Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

Elephant Talk Communications Corp.

 

Offering of Units,

Unit consisting of: (i) One (1) convertible promissory note in the principal
amount of $30,000 (the “Notes”), which is convertible into shares (the “Note
Shares”) of Common Stock of the Company, $.00001 par value, (the “Common Stock”)
at the option of the holder at a conversion price of $.30 per share; and (ii) a
five-year warrant (each a “Warrant” and collectively, the “Warrants”) to
purchase one hundred thousand (100,000) shares of Common Stock (the “Warrant
Shares”) at an exercise price of $.45 per share (the “Warrant Exercise Price”)

 

Offering Price: $30,000 Per Unit

 

Minimum Offering: 17 Units ($510,000)

 

Maximum Offering: 140 Units ($4,200,000)

 

HOW TO SUBSCRIBE

 

The minimum investment which must be made by any subscriber is one Unit of
Elephant Talk Communications Corp. (the “Company”). Any qualified subscriber who
wishes to purchase Units should deliver the following items to the Selling
Agent:

 

(1)one dated and executed copy of the Subscription Agreement with all blanks
properly completed;

(2)one dated and executed copy of the Confidential Subscriber Questionnaire with
all blanks properly completed; and

(3)either:

 

(i) a check payable to the order of “Continental Stock Transfer & Trust Company,
LLC as Escrow Agent for Elephant Talk Communications Corp.” in the amount of
$30,000 per each Unit purchased; or

 

(ii) wire transfer to “Continental Stock Transfer & Trust Company, LLC as Escrow
Agent for Elephant Talk Communications Corp.” in accordance with the wire
transfer instructions attached hereto as Exhibit A. All subscription proceeds
received and accepted will be deposited directly into the Escrow Account pending
receipt of funds equal or greater than to the Minimum Offering at which time the
proceeds will be distributed to the operating account of the Company in the
initial closing (“Initial Closing”). The Company may conduct subsequent closings
(each, a “Subsequent Closing”) until the earlier of: (i) the Termination Date
(hereinafter defined), or (ii) the date upon which the Maximum Amount is
subscribed for by Investors (the “Final Closing”). Each of the Initial Closing,
Subsequent Closings and the Final Closing is referred to as a “Closing.”

 

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ELEPHANT TALK COMMUNICATIONS CORP.

 

SUBSCRIPTION AGREEMENT

 

The undersigned (hereinafter “Subscriber”) hereby confirms his/her/its
subscription for the purchase of ______________ units (the “Units”), with each
Unit consisting of : one (1) convertible promissory note in the principal amount
of $30,000 (the “Notes”), which is convertible into shares (the “Note Shares”)
of Common Stock of the Company, $.00001 par value, (the “Common Stock”) at the
option of the holder at a conversion price of $.30 per share; and a five-year
warrant (each a “Warrant” and collectively, the “Warrants”) to purchase one
hundred thousand (100,000) shares of Common Stock (the “Warrant Shares”) at an
exercise price of $.45 per share (the “Warrant Exercise Price”), of Elephant
Talk Communications Corp., a Delaware corporation (the “Company”), on the terms
described below.

 

Capitalized terms used and not otherwise defined herein shall have the
respective meanings set forth in the Private Placement Memorandum dated December
2, 2015. The Units, Notes and Warrants are sometimes referred to herein as the
“Securities.”

 

In connection with this subscription, Subscriber and the Company agree as
follows:

 

1.          Purchase and Sale of the Units.

 

(a)          The Company hereby agrees to issue and to sell to Subscriber, and
Subscriber hereby agrees to purchase from the Company, units for the aggregate
subscription amount set forth on the signature page hereto. The Subscriber
understands that this subscription is not binding upon the Company until the
Company accepts it. The Subscriber acknowledges and understands that acceptance
of this Subscription will be made only by a duly authorized representative of
the Company executing and mailing or otherwise delivering to the Subscriber at
the Subscriber’s address set forth herein, a counterpart copy of the signature
page to this Subscription Agreement indicating the Company’s acceptance of this
Subscription. The Company reserves the right, in its sole discretion for any
reason whatsoever, to accept or reject this subscription in whole or in part.
Following the acceptance of this Subscription Agreement by the Company, the
Company shall issue and deliver to Subscriber the Units subscribed for hereunder
against payment in U.S. Dollars of the Purchase Price (as defined below). If
this subscription is rejected, the Company and the Subscriber shall thereafter
have no further rights or obligations to each other under or in connection with
this Subscription Agreement. If this subscription is not accepted by the Company
on or before the last day of the Offering Period, this subscription shall be
deemed rejected.

