Document:

EXHIBIT 10.2

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO VOIP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                                Right to Purchase 625,000 shares of Common Stock
                        of VoIP, Inc. (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

                                                      Issue Date: August 3, 2005

      VOIP, INC., a corporation organized under the laws of the State of Texas
(the "Company"), hereby certifies that, for value received, WQN, Inc., 14911
Quorum Drive, Suite 140, Dallas, Texas 75201, or its assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company at
any time after the Issue Date until July 27, 2006 (the "Expiration Date"), up to
625,000 fully paid and nonassessable shares of Common Stock at a per share
purchase price of $1.37; provided, however, this Warrant shall automatically
terminate and be of no further force and effect in the event the transactions
(the "Transactions") contemplated by the Asset Purchase Agreement (as defined
below) are terminated pursuant to Section 2.5 of that certain asset purchase
agreement (the "Asset Purchase Agreement"), of even date herewith, entered into
by the Company and Holder. The aforedescribed purchase price per share, as
adjusted from time to time as herein provided, is referred to herein as the
"Purchase Price." The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein. The Company may
reduce the Purchase Price without the consent of the Holder. Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the
Asset Purchase Agreement.

      As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

      (a) The term "Company" shall include VoIP, Inc. and any corporation which
shall succeed or assume the obligations of VoIP, Inc. hereunder.

      (b) The term "Common Stock" includes (a) the Company's common stock, $.001
par value per share (the "Common Stock"), as authorized on the date hereof, and
(b) any other securities into which or for which the Common Stock may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.

      (c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 or otherwise.

<PAGE>

      (d) The term "Warrant Shares" shall mean the Common Stock issuable upon
exercise of this Warrant.

      1. Exercise of Warrant.

      1.1. Number of Shares Issuable upon Exercise. From and after the date
hereof, through and including the Expiration Date, the Holder hereof shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of Subsection 1.2 or upon exercise of this Warrant in part in
accordance with Subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.

      1.2. Full Exercise. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the "Subscription Form") duly executed by such
Holder and surrender of the original Warrant within four (4) days of exercise,
to the Company at its principal office or at the office of its Warrant Agent (as
hereinafter defined), accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in effect.

      1.3. Partial Exercise. This Warrant may be exercised in part (but not for
a fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
whole shares of Common Stock designated by the Holder in the Subscription Form
by (b) the Purchase Price then in effect. On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.

      1.4. Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

      1.5. Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within four (4) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

                                       2
<PAGE>

      1.6. Cashless Exercise.

            (a) At the option of the Holder, exercise of this Warrant may be
      made in whole or part by delivery of Common Stock issuable upon exercise
      of the Warrants in accordance with Section (b) below for the number of
      Common Stock specified in such form (as such exercise number shall be
      adjusted to reflect any adjustment in the total number of shares of Common
      Stock issuable to the holder per the terms of this Warrant) and the holder
      shall thereupon be entitled to receive the number of duly authorized,
      validly issued, fully-paid and non-assessable shares of Common Stock
      determined as provided herein.

            (b) If the Fair Market Value of one share of Common Stock is greater
      than the Purchase Price (at the date of calculation as set forth below),
      in lieu of exercising this Warrant for cash, the holder may elect to
      receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at
      the principal office of the Company together with the properly endorsed
      Subscription Form in which event the Company shall issue to the holder a
      number of shares of Common Stock computed using the following formula:

                 X=Y (A-B)
                   -------
                      A

                 Where  X=   the number of shares of Common Stock to be issued
                             to the holder

                 Y=       the number of shares of Common Stock
                          purchasable under the Warrant or, if only a
                          portion of the Warrant is being exercised,
                          the portion of the Warrant being exercised
                          (at the date of such calculation)

                 A=       the Fair Market Value of one share of the
                          Company's Common Stock (at the date of such
                          calculation)

                 B=       Purchase Price (as adjusted to the date of such
                          calculation)

                                       3
<PAGE>

            (c) "Fair Market Value" shall mean the closing or last sale price,
      respectively, reported for the last business day immediately preceding the
      date of exercise on the Company's principal trading market.

      2. Adjustment for Certain Corporate Events.

      2.1. Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 2.3 and Section 3.

      2.2. Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrants after the effective date of
such dissolution pursuant to this Section 2 to a bank or trust company (a
"Trustee") having its principal office in New York, NY, as trustee for the
Holder of the Warrants.

