Document:

Security Agreement

 Exhibit 10.3 
  
 SECURITY AGREEMENT 
  
 THIS SECURITY AGREEMENT (the “Agreement”), is entered into and made effective as of January 9, 2006, by and between i2
TELECOM INTERNATIONAL, INC., a Washington corporation with its principal place of business located at 1200 Abernathy Road, Suite 1800, Atlanta, Georgia 30328 (the “Company”), and the BUYER(S) listed on Schedule I attached
to the Securities Purchase Agreement dated the date hereof (the “Secured Party”). 
  
 WHEREAS, the Company shall issue and sell to the Secured Party, as provided in the Securities Purchase Agreement of even date herewith between the
Company and the Secured Party (the “Securities Purchase Agreement”), and the Secured Party shall purchase up to One Million Seven Hundred Fifty Thousand Dollars ($1,750,000) of secured convertible debentures (the
“Convertible Debentures”), which shall be convertible into shares of the Company’s common stock, no par value (the “Common Stock”) (as converted, the “Conversion Shares”) in the respective
amounts set forth opposite each Buyer(s) name on Schedule I attached to the Securities Purchase Agreement; 
  
 WHEREAS, to induce the Secured Party to enter into the transaction contemplated by the Securities Purchase Agreement, the Convertible Debentures,
the Investor Registration Rights Agreement of even date herewith between the Company and the Secured Party (the “Investor Registration Rights Agreement”), the Pledge and Escrow Agreement of even date herewith among the Company, the
Secured Party and David Gonzalez, Esq. (the “Pledge Agreement”), the Escrow Agreement of even date herewith among the Company, the Secured Party, and David Gonzalez, Esq. (the “Escrow Agreement”), and the
Irrevocable Transfer Agent Instructions among the Company, the Secured Party, Continental Stock Transfer and Trust Company, and David Gonzalez, Esq. (the “Transfer Agent Instructions”) (collectively referred to as the
“Transaction Documents”), the Company hereby grants to the Secured Party a security interest in and to the pledged property identified on Exhibit A hereto (collectively referred to as the “Pledged Property”)
until the satisfaction of the Obligations, as defined herein below. 
  
 NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, and for other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as
follows: 
  
 ARTICLE 1. 
  
 DEFINITIONS AND INTERPRETATIONS 
  
 Section 1.1. Recitals. 
  
 The above recitals are true and correct and are incorporated herein, in
their entirety, by this reference. 

 Section 1.2. Interpretations. 
  
 Nothing herein expressed or implied is intended or shall be construed to confer upon any person other than the Secured Party
any right, remedy or claim under or by reason hereof. 
  
 Section 1.3. Obligations Secured. 
  
 The
obligations secured hereby are any and all obligations of the Company now existing or hereinafter incurred to the Secured Party, whether oral or written and whether arising before, on or after the date hereof including, without limitation, those
obligations of the Company to the Secured Party under this Agreement, the Transaction Documents, and any other amounts now or hereafter owed to the Secured Party by the Company thereunder or hereunder (collectively, the
“Obligations”). 
  
 ARTICLE 2. 

 
 PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL 

AND TERMINATION OF SECURITY INTEREST 
  
 Section 2.1. Pledged Property. 
  
 (a) Company hereby pledges to the Secured Party, and creates in the Secured Party for its benefit, a security interest for such time until the Obligations
are paid in full, in and to all of the property of the Company as set forth in Exhibit ”A” attached hereto and the products thereof and the proceeds of all such items (collectively, the “Pledged Property”):

  
 (b) Simultaneously with the execution and delivery of this
Agreement, the Company shall make, execute, acknowledge, file, record and deliver to the Secured Party any documents reasonably requested by the Secured Party to perfect its second priority security interest in the Pledged Property. Simultaneously
with the execution and delivery of this Agreement, the Company shall make, execute, acknowledge and deliver to the Secured Party such documents and instruments, including, without limitation, financing statements, certificates, affidavits and forms
as may, in the Secured Party’s reasonable judgment, be necessary to effectuate, complete or perfect, or to continue and preserve, the second priority security interest of the Secured Party in the Pledged Property, and the Secured Party shall
hold such documents and instruments as secured party, subject to the terms and conditions contained herein. 
  
 Section 2.2. Rights; Interests; Etc. 
  
 (a) So long as no Event of Default (as hereinafter defined) shall have occurred and be continuing: 
  
 (i) the Company shall be entitled to exercise any and all rights pertaining
to the Pledged Property or any part thereof for any purpose not inconsistent with the terms hereof; and 
  
 (ii) the Company shall be entitled to receive and retain any and all payments paid or made in respect of the Pledged Property. 
  

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 (b) Upon the occurrence and during the continuance of an Event of Default: 
  
 (i) All rights of the Company to exercise the rights which it would
otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and to receive payments which it would otherwise be authorized to receive and retain pursuant to Section 2.2(a)(ii) hereof shall be suspended, and all such
rights shall thereupon become vested in the Secured Party who shall thereupon have the sole right to exercise such rights and to receive and hold as Pledged Property such payments; provided, however, that if the Secured Party shall become
entitled and shall elect to exercise its right to realize on the Pledged Property pursuant to Article 5 hereof, then all cash sums received by the Secured Party, or held by Company for the benefit of the Secured Party and paid over pursuant to
Section 2.2(b)(ii) hereof, shall be applied against any outstanding Obligations; and 
  
 (ii) All interest, dividends, income and other payments and distributions which are received by the Company contrary to the provisions of
Section 2.2(b)(i) hereof shall be received in trust for the benefit of the Secured Party, shall be segregated from other property of the Company and shall be forthwith paid over to the Secured Party; or 
  
 (iii) The Secured Party in its sole discretion shall be authorized to sell
any or all of the Pledged Property at public or private sale in order to recoup all of the outstanding principal plus accrued interest owed pursuant to the Convertible Debenture as described herein 
  
 (c) An “Event of Default” shall be deemed to have occurred
under this Agreement upon an Event of Default under the Convertible Debentures. 
  
 ARTICLE 3. 
  
 ATTORNEY-IN-FACT; PERFORMANCE 
  
 Section 3.1. Secured Party Appointed Attorney-In-Fact. 
  
 Upon the occurrence of an Event of Default, and until such Event of Default is cured, the Company hereby appoints the Secured Party as its attorney-in-fact, with full authority in the place and stead of the Company
and in the name of the Company or otherwise, from time to time in the Secured Party’s discretion to take any action and to execute any instrument which the Secured Party may reasonably deem necessary to accomplish the purposes of this
Agreement, including, without limitation, to receive and collect all instruments made payable to the Company representing any payments in respect of the Pledged Property or any part thereof and to give full discharge for the same. The Secured Party
may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Pledged Property as and when the Secured Party may determine. To facilitate collection, the Secured Party may notify account debtors and obligors on
any Pledged Property to make payments directly to the Secured Party. 
  
