Document:

EXHIBIT 10.8

 

SPONSOR WARRANTS PURCHASE AGREEMENT

This SPONSOR WARRANTS PURCHASE AGREEMENT (this “ Agreement ”) is made as of this 21st day of April, 2011 by and between Azteca Acquisition Corporation, a British Virgin Islands business company (the “ Company ”), having its principal place of business at 421 N. Beverly Drive, Suite 300, Beverly Hills, CA 90210 and Azteca Acquisition Holdings, LLC, a Delaware limited liability company (the “ Sponsor ”), having its principal place of business at 421 N. Beverly Drive, Suite 300, Beverly Hills, CA 90210.

WHEREAS, the Company desires to sell on a private placement basis (the “ Offering ”) an aggregate of 4,333,333 warrants (the “Warrants”) of the Company for a purchase price of $0.75 per Warrant.  Each Warrant is exercisable to purchase one ordinary share of the Company, no par value (the “Ordinary Shares”), at an exercise price of $12.00 per Ordinary Share during the period commencing on the later of: (i) one (1) year from the date of the closing of the Company’s IPO (as defined below) and (ii) thirty (30) days following the consummation of an acquisition, share exchange, share reconstruction and amalgamation or contractual control arrangement with, purchase of all or substantially all of the assets of, or any other similar business combination with one or more operating businesses or assets (a “ Business Combination ”) and expiring on the fifth anniversary of the consummation of such Business Combination;

WHEREAS, Sponsor wishes to purchase the Warrants and the Company wishes to accept such subscription.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Sponsor hereby agree as follows:

1. Agreement to Subscribe

1.1. Purchase and Issuance of the Warrants . Upon the terms and subject to the conditions of this Agreement, Sponsor hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Sponsor, on the Closing Date (as defined in Section 1.2), the Warrants for an aggregate purchase price of $3,250,000 (the “ Purchase Price ”).

1.2. Closing . The closing (the “ Closing ”) of the Offering, shall take place at the offices of Ellenoff Grossman & Schole LLP, 150 East 42nd Street, New York, New York, 10017 on or prior to the effective date of the registration statement relating to the Company’s initial public offering (“ IPO ”) of 10,000,000 units consisting of Ordinary Shares and warrants (the “ Closing Date ”).

1.3. Delivery of the Purchase Price . At least one business day prior to the Closing Date the Sponsor agrees to deliver the Purchase Price by certified bank check or wire transfer of immediately available funds denominated in United States Dollars either: (i) to Ellenoff Grossman & Schole LLP, which is hereby irrevocably authorized to deposit such funds at least one business day prior to the Closing to the trust account which will be established for the benefit of the Company’s public shareholders, managed pursuant to that certain Investment Management Trust Agreement to be entered into by and between the Company and a trustee and into which substantially all of the proceeds of the IPO will be deposited (the “ Trust Account ”) or (ii) directly into the Trust Account.  If the IPO is not consummated, the Purchase Price shall be returned to the Sponsor as soon as practicable by certified bank check or wire transfer of immediately available funds denominated in United States Dollars.

1.4. Delivery of Warrant Certificate .  Upon delivery of the Purchase Price in accordance with Section 1.3, the Sponsor shall become irrevocably entitled to receive a warrant certificate representing the Warrants; provided , however , if the Company notifies the Sponsor that the IPO will not be consummated and the Purchase Price will be returned in accordance with the last sentence of Section 1.3, the Company shall have no obligation to provide any such certificate representing the Warrants to the Sponsor.

  

 

  

2. Representations and Warranties of the Sponsor

Sponsor represents and warrants to the Company that:

2.1. No Government Recommendation or Approval . Sponsor understands that no United States federal or state agency or similar agency of any other country has passed upon or made any recommendation or endorsement of the Company, the Offering or the Ordinary Shares underlying the Warrants (the “ Warrant Shares ” and, collectively with the Warrants, the “ Securities ”).

2.2. Organization and Authority .  The Sponsor is a Delawre limited liability company, validly existing and in good standing under the laws of Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.  Upon execution and delivery by Sponsor, this Agreement is a legal, valid and binding agreement of Sponsor, enforceable against Sponsor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

2.3. Private Offering . Sponsor represents that it is (a) an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “ Securities Act ”) or (b) not a “U.S. Person” as defined in Rule 902 of Regulation S (“Regulation S”) under the Securities Act. Subscriber acknowledges that the sale contemplated hereby is being made in reliance on a private placement exemption to “Accredited Investors” within the meaning of Section 501(a) of Regulation D under the Securities Act or similar exemptions under state law or to a non-U.S. Person under Regulation S.

