Document:

exhibit10_02.htm

EXHIBIT 10.02

 

LOAN AGREEMENT

 

$200,000,000

 

This LOAN AGREEMENT (this “Agreement”) is made as of June 1, 2010 (the “Effective Date”), between ENTERPRISE PRODUCTS OPERATING LLC, a Texas limited liability company, with principal offices at 1100 Louisiana Street, Suite 1000, Houston, Texas 77002 (“Lender”), and DUNCAN ENERGY PARTNERS L.P., a Delaware limited partnership with principal offices at 1100 Louisiana Street, Suite 1000, Houston, Texas 77002 (“Borrower”).  Each capitalized term used but not otherwise defined in this Agreement shall have the meaning given to such term in Exhibit A hereto.

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows:

 

1. Commitment. Subject to the terms and conditions set forth herein, Lender agrees to make available to Borrower funds in an aggregate maximum outstanding principal amount of $200,000,000 (as such amount may be reduced from time to time pursuant to Section 13, the “Commitment Amount”).

 

2. Loan. Subject to the provisions of this Agreement, upon the receipt of a Request for Borrowing (as defined in Section 5), Lender agrees to make a revolving loan (the “Loan”) to Borrower in an aggregate maximum outstanding principal amount not to exceed the Commitment Amount. Each amount drawn under the Loan (“Borrowings”), and each repayment of Borrowings, will be in a minimum principal amount of $25,000,000 and in whole increments of $25,000,000 in excess thereof.

 

3. Repayment of the Loan. Borrower promises to pay the outstanding principal balance of the Loan, together with interest accrued and outstanding thereon and any other sums due hereunder, on the earliest to occur of (a) September 28, 2010 (the “Maturity Date”), (b) the date upon which the maturity of the Loan may have been accelerated pursuant to Section 12, or (c) the date upon which the commitment of Lender hereunder may have been terminated pursuant to Section 13.

 

4. Early Repayment of the Loan. Borrower will have the option to repay the Loan upon three (3) Business Days prior written notice, in whole or in part (subject to the minimum and incremental principal amounts for repayments, as described in Section 2), on any Business Day. Any repayment of principal must be accompanied by a concurrent payment of any and all accrued and unpaid interest on such principal amount to the date of repayment.  Amounts repaid may be reborrowed in accordance with the terms of this Agreement, until the Maturity Date.

 

5. Request for Borrowing. On any Business Day including or after the Effective Date, but prior to the Maturity Date, Borrower may request a Borrowing by delivering a written notice to Lender (each, a “Request for Borrowing”), which such notice (a) shall be irrevocable and binding on Borrower, (b) shall state (i) the amount of such requested Borrowing and (ii) the date on which the funds underlying such Borrowing are to be delivered to Borrower, (c) must be received by Lender no later than 9:00 a.m., Houston, Texas time, on the third Business Day immediately preceding the date on which the funds underlying such Borrowing are to be delivered to Borrower, and (d) shall otherwise be in a form acceptable to Lender.

 

6. Fees.   Borrower agrees to pay Lender all fees as calculated below:

 

(a) Fee on Undrawn Portion of Commitment Amount. Borrower agrees to pay Lender a fee equal to (i) the amount of any undrawn portion of the Commitment Amount (i.e., the Commitment Amount minus the aggregate principal amount of any and all outstanding Borrowings), multiplied by (ii) 0.375% per annum (on the basis of a 365 day year), for each day commencing on the Effective Date and ending upon the earlier of, and including, the Maturity Date or the date that Lender’s commitment under this Agreement is terminated in accordance with Section 12 or Section 13. Fees payable in accordance with this Section 6 will be due on each Payment Date.

  

  

  

(b) All fees payable herein shall be paid on the dates due, and shall not be refundable under any circumstances.

 

7. Interest. Borrower shall pay interest on the unpaid principal amount of the Loan outstanding from the Effective Date until the principal amount shall be paid in full, at a rate per annum at all times during each Interest Period equal to the Interest Rate for such Interest Period, payable in arrears on each Payment Date; provided that, in the event of any repayment or prepayment of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. Interest payable hereunder shall be calculated on the basis of a year of 360 days.