 Section 3.2. Secured Party May Perform. 
  
 If the Company fails to perform any agreement contained herein, the Secured Party, at its option, may itself perform, or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be
included in the Obligations secured hereby and payable by the Company under Section 8.3. 
  

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 ARTICLE 4. 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Section 4.1. Authorization; Enforceability. 
  
 Each of the parties hereto represents and warrants that it has taken all action necessary to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated hereby; and upon execution and delivery, this Agreement shall constitute a valid and binding obligation of the respective party, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights or by the principles governing the availability of equitable remedies. 
  

Section 4.2. Ownership of Pledged Property. 
  
 The Company warrants and represents that it is the legal and beneficial owner of the Pledged Property except for the security interest created in the
Pledged Property to Troon & Co., Jordan E. Glazov and Gregory P. McGraw (collectively, the “Senior Lenders”) pursuant to the Loan Agreement dated September 7, 2005, by and among the Obligor and the Senior Lenders (the
“Loan Agreements”) and the second priority interest created by this Agreement. All necessary documents have been filed to perfect the Senior Lenders’ first priority security interest. 
  
 ARTICLE 5. 
  
 DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL 
  
 Section 5.1. Default and Remedies. 
  
 (a) If an Event of Default occurs, then in each such case the Secured Party
may declare the Obligations to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration, the Obligations shall become immediately due and payable. 
  
 (b) Upon the occurrence of an Event of Default, the Secured Party shall:
(i) be entitled to receive all distributions with respect to the Pledged Property, (ii) to cause the Pledged Property to be transferred into the name of the Secured Party or its nominee, (iii) to dispose of the Pledged Property, and
(iv) to realize upon any and all rights in the Pledged Property then held by the Secured Party. 
  

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 Section 5.2. Method of Realizing Upon the Pledged Property: Other Remedies. 
  
 Upon the occurrence of an Event of Default, in addition to any rights and
remedies available at law or in equity, the following provisions shall govern the Secured Party’s right to realize upon the Pledged Property: 
  
 (a) Any item of the Pledged Property may be sold for cash or other value in any number of lots at brokers board, public auction or private sale and may be
sold without demand, advertisement or notice (except that the Secured Party shall give the Company ten (10) days’ prior written notice of the time and place or of the time after which a private sale may be made (the “Sale
Notice”)), which notice period is hereby agreed to be commercially reasonable. At any sale or sales of the Pledged Property, the Company may bid for and purchase the whole or any part of the Pledged Property and, upon compliance with the
terms of such sale, may hold, exploit and dispose of the same without further accountability to the Secured Party. The Company will execute and deliver, or cause to be executed and delivered, such instruments, documents, assignments, waivers,
certificates, and affidavits and supply or cause to be supplied such further information and take such further action as the Secured Party reasonably shall require in connection with any such sale. 
  
 (b) Any cash being held by the Secured Party as Pledged Property and all cash
proceeds received by the Secured Party in respect of, sale of, collection from, or other realization upon all or any part of the Pledged Property shall be applied as follows: 
  
 (i) to the payment of all amounts due the Secured Party for the expenses reimbursable to it hereunder or owed to it
pursuant to Section 8.3 hereof; 
  
 (ii) to the payment of
the Obligations then due and unpaid. 
  
 (iii) the balance, if
any, to the person or persons entitled thereto, including, without limitation, the Company. 
  
 (c) In addition to all of the rights and remedies which the Secured Party may have pursuant to this Agreement, the Secured Party shall have all of the rights and remedies provided by law, including, without
limitation, those under the Uniform Commercial Code. 
  
 (i) If
the Company fails to pay such amounts due upon the occurrence of an Event of Default which is continuing, then the Secured Party may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company and collect the monies adjudged or decreed to be payable in the manner provided by law out of the property of Company, wherever situated. 
  
 (ii) The Company agrees that it shall be liable for any reasonable fees,
expenses and costs incurred by the Secured Party in connection with enforcement, collection and preservation of the Transaction Documents, including, without limitation, reasonable legal fees and expenses, and such amounts shall be deemed included
as Obligations secured hereby and payable as set forth in Section 8.3 hereof. 
  
 Section 5.3. Proofs of Claim. 
  
 In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relating to the Company or the property of the
Company or of such other obligor or its creditors, the Secured Party (irrespective of whether the Obligations shall then be due and payable as therein expressed 
  

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 or by declaration or otherwise and irrespective of whether the Secured Party shall have made any demand on the Company
for the payment of the Obligations), subject to the rights of Previous Security Holders, shall be entitled and empowered, by intervention in such proceeding or otherwise: 
  
 (i) to file and prove a claim for the whole amount of the Obligations and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Secured Party (including any claim for the reasonable legal fees and expenses and other expenses paid or incurred by the Secured Party permitted hereunder and of the Secured Party allowed in
such judicial proceeding), and 
  
 (ii) to collect and receive
any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby
authorized by the Secured Party to make such payments to the Secured Party and, in the event that the Secured Party shall consent to the making of such payments directed to the Secured Party, to pay to the Secured Party any amounts for expenses due
it hereunder provided the Secured Party submits written invoices documenting all such fees, expenses and costs. 
  
 Section 5.4. Duties Regarding Pledged Property. 
  
 The Secured Party shall have no duty as to the collection or protection of the Pledged Property or any income thereon or as to the preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of any of the Pledged Property actually in the Secured Party’s possession. 
  
 ARTICLE 6. 
  
 AFFIRMATIVE COVENANTS 
  
 The Company covenants and agrees that, from the date hereof and until the Obligations have been fully paid and satisfied, unless the Secured Party shall consent otherwise in writing (as provided in Section 8.4
hereof): 
  
 Section 6.1. Existence, Properties, Etc.

  
 (a) The Company shall do, or cause to be done, all things, or
proceed with due diligence with any actions or courses of action, that may be reasonably necessary (i) to maintain Company’s due organization, valid existence and good standing under the laws of its state of incorporation, and (ii) to
preserve and keep in full force and effect all qualifications, licenses and registrations in those jurisdictions in which the failure to do so could have a Material Adverse Effect (as defined below); and (b) the Company shall not do, or cause
to be done, any act impairing the Company’s corporate power or authority (i) to carry on the Company’s business as now conducted, and (ii) to execute or deliver this Agreement or any other document delivered in connection
herewith, including, without limitation, any UCC-1 Financing Statements required by the Secured Party to which it is or will be a party, or perform any of its obligations hereunder or thereunder. For purpose of this Agreement, the term
“Material Adverse Effect” shall mean any material and adverse affect as determined by a reasonable person, whether individually or in the 
  

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 aggregate, upon (a) the Company’s assets, business, operations, properties or condition, financial or
otherwise; (b) the Company’s to make payment as and when due of all or any part of the Obligations; or (c) the Pledged Property. 
  