2.4. Authority . This Agreement has been validly authorized, executed and delivered by Sponsor and is a valid and binding agreement enforceable in accordance with its terms, subject to the general principles of equity and to bankruptcy or other laws affecting the enforcement of creditors’ rights generally.

2.5. No Conflicts . The execution, delivery and performance of this Agreement and the consummation by the Sponsor of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the Sponsor’s organizational documents, (ii) any agreement, indenture or instrument to which the Sponsor is a party or (iii) any law, statute, rule or regulation to which Sponsor is subject, or any agreement, order, judgment or decree to which Sponsor is subject.

2.6. No Legal Advice from Company . Sponsor acknowledges it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement and the other agreements entered into between the parties hereto with Sponsor’s own legal counsel and investment and tax advisors. Except for any statements or representations of the Company made in this Agreement and the other agreements entered into between the parties hereto, Sponsor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

  

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2.7. Access to Information; Independent Investigation .  Prior to the execution of this Agreement, the Sponsor has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained.  In determining whether to make this investment, Sponsor has relied solely on Sponsor’s own knowledge and understanding of the Company and its business based upon Sponsor’s own due diligence investigation and the information furnished pursuant to this paragraph.  Sponsor understands that no person has been authorized to give any information or to make any representations which were not furnished pursuant to this Section 2 and Sponsor has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.

2.8. Reliance on Representations and Warranties . Sponsor understands the Warrants are being offered and sold to it in reliance on exemptions from the registration requirements under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of Sponsor set forth in this Agreement in order to determine the applicability of such provisions.

2.9. No Advertisements . Sponsor is not subscribing for the Warrants as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting.

2.10. Legend . Sponsor acknowledges and agrees the certificates evidencing the Warrants and the Warrant Shares shall bear a restrictive legend (the “ Legend ”), in form and substance as set forth in Section 4 hereof, prohibiting the offer, sale, pledge or transfer of the securities, except (i) pursuant to an effective registration statement covering these securities under the Securities Act or (ii) pursuant to any other exemptions from the registration requirements under the Securities Act and such laws which, in the opinion of counsel for the Company, is available.

2.11. Experience, Financial Capability and Suitability .  Sponsor is (i) sophisticated in financial matters and is able to evaluate the risks and benefits of its investment in the Securities and (ii) able to bear the economic risk of its investment in the Securities for an indefinite period of time because the Securities have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.  Sponsor has substantial experience in evaluating and investing in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests.  Sponsor must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale.  Sponsor is able to bear the economic risks of an investment in the Securities and to afford a complete loss of Sponsor’s investment in the Securities.

2.12. Investment Purposes .  The Sponsor is purchasing the Securities solely for investment purposes, for the Sponsor’s own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof and the Sponsor has no present arrangement to sell the interest in the Securities to or through any person or entity.

2.13. Restrictions on Transfer . Sponsor acknowledges and understands the Warrants are being offered in a transaction not involving a public offering in the United States within the meaning of the Securities Act. The Securities have not been registered under the Securities Act, and, if in the future Sponsor decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only (A) pursuant to an effective registration statement filed under the Securities Act, (B) pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act (“ Rule 144 ”), if available, or (C) pursuant to any other available exemption from the registration requirements of the Securities Act, and in each case in accordance with any applicable securities laws of any state or any other jurisdiction. Sponsor agrees that if any transfer of its Securities or any interest therein is proposed to be made, as a condition precedent to any such transfer, Sponsor may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration or another available exemption from registration, Sponsor agrees it will not resell the Securities. Sponsor further acknowledges that because the Company is a shell company Rule 144 may not be available to Sponsor for the resale of the Securities until the one year anniversary following consummation of the initial Business Combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

  

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3. Representations and Warranties of the Company

The Company represents and warrants to the Sponsor that:

3.1. Valid Issuance of Share Capital . The total number of all classes of share capital which the Company has authority to issue is (i) an unlimited number of Ordinary Shares and (ii) an unlimited number of preferred shares. As of the date hereof, the Company has issued 2,875,000 Ordinary Shares (of which 375,000 of such Ordinary Shares are subject to forfeiture as described in the registration statement related to the Company’s IPO) and no preferred shares issued and outstanding. All of the issued shares of the Company have been duly authorized, validly issued, and are fully paid and non-assessable.

