Document:

a6019752ex10_04.htm

    EXHIBIT
10.04

     

    
      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 “SECURITIES 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
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

      

      SERIES
BD COMMON STOCK PURCHASE WARRANT

      

      Warrant
No.:  BD-3

      to
Purchase 400,000 Shares

      of
Common Stock of

      NetTalk.com,
Inc.

      

      THIS SERIES BD-3 COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies
that, for value received, Midtown Partners & Co., LLC (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 the date hereof (the
“Initial Exercise
Date”) and on or prior to the close of business on the fifth (5th)
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from NetTalk.com, Inc., a
Florida corporation (the “Company”), up to
400,000 shares (the “Warrant Shares”) of
Common Stock, par value $.001 per share, of the Company (the “Common
Stock”).  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

       

      Section
1.               Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement of even date herewith (the “Purchase
Agreement”).

       

      Section
2.               Exercise.

       

      a)           Exercise of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Exercise Date and
on or before the Termination Date by delivery to the Company of a duly executed
facsimile copy of the Notice of Exercise form annexed hereto (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); and, within three (3) Trading Days of the date said Notice of Exercise
is delivered to the Company, 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.  Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the
Warrant Shares available hereunder and the Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for
cancellation within three (3) Trading Days of the date the final Notice of
Exercise is delivered to the Company.  Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased.  The Holder and the
Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases.  The Company shall deliver any
objection to any Notice of Exercise within two (2) Trading Days of receipt of
such notice.  THE
HOLDER AND ANY ASSIGNEE, BY ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE
THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING THE PURCHASE OF A
PORTION OF THE WARRANT SHARES HEREUNDER, THE NUMBER OF WARRANT SHARES AVAILABLE
FOR PURCHASE HEREUNDER AT ANY GIVEN TIME MAY BE LESS THAN THE AMOUNT STATED ON
THE FACE HEREOF.

      
        
          
          

        

        
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      b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.50, subject to adjustment hereunder (the “Exercise
Price”).

       

      c)           Exercise
Limitations.

       

      i.           Holder’s
Restrictions.  At any time after the Company has had a
registration statement filed pursuant to the Securities Act or the Exchange Act
declared effective, the Company shall not effect any exercise of this Warrant,
and a  Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, such Holder
(together with such Holder’s Affiliates, and any other person or entity acting
as a group together with such Holder or any of such Holder’s Affiliates), as set
forth on the applicable Notice of Exercise, would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below).  For purposes of
the foregoing sentence, the number of shares of Common Stock beneficially owned
by such Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by such Holder or any of its
Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other Series A Preferred Stock or Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by such Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(c)(i),
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder, it being
acknowledged by a Holder that the Company is not representing to such Holder
that such calculation is in compliance with Section 13(d) of the Exchange Act
and such Holder is solely responsible for any schedules required to be filed in
accordance therewith.  To the extent that the limitation contained in
this Section
2(c)(i) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder together with any
Affiliates) and of which a portion of this Warrant is exercisable shall be in
the sole discretion of a Holder, and the submission of a Notice of Exercise
shall be deemed to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.  In addition, a determination as to any group status as
contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 2(c), in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (X) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (Y) a more
recent public announcement by the Company or (Z) any other notice by the Company
or the Company’s transfer agent setting forth the number of shares of Common
Stock outstanding.  Upon the written or oral request of a Holder, the
Company shall within two (2) Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding.  In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Beneficial
Ownership Limitation provisions of this Section 2(c)(i) may
be waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company to change the Beneficial Ownership Limitation
to 9.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of
this Warrant, and the provisions of this Section 2(c)(i) shall
continue to apply. Upon such a change by a Holder of the Beneficial Ownership
Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial
Ownership Limitation may not be further waived by such Holder.  The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 2(c)(i) to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.  Notwithstanding anything herein to
the contrary, this provision shall not apply to any Holder that has elected to
waive this provision on its signature page to the Securities Purchase
Agreement, on or before the date of closing.

      
        
          
          

        

        
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      d)           Mechanics of
Exercise.

