Exhibit 10.3
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO VOIP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED .
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Right
to Purchase _________ shares of Common Stock of VoIP, Inc.
(subject to adjustment as provided herein)
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CLASS D COMMON STOCK PURCHASE WARRANT
No. 2007-D-____
Issue
Date: September 12, 2007
VOIP,
INC., a corporation organized under the laws of the State of
Texas (the “Company”), hereby certifies that, for
value received,
______________________________________, _______________________________________________________
,
or its assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the
Company at any time after the Issue Date until 5:00 p.m.,
E.S.T on the fifth (5
th )
anniversary of the Actual
Effective Date (as defined in Section 11.1(iv) of the Subscription
Agreement) (the
“Expiration Date”), up to __________ fully paid and
nonassessable shares of Common Stock at a per share purchase price
of $0.75. The aforedescribed purchase price per share, as adjusted
from time to time as herein provided, is referred to herein as the
"Purchase Price." The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein. The Company may reduce the Purchase Price without the
consent of the Holder. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain
Subscription Agreement (the “
Subscription Agreement ”),
dated September 12, 2007, entered into by the Company and Holders
of the Class D Warrants.
As
used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a)
The
term “Company” shall include VoIP, Inc. and any
corporation which shall succeed or assume the obligations of
VoIP, Inc. hereunder.
(b)
The
term “Common Stock” includes (a) the
Company's Common Stock, $.001 par value per share, as
authorized on the date of the Subscription Agreement, and (b)
any other securities into which or for which any of the
securities described in (a) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
(c)
The
term “Other Securities” refers to any stock (other
than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to
Section 5 or otherwise.
(d)
The
term “Warrant Shares” shall mean the Common Stock
issuable upon exercise of this Warrant.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon Exercise .
Subject to Section 9(f) and Section 9(s) of the Subscription
Agreement, from and after the Issue Date through and including the
Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the
Company, subject to adjustment pursuant to
Section 4.
1.2.
Full Exercise .
This Warrant may be exercised in full by the Holder hereof by
delivery of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the
“Subscription Form") duly executed by such Holder and
surrender of the original Warrant within four (4) days of exercise,
to the Company at its principal office or at the office of its
Warrant Agent (as provided hereinafter), accompanied by payment, in
cash, wire transfer or by certified or official bank check payable
to the order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock for which this Warrant is then
exercisable by the Purchase Price then in effect.
1.3.
Partial Exercise .
This Warrant may be exercised in part (but not for a fractional
share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by
the Holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of whole shares of Common Stock
designated by the Holder in the Subscription Form by (b) the
Purchase Price then in effect. On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant of like tenor, in
the name of the Holder hereof or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may request, the
whole number of shares of Common Stock for which such Warrant may
still be exercised.
1.4.
Fair Market Value .
Fair Market Value of a share of Common Stock as of a particular
date (the "Determination Date") shall mean:
(a)
If
the Company's Common Stock is traded on an exchange or is
quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ"), National Market System, the
NASDAQ SmallCap Market or the American Stock Exchange, LLC,
then the closing or last sale price, respectively, reported
for the last business day immediately preceding the
Determination Date;
(b)
If
the Company's Common Stock is not traded on an exchange or on
the NASDAQ National Market System, the NASDAQ SmallCap Market
or the American Stock Exchange, Inc., but is traded in the
over-the-counter market, then the average of the closing bid
and ask prices reported for the last business day immediately
preceding the Determination Date;
(c)
Except
as provided in clause (d) below, if the Company's Common
Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by
arbitration in accordance with the rules then standing of the
American Arbitration Association, before a single arbitrator
to be chosen from a panel of persons qualified by education
and training to pass on the matter to be decided;
or
(d)
If
the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company's charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all
other amounts to be payable per share in respect of the Common
Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the
Warrants are outstanding at the Determination
Date.
1.5.
Company Acknowledgment .
The Company will, at the time of the exercise of the Warrant, upon
the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the Holder shall
fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such Holder any
such rights.
1.6.
Trustee for Warrant Holders .
In the event that a bank or trust company shall have been appointed
as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the
powers and duties of a warrant agent (as hereinafter described) and
shall accept, in its own name for the account of the Company or
such successor person as may be entitled thereto, all amounts
otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this
Section 1.
1.7
Delivery of Stock Certificates, etc. on Exercise
.
The Company agrees that the shares of Common Stock purchased upon
exercise of this Warrant shall be deemed to be issued to the Holder
hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon
as practicable after the exercise of this Warrant in full or in
part, and in any event within five (5) business days
thereafter (“Warrant Share Delivery Date”), the Company
at its expense (including the payment by it of any applicable issue
taxes) will cause to be issued in the name of and delivered to the
Holder hereof, or as such Holder (upon payment by such Holder of
any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the
number of duly and validly issued, fully paid and nonassessable
shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional
share to which such Holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Fair Market Value of one
full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which
such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise. The Company understands that a delay
in the delivery of the Warrant Shares after the Warrant Share
Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company agrees to pay
(as liquidated damages and not as a penalty) to the Holder for late
issuance of Warrant Shares upon exercise of this Warrant the
proportionate amount of $100 per business day after the Warrant
Share Delivery Date for each $10,000 of Purchase Price of Warrant
Shares for which this Warrant is exercised which are not timely
delivered. The Company shall pay any payments incurred under this
Section in immediately available funds upon demand. Furthermore, in
addition to any other remedies which may be available to the
Holder, in the event that the Company fails for any reason to
effect delivery of the Warrant Shares by the Warrant Share Delivery
Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company
whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the exercise of the
relevant portion of this Warrant, except that the liquidated
damages described above shall be payable through the date notice of
revocation or rescission is given to the Company.
2.
Cashless Exercise .
(a)
Payment
upon exercise may be made at the option of the Holder either
in (i) cash, wire transfer or by certified or official
bank check payable to the order of the Company equal to the
applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in
accordance with Section (b) below or (iii) by a
combination of any of the foregoing methods, for the number of
Common Stock specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per
the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly
issued, fully-paid and non-assessable shares of Common Stock
(or Other Securities) determined as provided
herein.
(b)
If
the Fair Market Value of one share of Common Stock is greater
than the Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the
holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof
being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed
Subscription Form in which event the Company shall issue to
the holder a number of shares of Common Stock computed using
the following formula:
X=
Y (A-B)
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