Exhibit 10.4
CONVERTIBLE PROMISSORY NOTE
FOR
VALUE RECEIVED, the undersigned, VoIP, INC., a Texas
corporation (the "Company"), promises to pay to the order of
BRISTOL INVESTMENT FUND, LTD., or its successors or assigns
("Holder"), on June 25, 2007, or on demand ("Maturity Date")
at Caledonian Fund Services (Cayman) Limited, 69 Dr.
Roy’s Drive, George Town, Grand Cayman, Cayman Islands,
or at such other place as the Holder may designate in writing
to the Company, in lawful money of the United States of
America, the principal sum of Seventy-Five Thousand Dollars
($75,000.00), plus a premium of Twenty-Five Thousand Dollars
($25,000.00). Other terms and conditions follow.
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1.
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Standard Conversion . The Holder shall have the right from and
after the date of the issuance of this Convertible Promissory Note
(this “Note”) and then at any time until this Note is
fully paid, to convert any outstanding and unpaid principal portion
of this Note, exclusive of the $25,000 fee, into shares of the
Company’s common stock, par value $0.001 per share (the
“Conversion Shares”), at the conversion rate of $0.12
per share (the “Conversion Price”). If this Note is
converted into Conversion Shares which are issued free of
restrictive legend or registered for resale in an effective
registration statement, Holder agrees to waive the above $25,000
premium.
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2.
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Default Conversion . In the event of Company's default
hereunder, the Note, exclusive of the $25,000 fee, shall become
immediately convertible in whole or in part, at Holder’s
option into Conversion Shares, at the conversion rate of $0.08 per
share (the “Default Conversion Price”). If so
converted, Holder agrees to waive the above $25,000 premium. A
default for this purpose shall be defined as any of the following:
(a) not repaying the Note when due or demanded; (b) not converting
the Note by the Delivery Date as defined in Section 3; (b) failing
to register the Conversion Shares as provided in Section 4; (c)
failing to adjust the Conversion Price as provided in Section 5; or
(d) otherwise failing to comply with the provisions of this
Note.
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3.
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Conversion Notice . Upon formal notice of conversion, the
Company shall issue and deliver to the Holder within three (3)
business days after such formal notice (the date that such notice
is submitted being the “Conversion Date” and the third
business day following the Conversion Date being the
“Delivery Date”) that number of Conversion Shares
specified in the Holder’s notice.
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4.
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Piggyback Registration . Whenever the Company proposes to
register any of its securities under the Securities Act (other than
pursuant to a registration on Form S-4 or S-8 or any successor or
similar forms), and the registration form to be used may be used
for the registration of the Company’s common shares converted
hereunder, the Company will include in such registration all the
Conversion Shares, subject only to earlier existing registration
commitments unless waivers are obtained.
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5.
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Favored Nations . So long as this Note is outstanding, if the
Company shall issue or agree to issue any shares of its common
stock for a consideration less than the Conversion Price in effect
at the time of such issue, then, and thereafter successively upon
each such issue, the Conversion Price shall be reduce
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