Exhibitb 10.1

 
CONSULTING AGREEMENT
 
This Consulting Agreement (the “Agreement”) dated as of December 7th, 2007 is by
and between Modavox, Inc., a corporation organized under the laws of the State
of Delaware (the “Company”), and Andrew Burgess (“Consultant”), a resident of
Phoenix, Arizona.
 
RECITALS
 
A.  
Consultant possesses certain knowledge and familiarity with the Company and the
Company’s intellectual property.

 
B.  
The Company wishes to enforce certain rights it may have against certain third
parties with respect to its intellectual property and believes Consultant’s
knowledge and familiarity with the Company’s intellectual property will be
useful towards that end.

 
C.  
The Company desires to engage Consultant, and Consultant desires to accept such
engagement on the terms and conditions set forth in this Agreement.

 
D.  
With this Consulting Agreement, the parties wish to resolve an existing dispute
arising out of the performance of a Work-Made-For Hire Agreement between Company
and Consultant entered into on July 27, 2006 (the “Works-Made-For Hire
Agreement”).

 
E.  
The Company acknowledges that Consultant is an officer, director, employee and
or shareholder of entities unrelated to the Company and as a result is engaged
in other activities for such entities including software application development
services, provided, however, that this acknowledgement shall not diminish
Consultant’s obligations hereunder in respect of non-competition,
confidentiality or otherwise.

 
AGREEMENT
 
In Consideration of the conditions and covenants contained herein, the parties
agree as follows:
 
1.  
Engagement.  The Company hereby engages Consultant and Consultant hereby accepts
such engagement with the Company on the terms and conditions set forth in this
Agreement (the “Engagement”).

 
2.  
Duties and Performance.

 
(a)  
During the Engagement, Consultant shall report to the Chief Technology Officer
of the Company or such other person designated by the Chief Executive Officer of
the Company and shall perform the services described on Exhibit A and such other
services reasonably related thereto as the Company (acting through its Chief
Technology Officer or such other person as may be designated by the Company’s
Chief Executive Officer) may reasonably request.  During the Engagement
Consultant shall devote as much time as reasonably required to perform such
consulting services, which, on average, shall not exceed twenty (20) hours per
week as determined on an annual basis, and Consultant shall use his best efforts
to advance the interests of the Company.

 
 
 
 

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(b)  
Consultant shall not have, nor shall Consultant represent for any party that
Consultant has, any power or authority to enter into written or oral agreements
on behalf of the Company or otherwise bind the Company.

 
(c)  
Consultant shall be responsible for providing, at Consultant’s expense, all
necessary equipment and supplies for the performance of his services hereunder.

 
3.  
Assignment of Inventions:  Simultaneously with the execution of this Agreement
the parties are entering into the Assignment of Inventions Agreement attached
hereto as Exhibit B.

 
4.  
Term:  The Engagement shall commence on the date hereof and terminate as set
forth in Section 6 hereof.

 
5.  
Consulting Fees; Expenses.

 
(a)  
Upon the signing of this Agreement or in the case of 5(a)(2) on January 1, 2008,
and in exchange for the waiver in Section 14, the Company shall pay or issue to
Consultant the following:

 
(1)  
A cash payment of $30,000;

 
(2)  
275,000 shares of the Company’s Common Stock on January 1, 2008, which shares
shall bear appropriate restrictive legends;

 
(3)  
A nonqulified stock option to purchase 50,000 fully vested shares of the
Company’s Common Stock at $1.00 per share; and

 
(4)  
A nonqualified stock option to purchase 50,000 shares of the Company’s Common
Stock at $1.00 per share, which shall become fully vested on March 1, 2008.

 
(b)  
 In exchange for the work performed that is the subject of the Engagement and
the services set forth in Exhibit A, Consultant shall be entitled to received
the following compensation related to the infringement actions:

 
(1)  
A nonqualified stock option issued in conjunction with the execution of this
Agreement to purchase an aggregate of 200,000 shares of the Company’s Common
Stock at the exercise prices and subject to vesting as follows:

 
Number of Shares
Exercise Price
Vesting Schedule
100,000
$1.75
Ratably over 36 months from the date hereof
100,000
$2.00
Ratably over 36 months from the date hereof

 
 

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(2)  
Five percent (5%) of the Net Proceeds actually received by the Company resulting
from pending litigation or litigation threatened in writing (“Pending Actions”)
for infringement of U.S. Patent Number 6594691 and any continuations,
continuations-in-part, divisions, reissues, renewals or extensions of Patent
Number 6594691 (the “Company Patents”), where such Pending Actions were
initiated during the Engagement.  “Net Proceeds” shall mean the excess of (a)
the gross proceeds actually received by the Company pursuant to a court award of
damages for infringement, a settlement of infringement claims, a licensing
agreement resulting from any resolution of the Pending Actions, or a sale of the
Company Patents resulting from any resolution of the Pending Actions (“Gross
Proceeds”) over (b) all non-reimbursed costs and expenses (including
non-reimbursed attorneys’ fees) incurred by or on behalf of the Company relating
to all investigations of infringement and all litigation, technical and legal
studies and the like in connection with the enforcement of the Company Patents
against third parties for infringement, but excluding any pre-paid costs and
expenses for incomplete investigations of infringement, litigation, technical
and legal studies in connection with the enforcement of the Company Patents
against third parties for infringement and any payments paid to Consultant
pursuant to Section 5(a) and this Section 5(b)(2) (“Expenses”).  The
determination of Net Proceeds shall be made at the time of receipt by the
Company of each payment constituting Gross Proceeds and shall be calculated in
respect of the cumulative Gross Proceeds and cumulative Expenses as of such
calculation date.  Pre-paid costs and expenses excluded from the calculation of
Net Proceeds shall be included in such calculation once services for such
pre-paid costs and expenses have been rendered.  In no event will Consultant be
required to pay any amounts to the Company as a result of the Expenses exceeding
the Gross Proceeds.  If the Net Proceeds are in a form other than cash, the
payments to Consultant hereunder shall be in the same form as received by the
Company, or at the Company’s option in respect of all or any portion of non cash
proceeds in cash in an amount equal to the fair value of such
proceeds.  Consultant shall have the right, upon ten (10) days written notice to
the Company, to review the Company’s calculation of Net Proceeds at Consultant’s
expense unless it is determined that there has been an underpayment, in which
case the cost of such review shall be incurred by the Company.  An example of
how Net Proceeds are calculated is set forth on Schedule 1 attached hereto.