      2.3. Adjustments to Purchase Price for Diluting Issues.

            (a) Special Definitions. For purposes of this Section 2.3, the
      following definitions shall apply:

                  (i) "Option" shall mean rights, options or warrants to
            subscribe for, purchase or otherwise acquire Common Stock or
            Convertible Securities (as defined below), excluding rights or
            options granted to employees, directors or consultants of the
            Company pursuant to an option plan adopted by the Board of Directors
            of the Company to acquire up to that number of shares of Common
            Stock as is equal to fifteen (15%) percent of the Common Stock
            outstanding (provided that, for purposes of this Subsection
            2.3(a)(i), all shares of Common Stock issuable upon (A) exercise of
            options granted or available for grant under plans approved by the
            Board of Directors, (B) conversion of shares of Preferred Stock, or
            (C) conversion of Preferred Stock issuable upon conversion or
            exchange of any Convertible Security, shall be deemed to be
            outstanding).

                                       4
<PAGE>

                  (ii) "Original Issue Date" shall mean the date of this
            Warrant.

                  (iii) "Convertible Securities" shall mean any evidences of
            indebtedness, shares or other securities directly or indirectly
            convertible into or exchangeable for Common Stock.

                  (iv) "Additional Shares of Common Stock" shall mean all shares
            of Common Stock issued (or, pursuant to Section 2.3(c) below, deemed
            to be issued) by the Company after the Original Issue Date and other
            than shares of Common Stock issued or issuable:

                  (A)   as a dividend or distribution on the Preferred Stock;

                  (B)   by reason of a dividend, stock split, split-up or other
                        distribution on shares of Common Stock excluded from the
                        definition of Additional Shares of Common Stock by the
                        foregoing clause (A);

                  (C)   upon the exercise of options excluded from the
                        definition of "Option" in Section 2.3(a)(i); or

                  (D)   upon conversion of shares of the Preferred Stock.

                        (v) "Rights to Acquire Common Stock" (or "Rights") shall
                  mean all rights issued by the Company to acquire common stock
                  whatever by exercise of a warrant, option or similar call or
                  conversion of any existing instruments, in either case for
                  consideration fixed, in amount or by formula, as of the date
                  of issuance.

                  (b) No Adjustment of Conversion Rate. No adjustment in the
            number of shares of Common Stock into which this Warrant is
            exercisable shall be made, by adjustment in the Purchase Price
            thereof unless the consideration per share (determined pursuant to
            Section 2.3(e) below for an Additional Share of Common Stock issued
            or deemed to be issued by the Company is less than the applicable
            Purchase Price in effect on the date of, and immediately prior to,
            the issue of such additional shares.

                  (c) Issue of Securities Deemed Issue of Additional Shares of
            Common Stock. If the Company at any time or from time to time after
            the Original Issue Date shall issue any Options or Convertible
            Securities or other Rights to Acquire Common Stock, then the maximum
            number of shares of Common Stock (as set forth in the instrument
            relating thereto without regard to any provision contained therein
            for a subsequent adjustment of such number) issuable upon the
            exercise of such Options, Rights or, in the case of Convertible
            Securities, the conversion or exchange of such Convertible
            Securities, shall be deemed to be Additional Shares of Common Stock
            issued as of the time of such issue, provided that Additional Shares
            of Common Stock shall not be deemed to have been issued unless the
            consideration per share (determined pursuant to Section 2.3(e)
            hereof) of such Additional Shares of Common Stock would be less than
            the applicable Purchase Price in effect on the date of and
            immediately prior to such issue, or such record date, as the case
            may be, and provided further that in any such case in which
            Additional Shares of Common Stock are deemed to be issued:

                                       5
<PAGE>

                  (i) No further adjustment in the Purchase Price shall be made
            upon the subsequent issue of shares of Common Stock upon the
            exercise of such Rights or conversion or exchange of such
            Convertible Securities;

                  (ii) Upon the expiration or termination of any unexercised
            Option or Right, the Purchase Price shall not be readjusted, but the
            Additional Shares of Common Stock deemed issued as the result of the
            original issue of such Option or Right shall not be deemed issued
            for the purposes of any subsequent adjustment of the Purchase Price;
            and

                  (iii) In the event of any change in the number of shares of
            Common Stock issuable upon the exercise, conversion or exchange of
            any Option, Right or Convertible Security, including, but not
            limited to, a change resulting from the anti-dilution provisions
            thereof, the Purchase Price then in effect shall forthwith be
            readjusted to such Purchase Price as would have obtained had the
            adjustment that was made upon the issuance of such Option, Right or
            Convertible Security not exercised or converted prior to such change
            been made upon the basis of such change, but no further adjustment
            shall be made for the actual issuance of Common Stock upon the
            exercise or conversion of any such Option, Right or Convertible
            Security.

