STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement
(“Agreement”) made this date by and between CHINA VOICE HOLDING CORP., a Nevada
corporation (“CHVC”) and FLINT TELECOM GROUP, INC., a Nevada corporation
(“Purchaser”).
Whereas CHVC has agreed to sell and
Purchaser desires to purchase all of the issued and outstanding capital stock of
certain wholly owned subsidiaries of CHVC, (the “Subsidiaries”, whether one or
more) on the terms and conditions set forth in an Agreement and Plan of Merger
dated January 29, 2009 (“Merger Agreement”), and
Whereas CHVC desires to sell and
Purchaser desires to purchase 15,000,000 shares of common stock of CHVC
contemporaneously with the Merger Agreement,
Now, therefore, in consideration of the
mutual promises of the parties; in reliance on the representations, warranties,
covenants, and conditions contained in this Agreement; and for other good and
valuable consideration, the parties agree as follows:
ARTICLE
1: SALE
1.01 Sale of
Stock. CHVC agrees to sell, convey, transfer, assign, and
deliver to Purchaser 15,000,000 shares of CHVC common stock and Purchaser agrees
to purchase such stock (collectively, the “Stock”).
1.02 Consideration; Terms of
Sale. (a) In consideration of the sale and transfer of the
Stock and the representations, warranties, and covenants of CHVC set forth in
this Agreement, Purchaser shall deliver to CHVC the following consideration on
the Closing Date;
(b)
Purchaser shall pay $750,000 on or before February 27, 2009 and $750,000 on or
before April 30, 2009.
(c)
Purchaser shall deliver its promissory note to CHVC in the amount of $7,000,000
(“Note”) upon signing of the Merger Agreement. The Note shall not bear any
interest pre-default and shall be secured by 15,000,000 shares of CHVC common
stock and the guarantee of Purchaser. The Note shall be payable in three equal
installments on December 31, 2009, July 31, 2010, Xxxxxxxx 00,
0000,
(x) As
each payment is made on the Note, security will be reduced proportionally to the
amount of Note repaid. By way of example, when the first scheduled repayment is
made then security against the Note will be 10,000,000 shares of CHVC and so on
until all repayments are made. Buyer will be free to use the 5,000,000 shares
released on each payment date at its sole discretion.
(e) The
Note will bear interest at Eighteen percent (18%) per year for any period of
time when a payment is past due.
(f) Purchaser agrees that no
securities shall be sold in the public market
for twenty-four months after the Closing Date, without the
consent of CHVC. There will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in
substance:
“The
securities represented by this certificate are subject to restrictions on
transfer set forth in the Stock Purchase Agreement dated January 29, 2009, a
copy of which may be obtained from the Secretary of the Company. The
securities may not be sold or otherwise disposed of prior to January 29,
2011. This restriction is independent of and in addition to the other
restrictions on transfer noted hereon.”
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1.03 Closing. The
date of execution of the Merger Agreement shall be deemed the “Closing Date” of
this transaction.
ARTICLE
2: SELLER'S
REPRESENTATIONS AND WARRANTIES
CHVC hereby represents and warrants to
Purchaser that the following facts and circumstances are true and correct as of
the date of this Agreement:
2.01 Organization. CHVC
is duly organized, validly existing, and in good standing under the laws of its
state of incorporation. CHVC is qualified to do business in all
jurisdictions in which it does business and has all requisite power and
authority (corporate and, when applicable, government) to own, operate, and
carry on its businesses as now being conducted.
2.02 Authority. CHVC
has full power and authority to execute, deliver, and consummate this Agreement,
subject to the conditions to Closing set forth in this Agreement.
2.03 Representations. No
representation, warranty, or covenant made to Purchaser in this Agreement
contains or will contain any untrue statement of a material fact, or omits or
will omit a material fact necessary to make the statements contained in this
Agreement not misleading.
2.04 Broker. Neither
CHVC, nor any of its officers, directors, employees, or stockholders, has
retained, consented to, or authorized any broker, investment banker, or third
party to act on its behalf, directly or indirectly, as a broker or finder in
connection with the transactions contemplated by this Agreement.