 
(c)  
In exchange for the work performed that is the subject of the Engagement, the
duties set forth in Exhibit A and the Assignment of Inventions that is Exhibit
B, Consultant shall be entitled to receive the following compensation related to
the Company’s exploitation of the Company Patents, even if not related to any
pending or threatened litigation

 
(1)  
Five percent (5%) of all Net Royalties actually received from licensing by the
Company of the Company Patents to third parties other than under the
circumstances described in Section 5(b)(2) above, which licenses are entered
into during the term of the Engagement.  “Net Royalties” shall be calculated net
of all non-reimbursed direct costs and expenses actually incurred by or on
behalf of the Company related to the royalty stream including any
administration, reporting, or accounting expenses, but excluding any payments
paid to Consultant pursuant to Section 5(a) and this Section 5(c)(1).  If the
Net Royalties are in a form other than cash, the payments to Consultant
hereunder shall be in the same form as received by the Company from such sale
or, at the Company’s option in respect of all or any portion of non-cash Net
Royalties, in cash in an amount equal to the fair value of such Net Royalties.

 
 
 

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(2)  
Five percent (5%) of the Net Sale Proceeds actually received by the Company from
the sale of the Company Patents other than under the circumstances described in
Section 5(b)(2) above and not including the sale or transfer of the Company
Patents to an indirect or direct parent or subsidiary of the Company, which sale
agreement is entered into during the term of the Engagement.  “Net Sale
Proceeds” shall be calculated net of all non-reimbursed direct costs and
expenses actually incurred by or on behalf of the Company in connection with the
sale, excluding any payments paid to Consultant pursuant to Section 5(a) and
this Section 5(c)(2).  If the Net Sale Proceeds are in a form other than cash,
the payments to Consultant hereunder shall be in the same form as received by
the Company from such sale, or at the Company’s option in respect of all or any
portion of the non-cash Net Sale Proceeds, in cash in an amount equal to the
fair value of such proceeds.

 
The compensation payable under Sections 5(b) and (c) (“Consultant Compensation”)
shall be paid within 30 days of the end of the month in which the Net Proceeds,
Net Royalties or Net Sale Proceeds, as the case may be, are received by the
Company.
 
(d)  
The options described in the foregoing Sections 5(a) and (b) shall be set forth
in an Option Agreement in substantially the form attached as Exhibit C attached
hereto (the “Option Agreement”).

 
(e)  
The Company shall keep complete and accurate records relating to the Consultant
Compensation in sufficient detail to enable the amount of such Consultant
Compensation to be determined.  Consultant may, upon fifteen (15) days written
notice to the Company, engage an independent accounting firm to examine the
Company’s books, ledgers, and records during regular business hours solely for
the purpose of and to the extent necessary to verify the amount of Consultant
Compensation paid and the calculation thereof.  In the event that the Consultant
Compensation is determined to have been underpaid, the Company shall immediately
pay Consultant the underpaid amounts, together with interest thereon at a per
annum rate equal to the prime rate of interest, as published by the Wall Street
Journal.  The cost of the examination shall be borne by Consultant, provided,
however, that if it is determined the Consultant has been underpaid by an amount
greater than ten percent (10%) of the total owed during the period subject to
such review, the Company shall bear the cost of such examination.  The Company
may require the independent accounting firm to enter into a confidentiality
agreement in a form satisfactory to the Company prior to allowing access to the
Company’s books and records.

 
(f)  
The Company shall pay or reimburse Consultant for all reasonable travel and
other expenses incurred or paid by Consultant in connection with the performance
of services under the Agreement, provided that such expenses are approved in
advance in writing by the Company. Payment shall be made within 30 days
following the presentation of expense statements or vouchers and supporting
information consistent with the Company’s reimbursement polices; provided that
the Company shall not in any event reimburse Consultant for (i) first or
business class travel or (ii) entertainment expense not specifically approved in
writing in advance by the Company.

 
(g)  
Consultant shall be an independent contractor and not an employee. The Company
shall have no obligation to provide any health, welfare, retirement, employee or
other benefits to Consultant, except as expressly provided herein.

 

 
 

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6.  
Termination.  Consultant’s Engagement by the Company shall terminate as set
forth below.

 
(a)  
At any time either party may terminate the Engagement without cause upon 30 days
prior written notice.

