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NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS
SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR REASONABLY
ACCEPTABLE TO THE COMPANY TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.
WARRANT
To Purchase [_________] Shares of Common Stock of
i2 TELECOM INTERNATIONAL, INC.
THIS WARRANT (the "Warrant") certifies that, for value
received,
[__________] (the "Holder"), is entitled, upon the terms and
subject to the
limitations on exercise and the conditions hereinafter set
forth, at any time on
or after ___________, 2007 (the "Initial Exercise Date") and on
or prior to the
third-year anniversary of the Initial Exercise Date (the
"Termination Date"),
but not thereafter, to subscribe for and purchase from i2
Telecom International,
Inc., a Washington corporation (the "Company"), up to [________]
shares (the
"Warrant Shares") of common stock, no par value per share, of
the Company (the
"Common Stock"). The purchase price of each share of Common
Stock (the "Exercise
Price") under this Warrant shall be $0.12, subject to adjustment
hereunder.
1. Title to Warrant. Prior to the Termination Date and subject
to
compliance with applicable laws and Section 7 of this Warrant,
this Warrant and
all rights hereunder are transferable, in whole or in part, at
the office or
agency of the Company by the Holder in person or by duly
authorized attorney,
upon surrender of this Warrant together with the Assignment Form
attached hereto
as Exhibit A (the "Assignment Form"), properly endorsed.
2. Authorization of Shares. The Company covenants that all
Warrant Shares
which may be issued upon the exercise of the purchase rights
represented by this
Warrant will, upon exercise of the purchase rights represented
by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable
and free from
all taxes, liens and charges in respect of the issue thereof
(other than taxes
in respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this
<PAGE>
Warrant may be made at any time or times on or after the Initial
Exercise Date
and on or before the Termination Date by delivery to the Company
(or such other
office or agency of the Company as it may designate by notice in
writing to the
registered Holder at the address of such Holder appearing on the
books of the
Company) of a duly executed facsimile copy of the Notice of
Exercise in the form
attached hereto as Exhibit B (the "Notice of Exercise");
provided, however,
within three (3) Business Days of the date said Notice of
Exercise is delivered
to the Company, the Holder shall have surrendered this Warrant
to the Company,
and, if the Holder has not elected to make a cashless exercise
as provided
below, the Company shall have received payment of the aggregate
Exercise Price
of the shares thereby purchased by wire transfer or cashier's
check drawn on a
United States bank. Certificates for Warrant Shares purchased
hereunder shall be
delivered to the Holder no later than five (5) Business Days
after the delivery
to the Company of the Notice of Exercise, surrender of this
Warrant and, if the
Holder has not elected to make a cashless exercise as provided
below, payment of
the aggregate Exercise Price as set forth above ("Warrant Share
Delivery Date").
Prior to the issuance of such Warrant Shares, if the Company
fails to deliver to
the Holder a certificate or certificates representing the
Warrant Shares
pursuant to this Section 3(a) by the Warrant Share Delivery
Date, then the
Holder will have the right to rescind such exercise. Nothing
herein shall limit
a Holder's right to pursue any other remedies available to it
hereunder, at law
or in equity, including, without limitation, a decree of
specific performance
and/or injunctive relief with respect to the Company's failure
to timely deliver
certificates representing Warrant Shares as required pursuant to
the terms
hereof.
(b) If this Warrant shall have been exercised in part, then the
Company
shall, at the time of delivery of the certificate or
certificates representing
the Warrant Shares, deliver to Holder a new Warrant evidencing
the rights of
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant,
which new Warrant shall in all other respects be identical with
this Warrant.
(c) In the event that the Holder elects to make a cashless
exercise as
provided above, the Company shall issue to the Holder the number
of shares of
Common Stock equal to the result obtained by (i) subtracting B
from A, (ii)
multiplying the difference by C, and (iii) dividing the product
by A, as set
forth in the following equation:
X = (A - B) x C where:
A
X = the number of shares of Common Stock issuable upon
a cashless exercise of the Warrant pursuant to the
provisions of this Section 3.
A = the Fair Market Value (as defined below) of one
share of Common Stock on the date of net issuance
exercise.
B = the Exercise Price for one share of Common Stock under
this Warrant.
C = the number of shares of Common Stock as to which this
Warrant is exercisable.
If the foregoing calculation results in a negative number,
then no shares of Common Stock shall be issued upon a cashless
exercise.
