Exhibit
10.5
NONQUALIFIED STOCK OPTION
AGREEMENT
THIS OPTION AND
THE SHARES OF COMMON STOCK COVERED HEREBY (COLLECTIVELY, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES
LAW OR THE SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT") UPON
RELIANCE OF EXEMPTIONS AVAILABLE THEREFOR. THE
SECURITIES WILL BE ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED, NOR WILL ANY ASSIGNEE
OR TRANSFEREE THEREOF BE RECOGNIZED BY MODAVOX, INC. AS HAVING ANY
INTEREST IN SUCH SECURITIES IN THE ABSENCE OF (i) AN OPINION OF
COUNSEL THAT THE TRANSACTION BY WHICH SUCH SECURITIES WILL BE
OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED IS EXEMPT UNDER
THE FEDERAL ACT, AND APPLICABLE STATE SECURITIES LAWS; OR (ii) AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES
UNDER THE FEDERAL ACT AND APPLICABLE STATE SECURITIES
LAWS.
MODAVOX, INC.
NONQUALIFIED STOCK OPTION
No. of Shares
– 475,000
Dated: February
28, 2009
This certifies
that, for assignment by David J. Ide hereinafter referred to as the
“Optionee,” or his successors and assigns, is entitled,
subject to the terms and conditions hereinafter set forth, at or
before 5:00 o'clock P.M., Eastern time, subject to adjustment upon
the occurrence of the contingencies set forth, to purchase four
hundred seventy five thousand (475,000) shares of $.0001 par value
Common Stock (the "Common Stock") of Modavox, Inc., upon the
exercise of this nonqualified stock option (the
“Option”), at one dollar and fifty cents ($1.50) per
share (the “Option Price") and is subject to adjustments upon
the occurrence of the contingencies set forth in this
Option. The Optionee and Modavox are hereinafter
referred to collectively as the “Parties.”
Upon delivery
of this Option with the subscription form annexed hereto, duly
executed, together with payment of this Option Price for the shares
of Common Stock thereby purchased, at the principal office of 1900
West University Drive, Suite 230, Tempe, AZ 85281, or at such other
address as Modavox may designate by notice in writing to the
Optionee hereof, the Optionee of this Option shall be entitled to
receive a certificate or certificates for the shares of Common
Stock so purchased. All shares of Common Stock which may
be issued upon the exercise of this Option will, upon issuance, be
fully-paid and non-assessable and free from all taxes, liens and
charges with respect thereto.
This Option is
subject to the following terms and conditions:
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This Option may
be exercised in whole at any time, or in any part from time to
time, prior to 5:00 o'clock P.M., Eastern time, on or before
February 28, 2014, but not thereafter, as to all or any part of the
number of shares of Common Stock then subject hereto to the extent
such shares have vested. This Option is vested over five (5) years
from the date hereof unless Modavox is acquired by another entity
which will automatically vest all Options immediately.
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In case of any
partial exercise of this Option, Modavox shall execute and deliver
a new Option of like tenor and date for the balance of the shares
of Common Stock purchasable hereunder. This Option may
not be exercised as to less than one thousand (25,000) shares at
any one time unless the number of shares purchased is the total
number at the time available for purchase under this Option. This
Option may be exercised only as to whole shares; fractional share
interests will be disregarded except that they may be
accumulated.
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Upon any
exercise of this Option, Optionee may, in lieu of payment of the
Option Price in cash, surrender this Option (or any successor
hereto or fraction hereof) (valued for such purpose at the Fair
Market Value of the underlying Common Stock for which such Option
is exercisable on the date of such exercise less the Option Price
then in effect) and apply all or a portion of the amount so
determined to the payment of the Option Price for the number of
shares of Common Stock being purchased as to all the number of
whole shares of Common Stock then subject hereto. The term "Fair
Market Value" shall mean the means the fair market value of the
Common Stock, as either determined by the Board in good faith on
such basis as it deems appropriate or the average of the Closing
Sales Price of the Company’s Common Stock as quoted on the
OTC Bulletin Board, Amex, Nasdaq or NYSE for the five (5) trading
days immediately preceding the date of notice or exercise which
relates to said determination of Fair Market Value.