 

(b)          Subscriber has hereby delivered and paid concurrently herewith the
aggregate purchase price for the Unit set forth on the signature page hereof in
an amount required to purchase and pay for the Unit subscribed for hereunder
(the “Purchase Price”), which amount has been paid in U.S. Dollars by wire
transfer or check, subject to collection, to the order of “Elephant Talk
Communications Corp.”

 

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(c)          Subscriber understands and acknowledges that this subscription is
part of a private placement by the Company of up to a minimum of $510,000 (the
“Minimum Amount”) and a maximum of $4,200,000 in Units, which offering is being
made on a “all-or-none” basis with respect to the Minimum Amount and a “best
efforts” basis with respect to the Maximum Amount. Subscriber understands that
Company must sell the Minimum Amount before it receives, and have the right to
expend, the net proceeds from the sale of any Units. The proceeds from the sale
of the Units will be held in escrow until at least the Minimum Amount is met,
and the Company, upon accepting subscriptions, at its discretion may immediately
thereafter conduct a closing and expend the subscription proceeds.

 

2.          Representations and Warranties of Subscriber. Subscriber represents
and warrants to the Company and the Selling Agent as follows:

 

(a)          Subscriber is an “accredited investor” as defined by Rule 501 under
the Securities Act of 1933, as amended (the “Act”), and Subscriber is capable of
evaluating the merits and risks of Subscriber’s investment in the Securities and
has the ability and capacity to protect Subscriber’s interests.

 

(b)          Subscriber understands that the Securities have not been
registered. Subscriber understands that the Securities will not be registered
under the Act on the ground that the issuance thereof is exempt under Section
4(a)(2) and Rule 506 (b) of the Act and as a transaction by an issuer not
involving any public offering and that, in the view of the United States
Securities and Exchange Commission (the “SEC”), the statutory basis for the
exception claimed would not be present if any of the representations and
warranties of Subscriber contained in this Subscription Agreement or those of
other purchasers of the Units are untrue or, notwithstanding the Subscriber’s
representations and warranties, the Subscriber currently has in mind acquiring
any of the Units for resale upon the occurrence or non-occurrence of some
predetermined event.

 

(c)          Subscriber is purchasing the Unit subscribed for hereby for
investment purposes and not with a view to distribution or resale, nor with the
intention of selling, transferring or otherwise disposing of all or any part
thereof for any particular price, or at any particular time, or upon the
happening of any particular event or circumstance, except selling, transferring,
or disposing of the Securities in full compliance with all applicable provisions
of the Act, the rules and regulations promulgated by the SEC thereunder, and
applicable state securities laws; and that an investment in the Securities is
not a liquid investment.

 

(d)          Subscriber acknowledges that Subscriber has had the opportunity to
ask questions of, and receive answers from, the Company or any authorized person
acting on its behalf concerning the Company and its business and to obtain any
additional information, to the extent possessed by the Company (or to the extent
it could have been acquired by the Company without unreasonable effort or
expense) necessary to verify the accuracy of the information received by
Subscriber. In connection therewith, Subscriber acknowledges that Subscriber has
had the opportunity to discuss the Company’s business, management and financial
affairs with the Company’s management or any authorized person acting on its
behalf. Subscriber has received and reviewed the Memorandum, and all the
information concerning the Company and the Securities, both written and oral,
that Subscriber desires. Without limiting the generality of the foregoing,
Subscriber has been furnished with or has had the opportunity to acquire, and to
review: (i) copies of all of the Company’s publicly available documents,
Memorandum, and (ii) all information, both written and oral, that Subscriber
desires with respect to the Company’s business, management, financial affairs
and prospects. In determining whether to make this investment, Subscriber has
relied solely on (i) Subscriber’s own knowledge and understanding of the Company
and its business based upon Subscriber’s own due diligence investigations and
the information furnished pursuant to this paragraph, and (ii) the information
described in subparagraph 2(g) below. Subscriber understands that no person has
been authorized to give any information or to make any representations which
were not contained in the Memorandum and Subscriber has not relied on any other
representations or information.