3.2. Title to Warrants . Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, each of the Warrants and the Warrant Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, the Sponsor will have or receive good title to the Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) any transfer restrictions hereunder and under the other agreements contemplated hereby and (ii) transfer restrictions under federal and state securities laws.

3.3. Organization and Qualification . The Company has been duly incorporated and is validly existing as a British Virgin Islands business company and has the requisite corporate power to own its properties and assets and to carry on its business as now being conducted.

3.4. Authorization; Enforcement . (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Warrants and the Warrant Shares in accordance with the terms hereof, (ii) the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or shareholders is required, and (iii) this Agreement constitutes, and upon the execution and delivery thereof, the Warrants and the Warrant Agreement will constitute, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by equitable principles of general application and except as enforcement of rights to indemnity and contribution may be limited by federal and state securities laws or principles of public policy.

  

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3.5. No Conflicts . The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not (i) result in a violation of the Company’s Memorandum and Articles of Association, (ii) conflict with, or constitute a default under any agreement, indenture or instrument to which the Company is a party or (iii) any law statute, rule or regulation to which the Company is subject or any agreement, order, judgment or decree to which the Company is subject. Other than any Securities and Exchange Commission, state or foreign securities filings which may be required to be made by the Company subsequent to the Closing, and any registration statement which may be filed pursuant thereto, the Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or self-regulatory entity in order for it to perform any of its obligations under this Agreement or issue the Warrants or the Ordinary Shares issuable upon exercise thereof in accordance with the terms hereof.

4. Legends

4.1. Legend . The Company will issue the Warrants, and when issued, the Warrant Shares, purchased by the Sponsor, in the name of the Sponsor. The Securities will bear the following Legend and appropriate “stop transfer” instructions:

THESE SECURITIES (i) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH AZTECA ACQUISITION CORPORATION (THE “COMPANY” ) COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.

SECURITIES EVIDENCED BY THIS CERTIFICATE AND THE ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

4.2. Sponsor’s Compliance . Nothing in this Section 4 shall affect in any way the Sponsor’s obligations and agreements to comply with all applicable securities laws upon resale of the Securities.

4.3. Company’s Refusal to Register Transfer of the Securities . The Company shall refuse to register any transfer of the Securities, if in the sole judgment of the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the Securities Act, or (ii) pursuant to an available exemption from the registration requirements of the Securities Act.

  

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4.4. Registration Rights .  Subscriber will be entitled to certain registration rights which will be governed by a registration rights agreement (“ Registration Rights Agreement ”) to be entered into with the Company on or prior to the closing of the IPO.

5. Lockup

The Warrants will be subject to a lockup described in that certain Insider Letter to be entered into prior to the date of the preliminary prospectus in connection with the IPO between Sponsor and the Company pursuant to which the Warrants shall not be transferable, saleable or assignable until thirty (30) days following the consummation of a Business Combination, subject to certain limited exceptions.

6. Securities Laws Restrictions

Sponsor agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to be transferred shall then be effective or (b) the Company shall have received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction complies with the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws.

7. Waiver of Liquidation Distributions

In connection with the Securities purchased pursuant to this Agreement, Sponsor hereby waives any and all right, title, interest or claim of any kind in or to any distributions from the Trust Account which will be established for the benefit of the Company’s public shareholders and into which substantially all of the proceeds of the IPO will be deposited (the “ Trust Account ”). In no event will a Sponsor have the right to exercise any Warrants prior to the later of: (i) one year from the date of the closing of the IPO and (ii) thirty (30) days after the consummation of a Business Combination.

8. Forfeiture of Warrants

8.1. Failure to Consummate Business Combination . The Warrants shall be forfeited to the Company upon the liquidation of the Trust Account in the event an initial Business Combination is not consummated within 24 months from the date of the Closing of the IPO.

8.2. Termination of Rights . If the Warrants are forfeited in accordance with this Section 8, then after such time the Sponsor (or its successor in interest), shall no longer have any rights as a holder of such Warrants, and the Company and/or its agents shall take such action as is appropriate to cancel such Warrants on the books and records of the Company.