       

      i.      Authorization of Warrant
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 created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

       

      ii.           Delivery of Certificates
Upon Exercise. Certificates for Warrant Shares purchased hereunder shall
be transmitted by the transfer agent of the Company to the Holder by crediting
the account of the Holder’s prime broker with the Depository Trust Company
through its Deposit/Withdrawal at Custodian (“DWAC”) system if the
Company is a participant in such system, and otherwise by delivery to the
address specified by the Holder in the Notice of Exercise, within five (5)
Trading Days from the delivery to the Company of the Notice of Exercise form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to
Section
2(d)(vii) prior to the issuance of such shares, have been
paid.

       

      iii.           Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing 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.

      
        
          
          

        

        
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      iv.           Rescission
Rights.  If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to Section 2(d)(ii)
above by the Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise.

       

      v.      Obligation
Absolute;  Damages.  The Company’s obligations to
issue and deliver the certificates representing the Warrant Shares upon exercise
of the Warrant in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of such certificates representing the Warrant Shares.  The
Company shall issue the certificates representing the Warrant Shares or, if
applicable, cash, upon a properly noticed exercise.  If the Company
fails to deliver to the Holder such certificate or certificates pursuant to
Section 2(d)
within five (5) Trading Days of the Warrant Share Delivery Date applicable to
such exercise, the Company shall pay to such Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of VWAP of the Common Stock, $10
per Trading Day (increasing to $20 per Trading Day after ten (10) Trading Days
after the Warrant Share Delivery Date) for each Trading Day after the Warrant
Share Delivery Date until such certificates are delivered.

       

      vi.           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 at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.

       

      vii.           Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be made
without charge to the Holder or other incidental expense in respect of the
issuance of such certificate, 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 attached hereto duly executed by the Holder;
the assignment shall be subject to Section 4 below, and
the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto.

      
        
          
          

        

        
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      viii.           Closing of Books. The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

       

      e)           Cashless
Exercise.  At any time after the Initial Exercise Date this
Warrant may also be exercised at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

       

      
        	
                 
      

              	
                (A)
      = the VWAP on the Trading Day immediately preceding the date of such
      election;

              

      

      

      
        	
                 
      

              	
                (B)
      = the Exercise Price of this Warrant, as adjusted;
  and

              

      

      

      
        	
                 
      

              	
                (X)
      = the number of Warrant Shares issuable upon exercise of this Warrant in
      accordance with the terms of this Warrant by means of a cash exercise
      rather than a cashless exercise.

              

      

       

      Section
3.               Certain
Adjustments.

       

      a)           Stock Dividends and
Splits.  If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), provided that this clause (i) shall not apply to
shares of Common Stock issued solely in connection with dividends required to be
paid under the terms and conditions of the Series D Convertible Preferred Stock,
and/ or other securities issued and outstanding on the date of this Warrant,
provided that such stock dividend or distribution shall be issued pursuant to
the terms of such other securities as of the date of this Warrant, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by reclassification
of shares of the Common Stock any shares of capital stock of the Company, then
in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event and the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted.  Any adjustment made
pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

       

      
        
          
          

        

        
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      b)           Subsequent Equity
Sales.  If the Company or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, sells, grants or
otherwise issues (or announces any sale, grant or other issuance related to the
foregoing) any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less than the
then Exercise Price (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to
equal the Base Share Price.  As a point of clarification, the number
of Warrant Shares issuable hereunder shall not be increased upon
an adjustment to the Exercise Price under this Section 3(b). Such
adjustment to the Exercise Price shall be made whenever such Common Stock or
Common Stock Equivalents are issued. Notwithstanding the foregoing, no
adjustments shall be made, paid or issued under this Section 3(b) in
respect of an Exempt Issuance or issuances subject to Section 3(a)
above.  The Company shall notify the Holder in writing, no later than
the third (3rd)
Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other
pricing terms (such notice the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance, the Holder is entitled to receive a number of Warrant Shares based
upon the Base Share Price regardless of whether the Holder accurately refers to
the Base Share Price in the Notice of Exercise.

       

      c)           Subsequent Rights
Offerings.  If the Company, at any time while this Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP as of the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights, options or warrants plus the
number of shares which the aggregate offering price of the total number of
shares so offered (assuming receipt by the Company in full of all consideration
payable upon exercise of such rights, options or warrants) would purchase at
such VWAP.  Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants.

