Exhibit 10.1 

WARRANT EXCHANGE AGREEMENT

 

            This Warrant Exchange Agreement (this "Agreement") is dated as of
November 20, 2006, by and between VILLAGEEDOCS, a California corporation (the
"Company"), and BARRON PARTNERS, LP, a Delaware limited partnership (the "
Holder ").

Recitals:

 

            WHEREAS, the Holder currently holds (i) Stock Purchase Warrants "A"
to purchase an aggregate of 32,000,000 shares of the Company's common stock, no
par value ("Common Stock"), issued pursuant to that Note Purchase Agreement
dated as of April 11, 2005 (the "Purchase Agreement") by and between the Company
and the Holder (the "Series A Warrants") and (ii) Stock Purchase Warrants "B" to
purchase an aggregate of 8,000,000 shares of the Company's Common Stock, issued
pursuant to the Purchase Agreement dated as of February 25, 2005 by and among
the Company and the purchasers named therein (the "Series B Warrants" and,
collectively with the Series A Warrants and the Series B Warrants, the
"Warrants");

            WHEREAS, it is in the best interest of the Company and its
shareholders to eliminate certain penalty provisions pertaining to the failure
of the Company to keep current the Registration Statement that includes shares
of Common Stock currently owned by Holder;

            WHEREAS, subject to the terms and conditions set forth herein, the
Company desires to cancel the Warrants and all rights associated therewith and
the Holder is willing to exchange the Warrants for 22,500,000 shares of the
Company's Series A Preferred Stock (the "Preferred Stock").

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby agreed and acknowledged, the parties hereby
agree as follows:

 

AGREEMENT:

            1.  Securities Exchange.

            (a)  In consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Holder agrees to deliver to the Company the Warrants in exchange for
22,500,000 shares of the Company's Preferred Stock and the Company agrees to
issue and deliver 22,500,000 shares of the Company's Preferred Stock to the
Holder in exchange for the Warrants.

            (b)  So long as Holder has executed this Agreement on or before
November 22, 2006, the Company will file a Registration Statement on Form SB2 by
December 7, 2006 with the United States Securities and Exchange Commission and
include on such Registration Statement all shares of Common Stock currently
owned by Holder and all shares acquired by Holder upon exercise of conversion of
shares of Preferred Stock into shares of Common Stock.  The penalty provision
for VEDO stock included in the registration statement shall be reinstated
effective March 1, 2007 if such registration statements has not been declared
effective on or before February 28, 2007.  If the registration statement has
been declared effective on or before February 28, 2007, no VEDO shares owned by
Holder shall be subject to any penalty provisions, for past failures to register
on a timely basis.  In the event Holder does not execute this Agreement on or
before November 22, 2006, the Company agrees that it will include all such
shares in the first subsequent Registration Statement in which such shares can
be included for registration, in which event the penalty provision for
non-registered stock will not be reinstated unless such registration statement
has not been declared effective within ninety (90) days after filing thereof. 
In consideration for the 22,500,000 shares issuable hereunder and the Company's
agreement to include the shares on a Registration Statement.

            (c)  The Holder shall have all rights with respect to the Preferred
Stock issued hereunder in exchange for the Warrants granted pursuant to the
Purchase Agreement ,as if the new shares of preferred Stock issuable pursuant to
this Agreement were issued as part of the original Purchase Agreement. All
rights of  Holder with respect to the Warrants shall be cancelled.

            (d)  The closing under this Agreement (the "Closing") shall take
place at the offices of Johnson, Pope, Bokor, Ruppel & Burns, LLP, 911 Chestnut
Street, Clearwater, FL 33756 upon the satisfaction of each of the conditions set
forth in Sections 4 and 5 hereof (the "Closing Date").

            (e)  At the Closing, the Company shall issue to the Holder one or
more certificates aggregating 22,500,000 shares of the Company's Preferred
Stock, and the Holder shall deliver to the Company for cancellation the
Warrants, whereupon Holder shall have no further rights pursuant to the
Warrants.  Unless directed otherwise by the Holder at least five (5) days prior
to the Closing, the Company will issue a single certificate for all 22,500,000
shares of Preferred Stock in the name of Holder.