9. Rescission Right Waiver and Indemnification

9.1. Rescission Waiver .  Sponsor understands and acknowledges an exemption from the registration requirements of the Securities Act requires there be no general solicitation of purchasers of the Warrants. In this regard, if the IPO were deemed to be a general solicitation with respect to the Warrants, the offer and sale of such Warrants may not be exempt from registration and, if not, the Sponsor may have a right to rescind its purchase of the Warrants. In order to facilitate the completion of the Offering and in order to protect the Company, its shareholders and the trust account from claims that may adversely affect the Company or the interests of its shareholders, Sponsor hereby agrees to waive, to the maximum extent permitted by applicable law, any claims, right to sue or rights in law or arbitration, as the case may be, to seek rescission of its purchase of the Warrants. Sponsor acknowledges and agrees this waiver is being made in order to induce the Company to sell the Warrants to the Sponsor. Sponsor agrees the foregoing waiver of rescission rights shall apply to any and all known or unknown actions, causes of action, suits, claims or proceedings (collectively, “ Claims ”) and related losses, costs, penalties, fees, liabilities and damages, whether compensatory, consequential or exemplary, and expenses in connection therewith, including reasonable attorneys’ and expert witness fees and disbursements and all other expenses reasonably incurred in investigating, preparing or defending against any Claims, whether pending or threatened, in connection with any present or future actual or asserted right to rescind the purchase of the Warrants hereunder or relating to the purchase of the Warrants and the transactions contemplated hereby.

  

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9.2.   No Recourse Against Trust Account .  Sponsor agrees not to seek recourse against the Trust Account for any reason whatsoever in connection with its purchase of the Warrants or any Claim that may arise now or in the future.

9.3.   Third Party Beneficiaries .  Sponsor acknowledges and agrees the shareholders of the Company are and shall be third-party beneficiaries of the foregoing provisions of this Agreement to the fullest extent permissible under applicable law.

9.4.   Section 9 Waiver .  Sponsor agrees that, to the fullest extent permissible under applicable law, to the extent any waiver of rights under this Section 9 is ineffective as a matter of law, Sponsor has offered such waiver for the benefit of the Company as an equitable right that shall survive any statutory disqualification or bar that applies to a legal right. Sponsor acknowledges the receipt and sufficiency of consideration received from the Company hereunder in this regard.

10. Terms of the Warrant

The Warrants shall be substantially identical to the warrants included in the units offered in the IPO as set forth in the Warrant Agreement to be entered into with a mutually agreeable warrant agent on or prior to the closing of the IPO, except the Warrants: (i) will be subject to the transfer restrictions described herein, (ii) are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or the resale of the Warrants is registered under the Securities Act, (iii) will be non-redeemable so long as they are held by the Sponsor or any of its permitted transferees and (iv) are exercisable for cash or on a “cashless” basis if held by the Sponsor or any of its permitted transferees.

11. Governing Law; Jurisdiction; Waiver of Jury Trial

This Agreement shall be governed by and construed in accordance with the laws of the British Virgin Islands. The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions contemplated hereby.

12. Assignment; Entire Agreement; Amendment

12.1. Assignment . Neither this Agreement nor any rights hereunder may be assigned by any party to any other person other than by Sponsor to a person agreeing to be bound by the terms hereof.

12.2. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and supersedes any and all prior discussions, agreements and understandings of any and every nature.

12.3. Amendment . Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

  

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12.4. Binding upon Successors . This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and permitted assigns.

13. Notices; Indemnity

13.1 Notices . All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth on the first page of this Agreement or to such other address as a party may designate by notice hereunder, and shall be either (a) delivered by hand, (b) sent by overnight courier, or (c) sent by certified mail, return receipt requested, postage prepaid.  All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by certified mail, on the fifth business day following the day such mailing is made.

13.2 Indemnification . Each party shall indemnify the other party against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement set forth in this Agreement.

14. Counterparts

This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

15. Survival; Severability

15.1. Survival . The representations, warranties, covenants and agreements of the parties hereto shall survive the Closing and one (1) year following the consummation of an initial Business Combination.

15.2. Severability . In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

16. Headings

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

  

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17. Construction

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. The words “ include ,” “ includes ,” and “ including ” will be deemed to be followed by “ without limitation .” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “ this Agreement ,” “ herein ,” “ hereof ,” “ hereby ,” “ hereunder ,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.

[remainder of page intentionally left blank]

  

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This subscription is accepted by the Company as of the date first written above.

