Exhibit 10.5

REALLOCATION AND ASSIGNMENT AGREEMENT

AGREEMENT made as of February 16, 2007 among VoIP, Inc., a Texas corporation
(the “Company”), and the parties identified on Schedule A hereto (“Lenders”).

WHEREAS, commencing November 27, 2006 through January 18, 2007, several Bridge
Loans were made by the Lenders to the Company in an aggregate amount of $866,667
(“Bridge Loans” or “Bridge Notes”); and

WHEREAS, in contemplation of the completion of a new financing transaction among
the Company and Lenders for an aggregate of $3,462,719 of principal amount of
promissory notes of the Company in exchange for cash and surrender of certain
outstanding promissory notes, it is agreed that it is in the best interests of
the parties to reallocate and assign among the Lenders $866,667 principal
amounts of the Bridge Loans.

NOW THEREFORE, in consideration of the mutual promises and covenants set forth
in this Agreement, it is agreed:

1.    Effective immediately, an aggregate $866,667 principal amount of the
Bridge Loans will be reallocated and assigned in the amounts and to the Lenders
as more fully described on Schedule A hereto.

2.    The undersigned consent to the reallocation and assignment of an aggregate
$866,667 principal amount of the Bridge Loan comprised of funds received from
Lenders in connection with the Bridge Loans, together with a portion of the cash
to be received in connection with the new financing transaction, so that after
such reallocation and assignment, the Bridge Notes are deemed held by the
Lenders in the amounts set forth on Schedule A hereto.

3.    All other terms and conditions of the Bridge Loans shall remain in full
force and effect.

 
4.    This Agreement may be executed in any number of counterparts and by
different signatories hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument. This Agreement may be executed by
facsimile transmission and delivered by facsimile transmission.
 

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5.  Each of the undersigned states that he has read the foregoing Reallocation
and Assignment Agreement and understands and agrees to it.

 

        VOIP INC.  
   
   
    By:      

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Robert Staats
Chief Accounting Officer
   

 

      ALPHA CAPITAL ANSTALT   ELLIS INTERNATIONAL LTD.                  
WHALEHAVEN CAPITAL FUND LIMITED   BRISTOL INVESTMENT FUND LTD.                  
CHESTNUT RIDGE PARTNERS LP   CENTURION MICROCAP, L.P.                   PLATINUM
LONG TERM GROWTH II INC.   DOUBLE U MASTER FUND L.P.                  
DKR SOUNDSHORE OASIS HOLDING FUND LTD.
  CMS CAPITAL

 
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SCHEDULE A

LENDERS
AGGREGATE BRIDGE LOAN TO BE REALLOCATED AND ASSIGNED
ALPHA CAPITAL ANSTALT
Pradafant 7
9490 Furstentums
Vaduz, Lichtenstein
Fax: 011-42-32323196
$135,200.00
WHALEHAVEN CAPITAL FUND LIMITED
3rd Floor, 14 Par-Laville Road
Hamilton, Bermuda HM08
Fax: (441) 292-1373
$124,800.00
ELLIS INTERNATIONAL LTD.
53rd Street Urbanizacion Obarrio
Swiss Tower, 16th Floor, Panama
Republic of Panama
Fax: (516) 887-8990
$121,333.00
BRISTOL INVESTMENT FUND, LTD.
c/o Caledonian Fund Services Limited
69 Dr. Roy’s Drive
George Town, Grand Cayman
Cayman Islands
Fax: (310) 696-0334
$156,000.00
CHESTNUT RIDGE PARTNERS LP
50 Tice Boulevard
Woodcliff Lake, NJ 07677
Fax: (201) 802-9450
$62,400.00
CENTURION MICROCAP, L.P.
3014 Avenue L
Brooklyn, NY 11210
Fax: (718) 228-9570
$104,000.00
PLATINUM LONG TERM GROWTH II INC.
152 West 57th Street
New York, New York 10019
Attn: Mark Nordlicht
Fax: (212)
$52,000.00
DOUBLE U MASTER FUND L.P.
P. O. Box 972
Harbour House
Roadtown, Tortola, BVI
Fax: (284) 494-4770
$62,400.00
DKR SOUNDSHORE OASIS HOLDING FUND LTD.
C/o DKR Capital Partners, L.P.
1281 East Main Street
Stamford, CT 06902
Fax: (203) 674-4737
$24,267.00
CMS CAPITAL
9612 Van Nuys Blvd., Suite 108
Panorama City, CA 91402
Fax: (818) 907-3372
$24,267.00
TOTALS
$866,667.00

 
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