 

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(f)          Subscriber has all requisite legal and other power and authority to
execute and deliver this Subscription Agreement and to carry out and perform
Subscriber’s obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other general
principles of equity, whether such enforcement is considered in a proceeding in
equity or law.

 

(g)          Subscriber has carefully considered and has discussed with the
Subscriber’s legal, tax, accounting and financial advisors, to the extent the
Subscriber has deemed necessary, the suitability of this investment and the
transactions contemplated by this Subscription Agreement for the Subscriber’s
particular federal, state, local and foreign tax and financial situation and has
independently determined that this investment and the transactions contemplated
by this Subscription Agreement are a suitable investment for the Subscriber.
Subscriber has relied solely on such advisors and not on any statements or
representations of the Company or any of its agents. Subscriber understands that
Subscriber (and not the Company) shall be responsible for Subscriber’s own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.

 

(h)          This Subscription Agreement and the Confidential Subscriber
Questionnaire accompanying this Subscription Agreement do not contain any untrue
statement of a material fact or omit any material fact concerning Subscriber.

 

(i)          There are no actions, suits, proceedings or investigations pending
against Subscriber or Subscriber’s assets before any court or governmental
agency (nor, to Subscriber’s knowledge, is there any threat thereof) which would
impair in any way Subscriber’s ability to enter into and fully perform
Subscriber’s commitments and obligations under this Subscription Agreement or
the transactions contemplated hereby.

 

(j)          The execution, delivery and performance of and compliance with this
Subscription Agreement and the issuance of the Notes and Warrants constituting
the components of the Units will not result in any violation of, or conflict
with, or constitute a default under, any of Subscriber’s articles of
incorporation or by-laws, or equivalent limited liability company, trust or
partnership documents, if applicable, or any agreement to which Subscriber is a
party or by which it is bound, nor result in the creation of any mortgage,
pledge, lien, encumbrance or charge against any of the assets or properties of
Subscriber or the Units.

 

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(k)          Subscriber acknowledges that an investment in the Securities is
speculative and involves a high degree of risk and that Subscriber can bear the
economic risk of the purchase of the Securities, including a total loss of
his/her/its investment.

 

(l)          Subscriber acknowledges that he/she/it has carefully reviewed and
considered the risk factors discussed in the “Risk Factors” section of the
Memorandum.

 

(m)          Subscriber recognizes that no federal, state or foreign agency has
recommended or endorsed the purchase of the Securities.

 

(n)          Subscriber is aware that the Units, the Notes and Warrants are, and
the Common Stock issuable upon exercise of the Warrant will be, when issued,
“restricted securities” as that term is defined in Rule 144 of the general rules
and regulations under the Act.

 

(o)          Subscriber understands that the Notes and Warrants shall bear the
following legend or one substantially similar thereto, which Subscriber has read
and understands:

 

NEITHER THIS SECURITY NOR ANY SECURITY INTO WHICH IT MAY BE CONVERTED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY SECURITY INTO
WHICH IT MAY BE CONVERTED NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF AT ANY TIME IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION.

 

(p)          Because of the legal restrictions imposed on resale, Subscriber
understands that the Company shall have the right to note stop-transfer
instructions in its stock transfer records, and Subscriber has been informed of
the Company’s intention to do so. Any sales, transfers, or other dispositions of
the Notes or Warrants by Subscriber, if any, will be made in compliance with the
Act and all applicable rules and regulations promulgated thereunder.

 

(q)          Subscriber acknowledges that Subscriber has such knowledge and
experience in financial and business matters that Subscriber is capable of
evaluating the merits and risks of an investment in the Securities and of making
an informed investment decision with respect thereto.

 

(r)          Subscriber represents that: (i) Subscriber is able to bear the
economic risks of an investment in the Securities and to afford a complete loss
of the investment, and (ii) (A) Subscriber could be reasonably assumed to have
the ability and capacity to protect his/her/its interests in connection with
this subscription; or (B) Subscriber has a pre-existing personal or business
relationship with either the Company or any affiliate thereof of such duration
and nature as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the Company or such affiliate and is otherwise personally qualified to evaluate
and assess the risks, nature and other aspects of this subscription.

