ex10-7.htm


    Exhibit
10.7

     

    NEITHER
THE SECURITIES REPRESENTED HEREBY NOR THE SECURITIES ISSUABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD UNLESS AT
THE TIME OF SUCH OFFER OR SALE, THE PERSON MAKING SUCH OFFER OR SALE DELIVERS A
PROSPECTUS MEETING THE REQUIREMENTS OF SECTION 10 OF THE ACT, FORMING A PART OF
A REGISTRATION STATEMENT, OR POST-EFFECTIVE AMENDMENT THERETO, WHICH IS
EFFECTIVE UNDER SAID ACT, OR UNLESS, IN THE OPINION OF COUNSEL TO THE
CORPORATION, SUCH OFFER AND SALE IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF
THE ACT.

     

    MODAVOX,
INC.

     

    COMMON
STOCK PURCHASE WARRANT

     

    November
21, 2007

     

    Modavox,
Inc. (the “Company”), a Delaware
corporation, hereby certifies that, for value received, Barry M. Goldwater, Jr.
(together with all permitted assigns, the “Holder”), is
entitled, subject to the terms set forth below at any time or from time to time
after the date hereof and before the Expiration Date (as defined below), to
purchase from the Company up to ONE HUNDRED TWENTY THOUSAND (120,000) shares
(the “Shares”)
of the Company’s common stock at a price of $1.15 per Share (the purchase price
per Share, as adjusted from time to time pursuant to the provisions hereunder
set forth, is referred to in this Warrant as the “Purchase
Price”).

     

    
      	
              1.

            	
              Time of
      Exercise.  Subject to the provisions of Sections 4,
      “Transfer and Assignment,” and 15, “Legends,” this Warrant may be
      exercised at any time and from time to time after November 21, 2007 (the
      “Exercise
      Commencement Date”), but no later than 5:00 p.m., P.S.T., November
      21, 2010 (the “Expiration
      Date”), constituting a period of three (3) years, at which point
      this Warrant shall become void and all rights hereunder shall
      cease.

            


    

     

    2.         Manner of
Exercise.

     

    
      	
               
      

            	
              2.1

            	
              The
      Holder may exercise this Warrant, in whole or in part, at any time before
      the Expiration Date, upon surrender of this Warrant with the form of
      subscription attached hereto duly executed to the Company at its corporate
      office located at 4636 University Drive, Suite 275, Phoenix, Arizona 85034
      together with the full Purchase Price for each Share to be purchased in
      lawful money of the United States, or by certified check, bank draft or
      postal or express money order payable in United States dollars to the
      order of the Company, and upon compliance with and subject to the
      conditions set forth in this
Warrant.

            


    

     

    
      	
               
      

            	
              2.2

            	
              Upon
      receipt of this Warrant with the form of subscription duly executed and
      accompanied by payment of the aggregate Purchase Price for the Shares for
      which this Warrant is then being exercised, the Company shall cause to be
      issued certificates or other evidence of ownership, for the total number
      of whole Shares for which this Warrant is being exercised in such
      denominations as are required for delivery to the Holder, and the Company
      shall thereupon deliver such documents to the Holder or its
      nominee.

            


    

     

    
      	
               
      

            	
              2.3

            	
              If
      the Holder exercises this Warrant with respect to fewer than all of the
      Shares that may be purchased under this Warrant, the Company shall execute
      a new Warrant for the balance of the Shares that may be purchased upon
      exercise of this Warrant and deliver such new Warrant to the
      Holder.