            (d) Adjustment of Purchase Price upon Issuance of Additional Shares
      of Common Stock. If the Company shall at any time after the Original Issue
      Date issue Additional Shares of Common Stock (including Additional Shares
      of Common Stock deemed to be issued pursuant to Section 2.3(c), but
      excluding shares issued as a dividend or distribution or upon a stock
      split or combination as provided in Section 3), without consideration or
      for a consideration per share less than the applicable Purchase Price in
      effect on the date of and immediately prior to such issue, then and in
      such event, such Purchase Price shall be reduced, concurrently with such
      issue to a price (calculated to the nearest cent) determined by
      multiplying such Purchase Price by a fraction, (i) the numerator of which
      shall be (A) the number of shares of Common Stock outstanding immediately
      after such issue plus (B) the number of shares of Common Stock which the
      aggregate consideration received by the Company for the total number of
      Additional Shares of Common Stock so issued would purchase at such
      Conversion Rate; and (ii) the denominator of which shall be the number of
      shares of Common Stock outstanding immediately after such issue.

            (e) Determination of Consideration. For purposes of this Section
      2.3(e), the consideration received by the Company for the issue of any
      Additional Shares of Common Stock shall be computed as follows:

                                       6
<PAGE>

                  (i) Cash and Property: Such consideration shall:

                        (A) insofar as it consists of cash, be computed at the
                  aggregate of cash received by the Company, excluding amounts
                  paid or payable for accrued interest or accrued dividends;

                        (B) insofar as it consists of property other than cash,
                  be computed at the fair market value thereof at the time of
                  such issue, as determined in good faith by the Board of
                  Directors; and

                        (C) in the event Additional Shares of Common Stock are
                  issued together with other shares or securities or other
                  assets of the Company for consideration which covers both, be
                  the proportion of such consideration so received, computed as
                  provided in clauses (A) and (B) above, as determined in good
                  faith by the Board of Directors.

                  (ii) Options, Rights and Convertible Securities. The
            consideration per share received by the Company for Additional
            Shares of Common Stock deemed to have been issued pursuant to
            Section 2.3(c), relating to Options, Rights and Convertible
            Securities, shall be determined by dividing,

                        (A) the total amount, if any, received or receivable by
                  the Company as consideration for the issue of such Options,
                  Rights or Convertible Securities, plus the minimum aggregate
                  amount of additional consideration (as set forth in the
                  instruments relating thereto, without regard to any provision
                  contained therein for a subsequent adjustment of such
                  consideration) payable to the Company upon the exercise of
                  such Options, Rights or the conversion or exchange of such
                  Convertible Securities, by

                        (B) the maximum number of shares of Common Stock (as set
                  forth in the instruments relating thereto, without regard to
                  any provision contained therein for a subsequent adjustment of
                  such number) issuable upon the exercise of such Options or the
                  conversion or exchange of such Convertible Securities.

      3. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4.
The number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 3) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 3) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.

                                       7
<PAGE>

      4. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company, at its expense, will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant.

      5. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

      6. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered Holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the "Transferor Endorsement Form") and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at Transferor's expense but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant so
surrendered by the Transferor. No such transfers shall result in a public
distribution of the Warrant.

      7. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

                                       8
<PAGE>

      8. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

      9. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (a) personally served, (b) deposited in the
mail, registered or certified, return receipt requested, postage prepaid, (c)
delivered by reputable air courier service with charges prepaid, or (d)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (x) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (y) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company to: VoIP, Inc., 12330 SW53
Street, Suite 712, Fort Lauderdale, Florida 33330, Attn: Steven Ivester,
President and CEO, telecopier: (954) 434-2877, with a copy by telecopier only
to: Ronald L. Brown, Andrews Kurth LLP, 1717 Main Street, Suite 3700, Dallas,
Texas 75201, telecopier: (214) 659-4819, (ii) if to the Holder, to the address
and telecopier number listed on the first paragraph of this Warrant.

      10. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of Texas. Any dispute relating to this Warrant shall be
adjudicated in Dallas County in the State of Texas. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any
of the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.

                                       9
<PAGE>

      IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

                                        VOIP, INC.

                                        By: /s/ Steven Ivester
                                           -------------------------------------
                                           Name: Steven Ivester
                                                --------------------------------
                                           Title: Chief Executive Officer
                                                 -------------------------------

Witness:

/s/ Osvaldo Pitters
----------------------------------

<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (TO BE SIGNED ONLY ON EXERCISE OF WARRANT)

TO: VOIP, INC.

