Exhibit 10.3

PROMISSORY NOTE

$83,333.00
December 15, 2006

 
FOR VALUE RECEIVED, the undersigned VoIP, INC., a Texas corporation (“Debtor”),
promises to pay to the order of ELLIS INTERNATIONAL LTD., or its successors or
assigns (“Lender”), on December 22, 2006 or on demand (“Maturity Date”) at 53rd
Street Urbanizacion Obarrio, Swiss Tower, 16th Floor, Panama, Republic of
Panama, or at such other place as the Lender may designate from time to time in
writing to the Debtor, in lawful money of the United States of America, the
principal sum of Eighty Three Thousand Three Hundred Thirty Three Dollars
($83,333.00), together with interest on the unpaid principal balance of the Note
from the date hereof until paid at twelve percent (12%) per annum. In the event
Debtor’s default hereunder, interest on amounts past due pursuant to this Note
shall be paid at a rate of eighteen percent (18%) per annum. Interest shall be
computed on the basis of a 360-day year, rate of eighteen percent (18%) per
annum. Interest shall be computed on the basis of a 360-day year.

Lender shall also be entitled to receive 5-year warrants to purchase available
shares of Debtor’s common stock exercisable at $0.475 a warrant share (the
“Exercise Price”). The number of warrants Lender shall receive will be based
upon the amount due under this Promissory Note as of the Maturity Date (plus any
interest at the 18% default rate above) divided by the Exercise Price, and the
warrants shall contain a cashless exercise feature.

The delay or failure to exercise any right hereunder shall not waive such right.
The undersigned hereby waives demand, presentment, protest, notice of dishonor
or nonpayment, notice of protest, any and all delays or lack of diligence in
collection hereof and assents to each and every extension or postponement of the
time of payment or other indulgence.

The Lender may, at any time, present this Note or any sum payable hereunder to
the Debtor in satisfaction of any sum due or payable by the Lender to Debtor for
any reason whatsoever including but not limited to the payment for securities
subscriptions.

In the event of default hereunder such that this note is placed in the hands of
an attorney for collection (whether or not suit is filed), or if this Note is
collected by suit or legal proceedings or through bankruptcy proceedings, Debtor
aggress to pay reasonable attorney’s fees and expenses of collection.

This Note shall be governed by, and construed and interpreted in accordance with
the laws of the State of New York. Exclusive jurisdiction relating to this Note
shall vest in courts located in New York State.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Note
the date and year first above written.
 

 
 
VoIP, INC.        
By:_______________________
 
Name:
Robert Staats
 
Title:
Chief Accounting Officer

Attest:

_______________________

 
 
 

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