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<PAGE>
For the purpose of such calculations, the fair market value per
share of
the shares of Common Stock shall be, (i) if the cashless
exercise of the Warrant
is in connection with a public offering of the Company's Common
Stock, the
public offering price (before deducting commission, discounts or
expenses) at
which the Common Stock is sold in such offering, (ii) if a
public market for the
Company's Common Stock exists at the time of such exercise, the
average of the
closing bid and asked prices of the Common Stock quoted in the
Over-The-Counter
Market Summary or the last reported sale price of the Common
Stock or closing
price quoted on the Nasdaq National Market or on any exchange on
which the
Common Stock is listed, whichever is applicable, as published in
The Wall Street
Journal for the five (5) trading days prior to the date of
determination of fair
market value; or (iii) if there is no public market for the
Company's Common
Stock, determined by the Company's Board of Directors in good
faith.
4. No Fractional Shares or Scrip. No fractional shares or
scrip
representing fractional shares shall be issued upon the exercise
of this
Warrant. As to any fraction of a share which Holder would
otherwise be entitled
to purchase upon such exercise, the Company shall round such
fraction of a share
up to the nearest whole share.
5. Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares
shall be made without charge to the Holder for any issue or
transfer tax or
other incidental expense in respect of the issuance of such
certificate, all of
which taxes and expenses shall be paid by the Company, and such
certificates
shall be issued in the name of the Holder or in such name or
names as may be
directed by the Holder; provided, however, that in the event
certificates for
Warrant Shares are to be issued in a name other than the name of
the Holder,
this Warrant when surrendered for exercise shall be accompanied
by the
Assignment Form duly executed by the Holder, and the Company may
require, as a
condition thereto, the payment of a sum sufficient to reimburse
it for any
transfer tax incidental thereto.
6. Closing of Books. The Company will not close its shareholder
books or
records in any manner which prevents the timely exercise of this
Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws
and with the
provisions of Sections 1, 5 and 7(e) hereof, this Warrant and
all rights
hereunder are transferable, in whole or in part, upon surrender
of this Warrant
at the principal office of the Company, together with an
Assignment Form
completed and duly executed by the Holder or its agent or
attorney and funds
sufficient to pay any transfer taxes payable upon the making of
such transfer.
Upon such surrender and, if required, such payment, the Company
shall execute
and deliver a new Warrant or Warrants in the name of the
assignee or assignees
and in the denomination or denominations specified in the
Assignment Form, and
shall issue to the assignor a new Warrant evidencing the portion
of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if
properly assigned, may be exercised by a new holder for the
purchase of Warrant
Shares without having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants
upon
presentation hereof at the aforesaid office of the Company,
together with a
written notice specifying the names and denominations in which
new Warrants are
to be issued, signed by the Holder or its agent or attorney.
Subject to
compliance with Section 7(a), as to any transfer which
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<PAGE>
may be involved in such division or combination, the Company
shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be
divided or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own
expense (other
than transfer taxes) the new Warrant or Warrants under this
Section 7.
(d) The Company agrees to maintain, at its aforesaid office,
books for the
registration and the registration of transfer of the
Warrants.
(e) If, at the time of the surrender of this Warrant in
connection with any
transfer of this Warrant, the transfer of this Warrant shall not
be registered
pursuant to an effective registration statement under the 1933
Act and under
applicable state securities or blue sky laws, the Company may
require, as a
condition of allowing such transfer: (i) that the Holder or
assignee of this
Warrant, as the case may be, furnish to the Company a written
opinion of counsel
(which opinion shall be in form, substance and scope customary
for opinions of
counsel in comparable transactions) to the effect that such
transfer may be made
without registration under the 1933 Act and under applicable
state securities or
blue sky laws; (ii) that the Holder or assignee execute and
deliver to the
Company an investment representation letter in form and
substance reasonably
satisfactory to the Company; and (iii) that the assignee be an
"accredited
investor" as defined in Rule 501(a) promulgated under the 1933
Act or a
qualified institutional buyer as defined in Rule 144A(a) under
the 1933 Act.
8. No Rights as Shareholder until Exercise. This Warrant does
not entitle
the Holder to any voting rights or other rights as a shareholder
of the Company
prior to the exercise hereof. Upon the surrender of this
Warrant, the delivery
of the Notice of Exercise by facsimile copy, and the payment of
the aggregate
Exercise Price and the payment of all taxes required to be paid
by the Holder
prior to the issuance of the Warrant Shares pursuant to Section
5, if any, the
Warrant Shares so purchased shall be and be deemed to be issued
to such Holder
as the record owner of such shares as of the close of business
on the later of
the date of such surrender, delivery or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The
Company covenants
that upon receipt by the Company of evidence reasonably
satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or
any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or
destruction, of indemnit
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