            2.  Representations, Warranties and Covenants of the Holder. The
Holder hereby makes the following representations and warranties to the Company,
and covenants for the benefit of the Company, as follows:

            (a)  Holder is a limited liability company duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

            (b)  This Agreement has been duly authorized, validly executed and
delivered by the Holder and is a valid and binding agreement and obligation of
the Holder enforceable against the Holder in accordance with its terms, subject
to limitations on enforcement by general principles of equity and by bankruptcy
or other laws affecting the enforcement of creditors' rights generally, and the
Holder has full power and authority to execute and deliver the Agreement and the
other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.

            (c)  The Holder understands that the Preferred Stock is being
offered and sold to it in reliance on specific provisions of Federal and state
securities laws and that the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of the Holder set forth herein for purposes of qualifying for exemptions from
registration under the Securities Act of 1933, as amended (the "Securities Act
") and applicable state securities laws.

            (d)  The Holder is an "accredited investor" as defined under
Rule 501 of Regulation D promulgated under the Securities Act.

            (e)  The Holder is and will be acquiring the Preferred Stock for the
Holder's own account, and not with a view to any resale or distribution in whole
or in part, in violation of the Securities Act or any applicable securities
laws.

            (f)  The offer and sale of the Preferred Stock is intended to be
exempt from registration under the Securities Act, by virtue of Section 3(a)(9)
and/or 4(2) thereof. The Holder understands that the Securities purchased
hereunder have not been registered under the Securities Act and that none of the
Securities can be sold or transferred unless they are first registered under the
Securities Act and such state and other securities laws as may be applicable or
the Company receives an opinion of counsel reasonably acceptable to the Company
that an exemption from registration under the Securities Act is available (and
then the Securities may be sold or transferred only in compliance with such
exemption and all applicable state and other securities laws).

            3.  Representations, Warranties and Covenants of the Company. The
Company represents and warrants to the Holder, and covenants for the benefit of
the Holder, as follows:

            (a)  The Company has been duly incorporated and is validly existing
and in good standing under the laws of the state of California, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as currently conducted, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure to
register or qualify would not have a Material Adverse Effect. For purposes of
this Agreement, "Material Adverse Effect" shall mean any material adverse effect
on the business, operations, properties, prospects, or financial condition of
the Company and its subsidiaries and/or any condition, circumstance, or
situation that would prohibit or otherwise materially interfere with the ability
of the Company to perform any of its obligations under this Agreement in any
material respect.

            (b)  The Preferred Stock has been duly authorized by all necessary
corporate action and, when paid for or issued in accordance with the terms
hereof, the Preferred Stock shall be validly issued and outstanding, fully paid
and nonassessable, free and clear of all liens, encumbrances and rights of
refusal of any kind.

            (c)  This Agreement has been duly authorized, validly executed and
delivered on behalf of the Company and is a valid and binding agreement and
obligation of the Company enforceable against the Company in accordance with its
terms, subject to limitations on enforcement by general principles of equity and
by bankruptcy or other laws affecting the enforcement of creditors' rights
generally, and the Company has full power and authority to execute and deliver
the Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder.

            (d)  The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement by the Company,
will not (i) conflict with or result in a breach of or a default under any of
the terms or provisions of, (A)  the Company's certificate of incorporation or
by-laws, or (B) of any material provision of any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company is a party
or by which it or any of its material properties or assets is bound, (ii) result
in a violation of any provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, Federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company, or any of its material properties or assets or
(iii) result in the creation or imposition of any material lien, charge or
encumbrance upon any material property or assets of the Company or any of its
subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of their
property or any of them is subject except in the case of clauses (i)(B), (ii) or
(iii) for any such conflicts, breaches, or defaults or any liens, charges, or
encumbrances which would not have a Material Adverse Effect.

            (e)  The delivery and issuance of the Preferred Stock in accordance
with the terms of and in reliance on the accuracy of the Holder's
representations and warranties set forth in this Agreement will be exempt from
the registration requirements of the Securities Act.

            (f)  No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the Company
is required in connection with the valid execution and delivery of this
Agreement or the offer, sale or issuance of the Preferred Stock or the
consummation of any other transaction contemplated by this Agreement.

            (g)  The Company has complied and will comply with all applicable
federal and state securities laws in connection with the offer, issuance and
delivery of the Preferred Stock hereunder.  Neither the Company nor anyone
acting on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Preferred Stock, or similar securities to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will take any action so as to bring the issuance and sale of any of the
Preferred Stock under the registration provisions of the Securities Act and
applicable state securities laws.  Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
any of the Preferred Stock.

