[GRAPHIC OMITTED][GRAPHIC OMITTED]
February 7, 2007
Ms. Maureen Bauer
Staff Accountant
Securities and Exchange Commission
Division of Corporate Finance
Office of Emerging Growth Companies
450 Fifth Street N.W.
Washington, D.C. 20549
Re: Modavox, Inc.
Response letter dated September 15, 2006
Form 10-KSB/A1 for the year ended February 28, 2006
Filed October 28, 2006
Form 10-QSB/A1 for the quarter ended May 31, 2006
Filed October 28, 2006
File No. 333-57818
Dear Ms. Bauer:
As the Chief Executive Officer of Modavox Inc. (the "Company"), I am writing on
behalf of the Company to respond to the comments of the staff (the "Staff) of
the Division of Corporation Finance of the Securities and Exchange Commission
(the "Commission") contained in its letter, dated January 11, 2007, addressed to
me, with respect to the above referenced filing.
For convenience of reference, each Staff comment is reprinted in italics,
numbered to correspond with the paragraph numbers assigned in the Staff's
letter, and is followed by the corresponding response of the Company.
STAFF COMMENT: FORM 10-KSB FOR THE YEAR ENDED FEBRUARY 29, 2006
FINANCIAL STATEMENTS, PAGE 26
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, PAGE 34
REVENUE RECOGNITION, PAGE 35
1. PLEASE EXPLAIN TO US HOW THE COMPANY EARNS FEES THAT REPRESENT A
PERCENTAGE OF THE FEES PAID BY THIRD PARTY ADVERTISERS FOR ADVERTISING
ON THEIR WEBSITES OR THE COMPANY'S WEBSITE AND QUANTIFY THE AMOUNT FOR
EACH PERIOD COVERED BY THE FINANCIAL STATEMENTS, AS MENTIONED IN THE
SECOND PARAGRAPH ON PAGE 35. TELL US WHY THE COMPANY RECOGNIZES
REVENUES FROM THESE FEES WHEN CERTAIN CONTRACT CRITERIA ARE MET RATHER
THAN PRO RATA OVER THE CONTRACT PERIOD, AND EXPLAIN WHAT CONSTITUTES
TYPICAL CONTRACT CRITERIA.
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COMPANY RESPONSE:
We have revised Note 2 of our November 30, 2006 10-QSB to explain under "Revenue
Recognition" that "Fees representing a percentage of fees paid by third party
advertisers for advertising on third party or company websites are earned based
upon the number of times the website has been accessed by internet users and are
recorded when required access numbers have been met." We believe that this
better explains how the Company earns these fees. We record fees when the
criteria has been met because it is at that point that the fees are earned and
billed.
The Company believes that this will be an important source of future revenues.
However, fees recorded in the quarter ended November 30, 2006 were approximately
$200.
STAFF COMMENT: NOTE 3 ACQUISITION OF KINO INTERACTIVE LLC, PAGE 40
2. WE NOTE THAT YOU HAVE STILL NOT FILED A FORM 8-K CONTAINING THE
INFORMATION SPECIFIED IN ITEMS 2.01 - COMPLETION OF ACQUISITION OR
DISPOSITION OF ASSETS AND 9.01 - FINANCIAL STATEMENTS AND EXHIBITS.
THAT FORM 8-K WAS DUE NO LATER THAN 4 BUSINESS DAYS FOLLOWING THE DATE
YOU ACQUIRED KINO INTERACTIVE LLC, FEBRUARY 28, 2006. IT IS NOT
SUFFICIENT FOR YOU TO INFORM THE STAFF THAT YOU ARE AWARE OF THE
DELINQUENT FILING, YOU MUST ALSO INFORM THE INVESTING PUBLIC. PLEASE
FILE A FORM 8-K TO DISCLOSE THE FACT THAT YOU ACQUIRED A MATERIAL
SUBSIDIARY IN FEBRUARY AND PROVIDE ALL OF THE INFORMATION REQUIRED BY
ITEM 2.01 AND ALSO DISCLOSE THAT YOU ARE DELINQUENT REGARDING THE
FILING OF THE FINANCIAL STATEMENTS OF KINO, THE REASONS FOR THE
DELINQUENCY AND THE DATE YOU EXPECT TO FILE THE FINANCIAL STATEMENTS.
YOU SHOULD THEN PROVIDE THE CURRENT STATUS OF THE FILING DELINQUENCY IN
ALL SUBSEQUENT FORMS 10-QSB/10-KSB UNTIL THE FINANCIAL STATEMENTS ARE
FILED. IN ADDITION, PLEASE NOTE THE INSTRUCTION TO ITEM 9.01 OF FORM
8-K REGARDING FILINGS UNDER THE SECURITIES ACT UNTIL SUCH TIME AS THIS
REQUIRED INFORMATION HAS BEEN FILED.
COMPANY RESPONSE:
We will file the requested 8-K form covering the acquisition of Kino Interactive
during the week of February 12 2007. In addition, we have included in our Form
10-QSB for the quarter ended November 30, 2006, the following under "Item 5.
Other Information": "The Company is delinquent in filing Form 8-K and the
information required to be provided under Item 2.01 and 9.01 covering the
acquisition of Kino Interactive LLC, which occurred on February 28, 2006. The
information has not been filed because the required audited financial statements
of Kino Interactive LLC have not been completed. The Company is currently
working with it's auditors to complete the required financial information and
expects to complete the filing within 30 days." However, as set forth in our 8-K
dated February 5, 2007, the Chairman of our Audit Committee was verbally
informed by the Moss-Adams LLP audit partner that as a result of the acquisition
of our auditors, Epstein, Weber & Conover, P.L.C., by Moss-Adams LLP, that
subsequent to the filing of the November 30, 2006 10-QSB, Moss-Adams will no
longer perform audit services for Modavox, including the completion of the audit
required for the Kino Interactive acquisition 8-K. We are currently interviewing
with prospective new auditors and are optimistic that we will engage a new audit
firm within two or three weeks. We provided Epstein, Weber & Conover, P.L.C.
with financial information for the Kino Interactive audit several months ago. We
will provide this same information to our new auditors and request that they
complete the audit promptly.
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We have attached the specific page of Form 10Q-SB and our Form 8-K dated
February 5, 2007.
STAFF COMMENT: NOTE 5 - CAPITAL STOCK, PAGE 42
3. THE FACT THAT THERE ARE NO PROVISIONS OR TERMS WITHIN THESE WARRANTS
THAT COULD REQUIRE NET CASH SETTLEMENT DOES NOT NECESSARILY MEAN THAT
EQUITY CLASSIFICATION IS CORRECT. IF THE WARRANTS ARE REQUIRED TO BE
SETTLED WITH REGISTERED SHARES AND THE WARRANT AGREEMENT IS SILENT WITH
RESPECT TO THE CIRCUMSTANCES UNDER WHICH THE WARRANTS MAY BE NET
CASH-SETTLED, PARAGRAPH 17 OF EITF 00-19 PRESUMES THAT NET CASH
SETTLEMENT IS AN OPTION AND THEREFORE THE WARRANTS MUST BE CLASSIFIED
AS LIABILITIES. PLEASE DESCRIBE TO US THE TERMS OF SETTLING ALL
WARRANTS AND SUBMIT A COURTESY COPY OF THE APPLICABLE WARRANT
AGREEMENTS OR TELL US WHERE THE AGREEMENTS HAVE BEEN FILED AS EXHIBITS
SO THAT WE MAY REVIEW THE TERMS OF SETTLEMENT.
COMPANY RESPONSE:
We have submitted a courtesy copy of the applicable warrant agreements for your
review. The heading on the first page of the Warrant Agreement contains a
restrictive legend indicating that the shares underlying the Warrant are not
registered. Also, the Miscellaneous paragraph, subsection (c) indicates the same
and the Subscription Form attached indicates that cash payment is required for
the Warrants to be exercised and requires representation from the Warrant holder
that "the undersigned is acquiring such shares for the undersigned's own account
with the intent of holding such shares for investment and without the intent of
participating directly or indirectly in a distribution of such shares". We
believe that this meets the criteria which you discussed for equity
classification.
STAFF COMMENT: NOTE 5 - CAPITAL STOCK, PAGE 42
4. Please describe to us the circumstances under which the former officers
returned 300,000 shares of common stock to you in exchange for 170,000
shares. Generally, the value of compensation awards may only be
reversed when the employees fail to fulfill the obligation resulting in
the award. If you cancelled or modified the award for reasons other
than the officers' failure to fulfill the necessary obligations, the
new or modified award must be accounted for in accordance with the
guidelines set forth in Question 13 of FIN 44. Note also that the new
award may require variable accounting from the date of issuance. Please
revise the financial statements as necessary or cite the literature
upon which you are relying with respect to the accounting for this
transaction.
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COMPANY RESPONSE:
The compensation awards were reversed because the employees failed to fulfill
the obligations resulting in the award. The Company believes that this supports
the accounting used. The former officers returned 300,000 shares and received
170,000 shares under an agreement with the Company's Board of Directors, because
the officers had been terminated and had not fulfilled the two years of service
that was required for them to retain the 300,000 shares. In settlement with
these former officers, the Board of Directors authorized the issuance of 170,000
shares that were fully vested at the date of issuance. Since these shares were
issued as a termination settlement, and the former officers were no longer
employed by the Company in any capacity, we do not believe that variable
accounting is required.