 Section 6.2. Financial Statements and Reports. 
  
 The Company shall furnish to the Secured Party within a reasonable time such financial data as the Secured Party may reasonably request, including,
without limitation, the following: 
  
 (a) The balance sheet of
the Company as of the close of each fiscal year, the statement of earnings and retained earnings of the Company as of the close of such fiscal year, and statement of cash flows for the Company for such fiscal year, all in reasonable detail, prepared
in accordance with generally accepted accounting principles consistently applied, certified by the chief executive and chief financial officers of the Company as being true and correct and accompanied by a certificate of the chief executive and
chief financial officers of the Company, stating that the Company has kept, observed, performed and fulfilled each covenant, term and condition of this Agreement during such fiscal year and that no Event of Default hereunder has occurred and is
continuing, or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action the Company proposes to take in connection therewith; 
  
 (b) A balance sheet of the Company as of the close of each quarter, and
statement of earnings and retained earnings of the Company as of the close of such quarter, all in reasonable detail, and prepared substantially in accordance with generally accepted accounting principles consistently applied, certified by the chief
executive and chief financial officers of the Company as being true and correct; and 
  
 (c) Copies of all accountants’ reports and accompanying financial reports submitted to the Company by independent accountants in connection with each annual examination of the Company. 
  
 Section 6.3. Accounts and Reports. 
  
 The Company shall maintain a standard system of accounting in accordance
with generally accepted accounting principles consistently applied and provide, at its sole expense, to the Secured Party the following: 
  
 (a) as soon as available, a copy of any notice or other communication alleging any nonpayment or other material breach or default, or any foreclosure or
other action respecting any material portion of its assets and properties, received respecting any of the indebtedness of the Company in excess of $150,000 (other than the Obligations), or any demand or other request for payment under any guaranty,
assumption, purchase agreement or similar agreement or arrangement respecting the indebtedness or obligations of others in excess of $150,000, including any received from any person acting on behalf of the Secured Party or beneficiary thereof; and

  
 (b) within fifteen (15) days after the making of each
submission or filing, a copy of any report, financial statement, notice or other document, whether periodic or otherwise, 
  

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 submitted to the shareholders of the Company, or submitted to or filed by the Company with any governmental authority
involving or affecting (i) the Company that could have a Material Adverse Effect; (ii) the Obligations; (iii) any part of the Pledged Property; or (iv) any of the transactions contemplated in this Agreement or the Loan
Instruments. 
  
 Section 6.4. Maintenance of Books and
Records; Inspection. 
  
 The Company shall maintain its
books, accounts and records in accordance with generally accepted accounting principles consistently applied, and permit the Secured Party, its officers and employees and any professionals designated by the Secured Party in writing, at any time to
visit and inspect any of its properties (including but not limited to the collateral security described in the Transaction Documents and/or the Loan Instruments), corporate books and financial records, and to discuss its accounts, affairs and
finances with any employee, officer or director thereof. 
  
 Section 6.5. Maintenance and Insurance. 
  
 (a) The Company shall maintain or cause to be maintained, at its own expense, all of its assets and properties in good working order and condition, making all necessary repairs thereto and renewals and replacements thereof. 
  
 (b) The Company shall maintain or cause to be maintained, at its own expense,
insurance in form, substance and amounts (including deductibles), which the Company deems reasonably necessary to the Company’s business, (i) adequate to insure all assets and properties of the Company, which assets and properties are of a
character usually insured by persons engaged in the same or similar business against loss or damage resulting from fire or other risks included in an extended coverage policy; (ii) against public liability and other tort claims that may be
incurred by the Company; (iii) as may be required by the Transaction Documents and/or applicable law and (iv) as may be reasonably requested by Secured Party, all with adequate, financially sound and reputable insurers. 
  
 Section 6.6. Contracts and Other Collateral. 
  
 The Company shall perform all of its obligations under or with respect to
each instrument, receivable, contract and other intangible included in the Pledged Property to which the Company is now or hereafter will be party on a timely basis and in the manner therein required, including, without limitation, this Agreement.

  
 Section 6.7. Defense of Collateral, Etc.

  
 The Company shall defend and enforce its right, title and
interest in and to any part of: (a) the Pledged Property; and (b) if not included within the Pledged Property, those assets and properties whose loss could have a Material Adverse Effect, the Company shall defend the Secured Party’s
right, title and interest in and to each and every part of the Pledged Property, each against all manner of claims and demands on a timely basis to the full extent permitted by applicable law. 
  

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 Section 6.8. Payment of Debts, Taxes, Etc. 
  
 The Company shall pay, or cause to be paid, all of its indebtedness and
other liabilities and perform, or cause to be performed, all of its obligations in accordance with the respective terms thereof, and pay and discharge, or cause to be paid or discharged, all taxes, assessments and other governmental charges and
levies imposed upon it, upon any of its assets and properties on or before the last day on which the same may be paid without penalty, as well as pay all other lawful claims (whether for services, labor, materials, supplies or otherwise) as and
when due 
  
 Section 6.9. Taxes and Assessments; Tax
Indemnity. 
  
 The Company shall (a) file all tax
returns and appropriate schedules thereto that are required to be filed under applicable law, prior to the date of delinquency, (b) pay and discharge all taxes, assessments and governmental charges or levies imposed upon the Company, upon its
income and profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all taxes, assessments and governmental charges or levies that, if unpaid, might become a lien or charge upon any of its
properties; provided, however, that the Company in good faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate reserves are maintained with
respect thereto. 
  
 Section 6.10. Compliance with Law and
Other Agreements. 
  
 The Company shall maintain its business
operations and property owned or used in connection therewith in compliance with (a) all applicable federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such property, and
(b) all agreements, licenses, franchises, indentures and mortgages to which the Company is a party or by which the Company or any of its properties is bound. Without limiting the foregoing, the Company shall pay all of its indebtedness promptly
in accordance with the terms thereof. 
  
 Section 6.11.
Notice of Default. 
  
 The Company shall give written
notice to the Secured Party of the occurrence of any default or Event of Default under this Agreement, the Transaction Documents or any other Loan Instrument or any other agreement of Company for the payment of money, promptly upon the occurrence
thereof. 
  
 Section 6.12. Notice of Litigation.

  
 The Company shall give notice, in writing, to the Secured
Party of (a) any actions, suits or proceedings wherein the amount at issue is in excess of $50,000, instituted by any persons against the Company, or affecting any of the assets of the Company, and (b) any dispute, not resolved within
fifteen (15) days of the commencement thereof, between the Company on the one hand and any governmental or regulatory body on the other hand, which might reasonably be expected to have a Material Adverse Effect on the business operations or
financial condition of the Company. 
  