	  	
AZTECA ACQUISTION CORPORATION

	  	  
	  	
By:

	
/s/ Gabriel Brener

	  	
Name: Gabriel Brener

	  	
Title:   Chief Executive Officer

Accepted and agreed this

April 21, 2011

	
Azteca Acquisition Holdings, LLC

	  
	
By:

	
/s/ Gabriel Brener

	  
	
Name: Gabriel Brener

	
Title:   Director

  

10ex10-1.htm

Exhibit 10.1

EXHIBIT A

 

2010 STOCK INCENTIVE PLAN

(as amended and restated April 21, 2011)

 

1.Purpose of the Plan

 

The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining key employees, directors or consultants of outstanding ability and to motivate such employees, directors or consultants to exert their best efforts on behalf of the Company and its Affiliates by providing incentives through the granting of Awards.  The Company expects that it will benefit from the added interest which such key employees, directors or consultants will have in the welfare of the Company as a result of their proprietary interest in the Company's success.

 

2. Definitions

 

The following capitalized terms used in the Plan have the respective meanings set forth in this Section:

 

	
  

	
(a)

	
Act:  The Securities Exchange Act of 1934, as amended, or any successor thereto.

	
  

	 

	
  

	
(b)

	
Affiliate:  With respect to any Person, any entity directly or indirectly controlling, controlled by, or under common control with, the such Person and, as to the Company, any other entity designated by the Board in which the Company or an Affiliate has an interest.

	
  

	 

	
  

	
(c)

	
Award:  An Option or Other Stock-Based Award granted pursuant to the Plan.

	
  

	 

	
  

	
(d)

	
Board:  The Board of Directors of the Company.

	
  

	 

	
  

	
(e)

	
Change of Control:  The occurrence of any of the following events: 

	
  

	
(i)

	
a sale of all or substantially all of the assets of the Company to a Person who is not Hale or an Affiliate of Hale, (ii) a sale of Shares by the Company, Hale or any of their respective Affiliates resulting in more than 50% of the voting stock of the Company being held by a Person that does not include Hale or any of its Affiliates or (iii) a merger or consolidation of the Company into another Person which is not Hale or an Affiliate of Hale; if and only if any such event listed in (i) through (iii) above results in the inability of Hale to elect a majority of the Board or of the resulting entity.

 

	
  

	
(f)

	
Code:  The Internal Revenue Code of 1986, as amended, or any successor thereto.

	
  

	 

	
  

	
(g)

	
Committee:  The Compensation Committee of the Board.

	
  

	 

	
  

	
(h)

	
Company:  Telanetix, Inc., a Delaware corporation.

	
  

	 

	
  

	
(i)

	
Contingent Payable Event:   An event which occurs during the time period of April 21, 2011 to July 1, 2012, wherein the Company or its subsidiaries is obligated to pay for certain additional liabilities specified in Section 1(e) of the June 30, 2010 Securities Purchase Agreement between the Company and EREF-TELA, LLC, HCP-TELA, LLC and CBG-TELA, LLC.  Whether or not a Contingent Payable Event has occurred will be determined by the Committee, whose determination shall be final, conclusive and binding.

	
  

	
(j)

	
Contingent Share Issuance:  The number of Shares the Company issues to EREF-TELA, LLC, HCP-TELA, LLC and CBG-TELA, LLC as a result of a Contingent Payable Event in connection with Section 1(e) and Exhibit E to the June 30, 2010 Securities Purchase Agreement between the Company and EREF-TELA, LLC, HCP-TELA, LLC and CBG-TELA, LLC.

  

  

  

	
  

	
(k)

	
Effective Date:  July 2, 2010.

	
  

	 

	
  

	
(l)

	
Fair Market Value:  On a given date, (i) for any security as of any date, the last closing trade price for such security on the principal securities exchange or trading market for such security (the "Principal Market"), as reported by Bloomberg Financial Markets ("Bloomberg"), or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the closing trade price cannot be calculated for a security on a particular date on any of the foregoing bases, the Fair Market Value of such security on such date shall be the fair market value established by the Committee in good faith.

	
  

	 

	
  

	
(m)

	
Hale: means Hale Capital Partners, L.P. and its Affiliates.

	
  

	 

	
  

	
(n)

	
Invested Capital: means the amount of capital invested by Hale in the Company and its subsidiaries, whether in the form of debt, equity or otherwise, but excluding investments by Hale made by open market purchases of Shares on the principal trading market for the Shares.