STAFF COMMENT: FORM 10-QSB/A1 FOR MAY 31, 2006
EXHIBIT 31.13
5. THE SEC RULES UNDER SECTION 302 OF THE SARBANES-OXLEY ACT REQUIRE THAT
THE LANGUAGE OF THE 302 CERTIFICATION NOTE BE ALTERED. ITEM 601 (B)
(31) STATES THAT THE CERTIFICATION MUST BE PROVIDED EXACTLY AS STATED
THEREIN. WE NOTE MULTIPLE DIFFERENCES BETWEEN THE LANGUAGE OF YOUR
CERTIFICATION AND THE LANGUAGE THAT IS REQUIRED BY ITEM 601 (B) (31) OF
REGULATION S-B. AS PREVIOUSLY REQUESTED, PLEASE REVISE YOUR
CERTIFICATION ACCORDINGLY. SPECIFICALLY, WE NOTE THE FOLLOWING
DIFFERENCES BETWEEN YOUR DISCLOSURE AND THE REQUIRED LANGUAGE:
o YOUR DISCLOSURES IN PARAGRAPHS 2-5 SHOULD BE REVISED TO REFERENCE "THIS
REPORT" RATHER THAN "THIS QUARTERLY REPORT".
o PARAGRAPH 4 SHOULD BE REVISED TO REFER TO THE CORRECT CITATION FOR THE
DEFINITION OF DISCLOSURE CONTROLS AND PROCEDURES IN EXCHANGE ACT RULES
13A - 15(E) AND 15D-15(E).
o PARAGRAPHS 4(B) AND 4(C) SHOULD BE COMBINED AND REVISED TO STATE THAT
YOU HAVE EVALUATED THE EFFECTIVENESS OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AND PRESENTED YOUR CONCLUSIONS ABOUT THE
EFFECTIVENESS OF THE DISCLOSURE CONTROLS AND PROCEDURES AS OF THE END
OF THE PERIOD COVERED BY THE REPORT (NOTE BASED UPON OUR EVALUATION AS
OF THE EVALUATION DATE).
o PARAGRAPH 6 SHOULD BE MOVED TO PARAGRAPH 4(D) AND SHOULD INDICATE THAT
YOU HAVE DISCLOSED IN THE REPORT ANY CHANGE IN THE REGISTRANT'S
INTERNAL CONTROL OVER FINANCIAL REPORTING THAT OCCURRED DURING THE
REGISTRANT' MOST RECENT FISCAL QUARTER (THE REGISTRANT'S FOURTH FISCAL
QUARTER IN THE CASE OF AN ANNUAL REPORT) THAT HAS MATERIALLY AFFECTED,
OR IS REASONABLY LIKELY TO MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL
CONTROL OVER FINANCIAL REPORTING.
PARAGRAPH 5 SHOULD STATE THAT YOU HAVE DISCLOSED, BASED ON YOUR MOST
RECENT EVALUATION OF INTERNAL CONTROL OVER FINANCIAL REPORTING TO THE
REGISTRANT'S AUDITORS AND THE AUDIT COMMITTEE OF THE REGISTRANT'S BOARD
OF DIRECTIONS (OR PERSONS PERFORMING THE EQUIVALENT FUNCTIONS).
COMPANY RESPONSE:
We believe that we have modified the language of the Section 302 certification
in our November 30, 2006 Form 10-QSB to comply with the criteria that you have
set forth. We have also revised Section 302 certifications for our Forms 10-QSB
for the periods ending May 31, 2006 and August 31, 2006 as reflected in the
attachments.
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As you requested, we have marked copies of amended pages for your review. It is
our intention to file the requested amendments after your review of our
responses to your questions.
If you have any questions concerning this timing, please contact me at
480.294.6414.
Sincerely,
David J. Ide
Chief Executive Officer
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Attachment, Modavox Response Letter
ITEM 5. OTHER INFORMATION
The Company is delinquent in filing Form 8-K and the information required to be
provided under Item 2.01 and 9.01 covering the acquisition of Kino Interactive
LLC, which occurred on February 28, 2006. The information has not been filed
because the required audited financial statements of Kino Interactive LLC have
not been completed. The Company is currently working with it's auditors to
complete the required financial information and expects to complete the filing
within 30 days.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 5, 2007
Modavox, Inc.
------------------------------------------
(Exact name of registrant as specified in its charter)
State of Delaware 333-57818 20-0122076
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4636 E. University Drive, Suite #275
Phoenix, Arizona 85034
---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602-648-6090
Not Applicable
----------------------------------------------------
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
2.01 Completion of Acquisition of Disposition of Assets.
9.01 Financial Statements and Exhibits
ITEM 2.01. COMPLETION OF ACQUISITION OF DISPOSITION OF ASSETS.
On February, 28 2006 Modavox, Inc. completed the acquisition of Kino
Interactive, LLC pursuant to the Agreement and Plan of Merger dated December 5,
2005, by and among Modavox, Inc., Kino Acquisition Sub, Inc. and Kino
Interactive, LLC( the "Merger Agreement"). The acquisition was effected by a
merger of Kino Interactive LLC, into our wholly owned subsidiary, Kino
Acquisition Sub, Inc. A copy of the Merger Agreement was filed as Exhibit 10.41
to our quarterly report on Form 10-QSB filed January 24, 2006.
The consideration paid by Modavox pursuant to the Merger Agreement
consisted of 8,000,000 shares of our common stock, $0.0001 par value, 2,000,000
shares of our Series A Convertible Preferred Stock, $0.0001par value and
2,000,000 share of our series B Convertible Preferred Stock, $0.0001 par value,
all of which were issue to Kino Communication, LLC, the sole member of Kino
Interactive, LLC. David J. Ide and Nathan T Bradley were the sole members of
Kino Communications, LLC.
At the time of the transaction, Mr. Ide was our Chief Executive Officer
and Mr. Bradley was the Vice Chairman of our Board of Directors. Mr. Ide now is
our President, Chief Executive Officer and a member of our Board of Directors
and Mr. Bradley is the Chairman of our Board of Directors and our Executive Vice
President of Business Development and Strategic Marketing. The terms of the
transaction were established through negotiations between Mr. Ide, on behalf on
Kino Interactive, LLC and Robert Arkin, then the Chairman of our Board of
Directors and previously our CEO, on behalf of Modavox. The transaction was
approved the vote of a disinterested majority of our Board of Directors.
In addition, in connection with the transaction, Kino Interactive
entered in to a License Agreement with Kino Communications providing for an
exclusive, worldwide license of specified software programs and technical
information owned by Kino Communications. The license Agreement required Kino
Interactive to pay minimum license fees based on our monthly cash flow up to an
aggregate cumulative amount of 1,000,000 in such fees. A copy of the License
Agreement is filed as Exhibit 10.1 to this Form 8-K. Under the terms of the
Series A and Series B Preferred stock issued in the transaction, the license
fees paid under the License Agreement constituted redemptions of the preferred
stock at a price of $.25 per share. On March 15, 2006, we redeemed 500,000
shares of Services A preferred stock issued under the merger Agreement which
were then held by Messrs. Ide and Bradley for a cash payment of $125,000. On
August 31, 2006, we redeemed the remaining 3,500,000 outstanding shares of
Series A and Series B Preferred stock issued under the Merger Agreement which
were then held by Messrs. Ide and Bradley in exchange for cancellation of a
$33,884 payable to Audio Eye, LLC an affiliate of Kino Communication and Messrs.
Ide and Bradley, and the issuance of 3,364,463 shares of our common stock. No
further license fess are payable under the License Agreement.
Kino Interactive was a provider of software solutions that create
digital online audio/visual media for business to business and business to
consumer communications. The business of Kino Interact is now referred to as our
Interactive Media Division.
We are delinquent in filing this Form 8-K and the information required
to be provided under Items 2.01 and 9.01 for Form 8-K relating to the
Acquisition of Kino Interactive because the required audited financial
statements of Kino Interactive have not yet been completed.
SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) We will file the required audited financial statements of Kino
Interactive as soon as the statements and the related audit report
are complete.
(b) Exhibits
10.1 License Agreement dated December 5, 2005 between Kino
Interactive, LLC and Kino Communications, LLC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Modavox, Inc.
DATE: March 7, 2007 BY: /S/ DAVID J. IDE
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- ----------------------------- NAME: DAVID J. IDE
TITLE: CHIEF EXECUTIVE OFFICER
EXHIBIT 10.1
[GRAPHIC OMITTED][GRAPHIC OMITTED]
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY INTEREST IN SUCH
SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE TRANSACTION BY
WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR
TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES
LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
MODAVOX, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 50
No. of Shares: 40,000
Dated: April 20, 2006
This certifies that, for value received, Tiki Holdings LLC, hereinafter
referred to as the registered holder or the "Holder," or her successors and
assigns, is entitled, subject to the terms and conditions hereinafter set forth,
at or before 5:00 o'clock P.M., Eastern time, subject to adjustment upon the
occurrence of the contingencies set forth, to purchase forty thousand (40,000)
shares of $.0001 par value Common Stock (the "Common Stock") of Modavox, Inc.,
upon the exercise of this Warrant, at fifty cents ($.50) per share (the "Warrant
Price") and is subject to adjustments upon the occurrence of the contingencies
set forth in this Warrant. The Holder and Modavox are hereinafter referred to
collectively as the "Parties."
