or other change by holders of the number of shares of Common Stock into whichsuch Warrant Shares would have been convertible immediately prior to such reclassification orchange, all subject to successive adjustments thereafter from time to time pursuant to and inaccordance with, the provisions of this Article III.
     3.4. Notice of Adjustment. Whenever an event necessitating an adjustment to thisWarrant pursuant to this Article III occurs, the Company shall promptly deliver written noticethereof, by first class mail, postage prepaid, addressed to the Warrantholder in accordance withSection 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 thisWarrant setting forth in reasonable detail the method of calculation and the facts upon which suchcalculation 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 thisWarrant and any Warrant Shares issued upon exercise of this Warrant have not been registered underthe Securities Act or any applicable state securities laws, and may not be sold or transferredexcept in compliance with and subject to the Securities Act and such state securities laws. Unlessand until this Warrant and such Warrant Shares have been registered under the Securities Act andsuch state securities laws, the Company may require, as a condition to effecting any sale ortransfer of this Warrant or such Warrant Shares on the books of the Company, an opinion of counselreasonably satisfactory to the Company to the effect that an exemption from registration under theSecurities 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 voidunless made in compliance with the conditions set forth in this Article IV. Except as provided inSection 4.2, (a) this Warrant and any warrant of the Company issued in exchange or replacement forthis Warrant shall be stamped or otherwise imprinted with a legend in substantially the form setforth on the cover of this Warrant, (b) each certificate for Warrant Shares issued upon theexercise of this Warrant and each certificate issued upon the transfer of any such Warrant Sharesshall 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 thetransferability of this Warrant and the Warrant Shares shall terminate: (a) when and so long asthis Warrant or any such Warrant Shares shall have been effectively registered under the SecuritiesAct and transferred in compliance therewith; or (b) when the Company shall have received an opinionof counsel reasonably satisfactory to it that this Warrant or such Warrant Shares may betransferred without registration thereof under the Securities Act; provided, however, that if theWarrant or the Warrant Shares have been held (both legally and beneficially) by the Warrantholderfor at least two (2) years and is proposed to be sold in compliance with Rule 144(k) under theSecurities Act, no such opinion of counsel shall be required if the Warrantholder is not, andrepresents 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 theWarrant Shares, the holder of this Warrant or any Warrant Shares shall be entitled to receive fromthe Company, upon request, at the Company’s expense, a new warrant or a new certificaterepresenting the Warrant Shares, as the case may be, not bearing the restrictive legend describedin 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 thisWarrant are being acquired solely for the Warrantholder’s own account and not as a nominee for anyother party, and for investment, and that the Warrantholder will not offer, sell or otherwisedispose of this Warrant or any such Warrant Shares except under circumstances that will not resultin a violation of the Securities Act or any applicable state securities laws. The Warrantholder hassuch knowledge and experience in financial and business matters as to be capable of evaluating themerits and risks of its investment in this Warrant and any Warrant Shares purchased on exercisehereof and has the ability to bear the economic risks of such investment. The Warrantholdercertifies and represents to the Company that it is an “accredited investor” as defined in Rule 501of Regulation D promulgated under the Securities Act and, if not an individual, was not organizedfor the purpose of acquiring the Warrants.
     4.4. Transfer Procedure. Subject to compliance with the other provisions of thisArticle IV, transfer of this Warrant, in whole or in part, shall occur upon surrender of thisWarrant at the principal executive offices of the Company, together with a duly executed writtenassignment agreement in substantially the form attached hereto as Annex II and funds sufficient topay any transfer taxes payable upon the making of such transfer and, if required, an opinion ofcounsel reasonably acceptable to counsel of the Company in its professional determinationconcerning the compliance of such transfer with the Securities Act and applicable state securitieslaws. Upon receipt of such items, the Company shall execute and deliver a new warrant or warrantsin the name of the assignee or assignees and in the denomination(s) specified in such instrument ofassignment, and shall issue to the assignor a new warrant evidencing the portion of this Warrantnot so assigned, and this Warrant shall promptly be cancelled.
     4.5. Maintenance of Transfer Books. The Company agrees to maintain, at the principalexecutive office of the Company, books or records for the registration and the registration oftransfer 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, theCompany shall use commercially reasonable efforts to, within 90 days, file a registration statementregistering the Common Stock issuable on exercise of the Warrant, and shall use commerciallyreasonable efforts to cause such registration statement to remain effective until the date that istwo 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 theWarrant Shares shall be issued without a legend if such Warrant Shares are to be issued pursuant toa net cashless exercise/conversion pursuant to Section 2.3(ii) hereof; provided that theWarrantholder is not, and represents that it is not, then an “affiliate” of the Company as suchterm is defined under Rule 144.
