Contract
THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF
COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER
THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON DEFAULT HEREOF MAY
BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
FLINT
TELECOM GROUP, INC.
$250,000 May 2,
2009
FOR VALUE RECEIVED, Flint Telecom Group,
Inc., a Nevada corporation whose principal office is located at 000 Xxxxx Xxxx,
Xxxxx 000, Xxxx Xxxxx, XX 00000 (the "Company"), promises to pay to the order of
Xxxx Xxxxxx (the "Payee"), at the
office of the Payee at Xxxxx xx Carriage, Glenalua Road, Killiney, Ireland, or
at such other place as Payee may designate in writing, the principal sum of Two
Hundred Fifty Thousand Dollars ($250,000) (the "Principal Amount") on the terms
set forth below. No interest shall accrue. All payments of principal hereunder
shall be made in U.S. currency, and if the U.S. Dollar weakens between the date
of the Note and ninety days thereafter, the Company shall cover any foreign
currency loss incurred by the Payee.
1.
Definitions.
Capitalized
terms not defined herein shall have the same meaning as set forth in the
Investment Agreement. The following terms shall have the meanings herein
specified:
"Event
of Default" means an event specified in Section 3 hereof.
"Holder"
means the Payee, and each endorsee, pledgee, assignee, owner and holder of this
Note, as such; and any consent, waiver or agreement in writing by the then
Holder with respect to any matter or thing in connection with this Note, whether
altering any provision hereof or otherwise, shall bind all subsequent Holders.
Notwithstanding the foregoing, the Company may treat the registered holder
of this Note as the Holder for all purposes.
"Principal
Amount" shall have the meaning set forth in the initial paragraph.
"Person"
means an individual, trust, partnership, firm, association, corporation or other
organization or a government or governmental authority.
Words
of one gender include the other gender; the singular includes the plural; and
the plural includes the singular, unless the context otherwise
requires.
2. Payment of this Note - Principal and
Interest.
(a) Payment
after Milestone Deadline. All principal, and a cash fee of one
hundred twenty five thousand dollars ($125,000), shall be due and payable ninety
(90) days from the date of the Note.
(b) Payment
on an Event of Default. If the Note is not repaid within ninety
(90) days from the date of the Note, the Holder may request in writing that the
Company immediately assign a number of shares of China Voice Holding Corp.’s
(CHVC) restricted common stock being used as security under this Note (the
“Shares”), such number of shares shall equal the dollar value of the default
amount, to be calculated based on the average closing price (ACP) of CHVC’s
common stock during the ten trading days prior to the notice of default, and
such shares to be issued monthly on a pro rata basis to the Holder over a period
of twelve months. Holder may proceed to sell the Shares, in accordance with Rule
144 of the Securities and Exchange Commission (SEC) under the following terms
and conditions: (i) Holder may sell on a daily basis an amount of shares not to
exceed the daily average trading volume of CHVC’s common stock in the prior
month; (ii) Holder may sell the Shares at a price per share not less than 90% of
the ACP over the ten trading days prior to the Holder’s actual sale date(s). At
the end of each week, Holder shall provide documentation evidencing all sales of
the Shares completed in the previous month. Should any sales have been completed
at less than 90% of the ACP, the Company shall impose a penalty against Holder
equal to that week’s total share value sold. This penalty will also be imposed
should Seller not promptly provide its stock sales data to Buyer for any given
week.
If an
Event of Default occurs and is continuing, then the Holder of this Note
may without presentment, protest, notice or demand, all of which are
expressly waived, declare this Note immediately due and payable and demand
payment of all principal and, at any time thereafter, the Holder may proceed to
collect such unconverted principal.
(c) Prepayment. The
Company may prepay this Note at any time without penalty.
(d) Security. This Note
and the amounts due hereunder are secured by the following assets: five million
(5,000,000) shares of China Voice Holding Corp.’s restricted common stock held
directly by Flint Telecom Group, Inc. (the “Shares”). Xx. Xxxxxxxx and Xx.
Xxxxxx, jointly and severally, also agree to personally guarantee this
Note.
3. Events of Default.
The
existence of any of the following conditions shall constitute an Event of
Default:
(a) Commencement
of proceedings under any bankruptcy or insolvency law or other law for the
reorganization, arrangement, composition or similar relief or aid of debtors or
creditors if such proceeding remains undismissed and unstayed for a period of 60
days following notice to the Company by the Holder.
(b) If
the Company shall dissolve, liquidate or wind up its affairs or sell
substantially all of its assets, unless the provisions of Section 4 of this Note
are met, in which case there is no Event of Default.
4. Compliance with Securities
Laws.
(a) The
Holder agrees and acknowledges that none of these common shares acquired are,
and may never be, registered under the Securities Act of 1933 or under any state
securities or "blue sky" laws of any state of the United States, and, unless so
registered, may not be offered or sold in the United States or, directly or
indirectly, to U.S. Persons (as that term is defined in Regulation S under the
Securities Act of 1933), except in accordance with the provisions of Regulation
S, pursuant to an effective registration statement under the Securities Act of
1933, or pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933 and in each case only in
accordance with applicable state and federal securities laws.