2.05 Compliance with Securities
Laws. (a) Purchaser acknowledges that CHVC is relying upon the
accuracy and completeness of the statements and representations contained in
this section in complying with its obligations under the federal and state
securities laws. Purchaser acknowledges and represents
that:
(i)
Purchaser is in a financial position to hold the Shares,( the “Securities”) for
an indefinite period of time, is able to bear the economic risk of an investment
in the Securities and may withstand a complete loss of Purchaser’s investment in
the Securities;
(ii) The
Purchaser believes that it, either alone or together with the assistance of its
own professional advisor or advisors, has the knowledge and experience in
business and financial matters that make it capable of reading and interpreting
financial statements of and concerning CHVC and of evaluating the merits and
risks of an investment in the Securities;
(iii)
Purchaser has obtained, to the extent it deems necessary, its own personal
professional advice with respect to the risks inherent in an investment in the
Securities and to the suitability of an investment in the Securities in light of
its financial condition and investment needs;
(iv)
Purchaser understands that an investment in the Securities is highly speculative
but that it believes that an investment in the Securities is suitable based upon
Purchaser’s investment objectives and financial needs, and that it has adequate
means for providing for its current financial needs and contingencies and has no
need for liquidity of investment with respect to the Securities;
(v)
Purchaser acknowledges access to full and complete information regarding CHVC
and has utilized that access to Purchaser’s satisfaction for the purpose of
obtaining information concerning the named entities, an investment in the
Securities and the terms and conditions of this offering of the Securities, and
has either attended or been given reasonable opportunity to attend a meeting
with representatives of CHVC for the purpose of asking questions of, and
receiving answers from, these representatives concerning CHVC, an investment in
the Securities
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and the
terms and conditions of this offering of the Securities, and for the purpose of
obtaining any additional information to the extent reasonable available that is
necessary to verify the information provided;
(vi)
Purchaser recognizes that the Securities as an investment involve a high degree
of risk;
(vii)
Purchaser realizes that (A) the purchase of the Securities is a long-term
investment; (B) the Purchaser must bear the economic risk of investment for an
indefinite period of time because the Securities have not been registered under
the Securities Act of 1933, as amended, or the securities laws of any state,
and, therefore, cannot be sold unless they are subsequently registered under
these laws or exemptions from registrations are available; (C) there presently
is no public market for the Securities and Purchaser may not be able to
liquidate Purchaser's investment in the Securities in the event of an emergency
or to pledge the Securities as collateral for loans; and (D) the transferability
of the Securities is restricted, and (1) requires conformity with the
restrictions contained hereinbelow, and (2) will be further restricted by
legends placed on the certificates representing the Securities referring to the
applicable restrictions on transferability;
(b) Purchaser has been advised that the
Securities have not been registered under the Securities Act of 1933, as
amended, or applicable state securities laws, that the Securities are being
offered and sold pursuant to exemptions from the registration requirements of
these laws, and that the reliance of CHVC on these exemptions is predicated in
part on Purchaser’s representations contained in this
section. Purchaser represents and warrants that the Securities are
being purchased for its own account and for investment and without the intention
of reselling or redistributing the Securities, that Purchaser has not made any
agreement with any other person or entity regarding any of the Securities, and
that Purchaser’s financial condition is such that it is not likely that it will
be necessary for Purchaser to dispose of the Securities in the foreseeable
future. Purchaser is aware that, in the view of the Securities and
Exchange Commission, a purchase of the Securities with an intent to resell the
Securities by reason of any foreseeable specific contingency or anticipated
change in market values, or any change in the condition of Purchaser or its
business, or in connection with a contemplated liquidation or settlement of any
loan obtained for the acquisition of the Securities and for which the Securities
was pledged as security, would represent an intent that is inconsistent with the
representations set forth above. Purchaser further represents and
agrees that, if, contrary to Purchaser’s foregoing intentions, Purchaser later
should desire to dispose of or transfer any of the Securities in any manner,
Purchaser will not do so without first obtaining (A) an opinion of independent
counsel to the effect that the proposed disposition or transfer lawfully can be
made without registration of the Securities pursuant to the Securities Act of
1933 an then in effect and applicable state securities law, or (B) such
registration.