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 ARTICLE 7. 
  
 NEGATIVE COVENANTS 
  
 The Company covenants and agrees that, from the date hereof until the Obligations have been fully paid and satisfied, the Company shall not, unless the
Secured Party shall consent otherwise in writing: 
  
 Section 7.1. Indebtedness. 
  
 The Company
shall not directly or indirectly permit, create, incur, assume, permit to exist, increase, renew or extend on or after the date hereof any indebtedness on its part, including commitments, contingencies and credit availabilities, or apply for or
offer or agree to do any of the foregoing. 
  
 Section 7.2.
Liens and Encumbrances. 
  
 The Company shall not directly
or indirectly make, create, incur, assume or permit to exist any assignment, transfer, pledge, mortgage, security interest or other lien or encumbrance of any nature in, to or against any part of the Pledged Property or of the Company’s capital
stock, or offer or agree to do so, or own or acquire or agree to acquire any asset or property of any character subject to any of the foregoing encumbrances (including any conditional sale contract or other title retention agreement), or assign,
pledge or in any way transfer or encumber its right to receive any income or other distribution or proceeds from any part of the Pledged Property or the Company’s capital stock; or enter into any sale-leaseback financing respecting any part of
the Pledged Property as lessee, or cause or assist the inception or continuation of any of the foregoing. 
  
 Section 7.3. Certificate of Incorporation, By-Laws, Mergers, Consolidations, Acquisitions and Sales. 
  
 Without the prior express written consent of the Secured Party, which such
consent shall not be unreasonably withheld, the Company shall not: (a) Amend its Certificate of Incorporation or By-Laws; (b) issue or sell its stock, stock options, bonds, notes or other corporate securities or obligations; (c) be a
party to any merger, consolidation or corporate reorganization, (d) purchase or otherwise acquire all or substantially all of the assets or stock of, or any partnership or joint venture interest in, any other person, firm or entity,
(e) sell, transfer, convey, grant a security interest in or lease all or any substantial part of its assets, nor (f) create any subsidiaries nor convey any of its assets to any subsidiary. Notwithstanding anything in this Section 7.3,
to the contrary, the Company shall not need the written consent of the Secured Party to increase its authorized number of shares as contemplated in the Securities Purchase Agreement. 
  
 Section 7.4. Management, Ownership. 
  
 The Company shall not materially change its ownership, executive staff or management without the prior written consent of
the Secured Party. The ownership, executive staff and management of the Company are material factors in the Secured Party’s willingness to institute and maintain a lending relationship with the Company. 
  

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 Section 7.5. Dividends, Etc. 
  
 Except for dividend payments to the Series D and Series E Preferred shareholders, the Company shall not declare or pay any
dividend of any kind, in cash or in property, on any class of its capital stock, nor purchase, redeem, retire or otherwise acquire for value any shares of such stock, nor make any distribution of any kind in respect thereof, nor make any return of
capital to shareholders, nor make any payments in respect of any pension, profit sharing, retirement, stock option, stock bonus, incentive compensation or similar plan (except as required or permitted hereunder), without the prior written consent of
the Secured Party. 
  
 Section 7.6. Guaranties; Loans.

  
 The Company shall not guarantee nor be liable in any manner,
whether directly or indirectly, or become contingently liable after the date of this Agreement in connection with the obligations or indebtedness of any person or persons, except for (i) the indebtedness currently secured by the liens
identified on the Pledged Property identified on Exhibit A hereto and (ii) the endorsement of negotiable instruments payable to the Company for deposit or collection in the ordinary course of business. The Company shall not make any loan,
advance or extension of credit to any person other than in the normal course of its business. 
  
 Section 7.7. Debt. 
  
 The Company shall not create, incur, assume or suffer to exist any additional indebtedness of any description whatsoever in an aggregate amount in excess of $250,000 (excluding any indebtedness of the Company to the Secured Party, trade
accounts payable and accrued expenses incurred in the ordinary course of business and the endorsement of negotiable instruments payable to the Company, respectively for deposit or collection in the ordinary course of business). 
  
 Section 7.8. Conduct of Business. 
  
 The Company will continue to engage, in an efficient and economical manner,
in a business of the same general type as conducted by it on the date of this Agreement. 
  
 Section 7.9. Places of Business. 
  
 The location of the Company’s chief place of business is 1200 Abernathy Road, Suite 1800, Atlanta, Georgia 30328. The Company shall not change the location of its chief place of business, chief executive office
or any place of business disclosed to the Secured Party or move any of the Pledged Property from its current location without thirty (30) days’ prior written notice to the Secured Party in each instance. 
  

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 ARTICLE 8. 
  
 MISCELLANEOUS 
  
 Section 8.1. Notices. 
  
 All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as duly given
on: (a) the date of delivery, if delivered in person, by nationally recognized overnight delivery service or (b) five (5) days after mailing if mailed from within the continental United States by certified mail, return receipt
requested to the party entitled to receive the same: 
  

					
	If to the Secured Party:	  	Cornell Capital Partners, LP
	 	  	101 Hudson Street-Suite 3700
	 	  	Jersey City, New Jersey 07302
	 	  	Attention:	  	Mark Angelo
	 	  	 	  	Portfolio Manager
	 	  	Telephone:	  	(201) 986-8300
	 	  	Facsimile:	  	(201) 985-8266
		
	With a copy to:	  	David Gonzalez, Esq.
	 	  	101 Hudson Street, Suite 3700
	 	  	Jersey City, NJ 07302
	 	  	Telephone:	  	(201) 985-8300
	 	  	Facsimile:	  	(201) 985-8266
		
	And if to the Company:	  	i2 Telecom International, Inc.
	 	  	1200 Abernathy Road, Suite 1800
	 	  	Atlanta, Georgia 30328
	 	  	Attention: Paul Arena
	 	  	Telephone: (770) 512-7174
	 	  	Facsimile: (770) 844-9427
		
	With a copy to:	  	Richardson & Patel, LLP
	 	  	10900 Wilshire Boulevard, Suite 500
	 	  	Los Angeles, California 90024
	 	  	Attention: Peter Hogan, Esq.
	 	  	Telephone: (310) 208-1182
	 	  	Facsimile: (310) 208-1154

  
 Any party may change
its address by giving notice to the other party stating its new address. Commencing on the tenth (10th) day
after the giving of such notice, such newly designated address shall be such party’s address for the purpose of all notices or other communications required or permitted to be given pursuant to this Agreement. 
  

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 Section 8.2. Severability. 
  
 If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable provision were not
contained herein. 
  
 Section 8.3. Expenses.

  
 In the event of an Event of Default, the Company will pay to
the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel, which the Secured Party may incur in connection with: (i) the custody or preservation of, or the sale, collection from,
or other realization upon, any of the Pledged Property; (ii) the exercise or enforcement of any of the rights of the Secured Party hereunder or (iii) the failure by the Company to perform or observe any of the provisions hereof.