      
        
          
          

        

        
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      d)           Pro Rata
Distributions. If the Company, at any time prior to the Termination Date,
shall distribute to all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets (including cash and cash
dividends), then in each such case the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a fraction of which the denominator shall be the VWAP determined as of the
record date mentioned above, and of which the numerator shall be such VWAP as of
such record date less the then per share fair market value at such record date
of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of the Common Stock as determined by the
Board of Directors in good faith.  In either case the adjustments
shall be described in a statement provided to the Holder of the portion of
assets or evidences of indebtedness so distributed or such subscription rights
applicable to one share of Common Stock.  Such adjustment shall be
made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

       

      e)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.  For purposes of any such exercise,
the determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders
of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction.  To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 3(e) and
insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

      
        
          
          

        

        
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      f)           Calculations.  All
calculations under this Section 3 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number
of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.

       

      g)           Voluntary Adjustment By
Company.  The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the
Company.

       

      h)           Notice to
Holders.

       

      i.      Adjustment to Exercise
Price.  Whenever the Exercise Price is adjusted pursuant to any
provision of this Section 3, the
Company shall promptly mail to each Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

       

      ii.           Notice to Allow Exercise by
Holder.  If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least ten (10) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (X) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (Y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the ten (10) day period commencing on
the date of such notice to the effective date of the event triggering such
notice.

       

      
        
          
          

        

        
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      Section
4.               Transfer of
Warrant.

       

      a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d)
hereof, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto 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 such
instrument of assignment, 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)           New Warrants. 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
4(a), as to any transfer which 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)           Warrant
Register.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

       

      d)           Transfer
Restrictions.  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 Securities 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 transferee 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 Securities
Act and under applicable state securities or blue sky laws, (ii) that the holder
or transferee execute and deliver to the Company an investment letter in form
and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a “qualified institutional buyer”
as defined in Rule 144A(a) under the Securities Act.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Section 5. 
             Miscellaneous.

       

      a)           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 as set forth in Section
2.

       

      b)           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 indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

       

      c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

       

      d)           Authorized
Shares.  The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant.  The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant.  The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be
listed.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction
thereof.

       

      e)           Jurisdiction. All
questions concerning the construction, validity, enforcement, venue,
jurisdiction, and interpretation of this Warrant shall be determined in
accordance with the provisions of the Securities Purchase
Agreement.

       

      f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

       

      g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

       

      h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Securities Purchase Agreement.

       

      i)           Limitation of
Liability. No provision hereof, in the absence of any affirmative action
by Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

       

      j)           Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

       

      k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      l)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived only with the
written consent of the Company and the Holder.

       

      m)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

       

      n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

       

      

      ********************

      

      IN WITNESS
WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

       

      

      Dated:  July
20, 2009

      
 

      

      
        
          
            	 	
                    NET
      TALK.COM, INC.

                     

                  
	 	
                    By:
      /s/
      Anastasios Kyriakides___________

                    Name:
      Anastasios Kyriakides

                    Title:  Chief
      Executive Officer

                  
	 	 
      

          

        

      

      

      

      

      

      12a6019752ex10_05.htm

    EXHIBIT
10.05

     

    
      

       

      REGISTRATION
RIGHTS AGREEMENT

       

      

      This
Registration Rights Agreement is made and entered into as of July 20, 2009 (as
amended, modified or supplemented from time to time, this “Agreement”) by and
between Net Talk.com, Inc., a Florida corporation (the “Company”), and each securityholder
identified on the signature pages hereto (each, including its successors and
assigns, a “Holder” and
collectively the “Holders”).

      

      This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof between the Company and the Purchasers (as defined therein) (the
“Purchase
Agreement”).

       

      1.           Definitions. Capitalized terms
used and not otherwise defined herein that are defined in the Purchase Agreement
shall have the meanings given such terms in the Purchase
Agreement.  As used in this Agreement, the following terms shall have
the following meanings:

       

      “Commission” means the U.S.
Securities and Exchange Commission.

       

      “Common Stock” means shares
of the Company’s common stock, par value $0.001 per share.

       

      “Company” has the meaning
given to such term in the Preamble hereto.

       

      “Debentures” means the 12%
Senior Secured Convertible Debenture issued to the Purchaser pursuant to the
Purchase Agreement.

       

      “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and any successor
statute.

