FLINT TELECOM GROUP,
INC.
PROMISSORY NOTE
$7,000,000
January 29, 2009
FOR VALUE
RECEIVED , Flint Telecom
Group, Inc., a Nevada corporation (the "Maker"), promises to pay to
the order of China Voice Holding Corp, A Nevada
Corporation (the "Payee"), in lawful money of the United
States of America, the principal sum of SEVEN MILLION
AND NO/100 DOLLARS ($7,000,000.00) (the "Principal Amount") on the
terms set forth below (the “Note”). The Note shall not
bear any interest pre-default; The Note will bear interest at
Eighteen percent (18%) per year for any period of time when a
payment is past due.
The Note is made
in connection with that certain Stock Purchase Agreement dated
January 29, 2009 between Maker and Payee (the "Investment
Agreement").
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 4 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 Maker 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.
2. Payment of the Note - Principal and
Interest.
(a) Payment
Schedule. Maker shall pay the Note as follows: a payment
of $2,333,333.33 on or before December 31, 2009; a payment of
$2,333,333.33 on or before July 31, 2010, and a payment of
$2,333,333.34, plus any remaining balance due on the Note on or
before December 31, 2010.
(b) Payment
on an Event of Default.
Maker and any
and all co-makers, endorsers, guarantors and sureties severally
waive presentment for payment, notice of nonpayment, protest,
demand, notice of protest, notice of intention to accelerate,
notice of acceleration and dishonor, diligence in enforcement and
indulgences of every kind, and hereby agree that this Note and the
liens securing its payment
may be extended
and re-extended and the time for payment extended and re-extended
from time to time without notice to them or any of them, and they
severally agree that their liability on or with respect to this
Note shall not be affected by any release or change in any security
at any time existing or by any failure to perfect or maintain
perfection of any security interest in such security.
It is agreed
that time is of the essence of this Note, and if any payment of
principal and interest is not received by Payee on or before the
due date of the payment, or, if a default occurs under
any instrument now or hereafter executed in connection with or as
security for this Note, thereupon, after the passage of a ten day
notice and cure period, at the option of Payee, the entire unpaid
principal balance and the accrued and unpaid interest shall be due
and payable forthwith without demand, notice of default or of
intent to accelerate the maturity hereof, notice of nonpayment,
presentment, protest or notice of dishonor, all of which are hereby
expressly waived by Maker and each other liable party. Any past due
principal shall bear interest at the maximum rate allowed by law.
Failure to exercise this option upon any such default shall not
constitute a waiver of the right to exercise such option in
the event of any subsequent default.
If the entire
unpaid principal balance plus all accrued and unpaid interest due
and owing on this Note is not paid at maturity whether by
acceleration or otherwise and is placed in the hands of an attorney
for collection, or suit is filed hereon, or proceedings are
had in probate, bankruptcy, receivership, reorganization,
arrangement or other legal proceedings for collection hereof, Maker
and each other liable party agree to pay Payee its reasonable
collection costs, including a reasonable amount for attorneys'
fees, but in no event to exceed the maximum amount permitted by
law. Maker shall be directly and primarily liable
for the payment of all sums called for hereunder, and Maker hereby
expressly waives bringing of suit and diligence in taking any
action to collect any sums owing hereon and in the handling of any
security hereunder, and Maker hereby consents to and agrees to
remain liable hereon regardless of any renewals, extensions for any
period or rearrangements hereof, or any release or substitution of
security herefor, in whole or in part, with or without notice, from
time to time, before or after maturity.
(c) Prepayment. The
Maker may make optional prepayments of principal on this Note
without penalty or premium at any time or from time to time,
provided that any such prepayment shall be accompanied by the
payment of accrued and unpaid interest on the amount being prepaid
through the date of the prepayment. All prepayments on
this Note, whether voluntary or mandatory, shall be credited first
against accrued and unpaid interest and the balance shall be
credited against unpaid principal.
3.
Security. As
security for the performance of Maker’s obligations
hereunder, Maker hereby grants to Payee a security interest in and
to 15,000,000 shares of common stock of China Voice Holding Corp.,
issued pursuant to that certain Stock Purchase Agreement by and
among Maker and Payee (the “Collateral”).
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. Maker will
be free to use the 5,000,000 shares released on each payment date
at its sole discretion.
4. 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 Maker by the Holder.
(b) If
the Maker shall