            


    

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Holder as
      Owner.  Prior to due presentment for registration of
      transfer of this Warrant, the Company may deem and treat the Holder as the
      absolute owner of this Warrant (notwithstanding any notation of ownership
      or other writing hereon) for the purpose of any exercise hereof and for
      all other purposes, and the Company shall not be affected by any notice to
      the contrary.  Irrespective of the date of issue and delivery of
      certificates for any Shares issuable upon the exercise of the Warrant,
      each person in whose name any such certificate is issued shall be deemed
      to have become the holder of record of the Shares represented thereby on
      the date on which all or a portion of the Warrant surrendered in
      connection with the subscription therefor was surrendered and payment of
      the purchase price was tendered.  No surrender of all or a
      portion of the Warrant on any date when the stock transfer books of the
      Company are closed, however, shall be effective to constitute the person
      or persons entitled to receive Shares upon such surrender as the record
      holder of such Shares on such date, but such person or persons shall be
      constituted the record holder or holders of such Shares at the close of
      business on the next succeeding date on which the stock transfer books are
      opened.  Each person holding any Shares received upon exercise
      of Warrant shall be entitled to receive only dividends or distributions
      payable to holders of record on or after the date on which such person
      shall be deemed to have become the holder of record of such
      Shares.

            


    

     

    
      	
              4.

            	
              Transfer and
      Assignment.  This Warrant may not be sold, hypothecated,
      exercised, assigned or transferred except in accordance with and subject
      to the provisions of the Act.

            


    

     

    
      	
              5.

            	
              Method for
      Assignment.  Any assignment permitted under this Warrant
      shall be made by surrender of this Warrant to the Company at its principal
      office with the form of assignment attached hereto duly executed and funds
      sufficient to pay any transfer tax.  In such event, the Company
      shall, without charge, execute and deliver a new Warrant in the name of
      the assignee designated in such instrument of assignment and this Warrant
      shall promptly be canceled.

            


    

     

    
      	
              6.

            	
              Taxes.  The
      issuance of any Shares upon the exercise of this Warrant and the delivery
      of certificates or other instruments representing such shares or other
      securities shall be made without charge to the Holder for any tax or other
      charge in respect of such issuance.  The company shall not,
      however, be required to pay any tax which may be payable in respect of any
      transfer involved in the issue and delivery of any certificate in a name
      other than that of the Holder and the Company shall not be required to
      issue or deliver any such certificate unless and until the person or
      persons requesting the issue thereof shall have paid to the Company the
      amount of such tax or shall have established to the satisfaction of the
      Company that such tax has been
paid.

            


    

     

    
      	
              7.

            	
              Registration
      Rights.

            


    

     

    
      	
               
      

            	
              7.1

            	
              The
      Holder shall have the limited right to join with the Company to register
      the Shares in a resale registration statement filed by the Company with
      the SEC under the Act including a registration statement filed by the
      Company with the SEC on Form S-8.  This right to join with the
      Company in a registration statement under the Act is not applicable to a
      registration statement filed by the Company with the SEC on Form S-4 or
      any other inappropriate form.  If, at any time, the Company
      proposes to file a registration statement as described in this Paragraph
      7.1, it shall give timely written notice of such proposed filing to the
      Holder and its designees at their addresses appearing on the records of
      the Company and shall offer to include in any such filing any proposed
      disposition of the Shares.  Within fifteen (15) days of receipt
      of the Company’s notice of filing, the Holder may request registration of
      the Shares pursuant to a written request setting forth the intended method
      of distribution and such other data or information as the Company or its
      counsel shall reasonably require and such Shares shall be included in the
      registration statement under the Act to the maximum extent
      permissible.

            


    

     

     

     

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              7.2

            	
              In
      connection with any registration of its securities, the Company shall
      supply the Holder with copies of such registration statement, and of the
      prospectus included therein, in such quantities as may be reasonably
      necessary for the purpose of the proposed disposition.  The
      Company will pay all registration expenses in connection with the
      registration pursuant to Section 7.1.  Such reasonable expenses
      will include all registration of filing fees, all fees and expenses of
      compliance with securities or blue-sky laws, printing expenses and
      reasonable fees and disbursements of counsel for the Company and its
      independent certified public accountants.  The Company is not
      required to pay any fees or expenses of Holder, legal counsel of the
      Holder, or accountant or any other
advisors.