 

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(s)          Subscriber further represents that the address of Subscriber set
forth below is his/her principal residence (or, if Subscriber is a company,
partnership or other entity, the address of its principal place of business);
that Subscriber is purchasing the Securities for Subscriber’s own account and
not, in whole or in part, for the account of any other person; Subscriber is
purchasing the Securities for investment and not with a view to the resale or
distribution thereof; and that Subscriber has not formed any entity, and is not
an entity formed, for the purpose of purchasing the Securities.

 

(t)          Subscriber understands that the Company shall have the
unconditional right to accept or reject this subscription, in whole or in part,
for any reason or without a specific reason, in the sole and absolute discretion
of the Company (even after receipt and clearance of Subscriber’s funds). This
Subscription Agreement is not binding upon the Company until accepted in writing
by an authorized officer of the Company. In the event that this subscription is
rejected, then Subscriber’s subscription funds (to the extent of such rejection)
will be promptly returned in full without interest thereon or deduction
therefrom.

 

(u)          Subscriber has not been furnished with any oral representation or
oral information in connection with the offering of the Securities that is not
contained in, or is in any way contrary to or inconsistent with, statements made
in the Memorandum and this Subscription Agreement.

 

(v)         Subscriber represents that Subscriber is not subscribing for the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over the Internet, television or radio or presented at any seminar or
meeting or any public announcement or filing of or by the Company.

 

(w)          Subscriber has carefully read this Subscription Agreement and the
Memorandum, and Subscriber has accurately completed the Confidential Subscriber
Questionnaire which accompanies this Subscription Agreement.

 

(x)          No representations or warranties have been made to Subscriber by
the Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Securities the Subscriber is not relying upon any
representations other than those contained in the Memorandum or in this
Subscription Agreement.

 

(y)          Subscriber represents and warrants, to the best of Subscriber’s
knowledge, that no finder, broker, agent, financial advisor or other
intermediary, nor any purchaser representative or any broker-dealer acting as a
broker, is entitled to any compensation in connection with the transactions
contemplated by this Subscription Agreement.

 

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(z)          Subscriber represents and warrants that Subscriber has: (i) not
distributed or reproduced the Memorandum, in whole or in part, at any time,
without the prior written consent of the Company, (ii) kept confidential the
existence of the Memorandum and the information contained therein or made
available in connection with any further investigation of the Company and (iii)
refrained and shall refrain from trading in the publicly-traded securities of
the Company for so long as such recipient has been in possession of any material
non-public information contained in the Memorandum.

 

(aa)          If the Subscriber is a corporation, partnership, limited liability
company, trust, or other entity, the person executing this Subscription
Agreement hereby represents and warrants that the above representations and
warranties shall be deemed to have been made on behalf of such entity and the
Subscriber has made the same after due inquiry to determine the truthfulness of
such representations and warranties.

 

(bb)          If the Subscriber is a corporation, partnership, limited liability
company, trust, or other entity, it represents that: (i) it is duly organized,
validly existing and in good standing in its jurisdiction of incorporation or
organization and has all requisite power and authority to execute and deliver
this Subscription Agreement and purchase the Securities as provided herein; (ii)
its purchase of the Securities will not result in any violation of, or conflict
with, any term or provision of the charter, by-laws or other organizational
documents of Subscriber or any other instrument or agreement to which the
Subscriber is a party or is subject; (iii) the execution and delivery of this
Subscription Agreement and Subscriber’s purchase of the Securities has been duly
authorized by all necessary action on behalf of the Subscriber; and (iv) all of
the documents relating to the Subscriber’s subscription to the Securities have
been duly executed and delivered on behalf of the Subscriber and constitute a
legal, valid and binding agreement of the Subscriber.

 

(cc)         The Subscriber understands and agrees that the securities are
anticipated to be sold by the Company through the Selling Agent, a licensed
broker-dealer, in an “best efforts” offering and that the Company has engaged
the Selling Agent to sell the securities on its behalf, and will pay the Selling
Agent the fees, expenses and Selling Agent’s Warrants set forth in the
Memorandum in connection with the sale of the Securities.