 
(b)  
The Company may terminate the Engagement for cause upon written notice to
Consultant, which shall specify the cause for the termination. Cause shall
include any of the following occurring after the date hereof: (i) any material
breach by Consultant of this Agreement, which shall include a willful failure of
refusal to perform his duties in accordance with the terms of this Agreement,
that is not cured within 30 days of the Company’s delivery to Consultant of
written notice of such breach; (ii) any conduct by Consultant of anyone
authorized to act on Consultant’s behalf which actually and materially impairs
the goodwill and reputation of the Company and/or its operations; (iii) the
conviction or entry of a plea of nolo contendere by Consultant for a crime or
offense involving misappropriation of monies or other property or any felony
offense for any crime of moral turpitude or dishonesty, or the commission of
fraud or embezzlement; (iv) Consultant’s challenge to the validity of the
Company Patents, or support of any such third party challenge; or (v)
Consultant’s insobriety or non-therapeutic use of drugs, chemicals or controlled
substances either in the course of performing the duties and responsibilities
described in this Agreement or in any other manner affecting Consultant’s
ability to perform such duties and responsibilities.

 
(c)  
Additionally the Engagement shall terminate immediately upon the death or
disability of the Consultant. For this purpose, the Consultant shall be deemed
to the disabled if he is unable substantially to perform the duties required by
the Engagement, as determined by a responsible and licensed physician for a
continuous period of 60 days or for any 60 days within any 120-day period.

 
(d)  
Upon termination of this Agreement for any reason, Consultant shall immediately
return any and all things, all tangible expressions of Company intellectual
property and all Company Confidential Information (in any and all media now
known or hereafter existing) in his possession or control belonging to the
Company, including without limitation, computers, files and documents (whether
in electronic or hard copy format).

 
(e)  
The following provisions shall apply following the termination of the Engagement
hereunder:

 
(1)  
In the event the Engagement is terminated due to the death or disability of
Consultant or is terminated by Consultant for any reason or by the Company for
cause:

 
(A)  
All Consultant Compensation shall cease as of the date of such termination
except any Consultant Compensation that has accrued as of such date and which is
due and payable on or prior to the 30th day following the end of the month in
which the termination occurred; and

 
(B)  
All unvested options under the Option Agreement shall expire.

 
(2)  
In the event that the Engagement is terminated by the Company without cause:

 
(A)  
Consultant shall be entitled to receive all Consultant Compensation set forth in
Section 5(b)(2) which arises from settlement agreements, judgments or license
agreements in effect at the time the Engagement is terminated or which are
entered into or awarded within 180 days thereafter or which result from
litigation that was pending at the time of such termination, in each case for
the duration of such judgments or agreements.

 
 
 

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(B)  
Consultant shall be entitled to receive all Consultant Compensation set forth in
the Section 5(c)(1), provided that for purposes of this Section (e)(2)(b), such
Consultant Compensation shall be calculated in respect of the licenses described
in Section 5(c)(l) entered into during the term of the Engagement or during the
180 days thereafter.

 
(C)  
Consultant shall be entitled to receive all Consultant Compensation set forth in
Section 5(c)(2), provided that for purposes of this Section 6(c)(2)(C), such
Consultant Compensation shall be calculated in respect of the sale of Company
Patents described in Section 5(c)(2) where the sales agreement is entered into
during the term of the Engagement or during the 180 days thereafter.

 
(D)  
All unvested options under the Option Agreement shall vest.

 
(3)  
Except as expressly provided in this Section 6(e), Consultant shall not be
entitled to any Consultant Compensation or other proceeds or royalties arising
from any contract, award, license, settlement agreement, infringement or other
claim, or other arrangement entered into, made or awarded after the Engagement
is terminated.

 
(4)  
If the Company is required to disgorge, whether by order of a bankruptcy court
or otherwise, any amounts in respect of which Consultant has received Consultant
Compensation. Consultant shall not thereby be required to disgorge such
Consultant Compensation to the Company, provided that the Company shall be
entitled to offset future Consultant Compensation payable to Consultant by such
amount.

 
(f)  
The provisions, agreements, representations, warranties and covenants contained
in this Agreement shall survive the termination of the Engagement.

 
7.  
Confidentiality.

 
(a)  
“Confidential Information” shall mean any of the following created by, or
provided or made available to Consultant by or on behalf of the Company (whether
before or after the date hereof):

 
(1)  
all data or information that is competitively sensitive material, and not
generally known to the public, including, but not limited to, data or
information concerning products, planning, litigation strategies, litigation
analyses, reports, white papers, intellectual property enforcement strategies,
marketing strategies, plans, finances, operations, customer relationships,
customer profiles, sales estimates, business plans, pr internal performance
results relating to the past, present or future business activities of the
Company or any of its subsidiaries or affiliated companies or the customers,
clients and suppliers of any of the foregoing:

 
(2)  
all scientific or technical information, designs, processes, procedures,
formulae, or improvements that are commercially valuable and secret in the sense
that their confidentiality affords the Company a competitive advantage over its
competitors; and

 
(3)  
all confidential or proprietary concepts, documentation, reports, data
(including magnetic tapes), specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, show-how,
information, or trade secrets, whether or not patentable or copyrightable.

 

 
 

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(b)  
Except as expressly authorized in advance in writing by the Company, Consultant
shall:

 
(1)  
safeguard all Confidential Information received using a reasonable degree of
care, but not less than that degree of care used by him in safeguarding his own
similar information or material;

 
(2)  
not directly of indirectly communicate, disclose, disseminate to any third party
or otherwise put in public domain, any Confidential Information; and

 
(3)  
not use, directly or indirectly, any Confidential Information for any purpose
other than to perform the consulting services pursuant to the Engagement.