            


    

     

    
      	
               
      

            	
              7.3

            	
              The
      Company and the Holder shall indemnify and hold harmless each other and
      their respective affiliates from and against any loss, liability, claim,
      damage and expense (including reasonable attorneys’ fees) to the extent
      resulting from any untrue statement or alleged untrue statement of a
      material fact contained in any registration statement pursuant to which
      the Shares were registered under the Act, or any amendment thereto,
      including all documents incorporated by reference, or from the omission or
      alleged omission therefrom of a material fact required to be stated
      therein or necessary to make the statement not misleading; provided, that
      the obligations of the Holder to indemnify the Company and its affiliates
      shall be limited to the proceeds received by the Holder from the sale of
      the Shares pursuant to the registration statement and shall only apply
      with respect to the information furnished in writing by the Holder or on
      the Holder’s behalf expressly for use in the registration statement or any
      prospectus relating to the Shares or any amendment or supplement
      thereto.  The indemnification required by this Section 7.3 shall
      be in a form typical for transactions of such
  nature.

            


    

     

    
      	
              8.

            	
              Rights of
      Holder.  Nothing contained in this Warrant shall be
      construed as conferring upon the Holder the right to vote or consent or
      receive notice as a stockholder in respect of any meetings of stockholders
      for the election of directors or any other matter, or as having any rights
      whatsoever as a stockholder of the
Company.

            


    

     

    
      	
              9.

            	
              Covenants of the
      Company.  The Company covenants and agrees as
      follows:

            


    

     

    
      	
               
      

            	
              9.1

            	
              At
      all times it shall reserve and keep available for the exercise of this
      Warrant into common stock such number of authorized shares of common stock
      as are sufficient to permit the exercise in full of this Warrant into
      common stock; and

            


    

     

    
      	
               
      

            	
              9.2

            	
              All
      Shares issued upon exercise of the Warrant shall be duly authorized,
      validly issued and outstanding, fully paid and
    non-assessable.

            


    

     

    
      	
              10.

            	
              Recapitalization.  The
      number of Shares purchasable on exercise of this Warrant and the Purchase
      Price therefor shall be subject to adjustment from time to time in the
      event that the Company shall:  (i) subdivide its
      outstanding shares of common stock into a greater number of shares,
      (ii) combine its outstanding shares of common stock into a smaller
      number of shares, or (iii) spin-off a subsidiary by distributing, as
      a dividend or otherwise, shares of the subsidiary to its
      stockholders.  In any such case, the total number of shares
      purchasable on exercise of this Warrant immediately prior thereto shall be
      adjusted so that the Holder shall be entitled to receive, at the same
      aggregate purchase price, the number of shares of common stock that the
      Holder would have owned or would have been entitled to receive immediately
      following the occurrence of any of the events described above had this
      Warrant been exercised in full immediately prior to the occurrence (or
      applicable record date) of such event.  An adjustment made
      pursuant to this Section 9 shall, in the case of a stock dividend or
      distribution, be made as of the record date and, in the case of a
      subdivision or combination, be made as of the effective date
      thereof.  If, as a result of any adjustment pursuant to this
      Section 9, the Holder shall become entitled to receive shares of two or
      more classes of series of securities of the Company, the Board of
      Directors of the Company shall equitably determine the allocation of the
      adjusted purchase price between or among shares or other units of such
      classes or series and shall notify the Holder of such
      allocation.

            


    

     

     

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              11.

            	
              Merger or
      Consolidation.  In the event of any reorganization or
      recapitalization of the Company or in the event the Company consolidates
      with or merges into another entity or transfers all or substantially all
      of its assets to another entity, then and in each such event, the Holder,
      on exercise of this Warrant as provided herein, at any time after the
      consummation of such reorganization, recapitalization, consolidation,
      merger or transfer,  shall be entitled, and the documents
      executed to effectuate such event shall so provide, to receive the stock
      or other securities or property to which the Holder would have been
      entitled upon such consummation if the Holder had exercised this Warrant
      immediately prior thereto.  In such case, the terms of this
      Warrant shall survive the consummation of any such reorganization,
      recapitalization, consolidation, merger or transfer and shall be
      applicable to the shares of stock or other securities or property
      receivable on the exercise of this Warrant after such
      consummation.  and as an exchange for a larger or smaller number
      of shares, as the case may be.