Upon delivery of this Warrant with the subscription form annexed
hereto, duly executed, together with payment of this Warrant Price for the
shares of Common Stock thereby purchased, at the principal office of Modavox,
2617 S. 46th Street, Suite 300, Phoenix, Arizona 85034, or at such other address
as Modavox may designate by notice in writing to the registered holder hereof,
the registered holder of this Warrant shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. All shares of
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
2617 SOUTH 46TH STREET SUITE 300 o PHOENIX, ARIZONA 85034-7417
VOICE: 480.643.5626 o FAX: 480.643.5659
www.modavox.com
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This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any part
from time to time, prior to 5:00 o'clock P.M., Eastern time, on or
before April 20, 2009, but not thereafter, as to all or any part of
the number of shares of Common Stock then subject hereto.
b. In case of any partial exercise of this Warrant, Modavox shall execute
and deliver a new Warrant of like tenor and date for the balance of
the shares of Common Stock purchasable hereunder. This Warrant may not
be exercised as to less than one thousand (1,000) shares at any one
time unless the number of shares purchased is the total number at the
time available for purchase under this Warrant. This Warrant may be
exercised only as to whole shares; fractional share interests will be
disregarded except that they may be accumulated.
c. Upon any exercise of this Warrant, Holder may, in lieu of payment of
the Warrant Price in cash, surrender this Warrant (or any successor
hereto or fraction hereof) (valued for such purpose at the Fair Market
Value of the underlying Common Stock for which such Warrant is
exercisable on the date of such exercise less the Warrant Price then
in effect) and apply all or a portion of the amount so determined to
the payment of the Warrant Price for the number of shares of Common
Stock being purchased as to all the number of whole shares of Common
Stock then subject hereto.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE HEREUNDER. In
case Modavox shall at any time subdivide the outstanding shares of its
Common Stock, this Warrant Price in effect immediately prior to such
subdivision shall be proportionately decreased, and in case Modavox shall
at any time combine the outstanding shares of its Common Stock, this
Warrant Price in effect shall immediately prior to such combination be
proportionately increased, effective from and after the record date of such
subdivision or combination, as the case may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and any
increase or decrease in the number of shares of Common Stock purchasable
upon the exercise of this Warrant, then and in each such case, Modavox,
within thirty (30) days thereafter, shall give written notice thereof to
the registered holder of this Warrant at the address of such holder as
shown on the books of Modavox, which notice shall state this Warrant Price
as adjusted and the increased or decreased number of shares purchasable
upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation of each. The holder of this Warrant shall have ten
(10) days in which to review the proposed adjustment and to object to the
proposed adjustment by notifying Modavox in writing of such objection,
setting forth in reasonable detail the reasons for such objection. If the
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holder fails to object to the proposed adjustment during such ten (10) day
period the proposed adjustment shall become final. If the holder objects to
the proposed adjustment then Modavox and the holder shall attempt to
reconcile their differences and if unable to do so such adjustment shall be
determined by Modavox's independent accountants whose determination shall
be final.
4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this Holder
by a written notice signed by this Holder, and delivered or mailed to
Modavox to the attention of the President. The notice shall specify the
number of shares of Stock which this Holder elects to purchase hereunder,
and be accompanied by (i) a certified or cashier's check payable to Modavox
in payment of the total Exercise Price applicable to such shares as
provided herein. Upon receipt of an such notice and accompanying payment,
Modavox agrees to issue to this Holder stock certificates for the number of
shares specified in such notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares of
Common Stock upon any exercise of this Warrant shall be made without charge
to the holder hereof for any tax or other expense in respect to the
issuance of such certificates, all of which taxes and expenses shall be
paid by Modavox, and such certificates shall be issued in the name of, or
in such name or names as may be directed by, the holder of this Warrant;
provided, however, that in the event that certificates for shares of Common
Stock are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by
an instrument of transfer in form satisfactory to Modavox, duly executed by
the holder hereof in person or by an attorney duly authorized in writing.
6. CERTAIN OBLIGATIONS OF MODAVOX. Modavox will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act or
deed, avoid or seek to avoid the performance or observance of any of the
covenants, stipulations or conditions to be performed or observed by
Modavox, but will at all times in good faith assist, insofar as it is able,
in the carrying out of all provisions of this Warrant and in the taking of
all other action which may be necessary in order to protect the rights of
the holder of this Warrant against dilution. Without limiting the
generality of the foregoing, Modavox agrees that it will not establish or
increase the par value of the shares of any Common Stock which are at the
time issuable upon exercise of this Warrant above the then prevailing
Warrant Price hereunder and that, before taking any action which would
cause an adjustment reducing this Warrant Price hereunder below the then
par value, if any, of the shares of any Common Stock issuable upon exercise
hereof, Modavox will take any corporate action which may, in the opinion of
its counsel, be necessary in order that Modavox may validly and legally
issue fully-paid and non-assessable shares of such Common Stock at this
Warrant Price as so adjusted.
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7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall confer
upon this Holder any right to continue in the engagement of Modavox or
constitute any contract or agreement of engagement. Nothing contained in
this Warrant shall interfere in any way with the right of Modavox to (i)
terminate the engagement of this Holder, or (ii) reduce the compensation
received by this Holder from time to time, provided that nothing herein
shall modify any written engagement or consulting agreement as may now
exist or hereinafter be entered into between Holder and Modavox.
8. EFFECT OF TERMINATION OF RELATIONSHIP. If this Holder ceases to be engaged
by Modavox for any reason, this Warrant shall terminate to the extent not
vested. Upon termination of Holder's engagement by reason of retirement,
disability or death, this Warrant, to the extent vested, may be exercised
by this Holder or her executor or administrator, as the case may be, at any
time prior to April 30, 2009.
9. Notices. All notices and other communications required or permitted under
this Warrant will be delivered to the parties at the address set forth
below their respective signature blocks, or at such other address that they
hereafter designate by notice to all other parties in accordance with this
Section. All notices and communications will be deemed to be received in
accordance with the following: (i) in the case of personal delivery, on the
date of such delivery; (ii) in the case of facsimile transmission, on the
date on which the sender receives confirmation by facsimile transmission
that such notice was received by the addressee, provided that a copy of
such transmission is additionally sent by mail as set forth in (iv) below;
(iii) in the case of overnight air courier, on the second business day
following the day sent, with receipt confirmed by the courier; and (iv) in
the case of mailing by first class certified mail, postage prepaid, return
receipt requested, on the fifth business day following such mailing.
10. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute arising out
of or relating to this Warrant or the breach hereof or subject matter
hereof (including any action in tort) will be finally and fully settled by
arbitration in Maricopa County, Arizona in accordance with the
then-existing Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"), and judgment upon the award rendered by the
arbitrators may be entered in any court having applicable jurisdiction.
Written notice of demand for arbitration will be given to the other parties
and to the AAA within six (6) months after the controversy, claim or
dispute has arisen or be barred, and in no event after the date when the
institution of court proceedings based on such dispute would be barred by
the applicable statute of limitations. Controversies, claims and/or
disputes will be resolved by one arbitrator selected by the mutual
agreement of the parties or, failing that agreement within forty-five (45)
days after written notice demanding arbitration, by the AAA. There will be
limited discovery prior to the arbitration hearing as follows: (i) exchange
of witness lists and copies of documentary evidence and documents related
to or arising out of the issues to be arbitrated, and (ii) depositions of
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all Party witnesses. Depositions will be conducted in accordance with the
rules or code of Civil Procedure of the jurisdiction in which the
arbitration is conducted, and a court reporter will record all hearings,
with such record constituting the official transcript of such proceedings.
All decisions of the arbitrator will be in writing, and the arbitrator will
provide reasons for the decision. Each of the Parties will bear its own
respective attorney's fees and costs in accordance with any dispute or
arbitration.
11. GOVERNING LAW. This Warrant will be deemed to have been executed in the
State of Delaware and will be governed and construed as to both substantive
and procedural matters in accordance with the laws of the State of
Delaware, but excepting (i) any State of Delaware rule which would result
in judicial failure to enforce the arbitration provisions of Section 11
hereof or any portion thereof and (ii) any State of Delaware rule which
would result in the application of the law of a jurisdiction other than the
State of Delaware. Any dispute arising from this Warrant must be filed in
the county in which the principal office of Modaovx is located.
12. COMPLETE AGREEMENT. This Warrant, contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all prior
agreements and understandings, whether written or oral, with respect to
such subject matter, and the Parties have made no agreements,
representations or warranties relating to the subject matter of this
Warrant which are not set forth herein. If a conflict is determined to
exist among any of the aforementioned agreements, the terms of this Warrant
will control.
13. AMENDMENT. This Warrant may not be amended, modified, superseded, canceled
or terminated, and any of the matters, covenants, representations,
warranties or conditions hereof may not be waived, except by written
instrument executed by the Parties or, in the case of a waiver, by such of
the Parties to be charged with such waiver.
14. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant will
not be considered a waiver or deprive that Party of the right thereafter to
insist upon strict adherence to that term or any other term, condition or
other provision of this Warrant.
15. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
16. SEVERABILITY. If any one clause or part of this Warrant is deemed invalid,
unenforceable or illegal by the arbitrators or court of competent
jurisdiction, then it is severed from this Warrant and the rest of this
Warrant remains in full force and effect. Holder acknowledges the
uncertainty of the law in this respect and expressly stipulates that this
Warrant be given the construction which renders its
-5-
17. FURTHER ASSURANCES. The Parties will sign such other instruments, cause
such meetings to be held, resolutions passed and by-laws enacted, exercise
their vote and influence, do and perform and cause to be done and performed
such further and other acts.
18. LEGAL COUNSEL. Holder hereby acknowledges that the Holder been urged to
retain legal counsel for advise.
19. MISCELLANEOUS.
(a) Modavox covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise hereof, a
sufficient number of shares of Common Stock to permit the exercise
hereof in full and a sufficient number of shares of Common Stock to
permit the conversion of all such shares of Common Stock.
(b) The terms of this Warrant shall be binding upon and shall inure to the
benefit of any successors or assigns of Modavox and of the holder or
holders hereof and of the Common Stock issued or issuable on the
exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under this
Warrant to vote or receive dividends (except as provided in paragraph
2 hereof) or be deemed to be a stockholder of Modavox for any purpose.
(d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the registered holder hereof in person
or by duly authorized attorney on the books of Modavox upon surrender
of this Warrant, properly endorsed, to Modavox. Modavox may deem and
treat the registered holder of this Warrant at any time as the
absolute owner hereof for all purposes and shall not be affected by
any notice to the contrary.
(e) By acceptance of this Warrant the registered holder represents and
warrants to Modavox that such holder is acquiring this Warrant and
will acquire any shares of Common Stock issued upon the exercise of
this Warrant for the holder's own account with the intent of holding
such warrant or shares for investment and without the intent of
participating directly or indirectly in a distribution of the same.