	
  

	 

	
  

	
(o)

	
Option:  A non-qualified stock option granted pursuant to Section 6 of the Plan.

	
  

	 

	
  

	
(p)

	
Option Price:  The purchase price per Share of an Option, as determined pursuant to Section 6(a) of the Plan.

	
  

	 

	
  

	
(q)

	
Other Stock-Based Awards:  Awards granted pursuant to Section 7 of the Plan.

	
  

	 

	
  

	
(r)

	
Participant:  An employee, director or consultant who is selected by the Committee to participate in the Plan.

	
  

	 

	
  

	
(s)

	
Person:  A "person," as such term is used for purposes of Section 13(d) or 14(d) of the Act (or any successor section thereto).

	
  

	 

	
  

	
(t)

	
Plan:  The Telanetix, Inc. 2010 Stock Incentive Plan as it may be amended from time to time.

	
  

	
(u)

	
Share:  A share of common stock of the Company.

3. Shares Subject to the Plan

 

	
  

	
(a)

	
Shares Subject to Plan.  The maximum aggregate number of Shares which may be issued under the Plan is 92,409,050 Shares, subject to adjustment as provided in Sections 3(b) and 8.  The Shares may consist, in whole or in part, of unissued Shares or treasury Shares.

	
  

	
(b)

	
Additional Shares.  The numerical limit set forth in Section 3(a) for the maximum aggregate number of Shares issuable under the Plan shall be increased on the date of each Contingent Share Issuance by a number of Shares equal to one Share for every four Shares issued as part of such Contingent Share Issuance, rounded down to the nearest whole number (each a "Plan Increase"); provided, however, that such maximum aggregate number of Shares which may be issued under the Plan as set forth in Section 3(a) shall in no event exceed 112,000,000 Shares, subject to adjustment as provided in Section 8.

	
  

	
(c)

	
Option Limits.  The maximum number of Shares for which Options may be granted during a calendar year to any Participant under the Plan shall be 18,000,000 Shares, subject to adjustment as provided in Section 8.

	
  

	
(d)

	
Share Re-Use.  If any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, such Shares shall, to the extent of such forfeiture, expiration or termination, again be available for issuance under the Plan.  To the extent that the total number of Shares that may be issued under the Plan have not been issued immediately prior to a Change of Control, the Committee shall grant such unissued Shares in the form of Awards under the Plan immediately prior to such Change of Control, subject to vesting set forth in Section 3(e) below and other terms and conditions of the Awards determined by the Committee.

 

  

  

  

	
  

	
(e)

	
Vesting.  Unless otherwise provided by the Committee, and notwithstanding any other provision in the Plan, any grant of an Award shall vest as follows: 

	
  

	
(i) 

	
Fifty percent (50%) of the Shares subject to an Award (the “Tranche 1 Shares”) shall vest (the “Tranche 1 Vesting Date”) upon Hale receiving cash proceeds in return on its Invested Capital (whether such cash derives from interest payments, debt repayment, dividends, distributions, sale of equity or otherwise) in the Company and its subsidiaries which cash proceeds equal no less than one times its Invested Capital plus a four percent (4%) annual return on such Invested Capital, compounded annually (the "Tranche 1 Return"), and subject to the Participant's continued employment in good standing with the Company on the Tranche 1 Vesting Date.  Notwithstanding the foregoing and the failure of Hale to have achieved the Tranche 1 Return, Tranche 1 Shares shall vest with respect to ten percent (10%) of such Tranche 1 Shares on each of the first, second and third anniversaries of the Effective Date, irrespective of whether such Tranche 1 Shares were issued as of such dates (e.g., if Tranche 1 Shares are granted on the fourth anniversary of the Effective Date, 30% of such grant shall vest upon grant), subject to the Participant's continued employment in good standing with the Company on each such anniversary.

	
  

	
(ii) 

	
Sixteen and sixty-fifth one hundredths percent (16.65%) of the Shares subject to an Award (the “Tranche 2 Shares”) shall vest (the “Tranche 2 Vesting Date”) upon Hale receiving cash proceeds in return on its Invested Capital (whether such cash derives from interest payments, debt repayment, dividends, distributions, sale of equity or otherwise) in the Company and its subsidiaries which cash proceeds equal no less than two times its Invested Capital plus a four percent (4%) annual return on such Invested Capital, compounded annually  and subject to the Participant's continued employment in good standing with the Company on the Tranche 2 Vesting Date.