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Adjustment
of Option Price and Number of Shares Purchasable
Hereunder . In
case Modavox shall at any time subdivide the outstanding shares of
its Common Stock, this Option Price in effect immediately prior to
such subdivision shall be proportionately decreased, and in case
Modavox shall at any time combine the outstanding shares of its
Common Stock, this Option Price in effect shall immediately prior
to such combination be proportionately increased, effective from
and after the record date of such subdivision or combination, as
the case may be.
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Notice of
Adjustments . Upon any adjustment of this Option
Price and any increase or decrease in the number of shares of
Common Stock purchasable upon the exercise of this Option, then and
in each such case, Modavox, within thirty (30) days thereafter,
shall give written notice thereof to the Optionee of this Option at
the address of such Optionee as shown on the books of Modavox,
which notice shall state this Option Price as adjusted and the
increased or decreased number of shares purchasable upon the
exercise of this Option, setting forth in reasonable detail the
method of calculation of each. The Optionee of this
Option shall have ten (10) days in which to review the proposed
adjustment and to object to the proposed adjustment by notifying
Modavox in writing of such objection, setting forth in reasonable
detail the reasons for such objection. If the Optionee
fails to object to the proposed adjustment during such ten (10) day
period the proposed adjustment shall become final. If
the Optionee objects to the proposed adjustment then Modavox and
the Optionee shall attempt to reconcile their differences and if
unable to do so such adjustment shall be determined by Modavox's
independent accountants whose determination shall be
final.
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Notice of
Exercise of Option . This Option may be exercised by
this Optionee by a written notice signed by this Optionee, and
delivered or mailed to Modavox to the attention of the Chief
Executive Officer. The notice shall specify the number
of shares of Stock which this Optionee elects to purchase
hereunder, and be accompanied by (i) a certified or cashier’s
check payable to the Company in payment of the total Exercise Price
applicable to such shares as provided herein, (ii) surrender this
Option (or any successor hereto or fraction hereof) (valued for
such purpose at the Fair Market Value of the underlying Common
Stock for which such Option is exercisable on the date of such
exercise less the Option Price then in effect) and apply all or a
portion of the amount so determined to the payment of the Option
Price for the number of shares of Common Stock being purchased,
(iii) shares of Stock owned by Optionee and duly endorsed or
accompanied by stock transfer powers having a Fair Market Value
equal to the total Exercise Price applicable to such shares
purchased hereunder, (iv) a certified or cashier’s check
accompanied by the Option (valued for such purpose at the Fair
Market Value of the underlying Common Stock for which such Option
is exercisable on the date of such exercise less the Option Price
then in effect) whose Fair Market Value when added to the amount of
the check equals the total Exercise Price applicable to such shares
purchased hereunder; or (v) a certified or cashier’s check
accompanied by a certificate or certificates representing the
number of shares of Stock whose Fair Market Value when added to the
amount of the check equals the total Exercise Price applicable to
such shares purchased hereunder. Upon receipt of any
such notice and accompanying payment, the Company agrees to issue
to the Optionee stock certificates for the number of shares
specified in such notice registered in the name of the
Optionee.
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Charges,
Taxes and Expenses . The issuance of certificates for
shares of Common Stock upon any exercise of this Option shall be
made without charge to the Optionee hereof for any tax or other
expense in respect to the issuance of such certificates, all of
which taxes and expenses shall be paid by Modavox, and such
certificates shall be issued in the name of, or in such name or
names as may be directed by, the Optionee of this Option; provided,
however, that in the event that certificates for shares of Common
Stock are to be issued in a name other than the name of the
Optionee of this Option, this Option when surrendered for exercise
shall be accompanied by an instrument of transfer in form
satisfactory to Modavox, duly executed by the Optionee hereof in
person or by an attorney duly authorized in writing.
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Certain
Obligations of Modavox . Modavox will not, by amendment of
its Certificate of Incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any
other voluntary act or deed, avoid or seek to avoid the
performance
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