Any certificates for Common Stock issued upon the exercise of this
Warrant shall bear a legend similar to the legend appearing on the
first page of this Warrant.
-6-
IN WITNESS WHEREOF, Modavox has caused this Warrant to be signed by its duly
authorized officers and its corporation seal to be affixed hereto as of the date
first written on.
MODAVOX, INC.
By: /s/ DAVID IDE
---------------
David J. Ide
Chief Executive Officer
----------------------------------
Date
-7-
ASSIGNMENT
(To be Executed by the Registered Holder to effect a
Transfer of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of MODAVOX, INC., in accordance with the terms
and conditions thereof, and does hereby irrevocably constitute and appoint
- -------------------------------------- Attorney to transfer the said Warrant on
the books of Modavox, with full power of substitution.
By
- -------------------------------- --------------------------------------
Signature
Address
Dated: ______________________________
In the presence of:
-8-
SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights to
Purchase Stock evidenced by the foregoing Warrant)
TO: MODAVOX, INC.
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By: _____________________________
Signature
=================================
Address
Dated: _________________
-9-
EXHIBIT 10.2
[GRAPHIC OMITTED][GRAPHIC OMITTED]
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY INTEREST IN SUCH
SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE TRANSACTION BY
WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR
TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES
LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
MODAVOX, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 51
No. of Shares: 200,000
Dated: May 4, 2006
This certifies that, for value received, C & H Capital, Inc.,
hereinafter referred to as the registered holder or the "Holder," or successors
and assigns, is entitled, subject to the terms and conditions hereinafter set
forth, at or before 5:00 o'clock P.M., Eastern time, subject to adjustment upon
the occurrence of the contingencies set forth, to purchase two hundred thousand
(200,000) shares of $.0001 par value Common Stock (the "Common Stock") of
Modavox, Inc., upon the exercise of this Warrant, at twenty five cents ($.25)
per share (the "Warrant Price") and is subject to adjustments upon the
occurrence of the contingencies set forth in this Warrant. The Holder and
Modavox are hereinafter referred to collectively as the "Parties."
Upon delivery of this Warrant with the subscription form annexed
hereto, duly executed, together with payment of this Warrant Price for the
shares of Common Stock thereby purchased, at the principal office of Modavox,
2617 S. 46th Street, Suite 300, Phoenix, Arizona 85034, or at such other address
as Modavox may designate by notice in writing to the registered holder hereof,
the registered holder of this Warrant shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. All shares of
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
-1-
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any
part from time to time, prior to 5:00 o'clock P.M., Eastern time,
on or before May 4, 2009, but not thereafter, as to all or any
part of the number of shares of Common Stock then subject hereto.
b. In case of any partial exercise of this Warrant, Modavox shall
execute and deliver a new Warrant of like tenor and date for the
balance of the shares of Common Stock purchasable hereunder. This
Warrant may not be exercised as to less than twenty five thousand
(25,000) shares at any one time unless the number of shares
purchased is the total number at the time available for purchase
under this Warrant. This Warrant may be exercised only as to
whole shares; fractional share interests will be disregarded
except that they may be accumulated.
c. The Board of Directors' authorizes the issuance of the Company's
Common Stock pursuant to Securities and Exchange Commission Rule
144. The subscriber is not an officer, director or more than 5%
stockholder of the Company.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE
HEREUNDER. In case Modavox shall at any time subdivide the outstanding
shares of its Common Stock, this Warrant Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in
case Modavox shall at any time combine the outstanding shares of its
Common Stock, this Warrant Price in effect shall immediately prior to
such combination be proportionately increased, effective from and
after the record date of such subdivision or combination, as the case
may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and
any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, then and in each such
case, Modavox, within thirty (30) days thereafter, shall give written
notice thereof to the registered holder of this Warrant at the address
of such holder as shown on the books of Modavox, which notice shall
state this Warrant Price as adjusted and the increased or decreased
number of shares purchasable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation of each.
The holder of this Warrant shall have ten (10) days in which to review
the proposed adjustment and to object to the proposed adjustment by
notifying Modavox in writing of such objection, setting forth in
reasonable detail the reasons for such objection. If the holder fails
to object to the proposed adjustment during such ten (10) day period
the proposed adjustment shall become final. If the holder objects to
the proposed adjustment then Modavox and the holder shall attempt to
reconcile their differences and if unable to do so such adjustment
shall be determined by Modavox 's independent accountants whose
determination shall be final.
-2-
4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this
Holder by a written notice signed by this Holder, and delivered or
mailed to Modavox to the attention of the President. The notice shall
specify the number of shares of Stock which this Holder elects to
purchase hereunder, and be accompanied by (i) a certified or cashier's
check payable to Modavox in payment of the total Exercise Price
applicable to such shares as provided herein. Upon receipt of an such
notice and accompanying payment, Modavox agrees to issue to this
Holder stock certificates for the number of shares specified in such
notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made
without charge to the holder hereof for any tax or other expense in
respect to the issuance of such certificates, all of which taxes and
expenses shall be paid by Modavox, and such certificates shall be
issued in the name of, or in such name or names as may be directed by,
the holder of this Warrant; provided, however, that in the event that
certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of
transfer in form satisfactory to Modavox, duly executed by the holder
hereof in person or by an attorney duly authorized in writing.
6. CERTAIN OBLIGATIONS OF MODAVOX. Modavox will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act
or deed, avoid or seek to avoid the performance or observance of any
of the covenants, stipulations or conditions to be performed or
observed by Modavox, but will at all times in good faith assist,
insofar as it is able, in the carrying out of all provisions of this
Warrant and in the taking of all other action which may be necessary
in order to protect the rights of the holder of this Warrant against
dilution. Without limiting the generality of the foregoing, Modavox
agrees that it will not establish or increase the par value of the
shares of any Common Stock which are at the time issuable upon
exercise of this Warrant above the then prevailing Warrant Price
hereunder and that, before taking any action which would cause an
adjustment reducing this Warrant Price hereunder below the then par
value, if any, of the shares of any Common Stock issuable upon
exercise hereof, Modavox will take any corporate action which may, in
the opinion of its counsel, be necessary in order that Modavox may
validly and legally issue fully-paid and non-assessable shares of such
Common Stock at this Warrant Price as so adjusted.
7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall
confer upon this Holder any right to continue in the engagement of
Modavox or constitute any contract or agreement of engagement. Nothing
contained in this Warrant shall interfere in any way with the right of
Modavox to (i) terminate the engagement of this Holder, or (ii) reduce
the compensation received by this Holder from time to time, provided
that nothing herein shall modify any written engagement or consulting
agreement as may now exist or hereinafter be entered into between
Holder and Modavox.
-3-
8. Notices. All notices and other communications required or permitted
under this Warrant will be delivered to the parties at the address set
forth below their respective signature blocks, or at such other
address that they hereafter designate by notice to all other parties
in accordance with this Section. All notices and communications will
be deemed to be received in accordance with the following: (i) in the
case of personal delivery, on the date of such delivery; (ii) in the
case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission
is additionally sent by mail as set forth in (iv) below; (iii) in the
case of overnight air courier, on the second business day following
the day sent, with receipt confirmed by the courier; and (iv) in the
case of mailing by first class certified mail, postage prepaid, return
receipt requested, on the fifth business day following such mailing.
9. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute arising
out of or relating to this Warrant or the breach hereof or subject
matter hereof (including any action in tort) will be finally and fully
settled by arbitration in Maricopa County, Arizona in accordance with
the then-existing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), and judgment upon the award
rendered by the arbitrators may be entered in any court having
applicable jurisdiction. Written notice of demand for arbitration will
be given to the other parties and to the AAA within six (6) months
after the controversy, claim or dispute has arisen or be barred, and
in no event after the date when the institution of court proceedings
based on such dispute would be barred by the applicable statute of
limitations. Controversies, claims and/or disputes will be resolved by
one arbitrator selected by the mutual agreement of the parties or,
failing that agreement within forty-five (45) days after written
notice demanding arbitration, by the AAA. There will be limited
discovery prior to the arbitration hearing as follows: (i) exchange of
witness lists and copies of documentary evidence and documents related
to or arising out of the issues to be arbitrated, and (ii) depositions
of all Party witnesses. Depositions will be conducted in accordance
with the rules or code of Civil Procedure of the jurisdiction in which
the arbitration is conducted, and a court reporter will record all
hearings, with such record constituting the official transcript of
such proceedings. All decisions of the arbitrator will be in writing,
and the arbitrator will provide reasons for the decision. Each of the
Parties will bear its own respective attorney's fees and costs in
accordance with any dispute or arbitration.
10. GOVERNING LAW. This Warrant will be deemed to have been executed in
the State of Delaware and will be governed and construed as to both
substantive and procedural matters in accordance with the laws of the
State of Delaware, but excepting (i) any State of Delaware rule which
would result in judicial failure to enforce the arbitration provisions
-4-
of Section 11 hereof or any portion thereof and (ii) any State of
Delaware rule which would result in the application of the law of a
jurisdiction other than the State of Delaware. Any dispute arising
from this Warrant must be filed in the county in which the principal
office of Modavox is located.
11. COMPLETE AGREEMENT. This Warrant, along with the Network Host
Agreement, contains the entire agreement of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter, and the Parties have made no agreements, representations or
warranties relating to the subject matter of this Warrant which are
not set forth herein. If a conflict is determined to exist among any
of the aforementioned agreements, the terms of this Warrant will
control.
12. AMENDMENT. This Warrant may not be amended, modified, superseded,
canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived,
except by written instrument executed by the Parties or, in the case
of a waiver, by such of the Parties to be charged with such waiver.
13. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant
will not be considered a waiver or deprive that Party of the right
thereafter to insist upon strict adherence to that term or any other
term, condition or other provision of this Warrant.
14. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
15. SEVERABILITY. If any one clause or part of this Warrant is deemed
invalid, unenforceable or illegal by the arbitrators or court of
competent jurisdiction, then it is severed from this Warrant and the
rest of this Warrant remains in full force and effect. Holder
acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Warrant be given the construction which renders
its
16. FURTHER ASSURANCES. The Parties will sign such other instruments,
cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause
to be done and performed such further and other acts.
17. LEGAL COUNSEL. Holder hereby acknowledges that she has been advised
that the party who drafted this Warrant on behalf of Modavox is a
licensed attorney, that such party is representing Modavox's interests
only and that Holder been urged to retain legal counsel to advise her.
-5-
18. MISCELLANEOUS.
(a) Modavox covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit
the exercise hereof in full and a sufficient number of shares of
Common Stock to permit the conversion of all such shares of
Common Stock.
(b) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of Modavox and of the
holder or holders hereof and of the Common Stock issued or
issuable on the exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under this
Warrant to vote or receive dividends (except as provided in
paragraph 2 hereof) or be deemed to be a stockholder of Modavox
for any purpose.
(d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the registered holder hereof in
person or by duly authorized attorney on the books of Modavox
upon surrender of this Warrant, properly endorsed, to Modavox.
Modavox may deem and treat the registered holder of this Warrant
at any time as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
(e) By acceptance of this Warrant the registered holder represents
and warrants to Modavox that such holder is acquiring this
Warrant and will acquire any shares of Common Stock issued upon
the exercise of this Warrant for the holder's own account with
the intent of holding such warrant or shares for investment and
without the intent of participating directly or indirectly in a
distribution of the same. Any certificates for Common Stock
issued upon the exercise of this Warrant shall bear a legend
similar to the legend appearing on the first page of this
Warrant.
IN WITNESS WHEREOF, Modavox has caused this Warrant to be signed by its duly
authorized officers and its corporation seal to be affixed hereto as of the date
first written on.
MODAVOX, INC.
By: /S/ DAVID J. IDE
--------------------
David J. Ide
Chief Executive Officer
----------------------------------
Date
-6-
ASSIGNMENT
(To be Executed by the Registered Holder to effect a
Transfer of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of MODAVOX, INC., in accordance with the terms
and conditions thereof, and does hereby irrevocably constitute and appoint
- -------------------------------------- Attorney to transfer the said Warrant on
the books of Modavox, with full power of substitution.
By:
---------------------------
C & H Capital, Inc.
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
In the presence of:
__________________________________
-7-
SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights to Purchase
Stock evidenced by the foregoing Warrant)
TO: MODAVOX, INC.
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By:
---------------------------
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
-8-
EXHIBIT 10.3
[GRAPHIC OMITTED][GRAPHIC OMITTED]
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY INTEREST IN SUCH
SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE TRANSACTION BY
WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR
TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES
LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
MODAVOX, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 52
No. of Shares: 200,000
Dated: February 28, 2006
This certifies that, for value received, Dana LLC, hereinafter referred
to as the registered holder or the "Holder," or successors and assigns, is
entitled, subject to the terms and conditions hereinafter set forth, at or
before 5:00 o'clock P.M., Eastern time, subject to adjustment upon the
occurrence of the contingencies set forth, to purchase two hundred thousand
(200,000) shares of $.0001 par value Common Stock (the "Common Stock") of
Modavox, Inc., upon the exercise of this Warrant, at fifty cents ($.50) per
share (the "Warrant Price") and is subject to adjustments upon the occurrence of
the contingencies set forth in this Warrant. The Holder and Modavox are
hereinafter referred to collectively as the "Parties."
Upon delivery of this Warrant with the subscription form annexed
hereto, duly executed, together with payment of this Warrant Price for the
shares of Common Stock thereby purchased, at the principal office of Modavox,
2617 S. 46th Street, Suite 300, Phoenix, Arizona 85034, or at such other address
as Modavox may designate by notice in writing to the registered holder hereof,
the registered holder of this Warrant shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. All shares of
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
-1-
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any
part from time to time, prior to 5:00 o'clock P.M., Eastern time,
on or before February 28, 2009, but not thereafter, as to all or
any part of the number of shares of Common Stock then subject
hereto.
b. In case of any partial exercise of this Warrant, Modavox shall
execute and deliver a new Warrant of like tenor and date for the
balance of the shares of Common Stock purchasable hereunder. This
Warrant may not be exercised as to less than twenty five thousand
(25,000) shares at any one time unless the number of shares
purchased is the total number at the time available for purchase
under this Warrant. This Warrant may be exercised only as to
whole shares; fractional share interests will be disregarded
except that they may be accumulated.
c. The Board of Directors' authorizes the issuance of the Company's
Common Stock pursuant to Securities and Exchange Commission Rule
144. The subscriber is not an officer, director or more than 5%
stockholder of the Company.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE
HEREUNDER. In case Modavox shall at any time subdivide the outstanding
shares of its Common Stock, this Warrant Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in
case Modavox shall at any time combine the outstanding shares of its
Common Stock, this Warrant Price in effect shall immediately prior to
such combination be proportionately increased, effective from and
after the record date of such subdivision or combination, as the case
may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and
any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, then and in each such
case, Modavox, within thirty (30) days thereafter, shall give written
notice thereof to the registered holder of this Warrant at the address
of such holder as shown on the books of Modavox, which notice shall
state this Warrant Price as adjusted and the increased or decreased
number of shares purchasable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation of each.
The holder of this Warrant shall have ten (10) days in which to review
the proposed adjustment and to object to the proposed adjustment by
notifying Modavox in writing of such objection, setting forth in
reasonable detail the reasons for such objection. If the holder fails
to object to the proposed adjustment during such ten (10) day period
the proposed adjustment shall become final. If the holder objects to
the proposed adjustment then Modavox and the holder shall attempt to
reconcile their differences and if unable to do so such adjustment
shall be determined by Modavox 's independent accountants whose
determination shall be final.
-2-
4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this
Holder by a written notice signed by this Holder, and delivered or
mailed to Modavox to the attention of the President. The notice shall
specify the number of shares of Stock which this Holder elects to
purchase hereunder, and be accompanied by (i) a certified or cashier's
check payable to Modavox in payment of the total Exercise Price
applicable to such shares as provided herein. Upon receipt of an such
notice and accompanying payment, Modavox agrees to issue to this
Holder stock certificates for the number of shares specified in such
notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made
without charge to the holder hereof for any tax or other expense in
respect to the issuance of such certificates, all of which taxes and
expenses shall be paid by Modavox, and such certificates shall be
issued in the name of, or in such name or names as may be directed by,
the holder of this Warrant; provided, however, that in the event that
certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of
transfer in form satisfactory to Modavox, duly executed by the holder
hereof in person or by an attorney duly authorized in writing.
6. CERTAIN OBLIGATIONS OF MODAVOX. Modavox will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act
or deed, avoid or seek to avoid the performance or observance of any
of the covenants, stipulations or conditions to be performed or
observed by Modavox, but will at all times in good faith assist,
insofar as it is able, in the carrying out of all provisions of this
Warrant and in the taking of all other action which may be necessary
in order to protect the rights of the holder of this Warrant against
dilution. Without limiting the generality of the foregoing, Modavox
agrees that it will not establish or increase the par value of the
shares of any Common Stock which are at the time issuable upon
exercise of this Warrant above the then prevailing Warrant Price
hereunder and that, before taking any action which would cause an
adjustment reducing this Warrant Price hereunder below the then par
value, if any, of the shares of any Common Stock issuable upon
exercise hereof, Modavox will take any corporate action which may, in
the opinion of its counsel, be necessary in order that Modavox may
validly and legally issue fully-paid and non-assessable shares of such
Common Stock at this Warrant Price as so adjusted.
7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall
confer upon this Holder any right to continue in the engagement of
Modavox or constitute any contract or agreement of engagement. Nothing
contained in this Warrant shall interfere in any way with the right of
Modavox to (i) terminate the engagement of this Holder, or (ii) reduce
the compensation received by this Holder from time to time, provided
that nothing herein shall modify any written engagement or consulting
agreement as may now exist or hereinafter be entered into between
Holder and Modavox.
-3-
8. Notices. All notices and other communications required or permitted
under this Warrant will be delivered to the parties at the address set
forth below their respective signature blocks, or at such other
address that they hereafter designate by notice to all other parties
in accordance with this Section. All notices and communications will
be deemed to be received in accordance with the following: (i) in the
case of personal delivery, on the date of such delivery; (ii) in the
case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission
is additionally sent by mail as set forth in (iv) below; (iii) in the
case of overnight air courier, on the second business day following
the day sent, with receipt confirmed by the courier; and (iv) in the
case of mailing by first class certified mail, postage prepaid, return
receipt requested, on the fifth business day following such mailing.
9. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute arising
out of or relating to this Warrant or the breach hereof or subject
matter hereof (including any action in tort) will be finally and fully
settled by arbitration in Maricopa County, Arizona in accordance with
the then-existing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), and judgment upon the award
rendered by the arbitrators may be entered in any court having
applicable jurisdiction. Written notice of demand for arbitration will
be given to the other parties and to the AAA within six (6) months
after the controversy, claim or dispute has arisen or be barred, and
in no event after the date when the institution of court proceedings
based on such dispute would be barred by the applicable statute of
limitations. Controversies, claims and/or disputes will be resolved by
one arbitrator selected by the mutual agreement of the parties or,
failing that agreement within forty-five (45) days after written
notice demanding arbitration, by the AAA. There will be limited
discovery prior to the arbitration hearing as follows: (i) exchange of
witness lists and copies of documentary evidence and documents related
to or arising out of the issues to be arbitrated, and (ii) depositions
of all Party witnesses. Depositions will be conducted in accordance
with the rules or code of Civil Procedure of the jurisdiction in which
the arbitration is conducted, and a court reporter will record all
hearings, with such record constituting the official transcript of
such proceedings. All decisions of the arbitrator will be in writing,
and the arbitrator will provide reasons for the decision. Each of the
Parties will bear its own respective attorney's fees and costs in
accordance with any dispute or arbitration.