	
  

	
(iii) 

	
Sixteen and sixty-fifth one hundredths percent (16.65%) of the Shares subject to an Award (the “Tranche 3 Shares”) shall vest (the “Tranche 3 Vesting Date”) upon Hale receiving cash proceeds in return on its Invested Capital (whether such cash derives from interest payments, debt repayment, dividends, distributions, sale of equity or otherwise) in the Company and its subsidiaries which cash proceeds equal no less than three times its Invested Capital plus a four percent (4%) annual return on such Invested Capital, compounded annually  and subject to the Participant's continued employment in good standing with the Company on the Tranche 3 Vesting Date.

	
  

	
(iv) 

	
Sixteen and seventieth one hundredths percent (16.7%) of the Shares subject to an Award (the “Tranche 4 Shares”) shall vest (the “Tranche 4 Vesting Date”) upon Hale receiving cash proceeds in return on its Invested Capital (whether such cash derives from interest payments, debt repayment, dividends, distributions, sale of equity or otherwise) in the Company and its subsidiaries which cash proceeds equal no less than  four times its Invested Capital plus a four percent (4%) annual return on such Invested Capital, compounded annually  and subject to the Participant's continued employment in good standing with the Company on the Tranche 4 Vesting Date.

	
  

	
(f)

	
Termination of Employment.  In the event the Participant’s employment with the Company is terminated for any reason, the Participant shall forfeit any unvested Award and such portion of the Award shall be null and void and of no force or effect. 

 

  

  

  

4. Administration

 

The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof consisting solely of at least two individuals who are each "non-employee directors" within the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and "outside directors" within the meaning of Section 162(m) of the Code (or any successor section thereto).  The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan (but not the terms of the Plan), and to make any other determinations that it deems necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors).  The Committee shall have the full power and authority to establish the terms and conditions of any Award consistent with the provisions of the Plan.  The Committee shall require payment of any amount it may determine to be necessary to withhold for federal, state, local or other taxes as a result of the exercise of an Award.

 

5. Limitations

 

No Award may be granted under the Plan after June 29, 2020, but Awards theretofore granted may extend beyond that date.

 

6. Terms and Conditions of Options

 

Options granted under the Plan shall be non-qualified stock options for U.S. federal income tax purposes and shall be subject to the foregoing and the following terms and conditions and to such other terms and conditions, not inconsistent therewith, as the Committee shall determine:

 

	
  

	
(a)

	
Option Price.  The Tranche 1 Shares shall have an Option Price of $0.040000 per Share.  The Tranche 2 Shares shall have an Option Price of $0.07704 per Share.  The Tranche 3 Shares shall have an Option Price of $0.07704 per Share.  The Tranche 4 Shares shall have an Option Price of $0.07704 per Share.

	
  

	 

	
  

	
(b)

	
Exercisability.  Subject to the vesting conditions set forth in Section 3(e) of the Plan, Options granted under the Plan shall be exercisable at such time and upon such terms and conditions as may be determined by the Committee, but in no event shall an Option be exercisable more than ten years after the date it is granted.  To the extent that the Option Price of an Option is less than Fair Market Value as of the date of grant, the exercisability of the Option shall comply with Section 409A of the Code or fall within an exception under Section 409A of the Code.

	
  

	 

	
  

	
(c)

	
Exercise of Options.  Except as otherwise provided in the Plan or in an Option agreement, an Option may be exercised for all, or from time to time any part, of the Shares for which it is then exercisable.  For purposes of Section 6 of the Plan, the exercise date of an Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii) or (iv) in the following sentence.  The purchase price for the Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise at the election of the Participant: (i) in cash or its equivalent (e.g., by check), (ii) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that such Shares have been held by the Participant for no less than six months (or such other period as established from time to time by the Committee or generally accepted accounting principles), (iii) partly in cash and, to the extent permitted by the Committee, partly in such Shares or (iv) such other method approved by the Committee.  No Participant shall have any rights of a stockholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan. 

 

  

  

  

7. Other Stock-Based Awards.  

Subject to the consent of Hale, the Committee may grant Awards of Shares, Awards of restricted Shares and Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of, Shares ("Other Stock-Based Awards").  Such Other Stock-Based Awards shall vest in accordance with Section 3(e) of the Plan.  Other Stock-Based Awards may be granted alone or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan and Hale’s consent, the Committee shall determine (a) the number of Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards, (b) whether such Other Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares and (c) and all other terms and conditions of such Awards (other than the vesting provisions, which shall be as set forth in Section 3(e) of the Plan, and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).