 

8. Interest Period. For the purposes of this Agreement, “Interest Period” means (a) the period commencing on the Effective Date and ending on, but not including, July 1, 2010 and (b) thereafter, each subsequent period commencing on the last day of the next preceding Interest Period and ending on, but not including, the first Business Day of the next succeeding calendar month; provided, that, in the case of any Interest Period that commences before the Maturity Date, and would otherwise end on a date occurring after the Maturity Date, such Interest Period shall end on the Maturity Date.

 

9. Interest Rate. For the period commencing on the Effective Date and ending on (but not including) July 1, 2010, interest on outstanding Borrowings shall be assessed at a floating rate of interest equivalent to the one-month LIBO Rate plus 2.50% (the “Interest Rate”). The LIBO Rate shall be set for each Interest Period as provided in the definition of the term “LIBO Rate” set forth in Exhibit A hereto.

 

Notwithstanding the foregoing provisions of this Section 9 or any other provision of this Agreement, interest on the Loan and other amounts due hereunder at any time shall be limited to the highest lawful rate that may be charged under the laws of the State of New York at such time.

 

10. Borrower’s Representations and Warranties. Borrower represents and warrants to Lender that:

 

     (a) each of Borrower and its Subsidiaries (i) has been duly formed and is validly existing in good standing under the laws of its jurisdiction of organization and (ii) is qualified to do business as a foreign entity in good standing in each jurisdiction of the United States in which the ownership of its properties or the conduct of its business requires such qualification and where the failure to so qualify would be reasonably expected to have a material adverse effect on Borrower and its Subsidiaries, taken as a whole; and

 

     (b) this Agreement has been duly authorized, executed and delivered by Borrower and constitutes the valid and binding agreement of Borrower, enforceable in accordance with its terms, except as enforceability may be limited by BankruptcyLaws and general principles of equity.

 

11. Conditions of Lending. The obligation of Lender to fund any Borrowing hereunder is subject to the conditions precedent that, on and as of the date of funding of such Borrowing:

 

     (a) each of the representations and warranties set forth in Section 10 is true and accurate; and

 

     (b) no event has occurred and is continuing (or would result from the proposed Borrowing) that constitutes a Default or Event of Default under this Agreement or under the Credit Agreement.

 

12. Events of Default. If one or more of the following events of default (each an “Event of Default”) shall occur and be continuing:

 

     (a) Borrower shall default in any payment of principal of the Loan when and as the payment shall become due and payable, or Borrower shall default in any payment of interest as required herein, or in the payment of any fees or other amounts as required herein, when the same shall become due and payable, and such default shall continue for a period of three (3) Business Days;

  

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     (b) Borrower shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of its property, (ii) admit in writing of its inability to pay its debts as such debts become due, (iii) make a general assignment for the benefit of its creditors, (iv) commence a voluntary case under any Bankruptcy Law, (v) file a petition seeking to take advantage of any other law providing for similar relief of debtors, or (vi) consent or acquiesce in writing to any petition duly filed against it in any involuntary case under any Bankruptcy Law;

 

     (c) a proceeding or case shall be commenced, without the application or consent of Borrower in any court of competent jurisdiction seeking (i) its liquidation, reorganization, dissolution or winding up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of its assets, or (iii) similar relief in respect of it, under any law providing for the relief of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days (or such longer period, so long as Borrower shall be taking such action in good faith as shall be reasonably necessary to obtain the timely dismissal or stay of such proceeding or case); or an order for relief shall be entered in an involuntary case under any applicable Bankruptcy Law, against Borrower;

 

     (d) a Change in Control (as defined in the Credit Agreement) shall occur; or

 

     (e) any Event of Default (as defined in the Credit Agreement) shall occur;

 

then (and in each and every such case) Lender, by notice in writing to Borrower, may terminate the commitment of Lender hereunder and/or declare the unpaid balance of the Loan and any other amounts payable hereunder to be forthwith due and payable, and thereupon such balance shall become so due and payable without presentation, protest or further demand or notice of any kind, all of which are hereby expressly waived; provided that in the case of Section 12(b) and Section 12(c) above, the commitments of Lender hereunder shall automatically terminate and the Loan and any other amounts payable hereunder shall forthwith be due and payable.