 

(dd)         The Subscriber should check the Office of Foreign Assets Control
(“OFAC”) website at <http://www.treas.gov/ofac> before making the following
representations. The Subscriber represents that the amounts invested by it in
the Company in the Offering were not and are not directly or indirectly derived
from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at <http://www.treas.gov/ofac>. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists;

 

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To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any
person controlling or controlled by the Subscriber; (3) if the Subscriber is a
privately-held entity, any person having a beneficial interest in the
Subscriber; or (4) any person for whom the Subscriber is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. Please be advised that the Company may not accept any amounts from a
prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph. The Subscriber agrees to promptly notify
the Company and the Selling Agent should the Subscriber become aware of any
change in the information set forth in these representations. The Subscriber
understands and acknowledges that, by law, the Company may be obligated to
“freeze the account” of the Subscriber, either by prohibiting additional
subscriptions from the Subscriber, declining any redemption requests and/or
segregating the assets in the account in compliance with governmental
regulations, and Selling Agent may also be required to report such action and to
disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges
that the Company may, by written notice to the Subscriber, suspend the
redemption rights, if any, of the Subscriber if the Company reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable
to the Company and Selling Agent or any of the Company’s other service
providers. These individuals include specially designated nationals, specially
designated narcotics traffickers and other parties subject to OFAC sanctions and
embargo programs;

 

To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any
person controlling or controlled by the Subscriber; (3) if the Subscriber is a
privately-held entity, any person having a beneficial interest in the
Subscriber; or (4) any person for whom the Subscriber is acting as agent or
nominee in connection with this investment is a senior foreign political figure
, or any immediate family member or close associate of a senior foreign
political figure; and

 

If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if the Subscriber receives deposits from, makes payments on behalf
of, or handles other financial transactions related to a Foreign Bank, the
Subscriber represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

3.          Representations and Warranties of the Company. The Company
represents and warrants to Subscriber as follows:

 

(a)          Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
requisite power and authority to own its properties and to carry on its business
as presently conducted. The Company is qualified to transact business as a
foreign corporation and is in good standing under the laws of each jurisdiction
where the location of its properties or the conduct of its business makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not have a material and adverse effect on the business, condition
(financial or otherwise), operations, prospects or property of the Company or
any of its subsidiaries, taken as a whole (“Material Adverse Effect”).

 

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(b)          Due Authorization; Enforceability. Each transaction document has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
generally and to general principles of equity. The Company has full corporate
power and authority necessary to conduct its business as presently conducted and
to enter into and deliver the transaction documents and to perform its
obligations thereunder.

 

(c)          Non Contravention. None of the execution and delivery of, or
performance by the Company under, any of the transaction documents or the
consummation of the transactions herein or therein contemplated conflicts with
or violates, or will result in the creation or imposition of any lien, charge or
other encumbrance upon any of the assets of the Company under, any agreement or
other instrument to which the Company is a party or by which the Company or its
assets may be bound, any term of the certificate of incorporation or by-laws of
the Company, or any license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its assets, except where such
conflict, violation or creation

 

(d)          Conduct of Business. The conduct of business by the Company as
presently conducted is not subject to continuing oversight, supervision,
regulation or examination by any governmental official or body of the United
States or any other jurisdiction wherein the Company conducts or proposes to
conduct such business, except as such regulation as is applicable to commercial
enterprises generally. The Company has obtained all requisite licenses, permits
and other governmental authorization necessary to conduct its business as
presently, and as proposed to be, conducted, except where the failure to obtain
such license, permit or other governmental authorization would result in a
Material Adverse Effect.

 

(e)          No Defaults. No default by the Company exists in the due
performance under any material agreement to which the Company is a party or to
which any of its assets is subject (collectively, the “Company Agreements”),
except where such defaults do not, individually or in the aggregate, have a
Material Adverse Effect. The Company Agreements are in full force and effect in
accordance with their respective terms.

 

(f)          Anti-Terrorism. Neither the sale of the Units by the Company nor
its use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. Without limiting the foregoing,
the Company is not (a) a person whose property or interests in property are
blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) a person who
engages in any dealings or transactions, or be otherwise associated, with any
such person. The Company and its subsidiaries are in compliance, in all material
respects, with the USA Patriot Act of 2001 (signed into law October 26, 2001).