  
 Section 8.4. Waivers, Amendments, Etc. 

 
 The Secured Party’s delay or failure at any time or times hereafter
to require strict performance by Company of any undertakings, agreements or covenants shall not waiver, affect, or diminish any right of the Secured Party under this Agreement to demand strict compliance and performance herewith. Any waiver by the
Secured Party of any Event of Default shall not waive or affect any other Event of Default, whether such Event of Default is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements and covenants
of the Company contained in this Agreement, and no Event of Default, shall be deemed to have been waived by the Secured Party, nor may this Agreement be amended, changed or modified, unless such waiver, amendment, change or modification is evidenced
by an instrument in writing specifying such waiver, amendment, change or modification and signed by the Secured Party. 
  
 Section 8.5. Continuing Security Interest. 
  
 This Agreement shall create a continuing security interest in the Pledged Property and shall: (i) remain in full force and effect until payment in
full of the Obligations; and (ii) be binding upon the Company and its successors and heirs and (iii) inure to the benefit of the Secured Party and its successors and assigns. Upon the payment or satisfaction in full of the Obligations, the
Company shall be entitled to the return, at its expense, of such of the Pledged Property as shall not have been sold in accordance with Section 5.2 hereof or otherwise applied pursuant to the terms hereof. 
  
 Section 8.6. Independent Representation. 
  
 Each party hereto acknowledges and agrees that it has received or has had
the opportunity to receive independent legal counsel of its own choice and that it has been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement. 
  

 13 

 Section 8.7. Applicable Law: Jurisdiction. 
  
 This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New Jersey without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in Hudson County, New Jersey, and expressly consent to the jurisdiction and venue of the
Superior Court of New Jersey, sitting in Hudson County and the United States District Court for the District of New Jersey sitting in Newark, New Jersey for the adjudication of any civil action asserted pursuant to this Paragraph. 
  
 Section 8.8. Waiver of Jury Trial. 
  
 AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND TO MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION. 
  
 Section 8.9. Entire Agreement. 
  
 This Agreement constitutes the entire agreement among the parties and
supersedes any prior agreement or understanding among them with respect to the subject matter hereof. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 14 

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

			
	COMPANY:
	i2 TELECOM INTERNATIONAL, INC.
		
	 By:
	 	  

	 Name:
	 	 Paul Arena

	 Title:
	 	 Chief Executive Officer

	
	SECURED PARTY:
	CORNELL CAPITAL PARTNERS, LP
		
	By:	 	Yorkville Advisors, LLC
	Its:	 	General Partner
		
	 By:
	 	  

	 Name:
	 	 Mark Angelo

	 Title:
	 	 Portfolio Manager

  

 15 

 EXHIBIT A 
 DEFINITION OF PLEDGED PROPERTY 
  
 For the purpose of securing prompt and complete payment and performance by the Company of all of the Obligations, the Company unconditionally and irrevocably hereby grants to the Secured Party a continuing security
interest in and to, and lien upon, such continuing security interest being second priority to Senior Lenders security interest granted pursuant to the following Pledged Property of the Company: 
  
 (a) all goods of the Company, including, without limitation, machinery,
equipment, furniture, furnishings, fixtures, signs, lights, tools, parts, supplies and motor vehicles of every kind and description, now or hereafter owned by the Company or in which the Company may have or may hereafter acquire any interest, and
all replacements, additions, accessions, substitutions and proceeds thereof, arising from the sale or disposition thereof, and where applicable, the proceeds of insurance and of any tort claims involving any of the foregoing; 
  
 (b) all inventory of the Company, including, but not limited to, all goods,
wares, merchandise, parts, supplies, finished products, other tangible personal property, including such inventory as is temporarily out of Company’s custody or possession and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the foregoing; 
  
 (c) all contract rights and general intangibles of the Company, including, without limitation, goodwill, trademarks, trade styles, trade names, leasehold interests, partnership or joint venture interests, patents and
patent applications, copyrights, deposit accounts whether now owned or hereafter created; 
  
 (d) all documents, warehouse receipts, instruments and chattel paper of the Company whether now owned or hereafter created; 
  
 (e) all accounts and other receivables, instruments or other forms of obligations and rights to payment of the Company (herein collectively referred to as
“Accounts”), together with the proceeds thereof, all goods represented by such Accounts and all such goods that may be returned by the Company’s customers, and all proceeds of any insurance thereon, and all guarantees,
securities and liens which the Company may hold for the payment of any such Accounts including, without limitation, all rights of stoppage in transit, replevin and reclamation and as an unpaid vendor and/or lienor, all of which the Company
represents and warrants will be bona fide and existing obligations of its respective customers, arising out of the sale of goods by the Company in the ordinary course of business; 
  
 (f) to the extent assignable, all of the Company’s rights under all present and future authorizations, permits,
licenses and franchises issued or granted in connection with the operations of any of its facilities; 
  
 (g) all products and proceeds (including, without limitation, insurance proceeds) from the above-described Pledged Property. 
  

 A-1Warrant dated as of January 9

 Exhibit 10.4 
  
 WARRANT 
  
 THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS
WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT. 
  
 i2 TELECOM INTERNATIONAL, INC. 
  
 Warrant To
Purchase Common Stock 
  

			
	 Warrant No.: CCP-001
	 	Number of Shares: 7,150,000

  
 Date
of Issuance: January 9, 2006 
  
 I2 Telecom International, Inc., a
Washington corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Cornell Capital Partners, LP (“Cornell”), the
registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the date hereof, but not after 11:59 P.M.
Eastern Time on the Expiration Date (as defined herein) Seven Million One Hundred Fifty Thousand (7,150,000) fully paid and nonassessable shares of Common Stock (as defined herein) of the Company (the “Warrant Shares”) at the
exercise price per share provided in Section 1(b) below or as subsequently adjusted; provided, however, that in no event shall the holder be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant
Shares which, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the holder and its affiliates to exceed 4.99% of the outstanding shares of the Common Stock following such exercise,
except within sixty (60) days of the Expiration Date (however, such restriction may be waived by Cornell (but only as to itself and not to any other holder) upon not less than 65 days prior notice to the Company). For purposes of the foregoing
proviso, the aggregate number of shares of Common Stock beneficially owned by the holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such
proviso is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised Warrants beneficially owned by the holder and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company beneficially owned by the holder and its affiliates (including, 
  

 1 

 without limitation, any convertible notes or preferred stock) subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For
purposes of this Warrant, 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 (1) the Company’s most recent Form 10-QSB or Form 10-KSB, as
the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of any holder, the
Company shall promptly, but in no event later than one (1) Business Day following the receipt of such notice, confirm in writing to any 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 exercise of Warrants (as defined below) by such holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. 
  