            


    

     

    
      	
              12.

            	
              Notice of Dissolution or
      Liquidation.  Except as otherwise provided in Section 10,
      in the case of any sale or conveyance of all or substantially all of the
      assets of the Company in connection with a plan of complete liquidation of
      the Company, or in the case of the dissolution, liquidation or winding up
      of the Company, all rights under this Warrant shall terminate on a date
      fixed by the Company, such date so fixed to be not earlier than the date
      of the commencement of the proceedings for such dissolution, liquidation
      or winding up and not later than thirty (30) days after such commencement
      date.  Notice of such termination of purchase rights shall be
      given to the Holder at least thirty (30) days prior to such termination
      date.

            


    

     

    
      	
              13.

            	
              Statement of
      Adjustment.  Any adjustment pursuant to the provisions of
      Sections 9, 10 or 11 shall be made on the basis of the number of Shares
      which the Holder would have been entitled to acquire by exercise of this
      Warrant immediately prior to the event giving rise to such adjustment and,
      as to the Purchase Price in effect immediately prior to the rise to such
      adjustment.  Whenever any such adjustment is required to be
      made, the Company shall forthwith determine the new number of Shares which
      the Holder hereof shall be entitled to purchase hereunder and/or such new
      Purchase Price and shall prepare, retain on file and transmit to the
      Holder within ten (10) days after such preparation a statement describing
      in reasonable detail the method used in calculating such
      adjustment.

            


    

     

    
      	
              14.

            	
              No Fractional
      Shares.  The Company shall not issue any fraction of a
      Share in connection with the exercise of this Warrant, and in any case
      where the Holder would, except for the provisions of this Section 13, be
      entitled under the terms of this Warrant to receive a fraction of a Share
      upon such exercise, the Company shall upon the exercise and receipt of the
      Purchase Price, issue the largest number of whole Shares purchasable upon
      exercise of this Warrant.  The Company shall not be required to
      make any cash or other adjustment in respect of such fraction of a Share
      to which the Holder would otherwise be entitled.  The Holder, by
      the acceptance of this Warrant, expressly waives his right to receive a
      certificate for any fraction of a Share upon exercise
    hereof.

            


    

     

     

     

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              15.

            	
              No Change in Form
      Required.  The form of Warrant need not be changed
      because of any change pursuant to Sections 9, 10 or 11 in the Purchase
      Price or in the number of Shares purchasable upon the exercise of a
      Warrant and may state the same Purchase Price and the same number of
      shares of Preferred Stock as are stated in the Warrants initially issued
      pursuant to the Agreement.

            


    

     

    
      	
              16.

            	
              Legend.  Until
      sold pursuant to the provisions of the Act or an exemption thereunder, the
      Shares issued on exercise of this Warrant shall be subject to a stop
      transfer order and the certificate or certificates representing the Shares
      shall bear the following legend:

            


    

     

    
      	
               
      

            	
              THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
      SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, OR
      OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT
      THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
      SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
      HOLDER OF THE SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY
      SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD,
      PLEDGED, ASSIGNED, OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED
      WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
      APPLICABLE STATE SECURITIES LAWS.

            


    

     

    
      	
              17.

            	
              Binding
      Effect.  All the covenants and provisions of this Warrant
      by or for the benefit of the Company shall bind and inure to the benefit
      of its successors and assigns
hereunder.

            


    

     

    
      	
              18.

            	
              Notices.  Notices
      or demands pursuant to this Warrant to be given or made by the Holder to
      or on the Company shall be sufficiently given or made if sent by certified
      or registered mail, return receipt requested, postage prepaid, and
      addressed, until another address is designated in writing by the Company,
      as follows:

            


    

     

    Modavox,
Inc.

    4636
University Drive, Suite 275

    Phoenix,
Arizona 85034

    Attn:
Chief Executive Officer

    


    
      	
               
      

            	
              Notices
      to the Holder provided for in this Warrant shall be deemed given or made
      by the Company if sent by certified or registered mail, return receipt
      requested, postage prepaid, and addressed to the Holder at the Holder's
      last known address as it shall appear on the books of the
      Company.

