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ETAK > SEC Filings for ETAK > Form 8-K on 11-Jun-2013All Recent SEC Filings

Show all filings for ELEPHANT TALK COMMUNICATIONS CORP | Request a Trial to NEW EDGAR Online Pro



Entry into a Material Definitive Agreement, Financial Statement

Item 1.01 Entry Into a Material Definitive Agreement.

On June 11, 2013, Elephant Talk Communications Corp. (the "Company") entered into an Amendment No. 1 (the "Amendment to SPA") to that certain Securities Purchase Agreement (the "SPA") dated June 3, 2013 with certain institutional and other investors ("DJ Investors") placed by Dawson James Securities Inc. (the "Placement Agent") and Mr. Steven van der Velden, the Chief Executive Officer and Chairman of the Board ("Affiliated Investors"), relating to a registered direct public offering by the Company (the "Offering"). No securities were sold pursuant to the SPA.

Capitalized terms used in this Report that are not otherwise defined have the meanings set forth in the Company's Current Report on Form 8-K filed on June 3, 2013.

Material terms of the Amendment to SPA include but are not limited to the following amendments:

(a) Inclusion of an additional closing condition that the Company obtained the NYSE MKT's acceptance of the Company's Plan of Compliance by June 14, 2013;

(b) Inclusion of an additional closing condition that the Company shall enter into a Purchase Agreement ("Purchase Agreement") with all holders of the Company's Senior Secured Convertible Notes issued on March 29, 2013 ("Convertible Notes") pursuant to which the Company shall purchase the Convertible Notes;

(c) Inclusion of an additional closing condition that Crede CG III. Ltd, the Affiliate and the Placement Agent shall enter into an escrow agreement (the "Escrow Agreement") pursuant to which certain of the proceeds from the Offering shall be held in escrow by an escrow agent until consummation of the transactions contemplated in the SPA, as amended.

(d) Amendment of a representation made by the Company in the Investor SPA to include a reference to the deficiency notice received by the Company from the NYSE MKT.

The descriptions of the material terms of the Amendment to SPA contained in this Report are qualified in their entirety by reference to Exhibit 10.1.

Affiliated Investors' Participation in the Offering

The aggregate purchase price of Affiliate is increased to $4.5 million while the purchase price is changed to $0.70 per share and the Affiliate Warrant is exercisable at a per share exercise price of $0.887 pursuant to Amendment to SPA. Such changes were approved by all of the disinterested and independent directors of the Company. The Affiliate Warrants contain substantially same terms as those of the Investor Warrants except that the Affiliate Warrants are not exercisable until after One Hundred Eighty (180) days from the date of Closing and stockholder approval is obtained.

A form of the Affiliate Warrant is filed as Exhibit 4.1 to this Report. The descriptions of the material terms of the Affiliate Warrant contained in this Report are qualified in their entirety by reference to Exhibit 4.1.

The Company's press release, dated June 11, 2013, announcing the Offering pursuant to the Amendment to the SPA is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

4.1 Form of Warrant to purchase Common Stock by the Company in favor of the Affiliated Investor.

5.1 Opinion of Ellenoff Grossman & Shole LLP

10.1 Form of Amendment No. 1 to Securities Purchase Agreement, dated June 11, 2013, by and between the Company and the Investors.

99.1 Press Release dated June 11, 2013.

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