 Section 1. 
  
 (a) This Warrant is the common stock purchase warrant (the
“Warrant”) issued pursuant to the Securities Purchase Agreement (“Securities Purchase Agreement”) dated the date hereof between the Company and the Buyers listed on Schedule I thereto. 
  
 (b) Definitions. The following words and terms as used in this Warrant
shall have the following meanings: 
  
 (i) “Approved
Stock Plan” means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant to which the Company’s securities may be issued to any employee, officer or director for services provided to the
Company. 
  
 (ii) “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to remain closed. 
  
 (iii) “Closing Bid Price” means the closing bid price of Common Stock as quoted on the Principal Market (as reported by Bloomberg
Financial Markets (“Bloomberg”) through its “Volume at Price” function). 
  
 (iv) “Common Stock” means (i) the Company’s common stock, no par value per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. 
  
 (v) “Event of Default” means an event of default under the Securities Purchase Agreement or the Convertible Debentures issued in
connection therewith. 
  
 (vi) “Excluded
Securities” means, provided such security is issued at a price which is greater than or equal to the arithmetic average of the Closing Bid Prices of the Common Stock for the ten (10) consecutive trading days immediately preceding the
date of 
  

 2 

 issuance, any of the following: (a) any issuance by the Company of securities in connection with a strategic
partnership or a joint venture (the primary purpose of which is not to raise equity capital), (b) any issuance by the Company of securities as consideration for a merger or consolidation or the acquisition of a business, product, license, or
other assets of another person or entity and (c) options to purchase shares of Common Stock, provided (I) such options are issued after the date of this Warrant to employees of the Company within thirty (30) days of such
employee’s starting his employment with the Company, and (II) the exercise price of such options is not less than the Closing Bid Price of the Common Stock on the date of issuance of such option. 
  
 (vii) “Expiration Date” means the date three (3) years
from the Issuance Date of this Warrant or, if such date falls on a Saturday, Sunday or other day on which banks are required or authorized to be closed in the City of New York or the State of New York or on which trading does not take place on the
Principal Exchange or automated quotation system on which the Common Stock is traded (a “Holiday”), the next date that is not a Holiday. 
  
 (viii) “Issuance Date” means the date hereof. 
  

(ix) “Options” means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. 

 
 (x) “Other Securities” means (i) those options and
warrants of the Company issued prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the shares of Common Stock issuable on exercise of such options and warrants, provided such options and warrants are not amended after the
Issuance Date of this Warrant and (iii) the shares of Common Stock issuable upon exercise of this Warrant. 
  
 (xi) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency thereof. 
  
 (xii) “Principal Market” means the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, whichever is at the time the principal trading exchange
or market for such security, or the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg or, if no bid or sale information is reported for such security by Bloomberg, then the average of the bid prices
of each of the market makers for such security as reported in the “pink sheets” by the National Quotation Bureau, Inc. 
  
 (xiii) “Securities Act” means the Securities Act of 1933, as amended. 
  
 (xiv) “Warrant” means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.

  
 (xv) “Warrant Exercise Price” shall be $0.07
or as subsequently adjusted as provided in Section 8 hereof. 
  

 3 

 (xvi) “Warrant Shares” means the shares of Common Stock issuable at any time upon
exercise of this Warrant. 
  
  
 (c) Other Definitional Provisions. 
  
 (i) Except as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors and
(B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same may have been or may be amended or supplemented from time to time. 
  
 (ii) When used in this Warrant, the words “herein”,
“hereof”, and “hereunder” and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section”, “Schedule”,
and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to, this Warrant unless otherwise specified. 
  
 (iii) Whenever the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural, and vice
versa. 
  
 Section 2. Exercise of Warrant. 

 
 (a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing with the first day after the date
hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the “Exercise Notice”), of such
holder’s election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, payment to the Company of an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being
purchased, multiplied by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the “Aggregate Exercise Price”) in
cash or wire transfer of immediately available funds and the surrender of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) to a common carrier for overnight delivery to the
Company as soon as practicable following such date (“Cash Basis”) or (ii) if an Event of Default has occurred, by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire
transfer, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (the “Cashless Exercise”): 
  

					
	 Net Number
	 	=	 	(A x B) – (A x C)
	 	 	 	 	              B

  
 For purposes of the
foregoing formula: 
  
 A = the total number of Warrant Shares
with respect to which this Warrant is then being exercised. 
  

 4 

 B = the Closing Bid Price of the Common Stock on the date of exercise of the Warrant. 
  
 C = the Warrant Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise. 
  
 In the event of any
exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before the tenth (10th) Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or
destruction) and the receipt of the representations of the holder specified in Section 6 hereof, if requested by the Company (the “Exercise Delivery Documents”), and if the Common Stock is DTC eligible, credit such aggregate
number of shares of Common Stock to which the holder shall be entitled to the holder’s or its designee’s balance account with The Depository Trust Company; provided, however, if the holder who submitted the Exercise Notice requested
physical delivery of any or all of the Warrant Shares, or, if the Common Stock is not DTC eligible then the Company shall, on or before the fifth (5th) Business Day following receipt of the Exercise Delivery Documents, issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a certificate,
registered in the name of the holder, for the number of shares of Common Stock to which the holder shall be entitled pursuant to such request. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (i) or
(ii) above the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised. In the case of a dispute as to the determination
of the Warrant Exercise Price, the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the holder the number of Warrant Shares that is not disputed and shall submit the disputed determinations
or arithmetic calculations to the holder via facsimile within one (1) Business Day of receipt of the holder’s Exercise Notice. 
  
 (b) If the holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of the Warrant Shares
within one (1) day of such disputed determination or arithmetic calculation being submitted to the holder, then the Company shall immediately submit via facsimile (i) the disputed determination of the Warrant Exercise Price or the Closing
Bid Price to an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its independent, outside accountant. The Company shall cause the investment banking firm or the accountant, as
the case may be, to perform the determinations or calculations and notify the Company and the holder of the results no later than forty-eight (48) hours from the time it receives the disputed determinations or calculations. Such investment
banking firm’s or accountant’s determination or calculation, as the case may be, shall be deemed conclusive absent manifest error. 
  
 (c) Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in
no event later than five (5) Business Days after any exercise and at its own expense, issue a new Warrant identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised. 
  

 5 

 (d) No fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather
the number of Warrant Shares issued upon such exercise of this Warrant shall be rounded up or down to the nearest whole number. 
  