            


    

     

    
      	
              19.

            	
              Governing
      Law.  The validity, interpretation and performance of
      this Warrant shall be governed by the laws of the State of Delaware,
      without regard to principles of conflicts of
  law.

            


    

     

    
      	
              20.

            	
              Parties Bound and
      Benefited.  Nothing in this Warrant expressed and nothing
      that may be implied from any of the provisions hereof is intended, or
      shall be construed, to confer upon, or give to, any person or corporation
      other than the Company and the Holder any right, remedy or claim under
      promise or agreement hereof, and all covenants, conditions, stipulations,
      promises and agreements contained in this Warrant shall be for the sole
      and exclusive benefit of the Company and its successors and of the Holder,
      its successors and, if permitted, its
assignees.

            


    

     

    
      	
              21.

            	
              Headings.  The
      Article headings herein are for convenience only and are not part of this
      Warrant and shall not affect the interpretation
  thereof.

            


    

     

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, this Warrant has been duly executed by the Company under its
corporate seal as of the 21 day of November 2007.

     

    


    


    
      
        	 
      	
                MODAVOX,
      INC.

              
	 
      	 
      
	 
      	 
      
	 
      	
	 
      	
                By:
      /s/ David J.
      Ide              
      

              
	 
      	
                David
      J. Ide

              
	 
      	
                Chief
      Executive Officer

              


      

    

    


     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    MODAVOX
INC.

     

    Assignment

     

    FOR VALUE
RECEIVED, _____________________________________ hereby sells, assigns and
transfers unto ________________________________________________________
________________________________________________________ the within Warrant and
the rights represented thereby, and does hereby irrevocably constitute and
appoint ______________________________________ Attorney, to transfer said
Warrant on the books of the Company, with full power of
substitution.

     

    Dated:__________________________                                                                

     

    
      	 
      	
              Signed:___________________________

            
	 
      	 
      
	 
      	
              Print
      Name:_______________________

            


    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Subscription
Form

     

    Modavox,
Inc.

    4636
University Drive, Suite 275

    Phoenix,
Arizona 85034

     

    


     

    The
undersigned hereby irrevocably subscribes for the purchase of _____ shares of
common stock (the “Shares”), pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment, covering the purchase of
the Shares, which should be delivered to the undersigned at the address stated
below, and, if such number of Shares shall not be all of the Shares purchasable
hereunder, then a new Warrant of like tenor for the balance of the remaining
Shares purchasable under this Warrant 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 Shares, unless either (a) a
registration statement, or post-effective amendment thereto, covering such
Shares have been filed with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended ("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 Shares to be so
sold, transferred or otherwise disposed of, or (b) counsel to Modavox, Inc.
(“Company”) has rendered an opinion in writing and addressed to the Company that
such proposed offer, sale, transfer or other disposition of the 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 Section 3.1 of this Warrant to the
certificates for the Shares hereby subscribed for, if such legend is
applicable.

     

    
      	
              Dated:_____________________

            	
              Signed:_____________________________

            
	 
      	
              Address:____________________________

            
	 
      	__________________________________
	 
      	 
      


    

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SETTLEMENT
AGREEMENT AND MUTUAL RELEASE

    


    This Settlement Agreement and Mutual
Release (“Agreement”) dated as
of September 27, 2007, is made by and among Modavox, Inc., a Delaware
corporation (the “Company”), and Barry
Goldwater Jr., an Arizona resident (“Goldwater”).  The
Company and Goldwater are sometimes hereinafter referred to collectively as the
“Parties.”

     

    RECITALS:

     

     

    A.           Goldwater
was engaged as an independent contractor by the Company on or around August 2004
to perform certain government relations, public affairs and sales and marketing
services for the Company (the “Services”).

     

     

    B.           In
exchange for the Services, the Company granted Goldwater a common stock purchase
warrant dated August 25, 2004 (the “Warrant”) to purchase
up to 100,000 shares of the Company’s common stock upon the terms and conditions
set forth therein and agreed to pay certain other consideration to Goldwater in
the form of cash, warrants and shares of the Company’s common
stock.