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):

___ ________ shares of the Common Stock covered by such Warrant; or

___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):

___ $__________ in lawful money of the United States; and/or

___ the cancellation of such portion of the attached Warrant as is exercisable
for a total of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation); and/or

___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to ___________________________________________ whose
address is _____________________________________________________________________
________________________________________________________________________________
_________________________.

[NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED ON THE DATE OF EXERCISE:
LESS THAN FIVE PERCENT (5%) OF THE OUTSTANDING COMMON STOCK OF VOIP, INC.]

                                      A-1
<PAGE>

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.

Dated:___________________               ________________________________________
                                        (Signature must conform to name of
                                        holder as specified on the face of the
                                        Warrant)

                                        ________________________________________

                                        ________________________________________
                                        (Address)

                                      A-2
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (TO BE SIGNED ONLY ON TRANSFER OF WARRANT)

         For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of VOIP, INC. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of VOIP, INC. with
full power of substitution in the premises.

--------------------------------------------------------------------------------
Transferees              Percentage Transferred            Number Transferred
--------------------------------------------------------------------------------

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Dated:______________, ____              ________________________________________
                                        (Signature must conform to name of
                                        holder as specified on the face of the
                                        warrant)

Signed in the presence of:

___________________________________

___________________________________     ________________________________________

                                        ________________________________________
                                        (Address)

ACCEPTED AND AGREED:
[TRANSFEREE]

___________________________________

___________________________________     ________________________________________

                                        ________________________________________
                                        (Address)

                                      B-1EXHIBIT 10.3

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made
effective as of August 3, 2005, by and between VOIP, INC. (the "Company") and
WQN, INC. (the "Secured Party").

      WHEREAS, the Company shall issue to the Secured Party a secured promissory
note in the principal amount of Three Million Seven Hundred Thousand
($3,700,000) (the "Purchase Note") and that certain promissory note, in the
principal amount of $1,000,000 (the "Bridge Note," together with the Purchase
Note, the "Notes"); and

      WHEREAS, to induce the Secured Party to enter into the Notes, the Company
hereby grants to the Secured Party a security interest in and to all of the
assets of the Company until the satisfaction of the Obligations (as defined
herein).

      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 Notes and that certain Asset Purchase Agreement, by and
between the Company and the Secured Party, dated the date hereof (the "Asset
Purchase Agreement"), and any other amounts now or hereafter owed to the Secured
Party by the Company thereunder or hereunder (collectively, the "Obligations").
This Agreement, the Notes and the Asset Purchase Agreement are collectively
referred to herein as the "Transaction Documents."

<PAGE>

                                   ARTICLE 2.

                 PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL
                      AND TERMINATION OF SECURITY INTEREST
                      ------------------------------------

      Section 2.1 Pledged Property.

            (a) The Company hereby pledges to the Secured Party, and creates in
the Secured Party for its benefit, a security interest in and to all of the
assets of the Company and the products thereof and the proceeds of all such
items (collectively, the "Pledged Property") for such time until the Obligations
are paid in full.

            (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 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
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 defined in each of the Notes)
under either of the Notes 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.

            (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

<PAGE>

                  (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 Notes as described herein.

      Section 2.3 Subordination. Secured Party acknowledges and agrees that its
security interest in the Pledged Property shall be subordinate to securities
interests in existence as of the date hereof, including the security interests
in the Pledged Property in favor of Cedar Boulevard Lease Funding, LLC
("Cedar"), and agrees that Secured Party shall subordinate its security interest
in the Pledged Property, to the security interests of any future Senior Creditor
(as defined below) to the extent such security interests secure Senior Debt (as
defined below. For purposes of this Agreement (i) "Senior Creditors" shall mean
a bank, insurance company, pension fund, or accredited investor, or a syndicate
of such institutional lenders that provides Senior Debt financing to the Company
and its subsidiaries, including any party refinancing the obligations of the
Company and its subsidiaries to Cedar; provided, that Senior Creditor shall not
include any officer, director, or insider of the Company or any of its
subsidiaries, or any affiliate of the foregoing, except upon the express written
consent of Secured Party, (ii) "Senior Debt" shall mean any and all indebtedness
and obligations for borrowed money (including principal, premium (if any),
interest, fees, charges, expenses, costs, professional fees and expenses, and
reimbursement obligations) at any time owing by the Company to Senior Creditor
under the Senior Loan Documents (as defined below), including such amounts as
may accrue or be incurred before or after default or workout or the commencement
of any liquidation, dissolution, bankruptcy, receivership or reorganization by
or against Borrower and any obligations of the Company and its subsidiaries
incurred in connection with refinancing the obligations to Cedar; provided, that
Senior Debt shall not include debt exceeding ten million and No/100 Dollars
($10,000,000.00) outstanding at any one time, and (iii) "Senior Loan Documents"
means a loan agreement between Borrower and Senior Creditor and any other
agreement, security agreement, document, promissory note, UCC financing
statement, or instrument executed by Borrower in favor of Senior Creditor
pursuant to or in connection with the Senior Debt, as the same may from time to
time be amended, modified, supplemented, extended, renewed, restated or
replaced.