(c) Purchaser represents and warrants
that the Securities are being received by Purchaser in Purchaser’s own name
solely for Purchaser’s own beneficial interest, and not as nominee for, or on
behalf of, or for the beneficial interest of, or with the intention to transfer
to, any other person, trust or organization, except as specifically set forth
hereinbelow.
(d) Purchaser is informed of the
significance to CHVC of the foregoing representations, agreements and consents,
and they are made with the intention that CHVC may rely upon them and agrees to
indemnify CHVC, and its officers, directors and agents (the “Indemnified
Parties”) for any loss, claim or liability which any Indemnified Party might
incur as a result of reliance upon any fact misrepresented by Purchaser in this
section.
(e) Purchaser additionally represents
that the representations contained in this section have been duly authorized by
all necessary action on the part of Purchaser, has been duly executed by an
authorized officer or representative of Purchaser, and is a legal, valid and
binding obligation of Purchaser enforceable according to its terms.
ARTICLE
3: PURCHASER'S
REPRESENTATIONS AND WARRANTIES
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Purchaser represents and warrants to
CHVC that:
3.01 Authority. Purchaser
has full power and authority to execute, deliver, and consummate this Agreement
subject to the conditions to Closing set forth in this Agreement. All
corporate acts, reports, and returns required to be filed by Purchaser with any
government or regulatory agency with respect to this transaction have been or
will be properly filed prior to the date of this Agreement. No
provisions exist in any contract, document, or other instrument to which
Purchaser is a party or by which Purchaser is bound that would be violated by
consummation of the transactions contemplated by this Agreement.
3.02 Organization and Standing of
Purchaser. Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Nevada, with
corporate power to own property and carry on its business as it is now being
conducted.
ARTICLE
4: CONDITIONS
TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser to Close
under this Agreement is subject to each of the following conditions (any one of
which may, at the option of Purchaser, be waived in writing by Purchaser)
existing on the date of this Agreement, or such earlier date as the context may
require.
4.01 Representations and
Warranties. Each of the representations and warranties of CHVC
in this Agreement and all other information delivered under this Agreement shall
be true in all material respects as of the date of this Agreement.
4.02 Compliance With
Conditions. CHVC shall have complied with and performed all
agreements, covenants, and conditions in this Agreement required to be performed
and complied with. All requisite action (corporate and other) in
order to consummate this Agreement shall have been properly taken by
CHVC.
4.03 Suit or
Proceeding. No suit or proceeding, legal or administrative,
relating to any of the transactions contemplated by this Agreement shall have
been overtly threatened or commenced that, in the sole discretion of Purchaser
and its counsel, would make it inadvisable for Purchaser to Close this
transaction.
4.04 Government Approvals and
Filings. All necessary government approvals and filings
regarding this transaction, if any, shall have been received or made prior to
the date of this Agreement in substantially the form applied for to the
reasonable satisfaction of Purchaser and its counsel. Any applicable
waiting period for the approvals and filings shall have expired.
4.05 Corporate and Stockholder
Action. All corporate action necessary to consummate the
transactions contemplated in this Agreement shall have been properly taken by
CHVC.
4.06 Merger Agreement.
CHVC and its affiliates have executed the Merger Agreement.
ARTICLE
5: CONDITIONS
TO SELLER'S OBLIGATION TO CLOSE
The obligation of CHVC to Close under
this Agreement is subject to each of the following conditions (any one of which
at the option of CHVC may be waived in writing by CHVC) existing on the date of
this Agreement.
5.01 Corporate
Action. Purchaser shall have taken appropriate corporate
action regarding this transaction, which shall be evidenced by resolutions of
its board of directors and certified by Purchaser's corporate secretary,
authorizing Purchaser to enter into and complete this transaction.
5.02 Merger Agreement.
Purchaser and its affiliates have executed the Merger Agreement.