     

    C.           The
Parties wish to formally terminate any engagement of Goldwater to perform
services of any kind for the Company and any obligation of the Company to
compensate Goldwater therefor and have accordingly mutually agreed to release
each other from any and all claims arising from or related to Goldwater’s
engagement by the Company all upon the terms and conditions set forth
herein.

    


    In consideration of the mutual promises
made herein and other valuable consideration, receipt of which is hereby
acknowledged, the Parties agree as follows:

    


    1.           No Admission of
Liability.  The parties agree that the terms set forth herein
represent a good faith compromise and settlement of disputed
claims.  Neither this Agreement nor any action taken in connection
herewith shall be deemed an admission of liability on the part of either
Party.

    


    2.           Settlement.  The
Parties agree that the exercise of the Warrant as set forth in Section 3 below
shall serve as adequate and sufficient consideration for the full, complete and
total settlement of any and all amounts owed, in the form of cash, shares,
warrants or otherwise, by the Company to Goldwater, or to any of Goldwater’s
affiliates or assigns, including without limitation any amounts owing under the
Warrant, the Piggyback Registration Rights Agreement by and between Goldwater
and the Company dated August 25, 2004, the letter agreement by and between
Goldwater and the Company dated November 19, 2004 and the letter agreement by
and between Goldwater and the Company dated February 2, 2006.

    


    3.           Exercise of
Warrant.  In conjunction with the execution hereof, Goldwater
hereby exercises his right to purchase shares of Common Stock of the Company
pursuant to the cashless exercise provision contained in Section 1 of the
Warrant and as a result the Company will issue to Goldwater 70,548 shares of the
Company’s common stock (the “Exercise Shares”)
which amount is calculated as follows:

    


    
      
        
          
            	
                    Number
      of Shares Issuable

                  	
                    Exercise
      Price(1)

                  	
                    Fair
      Market Value(2)

                  	
                    Number
      of Shares Issuable upon Cashless Exercise

                  
	
                    100,000

                  	
                    $0.43

                  	
                    $1.46

                  	
                    70,548

                  


          

        

      

    

     

    (1)         As
set forth in the Warrant.

     

    
      	
               
      

            	
              (2)

            	
              As
      set forth in the Warrant, the “Fair Market Value” means the average
      closing price of the Company’s Common Stock as quoted on Yahoo! Finance
      for the last ten (10) days upon which the Company’s Common Stock has
      traded preceding the date of
exercise.

            


    

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In conjunction with the issuance of the
Exercise Shares, Goldwater represents and warrants to the Company as
follows:

    


    
      	
               
      

            	
              a)

            	
              Goldwater
      is not and has not been during the preceding three (3) months, an
      “affiliate” of the Company as that term is defined in paragraph (a)(1) of
      Rule 144 promulgated under the Securities Act of 1933;
  and

            


    

    


    
      	
               
      

            	
              b)

            	
              Goldwater
      has beneficially owned the Warrant for at least two (2) years as computed
      in accordance with paragraph (d) of Rule
144;

            


    

    


    4.           Release of the
Company.  In consideration for the obligations of the Company
set forth in this Agreement, Goldwater, on behalf of himself, and his heirs and
assigns, hereby fully and forever release the Company and its officers,
directors, employees, investors, stockholders, administrators, predecessor and
former or successor officers, directors, employees and assigns, of and from any
claim, duty, obligation or cause of action relating to any matter of any kind,
whether presently known or unknown, suspected or unsuspected, that Goldwater may
possess arising from any omissions, acts or facts that have occurred up until
and including the date of this Agreement including, without
limitation:

    


    
      	
               
      

            	
              (1)

            	
              any
      and all claims relating to or arising from any engagement by the Company
      of Goldwater;

            


    

    


    
      	
               
      

            	
              (2)

            	
              any
      and all claims relating to, or arising from, Goldwater’s right to
      purchase, or actual purchase of shares of stock of the
      Company;

            


    

    


    
      	
               
      

            	
              (3)

            	
              any
      and all claims for wrongful breach of contract, both express and implied;
      breach of a covenant of good faith and fair dealing, both express and
      implied, negligent or intentional infliction of emotional distress; or
      negligent or intentional misrepresentation; negligent or intentional
      interference with contract.