       

      “Holder” or “Holders” means the
Purchasers or any of its affiliates or transferees to the extent any of them
hold Registrable Securities, other than those purchasing Registrable Securities
in a market transaction.

       

      “Indemnified Party” has the
meaning set forth in Section 5(c).

       

      “Indemnifying Party” has the
meaning set forth in Section 5(c).

       

      “Public Date” means the date
on which the Company shall have completed an initial public offering of its
securities or shall through completion of a reverse merger transaction or
otherwise have become a reporting company under the Exchange Act.

       

      “Prospectus” means the
prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Registrable Securities”
means the shares of Common Stock issuable upon conversion or exercise of the
following securities: (i) the Debenture and (ii) the Series C Common Stock
Purchase Warrants exercisable for 2,000,000 shares of common stock, with an
exercise price equal to $0.50 (subject to adjustment).

      

      “Registration Statement”
means each registration statement required to be filed hereunder, including the
Prospectus therein, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

      

      “Requesting Holders” has the
meaning set forth in Section 2(a).

      

      “Requested Stock” has the
meaning set forth in Section 2(a).

      

      “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
rule.

      

      “Rule 415” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as such rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same purpose and effect as
such rule.

       

      “Securities Act” means the
Securities Act of 1933, as amended, and any successor statute.

       

      2.           
  Piggy-Back
Registration.

       

      (a)           If
at any time after the Public Date, the Company proposes to register any of its
securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration on Form S-4, Form
S-8, or any successor or similar forms), whether for the account of the Company
or otherwise, it will promptly, but not later than thirty (30) days before the
anticipated date of filing such registration statement, give written notice to
all record holders of the Registrable Securities.  Upon the written
request from any Holders (the “Requesting Holders”),
within 15 days after receipt of any such notice from the Company, the Company
will, except as herein provided, cause all of the Registrable Securities covered
by such request (the “Requested Stock”)
held by the Requesting Holders to be included in such registration statement,
all to the extent requisite to permit the sale or other disposition by the
prospective seller or sellers of the Requested Stock; provided, further, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      (b)           If
any registration pursuant to Section 2(a) shall be underwritten in whole or in
part, the Company may require that the Requested Stock be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters.  In such event, the Requesting Holders
shall, if requested by the underwriters, execute an underwriting agreement
containing customary representations and warranties by selling
stockholders.  If in the good faith judgment of the managing
underwriter of such public offering the inclusion of all of the Requested Stock
would reduce the number of shares to be offered by the Company or interfere with
the successful marketing of the shares of stock offered by the Company, the
number of shares of Requested Stock otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares) among the
Requesting Holders and all other holders of registration rights who have
requested inclusion of their securities or excluded in their entirety if so
required by the underwriter.  To the extent only a portion of the
Requested Stock is included in the underwritten public offering, those shares of
Requested Stock which are thus excluded from the underwritten public offering
and any other securities of the Company held by such holders shall be withheld
from the market by the Holders thereof for a period, not to exceed 90 days,
which the managing underwriter reasonably determines is necessary in order to
effect the underwritten public offering.  The obligation of the
Company under Section 2(a) shall not apply after the earlier of (i) the date
that all of the Conversion Shares have been sold pursuant to Rule 144 under the
Securities Act or an effective registration statement, or (ii) such time as the
Conversion Shares are eligible for immediate resale pursuant to Rule 144(b)(1)
under the Securities Act to the Holders.

       

      (c)           If
the registration statement is an offering to be made on a continuous basis
pursuant to Rule 415 and is not on a Form S-3, and the Commission advises the
Company that all of the Restricted Stock may not be included under Rule
415(a)(i), then the number of shares of Requested Stock otherwise to be included
in such registration statement may be reduced pro rata (by number of shares)
among the Requesting Holders and all other holders of registration rights who
have requested inclusion of their securities to an amount to which is permitted
by the Commission for resale under Rule 415(a)(i).

