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 u