 
Upon the request of the Company, Consultant shall surrender (or confirm the
destruction or nonrecoverable data erasure of computerized data comprising) all
memoranda, notes, drawings, manuals, records, computer code, software and other
documents or materials including, pertaining to, or based upon, the Confidential
Information and all copied of same, including “copies” that have been converted
to computerized media in the form of image, data or word processing files either
manually or by image capture). Upon the request of the Company, and upon the
surrender or destruction of the foregoing materials, Consultant agrees to
certify in writing to the Company that all of the foregoing materials have been
surrendered to the Company or destroyed; provided that Consultant shall continue
to be bound by the confidentiality obligations hereunder not withstanding the
expiration or termination of this Agreement.
 
(c)  
The obligations of confidentiality and restriction on use in Section 7(b) shall
not apply to any Confidential Information that:

 
(1)  
was in the public domain prior to the date of this Agreement or subsequently
came into the public domain through no fault of Consultant.

 
(2)  
was lawfully received by Consultant from a third party free of any obligation of
confidence to the Company, provided that Consultant was aware that such third
party was not bound by any obligation of confidence to the Company:

 
(3)  
is known to Consultant on non-confidential basis prior to disclosure by the
Company:

 
(4)  
is required to be disclosed on a judicial or administrative proceeding
(including a proceeding to enforce this Agreement), or is otherwise required to
be disclosed by law, provided that Consultant shall have provided to the Company
as much advance notice of the possibility of such disclosure as practical so the
Company may attempt to stop such disclosure or obtain a protective order
concerning such disclosure; or

 
(5)  
is disclosed by Consultant in accordance with the prior written approval of the
Company.

 
8.  
Non-Compete and Non-Solicitation Covenants.

 
(a)  
Consultant acknowledges and recognizes that prior to and during the Engagement
he has been and will be privy to Confidential Information. Accordingly, in
consideration of the promises contained herein and the consideration to be
received by Consultant hereunder, without the prior written consent of the
Company, Consultant shall not, at any time during the Term or within 180 days
thereafter directly or indirectly, either alone or as a partner, officer,
director, shareholder holding greater than 10% interest, sole proprietor,
employee or consultant of any other firm or entity, (i) engage in any Competing
Business or (ii) (A) induce, solicit or encourage employment with the Company or
any direct or indirect subsidiary thereof to terminate their employment with
Company or any such direct or indirect subsidiary, whether or not in connection
with commencing employment with a Competing Business or (B) induce or encourage
any entity or person with which the Company or any direct or indirect subsidiary
thereof has a business relationship to terminate or alter such business
relationship. “Competing Business” as used herein is defined as businesses
involving Internet radio, Internet advertising, and Internet e-learning.

 
 
 

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(b)  
Consultant understands that the foregoing restrictions may limit his ability to
earn a livelihood after the termination of this Agreement in a Competing
Business but he nevertheless believes that he has received and will receive
sufficient consideration provided hereunder to justify clearly such restrictions
which, in any event (given his education, skills and ability). Consultant does
not believe would prevent him from earning a living.

 
9.  
Injunction Relief.  It is agreed that the restrictions contained in Sections 7
and 8 of this Agreement are reasonable, but it is recognized that damages in the
event of the breach of any of those restrictions will be difficult or impossible
to ascertain; and, therefore, Consultant agrees that, in addition to and without
limiting any other right or remedy the Company may have, the Company shall have
the right to obtain an injunction against Consultant issued by a court of
competent jurisdiction enjoining any such breach if and to the extent that the
Company can establish that is has met its burden in demonstrating that it
satisfies the corresponding legal standards for imposing injunctive relief under
Arizona law. Moreover, nothing in this Agreement shall limit any rights or
remedies otherwise available to the Company or Consultant, including recovering
damages for any breach of this Agreement.

 
10.  
Part of Consideration.  Consultant also agrees, acknowledges, covenants,
represents and warrants that he is fully and completely aware that, and further
understands that, the restrictive covenants contained in Sections 7 and 8 of
this Agreement are an essential part of the consideration for the Company
entering into this Agreement and that the Company is entering into this
Agreement in full reliance on such acknowledgements, covenants, representations
and warranties.

 
11.  
Trading in Securities.  Consultant acknowledges that he is aware that in the
course of performing services under the Engagement Consultant may obtain
material nonpublic information about the Company and that the United States
securities laws restrict the ability of any person who has material, non public
information concerning any publicly traded company from purchasing or selling
securities of such company or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell each securities. Accordingly, Consultant
agrees that he will not, directly or indirectly, trade in the Company’s common
stock or tip others to do so at any time that Consultant is in possession of
material non public information.

 
12.  
Indemnification of Consultant.  The Company shall indemnify and hold Consultant
harmless against any expenses, liabilities and losses incurred or suffered by
Consultant in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal administrative or investigative arising
out of Consultant’s performance of the services set forth in Exhibit A, except
in the extent that such expenses, liabilities or losses arise from the willful
misconduct or gross negligence of Consultant.

 
13.  
Nondelegability of Consultant’s Obligations and Company’s Assignment Right.  The
obligations of Consultant hereunder are personal and may not be delegated,
assigned or transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. Company’s obligations
under this Agreement shall be assigned automatically to any entity merging with
or acquiring the Company or to any direct or indirect parent or subsidiary of
the Company to whom the Company Patents may be transferred.

 
 
 

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14.  
Satisfaction of Amounts Due. Consultant hereby agrees that the covenants of the
Company herein and the payment and issuance of the $30,000 and 250,000 shares of
Common Stock pursuant to Section 5(a)(1) and (2) and the 100,000 nonqualified
stock options set forth in Sections 5(a)(3) and 5(a)(4) shall constitute full
and complete satisfaction of any and all amounts due and payable by the Company
to Consultant as of the date hereof, whether for or in connection with services
previously rendered or otherwise. Failure of the Company to satisfy and of the
covenants in Section 5(a) will be considered a material breach of this Agreement
and will result in revocation of any waiver by Consultant of his rights under
the Work-Made Form Hire Agreement.