       

      3.          
  Registration
Procedures. If and whenever the Company is required by the provisions
hereof to effect the registration of any Registrable Securities under the
Securities Act, the Company will, as expeditiously as reasonably
possible:

       

      (a)           prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as reasonably possible to any
comments received from the Commission, and use its best efforts to cause such
Registration Statement to become and remain effective, and promptly provide to
the Holders copies of all filings and Commission letters of comment relating
thereto and before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders copies of all such
documents proposed to be filed, including documents incorporated by reference in
the Prospectus and, if requested by the Holders, the exhibits incorporated by
reference, and the Holders shall have the opportunity to object to any
information pertaining to itself that is contained therein and the Company will
make the corrections reasonably requested by the Holders with respect to such
information prior to filing any Registration Statement or amendment thereto or
any Prospectus or any supplement thereto;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      (b)           prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective;

       

      (c)           furnish
to the Holders such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus and any
amendments and supplements to the Registration Statement and the Prospectus) and
such other documents as the Holders reasonably may request to facilitate the
public sale or disposition of the Registrable Securities covered by such
Registration Statement;

       

      (d)           use
its best efforts to register or qualify the Holder’s Registrable Securities
covered by such Registration Statement under the securities or “blue sky” laws
of such jurisdictions within the United States as the Holders may reasonably
request and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Holders to consummate the disposition in
such jurisdiction of the Registrable Securities, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;

       

      (e)           list
the Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then
listed;

       

      (f)           immediately
notify the Holders at any time when a Prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the Prospectus contained in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, at the request of the Holders, the Company shall
prepare a supplement or amendment to such Prospectus so that, as thereafter
delivered to the purchasers of Registrable Securities, such Prospectus shall not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statement therein
not misleading;

       

      (g)           to
the extent pertinent to the registration and sale of the Registrable Securities
under the Registration Statement, make available for inspection by the Holders
and any attorney, accountant or other agent retained by the Holders, all
publicly available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and, to the extent pertinent
to the registration and sale of the Registrable Securities under the
Registration Statement, cause the Company’s officers, directors and employees to
supply all publicly available, non-confidential information reasonably requested
by the attorney, accountant or agent of the Holders;

       

      (h)           provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such Registration Statement;

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (i)           if
requested, cause to be delivered, immediately prior to the effectiveness of the
Registration Statement, letters from the Company’s independent certified public
accountants addressed to the Holders (unless the Holders does not provide to
such accountants the appropriate representation letter required by rules
governing the accounting profession) stating that such accountants are
independent public accountants within the meaning of the Securities Act and the
applicable rules and regulations adopted by the Commission thereunder, and
otherwise in customary form and covering such financial and accounting matters
as are customarily covered by letters of the independent certified public
accountants delivered in connection with primary or secondary underwritten
public offerings, as the case may be; and

       

      (j)           at
all times after the Company has filed a Registration Statement with the
Commission pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder, and take such further action as the
Holders may reasonably request, all to the extent required to enable the Holders
to be eligible to sell Registrable Securities pursuant to Rule 144 (or any
similar rule then in effect).

       

      4.      
     Registration
Expenses.  All expenses relating to the Company’s compliance
with Sections 2 and 3 hereof, including, without limitation, all registration,
filing and listing application fees, costs of distributing any prospectuses and
supplements thereto, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
“blue sky” laws, fees of the NASD, fees of transfer agents and registrars, fees
(not to exceed $20,000) of, and disbursements incurred by, one counsel for the
Holders are called “Registration Expenses.” All selling commissions applicable
to the sale of Registrable Securities, including any fees and disbursements of
any special counsel to the Holders beyond those included in Registration
Expenses, are called “Selling Expenses.”  The Company shall only be
responsible for all Registration Expenses.  The obligation of the
Company to bear the expenses described above shall apply irrespective of whether
a registration becomes effective, is withdrawn or suspended, is converted to
another form of registration and irrespective of when any of the foregoing shall
occur.

       

      5.    
        Indemnification.

       

      (a)           In
the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
each Holder, and its officers, directors and each other person, if any, who
controls such Holder within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable “blue sky” laws, and will
reimburse each Holder, and each such person for any reasonable legal or other
expenses incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by or on behalf of such Holder or any such
person in writing specifically for use in any such document.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (b)           In
the event of a registration of the Registrable Securities under the Securities
Act pursuant to this Agreement, the Holders will indemnify and hold harmless the
Company, and its officers, directors and each other person, if any, who controls
the Company within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact which was furnished in writing by the Holders to the
Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the
Holders will be liable in any such case if and only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on behalf
of the Holders specifically for use in any such
document.  Notwithstanding the provisions of this paragraph, the
Holders shall not be required to indemnify any person or entity in excess of the
amount of the aggregate net proceeds received by the Holders in respect of
Registrable Securities in connection with any such registration under the
Securities Act.

