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THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
WARRANT
TO PURCHASE 250,000 SHARES OF COMMON STOCK
OF
I2 TELECOM INTERNATIONAL, INC.
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No. D-00415
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August 31, 2007
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THIS CERTIFIES THAT ,
for value received, HUBERT G.
PHIPPS or (subject to the restrictions on
transfer contained herein and the provisions of the Registration
Rights Agreement (as hereinafter defined)) his registered assigns
(the “ Holder ”) is entitled to purchase from I2 TELECOM INTERNATIONAL, INC. , a
Washington corporation (the “ Company ”), at any time or from
time to time after 9:00 a.m., Atlanta, Georgia time, on the date
hereof and prior to 5:00 p.m., Atlanta, Georgia time, on August 31,
2010 (the “ Expiration
Date ”), at the place where the
Warrant Agency (as hereinafter defined) is located, at the Exercise
Price (as hereinafter defined), the number of shares of common
stock, no par value per share (the “ Common Stock ”), of the Company
specified above, all subject to adjustment and upon the terms and
conditions as hereinafter provided.
Capitalized terms used and not otherwise defined in
this Warrant shall have the meanings set forth in Article V
hereof.
ARTICLE I
EXERCISE OF WARRANT
1.1.
Method of Exercise . To
exercise this Warrant in whole or in part, the Holder shall deliver
to the Company at the Warrant Agency: (a) this Warrant; (b) a
written notice, substantially in the form of the subscription
notice attached hereto as Annex
1 , of such Holder’s election to
exercise this Warrant, which notice shall specify the number of
shares of Common Stock to be purchased, the denominations of the
share certificate or certificates desired and the name or names of
the Eligible Holder(s) in which such certificates are to be
registered; and (c) payment of the Exercise Price with respect to
such shares of Common Stock. Such payment may be made, at the
option of the Holder, by cash, money order, certified or bank
cashier’s check or wire transfer.
544013
The Company shall, as promptly as practicable and in
any event within seven (7) Business Days thereafter, execute and
deliver or cause to be executed and delivered, in accordance with
such subscription notice, a certificate or certificates
representing the aggregate number of shares of Common Stock
specified in said notice. The share certificate or certificates so
delivered shall be in such denominations as may be specified in
such notice (or, if such notice shall not specify denominations,
one certificate shall be issued) and shall be issued in the name of
the Holder or such other name or names of Eligible Holder(s) as
shall be designated in such notice. Such certificate or
certificates shall be deemed to have been issued, and such Holder
or any other person so designated to be named therein shall be
deemed for all purposes to have become holders of record of such
shares, as of the date the aforementioned notice is received by the
Company. If this Warrant shall have been exercised only in part,
the Company shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing the
right to purchase the remaining shares of Common Stock called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant. The Company shall pay all expenses
payable in connection with the preparation, issuance and delivery
of share certificates and new Warrants as contemplated by Section
2.6 below (other than transfer or similar taxes in connection with
the transfer of securities), except that, if share certificates or
new Warrants shall be registered in a name or names other than the
name of the Holder, funds sufficient to pay all transfer taxes
payable as a result of such transfer shall be paid by the Holder at
the time of delivering the aforementioned notice or promptly upon
receipt of a written request of the Company for payment.
If this Warrant shall be surrendered for exercise
within any period during which the transfer books for shares of the
Common Stock of the Company or other securities purchasable upon
the exercise of this Warrant are closed for any purpose, the
Company shall not be required to make delivery of certificates for
the securities purchasable upon such exercise until the date of the
reopening of said transfer books.
1.2.
Shares To Be Fully Paid and
Nonassessable . All shares of Common
Stock issued upon the exercise of this Warrant shall be validly
issued, fully paid and nonassessable.
1.3.
No Fractional Shares To Be Issued
. The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of this Warrant.
If any fraction of a share would, but for this Section 1.3, be
issuable upon any exercise of this Warrant, in lieu of such
fractional share the Company shall pay to the Holder a whole share
of Common Stock.
1.4.
Securities Laws; Share Legend
. The Holder, by acceptance of this Warrant, agrees
that this Warrant and all shares of Common Stock issuable upon
exercise of this Warrant will be disposed of only in accordance
with the Securities Act. In addition to any other legend which the
Company may deem advisable under the Securities Act and applicable
state securities laws, all certificates representing shares of
Common Stock (as well as any other securities issued hereunder in
respect of any such shares) issued upon exercise of this Warrant
shall be endorsed as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD
OR OFFERED FOR SALE OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
Any certificate issued at any time in exchange or
substitution for any certificate bearing such legend (except a new
certificate issued upon completion of a public distribution
pursuant to a registration statement under the Securities Act)
shall also bear such legend unless, in the opinion of counsel (in
form and substance reasonably satisfactory to the Company) selected
by the Holder of such certificate and reasonably acceptable to the
Company, the securities represented thereby need no longer be
subject to restrictions on resale under the Securities
Act.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE
AND
REPLACEMENT OF WARRANT
2.1.
