Exhibit 10.1
STOCK PURCHASE AGREEMENT
The parties to this Stock Purchase Agreement ("Agreement") are Elephant Talk
Communications, Inc. ("ETCI"), a California corporation, and Rising Water
Capital AG ("RWC"), registered in Zug, Switzerland.
When executed by RWC and ETCI, this Agreement will set out ETCI's and RWC's
understanding and agreement regarding this proposed transaction.
1. RWC wishes to purchase from ETCI, and ETCI wishes to sell to RWC,
195,947,395 restricted common shares ("Shares"), for a total
consideration of US$7,837,896.
2. The Shares to be issued to RWC shall be distributed as and when
payment is received from RWC to ETCI for such Shares.
3. As a restriction, these Shares will have a lock up period of
twelve (12) months. ETCI will take care that all shareholders will
agree to only sell shares after getting approval of all other
shareholders to sell such shares.
4. RWC will be entitled to appoint six (6) out of eleven (11)
directors in ETCI. Current ETCI management will stay in place and
will be contracted for a five (5) year term.
5. The parties to this Agreement acknowledge the following
(a) That ETCI has closed its 60% acquisition of a company herein
referred as "True Precise";
(b) That after the closing of its acquisition of True Precise, the
total number of issued and outstanding Shares of ETCI amounted to
80,259,670 shares;
(c) That this acquisition and its internal growth will bring ETCI
a general 2005 turnover of approximately US$10 million, with a
positive Earnings Before Interest Taxes Depreciation and
Amortization (EBITDA);
(d) That ETCI is entering into the telecommunications market in
Europe through the acquisition of various telecommunication
assets, and has entered into an agreement to purchase all the
issued and outstanding shares of a European telecommunication
company in exchange for a cash consideration of US$5,900,000;
(e) That ETCI has planned to take over the companies that own the
right of use of a dark fiber optic network covering 4,400 km in
Mainland China in exchange for 64,128,238 new Shares of ETCI to be
issued;
(f) That ETCI is seeking additional funding to further expand its
growth in both China and Europe to create a strong niche player in
10.1-1
outsourced telecom provisioning, value added services and
integrated VoIP solutions, covering markets in Europe, the Far
East and the USA;
(g) That ETCI will issue 24,938,759 additional Shares to
management.
6. In connection with this transaction, ETCI hereby represents that:
(a) It has due corporate authority to enter into this Agreement
and to perform the transaction contemplated herein.
(b) ETCI has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which RWC could be
obligated or liable.
(c) RWC will not have any anti-dilution rights in the Shares to be
issued.
(d) The execution, delivery and performance of this Agreement by
ETCI and the consummation by ETCI of the transaction contemplated
herein does not and will not result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which ETCI
is subject, or by which any property or asset of ETCI is bound or
affected.
7. In connection with this transaction, RWC hereby represents that:
(a) RWC is duly organized, validly existing and in good standing
under the laws of its jurisdiction, and has the necessary
authority to enter into this transaction.
(b) RWC is an accredited investor as the meaning is set forth
under Regulation D of the Securities Act of 1933 as amended (the
"Act").
(c) RWC was not solicited by ETCI or any of ETCI's representatives
for the purchase of these shares.
(d) RWC has received all of the information from its independent
professional, legal and/or tax advisors as it considers necessary
or appropriate for determining whether to purchase the shares. RWC
is familiar with the business, affairs, risks and properties of
ETCI, and RWC has had an opportunity to make inquiries of ETCI and
its officers, directors and representatives.
(e) RWC has such knowledge and expertise in financial and business
matters that it is capable of evaluating the merits and
substantial risks of an investment in the shares to be issued and
is able to bear the economic risks relevant to the purchase of the
Shares hereunder.
10.1-2
(f) RWC understands that there may be no market for the Shares to
be issued.
(g) RWC's financial condition is such that RWC is under no present
or contemplated future need to dispose of any portion of the
Shares to satisfy any existing or contemplated undertaking, need
or indebtedness.
(h) RWC has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which ETCI could
become liable or obligated.
(i) RWC acknowledges that ETCI has not made any representations or
warranties as to the past, present or future operations of ETCI or
of the price or activity of ETCI's Shares.
(j) The execution, delivery and performance of this Agreement by
RWC and the consummation by it of the transaction contemplated
herein does not and will not result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which RWC is
subject.
8. ETCI and RWC agree to execute such additional documents and take
whatever actions reasonably necessary to effectuate this
transaction or otherwise carry out the intent and purpose of this
Agreement, or subsequently transfer the Shares to be issued.
9. This Agreement sets forth the entire understanding between the
parties and no other prior written or oral agreement shall be
recognized or enforced.
10. If any clause or provision of this Agreement is later determined
to be invalid, illegal or unenforceable, the other clauses and
provisions of this Agreement shall remain in full force and
effect.
11. Every right and remedy provided herein shall be cumulative with
every other right and remedy, whether conferred herein, at law or
in equity, and may be enforced concurrently herewith, and no
waiver by the parties in the performance of any obligation by the
other shall be construed as a waiver of the same or other default
then, theretofore or thereafter occurring or existing. At any time
prior to the issuance or exchange of the Shares as contemplated
herein, this Agreement may be amended by a writing signed by all
parties hereto.
12. This Agreement may be executed in counterparts, each of which
shall constitute an original and which together, shall constitute
one and the same document.
10.1-3
Date: June 30, 2005 Elephant Talk Communications, Inc.
---------------------
By: /s/ Xxxxxxxx Xxxx
Xxxxxxxx Xxxx
President
Date: June 30, 2005 Rising Water Capital AG
---------------------
By: /s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
Managing Director
Stock Purchase Agreement June 30, 2005.RWC
10.1-4
