Exhibit 10.5 Agreement for Sale of LLC
Membership Units
AGREEMENT FOR SALE OF
LLC MEMBERSHIP UNITS
--------------------
MEMBERSHIP
UNIT PURCHASE AGREEMENT made and entered into as of September
15, 2004, by and between SBI Oil and Gas
Resource Exploration LLC, a Delaware
limited liability company (the "Seller")
and Aztec Oil & Gas, Inc., a Nevada
corporation (the "Buyer").
Whereas,
the Seller desires to sell to the Buyer, and the Buyer desires
to purchase from the Seller, a 31.283%
membership unit interest (the "Units")
in Z2, LLC, a Florida limited liability
company ("Z2") on the terms and
conditions set forth herein;
Now,
therefore, in consideration of the mutual covenants,
agreements,
undertakings, representations, and
warranties contained herein, and for other
good and valuable consideration, the
receipt and adequacy of which are hereby
acknowledged, the Seller and the Buyer
agree as follows:
1.
Sale and Purchase of
Membership Units. At
the Closing provided for
in Paragraph 3, the Seller shall sell and
transfer the Units to the Buyer
against payment by the Buyer of the
Purchase Price provided for in Paragraph 2.
2.
Purchase Price of
Membership Units. The
Purchase Price for the Units
is:
(a) The assumption and agreement to
pay the unpaid balance of the
Purchase Price Obligation in the amount of
Two Hundred Sixty-Five Thousand
Dollars ($265,000) described in that
certain agreement for sale of 8.083 LLC
Membership Units dated August 1, 2004 by
and between Business and Financial
Consultants, LLC, a Florida limited
liability company, as Seller, and SBI Oil
and Gas Resource Exploration, LLC, a
Delaware limited liability company, as
Buyer.
(b) The execution and delivery by
Buyer of a Promissory Note in the
original principal amount of Two Hundred
Fifty Thousand Dollars ($250,000)
payable on or before the expiration of two
years after date and convertible,
at the option of the holder, into Two
Hundred Fifty Thousand (250,000) shares
of common stock of Buyer in the form and
substance attached hereto as
Exhibit A.
(c) Four Hundred Thousand (400,000)
shares of common stock of Buyer
bearing the following restrictive
legend:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"),
OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL
IN
THE
FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER
THAT
THIS NOTE MAY BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF,
UNDER AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH STATE
SECURITIES LAWS.
3.
Closing. The Closing of the sale and
purchase of the Units shall
take place in Houston, Texas on such date
and at such time as the Parties shall
agree, with an effective date of September
15, 2004. At the
Closing, the
Seller shall deliver to the Buyer the
original Membership Certificate, a copy
of which is attached as Exhibit B,
representing the Units, duly endorsed to the
Buyer or as the Buyer may direct.
At the Closing, the
Seller and the Buyer
shall execute and deliver an Assignment of
Limited Liability Company Interest
with respect to the Units (the "Assignment
Document"), and the Seller shall
obtain and deliver the signatures to such
Assignment Document by all members
of Z2 indicating their consent to the
transfer of the Units and the admission
of the Buyer as a member of Z2.
4.
Representations and
Warranties of the Seller. The Seller represents
and warrants to the Buyer as follows:
(a)
Organization and
Qualification. Z2 is a
duly organized and
validly existing limited liability company
under the laws of the State of
Florida. Z2 has the power, authority and
capacity to own, lease and operate
its properties, and to carry on its
business, as the same is now being
conducted. Z2 is duly qualified as a foreign
corporation to do business and
is in good standing in every jurisdiction
in which the nature of the business
conducted or property owned by it makes
such qualification necessary, except
where the failure to do so would not have
an adverse material effect on Z2.
The total outstanding equity ownership of
Z2 consists of 100 membership units.
(b)
The Units.
The Seller is the
lawful owner of the Units, and the
Seller has the full power and authority to
sell such Units, free and clear of
any liens or encumbrances whatsoever.