            (h)  The Company represents that it has not paid, and shall not pay,
any commissions or other remuneration, directly or indirectly, to the Holder or
to any third party for the solicitation of the exchange of the Warrants for
shares of Preferred Stock pursuant to this Agreement.

            4.  Conditions Precedent to the Obligation of the Company to Issue
the Preferred Stock.  The obligation hereunder of the Company to issue and
deliver the Preferred Stock to the Holder is subject to the satisfaction or
waiver, at or before the Closing Date, of each of the conditions set forth
below. These conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion.

            (a)  The Holder shall have executed and delivered this Agreement.

            (b)  The Holder shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Holder at or prior
to the Closing Date.

            (c)  The representations and warranties of the Holder shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date.

            5.  Conditions Precedent to the Obligation of the Holder to Accept
the Preferred Stock. The obligation hereunder of the Holder to accept the
Preferred Stock is subject to the satisfaction or waiver, at or before the
Closing Date, of each of the conditions set forth below. These conditions are
for the Holder's sole benefit and may be waived by the Holder at any time in its
sole discretion.

            (a)  The Company shall have executed and delivered this Agreement.

            (b)  The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.

            (c)  Each of the representations and warranties of the Company shall
be true and correct in all material respects as of the date when made and as of
the Closing Date as though made at that time, except for representations and
warranties that speak as of a particular date, which shall be true and correct
in all material respects as of such date.

            (d)  No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement at or
prior to the Closing Date.

            (e)  As of the Closing Date, no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, shall be
pending against or affecting the Company, or any of its properties, which
questions the validity of the Agreement or the transactions contemplated thereby
or any action taken or to be taken pursuant thereto. As of the Closing Date, no
action, suit, claim or proceeding before or by any court or governmental agency
or body, domestic or foreign, shall be pending against or affecting the Company,
or any of its properties, which, if adversely determined, is reasonably likely
to result in a Material Adverse Effect.

            6.  Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York
without giving effect conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction.  Each of the
parties consents to the exclusive jurisdiction of the Federal courts whose
districts encompass any part of the County of New York located in the City of
New York in connection with any dispute arising under this Agreement and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on  forum non conveniens , to the bringing of any such
proceeding in such jurisdictions. Each party waives its right to a trial by
jury. Each party to this Agreement irrevocably consents to the service of
process in any such proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such party at its address set forth herein.
Nothing herein shall affect the right of any party to serve process in any other
manner permitted by law.

            7.  Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express overnight
courier, registered first class mail, or telecopier (provided that any notice
sent by telecopier shall be confirmed by other means pursuant to this Section
7), initially to the address set forth below, and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section.

If to the Company:

14471 Chambers Road, Suite 105
            Tustin, California  92780
            Attention: K. Mason Conner, Chief Executive Officer
            Facsimile No.: (714) 734-1040

                                    With a copy to:

                                    Johnson, Pope, Bokor, Ruppel & Burns, LLP
                                    911 Chestnut Street
                                    Clearwater, Florida 33756
                                    Attn:  Michael T. Cronin, Esq.
                                    Facsimile No.: (727) 441-8617

If to the Investor:

                                    Barron Partners L.P.
                                    c/o Barron Capital Advisors, LLC
                                    730 Fifth Avenue, 9th Floor
                                    New York, New York 10019
                                    Attn: Andrew Barron Worden

            All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when receipt is
acknowledged, if telecopied; or when actually received or refused if sent by
other means.

            8.  Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the subject matter
hereof and supersedes all prior and/or contemporaneous oral or written proposals
or agreements relating thereto all of which are merged herein. This Agreement
may not be amended or any provision hereof waived in whole or in part, except by
a written amendment signed by both of the parties.

            9.  Counterparts.  This Agreement may be executed by facsimile
signature and in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

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           IN WITNESS WHEREOF, this Agreement was duly executed on the date
first written above.

 

THE COMPANY:

 

VILLAGEEDOCS

/s/ K. Mason Conner                             

By: K. Mason Conner
Title: Chief Executive Officer

HOLDER:

BARRON PARTNERS LP

 

 /s/ Andrew Barron Worden                   

Andrew Barron Worden
President, General Partner of
Barron Partners LP
730 Fifth Avenue, 9th Floor
New York NY 10019

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