 

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(g)          Capitalization; Additional Issuances. The issued and outstanding
securities of the Company as of [          ], 2015 are as set forth in the
Memorandum. Except as set forth in the Memorandum, as of [         ], 2015 there
are no outstanding agreements or preemptive or similar rights affecting the
Company’s Common Stock and no outstanding rights, warrants or options to
acquire, or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any Common Stock of the
Company.

 

(h)          Consents. No consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its affiliates, is required for the execution by the Company
of the transaction documents and compliance and performance by the Company of
its obligations under the transaction documents, including, without limitation,
the issuance and sale of the Securities, other than such consents, approvals and
authorizations as shall have been received by the Company as of the closing
date.

 

(i)          The Securities. The Securities upon issuance:

 

(i)          are, or will be, free and clear of any security interests, liens,
claims or other encumbrances, subject to restrictions upon transfer under the
Act and any applicable state securities laws;

 

(ii)         have been, or will be, duly and validly authorized and on the date
of issuance of the Securities, such Securities will be duly and validly issued,
fully paid and non-assessable;

 

(iii)        will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company;

 

(iv)        will have been issued in reliance upon an exemption from the
registration requirements of and, assuming the representations and warranties of
the Subscriber herein is true and accurate, will have been issued in compliance
with Section 5 under the 1933 Act.

 

(j)          Litigation. Except as disclosed in the Memorandum, there are no
material legal proceedings, other than routine litigation incidental to the
business, pending or, to the knowledge of the Company, threatened against or
involving the Company or any of its respective property or assets. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against or involving the
Company.

 

4.          Indemnification. Subscriber agrees to indemnify and hold harmless
the Company, the Selling Agent, and their respective officers, directors,
employees, shareholders, agents, attorneys, representatives and affiliates, and
any person acting for or on behalf of the Company or the Selling Agent, from and
against any and all damage, loss, liability, cost and expense (including
reasonable attorneys’ fees and disbursements) which any of them may incur by
reason of the failure by Subscriber to fulfill any of the terms and conditions
of this Subscription Agreement, or by reason of any breach of the
representations and warranties made by Subscriber herein, or in any other
document provided by Subscriber to the Company in connection with this
investment. All representations, warranties and covenants of each of Subscriber
and the Company contained herein shall survive the acceptance of this
subscription and the closings.

 

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5.          Registration Rights. The Company shall, within forty-five (45) days
of the Final Closing, file a registration statement on Form S-1, Form S-3, or
other eligible form (the “Registration Statement”), registering the shares
issuable upon conversion of the Note (“Note Shares”) and shares issuable upon
exercise of the Warrant (“Warrant Shares”). The Warrant Shares and Note Shares
to be registered shall hereinafter be referred to as the “Registrable
Securities.” The Registration Statement shall be filed with the Securities and
Exchange Commission.

 

All expenses relating to the Company’s compliance with Section 5 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses incurred in connection with complying with
state securities or “blue sky” laws, fees of FINRA, transfer taxes, fees of
transfer agents and registrars are called “Registration Expenses;” provided,
however, Registration Expenses shall not include counsel fees to the Holder. The
Company shall be responsible for all Registration Expenses.

 

The Company shall use commercially reasonable efforts to provide to the Holder,
at least fifteen (15) days prior to the effectiveness of the Registration
Statement, notice of such expected effective date (the “Expected Effectiveness
Date”). When the Company proposes to effect the registration of the Registrable
Securities under the Securities Act, the Company, provided it received notice
(the “Holder Notice”) at least five (5) days prior to the Expected Effectiveness
Date from the Holder specifying items (a) and (b), below, shall:

 

(a)          furnish to the Holder such number of copies of the Registration
Statement and the prospectus included therein (including each preliminary
prospectus) as the Holder reasonably may request in the Holder Notice to
facilitate the public sale or disposition of the Registrable Securities covered
by the Registration Statement; and

 

(b)          list the Registrable Securities with any trading market on which
the Common Stock is then listed.

 

The Company shall use commercially reasonable efforts to keep the Registration
Statement continuously effective under the Securities Act until the earlier of:
(i) the date that all Registrable Securities has been sold or may be sold by
non-affiliates without volume restrictions pursuant to Rule 144 as determined by
the counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the affected
Holders and (ii) the date which is the expiration date of the Warrants. Such
Registration Statement shall also cover, to the extent allowable under the
Securities Act and the rules promulgated thereunder, such indeterminate number
of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Warrant Shares.