All of the Units have
been validly
issued and are fully paid and nonassessable
and not subject to any capital call
or requirement to make any further capital
contribution to Z2, except as
provided in the Z2, LLC Agreement Between
Equity Holders among the members of
Z2 dated May 17, 2004 (the "Equity Holders'
Agreement"). No person
has any
present or future right (conditional,
preemptive or otherwise) to acquire any
of the Units which has not been effectively
waived with respect to the sale
and transfer contemplated hereby.
(c)
Due Authorization;
Enforceability. The
execution and delivery of
this Agreement and the consummation of the
transactions contemplated hereby
(including, without limitation, the sale
and transfer of the Units) has been
duly authorized by all requisite action on
the part of the managers and
members of the Seller. This Agreement constitutes the
valid and binding
obligation of the Seller, enforceable in
accordance with its terms.
(d)
No Breach or Conflict.
The sale of the Units
contemplated by this
Agreement does not conflict with, or result
in a breach of, or a default
under, the Operating Agreement of Z2 or any
agreement or instrument to which
Z2 or the Seller is a party or by which Z2
or the Seller or the Units are
bound.
(e)
Access to Information
and Full Disclosure.
The Seller has provided,
and until the Closing will continue to
provide, to the Buyer the opportunity
to ask questions of and receive answers
from representatives of Z2 concerning
the business and prospects of Z2 and to
obtain any additional information
necessary to verify the information
provided to the Buyer or otherwise relative
to the finances and business of Z2, to the
extent that the Seller possesses
such information or can acquire it without
unreasonable effort or expense.
The Seller is not aware of any material
fact regarding Z2, the business and
prospects of Z2, or the industry in which
Z2 operates which has not been
disclosed to the Buyer.
5.
Representations and
Warranties of the Buyer. The Buyer represents
and warrants to the Seller as follows:
(a) Organization and Qualification.
Buyer is a duly
organized and
validly existing limited liability company
under the laws of the State of
Nevada. Buyer has the power, authority and
capacity to own, lease and
operate its properties, and to carry on its
business, as the same is now
being conducted.
(b) Due Authorization; Enforceability.
The execution and
delivery of
this Agreement and the consummation of the
transactions contemplated hereby
(including, without limitation, the sale
and transfer of the Units) has been
duly authorized by all requisite action on
the part of the board of directors
of the Buyer. This Agreement constitutes the
valid and binding obligation of
the Buyer, enforceable in accordance with
its terms.
(c) No Breach or Conflict.
The sale of the Units
contemplated by this
Agreement does not conflict with, or result
in a breach of, or a default
under any agreement or instrument to which
Buyer is a party or by which Buyer
is bound.
(d) Investment Intent. The Buyer is purchasing the Units
for investment
and has no present intent of engaging in a
distribution (as such term is
defined in the Securities Act of 1933, as
amended) of such Units.
(e) Knowledge and Experience.
The Buyer is an
"accredited investor"
(as such term is defined in Registration D
under the Securities Act of 1933,
as amended), is knowledgeable and
experienced in businesses of the sort
conducted by Z2, and acknowledges that it
has had the opportunity to make
inquiry of management of Z2 concerning the
business and financial condition
of Z2 and has received answers to its
inquiries that it considers fully
responsive and satisfactory.
(f) Investment Risk. The Buyer understands that the
Units have not
been registered under the Securities Act of
1933, as amended, were acquired
by the Seller in a transaction exempt from
the provisions of such Act, and
are being sold and transferred to the Buyer
in a transaction which the Seller
(in reliance on the representations and
warranties made by the Buyer herein)
believes is exempt from such registration
requirements; that there is no
public market for the Units; and that the
Buyer may be required to hold the
Units indefinitely. The Buyer is capable of evaluating
the merits and risks
involved in the acquisition of the Units
and is capable of bearing the
economic risk of such investment.
(g) Shares Duly Authorized.
The 400,000 shares of
common stock of Buyer
described in paragraph 2(c) hereinabove,
have been duly authorized and, when
delivered to Seller, will be validly
issued, fully paid and non-assessable
shares of common stock of Buyer.