10. GOVERNING LAW. This Warrant will be deemed to have been executed in
the State of Delaware and will be governed and construed as to both
substantive and procedural matters in accordance with the laws of the
State of Delaware, but excepting (i) any State of
-4-
Delaware rule which would result in judicial failure to enforce
the arbitration provisions of Section 11 hereof or any portion
thereof and (ii) any State of Delaware rule which would result in
the application of the law of a jurisdiction other than the State
of Delaware. Any dispute arising from this Warrant must be filed
in the county in which the principal office of Modavox is
located.
11. COMPLETE AGREEMENT. This Warrant, along with the Network Host
Agreement, contains the entire agreement of the parties relating
to the subject matter hereof and supersedes all prior agreements
and understandings, whether written or oral, with respect to such
subject matter, and the Parties have made no agreements,
representations or warranties relating to the subject matter of
this Warrant which are not set forth herein. If a conflict is
determined to exist among any of the aforementioned agreements,
the terms of this Warrant will control.
12. AMENDMENT. This Warrant may not be amended, modified, superseded,
canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be
waived, except by written instrument executed by the Parties or,
in the case of a waiver, by such of the Parties to be charged
with such waiver.
13. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant
will not be considered a waiver or deprive that Party of the right
thereafter to insist upon strict adherence to that term or any other
term, condition or other provision of this Warrant.
14. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
15. SEVERABILITY. If any one clause or part of this Warrant is deemed
invalid, unenforceable or illegal by the arbitrators or court of
competent jurisdiction, then it is severed from this Warrant and the
rest of this Warrant remains in full force and effect. Holder
acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Warrant be given the construction which renders
its
16. FURTHER ASSURANCES. The Parties will sign such other instruments,
cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause
to be done and performed such further and other acts.
17. LEGAL COUNSEL. Holder hereby acknowledges that she has been advised
that the party who drafted this Warrant on behalf of Modavox is a
licensed attorney, that such party is representing Modavox's interests
only and that Holder been urged to retain legal counsel to advise her.
-5-
18. MISCELLANEOUS.
(a) Modavox covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit
the exercise hereof in full and a sufficient number of shares of
Common Stock to permit the conversion of all such shares of
Common Stock.
(b) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of Modavox and of the
holder or holders hereof and of the Common Stock issued or
issuable on the exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under this
Warrant to vote or receive dividends (except as provided in
paragraph 2 hereof) or be deemed to be a stockholder of Modavox
for any purpose.
(d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the registered holder hereof in
person or by duly authorized attorney on the books of Modavox
upon surrender of this Warrant, properly endorsed, to Modavox.
Modavox may deem and treat the registered holder of this Warrant
at any time as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
(e) By acceptance of this Warrant the registered holder represents
and warrants to Modavox that such holder is acquiring this
Warrant and will acquire any shares of Common Stock issued upon
the exercise of this Warrant for the holder's own account with
the intent of holding such warrant or shares for investment and
without the intent of participating directly or indirectly in a
distribution of the same. Any certificates for Common Stock
issued upon the exercise of this Warrant shall bear a legend
similar to the legend appearing on the first page of this
Warrant.
IN WITNESS WHEREOF, Modavox has caused this Warrant to be signed by its duly
authorized officers and its corporation seal to be affixed hereto as of the date
first written on.
MODAVOX, INC.
By: [GRAPHIC OMITTED][GRAPHIC OMITTED][OBJECT OMITTED]
/S/ DAVID J. IDE
--------------------------
David J. Ide
Chief Executive Officer
----------------------------------
Date
-6-
ASSIGNMENT
(To be Executed by the Registered Holder to effect a
Transfer of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of MODAVOX, INC., in accordance with the terms
and conditions thereof, and does hereby irrevocably constitute and appoint
- --------------------------------------
Attorney to transfer the said Warrant on the books of Modavox, with full power
of substitution.
By: __________________________________
Dana LLC
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
In the presence of:
__________________________________
-7-
SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights to Purchase
Stock evidenced by the foregoing Warrant)
TO: MODAVOX, INC.
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By:
---------------------------
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
-8-
EXHIBIT 10.4
[GRAPHIC OMITTED][GRAPHIC OMITTED]
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY INTEREST IN SUCH
SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE TRANSACTION BY
WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR
TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES
LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
MODAVOX, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 54
No. of Shares: 500,000
Dated: May 29, 2005
This certifies that, for value received, Dennis Postma, hereinafter
referred to as the registered holder or the "Holder," or successors and assigns,
is entitled, subject to the terms and conditions hereinafter set forth, at or
before 5:00 o'clock P.M., Eastern time, subject to adjustment upon the
occurrence of the contingencies set forth, to purchase five hundred thousand
(500,000) shares of $.0001 par value Common Stock (the "Common Stock") of
Modavox, Inc., upon the exercise of this Warrant, at twenty five cents ($.25)
per share (the "Warrant Price") and is subject to adjustments upon the
occurrence of the contingencies set forth in this Warrant.
The Holder and Modavox are hereinafter referred to collectively as the
"Parties."
Upon delivery of this Warrant with the subscription form annexed
hereto, duly executed, together with payment of this Warrant Price for the
shares of Common Stock thereby purchased, at the principal office of Modavox,
2617 S. 46th Street, Suite 300, Phoenix, Arizona 85034, or at such other address
as Modavox may designate by notice in writing to the registered holder hereof,
the registered holder of this Warrant shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. All shares of
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
-1-
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any
part from time to time, prior to 5:00 o'clock P.M., Eastern time,
on or before May 29, 2008, but not thereafter, as to all or any
part of the number of shares of Common Stock then subject hereto.
b. In case of any partial exercise of this Warrant, Modavox shall
execute and deliver a new Warrant of like tenor and date for the
balance of the shares of Common Stock purchasable hereunder. This
Warrant may not be exercised as to less than twenty five thousand
(25,000) shares at any one time unless the number of shares
purchased is the total number at the time available for purchase
under this Warrant. This Warrant may be exercised only as to
whole shares; fractional share interests will be disregarded
except that they may be accumulated.
c. The Board of Directors' authorizes the issuance of the Company's
Common Stock pursuant to Securities and Exchange Commission Rule
144. The subscriber is not an officer, director or more than 5%
stockholder of the Company.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE
HEREUNDER. In case Modavox shall at any time subdivide the outstanding
shares of its Common Stock, this Warrant Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in
case Modavox shall at any time combine the outstanding shares of its
Common Stock, this Warrant Price in effect shall immediately prior to
such combination be proportionately increased, effective from and
after the record date of such subdivision or combination, as the case
may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and
any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, then and in each such
case, Modavox, within thirty (30) days thereafter, shall give written
notice thereof to the registered holder of this Warrant at the address
of such holder as shown on the books of Modavox, which notice shall
state this Warrant Price as adjusted and the increased or decreased
number of shares purchasable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation of each.
The holder of this Warrant shall have ten (10) days in which to review
the proposed adjustment and to object to the proposed adjustment by
notifying Modavox in writing of such objection, setting forth in
reasonable detail the reasons for such objection. If the holder fails
to object to the proposed adjustment during such ten (10) day period
the proposed adjustment shall become final. If the holder objects to
the proposed adjustment then Modavox and the holder shall attempt to
reconcile their differences and if unable to do so such adjustment
shall be determined by Modavox 's independent accountants whose
determination shall be final.
-2-
4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this
Holder by a written notice signed by this Holder, and delivered or
mailed to Modavox to the attention of the President. The notice shall
specify the number of shares of Stock which this Holder elects to
purchase hereunder, and be accompanied by (i) a certified or cashier's
check payable to Modavox in payment of the total Exercise Price
applicable to such shares as provided herein. Upon receipt of an such
notice and accompanying payment, Modavox agrees to issue to this
Holder stock certificates for the number of shares specified in such
notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made
without charge to the holder hereof for any tax or other expense in
respect to the issuance of such certificates, all of which taxes and
expenses shall be paid by Modavox, and such certificates shall be
issued in the name of, or in such name or names as may be directed by,
the holder of this Warrant; provided, however, that in the event that
certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of
transfer in form satisfactory to Modavox, duly executed by the holder
hereof in person or by an attorney duly authorized in writing.
6. CERTAIN OBLIGATIONS OF MODAVOX. Modavox will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act
or deed, avoid or seek to avoid the performance or observance of any
of the covenants, stipulations or conditions to be performed or
observed by Modavox, but will at all times in good faith assist,
insofar as it is able, in the carrying out of all provisions of this
Warrant and in the taking of all other action which may be necessary
in order to protect the rights of the holder of this Warrant against
dilution. Without limiting the generality of the foregoing, Modavox
agrees that it will not establish or increase the par value of the
shares of any Common Stock which are at the time issuable upon
exercise of this Warrant above the then prevailing Warrant Price
hereunder and that, before taking any action which would cause an
adjustment reducing this Warrant Price hereunder below the then par
value, if any, of the shares of any Common Stock issuable upon
exercise hereof, Modavox will take any corporate action which may, in
the opinion of its counsel, be necessary in order that Modavox may
validly and legally issue fully-paid and non-assessable shares of such
Common Stock at this Warrant Price as so adjusted.
7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall
confer upon this Holder any right to continue in the engagement of
Modavox or constitute any contract or agreement of engagement. Nothing
contained in this Warrant shall interfere in any way with the right of
Modavox to (i) terminate the engagement of this Holder, or (ii) reduce
the compensation received by this Holder from time to time, provided
that nothing herein shall modify any written engagement or consulting
agreement as may now exist or hereinafter be entered into between
Holder and Modavox.