 
15.  
Governing Law.  This Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of Arizona, exclusive of the
conflict of law provisions thereof, and the parties agree that any litigation
pertaining to this Agreement shall be in courts located in Maricopa County,
Arizona.

 
16.  
Attorney’s Fees.  If any party finds it necessary to employ legal counsel or to
bring an action at law or other proceeding against the other party to enforce
any of the terms hereof, the party prevailing in any such action or other
proceeding shall be paid by the other party its reasonable attorneys’ fees as
well as court costs all as determined by the court.

 
17.  
Notices.  All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be considered given and
delivered when personally delivered to the party to whom such notice or
communication is addressed, or one business day after posting with an overnight
courier, or when confirmation is received if sent by facsimile, or three
business days after mailing via certified mail through the United States Postal
Service, postage prepaid, with return receipt requested, properly addressed to a
party at the address set forth below, or at such other address as such party
shall have specified by notice given in accordance with this Section:

 
If to the Company
Modavox Inc.
 
2617 S. 46th Street, Suite 300
 
Phoenix, AZ 85034-7417
 
Attn: David J. Ide, CEO
   
If to Consultant to:
Andrew Burgess
 
37239 N. 33rd Avenue
 
Desert Hills, AZ 85086

 
18  
Entire Agreement.   This Agreement, along with the Assignment and Option
Agreement, constitutes the final written expression of the agreement between the
parties with regard to the Engagement and are complete and exclusive statements
of those terms. This Agreement, the Assignment and the Option Agreement
supersede all understandings and negotiations concerning the matters specified
herein and therein. Any representations, promises, warranties or statements made
by either party that differ in any way from the terms of this written Agreement,
the Assignment or the Option Agreement shall be given no force or effect. The
parties specifically represent, each to the other, that there are no additional
or supplemental agreements or obligations between them related in any way to the
matters herein contained unless specifically included or referred to herein or
in the Assignment or Option Agreement. No addition to or modification of any
provision of this Agreement shall be binding upon any party unless made in
writing and signed by all parties.

 
 
 

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19  
Waiver.  The waiver by either party of the breach of any covenant or provision
in this Agreement shall not operate or be constructed as a waiver of any
subsequent breach by either party.

 
20  
Invalidity of any Provision.  The provisions of this Agreement are severable, it
being the intention of the parties hereto that should any provisions hereof be
invalid or unenforceable, such invalidity or unenforceability of any provision
shall not affect the remaining provisions hereof, but the same shall remain in
full force and effect as if such invalid or unenforceable provisions were
omitted.

 
21  
Interpretation of Agreement.  When a reference is made in this Agreement to an
article or section, such reference shall be to an article or section of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words “include” “includes”, or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”. Headings in this agreement are for informational
purposes only and shall not be used to construe the intent of this Agreement.

 
22  
Binding Effect: Benefits.  Subject to the restrictions set forth in Section 13
above, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors, executors,
administrators and assigns. Notwithstanding anything contained in this Agreement
to the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

 
23  
           Counterparts.  This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same agreement.

 
IN WITNESS HEREOF, Consultant and the Company have executed this Agreement as of
the date of first written above.
 
Company
Consultant
Modavox Inc.
 
 
By: /s/ David J. Ide
/s/ Andrew Burgess
David J. Ide, President
Andrew Burgess

 

 
 

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Schedule 1
 
Calculation of Net Proceeds (Example)
 

 
End of Period 1
End of Period 2
End of Period 3
End of Period 4
End of Period 5
Cumulative Gross Proceeds
50
$200,000
$500,000
$1,000,000
$500,000
Cumulative Expenses
$500,000(1)
$100,000(2)
$100,000(3)
$100,000(5)
$100,000(7)
Cumulative Net Proceeds
$(500,000)
$(400,000)
$0(4)
$900,000
$400,000
Amount Due to Consultant
$0
$0
$0
$45,000(6)
$20,000(8)

 
1)  
Represents all Expenses incurred prior to End of Period 1.

 
2)  
Represents Expenses incurred between End of Period 1 and End of Period 2.

 
3)  
Represents Expenses incurred between End of Period 2 and End of Period 3.

 
4)  
At this point all Expenses have been netted against all Gross Proceeds.  Net
Proceeds shall equal $0.

 
5)  
Represents Expenses incurred between End of Period 3 and End of Period 4.

 
6)  
Represents 5% of cumulative Net Proceeds.

 
7)  
Represents Expenses incurred between End of Period 4 and End of Period 5 and
does not include the amount paid to Consultant at End of Period 4.

 
8)  
Represents 5% of cumulative Net Proceeds.

 

 
 
 

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Exhibit A
 
Services
 
·  
Consulting with the Company and its counsel and testifying as a witness in any
proceeding regarding enforcement of the Company Patents or any counterclaim
against the Company in connection therewith, including the preparation of
litigation case studies, writings, artwork, drawings, designs, code,
internet-based products, templates, graphic and computer-generated material
comparisons and opinions in connection therewith.

 
·  
Consulting with the Company and its counsel in connection with the prosecution
with the USPTO of the Company Patents, including without limitation,
construction of new claims and the preparation for and responses to office
actions.

 
·  
Consulting with and providing information to the Company and its counsel
regarding the historical operations and capital raising activities of the
Company, including the Company’s efforts to license, sell, or otherwise exploit
the Company Patents.