5. RESTRICTIONS ON TRANSFER OF WARRANTS
     5.1. Notwithstanding anything to the contrary contained in Article IV, the Warrantholder, byits 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 theWarrants, or dispose of any beneficial interest therein, except to (i) successors to Warrantholderin 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 ofWarrantholder or shareholders or partners of its transferees in the event of liquidation ordissolution.
6. NECESSARY ACTIONS
     6.1. The Company will: (a) use its commercially reasonable efforts to obtain all suchauthorizations, approvals, exemptions or consents from any Governmental Authority havingjurisdiction thereof as may be necessary to enable the Company to perform its obligations underthis Warrant (including, without limitation, making all necessary filings with such GovernmentalAuthorities); (b) take all necessary steps (including, without limitation, making appropriateamendments to its certificate of incorporation) to ensure that the Company has authorized asufficient number of authorized but unissued shares of its Common Stock to provide for the issuanceof the Warrant Shares; (c) reserve from its authorized but unissued shares of Common Stock asufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise ofthis Warrant; and (d) take all actions as may be necessary or appropriate to ensure that theCompany may validly and legally issue fully paid and non-assessable shares of Common Stock upon theexercise 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 theissuance thereof, other than taxes in respect of any transfer occurring contemporaneously with suchissuance 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, ondelivery of an indemnity agreement or bond reasonably satisfactory in form and substance to theCompany; or (b) in the case of mutilation, on surrender and cancellation of this Warrant, theCompany 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 theCompany and the Warrantholder with respect to the Warrant.
     8.2. Nonwaiver. No course of dealing or any delay or failure to exercise any righthereunder on the part of the Warrantholder shall operate as a waiver of such right or otherwiseprejudice the Warrantholder’s rights, powers or remedies.
     8.3. Effect; No Third-Party Beneficiaries. This Warrant shall inure to the benefit ofand shall be binding upon the Company and the Warrantholder and their respective successors andpermitted assigns. Nothing in this Warrant, expressed or implied, is intended to or shall confer onany Person other than the Company and the Warrantholder, or their respective successors orpermitted assigns, any rights, remedies, obligations or liabilities under or by reason of thisWarrant.
     8.4. Section and Other Headings. The section and other headings contained in thisWarrant are for reference purposes only and shall not be deemed to be a part of this Warrant or toaffect the meaning or interpretation of this Warrant.
     8.5. Notices. Except as otherwise expressly provided herein, all notices anddeliveries referred to in this Warrant shall be in writing (including facsimile transmission orsimilar writing) and shall be given to such party at its address or facsimile number set forth onthe signature pages hereof. Each such notice, request or other communication shall be deemedreceived by the other party (i) if given by facsimile transmission, when transmitted to thefacsimile number specified in this Section and confirmation of receipt is received, (ii) if givenby mail, 72 hours after such communication is deposited in the mails with first class postageprepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the addressspecified in this Section.
 

 

     8.6. Severability. Whenever possible, each provision of this Warrant will beinterpreted in such manner as to be effective and valid under applicable law, but if any provisionof this Warrant is held by a court of competent jurisdiction to be invalid, illegal orunenforceable 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 Warrantwill be reformed, construed and enforced in such jurisdiction as if such invalid, illegal orunenforceable provision had never been contained herein.
     8.7. Governing Law. All questions concerning the construction, validity andinterpretation of this warrant and the issuance of securities hereunder will be governed by andconstrued in accordance with the internal laws of the State of Delaware, without giving effect toany choice of law or conflict of law provision or rule (whether of the State of Delaware or anyother jurisdiction) that would cause the application of the laws of any jurisdiction other than theState of Delaware.
     8.8. Rights or Liabilities as Stockholder. The Warrantholder shall be deemed to havebecome a holder of record of the Warrant Shares issuable under Section 2.2 only as of the date onwhich all required deliverables pursuant to Section 2.2 have been received by the Company. Untilsuch time the Warrantholder shall not have any voting rights or other rights or liabilities of astockholder 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 priorwritten consent of the Company and the Majority Warrantholders, which amendment or waiver will beeffective on holders of this Warrant or any warrant issued on transfer hereof. Any amendment orwaiver must be in writing to be effective.
     8.10. Notices of Record Date. Upon any establishment by the Company of a record dateof the holders of any class of securities for the purpose of determining the holders thereof whoare entitled to receive any dividend or other distribution, or right or option to acquiresecurities of the Company, or any other right or any voluntary dissolution, liquidation or windingup 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 effectivedate specified in clause (ii) or (iii) hereof, a notice specifying (i) the date established as therecord date for the purpose of such dividend, distribution, option or right and a description ofsuch 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 towhen the holders of record of Common Stock shall be entitled to exchange their shares of CommonStock for securities or other property deliverable upon such dissolution, liquidation or windingup. Nothing herein shall prohibit the holder from exercising this Warrant during the ten (10) dayperiod commencing on the date of such notice.