-3-
8. Notices. All notices and other communications required or permitted
under this Warrant will be delivered to the parties at the address set
forth below their respective signature blocks, or at such other
address that they hereafter designate by notice to all other parties
in accordance with this Section. All notices and communications will
be deemed to be received in accordance with the following: (i) in the
case of personal delivery, on the date of such delivery; (ii) in the
case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission
is additionally sent by mail as set forth in (iv) below; (iii) in the
case of overnight air courier, on the second business day following
the day sent, with receipt confirmed by the courier; and (iv) in the
case of mailing by first class certified mail, postage prepaid, return
receipt requested, on the fifth business day following such mailing.
9. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute arising
out of or relating to this Warrant or the breach hereof or subject
matter hereof (including any action in tort) will be finally and fully
settled by arbitration in Maricopa County, Arizona in accordance with
the then-existing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), and judgment upon the award
rendered by the arbitrators may be entered in any court having
applicable jurisdiction. Written notice of demand for arbitration will
be given to the other parties and to the AAA within six (6) months
after the controversy, claim or dispute has arisen or be barred, and
in no event after the date when the institution of court proceedings
based on such dispute would be barred by the applicable statute of
limitations. Controversies, claims and/or disputes will be resolved by
one arbitrator selected by the mutual agreement of the parties or,
failing that agreement within forty-five (45) days after written
notice demanding arbitration, by the AAA. There will be limited
discovery prior to the arbitration hearing as follows: (i) exchange of
witness lists and copies of documentary evidence and documents related
to or arising out of the issues to be arbitrated, and (ii) depositions
of all Party witnesses. Depositions will be conducted in accordance
with the rules or code of Civil Procedure of the jurisdiction in which
the arbitration is conducted, and a court reporter will record all
hearings, with such record constituting the official transcript of
such proceedings. All decisions of the arbitrator will be in writing,
and the arbitrator will provide reasons for the decision. Each of the
Parties will bear its own respective attorney's fees and costs in
accordance with any dispute or arbitration.
10. GOVERNING LAW. This Warrant will be deemed to have been executed in
the State of Delaware and will be governed and construed as to both
substantive and procedural matters in accordance with the laws of the
State of Delaware, but excepting (i) any State of Delaware rule which
would result in judicial failure to enforce the arbitration provisions
of Section 11 hereof or any portion thereof and (ii) any State of
-4-
Delaware rule which would result in the application of the law of a
jurisdiction other than the State of Delaware. Any dispute arising
from this Warrant must be filed in the county in which the principal
office of Modavox is located.
11. COMPLETE AGREEMENT. This Warrant, along with the Network Host
Agreement, contains the entire agreement of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter, and the Parties have made no agreements, representations or
warranties relating to the subject matter of this Warrant which are
not set forth herein. If a conflict is determined to exist among any
of the aforementioned agreements, the terms of this Warrant will
control.
12. AMENDMENT. This Warrant may not be amended, modified, superseded,
canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived,
except by written instrument executed by the Parties or, in the case
of a waiver, by such of the Parties to be charged with such waiver.
13. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant
will not be considered a waiver or deprive that Party of the right
thereafter to insist upon strict adherence to that term or any other
term, condition or other provision of this Warrant.
14. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
15. SEVERABILITY. If any one clause or part of this Warrant is deemed
invalid, unenforceable or illegal by the arbitrators or court of
competent jurisdiction, then it is severed from this Warrant and the
rest of this Warrant remains in full force and effect. Holder
acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Warrant be given the construction which renders
its
16. FURTHER ASSURANCES. The Parties will sign such other instruments,
cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause
to be done and performed such further and other acts.
17. LEGAL COUNSEL. Holder hereby acknowledges that she has been advised
that the party who drafted this Warrant on behalf of Modavox is a
licensed attorney, that such party is representing Modavox's interests
only and that Holder been urged to retain legal counsel to advise her.
-5-
18. MISCELLANEOUS.
(a) Modavox covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit
the exercise hereof in full and a sufficient number of shares of
Common Stock to permit the conversion of all such shares of
Common Stock.
(b) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of Modavox and of the
holder or holders hereof and of the Common Stock issued or
issuable on the exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under this
Warrant to vote or receive dividends (except as provided in
paragraph 2 hereof) or be deemed to be a stockholder of Modavox
for any purpose.
(d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the registered holder hereof in
person or by duly authorized attorney on the books of Modavox
upon surrender of this Warrant, properly endorsed, to Modavox.
Modavox may deem and treat the registered holder of this Warrant
at any time as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
(e) By acceptance of this Warrant the registered holder represents
and warrants to Modavox that such holder is acquiring this
Warrant and will acquire any shares of Common Stock issued upon
the exercise of this Warrant for the holder's own account with
the intent of holding such warrant or shares for investment and
without the intent of participating directly or indirectly in a
distribution of the same. Any certificates for Common Stock
issued upon the exercise of this Warrant shall bear a legend
similar to the legend appearing on the first page of this
Warrant.
IN WITNESS WHEREOF, Modavox has caused this Warrant to be signed by its duly
authorized officers and its corporation seal to be affixed hereto as of the date
first written on.
MODAVOX, INC.
By:
/S/ DAVID J. IDE
--------------------------
David J. Ide
Chief Executive Officer
----------------------------------
Date
-6-
ASSIGNMENT
(To be Executed by the Registered Holder to effect a
Transfer of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of MODAVOX, INC., in accordance with the terms
and conditions thereof, and does hereby irrevocably constitute and appoint
- --------------------------------------
Attorney to transfer the said Warrant on the books of Modavox, with full power
of substitution.
By: __________________________________
Dennis Postma
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
In the presence of:
__________________________________
-7-
SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights to Purchase
Stock evidenced by the foregoing Warrant)
TO: MODAVOX, INC.
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By:
---------------------------
----------------------------------
Date
----------------------------------
Address
----------------------------------
City ST Zip
Dated: __________________________________
-8-
EXHIBIT 10.5
[GRAPHIC OMITTED][GRAPHIC OMITTED]
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAW OR THE
SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON RELIANCE OF EXEMPTIONS
AVAILABLE THEREFOR. THE SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT
BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR
TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY INTEREST IN SUCH
SECURITIES IN THE ABSENCE OF (i) AN OPINION OF COUNSEL THAT THE TRANSACTION BY
WHICH SUCH SECURITIES WILL BE OFFERED FOR SALE, HYPOTHECATED, SOLD OR
TRANSFERRED IS EXEMPT UNDER THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES
LAWS; OR (ii) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES LAWS.
MODAVOX, INC.
COMMON STOCK PURCHASE WARRANT
Warrant No. 55
No. of Shares: 100,000
Dated: June 16, 2005
This certifies that, for value received, Dana LLC, hereinafter referred
to as the registered holder or the "Holder," or successors and assigns, is
entitled, subject to the terms and conditions hereinafter set forth, at or
before 5:00 o'clock P.M., Eastern time, subject to adjustment upon the
occurrence of the contingencies set forth, to purchase one hundred thousand
(100,000) shares of $.0001 par value Common Stock (the "Common Stock") of
Modavox, Inc., upon the exercise of this Warrant, at fifty cents ($.50) per
share (the "Warrant Price") and is subject to adjustments upon the occurrence of
the contingencies set forth in this Warrant. The Holder and Modavox are
hereinafter referred to collectively as the "Parties."
Upon delivery of this Warrant with the subscription form annexed
hereto, duly executed, together with payment of this Warrant Price for the
shares of Common Stock thereby purchased, at the principal office of Modavox,
2617 S. 46th Street, Suite 300, Phoenix, Arizona 85034, or at such other address
as Modavox may designate by notice in writing to the registered holder hereof,
the registered holder of this Warrant shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. All shares of
Common Stock which may be issued upon the exercise of this Warrant will, upon
issuance, be fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
-1-
This Warrant is subject to the following terms and conditions:
1. EXERCISE OF WARRANT.
a. This Warrant may be exercised in whole at any time, or in any
part from time to time, prior to 5:00 o'clock P.M., Eastern time,
on or before June 16, 2008, but not thereafter, as to all or any
part of the number of shares of Common Stock then subject hereto.
b. In case of any partial exercise of this Warrant, Modavox shall
execute and deliver a new Warrant of like tenor and date for the
balance of the shares of Common Stock purchasable hereunder. This
Warrant may not be exercised as to less than twenty five thousand
(25,000) shares at any one time unless the number of shares
purchased is the total number at the time available for purchase
under this Warrant. This Warrant may be exercised only as to
whole shares; fractional share interests will be disregarded
except that they may be accumulated.
c. The Board of Directors' authorizes the issuance of the Company's
Common Stock pursuant to Securities and Exchange Commission Rule
144. The subscriber is not an officer, director or more than 5%
stockholder of the Company.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE
HEREUNDER. In case Modavox shall at any time subdivide the outstanding
shares of its Common Stock, this Warrant Price in effect immediately
prior to such subdivision shall be proportionately decreased, and in
case Modavox shall at any time combine the outstanding shares of its
Common Stock, this Warrant Price in effect shall immediately prior to
such combination be proportionately increased, effective from and
after the record date of such subdivision or combination, as the case
may be.
3. NOTICE OF ADJUSTMENTS. Upon any adjustment of this Warrant Price and
any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, then and in each such
case, Modavox, within thirty (30) days thereafter, shall give written
notice thereof to the registered holder of this Warrant at the address
of such holder as shown on the books of Modavox, which notice shall
state this Warrant Price as adjusted and the increased or decreased
number of shares purchasable upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation of each.
The holder of this Warrant shall have ten (10) days in which to review
the proposed adjustment and to object to the proposed adjustment by
notifying Modavox in writing of such objection, setting forth in
reasonable detail the reasons for such objection. If the holder fails
to object to the proposed adjustment during such ten (10) day period
the proposed adjustment shall become final. If the holder objects to
the proposed adjustment then Modavox and the holder shall attempt to
reconcile their differences and if unable to do so such adjustment
shall be determined by Modavox 's independent accountants whose
determination shall be final.