 

 

 

 

 

 

 

 
 

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Exhibit B
 
Assignment of Inventions Agreement
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

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ASSIGNMENT OF INVENTION AGREEMENT
 
This Agreement of Inventions Agreement (“Agreement”) is made and entered into as
of this 7th day of December (“Effective Date”) by and between Modavox, Inc., a
corporation organized under the laws of the State of Delaware (“Assignee”) and
Andrew Burgess (“Assignor”).
 
RECITALS
 
A.  
Assignor has been engaged from time to time by Assignee to perform services
(collectively, the “Engagement”) including pursuant to a Consulting Agreement
dated December 7th, 2007 (the “Consulting Agreement”).

 
B.  
In connection with the Engagement, Assignor has or may in the future develop
certain inventions, assets and know-how and the intellectual property therein.

 
C.  
Assignor wishes to assign the Inventions described below to Assignee and subject
to the terms and conditions set forth below. Assignee is willing to accept an
assignment of the Inventions.

 
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties hereto agree as follows:
 
1  
Assignment.

 
1.1  
Assignor does hereby sell, assign and transfer to Assignee his entire right,
title and interest, including without limitation all patent, trademark,
copyright and other intellectual property rights, in and to the Inventions,
whether created or to be created by Assignee. The term “Inventions” shall mean
all writings, drawings, documentation, manuals, discoveries, concepts, and
ideas, whether patentable or not, including improvements, know-how, data,
processes, methods, formulae and techniques concerning any past, present or
prospective Assignee activities that the Assignor makes, discovers or conceives
either solely or jointly with others in the course of the Engagement or using
Assignee’s facilities, materials or personnel, and if based on or related to any
Confidential Information, as defined in the Consulting Agreement at any time
before such Engagement or after termination of such Engagement. All Inventions
shall be solely the property of the Assignee and Assignor agrees to perform the
obligations of this Section 1 without payment by the Assignee of any royalty or
consideration other than as explicitly provided in this Agreement.

 
1.2  
The Assignor shall maintain written notebooks in which he shall set forth on a
current basis information as to all Inventions, describing in detail the
procedures employed and the results achieved, whether or not in the Assignor’s
opinion a given project has resulted in an Invention. The written notebooks
shall at all times be the property of the Assignee and shall be surrendered to
the Assignee upon termination of the Engagement or upon the Assignee’s request
at any time.

 
1.3  
Assignee shall provide Assignor any and all materials, whether written or
electronic, related to any Inventions preceding the Engagement within five (5)
business days of the date of this Agreement.

 
1.4  
The Assignor shall apply, at the Assignee’s request and expense, for United
States and foreign letters patent either in the Assignor’s name or otherwise as
the Assignee shall direct.

 
 
 

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1.5  
Assignor hereby assigns to Assignee all of his rights to Inventions, and to
applications for United States and or foreign letters patent and to United
States and or foreign letters patent granted for Inventions.

 
1.6  
Assignor will not assert any rights under any inventions, discoveries, concepts
or ideas, or improvements thereof, or know-how related thereto (including any
Inventions), as having made or acquired by him being engaged by the Assignee or
during the term of his Engagement if based upon otherwise related to the
Confidential Information as defined in the Consulting Agreement.

 
2.           Shop Rights:  Assignee shall also have the royalty free right to
use in its business and to make, use, and sell produces, processes and or
services derived from any inventions discoveries concepts and ideas whether or
not patentable including processes methods formulas and techniques as well as
improvements thereof or know how related thereto which are not within the scope
of the Inventions but which are conceived or made by the Assignor with the use
or assistance of the Assignee’s facilities, materials, or personnel.
 
3.            Additional Obligations: Without charge to Assignee, Assignor
covenants and agrees that Assignor will sign all papers and documents and
perform all other acts reasonably necessary or desirable for Assignee to
perfect, confirm, complete, or record the assignment of the Inventions to the
Assignee. Assignee also covenants and agrees to provide all reasonable
information and assistance without charge to Assignee as may be required to
fully disclose the Inventions to Assignee.
 
4.           Confidential Information: The parties understand and agree that
they are bound by the confidentiality obligations set forth in the Consulting
Agreement.
 
5.           Governing Law: This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Arizona
exclusive of the conflict of law provisions thereof and the parties agree that
any litigation pertaining to this Agreement shall be in courts located in
Maricopa County, Arizona.
 
6.           Attorneys’ Fees:  If any party finds it necessary to employee legal
counsel or to bring an action of law or other proceedings against the other
party to enforce any of the terms therefore, the party prevailing in any such
action or proceeding shall be paid by the other party its reasonable attorneys
fees as well as court costs all as determined by the court.
 
7.           Modification:  No addition to or modification of any provision of
this Agreement shall be binding upon any party unless made in writing and signed
by all parties.
 
8.           Waiver:  The waiver by either party of the breach of covenant or
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.
 
9.           Invalidity of any Provision:  The provisions of this Agreement are
severable if being the intention of the parties hereto that should any
provisions hereto be invalid of unenforceable such invalidity or
unenforceability of any provisions shall not affect the remaining provisions
hereof but the same shall remain in full force and effect as if such invalid or
unenforceable provisions were omitted.
 
10.           Interpretation of Agreement:  When a reference is made in this
Agreement to an article or section, such reference shall be to an article or
section of this Agreement unless otherwise indicated.  The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words “include,”
“includes,” or “including” are used in this Agreement they shall be deemed to be
followed by the words “without limitation.”  Headings in this Agreement are for
informational purposes only and shall not be used to constitute the intent of
this Agreement.
 