ARTICLE
6: PARTIES'
OBLIGATIONS AT THE CLOSING
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6.01 CHVC’s Obligations at the
Closing. At the Closing, CHVC shall deliver or cause to be
delivered to Purchaser certificates evidencing ownership of the Stock, subject
to the lien contained in the Note.
6.02 Purchaser's Obligation at
Closing. At the Closing, Purchaser shall pay the purchase
price, against delivery of the items specified in Paragraph 6.01,
above.
ARTICLE
7: GENERAL
PROVISIONS
7.01 Survival of Representations,
Warranties, and Covenants. The representations, warranties,
covenants, and agreements of the parties contained in this Agreement or
contained in any writing delivered pursuant to this Agreement shall survive the
date of this Agreement.
7.02 Notices. All
notices or other communications hereunder must be given in writing and either
(i) delivered in person, (ii) transmitted by facsimile telecommunication,
provided that any notice so given is also mailed as provided for herein, (iii)
delivered by Federal Express or similar commercial delivery service, or (iv)
mailed by certified mail, postage prepaid, return receipt requested, as
follows:
|
If
to CHVC:
|
000
Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000; Fax: (000)
000-0000;
|
|
If
to Purchaser:
|
0000
Xxxxxxxxx Xx. XX, Xxxxx 0000, Xxxxxxx, XX 00000; Fax: (000)
000-0000;
|
or to
such other address or facsimile number as CHVC or the Purchaser shall have
designated to the other by like notice. Each such notice or other
communication shall be effective (i) if given by facsimile telecommunication,
when transmitted, (ii) if given by mail, five (5) business days after such
communication is deposited in the mail and addressed as aforesaid, (iii) if
given by Federal Express or similar commercial delivery service, one (1)
business day after such communication is deposited with such service and
addressed as aforesaid, and (iv) if given by any other means, when actually
delivered at such address.
7.03 Assignment of
Agreement. This Agreement shall be binding on and inure to the
benefit of the parties to this Agreement and their respective successors and
permitted assigns. This Agreement may not be assigned by any other
party without the written consent of all parties and any attempt to make an
assignment without consent is void.
7.04 Governing
Law. This Agreement shall be construed and governed by the
laws of the state of Florida (without reference to the choice of law provisions
of Florida law), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.
7.05 Default. The
following are considered to be events of default, but only after the defaulting
Party fails to remedy such breach within thirty (30) days: A Party: (1) fails to
perform any material obligation or covenant in any written agreement between
CHVC and Purchaser, (2) makes any material false statement or representation in
any agreement or document presented to CHVC and Purchaser, or (3) a receiver is
appointed for a Party, or (4) bankruptcy or insolvency proceedings are commenced
against a Party. Notwithstanding the above, the defaulting Party has ten (10)
business days to remedy any monetary breach of this Agreement.
7.06 Amendments;
Waiver. This Agreement may be amended only in writing by the
mutual consent of all of the parties, evidenced by all necessary and proper
corporate authority. No waiver of any provision of this Agreement
shall arise from any action or inaction of any party, except an instrument in
writing expressly waiving the provision executed by the party entitled to the
benefit of the provision.
7.07 Entire
Agreement. This Agreement, together with any documents and
exhibits given or delivered pursuant to this Agreement, constitutes the entire
agreement between the parties to this Agreement on
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the
subject matter of this Agreement. No party shall be bound by any
communications between them on the subject matter of this Agreement unless the
communication is (a) in writing, (b) bears a date contemporaneous with or
subsequent to the date of this Agreement, and (c) is agreed to by all parties to
this Agreement. On execution of this Agreement, all prior agreements
or understandings between the parties on the subject matter of this Agreement
shall be null and void.
Signed as
of January 29, 2009.
CHVC: China Voice
Holding Corp.
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|
By:
/s/ Xxxx
Burbank___________
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Xxxx
Xxxxxxx, Chief Executive Officer
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Purchaser: Flint
Telecom Group, Inc.
By: /s/ Xxxxxxx
Browne_______
Xxxxxxx Xxxxxx, Chief Executive
Officer
Stock
Purchase Agreement CHVC Flint 12 27 08
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