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4. NOTICE OF EXERCISE OF WARRANT. This Warrant may be exercised by this
Holder by a written notice signed by this Holder, and delivered or
mailed to Modavox to the attention of the President. The notice shall
specify the number of shares of Stock which this Holder elects to
purchase hereunder, and be accompanied by (i) a certified or cashier's
check payable to Modavox in payment of the total Exercise Price
applicable to such shares as provided herein. Upon receipt of an such
notice and accompanying payment, Modavox agrees to issue to this
Holder stock certificates for the number of shares specified in such
notice registered in the name of this Holder.
5. CHARGES, TAXES AND EXPENSES. The issuance of certificates for shares
of Common Stock upon any exercise of this Warrant shall be made
without charge to the holder hereof for any tax or other expense in
respect to the issuance of such certificates, all of which taxes and
expenses shall be paid by Modavox, and such certificates shall be
issued in the name of, or in such name or names as may be directed by,
the holder of this Warrant; provided, however, that in the event that
certificates for shares of Common Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when
surrendered for exercise shall be accompanied by an instrument of
transfer in form satisfactory to Modavox, duly executed by the holder
hereof in person or by an attorney duly authorized in writing.
6. CERTAIN OBLIGATIONS OF MODAVOX. Modavox will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act
or deed, avoid or seek to avoid the performance or observance of any
of the covenants, stipulations or conditions to be performed or
observed by Modavox, but will at all times in good faith assist,
insofar as it is able, in the carrying out of all provisions of this
Warrant and in the taking of all other action which may be necessary
in order to protect the rights of the holder of this Warrant against
dilution. Without limiting the generality of the foregoing, Modavox
agrees that it will not establish or increase the par value of the
shares of any Common Stock which are at the time issuable upon
exercise of this Warrant above the then prevailing Warrant Price
hereunder and that, before taking any action which would cause an
adjustment reducing this Warrant Price hereunder below the then par
value, if any, of the shares of any Common Stock issuable upon
exercise hereof, Modavox will take any corporate action which may, in
the opinion of its counsel, be necessary in order that Modavox may
validly and legally issue fully-paid and non-assessable shares of such
Common Stock at this Warrant Price as so adjusted.
7. CONTINUANCE OF ENGAGEMENT. Nothing contained in this Warrant shall
confer upon this Holder any right to continue in the engagement of
Modavox or constitute any contract or agreement of engagement. Nothing
contained in this Warrant shall interfere in any way with the right of
Modavox to (i) terminate the engagement of this Holder, or (ii) reduce
the compensation received by this Holder from time to time, provided
that nothing herein shall modify any written engagement or consulting
agreement as may now exist or hereinafter be entered into between
Holder and Modavox.
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8. Notices. All notices and other communications required or permitted
under this Warrant will be delivered to the parties at the address set
forth below their respective signature blocks, or at such other
address that they hereafter designate by notice to all other parties
in accordance with this Section. All notices and communications will
be deemed to be received in accordance with the following: (i) in the
case of personal delivery, on the date of such delivery; (ii) in the
case of facsimile transmission, on the date on which the sender
receives confirmation by facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission
is additionally sent by mail as set forth in (iv) below; (iii) in the
case of overnight air courier, on the second business day following
the day sent, with receipt confirmed by the courier; and (iv) in the
case of mailing by first class certified mail, postage prepaid, return
receipt requested, on the fifth business day following such mailing.
9. COMPULSORY ARBITRATION. Any controversy, claim and/or dispute arising
out of or relating to this Warrant or the breach hereof or subject
matter hereof (including any action in tort) will be finally and fully
settled by arbitration in Maricopa County, Arizona in accordance with
the then-existing Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"), and judgment upon the award
rendered by the arbitrators may be entered in any court having
applicable jurisdiction. Written notice of demand for arbitration will
be given to the other parties and to the AAA within six (6) months
after the controversy, claim or dispute has arisen or be barred, and
in no event after the date when the institution of court proceedings
based on such dispute would be barred by the applicable statute of
limitations. Controversies, claims and/or disputes will be resolved by
one arbitrator selected by the mutual agreement of the parties or,
failing that agreement within forty-five (45) days after written
notice demanding arbitration, by the AAA. There will be limited
discovery prior to the arbitration hearing as follows: (i) exchange of
witness lists and copies of documentary evidence and documents related
to or arising out of the issues to be arbitrated, and (ii) depositions
of all Party witnesses. Depositions will be conducted in accordance
with the rules or code of Civil Procedure of the jurisdiction in which
the arbitration is conducted, and a court reporter will record all
hearings, with such record constituting the official transcript of
such proceedings. All decisions of the arbitrator will be in writing,
and the arbitrator will provide reasons for the decision. Each of the
Parties will bear its own respective attorney's fees and costs in
accordance with any dispute or arbitration.
10. GOVERNING LAW. This Warrant will be deemed to have been executed in
the State of Delaware and will be governed and construed as to both
substantive and procedural matters in accordance with the laws of the
State of Delaware, but excepting (i) any State of Delaware rule which
would result in judicial failure to enforce the arbitration provisions
of Section 11 hereof or any portion thereof and (ii) any State of
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Delaware rule which would result in the application of the law of a
jurisdiction other than the State of Delaware. Any dispute arising
from this Warrant must be filed in the county in which the principal
office of Modavox is located.
11. COMPLETE AGREEMENT. This Warrant, along with the Network Host
Agreement, contains the entire agreement of the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, with respect to such subject
matter, and the Parties have made no agreements, representations or
warranties relating to the subject matter of this Warrant which are
not set forth herein. If a conflict is determined to exist among any
of the aforementioned agreements, the terms of this Warrant will
control.
12. AMENDMENT. This Warrant may not be amended, modified, superseded,
canceled or terminated, and any of the matters, covenants,
representations, warranties or conditions hereof may not be waived,
except by written instrument executed by the Parties or, in the case
of a waiver, by such of the Parties to be charged with such waiver.
13. WAIVER. The failure of either of the Parties to insist upon strict
adherence to any term, condition or other provision of this Warrant
will not be considered a waiver or deprive that Party of the right
thereafter to insist upon strict adherence to that term or any other
term, condition or other provision of this Warrant.
14. HEADINGS. The headings of this Warrant are solely for convenience of
reference and will not affect its interpretation.
15. SEVERABILITY. If any one clause or part of this Warrant is deemed
invalid, unenforceable or illegal by the arbitrators or court of
competent jurisdiction, then it is severed from this Warrant and the
rest of this Warrant remains in full force and effect. Holder
acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Warrant be given the construction which renders
its
16. FURTHER ASSURANCES. The Parties will sign such other instruments,
cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause
to be done and performed such further and other acts.
17. LEGAL COUNSEL. Holder hereby acknowledges that she has been advised
that the party who drafted this Warrant on behalf of Modavox is a
licensed attorney, that such party is representing Modavox's interests
only and that Holder been urged to retain legal counsel to advise her.
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18. MISCELLANEOUS.
(a) Modavox covenants that it will at all times reserve and keep
available, solely for the purpose of issue upon the exercise
hereof, a sufficient number of shares of Common Stock to permit
the exercise hereof in full and a sufficient number of shares of
Common Stock to permit the conversion of all such shares of
Common Stock.
(b) The terms of this Warrant shall be binding upon and shall inure
to the benefit of any successors or assigns of Modavox and of the
holder or holders hereof and of the Common Stock issued or
issuable on the exercise hereof.
(c) No holder of this Warrant, as such, shall be entitled under this
Warrant to vote or receive dividends (except as provided in
paragraph 2 hereof) or be deemed to be a stockholder of Modavox
for any purpose.
(d) Except as otherwise provided herein, this Warrant and all rights
hereunder are transferable by the registered holder hereof in
person or by duly authorized attorney on the books of Modavox
upon surrender of this Warrant, properly endorsed, to Modavox.
Modavox may deem and treat the registered holder of this Warrant
at any time as the absolute owner hereof for all purposes and
shall not be affected by any notice to the contrary.
(e) By acceptance of this Warrant the registered holder represents
and warrants to Modavox that such holder is acquiring this
Warrant and will acquire any shares of Common Stock issued upon
the exercise of this Warrant for the holder's own account with
the intent of holding such warrant or shares for investment and
without the intent of participating directly or indirectly in a
distribution of the same. Any certificates for Common Stock
issued upon the exercise of this Warrant shall bear a legend
similar to the legend appearing on the first page of this
Warrant.
IN WITNESS WHEREOF, Modavox has caused this Warrant to be signed by its duly
authorized officers and its corporation seal to be affixed hereto as of the date
first written on.
MODAVOX, INC.
By:
/S/ DAVID J. IDE
--------------------------
David J. Ide
Chief Executive Officer
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Date
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ASSIGNMENT
(To be Executed by the Registered Holder to effect a
Transfer of the foregoing Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, and assigns and
transfers unto the foregoing Warrant and the rights represented thereto to
purchase shares of Common Stock of MODAVOX, INC., in accordance with the terms
and conditions thereof, and does hereby irrevocably constitute and appoint
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Attorney to transfer the said Warrant on the books of Modavox, with full power
of substitution.
By:
Dana LLC
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Date
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Address
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City ST Zip
Dated: __________________________________
In the presence of:
__________________________________
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SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights to Purchase
Stock evidenced by the foregoing Warrant)
TO: MODAVOX, INC.
The undersigned hereby exercises the right to purchase _______ shares
of Common Stock covered by the attached Warrant in accordance with the terms and
conditions thereof, and herewith makes payment of this Warrant Price of such
shares in full.
The undersigned represents and warrants to you that the undersigned is
acquiring such shares for the undersigned's own account with the intent of
holding such shares for investment and without the intent of participating
directly or indirectly in a distribution of such shares.
By: __________________________________
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Date
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Address
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City ST Zip
Dated: __________________________________
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