 

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11.           Binding Effect; Benefits:  This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this agreement,
expressed or implied is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement
 
12.           Counterparts: This Agreement may be executed simultaneously in any
number of counterparts each of which shall be deemed an original but all of
which together shall constitute one and the same Agreement.
 
13.           Miscellaneous:  This Agreement does not create and nothing in this
Agreement shall be construed to create a partnership or joint venture between
the parties and neither party shall act or represent itself as an agent of the
other party and shall not bind or obligate the other party in any
manner.  Neither party may sell, assign or transfer any rights or interest under
this Agreement nor delegate any duties without the prior written consent of the
other party.
 
IN WITNESS WHEREOF the parties have caused this Agreement to be entered into as
of the Effective Date
 
Company
Consultant
Modavox Inc.
 
 
By: /s/ David J. Ide
/s/ Andrew Burgess
David J. Ide, President
Andrew Burgess

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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MODAVOX, INC.
 
OPTION AGREEMENT
 
This Option Agreement (the “Agreement”) is made as of the 7th day of December
2007, by Modavox, Inc. a Delaware corporation (the “Company”) and ANDREW BURGESS
an individual (“Burgess”)
 
W I T N E S S E T H
 
WHEREAS, the Company has engaged Burgess as a consultant as set forth in that
certain Consultant Agreement dated as of December 7th 2007 by and between the
Company and Burgess (the “Consultant Agreement”) and
 
WHEREAS, pursuant to the Consulting Agreement and in consideration for the
services rendered by Burgess thereunder and the other covenants therein the
board of directors of the Company has determined that it is in the best interest
of the Company to grant Burgess the right and option to purchase shares of the
Company on and subject to the terms set forth herein.
 
NOW, THEREFORE in consideration of the mutual covenants and agreements contained
herein and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged the Company and Burgess hereby agree as follows
 
1.  
Grant of Option:  The Company hereby grants to Burgess, on the terms and
conditions set forth herein an option to purchase (the “Option”) an aggregate of
300,000 shares of common stock, par value $0.0001 of the Company (“Common
Stock”) at the exercise prices and subject to vesting as follows:

 
Number of shares
Exercise Price
Vesting Schedule
50,000
$1.00
Fully vested
50,000
$1.00
Vests on March 1, 2007
100,000
$1.75
Vests ratably ever 36 months fromthe date hereof
100,000
$2.00
Vests ratably over 36 months from the date hereof

 
The Option granted hereunder is designated as a Nonqualified Stock Option and
the Option is not an incentive stock option as described in Section 422 of the
Internal Revenue Code of 1986, as amended.
 
2.  
Term of Option: The Option shall have a term of five (5) years (the “Term”)
measured from the date hereof and shall accordingly expire on the date five (5)
years from the date hereof unless sooner terminated in accordance with Paragraph
4.

 
 
 

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3.  
Method of Exercising Option: To the extent vested the Option may be exercised in
whole or in part prior to its expiration by delivery of written notice to the
Company substantially in the form of Exhibit A attached hereto (the “Exercise
Notice”) identifying the Option and stating the number of shares being purchased
(the “Exercise Shares”) along with payment in full of the exercise price for
such shares in immediately available funds.  Promptly after receipt thereof the
Exercise Notice and the exercise price the Company shall deliver the
certificates evidencing the Exercise Shares to Burgess.  Burgess further agrees
to pay to the Company at the time of exercise and as a condition thereto, all
amounts necessary to satisfy all Federal, state, and local income and employment
tax withholding requirements, if any, applicable to the exercise of the Option.

 
4.  
Termination of Engagement under Consulting Agreement: In the event that the
Engagement (as such term is defined in the Consulting Agreement) is terminated
(i) due to the death or disability of Burgess (ii) by Burgess for any reason; or
(iii) by the Company for cause the unvested options under this Agreement as of
the date such termination shall expire.  In the event that the Engagement is
terminated by the Company without cause, all unvested options under this
Agreement shall vest and be exercisable immediately.

 
5.  
Change in Control:  In the event of any Change in Control, the Option shall
automatically vest on full.

 
For purposes of this Agreement, “Change in Control” shall mean any of the
following:
 
(a)  
a stockholder-approved merger or consolidation after which the stockholders of
the Company immediately prior to such transaction together with their respective
affiliates own less than 50% of the total combined voting power of the Company’s
outstanding securities, or

 
(b)  
a stockholder-approved sale, transfer or other disposition of all or
substantially all of the Company’s assets.

 
6.  
Merger, Consolidation or Reorganization:  In the event of a merger,
consolidation or reorganization with another corporation in which the Company is
not the surviving corporation, the Board of Directors, or the board of directors
of any corporation assuming the obligations of the Company hereunder, shall take
action regarding each outstanding and unexercised option pursuant to either
clause (a) or (b) below:

 
(a)  
Appropriate provision shall be made for the protection of such option by the
substitution on an equitable basis of appropriate shares of the surviving
corporation provided that the excess of the aggregate fair market value (as
defined below of the shares subject to such option immediately before such
substitution over the exercise price thereof is not more than the excess of the
aggregate fair market value of the substituted shares made subject to such
option immediately after such substitution over the exercise price thereof; or

 
(b)  
Appropriate provision shall be made for the cancellation of such option.  In
such event, the Company, or the corporation assuming the obligation of the
Company hereunder, shall pay the Optionee an amount of case (less required
withholding taxes) equal to the excess of the highest fair market value (as
defined below) per share of the Common Stock during the 60-day period
immediately proceeding the merger, consolidation or reorganization over the
option exercise price multiplied by the number of shares subject to such options
(whether or not then exercisable).