 

8. Adjustments Upon Certain Events

 

Notwithstanding any other provisions in the Plan to the contrary, the following provisions shall apply to all Awards granted under the Plan:

 

	
  

	
(a)

	
Generally.  In the event of any change in the outstanding Shares after the Effective Date by reason of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination, or transaction or exchange of Shares or other corporate exchange, or any distribution to shareholders of Shares other than regular cash dividends or any transaction similar to the foregoing, the Committee, without liability to any person, shall make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number or kind of Shares or other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares that may be granted under the Plan pursuant to Options specified in Section 3(c) of the Plan (iii) the Option Prices specified in Section 6(a) of the Plan, (iv) the Option Prices under each outstanding Option and/or the purchase price under each outstanding Other Stock-Based Award and/or (v) any other affected terms of such Awards.

	
  

	
(b)

	
Change of Control. In the event of a Change of Control after the Effective Date, the Committee may, with the consent of Hale, provide for (i) the termination of an Award upon the consummation of the Change of Control, but only if such Award has vested and been paid out or the Participant has been permitted to exercise the Award in full for a period of not less than 10 days prior to the Change of Control, (ii) acceleration of all or any portion of an Award, (iii) the payment of any amount (in cash or, in the discretion of the Committee, in the form of consideration paid to shareholders of the Company in connection with such Change of Control) in exchange for the cancellation of such Award which, in the case of Options, may equal the excess, if any, of the Fair Market Value of the Shares subject to such Options over the Option Price of such Options, and/or (iv) issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder.

 

9. No Right to Employment or Awards

 

The granting of an Award under the Plan shall impose no obligation on the Company or any Affiliate to continue the employment or service or consulting relationship of a Participant and shall not lessen or affect the Company's or Affiliate's right to terminate the employment or service or consulting relationship of such Participant.  No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the Committee's determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).

 

10. Successors and Assigns

 

The Plan shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant's creditors.

  

  

  

11. Nontransferability of Awards

 

Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant otherwise than by will or by the laws of descent and distribution; provided that any transferees shall be subject to the terms and conditions of the Award.  An Award exercisable after the death of a Participant may be exercised by the legatees, personal representatives or distributees of the Participant.

  

12. Amendments or Termination

 

With the consent of Hale, the Board may amend, alter or discontinue the Plan, but no amendment, alteration or discontinuation shall be made which (a) without the approval of the shareholders of the Company, would (except as is provided in Section 8 of the Plan), increase the total number of Shares reserved for the purposes of the Plan or change the maximum number of Shares for which Awards may be granted to any Participant or (b) without the consent of a Participant, would diminish any of the rights of the Participant under any Award theretofore granted to such Participant under the Plan; provided, however, that the Board may amend the Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements of the Code or other applicable laws.  The Plan shall terminate on June 29, 2020 and may be terminated on any earlier date pursuant to this Section 12.

 

13. Tax Withholding.

 

The Company shall have the right to make all payments or distributions pursuant to the Plan to a Participant net of any applicable federal, state and local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Award, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event occurring pursuant to the Plan.  The Company or any Affiliate shall have the right to withhold from wages or other amounts otherwise payable to such Participant such withholding taxes as may be required by law, or to otherwise require the Participant to pay such withholding taxes. If the Participant shall fail to make such tax payments as are required, the Company or its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized to establish procedures for election by Participants to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value), or by directing the Company to retain Shares (up to the Participant's minimum required tax withholding rate or such other rate that will not trigger a negative accounting impact) otherwise deliverable in connection with the Award.  The Company shall not be required to issue any Shares or make any payments or distributions under the Plan until all applicable tax obligations are satisfied.

 

14. Compliance with Section 409A of the Code.

 

This Plan is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent that an Award or the payment, settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be granted, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including regulations or other guidance issued with respect thereto, except as otherwise determined by the Committee. Any provision of this Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A of the Code.  In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on a Participant by Code Section 409A or any damages for failing to comply with Section 409A of the Code.

 

15. Choice of Law

 

The Plan shall be governed by and construed in accordance with the laws of the State of Delaware without regard to conflicts of laws principles.

 

16.  Effectiveness of the Plan

 

The Plan was originally effective on the Effective Date.

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