 

13. Termination and Reduction of Lender’s Commitment at Election of Borrower.  Upon three Business Days’ prior written notice to Lender, Borrower may at any time terminate, or from time to time reduce, Lender’s commitment to make the Loan under this Agreement; provided, that (a) upon any such termination or reduction, (i) any unpaid balance of the Loan and any other amounts payable hereunder (in the case of a termination) or (ii) any unpaid balance of the Loan in excess of the Commitment Amount, as so reduced (in the case of a reduction), shall become immediately due and payable without presentation, protest or further demand or notice of any kind, all of which are hereby expressly waived, and (b) any such reduction shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000.

 

14. Waivers; Amendments. No failure or delay by Lender to exercise any right or power shall operate as a waiver thereof, nor shall any partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise of such right or power. No waiver of any right or power of Lender in this Agreement shall be effective unless given in writing signed by Lender. This Agreement may not be amended or modified except by a writing signed by the parties.

 

15. Expenses of Enforcement. Borrower shall reimburse Lender on demand for any fees or other expenses of Lender in connection with the enforcement of this Agreement and the collection of the Loan and any other amounts due Lender hereunder. Borrower agrees, to the fullest extent permitted by law, to indemnify and hold harmless Lender and each of its directors, officers, employees and agents (each an “Indemnified Party”) from and against any and all claims, damages, liabilities and expenses (including without limitation fees and disbursements of counsel) arising out of or in connection with any investigation, litigation or proceeding (whether or not any Indemnified Party is a party) arising out of, related to or in connection with this Agreement, the Loan or any transaction in which any proceeds of all or any part of the Loan made hereunder are applied, provided that such indemnity shall not, as to any Indemnified Party, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence, unlawful conduct or willful misconduct of such Indemnified Party.

  

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16. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties and their respective successors and permitted assigns. Borrower may not assign this Agreement or delegate any of its duties hereunder without the express written consent of Lender.

 

17. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

18. Headings; Section References. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions. Unless otherwise specified, references to Sections in this Agreement are to Sections of this Agreement.

 

19. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

20. Entire Agreement. This instrument and any other loan documents executed in connection herewith constitute the entire Agreement between Lender and Borrower and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

 

21. Notices. All notices under this Agreement shall be in writing and mailed, hand delivered or faxed and confirmed to the respective parties as follows:

 

If to Lender:

 

Enterprise Products Operating LLC

1100 Louisiana, Suite 1000

Houston, TX 77002

Facsimile:  (713) 381-8200

Attention:  Michael A. Creel, President and Chief Executive Officer

 

If to Borrower:

 

Duncan Energy Partners L.P.

1100 Louisiana, Suite 1000

Houston, TX 77002

Facsimile:  (713) 803-1482

Attention :  W. Randall Fowler, President and Chief Executive Officer

 

Any party hereto may change its address for receipt of communications by giving written notice to the other party in accordance with this Section 21.

 

22. No Third Party Beneficiaries. The agreement of Lender to make the Loan to Borrower on the terms and conditions set forth in this Agreement is solely for the benefit of Borrower and no other person has any rights hereunder against Lender or with respect to the extension of credit contemplated hereby.

 

23. Special Exculpation. No claim may be made by Borrower or any other person against Lender, its directors, officers, employees, attorneys or agents of any of them for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or relating to this Agreement or any other financing document or the transactions contemplated hereby or thereby, or any act, omission or event occurring in connection therewith, and Borrower hereby waives, releases and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

  

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24. Waiver of Jury Trial. Each of Borrower and Lender hereby irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

25. Severability. If any term or provision of this Agreement shall be determined to be illegal or unenforceable, all other terms and provisions of this Agreement shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law.

 

26. Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

 

27. Non-Recourse to Partners. Lender agrees that in the event of non-performance by Borrower hereunder, including an Event of Default, Lender’s rights to payment under this Agreement are limited to the assets of Borrower, and Lender may not pursue payment from any general partner (including the General Partner) or limited partner of Borrower for any amounts hereunder, even if the assets of Borrower are collectively insufficient to pay all amounts due to Lender under this Agreement.

 

(Signature Page Follows)

  

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In witness whereof the parties have caused this Agreement to be executed by their proper officers on the day and year first above written.

 

	  	  	  	  	  
	  	
Enterprise Products Operating LLC, as Lender

 

By:    Enterprise Products OLPGP, Inc.,

its managing member

 

	  
	  	
By:  

	
/s/ Michael A. Creel                                                                              

	  
	  	  	
Michael A. Creel

	  
	  	  	
President and Chief Executive Officer

	  
	
  

 

 

 

 

 

	  	
Duncan Energy Partners L.P., as Borrower

 

By:   DEP Holdings, LLC,

its general partner

 

	  
	  	
By:  

	
/s/ W. Randall Fowler                                                                         

	  
	  	  	
W. Randall Fowler

	  
	  	  	
President and Chief Executive Officer

	  
	  
	  	  	  	  
	  

 

Signature Page to Loan Agreement

  

  

  

 

Exhibit A

 

As used in the Agreement to which this Exhibit A is attached, the following terms have the meanings indicated below.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Bankruptcy Law” means Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time and any similar other applicable law or statute in any other jurisdiction as amended from time to time.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City, New York are authorized or required by law to remain closed; provided that when used in connection with an Interest Period, the term “Business Day” shall also exclude any day on which banks are not open for dealings in U.S. Dollar deposits in the London interbank market.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Agreement” means the Revolving Credit Agreement, dated as of January 5, 2007, by and among Borrower, the Lenders party thereto, Wachovia Bank, National Association, as administrative agent, issuing bank and swingline lender, The Bank of Nova Scotia and Citibank, N.A., as co-syndication agents, and JPMorgan Chase Bank, N.A. and Mizuho Corporate Bank, as co-documentation agents, as amended and supplemented by the First Amendment to Revolving Credit Agreement, dated as of June 30, 2007 (as such agreement may be further amended, restated, modified, renewed, refunded, replaced or refinanced from time to time, regardless of whether such amendment, restatement, modification, renewal, refunding, replacement or refinancing is with the same financial institutions or otherwise).

 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“DEP Holdings” means DEP Holdings, LLC, a Delaware limited liability company.

 

“Equity Interest” means shares of the capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, or any warrants, options or other rights to acquire such interests.

 

“General Partner” means DEP Holdings or any other Person that serves as the general partner of Borrower without causing the occurrence of a Default or an Event of Default.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“LIBO Rate” means, with respect to any Borrowing for any Interest Period, (a) the rate per annum appearing on Page 3750 of the Bridge Telerate Service (formerly Dow Jones Market Service) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Lender from time to time for purposes of providing quotations of interest rates applicable to dollar deposits

  

  

  

 

in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period; (b) if for any reason the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such Service), the rate per annum appearing on Reuters Screen LIBO page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period for a maturity comparable to such Interest Period; and (c) if the rate specified in clause (a) of this definition does not so appear on Page 3750 of the Bridge Telerate Service (or any successor or substitute page or any such successor to or substitute for such Service) and if no rate specified in clause (b) of this definition so appears on Reuters Screen LIBO page (or any successor or substitute page), the average of the interest rates per annum at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Reference Bank in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

“Payment Date” means the last day of each Interest Period, commencing July 1, 2010.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Reference Bank” means, at any time, the then-current administrative agent under the Credit Agreement.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests, are, as of such date, owned, controlled or held by the parent and one or more subsidiaries of the parent.

Exhibit B to Loan Agreement, Page 2ex10_1.htm

SETTLEMENT AND GENERAL RELEASE AGREEMENT

This Settlement and General Release Agreement (“Agreement”) is entered into as of May 28, 2010 between Flint Telecom Group, Inc. (consisting of Flint Telecom Group, Inc. and its subsidiaries and affiliates) (hereinafter, altogether referred to as “Flint”) and China Voice
Holding Corp. and its subsidiaries and affiliates (“CHVC”). CHVC and Flint agree as follows:

Unless otherwise indicated, terms used herein that are defined in the Agreements shall have the same meanings herein as in the Agreements.

RECITALS

	
A.  
	
WHEREAS, on January 29, 2009, CHVC and Flint entered into an Agreement and Plan of Merger, a Stock Purchase Agreement and a Security Agreement, as amended, (together, the “Agreements”), whereby CHVC sold to Flint six wholly owned subsidiary companies and issued 15,000,000 shares of its common stock to Flint, and in exchange Flint issued to
CHVC a $7,000,000 promissory note (the “Note”), 21,000,000 shares of its common stock and 1,800 shares of Preferred Series C Stock, redeemable at $1.00 per share over a period of time; and

	
B.  
	
WHEREAS, Flint has defaulted on payments due to CHVC and certain disputes and/or disagreements have arisen between the parties relating to the above transactions (the “Transactions”), and the parties have entered into this Agreement to fully and finally settle all of their disputes and disagreements, and to settle any and all claims that each
of the parties may have against each other.

AGREEMENT

WHEREFORE, the parties to this Agreement hereby agree as follows:

	
1.  
	
Flint hereby agrees to pay a total of $520,242 cash to CHVC over a period of 8 months; the first monthly payment in the amount of $82,742 to be made on or before August 31, 2010 and 7 monthly payments of $62,500 shall commence as of September 30, 2010.

	
2.  
	
Flint hereby agrees to pay a total of $1,000,000 or GBP721,000 to CHVC, at CHVC’s option, in a lump payment on or before May 31, 2011.

	
3.  
	
CHVC hereby irrevocably authorizes an authorized third party to be designated by Flint, as set forth in the Proxy Agreement attached hereto and incorporated herein as Exhibit A, to exercise at every Shareholder’s Meeting of Flint, for and on behalf of CHVC, all the voting rights that CHVC has in its capacity as a shareholder of the Flint under applicable
laws and the Articles of Incorporation of Flint.

	
4.  
	
CHVC hereby agrees to return to Flint the 15,800,000 shares of Flint common stock issued to CHVC as of January 29, 2009, including a fully executed assignment of the shares back to Flint with a bank notarized medallion signature guarantee, and any other documentation required by Flint’s transfer agent to affect a full return and cancellation of the
shares. Flint will waive the pre-existing contractual two year holding restriction on the resale of the remaining shares of Flint’s

  

  

  

common stock held by CHVC. CHVC agrees to hold its remaining 5,200,000 shares of Flint common stock for a period of three months from the date of full execution of this Agreement.

	
5.  
	
Flint agrees to abandon any claim it may have to the 15,000,000 CHVC shares held by CHVC as collateral and hold CHVC harmless from claims of Flint creditors with respect to the CHVC shares.

	
6.  
	
Flint hereby agrees to sell to CHVC or its assigns all of the issued and outstanding stock of CVC INTL, Inc. through an Agreement and Plan of Merger, attached hereto as Exhibit B and incorporated herein. CVC INTL, Inc. owns all of the assets and liabilities of the following entities, which were merged with and into CVC INTL, Inc. on April 28, 2010: Phone
House of Florida, Inc., Dial-Tone Communication, Inc. and Starcomm Alliance, Inc.  It is expressly agreed between the parties that CHVC or the assign receiving the stock of CVC INTL, Inc. is not liable for any liabilities of CVC INTL, Inc.  It is also expressly agreed between the parties that Flint is not be liable for any liabilities of CVC INTL, Inc. either.

	
7.  
	
CHVC hereby agrees that neither CHVC nor any subsidiary or affiliate of CHVC shall use either the name “Phone House” or any like sounding or appearing names or marks in any fashion, anywhere.

	
8.  
	
Flint hereby agrees that neither Flint nor any subsidiary or affiliate of Flint shall use either the name “Wize” or any like sounding or appearing names or marks in any fashion, anywhere.

	
9.  
	
Flint will not directly or indirectly sell or provide prepaid calling cards or pins in the state of Florida, and will not provide or issue cards or card pins with Florida local access numbers for a period ending twelve (12) months after the final cash payment to be made by Flint under this Agreement to CHVC has been made.

	
10.  
	
CHVC hereby agrees to cancel and terminate any and all rights it has under the Note and the Series C Preferred Shares, including the repayment of any and all principal amounts underneath the Note and the Preferred Shares, as set forth in this Agreement. In the event of any conflict between this Agreement and the Note, the Shares or the other Agreements,
the provisions of this Agreement shall prevail.

	
11.  
	
CHVC will ensure that the transfer of all access to the Flinttel.com website and email system is either passed to Flint or confirmed to be switched permanently and all corresponding history and transactions have been deleted from CHVC servers, on signing of this agreement. CHVC also agrees
to provide reasonable administrative support effort and backup data that may be required to effect the timely completion of Flint’s year-end audit for its fiscal year ending June 30, 2010 with Flint paying any reasonable out of pocket costs to CHVC, if any.

	
12.  
	
Subject to full performance by Flint, as set forth herein, the above Paragraphs of this Agreement is for full settlement of any and all claims CHVC may have, now or in the future, against Flint and its Releasees with respect to the subject matter herein, and for the release, as set forth below.  CHVC shall be responsible for payment of all CHVC
income taxes related to receipt of the consideration hereunder.

  

  

  

	
13.  
	
In the event Flint fails to make any payment to CHVC in accordance with the terms set forth herein, Flint will be in default of this Agreement and shall have forty five days of when the payment is due to cure such default (a “Default Event”). A default interest rate of 18% shall be applied to any outstanding payments owed as of the Default
Event. An additional cash payment of five hundred thousand dollars ($500,000) will also be immediately due and payable from Flint to CHVC.  This additional amount is agreed by the parties to be a liquidated sum for the disputed claims of CHVC against Flint, as well as CHVC’s legal and administrative expenses, and shall in no way be construed as a penalty.  CHVC shall have the option, to have Flint issue to CHVC a number of common shares equal to the amount of cash payments that remain
unpaid, plus accrued interest thereon, to CHVC under this Agreement, or a portion of that amount may be issued in shares and the remaining portion to be paid in cash, at Flint’s sole discretion.  The total number of shares to be issued shall be calculated using a per share price equal to a 33% discount to the average closing market price over the preceding 30 trading days.  Flint shall, within ninety days of the date of this Agreement, file with the SEC a registration statement on Form
S-1, covering the resale of these potentially issuable shares, up to a maximum of 20,000,000 shares to be registered.  Flint shall use its best efforts to cause such registration statement to become effective as soon as possible thereafter.  If Flint fails to cure the Default Event within ten (10) business days of receipt of such notice, CHVC will be entitled to apply to the Court and obtain judgment against Flint for the outstanding payments outstanding and not made as of the Default Event.  Flint
agrees it will not object to the entry of the Default Judgment and this Agreement will serve as Flint’s consent to the entry of same.   Notwithstanding the forgoing, Flint shall be entitled to challenge the final balance based upon payments actually made.

	
14.  
	
Except for full performance by Flint of all obligations hereunder, CHVC hereby releases, waives and forever discharges, individually and collectively, Flint and its current or former officers, directors, employees, agents, affiliates, predecessors, successors, assigns, subsidiaries and all persons acting through or with them (hereinafter collectively referred
to as “Flint Releasees”), from any and all claims, rights, demands, liabilities, causes of action, losses, counterclaims, obligations, third party claims, costs or expenses (including attorneys’ fees) of any kind whatsoever, known or unknown, fixed or contingent, suspected or unsuspected, that CHVC may now have or has ever had against any Flint Releasees. This release includes, without limitation, all claims relating to any contract between any Flint Releasees, whether express or implied, and
its termination or breach; any and all claims relating to or arising from any consulting relationship with the Flint Releasees; any claims for misrepresentation, fraud, or breach of any covenant of good faith and fair dealing; and any and all claims related to or in any manner incidental to CHVC’s relationship with the Flint Releasees, or by reason of any matter, cause or thing arising out of or relating to the Transactions.

This release also expressly includes any and all claims relating to, or arising from, CHVC’s actual purchase of any securities of Flint or any of its afilliates, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law.

It is expressly understood and agreed by the parties that this Agreement is in full accord, satisfaction and discharge of any and all claims by each party against the other (other than as set forth herein), and that this Agreement has been signed with the express intent of extinguishing all such claims.

 

 

 

Except for full performance by CHVC of all obligations hereunder, Flint hereby releases, waives and forever discharges, individually and collectively, CHVC and its current or former officers, directors, employees, agents, affiliates, predecessors, successors, assigns, and all persons acting through or with him (hereinafter collectively referred
to as “ CHVC Releasees”), from any and all claims, rights, demands, liabilities, causes of action, losses, counterclaims, obligations, third party claims, costs or expenses (including attorneys’ fees) of any kind whatsoever, known or unknown, fixed or contingent, suspected or unsuspected, that Flint may now have or has ever had against CHVC Releasees. This release includes, without limitation, all claims relating to any contract between Flint and CHVC Releasees, whether express or implied, and
its termination or breach; any and all claims relating to or arising from any consulting relationship with the CHVC Releasees; any claims for misrepresentation, fraud, or breach of any covenant of good faith and fair dealing; and any and all claims related to or in any manner incidental to Flint’s relationship with the CHVC Releasees, or by reason of any matter, cause or thing arising out of or relating to the Transactions.

Flint acknowledges that its creditors may assert a claim or claims against CHVC for certain liabilities of Flint. So long as it is mutually agreed among the parties that the claim asserted is a liability of Flint, Flint hereby agrees to indemnify and hold harmless CHVC
and their successors and assigns, from any claims by any third party against CHVC which indemnification shall include reimbursement for all attorneys' fees and expenses, and court costs incurred in defending against such claims, up through and including the appellate level.

 

	
15.  
	
CHVC agrees and acknowledges that none of the Flint common shares or other securities that are issued hereunder or any of CHVC’s current ownership of such securities 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 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. Additionally, CHVC acknowledges and agrees that
for a period nine months following the effective date of this Agreement, it may only sell a maximum amount of shares per month not to exceed the greater of 1% of outstanding stock or weekly average trading volume of Flint’s common stock in the prior month, whichever is greater.

	
16.  
	
No Admission:  By entering into this Agreement, no party is admitting the sufficiency of any claim, allegation, assertion, contention or position of any other party, nor the sufficiency of any defense to any such claim, allegation, assertion, contention or position.  The
Parties have entered into this Agreement in good faith and with a desire to forever settle all claims relating to the Transactions.

	
17.  
	
Disputed Claim:  Each of the Parties understand and hereby agree that this settlement is in compromise of a disputed claim, that the Releases given are not to be construed as an admission of liability on the part of the party or parties hereby released, that the
parties deny any liability on their respective parts, and that the parties hereto, by entering into this Agreement, attempt merely to avoid costly and lengthy litigation.

 

 

 

	
18.  
	
Any controversy or claim of any kind arising out of or relating to this Agreement or its breach, including but not limited to any claim relating to its validity, interpretation, or enforceability, shall be governed by the law of State of Florida.

	
19.  
	
Civil Code.  Each Party represents that it is not aware of any claim against the other than the claims that are released by this Agreement.  Each Party acknowledges that it has been advised by legal counsel and is familiar with the provisions of the Florida Civil Code,
which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Each Party, being aware of said code section, agrees to expressly waive and relinquish any right or benefit it has or may have under the Civil Code of the State of Florida, as well as any other similar provision under the statutory or nonstatutory law of any other jurisdiction to the full extent that it may lawfully waive all such rights
and benefits.

 

	
20.  
	
This is the entire Agreement regarding the subject matter hereof and supersedes all previous and contemporaneous discussions, negotiations, agreements and understandings. No other promises or agreements have been made.

	
21.  
	
In the event that any provision of this Agreement is determined to be unenforceable for any reason, the remaining provisions shall remain in full force and effect and the unenforceable provision(s) shall be interpreted and rewritten to give effect to the parties’ intentions.

	
22.  
	
Each of the Parties acknowledges and agrees that it has been advised that this Agreement is a binding legal document. Each of the Parties further agrees that has had adequate time and a reasonable opportunity to review the provisions of this Agreement and to seek legal advice regarding all its aspects, and that in executing this Agreement each of the Parties
has acted voluntarily and has not relied upon any representation made by the other Party or any of its employees or representatives regarding the Agreement’s subject matter and/or effect. Each of the Parties has read and fully understands this Agreement and voluntarily agrees to its terms.

	
23.  
	
Each of the parties hereto agrees not to disclose the facts or any of the terms of this Agreement to anyone except for its attorney, accountant and government taxing authorities, unless required to do so by court order. Each of the parties further agrees not to make any negative or disparaging statements about any other party, its affiliates or its employees
or representatives to any third party, or to disclose any information that it became aware of as a result of its relationship with a party.

	
24.  
	
This Agreement may be executed via facsimile or e-mail in counterparts, and each facsimile or e-mail counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

 

 

 

	
25.  
	
In the event of any litigation to enforce the provisions of this Agreement, the prevailing party shall be entitled to recove all costs incurred including  its reasonable attorneys’ fees and costs incurred in such litigation

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

FLINT TELECOM GROUP, INC.

By:    /s/ Vincent Browne

           Vincent Browne

Chief Executive Officer

 

CHINA VOICE HOLDING CORP.

By:           /s/ D. Ronald Allen

D. Ronald Allen

Chief Financial Officer

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