 
 
 

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For purposes of this Paragraph 6, fair market value shall be (i) the last
reported closing price of such stock on the principal stock exchange on which
such stock is listed or (ii) if such stock is not listed on an exchange, the
last trade price per share for such stock in the over-the-counter market as
quoted on the OTC Bulletin Board or the pink sheets or successor publication of
the National Quotation Bureau on such date, or (iii) if such stock is not then
listed or quoted as referenced above an amount determined in good faith by the
Board of Directors.
 
7.  
Adjusted in Option Shares:  Should any change be made to the Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares for other change affecting the outstanding Common
Stock as a class without the Company’s receipt of consideration appropriate
adjustments shall be made to (i) the total number and or class of securities
subject to the Option and (ii) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

 
8.  
Prohibitions Against Transfer:  The Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Burgess only by Burgess. The terms of this
Agreement shall be binding upon the executors, administrators, heirs,
successors, and assigns of Burgess.

 
9.  
Registration and Legends: Burgess understands that (i) the Company has not
registered the Option or the Exercise Shares under the Securities Act of 1933 as
amended (the “Act”) or the applicable securities laws of any state. Burgess
represents and warrants that Burgess is acquiring the Option and will acquire
the Exercise Shares, for Burgess’s own account for investment not with a view to
distribution, assignment, resale or other transfer of the Option or the Exercise
Shares.  Because the Option and the Exercise Shares are not registered.  Burgess
is aware that Burgess must hold them indefinitely unless they are registered
under the Act and any applicable securities laws or Burgess must obtain
exemptions from such registration.  Upon exercise in part or in whole of this
Option, the Exercise Shares shall bear the following legend:

 
The shares of Common Stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any applicable state
securities laws and they may not be offered for sale, sold, transferred,
pledged, or hypothecated without an effective registration statement under the
Act and under any applicable state securities laws, or any opinion of counsel,
satisfactory to the Company that an exemption from such registration is
available.
 
10.  
Stockholder Rights: The holder of this Option shall not have any stockholder
rights with respect to this Option until such holder shall have exercised this
Option for Exercise

 
Shares paid the required exercise price for such Exercise Shares and become the
record holder of such Exercise Shares.
 
 
 

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11.  
Successors and Assigns: Except to the extent otherwise provided in Paragraph 8
of this Agreement the provisions of this Agreement shall inure to the benefit of
and be binding upon the Corporation and ifs successors and assigns and Burgess.
Burgess’s assigns and the legal representatives, heirs and legates of Burgess’s
estate.

 
12.  
Entire Agreement Governing Law: This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes in its
entirety all prior undertakings and agreements of the Company and Burgess with
respect to the subject matter hereof, and may not be modified adversely to
Burgess’s interest except by means of a writing signed by the Company and
Burgess. This Agreement shall be governed by Arizona law except for the body of
law pertaining to conflict of laws.

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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IN WITNESS WHEREOF, the Company and Burgess have executed this Agreement as of
the date first above written.
 

 
MODAVOX, INC.
 
Company
Consultant
Modavox Inc.
 
 
By: /s/ David J. Ide
/s/ Andrew Burgess
David J. Ide, President
Andrew Burgess

[Signature Page to Option Agreement between Modavox, Inc. and Andrew Burgess]
 
 
 
 
 
 
 

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Exhibit A
 
Exercise Notice
 
Modavox, Inc.
2617 South 46th Street
Suite 300
Phoenix, Arizona 85034-7417

The  undersigned                                hereby                      irrevocably                      subscribes                      for           the           
purchase         of
(__________) shares pursuant to and in accordance with the terms and the
undersigned and Modavox, Inc. (the “Company”) and herewith makes payment,
covering the purchase of the Exercise Shares and any withholding taxes required
to be paid under the Agreement which Exercise Shares should be delivered to the
undersigned at the address stated below and if such number of Exercise Shares
shall not be all of the shares purchasable under the Option, then a new Option
of like tenor for the balance of the remaining shares purchasable under the
Option shall be delivered to the undersigned at the address stated below.

The undersigned agrees that: (1) the undersigned will not offer, sell, transfer,
or otherwise dispose of any such Exercise Shares, unless either (a) a
registration statement, or post-effective amendment thereto covering such
Exercise Shares have been filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as mended (the “Act”) and such sale,
transfer, or other disposition is accompanied by a prospectus meeting the
requirements of Section 10 of the Act forming a part of such registration
statement, or post effective amendment thereto which is in effect under the Act
covering the Exercise Shares to be so sold, transferred or otherwise disposed of
or (b) the Company has received an opinion on writing and acceptable on the
Company, addressed to the Company and rendered by the Company’s counsel, that
such proposed offer, sale, transfer or other disposition of the Exercise Shares
is exempt from the provisions of Section 5 of the Act in view of the
circumstances of such proposed offer, sale, transfer or other disposition (2)
the Company may notify the transfer agent for its Common Stock that the
certificates for the Common Stock acquired by the undersigned are not to be
transferred unless the transfer agent receives advice from the Company that one
or both of the conditions referred to in (1)(a) and (1)(b) above have been
satisfied, and (3) the Company may affix the legend set forth in Paragraph 9 of
the Agreement to the certificates for Shares hereby subscribed for if such
legend is applicable.
 
 
 
Dated:________________________
Signed:__________________________
 
Addressed:_______________________

 
 
 
 
 
 
 
 
 

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