6.
Corporate Governance.
The Seller and the
Buyer agree that the Buyer
is acquiring the Units subject to the terms
of the Equity Holders' Agreement
and of the Articles of Organization and
Regulations of Z2.
7.
Provisions to Survive
Delivery. The
representations, warranties,
covenants, indemnities, understandings,
agreements, and other statements of the
Seller and the Buyer set forth in, or made
in connection with, this Agreement
and the sale of the Units contemplated
hereby, shall survive transfer of, and
payment for, the Units.
8
Governing Law.
This Agreement shall
be construed in accordance with
the laws of the State of Texas.
All questions with
respect to the
construction of this Agreement and the
rights and liabilities of the parties
to this Agreement shall be governed by the
laws of the State of Texas. Any
action or proceeding arising out of or
relating to this Agreement shall be
brought in the State of Texas.
9.
Assignment.
Neither this Agreement
nor any interest of any party
herein may be assigned, pledged or
transferred without the prior written
consent of the parties hereto and subject
to the provisions outlined in the
Equity Holders' Agreement.
10.
Binding Effect.
This Agreement shall
inure to the benefit of, and
is binding upon, the parties hereto, and
their respective heirs,
representatives, successors, assigns, and
controlling person, but nothing
herein shall be construed as an
authorization or right of any party to
assign its rights and obligations under
this Agreement.
11.
Waiver. No waiver of any provision hereof
shall be valid unless
it is in writing and signed by the person
against whom it is charged.
12.
Notice. Any notice or demand required or
permitted to be given
pursuant hereto must be in writing
delivered personally or mailed by certified
mail, postage prepaid, addressed to the
person at the address specified below,
or at an address changed in this
manner.
If to the Buyer:
L. Mychal Jefferson, II, CEO
Aztec Oil & Gas, Inc.
770 South Post Oak Lane, Suite 435
Houston, Texas 77056
With a copy to:
Robert L. Sonfield, Jr., Esq.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056
If to the Seller:
Matthew McGovern
SBI-USA LLC
610 Newport Center Drive, Suite 1205
Newport Beach, California 92660
With a copy to:
Melissa A. Mahler, Esq.
Nixon Peabody LLP
Clinton
Square
P.O. Box 31051
Rochester, New York 14603
13.
Entire Agreement.
This Agreement
constitutes the entire agreement
upon the parties hereto with respect to the
subject matter hereof.
IN WITNESS
WHEREOF, the parties hereto have executed this Agreement
effective as of the 15th day of September,
2004.
SBI Oil and Gas Resource Exploration LLC
By _______________________________
Shelly Singhal
Aztec Oil & Gas, Inc.
By _______________________________
L. Mychal Jefferson, II, CEO
By _______________________________
Robert L. Sonfield, Jr.
Attorney-In-Fact
<PAGE>
Exhibit 10.6 - Term Credit Agreement
TERM CREDIT AGREEMENT
THIS TERM CREDIT
AGREEMENT (this "Agreement") is made and entered into as
of August 12, 2004, by and between Aztec
OIL & GAS, Inc., FKA Aztec
Communications Inc. ("Borrower") and HONG
KONG LEAGUE CENTRAL CREDIT UNION
("Lender"), with reference to the
following:
WITNESSETH:
WHEREAS, Lender
desires to make a Term Loan to Borrower, and Borrower
desires to borrow from Lender the amount of
such Term Loan, subject to and in
accordance with the terms and conditions
set forth herein, and in the Term
Note Agreement.
NOW, THEREFORE,
in consideration of the mutual covenants and agreements
contained herein, and for other good and
valuable consideration, the delivery,
receipt, and sufficiency of which is hereby
acknowledged, the parties hereto
agree as follows:
1. Certain Defined Terms.
As used in this Agreement, the following terms
shall have the following meanings:
"Business
Day" means a day (a) other than Saturday or Sunday, and (b) on
which commercial banks are open for
business in New York, New York, and Los
Angeles, California.
"Closing
Date" means the date each of the conditions precedent se