       

      (c)           Promptly
after receipt by a party entitled to claim indemnification hereunder (an “Indemnified Party”)
of notice of the commencement of any action, such Indemnified Party shall, if a
claim for indemnification in respect thereof is to be made against a party
hereto obligated to indemnify such Indemnified Party (an “Indemnifying Party”),
notify the Indemnifying Party in writing thereof, but the omission so to notify
the Indemnifying Party shall not relieve it from any liability which it may have
to such Indemnified Party other than under this Section 5(c) and shall only
relieve it from any liability which it may have to such Indemnified Party under
this Section 5(c) if and to the extent the Indemnifying Party is prejudiced by
such omission.  In case any such action shall be brought against any
Indemnified Party and it shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section 5(c) for any legal expenses subsequently incurred by
such Indemnified Party in connection with the defense thereof; if the
Indemnified Party retains its own counsel, then the Indemnified Party shall pay
all fees, costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the interests
of the Indemnifying Party, the Indemnified Party shall have the right to select
one separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (d)           In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the Holders,
or any officer, director or controlling person of the Holders, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of the Holders
or such officer, director or controlling person of the Holders in circumstances
for which indemnification is provided under this Section 5; then, and in each
such case, the Company and the Holders will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion so that the Holders is responsible only for the
portion represented by the percentage that the public offering price of its
securities offered by the Registration Statement bears to the public offering
price of all securities offered by such Registration Statement, provided, however, that, in any
such case, (A) the Holders will not be required to contribute any amount in
excess of the public offering price of all such securities offered by it
pursuant to such Registration Statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.

       

      (e)           The
indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified party
and shall survive the transfer of securities.

       

      6.         
   Representations and
Warranties.

       

      (a)           Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Purchase Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of the
Securities to be integrated with other offerings (other than such concurrent
offering to the Holders) or other offerings of the Company that will not result
in the loss of an exemption from registration under Rule 506 of the Securities
Act).

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (b)           The
Debenture and the shares of Common Stock issuable upon the conversion of the
Debenture are all restricted securities under the Securities Act as of the date
of this Agreement. The Company will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Registrable Securities at
such time as such Registrable Securities are registered for public sale or an
exemption from registration is available, except as required by federal or state
securities laws.

       

      (c)           The
Company understands the nature of the Registrable Securities issuable upon the
conversion of the Debenture and recognizes that the issuance of such Registrable
Securities may have a potential dilutive effect.  The Company
specifically acknowledges that its obligation to issue the Registrable
Securities is binding upon the Company and enforceable regardless of the
dilution such issuance may have on the ownership interests of other shareholders
of the Company.

       

      (d)           Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.

       

      (e)           The
Company will at all times have authorized and reserved a sufficient number of
shares of Common Stock for the full conversion of the Debenture.

       

      (f)           The
Company shall provide written notice to each Holder of (i) the occurrence of
each Discontinuation Event (as defined below) and (ii) the declaration of
effectiveness by the Commission of each Registration Statement required to be
filed hereunder, in each case within one (1) business day of the date of each
such occurrence and/or declaration.

       

      7.            
Miscellaneous.

       

      (a)           Remedies.  In the
event of a breach by the Company or by a Holder, of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.

       

      (b)           Compliance.  Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to any Registration Statement.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      (c)           Discontinued
Disposition.  Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.  The Company may provide appropriate stop
orders to enforce the provisions of this paragraph.  For purposes of
this Agreement, a “Discontinuation Event” shall mean (i) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement (the Company shall provide true and complete copies thereof and all
written responses thereto to each of the Holders); (ii) any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to such Registration Statement or Prospectus or for additional
information; (iii) the issuance by the Commission of any stop order suspending
the effectiveness of such Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; and/or (v) the occurrence of any
event or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

       

      (d)           Amendments and
Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
the then outstanding Registrable Securities.  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of certain Holders and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding
sentence.