     IN WITNESS WHEREOF, the parties hereto have executed this Warrant on the date first abovewritten.     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 topurchase                     shares of Common Stock, and herewith (a) tenders to theCompany as payment for such shares the amount of $                      in accordance withSection 2.2(a) of this Warrant or (b) elects to convert in accordance with Section 2.2(b) of thisWarrant. The undersigned requests that a certificate for such shares be registered in the name ofeach 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 rulesand regulations under the Securities Act of 1933, as amended), and that it is acquiring such sharesof Common Stock for its own account for investment and not with a view to or for sale in connectionwith 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 AvenueNetworks, 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 “TransferredWarrant”);
     WHEREAS, it is a condition to such transfer that the Transferor and the Transferee executethis Assignment;
     NOW THEREFORE, in consideration of the mutual agreements, representations, warranties andcovenants herein contained, the parties hereto agree as follows:
     1. **Transfer**. Subject to the terms and conditions contained herein, the Transferorhereby sells, assigns, and transfers unto the Transferor the Transferred Warrant, together with allright, title and interest therein, and does hereby irrevocably constitute and appoint the Companyas attorney, to transfer the Transferred Warrant on the books of the Company.
     2. **Representations, Warranties and Covenants**. The Transferor and the Transferee eachrepresents, warrants and agrees as follows:
          2.1 Status: The Transferee is an “accredited investor” as that term is defined in Rule501(a) under the Securities Act of 1933, as amended (the “Securities Act”).
          2.2 Experience: The Transferee has sufficient knowledge and experience in investing incompanies similar to the Company so as to be able to evaluate the risks and merits of itsinvestment in the Company and is able financially to bear the risks thereof.
          2.3 Investment: The Transferee is acquiring the Transferred Warrant for its ownaccount for investment and not with a view to, or for sale in connection with, any distributionthereof, nor with any present intention of distributing or selling the same; and the Transferee hasno present or contemplated agreement, undertaking, arrangement, obligation, indebtedness orcommitment providing for the disposition thereof, except pursuant to a registration statement underthe Securities Act.
          2.4 Transferability:
               (a) The Transferee acknowledges and understands and agrees that (i) the Transferred Warrantand the Warrant Shares may not have been registered under the Securities Act and have not beenregistered under any act applicable to the registration of securities in any state and (ii) theTransferred Warrant and the Warrant Shares must be held indefinitely unless a registrationstatement covering such securities is effective under the Securities Act and applicable statesecurities laws or unless an exemption from registration under the Securities Act and such laws isavailable.
               (b) The Transferred Warrant and the Warrant Shares may not be sold, assigned, transferred orpledged except in compliance with the terms of the Transferred Warrant, in which case an assignmentagreement substantially similar to the Assignment Agreement is executed and delivered to theCompany.
               (c) The Transferor has not offered the Transferred Warrant by way of a general solicitation orotherwise 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 theirrespective heirs, executors, administrators and assigns, and upon the Company, its successors andassigns.
          3.2 This Agreement may be executed in more than one counterpart, each of which shall be deemedan original, but all of which together shall constitute one and the same instrument, and inpleading or proving any provision of this Assignment Agreement, it shall not be necessary toproduce more than one of such counterparts.
          3.3 This Assignment Agreement shall be governed by and construed in accordance with the lawsof the State of Delaware.
 

 

          3.4 This Agreement contains the entire agreement between the parties with respect to thematters 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 inaccordance with the foregoing. The Transferred Warrant will be issued in the name set forth belowand will be delivered to the address set forth below, which address shall be considered theTransferee’s record address for purposes of notices and other communications by the Company to therecord addresses of its stockholders, unless the Transferee otherwise notifies the Company inwriting. THE TRANSFEROR AND THE TRANSFEREE HEREBY JOINTLY INDEMNIFY AND WILL HOLD THE COMPANY, ITSOFFICERS, DIRECTORS AND AGENTS AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS HARMLESS FROM ANYAND ALL LIABILITY, COST, EXPENSE AND DAMAGES WHICH ANY OF THEM MAY INCUR AS A RESULT OF OR ARISINGOUT OF THE UNDERTAKING BY ANY OF THEM OF THE FOREGOING INSTRUCTIONS OR WHICH RESULT FROM OR ARISEOUT 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 executedor 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: