8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

Form  8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

Of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):                                                                                     October 5, 2010

FLINT TELECOM GROUP, INC.

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(Exact Name of Registrant as Specified in its Charter)

          Nevada                            000-21069                             36-3574355

                                                                                                                                       (State or other jurisdiction of  &# 160;        (Commission                       (I.R.S. Employer

                                                                                                                                     incorporation or organization)    
60;       File Number)                     Identification No.)

 7500 College Blvd., Suite 500, Overland Park, KS                                              66210

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         (Address of Principal Executive Offices)                                                              (Zip Code)

(913) 815-1570

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(Registrant’s Telephone Number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Flint Telecom Group, Inc. (“Flint”) entered into a definitive Agreement and Plan of Merger on October 5, 2010 with two of its wholly-owned subsidiaries, and Ingedigit International, Inc., a Florida Corporation (“III”), Gotham Ingedigit Financial Processing Corp (“P2P”), each a Florida corporation and together the “Targets”, and all of the shareholders of III and P2P (the “Merger Agreement”), relating to the acquisition of all of the stock of III and P2P by Flint’s two subsidiaries through a merger in exchange for a potential maximum total of 600,000 shares of our Series H Convertible Preferred Stock (the “Merger Stock”).  300,000 shares of the Merger Stock shall be issued on the Closing Date.  The remaining 300,000 shares of the Merger Stock may be issued, in two tranches of 150,000 each,  during the 12 and 24 months following the Closing Date if either or both of the Targets meet or exceed the revenue and/or other operating targets as mutually agreed upon by Flint and the Targets as of the Closing Date.

The Series H Convertible Preferred Stock has a $10.00 per share liquidation value, a $0.001 par value, one vote for each preferred share issued, and is convertible on or after a period of twelve months from the Closing Date into common stock at a 25% discount to the Market Price.  Market Price is defined as the average closing price per share over the twenty trading days prior to the date of conversion. Provided, however, that the conversion price shall never be lower than ten percent of the Market Price on the Closing Date. Based on the current Market Price of $0.00697 per share and assuming that the Market Price does not improve, the maximum number of common shares potentially convertible from the 300,000 shares of Series H Convertible Preferred Stock to be issued at the Closing is 478,240,070 common shares, with an additional potential 478,240,070 shares potentially to be issued at the end of the 12 and 24 months following the Closing Date, should an additional 300,000 shares of preferred stock be issued pursuant to the Merger Agreement.

The Merger Agreement is subject to certain closing conditions, including, among other things, no material adverse changes to the Targets’ businesses and the cancellation of all related party debt (the “Closing”).  Flint will incur no placement agent fees or expenses as part of this transaction.  The foregoing descriptions of the Merger Agreement and the Merger Stock are qualified in its entirety by reference to the full text of the Agreement and Plan of Merger and the Form of Certificate of Designation of Series H Preferred Stock, which are attached hereto as Exhibits 2.1 and 2.2, and are incorporated herein by reference.

III was founded in 2001 and P2P was founded in 2006, and both are incorporated and have offices located in Florida. III is a U.S. based international pre-paid debit card company, partnered with both U.S. banks and international banks to offer debit cards to their customers.  P2P is a U.S. based financial transaction processing and technology company, working with banking clients and other program sponsors globally. In determining the number of our preferred shares to be issued to the shareholders of III and P2P in the transaction, Flint placed primary value on the combined companies’ assets, its business plan and the computer equipment and software licenses owned by III and P2P, and the existing relationships with banking partners that have cultivated over many years.  This combination should provide value in the form of the expectation of a profitable ongoing business with meaningful revenues.  Additional factors considered in the value determination included that these acquisitions will expand and strengthen Flint’s existing pre-paid market activities and open up new international markets and products for the group. Upon closing, Flint will assume ownership of operating companies in the U.S. and India, with additional market operations in Australia and Asia Pacific. Consequently, based upon all of the above factors, it was agreed to by the parties that Flint would issue 600,000 shares of preferred stock to the shareholders of III and P2P in exchange for all of the stock of III and P2P.

On September 22, 2010, September 29, 2010 and October 6, 2010, Flint issued press releases with respect to this potential merger.  A copy of these press releases are attached hereto as Exhibits 99.1, 99.2 and 99.3.

ITEM 3.02  UNREGISTERED SALES OF EQUITY SECURITIES

In connection with the merger as discussed above in Item 1.01, and conditional upon its Closing, Flint has agreed to issue up to a maximum potential total of 600,000 shares of Series H Convertible Preferred Stock to the Shareholders of III and P2P.  600,000 shares of Series H Convertible Preferred Stock are convertible on or after a period of twelve months from the Closing Date into common stock at a 25% discount to the Market Price.  Market Price is defined as the average closing price per share over the twenty trading days prior to the date of conversion. Provided, however, that the conversion price shall never be lower than ten percent of the Market Price on the Closing Date. Based on the current Market Price of $0.00697 per share and assuming that the Market Price does not improve, the maximum number of common shar es potentially convertible from the 300,000 shares of Series H Convertible Preferred Stock to be issued at the Closing is 478,240,070 common shares, with an additional potential 478,240,070 shares potentially to be issued at the end of the 12 and 24 months following the Closing Date, should an additional 300,000 shares of preferred stock be issued pursuant to the Merger Agreement.

We believe our offering and sale of the securities in the above transaction, made to accredited investors and certain persons outside of the United States, was exempt from registration under Section 4(2) of the Securities Act and Regulation D and Regulation S, promulgated thereunder.

ITEM 9.  FINANCIAL STATEMENTS AND EXHIBITS.

(a)   Not applicable.

(b)   Not applicable.

(c)   Exhibits.  The following exhibits are filed with this report:

Exhibit Number --------------------		Description ---------------
	2.1	Agreement and Plan of Merger dated October 5, 2010.
	2.2	Form of Certificate of Designation of Series H Preferred Stock.
	99.1	Press Release of Flint Telecom Group, Inc. issued on September 22, 2010.
	99.2	Press Release of Flint Telecom Group, Inc. issued on September 29, 2010.
	99.3	Press Release of Flint Telecom Group, Inc. issued on October 6, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

FLINT TELECOM GROUP, INC.

Date:   October 6, 2010                                                                           By:  /s/ Vincent Browne

  Vincent Browne,

  Chief Executive Officer

EX-2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

Flint Telecom Group, Inc.,

TelSpace, Inc.,

Better Choice Communications, Inc.,

AND

Ingedigit International, Inc. (“III”),

Gotham Ingedigit Financial Processing Corp. (“P2P”),

And Mr. Carlos Barrientos,  Mr. Abu Karim, Mrs. Vivian Manevich Siegel, Process4Money Continental LLC and Florida Export Finance Corp.  (the “III Shareholders”) and Gotham Financial LLC, III, Process4Money Continental LLC and Digital Engineering Corp. (the “P2P Shareholders”) (and together, the III Shareholders and P2P Shareholders shall be referred to as the “Shareholders”)

DATED AS OF OCTOBER 5, 2010

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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

This Agreement and Plan of Merger and Reorganization made this date by and between Flint Telecom Group Inc., a Nevada Corporation ("PARENT"), TelSpace, Inc. and Better Choice Communications, Inc., each a wholly-owned subsidiary of Parent and Florida Corporations, (together "MERGER SUBS"), Ingedigit International, Inc., a Florida Corporation (“III”) and Gotham Ingedigit Financial Processing Corp (“P2P”)., a Florida Corporation (III and P2P together referred to as the “Targets”), and Mr. Carlos Barrientos, Mr. Abu Karim,Mrs. Vivian Manevich Siegel,Process4Money Continental LLC andFlorida Export Finance Corp. (together, the “III Shareholders”) and Gotham Financial LLC,  III, Process4Money Continental LLC and Digital Engineering Corp.(together the “P2P Shareholders”) (and the III Shareholders and P2P Shareholders shall be referred to together as the “Shareholders"). Parent, Merger Subs, Targets, and Shareholders are referred to collectively herein as the "Parties."

PREAMBLE

The respective Boards of Directors of Parent, Merger Subs and Targets are of the opinion that the transactions described herein are in the best interests of the Parties to this Agreement and their respective Shareholders. This Agreement provides for the acquisition of Targets by Parent pursuant to the merger of Merger Subs with and into Targets. At the Effective Time (as defined in Section 1.2) of such merger, the outstanding shares of the capital stock of Targets shall be converted into the right to receive the shares of the common stock of Parent, as provided below. As a result, each shareholder of Targets shall become a Shareholder of Parent (the “Shareholders”) and each of the Targets shall continue to conduct the business and operations of Targets as wholly owned subsidiaries of Parent. The transactions described in th is Agreement are subject to the satisfaction of certain other conditions described in this Agreement. It is the intention of the Parties to this Agreement that the Merger for federal income tax purposes shall qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code and that this Agreement shall constitute a "plan of reorganization" for the purposes of the Internal Revenue Code.

NOW, THEREFORE, in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, the parties agree as follows:

ARTICLE 1.  TRANSACTIONS AND TERMS OF MERGER

1.1           THE MERGER.  At the Effective Time and subject to and upon the terms and conditions of this Agreement, Merger Subs shall be merged with and into Targets (the "MERGER"). As a result of the merger, the separate corporate existence of Merger Subs shall cease and Targets shall continue as the surviving corporations (sometimes hereinafter referred to as the "SURVIVING CORPORATIONS") of the Merger, each as a wholly owned Subsidiary of Parent under the corporate name it possesses immediately prior to the Effective Time and shall succeed to and assume all of the rights and obligations of Merger Subs in accordance with the laws of Florida. The Merger shall be consummated pursuant to the terms of this Agreement and the Plan of Merger, which has been approved and adopt ed by the respective Boards of Directors of Parent and Targets, and by the Shareholders.

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1.2           CLOSING; EFFECTIVE TIME.  Subject to the provisions of this Agreement, the parties hereto shall cause the Merger to be consummated by filing Articles of Merger with the Secretary of State of Florida in accordance with the relevant provisions of the Florida Business Corporation Act (FBCA). The time of such filing (or such later time as may be agreed in writing by Targets and the Parent) being the "EFFECTIVE TIME" as soon as practicable on or after the Closing Date (as herein defined). The closing of the Merger (the "CLOSING") shall take place no later than the week of October 11, 2010, at the offices of Parent, or at such time, date and location as may be mutually agreed by the Parties (the "CLOSING DATE").

1.3           EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the FBCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of Targets and Merger Subs shall vest in each Surviving Corporation, and all debts, liabilities and duties of Targets and Merger Subs shall become the debts, liabilities and duties of each Surviving Corporation.

1.4           ARTICLES OF INCORPORATION; BYLAWS. At the Effective Time, the Articles of Incorporation of Targets, as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation of each Surviving Corporation until duly amended or repealed. The Bylaws of Targets, as in effect immediately prior to the Effective Time, shall be the Bylaws of each Surviving Corporation and thereafter shall continue to be its bylaws until duly amended or repealed.

1.5           DIRECTORS AND OFFICERS. Unless otherwise determined by Parent and Targets prior to the Effective Time of Merger, the directors and officers of Merger Sub in office immediately prior to the Effective Time, together with such additional persons as may thereafter be elected, shall serve as the initial directors of the Surviving Corporation from and after the Effective Time in accordance with the Bylaws of the Surviving Corporation. Immediately prior to the Effective Time, all directors of the Targets shall resign, and appoint in their place Mr. Joseph Seroussi as the Director in P2P, and Mr. Mitchell A. Siegel as the Director in III, each of whom shall take all necessary action to fill the resulting vacancies on the Board of Directors of the Targets by electing Vincent B rowne and Bernard A. Fried to the Board of Directors of each of the Targets, and such directors shall be the directors of each Surviving Corporation at the Effective Time.  Such directors will hold office until their respective successors are duly elected or appointed and qualify in the manner provided in the Certificate of Incorporation and bylaws of each Surviving Corporation, or as otherwise provided by applicable law.

1.6           CONVERSION OF SHARES. Subject to the provisions of this Section 1.6, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Targets or the Shareholders or members of any of the foregoing, the shares of the constituent corporations shall be converted as follows:

(a)Each share of capital stock of Parent issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time.

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(b)All shares of Targets common stock (the "Targets Common Stock") issued and outstanding immediately prior to the Effective Time will be canceled and extinguished and automatically converted into the right to receive:

(i)A total of $6,000,000 worth of shares of Series H convertible preferred stock of Parent, the terms and conditions of which are set forth in more detail in the Certificate of Designation of Series H Convertible Preferred, attached hereto and incorporated herein as Schedule 1.6(b) (the “Merger Stock”) issued to the Shareholders on a pro rata basis determined by the percentage of ownership of the Targets at the Closing and as set forth on Schedule 1.6(b)(i), as follows:

A)     On the Closing Date of the Transaction, Parent will issue three million dollars ($3,000,000) worth of shares of Merger Stock to the Shareholders, convertible on or after a period of twelve months from the Closing Date into common stock at a twenty five percent (25%) discount to the Market Price.  [Market Price shall be defined as the average closing price per share over the twenty trading days prior to the date of conversion. Provided, however, that the conversion price shall never be lower than ten percent of the Market Price on the Closing Date]; and

B)   if either or both of the Surviving Corporations meet or exceed the revenue and/or other operating targets as mutually agreed upon by the Parent and the Targets in the Budget, as set forth in Schedule 1.6(b)(i)B attached hereto and incorporated herein, during the twelve (12) months following the Closing Date (the “First Year Period”), then the Shareholders shall receive $1,500,000 worth of additional Merger Stock (the “First Year Shares”); and

C)   if either or both of the Surviving Corporations meet or exceed the revenue and/or other operating targets in the Budget as set forth in Schedule 1.6(b)(i)B, attached hereto and incorporated herein, during the twelve (12) months following the First Year Period (the “Second Year Period”), then the Shareholders shall receive $1,500,000 worth of additional Merger Stock (the “Second Year Shares”).

(c)CANCELLATION OF TARGETS OWNED STOCK. Each share of Targets Common Stock held by the Targets or any direct or indirect wholly-owned subsidiary of Targets, with the exception of IIS, immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

(d)ADJUSTMENTS TO CONVERSION. The conversion rights of the Shareholders shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock), reorganization, recapitalization or other like change with respect to Parent Common Stock occurring after the date hereof and prior to the Effective Time.

(e)FRACTIONAL SHARES. No fractional shares of Parent Common Stock will be issued in connection with the Merger.

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1.7            EXCHANGE AGENT. Parent shall act as exchange agent for the Merger (the "EXCHANGE AGENT").

1.8           EXCHANGE PROCEDURES. Parent shall deliver to each Shareholder a certificate evidencing their portion of the Merger Stock upon surrender of a certificate for cancellation of Shareholder’s Target common stock to Parent.

1.9           REQUIRED WITHHOLDING.  The Parent and the Surviving Corporations shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Targets Common Stock such amounts as may be required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.

1.10           NO LIABILITY.  Notwithstanding anything to the contrary in this Section, neither Parent, Merger Subs, Shareholders nor Targets shall be liable to any holder of shares of Targets Common Stock, Parent Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

1.11           LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificates shall have been lost, stolen or destroyed, the Parent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, such shares of Targets Common Stock as may be required pursuant to this Agreement; provided, however, that Parent may, in its sole discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent with respect to the Certificates alleged to have been lost, stolen or destroyed.

1.12           NO FURTHER OWNERSHIP RIGHTS IN TARGETS COMMON STOCK. All shares of Merger Stock issued upon the surrender for exchange of shares of Targets Common Stock in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Targets Common Stock, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Targets Common Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, certificates are presented to the Surviving Corporation for any reason, they shall be cancelled and exchanged as provided in this Section 1.14.

1.13           ADDITIONAL ACTIONS. If, at any time after the Effective Time, the Surviving Corporation or Parent shall consider or be advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm of record or otherwise in the Surviving Corporation its right, title or interest in, to or under any of the rights, properties or assets of the Targets or otherwise to carry out the purposes of this Agreement, the officers and directors of the Surviving Corporation shall be authorized to execute

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and deliver, in the name and on behalf of the Targets, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of the Targets, all such other actions and things as may be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in the Surviving Corporation or otherwise to carry out the purposes of this Agreement.

1.14           TAX AND ACCOUNTING CONSEQUENCES. It is intended by the parties hereto that the Merger shall constitute a reorganization within the meaning of Section 368 of the Code. The parties hereto adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

1.15           RESTRICTED STOCK. The shares of Merger Stock to be issued in connection with this Agreement will be issued in a transaction exempt from registration under the Securities Act by reason of Section 4(2) thereof, and Parent is relying on the representations of Targets and the Shareholders with respect to such exemption. There will be placed on the certificates for such shares, or shares issued in substitution thereof, a legend stating in substance:

"The securities represented hereby have not been registered under the Securities Act of 1933, as amended, and may not be offered, sold, transferred or otherwise disposed of unless registered with the Securities and Exchange Commission of the United States and the securities regulatory authorities of applicable states or unless an exemption from such registration is available."

ADDITIONAL  RESTRICTIONS.   Shareholders  agree  that  no securities  shall be sold in the public market for  twelve  months after the Closing Date, without the consent of Parent.  After twelve months from the Closing Date, Seller and its affiliates may sell a maximum amount of Flint securities per month not to exceed the weekly average trading volume of Flint’s common stock in the prior month.  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 Agreement and Plan of Merger dated ―----, 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 ―-------------.  This restriction is independent of and in addition to the other restrictions on transfer noted hereon.”

The foregoing legends will also be placed on any certificate representing securities issued subsequent to the original issuance of the Merger Stock pursuant to the Merger as a result of any transfer of such shares or any stock dividend, stock split, or other recapitalization as long as the Merger Stock issued pursuant to the Merger has not been transferred in such manner to justify the removal of the legend therefrom.

Notwithstanding anything to the contrary contained herein and unless otherwise agreed to by the Buyer, the number of shares of Common Stock that may be acquired by the Shareholders, as a group, through conversion of the Merger Stock (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by the Seller and its affiliates and

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any other persons whose beneficial ownership of Common Stock would be aggregated with the Seller’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder.  On the Closing Date each Shareholder to receive Merger Stock shall be assigned a maximum percentage ownership allowance at any given time following conversion, based on the Shareholder’s proportionate ownership interest in the Targets, the total aggregate percentage of which at any given time shall not exceed 4.999% as described above .

The Merger Stock shall be automatically converted into common stock upon a Change of Control.  Change of Control means any merger, consolidation, acquisition, separation, or reorganization in which more than 50% of the shares of Common Stock of the Parent outstanding immediately before such event are converted into cash or into another security, or any sale of more than 50% of the Parent's assets.

ARTICLE 2. TARGETS DELIVERIES

         2.1 ACCOUNTS RECEIVABLE, INVENTORY, ETC. Simultaneously with the execution of this Agreement, attached hereto and incorporated herein as Exhibits 2.1 to this Agreement, and again on the Closing Date, each Target shall deliver to Parent the following:

                  (a) a list of all of the Targets’ accounts  receivable,  notes receivable, cash balances, deposits;

                  (b) a list of all of the Targets’ inventory;

                  (c) a list of all of the Targets’  fixed  assets  and any  other  real and company assets;

                  (d) a list of all of the Targets’ intellectual  property,  tradenames and trademarks and any other intangible property ;

                  (e) a list of all of the Targets’ accounts  payable and other  liabilities and contingent liabilities; and

   (f)   a list of all of the Targets’ employees  and the current  compensation of each employee,  all fringe  benefits  provided for each employee and all employee benefit plans.

         2.2 DISCLOSURE LETTER. In each instance,  the delivery of the documents shall be accompanied by a  certification  ("Disclosure  Letter") from each of the Targets that the documents  or  information  are  true,  correct  and  complete  in all  material respects, subject to the following:

                  (a) the  documents and  information  will be subject to change based  on the  ordinary  course  of the Target's  business  up and  until  the Effective Time;

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                  (b)  the Disclosure Letter will be updated prior to Closing.

ARTICLE 3.  REPRESENTATIONS AND WARRANTIES OF TARGETS AND SHAREHOLDERS

:  Each of the Targets and Shareholders, jointly and severally, hereby represent and warrant to Parent as follows:

3.1           ORGANIZATION, STANDING, AND POWER. Targets are each a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is organized, with full corporate power and authority to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use. Targets are duly qualified or licensed to transact business as a foreign corporation in good standing in the States of the United States and foreign jurisdictions where the character of its assets or the nature or conduct of its business requires it to be so qualified or licensed, except for such jurisdictions in which the failure to be so qualified or licensed is not reasonably likely to have, individually or in the aggreg ate, a Targets material adverse effect. The minute book and other organizational documents for Targets have been made available to Parent for its review and are true and complete in all material respects as in effect as of the date of this Agreement and accurately reflect in all material respects all amendments thereto and all proceedings of the Board of Directors and Shareholders thereof.

3.2           AUTHORITY OF TARGETS; NO BREACH BY AGREEMENT

(a)           Targets have the corporate power and authority necessary to execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly approved by the Targets Board of Directors, as required by applicable law, and the Targets Board of Directors have, as of the date of this Agreement, determined (i) that the Merger is advisable and fair to, and in the best interests of Targets and its Shareholders and (ii) to recommend that the Shareholders of Targets approve and adopt this Agreement and approve the Merger.   The Shareholders have adopted this Agreement and approved the Merger.

This Agreement, when executed and delivered by the Targets, represents a legal, valid, and binding obligation of Targets, enforceable against Targets in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly approved by Ingedigit India Software Services, Ltd. (IIS), a 95% owned subsidiary of III, IIS’ Board of Directors. IIS’s Board of Directors have, as of the date of this Agreement, determined (i) that the

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Merger is advisable and fair to, and in the best interests of IIS and its shareholders and (ii) to recommend that the shareholders of IIS approve and adopt this Agreement and approve the Merger.  100% of the IIS shareholders have adopted this Agreement and approved the Merger. The authorized capital stock of IIS consists solely of shares of IIS’s Common Stock, all of which issued and outstanding shares as of the date of this Agreement and are owned 95% by III and 5% by Sayid Mohamed Nazieb.

(b)           Neither the execution and delivery of this Agreement by Targets, nor the consummation by Targets of the transactions contemplated hereby, nor compliance by Targets with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of Targets Articles of Incorporation or Bylaws or the certificate or articles of incorporation or bylaws of any Targets Subsidiary or any resolution adopted by the board of directors or the Shareholders of Targets, or (ii) constitute or result in a default under, or require any consent pursuant to, or result in the creation of any lien on any asset of Targets under, any contract or permit of Targets, where such default or lien, or any failure to obtain such consent, is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect, or, (iii) constitute or result in a default under, or require any consent pursuant to, any law or order applicable to Targets or any of its material assets.

 (c)           Targets are not or will not be required to give any notice to or obtain any consent from any person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the contemplated transactions.

3.3           CAPITAL STOCK

(a)           The authorized capital stock of Targets consists solely of shares of Targets Common Stock, all of which issued and outstanding shares as of the date of this Agreement and are owned by the Shareholders. All of the issued and outstanding shares of Targets Capital Stock are duly and validly issued and outstanding and are fully paid and nonassessable under the FBCA and, as it relates to PHC, under the IBCA. None of the outstanding shares of Targets capital stock has been issued in violation of any preemptive rights of the current or past shareholders of Targets.

(b)           Except as set forth in Section 2.3(a) above, there are no shares of capital stock or other equity securities of Targets outstanding and no outstanding equity rights relating to the capital stock or equity securities of Targets.

3.4           TARGETS SUBSIDIARIES. Targets have no Subsidiaries, except that as of the Closing Date IIS is a majority owned subsidiary of III.

3.5 COMPLIANCE WITH LAWS.  Targets have in effect all permits necessary for it to own, lease, or operate its material assets and to carry on its business as now conducted, except for those permits the absence of which are not reasonably likely to have, individually or in the aggregate, a Targets material adverse effect, and there has occurred no default under any such permit, other than defaults which are not reasonably likely to have, individually or in the aggregate, a Targets material adverse effect. Each of the Targets:

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(a)           is not in default under any of the provisions of its Articles of Incorporation or Bylaws (or other governing instruments);

(b)           is not in default under any laws, orders, or permits applicable to its business or employees conducting its business, except for defaults which are not reasonably likely to have, individually or in the aggregate, a Targets material adverse effect; or

(c)           has not received any notification or communication from any agency or department of federal, state, or local government or any regulatory authority or the staff thereof (i) asserting that Targets is not in compliance with any of the laws or orders which such governmental authority or regulatory authority enforces, where such noncompliance is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect, (ii) threatening to revoke any permits, the revocation of which is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect, or (iii) requiring Targets to enter into or consent to the issuance of a cease and desist order, formal agreement, directive, commitment, or memorandum of understanding, or to adopt any Board resolution or similar undertaking.

Copies  of all  reports,  correspondence,  notices  and other documents relating to any inspection,  audit, monitoring or other form of review or enforcement  action by a regulatory  authority has been provided to Parent prior to the execution of this Agreement, and any and all documents received between the Effective Date and the Closing Date shall made  immediately available  to Parent.

3.6 LEGAL PROCEEDINGS. There is no litigation instituted or pending, or, to the knowledge of Targets, threatened (or unasserted but considered probable of assertion and which if asserted would have at least a reasonable probability of an unfavorable outcome) against Targets, or against any director, employee or employee benefit plan of Targets, or against any asset, interest, or right of any of them, that is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect, nor are there any orders of any regulatory authorities, other governmental authorities, or arbitrators outstanding against Targets, that are reasonably likely to have, individually or in the aggregate, a Targets material adverse effect. Targets are not involved in or, to the knowledge of Targets, reasonably anticipate any dispute with an y of its current or former employees, agents, brokers, distributors, vendors, customers, business consultants, representatives or independent contractors (or any current or former employees of any of the foregoing persons).

3.7 TAX AND REGULATORY MATTERS. Neither Targets nor any affiliate thereof has taken or agreed to take any action or has any Knowledge of any fact or circumstance that is reasonably likely to (i) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay receipt of any consents of regulatory authorities referred to in Section  6.1(b) or result in the imposition of a condition or restriction of the type referred to in the last sentence of such Section 6.1(b).

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3.8 STATEMENTS TRUE AND CORRECT.  No statement, certificate, instrument or other writing furnished or to be furnished by Targets pursuant to this Agreement contains or will contain any untrue statement of material fact or will omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

3.9  Disclosure.  Each of the Targets and Shareholders has fully provided Parent with all the information that has been requested for deciding whether to enter into this transaction and all information that the Targets and Shareholders believe is reasonably necessary to enable Parent to make such a decision, including the Target’s projections described in the Budget, as set forth in Schedule 1.6(b)(i)B attached hereto and incorporated herein.  No representation or warranty of the Targets contained in this Agreement and the exhibits attached hereto, any certificate furnished or to be furnished to Parent at the Closing, or the Budget (when read together) contains any untrue statement of a material fact or omits to state a material fact ne cessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.  The Budget and the financial and other projections were prepared in good faith by the Targets and the Shareholders and reviewed with Parent and mutually agreed to between the Targets and Parent.

3.10  Absence of Breaches or Defaults.  Disclosure Schedule 3.10 sets forth a list of each of the Targets’ contracts that are material to its business and operations (the “Contracts”). All of the Contracts are valid and in full force and effect.  The Targets have duly performed all of their obligations under the Contracts, and no violation of, or default or breach under any contract has accrued.

3.11   Financial Statements.  The Financial Statements (1) are in accordance with the books and records of each of the Targets, (2) except as set forth in Schedule 3.11 or in the notes to the Financial Statements, have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and (3) fairly and accurately present the assets, liabilities (including all reserves) and financial position of the Targets as of the respective dates thereof and the results of operations and changes in cash flows for the periods then ended. Financial Statements have been compiled by Michael Siano, PA for on behalf of P2P and Douglas N. Rice C.P.A., P.A., an independent certified publ ic accountant through December 31, 2008 and the Orlando Monsalve, CFO of Grupo Com, a wholly owned subsidiary of Grupo Ingedigit.  At the respective dates of the Financial Statements, there were no liabilities of the Company, which, in accordance with generally accepted accounting principles, should have been shown or reflected in the Financial Statements or the notes thereto, which are not shown or reflected in the Financial Statements or the notes thereto.

3.12 Litigation.  Except as disclosed in Schedule 3.12, there is no action, order, writ, injunction, judgment or decree outstanding or any claim, suit, litigation, proceeding, labor dispute, arbitral action, governmental audit or investigation (collectively, “Actions”) pending, threatened or anticipated (a) against, related to or affecting: (1) any of the Targets, (2) any officers or directors of the Targets, or (3) the Shareholder, (b) seeking to delay, limit or

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enjoin the transactions contemplated by this Agreement, (c) that involve the risk of criminal liability, or (d) in which a Target is a plaintiff, including any derivative suits.  None of the Targets are in default with respect to or subject to any judgment, order, writ, injunction or decree of any court or governmental agency, and there are no unsatisfied judgments.

3.13  Liabilities.  The Targets do not have any liabilities, obligations or commitments of any nature (whether absolute, accrued, contingent or otherwise and whether matured or unmatured), including without limitation tax liabilities due or to become due, except (1) liabilities which are reflected and reserved against on the Financial Statement, which have not been paid or discharged since the date thereof, (2) liabilities arising under contracts, leases, letters of credit, purchase orders, licenses, Permits, purchase agreements and other agreements, business arrangements and commitments described in the Disclosure Schedule 3.11 (and under those Contracts which are not required to be disclosed on the Disclosure Schedule) and (3) liabilit ies incurred since the date of the Financial Statement in the ordinary course of business and consistent with past practice and in accordance with this Agreement, or listed in Disclosure Schedule 2.1 (none of which relates to any breach of Contract, breach of warranty, tort, infringement or violation of law or arose out of any Action) which, individually or in the aggregate, has or would have a material adverse effect.

3.15  Material Misstatements Or Omissions.  No representations or warranties by the Targets or the Shareholder in this Agreement, nor any document, exhibit, statement, certificate or schedule heretofore or hereafter furnished to the Parent pursuant hereto, or in connection with the transactions contemplated hereby, including without limitation the Disclosure Schedule, contains any untrue statement of a material fact, or omits to state any material fact necessary to make the statements or facts contained therein not misleading.  The Targets and the Shareholder have disclosed all events, conditions and facts materially affecting the business, prospects and financial condition of the Targets.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS

  The Shareholders hereby represent and warrant, jointly and severally, to Parent and Merger Subs that the following representations and warranties are, as of the date hereof, and will be, as of the Closing Date, true and correct:

4.1           Title.  The Shareholders hold of record and hold beneficially 100% of the issued and outstanding shares of common stock of each of the Targets, free and clear of any and all encumbrances or other restrictions on transfer.  Other than this Agreement, none of the Shareholders are a party to any voting trust, proxy or other agreement or understanding with respect to any capital stock of the Targets.

4.1           Execution and Effect of Agreement.  The Shareholders have the full right, power and authority to execute and deliver this Agreement and to perform her obligations hereunder, and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by the Shareholders, and the consummation by the shareholder of the transactions contemplated hereby have been duly

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authorized by all necessary action (corporate or otherwise) and no other proceeding on the part of any Shareholder is necessary to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby.  This Agreement has been duly executed and delivered by the Shareholders and constitutes the legal, valid and binding obligation of Shareholders, enforceable against the shareholder in accordance with its terms.

           ARTICLE 5.                                REPRESENTATIONS AND WARRANTIES OF MERGER SUBS AND PARENT.

Merger Subs and Parent, jointly and severally, hereby represent and warrant to Targets and Shareholders as follows:

5.1           ORGANIZATION, STANDING, AND POWER. Each of Merger Subs and Parent is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and each of Merger Subs and Parent has all requisite corporate power and authority to own, lease and operate its assets and to carry on its business as now being conducted. Each of Merger Subs and Parent is duly qualified to transact business, and is in good standing, as a foreign corporation in each jurisdiction where the character of its activities requires such qualification, except where the failure to so qualify would not have a material adverse effect on the assets, liabilities, results of operations, financial condition, business or prospects of, each of Merger Subs and Parent or it's respective subsidiaries taken as a whole.

5.2           AUTHORITY; NO BREACH BY AGREEMENT.

(a)           Each of Merger Subs and Parent has the corporate power and authority necessary to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of each of Merger Subs and Parent. This Agreement represents a legal, valid, and binding obligation of Merger Sub and Parent, enforceable against each of Merger Subs and Parent in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivers hip, conservatorship, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

(b)           Neither the execution and delivery of this Agreement by each of Merger Subs and Parent, nor the consummation by each of Merger Subs and Parent of the transactions contemplated hereby, nor compliance by each of Merger Subs and Parent with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of each of Merger Subs and Parent's Certificate of Incorporation or Bylaws, or (ii) constitute or result in a default under, or require any Consent pursuant to, or result in the creation of any Lien on any asset of any of Merger Subs, Parent or any subsidiary or controlled entity of Parent ("Parent Entity") under, any contract or permit of any of Merger Subs, Parent or Parent Entity, where such default or lien, or any failure to obtain such co nsent, is reasonably likely to have, individually or in the aggregate, a Merger Sub or Parent material adverse effect, constitute or result in a default under,

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or require any consent pursuant to, any law or order applicable to any Parent Entity or any of their respective material assets.

(c)           Other than such consents, filings, or notifications which, if not obtained or made, are not reasonably likely to have, individually or in the aggregate, a Merger Subs or Parent material adverse effect, no notice to, filing with, or consent of, any public body or authority is necessary for the consummation by each of Merger Subs and Parent of the Merger and the other transactions contemplated in this Agreement.

5.3           CAPITALIZATION OF MERGER SUB AND PARENT.

(a)           The authorized capital stock of Parent consists of nine hundred million (900,000,000) shares of common stock, $.01 par value per share of which 292,392,359 shares were issued and outstanding, and 5,000,000 shares of preferred stock, o $0.001 par value per share of which 608,780 shares were issued and outstanding, as of September 14, 2010.

(b)           The authorized capital stock of Merger Subs consists of 1,000 shares of  common stock, $.001 par value per share of which 100 shares will be issued and outstanding as of the Closing Date.

5.4           SEC FILINGS; FINANCIAL STATEMENTS.

(a)           Parent has filed and made available to Targets all SEC Documents required to be filed by Parent, (the "Parent SEC Reports") . The Parent SEC Reports (i) at the time filed or published, complied in all material respects with the applicable requirements of the Securities Laws and  other applicable Laws and (ii) did not, at the time they were filed (or, if  amended or superseded by a filing prior to the date of this Agreement, then on  the date of such filing) contain any untrue statement of a material fact or omit  to state a material fact required to be stated in such Parent SEC Reports or  necessary in order to make the statements in such Parent SEC Reports, in light  of the circumstances under which they we re made, not misleading. None of Parent's subsidiaries is required to file any reports or other documents with the SEC.

(b)           Each of the Parent Financial Statements  (including, in each case, any related notes) contained in the Parent SEC  Reports, filed or published after the date of this Agreement  until the Effective Time, complied as to form in all material respects with the  applicable published rules and regulations of the SEC with respect thereto, was  prepared in accordance with GAAP applied on a consistent basis throughout the  periods involved (except as may be indicated in the notes to such financial  statements or, in the case of unaudited interim statements, as permitted by Form  10-Q of the SEC), and fairly presented in all material respects the consolidated  financial position of Parent and its Subsidiaries as at the respective dates and  the consolidated results of operations and cash flows for the periods indicated,  except that the unaudited interim financial statements were or are subject to  normal and recurring year-end adjustments which were not or are not expected to  be material in amount or effect.

5.5           ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the Parent SEC Reports filed or published prior to the date of this Agreement, there have been no events,

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changes or occurrences (whether or not covered by insurance) which have had, or are reasonably likely to have, individually or in the aggregate, a Parent or Merger Subs material adverse effect.

5.6           COMPLIANCE WITH LAWS. Each Parent Entity has in effect all permits necessary for it to own, lease or operate its material Assets and to carry on its business as now conducted, except for those permits the absence of which are not reasonably likely to have, individually or in the aggregate, a Parent material adverse effect, and there has occurred no default under any such permit, other than defaults which are not reasonably likely to have, individually or in the aggregate, a Parent material adverse effect. None of the Parent Entities:

(a)           is in default under its Certificate of Incorporation or Bylaws (or other governing instruments); or

(b)           is in default under any laws, orders or permits applicable to its business or employees conducting its business, except for Defaults which are not reasonably likely to have, individually or in the aggregate, a Parent material adverse effect; or

(c)           has received any notification or communication from any agency or department of federal, state, or local government or any regulatory authority or the staff thereof (i) asserting that any Parent Entity is not in compliance with any of the Laws or Orders which such governmental authority or regulatory authority enforces, where such noncompliance is reasonably likely to have, individually or in the aggregate, a Parent material adverse effect, (ii) threatening to revoke any Permits, the revocation of which is reasonably likely to have, individually or in the aggregate, a Parent material adverse effect, or (iii) requiring any Parent Entity to enter into or consent to the issuance of a cease and desist order, formal agreement, directive, commitment or memorandum of unders tanding, or to adopt any Board resolution or similar undertaking, which restricts materially the conduct of its business.

5.7           LEGAL PROCEEDINGS. There is no litigation instituted or pending, or, to the knowledge of Parent, threatened (or unasserted but considered probable of assertion and which if asserted would have at least a reasonable probability of an unfavorable outcome) against any Parent Entity, or against any director, employee or employee benefit plan of any Parent Entity, or against any Asset, interest, or right of any of them, that is reasonably likely to have, individually or in the aggregate, a Parent material adverse effect, nor are there any Orders of any regulatory authorities, other governmental authorities, or arbitrators outstanding against any Parent Entity, that are reasonably likely to have, individually or in the aggregate, a Parent material adverse effect.

5.8           STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or other writing furnished or to be furnished by any Parent Entity or any Affiliate thereof to Targets pursuant to this Agreement contains or will contain any untrue statement of material fact or will omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All documents that any Parent Entity or any affiliate thereof is responsible for filing with any regulatory authority in connection with the transactions contemplated hereby will comply as to form in all material respects with the provisions of applicable Law.

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5.9           AUTHORITY OF MERGER SUBS. Merger Subs are each a corporation duly organized, validly existing and in good standing under the Laws of the State of Incorporation as a wholly owned Subsidiary of Parent. The authorized capital stock of Merger Subs consists of 1,000 shares of Merger Sub Common Stock, all of which is validly issued and outstanding, fully paid and nonassessable and is owned by Parent free and clear of any lien. Merger Subs have the corporate power and authority necessary to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validl y authorized by all necessary corporate action in respect thereof on the part of Merger Subs. This Agreement represents a legal, valid, and binding obligation of Merger Subs, enforceable against Merger Subs in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought). Parent, as the sole Shareholder of Merger Subs, has voted prior to the Effective Time the shares of Merger Subs Common Stock in favor of adoption approval of this Agreement, as and to the extent required by applicable Law.

5.10           ACCOUNTING, TAX AND REGULATORY MATTERS. No Parent Entity or any Affiliate thereof has taken or agreed to take any action or has any Knowledge of any fact or circumstance that is reasonably likely to (i) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay receipt of any Consents of regulatory authorities referred to in Section 6.1(b) or result in the imposition of a condition or restriction of the type referred to in the last sentence of such Section 6.1(b).

ARTICLE 6.  CONDUCT OF BUSINESS PENDING CONSUMMATION AND OTHER COVENANTS.

6.1           AFFIRMATIVE COVENANTS OF TARGETS.   From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of Parent shall have been obtained, and except as otherwise expressly contemplated herein, each of the Targets shall (a) operate its business only in the usual, regular, and ordinary course, (b) preserve intact its business organization and assets and maintain its rights and franchises, and (c) take no action which would (i) materially adversely affect the ability of any Party to obtain any consents required for the transactions contemplated hereby without imposition of a condition or restriction of the type referred to in the last sentences of Section 7.1(b) or 7.1(c), or (ii) materially adversely affect the ability of any Party to perform its covenants and agreements under this Agreement.

6.2           NEGATIVE COVENANTS OF TARGETS. From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of Parent shall have been obtained, and except as otherwise expressly contemplated

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herein, each of the Targets covenants and agrees that it will not do or agree or commit to do any of the following:

(a)amend the Articles of Incorporation, Bylaws or other governing instruments of Targets, or

(b) except as may be incurred in the ordinary course of business or to fund operations, incur any indebtedness for borrowed money, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person, or impose, or suffer the imposition, on any Asset of Targets of any Lien or permit any such Lien to exist without prior written consent of the Parent; or

(c)except for this Agreement, issue, sell, pledge, encumber, authorize the issuance of, enter into any Contract to issue, sell, pledge, encumber, or authorize the issuance of, or otherwise permit to become outstanding, any additional shares of Targets Capital Stock or any other equity right; or

(d)adjust, split, combine or reclassify any capital stock of Targets or issue or authorize the issuance of any other securities in respect of or in substitution for shares of Targets Capital Stock, or sell, lease, mortgage or otherwise dispose of or otherwise encumber any Asset having a book value in excess of $10,000 other than in the ordinary course of business for reasonable and adequate consideration, or transfer or license to any Person other than Targets or otherwise extend, amend or modify in any material respect any rights to material Intellectual Property other than in the ordinary course of business (including changing any domain names or failing to renew existing domain name registrations on a timely basis), or enter into grants to future Intellectual Property rights, other than as may be required by applicable Law; or

(e)purchase any securities or make any material investment, either by purchase of stock or securities, contributions to capital, Asset transfers, or purchase of any Assets, in any Person other than a wholly owned Targets Subsidiary, or otherwise acquire direct or indirect control over any Person; or

(f)enter into or amend any employment contract between Targets and any Person (except for any such amendment as is required by law) that Targets do not have the unconditional right to terminate without liability (other than liability for services already rendered), at any time on or after the Effective Time; or

(g)adopt any new employee benefit plan or terminate or withdraw from, or make any material change in or to, any existing employee benefit plans of Targets other than any such change that is required by law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such employee benefit plans, except as required by law, the terms of such plans or consistent with past practice; or

(h)make any significant change in any tax or accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in Tax Laws or GAAP as concurred to by Parent's independent auditors; or

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(i)commence any litigation other than in accordance with past practice, or settle any litigation involving any Liability of Targets for money damages or restrictions upon the operations of Targets; or

(j)except in the ordinary course of business, enter into, modify, amend or terminate any material contract or waive, release, compromise or assign any material rights or claims.

6.3           ADVERSE CHANGES IN CONDITION. Each Party agrees to give written notice promptly to the other Party upon becoming aware of the occurrence or impending occurrence of any event or circumstance relating to it or any of its Subsidiaries which (i) is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect or a Parent material adverse effect, as applicable, or (ii) would cause or constitute a material breach of any of its representations, warranties, or covenants contained herein, and to use its reasonable efforts to prevent or promptly to remedy the same.

6.4           REGULATORY FILINGS; REQUIRED CONSENTS. The Parties hereto shall cooperate with each other and use their reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, and to obtain as promptly as practicable all consents of all regulatory authorities and other Persons which are necessary or advisable to consummate the transactions contemplated by this Agreement (including the Merger). Each Party shall have the right to review in advance, and to the extent practicable each will consult the other on, in each case subject to applicable Laws relating to the exchange of information, all the information relating to the other Party which appears in any filing made with, or written materials submitted t o, any regulatory authority or other Person in connection with the transactions contemplated by this Agreement and will promptly notify each other of any communication with any regulatory authority or other Person and provide the other Party with an opportunity to participate in any meetings with a regulatory authority or other Person relating thereto; provided, that nothing contained herein shall be deemed to provide either Party with a right to review any information provided to any regulatory authority on a confidential basis in connection with the transactions contemplated hereby. In exercising the foregoing right, each of the Parties hereto shall act reasonably and as promptly as practicable. The Parties agree that they will consult with each other with respect to the obtaining of all Consents of all regulatory authorities and other Persons necessary or advisable to consummate the transactions contemplated by this Agreement and each Party will keep the other apprised of the status of matters relating to contemplation of the transactions contemplated herein. To the extent permitted by Law, the Parties shall deliver to each other copies of all filings, correspondence and orders to and from all regulatory authorities in connection with the transactions contemplated hereby. Each Party also shall promptly advise the other upon receiving any communication from any regulatory authority whose Consent is required for consummation of the transactions contemplated by this Agreement which causes such Party to believe that there is a reasonable likelihood that any requisite Consent will not be obtained or that the receipt of any such Consent will be materially delayed.

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6.5           AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and conditions of this Agreement, each Party agrees to use, and to cause its Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable laws to consummate and make effective, as soon as reasonably practicable after the date of this Agreement, the transactions contemplated by this Agreement, including using its reasonable efforts to lift or rescind any Order adversely affecting its ability to consummate the transactions contemplated herein and to cause to be satisfied the conditions referred to in ARTICLE 6; provided, that nothing herein shall preclude either Party from exercising its rights under this Agreement. Each Party shall use its reasonable efforts to obtain all Consents necessary or desirable for the consummation of the transactions contemplated by this Agreement.

6.6           INVESTIGATION AND CONFIDENTIALITY.

(a)           Prior to the Effective Time and subject to applicable Laws relating to the exchange of information, each Party shall keep the other Party advised of all material developments relevant to its business and to consummation of the Merger and shall permit the other Party to make or cause to be made such investigation of its business and properties and of its financial and legal conditions as the other Party reasonably requests, provided that such investigation shall be reasonably related to the transactions contemplated hereby and shall not interfere unnecessarily with normal operations. No investigation by a Party shall affect the representations and warranties of the other Party.

(b)           Each Party shall, and shall cause its advisers and agents to, maintain the confidentiality of all confidential information furnished to it by the other Party concerning its and its Subsidiaries' businesses, operations, and financial positions and shall not use such information for any purpose except in furtherance of the transactions contemplated by this Agreement. If this Agreement is terminated prior to the Effective Time, each Party shall promptly return or certify the destruction of all documents and copies thereof, and all work papers containing confidential information received from the other Party.

(c)           Targets shall use its reasonable efforts to exercise its rights, and shall not waive any rights, under confidentiality agreements entered into with Persons who were considering an acquisition proposal with respect to Targets to preserve the confidentiality of the information relating to Targets provided to such Persons and their Affiliates and Representatives.

(d)           Each Party agrees to give the other Party notice as soon as practicable after any determination by it of any fact or occurrence relating to the other Party which it has discovered through the course of its investigation and which represents, or is reasonably likely to represent, either a material breach of any representation, warranty, covenant or agreement of the other Party or which has had or is reasonably likely to have a Targets material adverse effect or a Parent material adverse effect, as applicable.

6.7           PRESS RELEASES. Prior to the Effective Time, Targets and Parent shall consult with each other as to the form and substance of any press release or other public disclosure materially related to this Agreement or any other transaction contemplated hereby; provided, that nothing in this Section 6.7 shall be deemed to prohibit any Party from making any disclosure which its

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counsel deems necessary or advisable in order to satisfy such Party's disclosure obligations imposed by Law.

6.8           CERTAIN ACTIONS. Except with respect to this Agreement and the transactions contemplated hereby, neither Targets nor any Affiliate thereof nor any Representatives thereof shall directly or indirectly solicit any acquisition proposal by any Person. Neither Targets nor any Affiliate or Representative thereof shall furnish any non-public information that it is not legally obligated to furnish, negotiate with respect to, or enter into any Contract with respect to, any acquisition proposal, but Targets may communicate information about such an acquisition proposal to its Shareholders if and to the extent that it is required to do so in order to comply with its legal obligations as advised by outside counsel. Targets shall promptly advise Parent following the receipt of any acquisition proposal and the details thereof, and advise Parent of any developments with respect to such acquisition proposal promptly upon the occurrence thereof. Targets shall (i) immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Persons conducted heretofore with respect to any of the foregoing, and (ii) direct and use its reasonable efforts to cause all of its Affiliates and Representatives not to engage in any of the foregoing.

6.9           TAX TREATMENT. Each of the Parties undertakes and agrees to use its reasonable efforts to cause the Merger, and to take no action which would cause the Merger not, to qualify for treatment as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code for federal income tax purposes.

6.10           CHARTER PROVISIONS.  Targets shall take all necessary action to ensure that the entering into of this Agreement and the consummation of the Merger and the other transactions contemplated hereby do not and will not result in the grant of any rights to any Person under the Articles of Incorporation, Bylaws or other governing instruments of Targets or restrict or impair the ability of Parent or any of its Subsidiaries to vote, or otherwise to exercise the rights of a Shareholder with respect to, shares of Targets that may be directly or indirectly acquired or controlled by them.

6.11           EMPLOYEE BENEFITS AND CONTRACTS.  The Surviving Corporations, as applicable, will enter into employment agreements with Abu Karim, Joseph Seroussi, Mitchell A. Siegel  and other mutually agreed to key employees of Targets on such terms and conditions to be mutually agreed prior to the Closing.  The Targets’ Benefits and Insurance Plans shall be cancelled effective as of the Closing Date.

ARTICLE 7.                                CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

7.1           CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of each Party to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived in writing by both Parties:

(a)           REGULATORY APPROVALS. All Consents of, filings and registrations with, and notifications to, all regulatory authorities required for consummation of the Merger shall have been obtained or made and shall be in full force and effect and all waiting periods required

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by Law shall have expired. No Consent obtained from any regulatory authority which is necessary to consummate the transactions contemplated hereby shall be conditioned or restricted in a manner (including requirements relating to the raising of additional capital or the disposition of Assets) which in the reasonable judgment of the Board of Directors of Parent would so materially adversely impact the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, Parent would not, in its reasonable judgment, have entered into this Agreement.

(b)           CONSENTS AND APPROVALS. Targets shall have obtained any and all other Consents required for consummation of the Merger or for the preventing of any Default under any Contract or Permit of such Party which, if not obtained or made, is reasonably likely to have, individually or in the aggregate, a Targets material adverse effect or a Parent material adverse effect. No Consent so obtained which is necessary to consummate the transactions contemplated hereby shall be conditioned or restricted in a manner which in the reasonable judgment of the Board of Directors of Parent would so materially adversely impact the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, Parent would not, in its rea sonable judgment, have entered into this Agreement.

(c)           LEGAL PROCEEDINGS. No court or governmental or regulatory authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order (whether temporary, preliminary or permanent) or taken any other action which prohibits, restricts or makes illegal consummation of the transactions contemplated by this Agreement, or which makes it inadvisable to consummate such transaction.

(d)    Material Changes.  There shall not have been any material adverse change with respect to the business of any of the Targets or the Parent since the date of this Agreement.

7.2           CONDITIONS TO OBLIGATIONS OF PARENT. The obligations of Parent to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by Parent:

(a)           REPRESENTATIONS AND WARRANTIES. For purposes of this Section 7.2(a), the accuracy of the representations and warranties of Targets set forth in this Agreement shall be assessed as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (provided that representations and warranties which are confined to a specified date shall speak only as of such date). The representations and warranties of Targets shall be true and correct in all material respects.

(b)           PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the agreements and covenants of Targets to be performed and complied with pursuant to this Agreement and the other agreements contemplated hereby prior to the Effective Time shall have

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been duly performed and complied with in all material respects. Such other agreements shall include, but not be limited to, the following:

(i)   The full execution and delivery of employment agreements and offer letters, as set forth in Schedule 7.2(b)(i), attached hereto and incorporated herein;

(ii)   The full execution and delivery of the FEFC Amendment;

(iii)   Parent shall have received any and all loan or other debt documentation in which either or both of the Targets is/are a party, including but not limited to any and all documentation relating to DSG; such debt shall reduce the Merger Stock issued to the Shareholders at the end of the First Year Period;

(iv)   The calculation of any finder’s fees that may be allegedly owed pursuant to this transaction , when and if agreed upon or otherwise determined to be owed, shall reduce the Merger Stock to be issued to the Shareholders; and

(v)   Targets shall cause all notes and accounts receivable and payable of Targets owing by or to any shareholder or any director, officer, employee or affiliate of Targets to be paid in full or otherwise cancelled or disposed of prior to the Closing Date, including, but not limited to, Graham Zug.

(c)           CERTIFICATES.  Targets shall have delivered to Parent (i) a certificate, dated as of the Effective Time and signed on its behalf by its chief executive officer and its chief financial officer, to the effect that the conditions set forth in Section 7.1 as relates to Targets and in Section 7.2(a) and 7.2(b) have been satisfied, (ii) certified copies of resolutions duly adopted by Targets’ Board of Directors and Shareholders, and IIS’s Board of Directors, evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such reasonable detail as Parent and its counsel shall request, (iii) certificates of good standing f rom the State of Florida dated as of a date not more than ten (10) days prior to the Closing Date and certifying that each Target (and IIS) is duly qualified and in good standing as of the date of such certificate, (iv) executed Certificates of Merger substantially in the form of Exhibit 7.2, and (v) at the Closing, the Shareholders shall deliver to Parent the certificates evidencing all of the issued and outstanding shares of the Targets, duly endorsed in blank for transfer or accompanied by a stock power duly executed in blank in a form reasonably requested by Parent to evidence the acknowledgment of and consent to the sale of the Target’s Shares, or an Affidavit of Lost Stock Certificate in lieu of each certificate not delivered.

(d)           ADDITIONAL CONDITIONS.  Targets and the Shareholders will, from and after the Closing Date:

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 (i)           Cooperate with Parent and Merger Subs to preserve intact Targets’ personnel and to keep available the services of all of its employees, agents, independent contractors, and consultants commensurate with Targets’ business requirements.

(ii)           Cooperate with Parent and Merger Subs to preserve intact the present customers of Targets and the goodwill of all customers and others with respect to the business.

    (iii)  Agree to not,  for a period of three (3) years from the Closing Date, on their own behalf or on behalf of all other entity,  hire, solicit, or seek to hire, any employee of Parent  or its  Affiliates  or in  any  other  manner  attempt directly or indirectly  to influence,  induce or encourage any employee of Parent or its  Affiliates to leave the  employment of Parent or its Affiliates.

 (iv)           Agree that after the Closing Date, they will not, and will use their best efforts to cause their employees, agents and Affiliates to not, except as expressly requested by Parent or otherwise required to carry out the provisions of this Agreement:

A)Provide technical information or assistance relating to Targets to any person or organization other than Parent or persons authorized by Parent to receive such information or assistance.

    B) Assist any other person or  organization in engaging in the design,  development,  engineering or sale of  goods  or  services  competing  with  the business of Parent or its Affiliates at any time within  three years of the date hereof.

C)   Directly or indirectly reveal to anyone the confidential information of Parent  or its Affiliates except as required by this Agreement or as expressly requested by Parent.

(v)   Agree that each of the Targets shall operate within its Budget as set forth in Schedule 1.6(b)(i)B.  Targets and Shareholders also agree that Parent shall have the right to use any and all rights it may have through indemnification against Targets and Shareholders, including, but not limited to, the Right of Offset, as set forth in Section 9.14.   If Parent is required to invest a greater amount of money into the Targets in order to keep them operating as a result of a Target not meeting its Budget, then that additional amount of cash invested by the Parent shall proportionately reduce the number of shares of Merger Stock (First Year Shares and/or Second Year Shares) the Shareholders are entitled to receive under this Agreement.

(A)         Determination of Recognized Revenue and Margins.    The Targets and Shareholders acknowledge and agree that the Chief Financial Officer of Parent (the “Parent CFO”) shall determine the Recognized Revenue and Margins for each respective quarterly period (as determined in accordance with generally accepted accounting principles).  Promptly, but in no event later than forty five (45) business days after each quarterly period, the Parent CFO shall provide to the Shareholders a statement which shall disclose the

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Recognized Revenue and Margins for the preceding quarterly period (a “Quarterly End Statement”).  Each Surviving Corporation agrees to provide any and all information, as reasonably requested by the Parent CFO, that is necessary to calculate the Recognized Revenue and Margins for any given quarterly period, to Parent and the Shareholders.

(vi)     As a guarantee of Targets’ and the Shareholders'  covenants pursuant to Section  7.2(d) above ("Additional  Covenants"),  Targets and  Shareholder  agree to forfeit  any consideration not yet received, in the event that any of the Targets or the Shareholder materially breach the Additional Covenants. Targets and Shareholder also agree that Parent shall have the right to use any and all rights it may have through indemnification against Targets and Shareholder pursuant to Section 9.14, including, but not limited to, any and all shares put into escrow for such purposes.

(e)              In the event Parent fails to meet its Budget obligations in accordance with the terms set forth in Schedule 1.6(b)(i)B, the Targets shall provide written notice of such failure to Parent and Parent shall have thirty days from receipt of such notice to respond and cure such failure (the "Cure Period").  If Parent is unable to cure or reach an alternative agreement with the Targets, Parent will be in default (a “Default Event”). If a Default Event occurs, the Targets shall have the option to seek additional equity or financing from a third party, the terms and conditions of which Parent shall have the right to review and provide its consent to, such consent not to be unreasonably withheld  The terms and conditions from the third party will be considered market and fair and reasonable unless the Parent can meet or better the terms and conditions obtained by the Targets during the period of the uncured default.  In the event the third party provides the equity or financing required and the Parent is unable to provide and cure the default, the Parent will provide all reasonable assistance in every way to the Targets and the third party to close on the third party equity or financing in the most expeditious way.

7.3           CONDITIONS TO OBLIGATIONS OF TARGETS. The obligations of Targets to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by Targets pursuant to Section 9.5(b):

(a)           REPRESENTATIONS AND WARRANTIES. For purposes of this Section 7.3(a), the accuracy of the representations and warranties of Parent set forth in this Agreement shall be assessed as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (provided that representations and warranties which are confined to a specified date shall speak only as of such date). The representations and warranties of Parent set forth in Section 3 shall be true and correct in all material respects.

(b)           PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the agreements and covenants of Parent to be performed and complied with pursuant to this Agreement and the other agreements contemplated hereby prior to the Effective Time shall have been duly performed and complied with in all material respects.

(c)           CERTIFICATES. Parent shall have delivered to Targets (i) a certificate, dated as of the Effective Time and signed on its behalf by its chief executive officer and its chief financial officer, to the effect that the conditions set forth in Section 5.1 as relates to Parent and in

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Sections 7.3(a) and 7.3(b) have been satisfied, and (ii) certified copies of resolutions duly adopted by Parent's Board of Directors and Merger Sub's Board of Directors and Shareholders evidencing the taking of all corporate action necessary to authorize the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, all in such reasonable detail as Targets and counsel shall request.

ARTICLE 8.                                TERMINATION.

8.1           TERMINATION

Notwithstanding any other provision of this Agreement, this Agreement may be terminated and the Merger abandoned at any time prior to the Effective Time

(a)   by mutual consent of Parent, Shareholder, and Targets.

(b) By either Party  (provided that the  terminating  Party is not then in material breach of any representation,  warranty, covenant, or other  agreement  contained  in this  Agreement)  in the  event of a material  breach by the other Party of any  representation  or warranty contained  in this  Agreement  which  cannot  be or has not been  cured within 30 days  after the  giving of  written  notice to the  breaching Party of such  breach and which  breach is  reasonably  likely,  in the opinion of the  non-breaching  Party,  ; to have,  individually or in the aggregate,  a Target material  adverse effect or a Parent material adverse effect, as applicable, on the breaching Party; or

  (c) By either Party  (provided that the  terminating  Party is not then in material breach of any representation,  warranty, covenant, or other  agreement  contained  in this  Agreement)  in the  event of a material  breach  by the  other  Party  of any  covenant  or  agreement contained  in this  Agreement  which  cannot  be or has not been  cured within 30 days  after the  giving of  written  notice to the  breaching Party of such breach; or

  (d) By either Party  (provided that the  terminating  Party is not then in material breach of any representation,  warranty, covenant, or other  agreement  contained  in this  Agreement)  in the  event  any consent of any regulatory  authority  required for  consummation of the Merger and the other transactions  contemplated  hereby shall have been denied by final nonappealable action of such authority or if any action taken by such  authority  is not  appealed  within  the time  limit for appeal; or

 (e) By either  Party in the event  that the  Merger  shall not have been consummated by September 17, 2010, if the failure to consummate the transactions  contemplated  hereby on or before such date is not caused by any breach of this  Agreement  by the Party  electing  to  terminate pursuant to this Section 8.1(e); or

(f)   By either Party  (provided that the  terminating  Party is not then in material breach of any representation,  warranty, covenant, or other  agreement  contained in this Agreement) in the event that any of the  conditions  precedent  to the  obligations  of

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 such  Party  to consummate  the Merger  cannot be  satisfied  or  fulfilled by the date specified in Section 8.1(e).

8.2              EFFECT OF TERMINATION. In the event of the termination and abandonment of this Agreement pursuant to Section 6.1 above, this Agreement shall become void and have no effect, except that (i) the provisions of this Section 8.2, Article 7, and Section 5.6(b) shall survive any such termination and abandonment, and (ii) a termination pursuant to Sections\ 8.1(b), 8.1(c), or

8.1(t),  shall not relieve the  breaching  Party from  Liability  for an uncured willful breach of a representation, warranty, covenant, or agreement giving rise to such termination.

ARTICLE 9.  GENERAL PROVISIONS

9.1              EXPENSES. Each of the Parties shall bear and pay all direct costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including filing, registration and application fees, printing fees, and fees and expenses of its own financial or other consultants, investment bankers, accountants, and counsel. Promptly after the execution of this Agreement, Targets and Shareholder shall ask all of its attorneys and other professionals  to render  current and correct  invoices for all unbilled  time and  disbursements related solely to work on the Targets.  Targets shall accrue and/or pay all of such amounts promptly thereafter. Nothing  contain ed in this Section 9.1 shall constitute or shall be deemed to  constitute  liquidated  damages for any breach by a Party of the terms of this  Agreement or otherwise  limit the rights of the nonbreaching Party

9.2           BROKERS AND FINDERS. Each of the Parties represents and warrants that neither it nor any of its officers, directors, employees, or Affiliates has employed any broker or finder or incurred any Liability for any financial advisory fees, investment bankers' fees, brokerage fees, commissions, or finders' fees in connection with this Agreement or the transactions contemplated hereby. In the event of a claim by any broker or finder based upon his or its representing or being retained by or allegedly representing or being retained by Targets or any Affiliate or by Parent, each of Targets and Parent, as the case may be, agrees to indemnify and hold the other Party harmless of and from any Liability in respect of any such claim.

9.3           ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this Agreement (including the documents and instruments referred to herein) constitutes the entire agreement between the Parties with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect thereto, written or oral. Nothing in this Agreement expressed or implied, is intended to confer upon any Person, other than the Parties or their respective successors, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, other than as provided in Sections 4.12.

9.4           AMENDMENTS. To the extent permitted by Law, this Agreement may be amended by a subsequent writing signed by each of the Parties upon the approval of each of the Parties, whether before or after Shareholder approval of this Agreement has been obtained; provided, that after any such approval by the holders of Targets Capital Stock, there shall be made no amendment that reduces or modified in any material respect the consideration to be received by holders of Targets Capital without the further approval of such Shareholders.

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9.5           WAIVERS.

(a)Prior to or at the Effective Time, Parent, acting through its Board of Directors, chief executive officer or other authorized officer, shall have the right to waive any Default in the performance of any term of this Agreement by Targets, to waive or extend the time for the compliance or fulfillment by Targets of any and all of its obligations under this Agreement, and to waive any or all of the conditions precedent to the obligations of Parent under this Agreement, except any condition which, if not satisfied, would result in the violation of any Law. No such waiver shall be effective unless in writing signed by a duly authorized officer of Parent.

(b)Prior to or at the Effective Time, Targets, acting through each of its Board of Directors, chief executive officer or other authorized officer, shall have the right to waive any Default in the performance of any term of this Agreement by Parent, to waive or extend the time for the compliance or fulfillment by Parent of any and all of its obligations under this Agreement, and to waive any or all of the conditions precedent to the obligations of Targets under this Agreement, except any condition which, if not satisfied, would result in the violation of any Law. No such waiver shall be effective unless in writing signed by a duly authorized officer of Targets.

(c)The failure of any Party at any time or times to require performance of any provision hereof shall in no manner affect the right of such Party at a later time to enforce the same or any other provision of this Agreement. No waiver of any condition or of the breach of any term contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement.

9.6           ASSIGNMENT. Except as expressly contemplated hereby, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party hereto (whether by operation of Law or otherwise) without the prior written consent of the other Party, except that of Flint Acquisition Corp may assign its Merger Rights to other wholly owned subsidiaries of Parent which shall become Merger Subs. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

9.7           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 the Shareholders and the Targets:                            Ingedigit International, Inc.

Attn: Mitch Siegel

Gotham Ingedigit Financial Processing Corp.

Attn.: Joseph Seroussi

9050 Pines Boulevard, Suite 255,

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Pembroke Pines, Florida 33024

Facsimile number: 954-457-7170

With Copy to:                                                                                     Reiss Law, LLC

Jared H. Reiss, Esq

3411 Midvale Ave,

Philadelphia PA, 19129

If to the Parent or Merger Subs:                                            Flint Telecom Group, Inc.

Attn: Vincent Browne

7500 College Blvd., Suite 500

Overland Park, KS 66210

                                                                                        Facsimile number: 913-273-0984

or to such other address or facsimile number as the Shareholder, the Targets, the Parent or Parent Subsidiary 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.

9.8 DISPUTES.  If a dispute  arises  concerning  this  agreement or the sale,  the  Shareholder  and Parent  will try in good faith to settle it through mediation  conducted by a mediator to be mutually selected.  The Shareholder and Parent will share the cost of the mediator  equally.  The Shareholder and Parent will  cooperate  fully with the  mediator  and will  attempt to reach a mutually satisfactory resolution of the dispute. If the dispute is not resolved within 60 days after it is referred to the mediator, The Shareholder and Parent agree that the  dispute  will be  arbitrated  by an  arbitrator & #160;to be  mutually  selected. Arbitration will be conducted pursuant to the American  Arbitration  Association rules for  commercial  disputes.  Each party  shall have the right to take up to three depositions in connection with any arbitration. The parties agree that the arbitrator  shall render a written opinion which shall include  findings of fact and  conclusions  of law and that,  on a  petition  to  confirm  or  vacate  the arbitration award, the court shall vacate the award in addition to other grounds provided by statute  applicable to arbitrations  if the court  determines that a question of law was determined  erroneously.  Judgment on the arbitration  award may be entered  in any court that has  jurisdiction  over the&# 160; matter.  Costs of arbitration, including lawyers' fees, will be allocated by the arbitrator.

9.9           GOVERNING LAW; VENUE.  This Agreement shall be made and entered into in the state of Nevada, and shall be governed by and construed and enforced in accordance with the Laws of the State of Nevada without giving effect to any conflict of law, rule or principle of that state.  Venue for any actions in construction or enforcement of this Agreement shall be in the State of Nevada.

9.10           COUNTERPART EXECUTION. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and each of which alone, and all of

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which together, shall constitute one and the same instrument.  When each party has executed and delivered a counterpart of this Agreement, the Agreement shall be fully binding on and enforceable by the parties.  In making proof of the Agreement it shall not be necessary to produce or account for any counterpart other than the counterpart signed by a party against whom this Agreement is to be enforced.

9.11           CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this Agreement are for reference purposes only and are not part of this Agreement. Unless otherwise indicated, all references to particular Articles or Sections shall mean and refer to the referenced Articles and Sections of this Agreement. The headings in this Agreement are inserted for convenience and identification only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

9.12           SEVERABILITY. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

9.13           SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES.  The covenants, agreements, representations and warranties made by the parties in this Agreement and in any other certificates and documents delivered in connection herewith shall survive the Closing.

9.14           Indemnification; Set Off Rights.

(a)           By the Shareholders.  The Shareholders shall indemnify, save and hold harmless Parent, their affiliates and subsidiaries, and their respective representatives, from and against any and all costs, losses (including without limitation diminution in value), taxes, liabilities, obligations, damages, lawsuits, deficiencies, claims, demands, and expenses (whether or not arising out of third-party claims), reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of the foregoing (herein, “Damages”), incurred in connection with, arising out of, resulting from or incident to (1) any breach of an y representation or warranty or the inaccuracy of any representation made by the Targets or the Shareholders in or pursuant to this Agreement, or (2) any breach of any covenant or agreement made by the Targets or the Shareholders in or pursuant to this Agreement; provided, however, that Parent makes a written claim for indemnification against the Shareholder.

(b)           Tax Indemnity.  The Shareholders shall indemnify, save and hold harmless Parent, their affiliates and subsidiaries, and their respective representatives, from and against any and all Damages incurred in connection with, arising out of, resulting from or incident to (1) any taxes of the Targets with respect to any tax year or portion thereof ending on or before the Closing Date and (2) for the unpaid taxes of any person

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(other than the Targets) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract, or otherwise.

(c)           Indemnification By Parent.  Parent shall indemnify and save and hold harmless the Targets and the Shareholders and each of their affiliates and subsidiaries, and their respective representatives from and against any and all Damages incurred in connection with, arising out of, resulting from or incident to (1) any breach of any representation or warranty or the inaccuracy of any representation, made by Parent in or pursuant to this Agreement, or (2) any breach of any covenant or agreement made by Parent in or pursuant to this Agreement;  provided, however, that the Shareholders make a written claim for indemnification against Parent within the applicable survival period.

(d)           Damages.  The term “Damages” as used in this Section 9.14 is not limited to matters asserted by third parties against the Targets, the Shareholders, Parent or Merger Subs, but includes Damages incurred or sustained by the Targets, the Shareholders, Parent or Merger Subs in the absence of third party claims.  Payments by Parent of amounts for which Parent or Merger Subs is indemnified or has a Right of Offset hereunder, and payments by the Targets of amounts for which the Targets are indemnified, shall not be a condition precedent to recovery.  The Targets’ or the Shareholders’ obligation to indemnify Pa rent or Merger Subs, and Parent’s obligation to indemnify the Targets or the Shareholders shall not limit any other rights, including without limitation rights of contribution which any such party may have under statute or common law.

(e)           Cooperation.  The indemnified party shall cooperate in all reasonable respects with the indemnifying party and the attorneys defending the indemnification claims in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; provided, however, that the Indemnified Party may, at its own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom.  The parties shall cooperate with each other in any notifications to ins urers.

(f)           Defense of Claims.  If a claim for Damages (a “Claim”) is made by a party entitled to Indemnification or Set Off Rights hereunder against the Indemnifying Party, the party claiming such indemnification or Set Off Rights shall give written notice (a “Claim Notice”) to the other Party (the (“Indemnifying Party”) as soon as practicable after the party entitled to indemnification or Set Off Rights (the “Indemnified Party”) becomes aware of any fact, condition or event which may give rise to Damages for which indemnification or Set Off Rights may be sought under this Section 9.14.  If any lawsu it or enforcement action is filed against any party entitled to the benefit of indemnity or Set Off Rights hereunder, the Claim Notice thereof shall be given to the Indemnifying Party as promptly as practicable (and in any event within thirty (30) calendar days after the service of the citation or summons).  The failure of any Indemnified Party to give timely notice hereunder shall not affect rights to indemnification or Set Off Rights hereunder, except to the extent that the Indemnifying Party demonstrates actual damage caused by such failure.  After such notice, if the Indemnifying Party shall acknowledge in writing to the Indemnified  Party that the Indemnifying Party shall be obligated under the terms of its indemnity or Set Off Rights hereunder in connection with such lawsuit or action, then the Indemnifying Party shall be entitled, if it so elects, (1) to take control

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of the defense and investigation of such lawsuit or action, (2) to employ and engage attorneys of its own choice to handle and defend the same, at the Indemnifying Party’s cost, risk and expense unless the named parties to such action or proceeding include both the Indemnifying Party and the Indemnified Party and the Indemnified Party has been advised in writing by counsel that there may be one or more legal defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, and (3) to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the Indemnified Party, such consent not to be unreasonably withheld.  If the Indemnifying Party fails to assume the defense of such claim within fifteen (15) calendar days after receipt of the Claim Notice, the Indemnified Party against which such claim has been asserted will (upon delivering notice to such effect to the Indemnifying Party) have the right to undertake, at the Indemnifying Party’s cost and expense, the defense, compromise or settlement of such claim on behalf of and for the account and risk of the Indemnifying Party.  In the event the Indemnified Party assumes the defense of the claim, the Indemnified Party will keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement.  The Indemnifying Party shall be liable for any settlement of any action effected pursuant to and in accordance with this Section 9.14 and for any final judgment (subject to any right of appeal), and the Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any Damages by reason of such settlement or judgment.

(g)              Parent’s Right of Offset.  Anything in this Agreement to the contrary notwithstanding, Parent may withhold and set off against any of the merger consideration otherwise due to the Shareholders. The Parent may withhold and set off against these amounts as to which the Targets or the Shareholders are obligated to pay Parent, Merger Subs or a third party pursuant to any provision of this Agreement (the “Set Off Rights”).  This shall be in addition to any other rights or remedies the Parent may have.

(h)  Product and Warranty Liability.  The provisions of this Section 9.14 shall cover, without limitation, all obligations and liabilities of whatsoever kind, nature or description relating, directly or indirectly, to product liability, litigation or claims against Parent, Merger Subs or each Surviving Corporation in connection with, arising out of, or relating to products or services developed or sold by Parent, Merger Subs or the Surviving Corporation in connection with the business.

(i)  (f) Value of Merger Stock

.  In calculating the amount of Merger Stock which Parent may withhold and set off against under this Section 9.14 hereof, the value of one share of common stock of Parent shall be deemed to be equal to the average closing price per share that Parent’s common stock is traded on any established stock exchange, automated quotation system or bulletin board, for the thirty consecutive market trading days ending on the date on which the Claim Notice is delivered.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first written above.

PARENT

Flint Telecom Group, Inc, a Nevada Corporation

By: /s/ Vincent Browne

Vincent Browne, Chief Executive Officer

MERGER SUBS

TELSPACE, INC., a Florida Corporation

By: /s/ Vincent Browne

Vincent Browne, Chief Executive Officer

BETTER CHOICE COMMUNICATIONS, INC., a Florida Corporation

By: /s/ Vincent Browne

Vincent Browne, Chief Executive Officer

TARGETS

Ingedigit International, Inc.

By: /s/ Carlos Barrientos

Name & Title: Carlos Barrientos, Chairman of the Board

Gotham Ingedigit Financial Processing Corp. (“P2P”),

By: /s/ Joseph Seroussi

Name & Title: Joseph Seroussi, President & CTO

SHAREHOLDERS

Name                                                                                     Signature                                                    ;   

Mr. Carlos Barrientos                                                            /s/ Carlos Barrientos

Mr. Abu Karim                                                                       /s/ Abu Karim

Mrs. Vivian Manevich Siegel                                              /s/ Vivian Manevich Siegel

Process4Money Continental LLC.                                     /s/ Joseph Seroussi

By: Joseph Seroussi

Title: Manager

Florida Export Finance Corp.                                             /s/ J. Stephen Fancher

By: J. Stephen Fancher

Title: President and CEO

32

Gotham Financial LLC                                                              /s/ Graham F. Zug

By: Graham F. Zug

Title: CEO

III                                                /s/ Carlos Barrientos                

By: Carlos Barrientos

Title: Chairman of the Board

Digital Engineering Corp.                                                       /s/ Serafin Gutierrez       

By: Serafin Gutierrez

Title: Director

33

EX-2.2 3 ex2_2.htm

CERTIFICATE OF DESIGNATION

OF

SERIES H CONVERTIBLE PREFERRED STOCK

OF

FLINT TELECOM GROUP, INC.

_________________________

Flint Telecom Group, Inc., a Nevada corporation (the "Company") certifies that pursuant to the authority contained in ARTICLE IV of its Articles of Incorporation, as amended (the "Articles of Incorporation"), the Board of Directors of the Company (the "Board of Directors"), by unanimous written consent in lieu of a meeting effective October __, 2010, duly approved and adopted the following resolution, which resolution remains in full force and effect on the date hereof:

RESOLVED, that pursuant to the authority vested in the Board of Directors by the Articles of Incorporation, the Board of Directors does hereby designate, create, authorize and provide for the issue of a series of preferred stock, having $0.001 par value per share, which shall be designated as Series H Convertible Preferred Stock, and which shall have the voting powers, designations, preferences, limitations, restrictions, and relative rights as follows:

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CERTIFICATE OF DESIGNATION OF

SERIES H CONVERTIBLE PREFERRED STOCK

OF FLINT TELECOM GROUP, INC.

1.           Designation, Amount, Par Value, Liquidation Value and Rank.

a.  The Preferred Stock authorized under this Certificate of Designation shall be designated as the Series H Convertible Preferred Stock (the “Series H Preferred”), and the   number of shares so designated shall be 600,000 subject to adjustment for any stock splits, stock dividends or similar transactions affecting the Series H Preferred, and which shall not be subject to increase without the consent of each holder of the Series H Preferred (each, a “Holder”, and collectively, the “Holders”).  Each share of Series H Preferred, having $0.001 par value per share, shall have a liquidation value of $10.00 per share (the “Liquidation Value”).

b. The Series H Preferred shall, with respect to dividends and distributions upon liquidation, dissolution or winding up of the Company, rank pari passu to all classes of Common Stock, and rank junior to the Series E, F and G Preferred.

2.           Dividends.  The Holders of the Series H Preferred shall be entitled to dividend payments pari passu to all classes of Common Stock and any Series Preferred, other than the Series E, F and G Preferred, based on a fully converted basis at the Market Price at the time.

3.           Voting Rights. Except as expressly provided otherwise herein, or as required by law, the holders of shares of Series H Preferred Stock shall vote together as a single class with the holders of the Common Stock, on the basis of one vote per share of Series H Preferred Stock.

4.           Liquidation.

a.  Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of record of the Series H Preferred and Common Stock shall be entitled to receive, out of the assets of the Company and after any distribution or payment is made upon any series of Preferred Stock senior in rank to the Series H Preferred, for each share of Series H Preferred and Common Stock, an amount per share equal to the greater of (i) the Liquidation Value or (ii) the assets of the Company available for distribution to its stockholders, distributed ratably among the Holders of the outstanding Preferred Stock (determined on an “as converted” basis) and the holders of all of the outstanding capital stock of the Company.  If the assets of the Company shall be insufficient to pay in full all amounts due to the Holders of the Series H Preferred and Common Stock then the entire assets of the Company shall be distributed to such Holders ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

b.  The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

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5.           Mechanics of Conversion.

a.           Holder’s Delivery Requirements.   Each share of Series H Preferred shall be convertible, at the option of the Holder thereof, at any time after September __, 2011, into that number of fully paid and non-assessable shares of Common Stock as is determined by the quotient of (i) $10.00 over (ii) the Conversion Price in effect at the time of conversion, determined as hereinafter provided.  The Conversion Price shall be equal to a twenty five percent (25%) discount to the Per Share Market Value at the time of conversion, subject to a minimum Conversion Price of ten percent of the Per Share Market Price on the Closing Date (the “Conversion Price”). A Holder shall effe ct conversions by surrendering to the Company the certificate or certificates representing the shares of Series H Preferred to be converted, together with a copy of the form of conversion notice attached hereto as Exhibit A (the “Conversion Notice”).  Each Conversion Notice shall specify the Holder, the number of shares of Series H Preferred to be converted and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such Conversion Notice by facsimile (the “Conversion Date”).  If no Conversion Date is specified in a Conversion Notice the Conversion Date shall be the date that the Conversion Notice is deemed delivered pursuant to Section 11.  Subject to Section 5(b) hereof, each Conversion Notice, once given, shall be irrevocable.

b.  Company’s Response.  Not later than five (5) trading days after any Conversion Date, the Company will use  its best efforts to cause to be delivered to the Holder, or to such Holder’s designee, (i) a certificate or certificates which shall contain the necessary restrictive legends and trading restrictions representing the number of shares of Common Stock being acquired upon the conversion of shares of Series H Preferred and (ii) if the Holder is converting less than all shares of Series H Preferred represented by the certificate or certificates tendered by the Holder with the Conversion Notice, one or more certificates representing the number of shares of Series H Preferred not converted.

6.Reservation of Shares.  The Company covenants that it will use its best efforts to at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of issuance upon conversion of the Series H Preferred and free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of Series H Preferred, not less than 100% of such number of shares of Common Stock as shall (subject to any additional requirements of the Company as to reservation of such shares set forth in the Purchase Agreement) be issuable (taking into account the adjustments of Section 7) upon the conversion of all outst anding shares of Series H Preferred (without regard to any limitations on conversion).  The Company shall, from time to time in accordance with Nevada law, take all steps necessary to increase the authorized amount of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of the Series H Preferred.  The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued and fully paid, nonassessable and, subsequent to the effectiveness of a registration statement, freely tradable.

7.Maximum Conversion.  The Holders shall not be entitled to convert these shares of Series H Preferred into shares of common stock on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock

3

8.beneficially owned by the Holders and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the conversion of the shares of Series H Preferred with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holders and its affiliates of more than 4.99% of the outstanding shares of Common Stock on such date.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Rule 13d-3 thereunder.

8.           Adjustment of Conversion Price.

a.      Common Stock Dividends; Common Stock Splits; Reclassification.  If the Company, at any time after the Original Issue Date shall (a) subdivide outstanding shares of Common Stock into a larger or smaller number of shares or (b) issue by reclassification of shares of Common Stock any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding before such event and the denominator of which shall be the number of shares of Common Stock outstanding after such event.  Any adjustment made pursuant to this Section 7(a) shall become effective immediately af ter the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or re-classification.

b.      Rounding.  All calculations under this Section 7 shall be made to the nearest cent or the nearest l/l00th of a share, as the case may be.

c.      Notice of Adjustment.  Whenever the Conversion Price is adjusted pursuant to this Section 8 the Company shall promptly mail to the Holders a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Such notice shall be signed by the chairman, president or chief financial officer of the Company.

d.      Change of Control; Compulsory Share Exchange. In case of (A) any Change of Control Transaction or (B) any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property (each, an “Event”), lawful provision shall be made so that the Holders shall have the right thereafter to convert the shares of Series H Preferred for shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such Event, and the Holders shall be entitled upon such Event to receive such amount of shares of stock and other sec urities, cash or property as the shares of the Common Stock of the Company into which the shares of Series H Preferred could have been converted immediately prior to such Event (without taking into account any limitations or restrictions on the convertibility of the Securities) would have been entitled.  The provisions of this Section 7(d) shall similarly apply to successive Events.

e.           Notice of Certain Events.  If:

(i)         the Company shall declare a dividend (or any other distribution) on its Common Stock;

4

(ii)         the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock;

(iii) the Company shall authorize the granting to the holders of its Common Stock rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights;

(iv)         the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or

(v)         the Company shall authorize the Liquidation of the affairs of the Company;

then the Company shall cause to be filed at each office or agency maintained for the purpose of the conversion of the Series H Preferred, and shall cause to be delivered to the Holders at the address specified herein, at least 30 (thirty) calendar days prior to the applicable record or effective date hereinafter specified, a notice (provided such notice shall not include any material non-public information) stating (a) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, or granting of options, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights, options or warrants are to be determined or (b) the date on which such reclassification, consolidation, merger, sale , transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  Nothing herein shall prohibit the Holders from converting shares of Series H Preferred held by such Holder during the 30-day period commencing on the date of such notice to the effective date of the event triggering such notice.

9.   Non-Transferability. The holders of the Series H Preferred shall not be entitled to transfer the Series H Preferred to a third party without the Company’s prior written consent.

10.           Definitions. For the purposes hereof, the following terms shall have the following meanings:

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; and the terms

“controlling” and “controlled” have meanings correlative to the foregoing.

5

 “Appraiser” means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing.

“Change of Control” means the sale, conveyance or disposition of all or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of, or the consolidation, merger or other business combination of the Company with or into any other Person (as defined below) or Persons when the Company is not the survivor.

 “Common Stock” means the Company’s common stock, $.01 par value per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“Conversion Price” has the meaning set forth in Section 5(a).

“Liquidation Value” has the meaning set forth in Section 1 hereof.

“Per Share Market Value” means on any particular date (a) the average closing bid price per share of the Common Stock on such exchange or quotation system on the date nearest preceding such date and over the twenty trading days preceding such date, or (b) if the Common Stock is not listed then on any exchange, the average closing bid price for a share of Common Stock in the over-the-counter market, as reported by the NASDAQ or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date and over the preceding twenty trading days from such date, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as deter mined by an Appraiser selected in good faith by the Holders of a majority in interest of the shares of the Series H Preferred; provided, however, that the Company, after receipt of the determination by such Appraiser, shall have the right to select, in good faith, an additional Appraiser, in which case the fair market value shall be equal to the average of the determinations by each such Appraiser so long as the difference between the values does not differ by more than ten percent (10%); if the values so differ, the two appraisers shall appoint a third appraiser whose determination shall be binding; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period.

“Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

“Preferred Stock” means the preferred stock of the Company, having $0.001 par value per share.

11.           Notices.  Except as otherwise provided in the event of conversion of shares of Series H Preferred, all notices or other communications required hereunder shall be in writing and shall be deemed to have been received (a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct answer back received) telecopy or facsimile (with transmission confirmation report) at the address or number designated below (if received by 6:00 p.m. EST where such notice is to be received), or the first business day following such delivery (if received after 6:00 p.m. EST where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully pr epaid,

6

 addressed to such address, or upon actual receipt of such mailing, whichever shall first occur; and shall be regarded as properly addressed if sent to (i) the Company, to Flint Telecom Group, Inc., 7500 College Blvd., Suite 500, Overland Park, KS 66210,  Attn:  Chief Executive Officer, facsimile (913) 273-0984, and (ii) if the Holders, at their respective addresses set forth in the books and records of the Company, or such other address as any of the above may have furnished to the other parties in writing by registered mail, return receipt requested.

12.           Lost or Stolen Certificates.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any stock certificates representing the shares of Series H Preferred, and, in the case of loss, theft or destruction, of any indemnification undertaken by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of such Series H Preferred stock certificate(s), the Company shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however, the Company shall not be obligated to re-issue preferred stock certificates if the Holder contemporaneously requests the Company to convert such Series E Preferred into Common Stock.

13.           Remedies Characterized; Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Certificate of Designation shall be cumulative and in addition to all other remedies available under this Certificate of Designation, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder’s right to pursue actual damages for any failure by the Company to comply with the terms of this Certificate of Designation.  The Company covenants to each Holder of Series H Preferred that there shall be no characterization concerning this instrument other than as expressly provided herein.  Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders of the Series H Preferred and that the remedy at law in the event of any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Holders of the Series H Preferred shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

14.           Specific Shall Not Limit General; Construction.  No specific provision contained in this Certificate of Designation shall limit or modify any more general provision contained herein.  This Certificate of Designation shall be deemed to be jointly drafted by the Company and all Purchasers (as defined in this Purchase Agreement) and shall not be construed against any Person as the drafter hereof.

15.           Failure or Indulgence Not Waiver.  No failure or delay on the part of a Holder of Series H Preferred in the exercise of any power, right or privilege hereunder shall operate as a

7

waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

            16.     Fractional Shares. Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Per Share Market Value at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder of a share of Series H Preferred shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

17.           Payment of Tax Upon Issue of Transfer.  The issuance of certificates for shares of the Common Stock upon conversion of the Series H Preferred Shares shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders so converted, and the Company shall not be required to issue or deliver such certificates unless or until the Per son or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

18.           Shares Owned by Company Deemed Not Outstanding. In determining whether the Holders of the outstanding shares of Series H Preferred have concurred in any direction, consent or waiver under this Certificate of Designation, shares of Series H Preferred which are owned by the Company or any other obligor thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided, that any Series H Preferred owned by the Holders shall be deemed outstanding for purposes of making such a determination.  Shares of the Series H Preferred so owned which have been pledged in good faith may be regarded as outstanding if (i) the pledgee establishes to the satisfaction of the Holders and the Company the pledgee’s right so to act with respect to such shares and (ii) the pledgee is not the Company or any other obligor of the Company.

19.           Communications.  The holders of the Series H Preferred shall be entitled to receive, and the Company shall deliver pursuant to Section 11 hereof, all communications sent by the Company to the holders of the Common Stock.

20.           Reacquired Shares.Any shares of Series H Preferred redeemed, purchased, converted or otherwise acquired by the Company in any manner whatsoever shall not be reissued as part of the Company’s Series H Preferred and shall be retired promptly after the acquisition thereof.  All such shares shall become, upon their retirement (and the filing of any certificate required in connection therewith pursuant to the General Corporation Law of the state of Nevada), authorized but unissued shares of Preferred Stock.

21. Effect of Headings.  The section headings herein are for convenience only and shall not affect the construction hereof.

8

IN WITNESS WHEREOF, Flint Telecom Group, Inc. has caused this Certificate of Designation to be signed by its Chief Executive Officer on this __th day of October, 2010.

By:

Name:  Vincent Browne

Title:           Chief Executive Officer

9

EXHIBIT A

NOTICE OF CONVERSION

AT THE ELECTION OF HOLDER

(To be Executed by the Registered Holder in order to Convert shares of Series H Preferred Stock)

The undersigned hereby elects to convert the number of shares of Series H Convertible Preferred Stock indicated below, into shares of common stock (the “Common Stock”), of Flint Telecom Group, Inc. (the “Company”) according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:	____________________________________________ Date to Effect Conversion
	____________________________________________ Number of shares of Series H Preferred Stock to be Converted
	____________________________________________ Number of shares of Common Stock to be Issued
	____________________________________________ Applicable Conversion Price
	____________________________________________ Name of Person to whom Shares of Common Stock are to be Issued
	____________________________________________ Signature
	____________________________________________ Name
	____________________________________________ Address

10

EX-99.1 4 ex99_1.htm

Flint Telecom signs LOI to Acquire International Prepaid Debit Card Company

OVERLAND PARK, KANSAS — September 22, 2010 — Flint Telecom Group, Inc. (http://www.flinttelecomgroup.com) (FLTT.OB), a Telecoms Technology and Services Organization, announces today completion of a Letter of Intent to acquire 100% of a U.S. based International Prepaid Debit Card Company. The transaction, after we do the necessary due diligence is expected to close within the next 30 days.

This acquisition will allow Flint Telecom to supply Americans who have lost their credit standing, the dignity and convenience of having a debit card without the need of a bank account. Flint Telecom will allow corporations and small companies the ability to display their company logo on debit cards for employee expense accounts. These are a few of the many marketing opportunities available to Flint Telecom following this addition.

CEO, Vincent Browne said today: “This marks another major milestone in our ongoing repositioning to higher profit margin and value added products within our Prepaid Business Segment. Flint will also uniquely incorporate its calling products on the same card at the same great rates. Balances held on the card can be used to make both mobile and international calls while supporting online and in store purchases.

We believe that this acquisition will not just increase revenues and profit margins, but also drive increased loyalty within our existing and growing customer base.”

Investor Relations Contact:

Tony Muratore

Investors@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is one of the fast growing Telecom Technology Organizations with a portfolio of companies that deliver next-generation IP communications Products and Services.

 Founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Trading on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB, Flint Telecom has grown both organically as well as through their corporate activity. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, ``intends'', ``believes'', and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

EX-99.2 5 ex99_2.htm

Flint to offer exciting ‘Mobile Remittance’ services with pending acquisition.

Technology acquisition will allow users to transfer money directly from their Cell phones.

OVERLAND PARK, KANSAS — September 29, 2010 — Flint Telecom Group, Inc. (http://www.flinttelecomgroup.com) (FLTT.OB), a Telecom Technology and Services Organization, announces today that it is nearing completion of the due diligence process to acquire 100% of a U.S. based International Remittance Company. Following the successful completion of the necessary due diligence which is already underway, the transaction is expected to close within the next 30 days.

This acquisition will allow Flint Telecom to access the international market of mobile money transfer, which Juniper Research believes to be worth $65 Billion worldwide by 2014.

Eliminating the need and expense of money order transfers to foreign countries, Flint Telecom will establish a system of prepaid debit cards through its existing market outlets. This will allow people and businesses the ability to transfer money internationally using these cards or directly from their cell phones. The system is in complete compliance with domestic and international money laundering and counter-terrorism regulations.

The remittances are practically instantaneous and a cardholder can send funds 24/7 every day of the year directly to the recipient who can then can simply withdraw the funds from a local ATM where they live. The cards will also incorporate Flint’s existing wireless and international calling services on a single card with the aim of increasing customer retention and increasing overall profit margins for the group.

CEO, Vincent Browne said today: “We are excited with this latest development, as it opens valuable new revenue streams and strengthens our offerings to our existing customer groups. Targeted towards the demographic most likely to use these services first, initial marketing of this highly versatile product will be within our existing market outlets. Coupling this with our recent announcement of the signing of an LOI to acquire an international prepaid debit card company, will allow our customers to transfer money abroad directly from their cell phone if they wish without the inconvenience and high expense of traditional forms of money transfer. We see this as a major advancement for our technology and prepaid business groups and our growth into international markets.”

Investor Relations Contact:

Tony Muratore

Investors@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is one of the fast growing Telecom Technology Organizations with a portfolio of companies that deliver next-generation IP communications Products and Services.

Founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Trading on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB, Flint Telecom has grown both organically as well as through their corporate activity. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, ``intends'', ``believes'', and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

EX-99.3 6 ex99_3.htm

News Release

FLINT TELECOM SET TO GO GLOBAL WITH COMPLETION OF DEFINITIVE AGREEMENTS WITH TWO COMPANIES

OVERLAND PARK, KANSAS — October 6, 2010 — Flint Telecom Group, Inc. (FLTT.OB), an International Telecoms Technology and Services Organization, announced today that it has entered into definitive agreements to acquire all of the issued capital of Debit Card Company, Ingedigit International Inc. (III) and Financial Transaction Processing Company, Gotham Ingedigit Financial Processing Corp. (P2P). These acquisitions will expand and strengthen Flint’s existing pre-paid market activities and open up new international markets and products for the group. Management anticipates that these companies will add additional high revenues and margin for Flint Telecom in their own right going forward, while increasing gross margins and market penetration in the existing portfolio of telecommunicat ions products. The transaction is expected to be finalized within the next two weeks, provided closing conditions are met.  Upon closing, Flint Telecom will assume fully operating turn-key companies in the U.S. and India, with additional market operations in Australia and Asia Pacific, evolving Flint Telecom into a Global Enterprise.

Prepaid services are among the fastest growing service industry segments globally. In 2007, The World Bank estimated that worldwide remittances exceeded $318 Billion. Independent research commissioned by MasterCard estimates the U.S. market opportunity for branded pre-paid cards in excess of $440 Billion by 2017, a 400% increase over the market value estimated in 2009.

Consideration for the transactions will be performance based. Payment will be share based in the form of Preferred Shares that will be restricted from conversion to Common Shares for a period of 12 months from Closing.

Ingedigit International Inc. (“III”) is a U.S. based International Pre-Paid Debit Card company, partnered with both U.S. Banks and International Banks to offer debit cards to their customers. Included with the debit card services are additional services; allowing the partnering Banks to add new customers, share funds between existing card holders and perform international fund remittance. All transactions are fully compliant with U.S. and International money laundering laws, as well as counter-terrorism regulations. Transactions are practically instantaneous, available to the card-holder on a 24/7, 365-day basis. The Company’s current markets include the United States, Canada, Mexico, India, Central and South America, Gulf Coast Countries, The Philippines, expand ing to the U.K., Africa, Sri Lanka, Bangladesh and the Pacific Rim.

Gotham Ingedigit Financial Processing Corp. (“P2P”) is a U.S. based Advanced Financial Transaction Processing and Technology company, working with banking clients and other program sponsors globally. Using P2P solutions, clients can deliver ‘own brand’ financial transaction processing services, such as pre-paid products, virtual accounts, money remittances and other stored value services. Both MasterCard and fully PCI Certified, as well as being SAS-70 compliant, P2P is in the unique position of having complete control of all its services from applications development and processing to marketing and support for a full array of back office processing including ATM and POS network integration and management. P2P will operate as an independent business followi ng the acquisition.

Mitch Siegel, President of III, said, “We are very excited to be joining Flint Telecom and look forward to achieving great success together. We have been searching for the right partner to take our business to the next level for some time and we believe we have that partner in Flint Telecom. These acquisitions will allow Flint Telecom to offer Financial Service activities, without risk, through significant participation by banks on a global basis. Our existing relationships with a number of banks around the world, including India, provide significant flexibility in delivering card programs and clear competitive advantages over other programs. This market is huge. Expatriate workers remit billions of dollars every month around the world and debit card usage is growing every year, p articularly in these tough economic conditions. We enable our clients to offer customers the ability to operate a debit card without the need of a bank account or credit standing. We expect to be a significant contributor of growth and profits to Flint Telecom in the as we execute.”

Vincent Browne, Chairman and CEO of Flint Telecom Group, commented "These are hugely significant acquisitions for us. Not only do they give Flint Telecom ownership of the complex technology required to deliver these services and a proven expertise in delivering financial transactions globally, they also bring a whole new dimension to our operations and service portfolios making us a truly global company. The world is going mobile and these types of transactions now suit the mobile device also delivering convenience and costs savings to those groups who send money home frequently. Debit card usage is growing exponentially around the world and when coupled with our telecom experience and capabilities we expect to deliver some truly compelling and exciting applications to both our existing customers and to a growing global user base. We have significant plans for the capabilities we have now acquired and look forward to announcing these in due course.”

ENDS

Investor Relations Contact:

Tony Muratore - investor@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is a fast growing Telecoms Technology Organization with a portfolio of companies that deliver next-generation IP communications Products and Services. The Company was founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Flint Telecom has grown both organically and through corporate activity and is traded on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” ``intends,'' ``believes,'' and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from an y forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-2.2

CERTIFICATE OF DESIGNATION

OF

SERIES H CONVERTIBLE PREFERRED STOCK

OF

FLINT TELECOM GROUP, INC.

_________________________

Flint Telecom Group, Inc., a Nevada corporation (the "Company") certifies that pursuant to the authority contained in ARTICLE IV of its Articles of Incorporation, as amended (the "Articles of Incorporation"), the Board of Directors of the Company (the "Board of Directors"), by unanimous written consent in lieu of a meeting effective October __, 2010, duly approved and adopted the following resolution, which resolution remains in full force and effect on the date hereof:

RESOLVED, that pursuant to the authority vested in the Board of Directors by the Articles of Incorporation, the Board of Directors does hereby designate, create, authorize and provide for the issue of a series of preferred stock, having $0.001 par value per share, which shall be designated as Series H Convertible Preferred Stock, and which shall have the voting powers, designations, preferences, limitations, restrictions, and relative rights as follows:

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CERTIFICATE OF DESIGNATION OF

SERIES H CONVERTIBLE PREFERRED STOCK

OF FLINT TELECOM GROUP, INC.

1.           Designation, Amount, Par Value, Liquidation Value and Rank.

a.  The Preferred Stock authorized under this Certificate of Designation shall be designated as the Series H Convertible Preferred Stock (the “Series H Preferred”), and the   number of shares so designated shall be 600,000 subject to adjustment for any stock splits, stock dividends or similar transactions affecting the Series H Preferred, and which shall not be subject to increase without the consent of each holder of the Series H Preferred (each, a “Holder”, and collectively, the “Holders”).  Each share of Series H Preferred, having $0.001 par value per share, shall have a liquidation value of $10.00 per share (the “Liquidation Value”).

b. The Series H Preferred shall, with respect to dividends and distributions upon liquidation, dissolution or winding up of the Company, rank pari passu to all classes of Common Stock, and rank junior to the Series E, F and G Preferred.

2.           Dividends.  The Holders of the Series H Preferred shall be entitled to dividend payments pari passu to all classes of Common Stock and any Series Preferred, other than the Series E, F and G Preferred, based on a fully converted basis at the Market Price at the time.

3.           Voting Rights. Except as expressly provided otherwise herein, or as required by law, the holders of shares of Series H Preferred Stock shall vote together as a single class with the holders of the Common Stock, on the basis of one vote per share of Series H Preferred Stock.

4.           Liquidation.

a.  Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of record of the Series H Preferred and Common Stock shall be entitled to receive, out of the assets of the Company and after any distribution or payment is made upon any series of Preferred Stock senior in rank to the Series H Preferred, for each share of Series H Preferred and Common Stock, an amount per share equal to the greater of (i) the Liquidation Value or (ii) the assets of the Company available for distribution to its stockholders, distributed ratably among the Holders of the outstanding Preferred Stock (determined on an “as converted” basis) and the holders of all of the outstanding capital stock of the Company.  If the assets of the Company shall be insufficient to pay in full all amounts due to the Holders of the Series H Preferred and Common Stock then the entire assets of the Company shall be distributed to such Holders ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.

b.  The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

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5.           Mechanics of Conversion.

a.           Holder’s Delivery Requirements.   Each share of Series H Preferred shall be convertible, at the option of the Holder thereof, at any time after September __, 2011, into that number of fully paid and non-assessable shares of Common Stock as is determined by the quotient of (i) $10.00 over (ii) the Conversion Price in effect at the time of conversion, determined as hereinafter provided.  The Conversion Price shall be equal to a twenty five percent (25%) discount to the Per Share Market Value at the time of conversion, subject to a minimum Conversion Price of ten percent of the Per Share Market Price on the Closing Date (the “Conversion Price”). A Holder shall effe ct conversions by surrendering to the Company the certificate or certificates representing the shares of Series H Preferred to be converted, together with a copy of the form of conversion notice attached hereto as Exhibit A (the “Conversion Notice”).  Each Conversion Notice shall specify the Holder, the number of shares of Series H Preferred to be converted and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such Conversion Notice by facsimile (the “Conversion Date”).  If no Conversion Date is specified in a Conversion Notice the Conversion Date shall be the date that the Conversion Notice is deemed delivered pursuant to Section 11.  Subject to Section 5(b) hereof, each Conversion Notice, once given, shall be irrevocable.

b.  Company’s Response.  Not later than five (5) trading days after any Conversion Date, the Company will use  its best efforts to cause to be delivered to the Holder, or to such Holder’s designee, (i) a certificate or certificates which shall contain the necessary restrictive legends and trading restrictions representing the number of shares of Common Stock being acquired upon the conversion of shares of Series H Preferred and (ii) if the Holder is converting less than all shares of Series H Preferred represented by the certificate or certificates tendered by the Holder with the Conversion Notice, one or more certificates representing the number of shares of Series H Preferred not converted.

6.Reservation of Shares.  The Company covenants that it will use its best efforts to at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of issuance upon conversion of the Series H Preferred and free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of Series H Preferred, not less than 100% of such number of shares of Common Stock as shall (subject to any additional requirements of the Company as to reservation of such shares set forth in the Purchase Agreement) be issuable (taking into account the adjustments of Section 7) upon the conversion of all outst anding shares of Series H Preferred (without regard to any limitations on conversion).  The Company shall, from time to time in accordance with Nevada law, take all steps necessary to increase the authorized amount of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of the Series H Preferred.  The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued and fully paid, nonassessable and, subsequent to the effectiveness of a registration statement, freely tradable.

7.Maximum Conversion.  The Holders shall not be entitled to convert these shares of Series H Preferred into shares of common stock on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock

3

8.beneficially owned by the Holders and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the conversion of the shares of Series H Preferred with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holders and its affiliates of more than 4.99% of the outstanding shares of Common Stock on such date.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and Rule 13d-3 thereunder.

8.           Adjustment of Conversion Price.

a.      Common Stock Dividends; Common Stock Splits; Reclassification.  If the Company, at any time after the Original Issue Date shall (a) subdivide outstanding shares of Common Stock into a larger or smaller number of shares or (b) issue by reclassification of shares of Common Stock any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding before such event and the denominator of which shall be the number of shares of Common Stock outstanding after such event.  Any adjustment made pursuant to this Section 7(a) shall become effective immediately af ter the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or re-classification.

b.      Rounding.  All calculations under this Section 7 shall be made to the nearest cent or the nearest l/l00th of a share, as the case may be.

c.      Notice of Adjustment.  Whenever the Conversion Price is adjusted pursuant to this Section 8 the Company shall promptly mail to the Holders a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Such notice shall be signed by the chairman, president or chief financial officer of the Company.

d.      Change of Control; Compulsory Share Exchange. In case of (A) any Change of Control Transaction or (B) any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property (each, an “Event”), lawful provision shall be made so that the Holders shall have the right thereafter to convert the shares of Series H Preferred for shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such Event, and the Holders shall be entitled upon such Event to receive such amount of shares of stock and other sec urities, cash or property as the shares of the Common Stock of the Company into which the shares of Series H Preferred could have been converted immediately prior to such Event (without taking into account any limitations or restrictions on the convertibility of the Securities) would have been entitled.  The provisions of this Section 7(d) shall similarly apply to successive Events.

e.           Notice of Certain Events.  If:

(i)         the Company shall declare a dividend (or any other distribution) on its Common Stock;

4

(ii)         the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock;

(iii) the Company shall authorize the granting to the holders of its Common Stock rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights;

(iv)         the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or

(v)         the Company shall authorize the Liquidation of the affairs of the Company;

then the Company shall cause to be filed at each office or agency maintained for the purpose of the conversion of the Series H Preferred, and shall cause to be delivered to the Holders at the address specified herein, at least 30 (thirty) calendar days prior to the applicable record or effective date hereinafter specified, a notice (provided such notice shall not include any material non-public information) stating (a) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, or granting of options, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights, options or warrants are to be determined or (b) the date on which such reclassification, consolidation, merger, sale , transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  Nothing herein shall prohibit the Holders from converting shares of Series H Preferred held by such Holder during the 30-day period commencing on the date of such notice to the effective date of the event triggering such notice.

9.   Non-Transferability. The holders of the Series H Preferred shall not be entitled to transfer the Series H Preferred to a third party without the Company’s prior written consent.

10.           Definitions. For the purposes hereof, the following terms shall have the following meanings:

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise; and the terms

“controlling” and “controlled” have meanings correlative to the foregoing.

5

 “Appraiser” means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing.

“Change of Control” means the sale, conveyance or disposition of all or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of, or the consolidation, merger or other business combination of the Company with or into any other Person (as defined below) or Persons when the Company is not the survivor.

 “Common Stock” means the Company’s common stock, $.01 par value per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“Conversion Price” has the meaning set forth in Section 5(a).

“Liquidation Value” has the meaning set forth in Section 1 hereof.

“Per Share Market Value” means on any particular date (a) the average closing bid price per share of the Common Stock on such exchange or quotation system on the date nearest preceding such date and over the twenty trading days preceding such date, or (b) if the Common Stock is not listed then on any exchange, the average closing bid price for a share of Common Stock in the over-the-counter market, as reported by the NASDAQ or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date and over the preceding twenty trading days from such date, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock as deter mined by an Appraiser selected in good faith by the Holders of a majority in interest of the shares of the Series H Preferred; provided, however, that the Company, after receipt of the determination by such Appraiser, shall have the right to select, in good faith, an additional Appraiser, in which case the fair market value shall be equal to the average of the determinations by each such Appraiser so long as the difference between the values does not differ by more than ten percent (10%); if the values so differ, the two appraisers shall appoint a third appraiser whose determination shall be binding; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during such period.

“Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

“Preferred Stock” means the preferred stock of the Company, having $0.001 par value per share.

11.           Notices.  Except as otherwise provided in the event of conversion of shares of Series H Preferred, all notices or other communications required hereunder shall be in writing and shall be deemed to have been received (a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct answer back received) telecopy or facsimile (with transmission confirmation report) at the address or number designated below (if received by 6:00 p.m. EST where such notice is to be received), or the first business day following such delivery (if received after 6:00 p.m. EST where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully pr epaid,

6

 addressed to such address, or upon actual receipt of such mailing, whichever shall first occur; and shall be regarded as properly addressed if sent to (i) the Company, to Flint Telecom Group, Inc., 7500 College Blvd., Suite 500, Overland Park, KS 66210,  Attn:  Chief Executive Officer, facsimile (913) 273-0984, and (ii) if the Holders, at their respective addresses set forth in the books and records of the Company, or such other address as any of the above may have furnished to the other parties in writing by registered mail, return receipt requested.

12.           Lost or Stolen Certificates.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any stock certificates representing the shares of Series H Preferred, and, in the case of loss, theft or destruction, of any indemnification undertaken by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of such Series H Preferred stock certificate(s), the Company shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however, the Company shall not be obligated to re-issue preferred stock certificates if the Holder contemporaneously requests the Company to convert such Series E Preferred into Common Stock.

13.           Remedies Characterized; Other Obligations, Breaches and Injunctive Relief.  The remedies provided in this Certificate of Designation shall be cumulative and in addition to all other remedies available under this Certificate of Designation, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit a Holder’s right to pursue actual damages for any failure by the Company to comply with the terms of this Certificate of Designation.  The Company covenants to each Holder of Series H Preferred that there shall be no characterization concerning this instrument other than as expressly provided herein.  Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders of the Series H Preferred and that the remedy at law in the event of any such breach may be inadequate.  The Company therefore agrees that, in the event of any such breach or threatened breach, the Holders of the Series H Preferred shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

14.           Specific Shall Not Limit General; Construction.  No specific provision contained in this Certificate of Designation shall limit or modify any more general provision contained herein.  This Certificate of Designation shall be deemed to be jointly drafted by the Company and all Purchasers (as defined in this Purchase Agreement) and shall not be construed against any Person as the drafter hereof.

15.           Failure or Indulgence Not Waiver.  No failure or delay on the part of a Holder of Series H Preferred in the exercise of any power, right or privilege hereunder shall operate as a

7

waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

            16.     Fractional Shares. Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Per Share Market Value at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder of a share of Series H Preferred shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

17.           Payment of Tax Upon Issue of Transfer.  The issuance of certificates for shares of the Common Stock upon conversion of the Series H Preferred Shares shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders so converted, and the Company shall not be required to issue or deliver such certificates unless or until the Per son or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

18.           Shares Owned by Company Deemed Not Outstanding. In determining whether the Holders of the outstanding shares of Series H Preferred have concurred in any direction, consent or waiver under this Certificate of Designation, shares of Series H Preferred which are owned by the Company or any other obligor thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided, that any Series H Preferred owned by the Holders shall be deemed outstanding for purposes of making such a determination.  Shares of the Series H Preferred so owned which have been pledged in good faith may be regarded as outstanding if (i) the pledgee establishes to the satisfaction of the Holders and the Company the pledgee’s right so to act with respect to such shares and (ii) the pledgee is not the Company or any other obligor of the Company.

19.           Communications.  The holders of the Series H Preferred shall be entitled to receive, and the Company shall deliver pursuant to Section 11 hereof, all communications sent by the Company to the holders of the Common Stock.

20.           Reacquired Shares.Any shares of Series H Preferred redeemed, purchased, converted or otherwise acquired by the Company in any manner whatsoever shall not be reissued as part of the Company’s Series H Preferred and shall be retired promptly after the acquisition thereof.  All such shares shall become, upon their retirement (and the filing of any certificate required in connection therewith pursuant to the General Corporation Law of the state of Nevada), authorized but unissued shares of Preferred Stock.

21. Effect of Headings.  The section headings herein are for convenience only and shall not affect the construction hereof.

8

IN WITNESS WHEREOF, Flint Telecom Group, Inc. has caused this Certificate of Designation to be signed by its Chief Executive Officer on this __th day of October, 2010.

By:

Name:  Vincent Browne

Title:           Chief Executive Officer

9

EXHIBIT A

NOTICE OF CONVERSION

AT THE ELECTION OF HOLDER

(To be Executed by the Registered Holder in order to Convert shares of Series H Preferred Stock)

The undersigned hereby elects to convert the number of shares of Series H Convertible Preferred Stock indicated below, into shares of common stock (the “Common Stock”), of Flint Telecom Group, Inc. (the “Company”) according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:	____________________________________________ Date to Effect Conversion
	____________________________________________ Number of shares of Series H Preferred Stock to be Converted
	____________________________________________ Number of shares of Common Stock to be Issued
	____________________________________________ Applicable Conversion Price
	____________________________________________ Name of Person to whom Shares of Common Stock are to be Issued
	____________________________________________ Signature
	____________________________________________ Name
	____________________________________________ Address

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EX-99.1

Flint Telecom signs LOI to Acquire International Prepaid Debit Card Company

OVERLAND PARK, KANSAS — September 22, 2010 — Flint Telecom Group, Inc. (http://www.flinttelecomgroup.com) (FLTT.OB), a Telecoms Technology and Services Organization, announces today completion of a Letter of Intent to acquire 100% of a U.S. based International Prepaid Debit Card Company. The transaction, after we do the necessary due diligence is expected to close within the next 30 days.

This acquisition will allow Flint Telecom to supply Americans who have lost their credit standing, the dignity and convenience of having a debit card without the need of a bank account. Flint Telecom will allow corporations and small companies the ability to display their company logo on debit cards for employee expense accounts. These are a few of the many marketing opportunities available to Flint Telecom following this addition.

CEO, Vincent Browne said today: “This marks another major milestone in our ongoing repositioning to higher profit margin and value added products within our Prepaid Business Segment. Flint will also uniquely incorporate its calling products on the same card at the same great rates. Balances held on the card can be used to make both mobile and international calls while supporting online and in store purchases.

We believe that this acquisition will not just increase revenues and profit margins, but also drive increased loyalty within our existing and growing customer base.”

Investor Relations Contact:

Tony Muratore

Investors@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is one of the fast growing Telecom Technology Organizations with a portfolio of companies that deliver next-generation IP communications Products and Services.

 Founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Trading on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB, Flint Telecom has grown both organically as well as through their corporate activity. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, ``intends'', ``believes'', and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

EX-99.2

Flint to offer exciting ‘Mobile Remittance’ services with pending acquisition.

Technology acquisition will allow users to transfer money directly from their Cell phones.

OVERLAND PARK, KANSAS — September 29, 2010 — Flint Telecom Group, Inc. (http://www.flinttelecomgroup.com) (FLTT.OB), a Telecom Technology and Services Organization, announces today that it is nearing completion of the due diligence process to acquire 100% of a U.S. based International Remittance Company. Following the successful completion of the necessary due diligence which is already underway, the transaction is expected to close within the next 30 days.

This acquisition will allow Flint Telecom to access the international market of mobile money transfer, which Juniper Research believes to be worth $65 Billion worldwide by 2014.

Eliminating the need and expense of money order transfers to foreign countries, Flint Telecom will establish a system of prepaid debit cards through its existing market outlets. This will allow people and businesses the ability to transfer money internationally using these cards or directly from their cell phones. The system is in complete compliance with domestic and international money laundering and counter-terrorism regulations.

The remittances are practically instantaneous and a cardholder can send funds 24/7 every day of the year directly to the recipient who can then can simply withdraw the funds from a local ATM where they live. The cards will also incorporate Flint’s existing wireless and international calling services on a single card with the aim of increasing customer retention and increasing overall profit margins for the group.

CEO, Vincent Browne said today: “We are excited with this latest development, as it opens valuable new revenue streams and strengthens our offerings to our existing customer groups. Targeted towards the demographic most likely to use these services first, initial marketing of this highly versatile product will be within our existing market outlets. Coupling this with our recent announcement of the signing of an LOI to acquire an international prepaid debit card company, will allow our customers to transfer money abroad directly from their cell phone if they wish without the inconvenience and high expense of traditional forms of money transfer. We see this as a major advancement for our technology and prepaid business groups and our growth into international markets.”

Investor Relations Contact:

Tony Muratore

Investors@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is one of the fast growing Telecom Technology Organizations with a portfolio of companies that deliver next-generation IP communications Products and Services.

Founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Trading on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB, Flint Telecom has grown both organically as well as through their corporate activity. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, ``intends'', ``believes'', and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

EX-99.3

News Release

FLINT TELECOM SET TO GO GLOBAL WITH COMPLETION OF DEFINITIVE AGREEMENTS WITH TWO COMPANIES

OVERLAND PARK, KANSAS — October 6, 2010 — Flint Telecom Group, Inc. (FLTT.OB), an International Telecoms Technology and Services Organization, announced today that it has entered into definitive agreements to acquire all of the issued capital of Debit Card Company, Ingedigit International Inc. (III) and Financial Transaction Processing Company, Gotham Ingedigit Financial Processing Corp. (P2P). These acquisitions will expand and strengthen Flint’s existing pre-paid market activities and open up new international markets and products for the group. Management anticipates that these companies will add additional high revenues and margin for Flint Telecom in their own right going forward, while increasing gross margins and market penetration in the existing portfolio of telecommunicat ions products. The transaction is expected to be finalized within the next two weeks, provided closing conditions are met.  Upon closing, Flint Telecom will assume fully operating turn-key companies in the U.S. and India, with additional market operations in Australia and Asia Pacific, evolving Flint Telecom into a Global Enterprise.

Prepaid services are among the fastest growing service industry segments globally. In 2007, The World Bank estimated that worldwide remittances exceeded $318 Billion. Independent research commissioned by MasterCard estimates the U.S. market opportunity for branded pre-paid cards in excess of $440 Billion by 2017, a 400% increase over the market value estimated in 2009.

Consideration for the transactions will be performance based. Payment will be share based in the form of Preferred Shares that will be restricted from conversion to Common Shares for a period of 12 months from Closing.

Ingedigit International Inc. (“III”) is a U.S. based International Pre-Paid Debit Card company, partnered with both U.S. Banks and International Banks to offer debit cards to their customers. Included with the debit card services are additional services; allowing the partnering Banks to add new customers, share funds between existing card holders and perform international fund remittance. All transactions are fully compliant with U.S. and International money laundering laws, as well as counter-terrorism regulations. Transactions are practically instantaneous, available to the card-holder on a 24/7, 365-day basis. The Company’s current markets include the United States, Canada, Mexico, India, Central and South America, Gulf Coast Countries, The Philippines, expand ing to the U.K., Africa, Sri Lanka, Bangladesh and the Pacific Rim.

Gotham Ingedigit Financial Processing Corp. (“P2P”) is a U.S. based Advanced Financial Transaction Processing and Technology company, working with banking clients and other program sponsors globally. Using P2P solutions, clients can deliver ‘own brand’ financial transaction processing services, such as pre-paid products, virtual accounts, money remittances and other stored value services. Both MasterCard and fully PCI Certified, as well as being SAS-70 compliant, P2P is in the unique position of having complete control of all its services from applications development and processing to marketing and support for a full array of back office processing including ATM and POS network integration and management. P2P will operate as an independent business followi ng the acquisition.

Mitch Siegel, President of III, said, “We are very excited to be joining Flint Telecom and look forward to achieving great success together. We have been searching for the right partner to take our business to the next level for some time and we believe we have that partner in Flint Telecom. These acquisitions will allow Flint Telecom to offer Financial Service activities, without risk, through significant participation by banks on a global basis. Our existing relationships with a number of banks around the world, including India, provide significant flexibility in delivering card programs and clear competitive advantages over other programs. This market is huge. Expatriate workers remit billions of dollars every month around the world and debit card usage is growing every year, p articularly in these tough economic conditions. We enable our clients to offer customers the ability to operate a debit card without the need of a bank account or credit standing. We expect to be a significant contributor of growth and profits to Flint Telecom in the as we execute.”

Vincent Browne, Chairman and CEO of Flint Telecom Group, commented "These are hugely significant acquisitions for us. Not only do they give Flint Telecom ownership of the complex technology required to deliver these services and a proven expertise in delivering financial transactions globally, they also bring a whole new dimension to our operations and service portfolios making us a truly global company. The world is going mobile and these types of transactions now suit the mobile device also delivering convenience and costs savings to those groups who send money home frequently. Debit card usage is growing exponentially around the world and when coupled with our telecom experience and capabilities we expect to deliver some truly compelling and exciting applications to both our existing customers and to a growing global user base. We have significant plans for the capabilities we have now acquired and look forward to announcing these in due course.”

ENDS

Investor Relations Contact:

Tony Muratore - investor@flinttelecomgroup.com

About Flint Telecom Group, Inc.

Flint Telecom Group Inc. is a fast growing Telecoms Technology Organization with a portfolio of companies that deliver next-generation IP communications Products and Services. The Company was founded by telecom and technology entrepreneurs with a proven track record in building global technology companies. Flint Telecom has grown both organically and through corporate activity and is traded on the OTC Bulletin Board® (OTCBB) under the ticker FLTT.OB. Additional information may be found at www.flinttelecomgroup.com

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” ``intends,'' ``believes,'' and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from an y forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.