            


    

    


    This
release does not extend to any obligations incurred or specified under this
Agreement.

    


    5.           Release of
Goldwater.  In consideration for the obligations of Goldwater
set forth in this Agreement, the Company, on behalf of itself and its respective
officers, directors, employees, investors, stockholders, administrators and
assigns, hereby fully and forever releases Goldwater and his heirs, executors
and assigns, of and from any claim, duty, obligation or cause of action relating
to any services performed by Goldwater for the Company, whether presently known
or unknown, suspected or unsuspected, that the Company may possess arising from
any omissions, acts or facts that have occurred up until and including the date
of this Agreement relating to such services.  This release does not
extend to any obligations incurred or specified under this
Agreement.

    


    6.           Non-Disparagement.  Each
Party agrees to refrain from any disparagement, defamation, slander of the
other, or tortious interference with the contracts and relationships of the
other.

    


    7.           Representations of the
Parties.  Each of the Parties represents and warrants that it
has the full legal right, power and authority to enter into this Agreement and
to consummate its respective obligations as contemplated by this Agreement, and
that this Agreement constitutes a valid and binding Agreement of it and is
enforceable against it in accordance with this Agreement’s terms and
conditions.  Each of the representations, warranties, covenants and
agreements set forth in this Agreement will survive the execution, delivery and
performance of the obligations of and under this Agreement.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.           Entire Agreement;
Severability.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter contained
herein.  In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, then only the portions of this Agreement that violate that
statute or public policy will be stricken.  All portions of this
Agreement that do not violate any statute or public policy will continue in full
force and effect.  Any court order striking any portion of this
Agreement may modify the stricken terms as narrowly as possible to give as much
effect as possible to the intentions of the parties under this
Agreement.

    


    9.           Amendment.  This
Agreement may not be amended, modified or discharged except by an instrument in
writing duly signed by authorized representatives of each party.

    


    10.          Waiver.  A
party’s waiver of any provision of this Agreement will not, under any
circumstances, be deemed to be a waiver of any preceding or subsequent breach
hereunder, or constitute a general waiver of any of its rights
hereunder.  No waiver will be binding unless executed in writing by
the waiving party.

    


    11.          Assignment.  This
Agreement will be binding upon and be observed by the parties, and their
respective subsidiaries, affiliates, directors, assigns, agents, officers,
shareholders, employees and successors.  Notwithstanding the
foregoing, neither party may assign their rights or obligations under this
Agreement without the express written consent of the other party, which consent
will not be unreasonably withheld or delayed.

    


    12.          Governing
Law.  This Agreement shall be governed in accordance with the
substantive laws of the State of Arizona, without regard to any conflicts of
laws provisions.  The parties agree that venue and jurisdiction for
the resolution of any disputes hereunder shall rest exclusively with the state
or federal courts located in Maricopa County, Arizona, and any such dispute or
litigation relating hereto shall be brought exclusively in such courts, and each
of the parties does hereby consent to the jurisdiction of such
courts.  In the event of a dispute between the parties hereto, the
prevailing party in any litigation, arbitration and/or appeal shall be entitled
to recover reasonable attorneys fees incurred in connection with such
litigation.

    


    13.           Counterparts.  This
Agreement may be executed in counterparts, and each counterpart will have the
same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.

    


    IN WITNESS WHEREOF, the Parties have
executed this Settlement Agreement and Mutual Release on the respective dates
set forth below.

    


    
      
        
          	
                  Modavox:

                   

                  MODAVOX,
      INC.

                   

                  /s/ David
      Ide                                       
      

                  By:
      David Ide,  Chief Executive Officer

                   

                   

                
	
                  Honorable
      Barry Goldwater Jr.:

                   

                  /s/ Barry Goldwater,
      Jr.                       
      

                  Barry
      Goldwater Jr.