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE

      Section 3.1 Secured Party Appointed Attorney-In-Fact.

      Upon the occurrence of an Event of Default, 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.

<PAGE>

      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 7.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES

      The Company represents and warrants to the Secured Party that, in addition
to the representations and warranties in the Transaction Documents, the Company
warrants and represents that it is the legal and beneficial owner of the Pledged
Property free and clear of any lien, security interest, option or other charge
or encumbrance except for the security interest created by this Agreement.

                                   ARTICLE 5.

                                DEFAULT; REMEDIES

      Section 5.1 Default and Remedies.

            (a) If an Event of Default described in Section 3.1 of the Purchase
Note or Section 6(a) of the Bridge Note 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 and the Secured Party can
immediately exercise any of its rights and remedies pursuant to the Transaction
Documents or under any applicable law. If an Event of Default described in
Sections 3.2. 3.3 or 3.4 of the Purchase Note or under Section 6(c) of the
Bridge Note occurs and is continuing for the period set forth therein, then the
Obligations shall automatically become immediately due and payable without
declaration or other act on the part of the Secured Party and the Secured Party
can immediately exercise any of its rights and remedies pursuant to the
Transaction Documents and under any applicable law.

            (b) Upon the occurrence of an Event of Default, the Secured Party
shall be entitled to (i) receive all distributions with respect to the Pledged
Property, (ii) cause the Pledged Property to be transferred into the name of the
Secured Party or its nominee, (iii) dispose of the Pledged Property, (iv)
realize upon any and all rights in the Pledged Property then held by the Secured
Party, and (v) exercise any of its rights and remedies pursuant to the
Transaction Documents and any applicable law.

<PAGE>

      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), 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 determined by the Secured Party.

            (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 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) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

<PAGE>

            (a) 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

            (b) 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.

      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.

                               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, 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.

                                   ARTICLE 7.

                                  MISCELLANEOUS

      Section 7.1 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:

<PAGE>

      If to the Secured Party:      WQN, Inc.
                                    14911 Quorum Drive, Suite 140
                                    Dallas, TX 75254
                                    Attention:
                                    Telecopy No.:
                                    Telephone No.:

      with a copy to:

                                    Patton Boggs LLP
                                    2100 Ross Avenue  Suite 3000
                                    Dallas, Texas  75201
                                    Attention:  Charles Miller, Esq.
                                                --------------------
                                    Telecopy No.:  214-758-1550
                                    Telephone No.: 214-758-1500

      and if to the Company:        VoIP, Inc.
                                    12330 SW 53rd Street, Suite 712
                                    Fort Lauderdale, FL  33330
                                    Attention:  Steven Ivester
                                    Telephone:  (954) 434-2000
                                    Facsimile:  (954) 434-4454

      with a copy to:               Andrews Kurth LLP
                                    1717 Main Street, Suite 3700
                                    Dallas, TX  75201
                                    Attention:  Ronald L. Brown, Esq.
                                    Telephone:  (214) 659-4469
                                    Facsimile:  (214) 659-4819

      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.

      Section 7.2 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.

<PAGE>

      Section 7.3 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 7.4 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 7.5 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 7.6 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.

      Section 7.7 Applicable Law: Jurisdiction.

      This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Texas without regard to the principles of conflict of laws.
The parties further agree that any action between them shall be heard in Dallas
County, Texas.

<PAGE>

      Section 7.8 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 7.9 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.

      Section 7.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

                                   VOIP, INC.

                                   By:    /s/  Steven Ivester
                                      ---------------------------------------
                                   Name:  Steven Ivester
                                        -------------------------------------
                                   Title: Chief Executive Officer
                                         ------------------------------------

                                   WQN, INC.

                                   By:    /s/ B. Michael Adler
                                      ---------------------------------------
                                   Name:  B. Michael Adler
                                        -------------------------------------
                                   Title: CEO
                                         ------------------------------------

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