 (e) If the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the holder within ten (10) days of receipt of the
Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the holder is entitled or to credit the holder’s balance account with The Depository Trust Company for such number of Warrant Shares to which the holder is
entitled upon the holder’s exercise of this Warrant, the Company shall, in addition to any other remedies under this Warrant or the Placement Agent Agreement or otherwise available to such holder, pay as additional damages in cash to such
holder on each day the issuance of such certificate for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of Warrant Shares not issued to the holder on a timely basis and to which the
holder is entitled, and (B) the Closing Bid Price of the Common Stock for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the holder without violating this Section 2.

  
 (f) If within ten (10) days after the Company’s
receipt of the Exercise Delivery Documents, the Company fails to deliver a new Warrant to the holder for the number of Warrant Shares to which such holder is entitled pursuant to Section 2 hereof, then, in addition to any other available
remedies under this Warrant or the Placement Agent Agreement, or otherwise available to such holder, the Company shall pay as additional damages in cash to such holder on each day after such tenth (10th) day that such delivery of such new Warrant is not timely effected in an amount equal to 0.25% of the product of (A) the number of Warrant Shares
represented by the portion of this Warrant which is not being exercised and (B) the Closing Bid Price of the Common Stock for the trading day immediately preceding the last possible date which the Company could have issued such Warrant to the
holder without violating this Section 2. 
  
 Section 3.
Covenants as to Common Stock. The Company hereby covenants and agrees as follows: 
  
 (a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued. 
  
 (b) All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance,
be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. 
  
 (c) During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at
least one hundred percent (100%) of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the
applicable Warrant Exercise Price. If at any time the Company does not have a sufficient number of shares of Common Stock authorized and available, then the Company shall call and hold a special meeting of its stockholders within sixty (60)
days of that time for the sole purpose of increasing the number of authorized shares of Common Stock. 
  

 6 

 (d) If at any time after the date hereof the Company shall file a registration statement, the Company
shall include the Warrant Shares issuable to the holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Warrant Shares from time to time issuable upon the
exercise of this Warrant; and the Company shall so list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of the same class shall be listed on such national securities exchange or automated quotation system. 
  
 (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying
out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and
(ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. 
  
 (f) This Warrant will be binding upon any entity succeeding to the Company by
merger, consolidation or acquisition of all or substantially all of the Company’s assets. 
  
 Section 4. Taxes. The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

  
 Section 5. Warrant Holder Not Deemed a
Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he
or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or
otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of the same
notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. 
  

 7 

 Section 6. Representations of Holder. The holder of this Warrant, by the acceptance hereof,
represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except
pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and
reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents, by acceptance
hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an “Accredited
Investor”). Upon exercise of this Warrant the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the holder’s own
account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations because they would be factually
incorrect, it shall be a condition to such holder’s exercise of this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon
exercise of this Warrant shall not violate any United States or state securities laws. 
  
 Section 7. Ownership and Transfer. 
  
 (a) The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant. 
  
 Section 8. Adjustment of Warrant Exercise Price and Number of Shares. The Warrant Exercise Price and the number
of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows: 
  
 (a) Adjustment of Warrant Exercise Price and Number of Shares upon Issuance of Common Stock. If and whenever on or after the Issuance Date of this
Warrant, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than (i) Excluded Securities and (ii) shares of Common Stock which are issued or deemed to have been issued by the Company in
connection with an Approved Stock Plan or upon exercise or conversion of the Other Securities) for a consideration per share less than a price (the “Applicable Price”) equal to the Warrant Exercise Price in effect immediately prior
to such issuance or sale, then immediately after such issue or sale the Warrant Exercise Price then in effect shall be reduced to an amount equal to such consideration per share. Upon each such adjustment of the Warrant Exercise Price hereunder, the
number of Warrant Shares issuable upon exercise of this Warrant shall be adjusted to the number of shares determined by multiplying the Warrant Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Warrant Exercise Price resulting from such adjustment. 
  

 8 

 (b) Effect on Warrant Exercise Price of Certain Events. For purposes of determining the adjusted
Warrant Exercise Price under Section 8(a) above, the following shall be applicable: 
  
 (i) Issuance of Options. If after the date hereof, the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion or exchange of any convertible securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by
the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon
conversion or exchange of such Convertible Securities shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the
Option, upon exercise of the Option or upon conversion or exchange of any convertible security issuable upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock or
of such convertible securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange of such convertible securities. 
  
 (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any convertible securities and
the lowest price per share for which one share of Common Stock is issuable upon the conversion or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the issuance or sale of such convertible securities for such price per share. For the purposes of this Section 8(b)(ii), the lowest price per share for which one share of Common Stock is issuable upon such
conversion or exchange shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the convertible security and upon
conversion or exchange of such convertible security. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such convertible securities, and if any such issue or
sale of such convertible securities is made upon exercise of any Options for which adjustment of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b), no further adjustment of the Warrant
Exercise Price shall be made by reason of such issue or sale. 
  
 (iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect at the time of such change shall be adjusted to the Warrant Exercise Price which would have been in
effect at such time had such Options or convertible 
  

 9 

 securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold and the number of Warrant Shares issuable upon exercise of this Warrant shall be correspondingly readjusted. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible
security that was outstanding as of the Issuance Date of this Warrant are changed in the manner described in the immediately preceding sentence, then such Option or convertible security and the Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall be made if such adjustment would result in an increase of the Warrant Exercise Price then in effect.

  
 (c) Effect on Warrant Exercise Price of Certain Events.
For purposes of determining the adjusted Warrant Exercise Price under Sections 8(a) and 8(b), the following shall be applicable: 
  
 (i) Calculation of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed to have been issued
or sold for cash, the consideration received therefore will be deemed to be the net amount received by the Company therefore. If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration received by the Company will be the market price
of such securities on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefore will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or convertible securities, as the case may be. The fair
value of any consideration other than cash or securities will be determined jointly by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five
(5) Business Days after the tenth (10th) day following the Valuation Event by an independent, reputable
appraiser jointly selected by the Company and the holders of Warrants representing at least two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then outstanding. The determination of such appraiser shall be final and
binding upon all parties and the fees and expenses of such appraiser shall be borne jointly by the Company and the holders of Warrants. 
  
 (ii) Integrated Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $.01. 
  
 (iii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock. 
  

 10 

 (iv) Record Date. If the Company takes a record of the holders of Common Stock for the purpose of
entitling them (1) to receive a dividend or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase Common Stock, Options or convertible securities, then such record date will be
deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or
purchase, as the case may be. 
  
 (d) Adjustment of Warrant
Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this
Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, any Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares issuable upon exercise of this Warrant will be proportionately decreased. Any adjustment
under this Section 8(d) shall become effective at the close of business on the date the subdivision or combination becomes effective. 
  