(b) The
Holder of this Note acknowledges that this Note is being acquired solely for the
Holder’s own account and not as a nominee for any other party, and for
investment, and that the Holder shall not offer, sell or otherwise dispose of
this Note. This Note and any Note issued in substitution or
replacement there for shall be stamped or imprinted with a legend in
substantially the following form:
THIS NOTE
AND THE SHARES OF COMMON STOCK ISSUABLE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE MAKER OF AN OPINION OF COUNSEL IN THE FORM,
SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE MAKER THAT THIS NOTE AND THE
SHARES OF COMMON STOCK ISSUABLE UPON DEFAULT HEREOF MAY BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
THE
SECURITIES MAY ONLY BE SOLD OR OTHERWISE DISPOSED OF AS FOLLOWS: THE MAXIMUM
AMOUNT OF SHARES SOLD OR OTHERWISE DISPOSED OF PER DAY MAY NOT EXCEED THE DAILY
AVERAGE TRADING VOLUME OF THE ISSUER’S COMMON STOCK IN THE PRIOR MONTH. THIS
RESTRICTION IS INDEPENDENT OF AND IN ADDITION TO THE OTHER RESTRICTIONS ON
TRANSFER NOTED HEREON.
5. Transfer. Transfer of this Note
shall be subject to prior delivery by the proposed transferee to the Company of
an opinion of counsel that such transfer is in compliance with all federal and
all other applicable laws. In order to transfer this Note, the Holder, or its
duly authorized attorney, shall surrender this Note at the office of the Company
pursuant to Section 10 herein, accompanied by an assignment duly executed by the
Holder hereof.
6. Loss or Mutilation of Note.
Upon
receipt by the Company of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, together with an indemnity
reasonably satisfactory to the Company, in the case of loss, theft, or
destruction, or the surrender and cancellation of this Note, in the case of
mutilation, the Company shall execute and deliver to the Holder a new Note of
like tenor and denomination as this Note.
7. Holder not Shareholder.
This Note
does not confer upon the Holder any right to vote or to consent or to receive
notice as a shareholder of the Company or of China Voice Holding Corp., as such,
in respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the default hereof.
8. Waivers. The failure of Holder to
enforce at any time any of the provisions of this Note shall not, absent an
express written waiver signed by Holder specifying the provision being waived,
be construed to be a waiver of any such provision, nor in any way to affect the
validity of this Note or any part hereof or the right of Holder thereafter to
enforce each and every such provision. No waiver of any breach of this Note
shall be held to be a waiver of any other or subsequent breach. The Company
waives presentment, demand, notice of dishonor, protest and notice of nonpayment
and protest.
9. Taxes. The Company agrees that
it will pay, when due and payable, any and all stamp, original issue or similar
taxes which may be payable in respect of the issue of this Note. The
Company shall not be required to pay any stamp, original issue or similar tax
which may be payable in respect of any transfer involved in the transfer and
delivery of this Note to a person other than of the Payee.
10. Notices. All notices or
other communications to a party required or permitted hereunder shall be in
writing and shall be delivered personally or by facsimile (receipt confirmed
electronically) to such party (or, in the case of an entity, to an executive
officer of such party) or shall be sent by a reputable express delivery service
or by certified mail, postage prepaid with return receipt requested, addressed
as follows:
if to Payee
to:
Xxxx
Xxxxxx
Xxxxx xx
Carriage,
Glenalua
Road,
Killiney,
Ireland
if to the Company
to:
Xxxxxxx
Xxxxxx
Xxxxx
Telecom Group, Inc.
000 Xxxxx
Xxxx, Xxxxx 000
Boca
Raton, FL 33432
Any
party may change the above specified recipient and/or mailing address by notice
to all other parties given in the manner herein prescribed. All notices shall be
deemed given on the day when actually delivered as provided above (if delivered
personally or by facsimile, provided that any such facsimile is received during
regular business hours at the recipient's location) or on the day shown on the
return receipt (if delivered by mail or delivery service).
11. Headings. The titles and
headings to the Sections herein are inserted for the convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Note. This Note shall be construed without regard to any
presumption or other rule requiring construction hereof against the party
causing this Note to be drafted.
12. Applicable Law and Jurisdiction.
The legality, validity, enforceability and interpretation of this Note
and the relationship of the parties hereunder shall be governed by the laws of
the State of Nevada, without giving effect to the principles of conflict of
laws, 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. Any claim, cause of
action, suit or demand allegedly arising out of or related to this Note, or the
relationship of the parties, shall be brought exclusively in the state or
federal courts located in Palm Beach County, Florida, and the parties
irrevocably consent to the exclusive jurisdiction and venue of such courts and
waive any objections they may have at any time to such exclusive jurisdiction
and venue.
13. Survival Of Representations And
Warranties; Attorneys Fee. This Note shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto. If
this Note is not paid when due or if the Company breaches any provisions of this
Note, in addition to all other amounts due herein, the Company
promises to pay all costs of collection and all reasonable attorney fees and
court costs incurred by Xxxxxx.
14. Assignment. This
Note may not be assigned by either party hereto without the prior written
consent of the other (except that the Company may without the prior written
consent of the Holder assign this Note in the event of a merger, acquisition,
reorganization or the sale of all or substantially all of its assets to another
corporation to the surviving entity of such merger, acquisition, reorganization
or sale).
IN WITNESS WHEREOF, Flint
Telecom Group, Inc. has caused this Promissory Note to be signed in its name by
the signature of its duly authorized representative.
Flint
Telecom Group, Inc.
/s/ Xxxxxxx
Xxxxxx
By:
Xxxxxxx Xxxxxx
Its:
CEO
Date: May
2, 2009
Guaranty
The
undersigned Guarantors, jointly and severally, hereby guarantee to the Holder
the strict performance of this Promissory Note. Each of the
Guarantors agree to be equally liable with the Company so that the Holder may
sue the Guarantors directly without first suing the Company if an Event of
Default should occur. The Guarantors further agree that each of their guarantees
shall remain in full effect even if the Note is amended, extended or otherwise
modified in any way.
By: /s/
Xxxxx
Xxxxxxxx By:
/s/ Xxxxxxx Xxxxxx
Xxxxx
Xxxxxxxx Xxxxxxx
Xxxxxx
Date: May
2,
2009 Date: May 2,
2009