Warrant Agency . Until
such time, if any, as an independent agency shall be appointed by
the Company to perform services described herein with respect to
this Warrant (the “ Warrant
Agency ”), the Company shall
perform the obligations of the Warrant Agency provided herein at
its principal office address or such other address as the Company
shall specify by prior written notice to the Holder.
2.2.
Ownership of Warrant .
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made
by any person other than the Company) for all purposes and shall
not be affected by any notice to the contrary, until presentation
of this Warrant for registration of transfer as provided in this
Article II.
2.3.
Transfer of Warrant .
This Warrant may only be transferred to a purchaser subject to and
in accordance with this Section 2.3, and any attempted transfer
which is not in accordance with this Section 2.3 shall be null and
void and the transferee shall not be entitled to exercise any of
the rights of the holder of this Warrant. The Company agrees to
maintain at the Warrant Agency books for the registration of such
transfers of Warrants, and transfer of this Warrant and all rights
hereunder shall be registered, in whole or in part, on such books,
upon surrender of this Warrant at the Warrant Agency in accordance
with this Section 2.3, together with a written assignment of this
Warrant, substantially in the form of the assignment attached
hereto as Annex 2 , duly executed by the Holder or its duly authorized agent or
attorney-in-fact, with signatures guaranteed by a bank or trust
company or a broker or dealer registered with the NASD, and with
funds sufficient to pay any transfer taxes payable upon such
transfer. Upon surrender of this Warrant in accordance with this
Section 2.3, the Company (subject to being satisfied that such
transfer is in compliance with Section 1.4) shall execute and
deliver a new Warrant or Warrants of like tenor and representing in
the aggregate the right to purchase the same number of shares
of
Common Stock in the name of the assignee or
assignees and in the denominations specified in the instrument of
assignment, and this Warrant shall promptly be canceled.
Notwithstanding the foregoing, a Warrant may be exercised by a new
holder without having a new Warrant issued. The Company shall not
be required to pay any Federal or state transfer tax or charge that
may be payable in respect of any transfer of this Warrant or the
issuance or delivery of certificates for Common Stock in a name
other than that of the registered holder of this
Warrant.
2.4.
Division or Combination of Warrants
. This Warrant may be divided or combined with other
Warrants, in connection with the partial exercise of this Warrant,
upon surrender hereof and of any Warrant or Warrants with which
this Warrant is to be combined at the Warrant Agency, together with
a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued, signed by the holders
hereof and thereof or their respective duly authorized agents or
attorneys-in-fact. Subject to compliance with Section 2.3 as to any
transfer which may be involved in the 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.
2.5.
Loss, Theft, Destruction of Warrant
Certificates . Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the
case of any such loss, theft or destruction, upon receipt of
indemnity or security (in customary form) reasonably satisfactory
to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant and upon reimbursement
of the Company’s reasonable incidental expenses, the Company
will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of shares of Common
Stock.
2.6.
Expenses of Delivery of Warrants
. Except as otherwise expressly provided herein, the
Company shall pay all expenses (other than transfer taxes as
described in Section 2.3) and other charges payable in connection
with the preparation, issuance and delivery of Warrants hereunder
and shares of Common Stock upon the exercise hereof.
ARTICLE III
ADJUSTMENT PROVISIONS
3.1.
Adjustments Generally .
The Exercise Price and the number of shares of Common Stock (or
other securities or property) issuable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events, as provided in this
Article III.
3.2.
Common Share Reorganization and Stock Dividend
Payments . If the Company, at any time
this Warrant is outstanding, (a) shall subdivide its outstanding
shares of Common Stock into a greater number of shares or
consolidate its outstanding shares of Common Stock into a smaller
number of shares (any such event being called a “
Common Share Reorganization
”), or (b) pay a stock dividend (except
scheduled dividends paid on preferred stock which contain a stated
dividend rate) or otherwise make a distribution or distributions on
shares of its Common Stock or on any other class of capital stock
payable in shares of Common
Stock (any such event being called a “
Stock Dividend Payment ”), then (i) the Exercise Price shall be adjusted,
effective immediately after the record date at which the holders of
shares of Common Stock are determined for purposes of a Common
Share Reorganization or at which the holders of shares of Common
Stock or any other class of capital stock are determined for
purposes of a Stock Dividend Payment, as the case may be, to a
price determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator
of which shall
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