 (e) Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case: 
  
 (i) any Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the
Closing Sale Price of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and
(B) the denominator shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date; and 
  
 (ii) either (A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the number
of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in
the immediately preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on a national securities exchange or a national automated quotation system, then the holder of this
Warrant shall receive an additional warrant to purchase Common Stock, the terms of which shall 
  

 11 

 be identical to those of this Warrant, except that such warrant shall be exercisable into the amount of the assets that
would have been payable to the holder of this Warrant pursuant to the Distribution had the holder exercised this Warrant immediately prior to such record date and with an exercise price equal to the amount by which the exercise price of this Warrant
was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i). 
  
 (f) Certain Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the rights of the holders of the Warrants; provided, except as set forth in section 8(d), that no such adjustment pursuant to this
Section 8(f) will increase the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant to this Section 8. 
  
 (g) Notices. 
  
 (i) Immediately upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant, setting
forth in reasonable detail, and certifying, the calculation of such adjustment. 
  
 (ii) The Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic Change (as defined below), dissolution or liquidation,
provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to such holder. 
  
 (iii) The Company will also give written notice to the holder of this Warrant at least ten (10) days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to such holder. 
  
 Section 9. Purchase Rights; Reorganization, Reclassification, Consolidation, Merger or Sale. 
  
 (a) In addition to any adjustments pursuant to Section 8 above, if at
any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the holder of this Warrant will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of
Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 
  

 12 

 (b) Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets to another Person or other transaction in each case which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially all of the Company’s assets to an
acquiring Person or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the
“Acquiring Entity”) a written agreement (in form and substance satisfactory to the holders of Warrants representing at least two-thirds (iii) of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to
deliver to each holder of Warrants in exchange for such Warrants, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and satisfactory to the holders of the Warrants
(including an adjusted warrant exercise price equal to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable upon
exercise of the Warrants without regard to any limitations on exercise, if the value so reflected is less than any Applicable Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to the holders of Warrants representing a majority of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure that each of
the holders of the Warrants will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore issuable and receivable upon the exercise of such holder’s
Warrants (without regard to any limitations on exercise), such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of Warrant Shares which would have
been issuable and receivable upon the exercise of such holder’s Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on the exercisability of this Warrant). 
  
 Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed. 
  
 Section 11.
Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of receipt is received by the sending party transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 
  

 13 

					
	 If to Cornell:
	  	Cornell Capital Partners, LP
	 	  	101 Hudson Street – Suite 3700
	 	  	Jersey City, NJ 07302
	 	  	Attention:	  	Mark A. Angelo
	 	  	Telephone:	  	(201) 985-8300
	 	  	Facsimile:	  	(201) 985-8266
		
	 With Copy to:
	  	David Gonzalez, Esq.
	 	  	101 Hudson Street – Suite 3700
	 	  	Jersey City, NJ 07302
	 	  	Telephone:	  	(201) 985-8300
	 	  	Facsimile:	  	(201) 985-8266
		
	 If to the Company, to:
	  	i2 Telecom International, Inc.
	 	  	1200 Abernathy Road, Suite 1800
	 	  	Atlanta, Georgia 30328
	 	  	Attention: Paul Arena
	 	  	Telephone: (770) 512-7174
	 	  	Facsimile: (770) 884-9427
		
	 With a copy to:
	  	Richardson & Patel, LLP
	 	  	10900 Wilshire Boulevard, Suite 500
	 	  	Los Angeles, California 90024
	 	  	Attention: Peter Hogan, Esq.
	 	  	Telephone: (310) 208-1182
	 	  	Facsimile: (310) 208-1154

  
 If to a holder of this Warrant, to it
at the address and facsimile number set forth on Exhibit C hereto, with copies to such holder’s representatives as set forth on Exhibit C, or at such other address and facsimile as shall be delivered to the Company upon
the issuance or transfer of this Warrant. Each party shall provide five days’ prior written notice to the other party of any change in address or facsimile number. Written confirmation of receipt (A) given by the recipient of such notice,
consent, facsimile, waiver or other communication, (or (B) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above, respectively. 
  
 Section 12. Date. The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of no effect after the close of business on the Expiration Date, except
that notwithstanding any other provisions hereof, the provisions of Section 8(b) shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise of this Warrant. 
  

 14 

 Section 13. Amendment and Waiver. Except as otherwise provided herein, the provisions of the
Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the holders of Warrants representing at least
two-thirds of the Warrant Shares issuable upon exercise of the Warrants then outstanding; provided that, except for Section 8(d), no such action may increase the Warrant Exercise Price or decrease the number of shares or class of stock
obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant. 
  
 Section 14. Descriptive Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted
for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of Washington shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New
Jersey or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New Jersey. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
Hudson County and the United States District Court for the District of New Jersey, for the adjudication of any dispute hereunder or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. 
  
 Section 15. Waiver of
Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER
DOCUMENTS ASSOCIATED WITH THIS TRANSACTION. 
  
 REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
  

 15 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of the date first set
forth above. 
  

			
	i2 TELECOM INTERNATIONAL, INC.
		
	By:	 	  

	Name:	 	Paul Arena
	Title:	 	Chief Executive Officer

  

 16 

 EXHIBIT A TO WARRANT 
  
 EXERCISE NOTICE 
  
 TO BE EXECUTED 
 BY THE REGISTERED
HOLDER TO EXERCISE THIS WARRANT 
  
 I2 TELECOM
INTERNATIONAL, INC. 
  
 The undersigned holder hereby
exercises the right to purchase              of the shares of Common Stock (“Warrant Shares”) of i2 Telecom International, Inc. (the “Company”),
evidenced by the attached Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 
  
 Specify Method of exercise by check mark: 
  
 1.              Cash Exercise 
  
 (a) Payment of Warrant Exercise Price. The holder shall pay the
Aggregate Exercise Price of $             to the Company in accordance with the terms of the Warrant. 
  
 (b) Delivery of Warrant Shares. The Company shall deliver to the holder
            Warrant Shares in accordance with the terms of the Warrant. 
  
 2.              Cashless Exercise 
  
 (a) Payment of Warrant Exercise Price. In lieu of making payment of
the Aggregate Exercise Price, the holder elects to receive upon such exercise the Net Number of shares of Common Stock determined in accordance with the terms of the Warrant. 
  
 (b) Delivery of Warrant Shares. The Company shall deliver to the holder
            Warrant Shares in accordance with the terms of the Warrant. 
  

	Date:	                         ,
             

  

	Name	of Registered Holder 

  

			
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

 EXHIBIT B TO WARRANT 
  
 FORM OF WARRANT POWER 
  

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
            , Federal Identification No.             , a warrant to purchase
             shares of the capital stock of i2 Telecom International, Inc. represented by warrant certificate
no.             , standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint
            , attorney to transfer the warrants of said corporation, with full power of substitution in the premises. 
  

							
	Dated:	 	  

	 	  

				
	 	 	 	 	By:	 	  

	 	 	 	 	Name:	 	  

	 	 	 	 	Title:	 	  

  

 B-1

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