       

      (e)           Notices.  Any notice
or request hereunder may be given to the Company or the Holders at the
respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section 7(e). Any notice or
request hereunder shall be given by registered or certified mail, return receipt
requested, hand delivery, overnight mail, Federal Express or other national
overnight next day carrier (collectively, “Courier”) or telecopy
(confirmed by mail).  Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in
the case of a telecopy, when confirmed. The address for such notices and
communications shall be as follows:

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
        	
                 
      

              	
                If to the
      Company:

              	
                Net
      Talk.com, Inc.

              

      

      1100 NW
163 Drive

      Miami,
Florida 33169

      

      Fax: (305)
621-1201

      Attention:
Anastasios Kyriakides

      

      If to Holders:  To
the address set forth under Holder’s name on the signature page
hereto

       

      
        	
                 
      

              	
                If
      to any other Person who is

              

      

      
        	
                 
      

              	
                then the registered
      Holder:

              	
                To
      the address of such Holder as it appears in the stock transfer books of
      the Company or such other address as may be designated in writing
      hereafter in accordance with this Section 7(e) by such
    Person.

              

      

       

      (f)           Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder.  The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Holder.  Each Holder may assign their respective rights hereunder in
the manner and to the persons and entities as permitted under the Debenture or
Warrants.

       

      (g)           Execution and
Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
agreement.  In the event that any signature is delivered by facsimile
or electronic transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile or
electronic signature were the original thereof.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      (h)           Governing Law, Jurisdiction and
Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. The Company hereby consents and agrees that the state or
federal courts located in the County of New York, State of New York shall have
exclusion jurisdiction to hear and determine any Proceeding between the Company,
on the one hand, and the Holders, on the other hand, pertaining to this
Agreement or to any matter arising out of or related to this Agreement; provided, that the
Holders and the Company acknowledge that any appeals from those courts may have
to be heard by a court located outside of the County of New York, State of New
York, and further provided, that
nothing in this Agreement shall be deemed or operate to preclude the Holders
from bringing a Proceeding in any other jurisdiction to collect the obligations,
to realize on the Collateral or any other security for the obligations, or to
enforce a judgment or other court order in favor of the Holders. The Company
expressly submits and consents in advance to such jurisdiction in any Proceeding
commenced in any such court, and the Company hereby waives any objection which
it may have based upon lack of personal jurisdiction, improper venue or forum non conveniens.
The Company hereby waives personal service of the summons, complaint and other
process issued in any such Proceeding and agrees that service of such summons,
complaint and other process may be made by registered or certified mail
addressed to the Company at the address set forth in Section 7(f) and that
service so made shall be deemed completed upon the earlier of the Company’s
actual receipt thereof or three (3) days after deposit in the U.S. mails, proper
postage prepaid.  The parties hereto desire that their disputes be
resolved by a judge applying such applicable laws.  Therefore, to
achieve the best combination of the benefits of the judicial system and of
arbitration, the parties hereto waive all rights to trial by jury in any
Proceeding brought to resolve any dispute, whether arising in contract, tort, or
otherwise between the Holders and/or the Company arising out of, connected with,
related or incidental to the relationship established between then in connection
with this Agreement.  If either party hereto shall commence a
Proceeding to enforce any provisions of this Agreement, then the prevailing
party in such Proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

       

      (i)           Cumulative
Remedies.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

       

      (j)           Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

       

      (k)           Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.

       

      [Balance
of page intentionally left blank; signature page follows]

       

       

       

       

      
 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      IN WITNESS
WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

       

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 	NET
      TALK.COM
	 	 	 
	 
      	
                                                By:

                                              	
                                                /s/ Anastasios
Kyriakides

                                              
	 
      	 
      	
                                                Name:
      Anastasios Kyriakides, Chief Executive Officer

                                              
	 	 	 
	 	 	 
	 
      	
                                                DEBT
      OPPORTUNITY FUND, LLLP

                                              
	 	 
	 
      	
                                                By:

                                              	
                                                /s/ Sean M. Lyons

                                              
	 
      	 
      	
                                                Name:  Sean
      M. Lyons

                                              
	 
      	 
      	
                                                Title:
      Managing Member

                                              
	 
      	 
      	 
      
	 
      	 
      	
                                                Address
      for Notices:

                                              
	 
      	 
      	 
      
	 	 	 
	 	 	 
	 
      	 
      	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

     

     

    12

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