 

The foregoing provisions notwithstanding, the Company may withdraw any
registration statement referred to in this Section 5 without thereby incurring
any liability to the Holder.

 

 11 

 

  

6.          Miscellaneous.

 

(a)          Subscriber agrees not to transfer or assign this Subscription
Agreement or any of Subscriber’s interest herein and further agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.

 

(b)          Subscriber agrees that Subscriber cannot cancel, terminate, or
revoke this Subscription Agreement or any agreement of Subscriber made
hereunder, and this Subscription Agreement shall survive the death or legal
disability of Subscriber and shall be binding upon Subscriber’s heirs,
executors, administrators, successors, and permitted assigns.

 

(c)          Subscriber has read and has accurately completed this entire
Subscription Agreement.

 

(d)          This Subscription Agreement, the Confidential Purchase
Questionnaire, the Note, the certificate representing the Warrant constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended or waived only by a written instrument signed by all
parties.

 

(f)          Subscriber acknowledges that it has been advised and has had the
opportunity to consult with Subscriber’s own attorney regarding this
subscription and Subscriber has done so to the extent that Subscriber deems
appropriate.

 

(g)          Any notice or other document required or permitted to be given or
delivered to the parties hereto shall be in writing and sent: (i) by fax if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid) or (c) by a recognized
overnight delivery service (with charges prepaid).

 

If to the Company, at:

 

Elephant Talk Communication Corp.

100 Park Avenue

New York, NY 10017

Tel: 31 20 635916

 

With a copy to:

 

Barry I. Grossman, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas FL 11

New York, NY 10105

Tel: (212) 370-1300, Fax: (212) 370-7889

 

If to the Subscriber, at its address set forth on the signature page to this
Subscription Agreement, or such other address as Subscriber shall have specified
to the Company in writing.

 

 12 

 

  

(h)          Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or any delay by the Company in exercising such right
or remedy, will not operate as a waiver thereof. No waiver by the Company will
be effective unless and until it is in writing and signed by the Company.

 

(i)          This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
as such laws are applied by the New York courts except with respect to the
conflicts of law provisions thereof, and shall be binding upon the Subscriber
and the Subscriber’s heirs, estate, legal representatives, successors and
permitted assigns and shall inure to the benefit of the Company, and its
successors and assigns.

 

(j)          Any legal suit, action or proceeding arising out of or relating to
this Subscription Agreement or the transactions contemplated hereby shall be
instituted exclusively in New York Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York. The parties
hereto hereby: (i) waive any objection which they may now have or hereafter have
to the venue of any such suit, action or proceeding, and (ii) irrevocably
consent to the jurisdiction of the New York Supreme Court, County of New York,
and the United States District Court for the Southern District of New York in
any such suit, action or proceeding. The parties further agree to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the New York Supreme Court, County of New York, or in
the United States District Court for the Southern District of New York and agree
that service of process upon a party which is mailed by certified mail to such
party’s address shall be deemed in every respect effective service of process
upon such party in any such suit, action or proceeding.

 

(k)          If any provision of this Subscription Agreement is held to be
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.

 

(l)          The parties understand and agree that money damages would not be a
sufficient remedy for any breach of this Subscription Agreement by the Company
or the Subscriber and that the party against which such breach is committed
shall be entitled to equitable relief, including an injunction and specific
performance, as a remedy for any such breach, without the necessity of
establishing irreparable harm or posting a bond therefor. Such remedies shall
not be deemed to be the exclusive remedies for a breach by either party of this
Subscription Agreement but shall be in addition to all other remedies available
at law or equity to the party against which such breach is committed.

 

(m)          All pronouns and any variations thereof used herein shall be deemed
to refer to the masculine, feminine, singular or plural, as identity of the
person or persons may require.

 

 13 

 

  

(n)          This Subscription Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

[Remainder of Page intentionally left blank]

 

[Signature Pages Follow]

 

 14 

 

 

Signature Page for Individuals:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

$      

Purchase Price   Aggregate Amount of Investment             Print or Type Name  
Print or Type Name (Joint-owner)             Signature   Signature (Joint-owner)
            Date   Date (Joint-owner)             Social Security Number  
Social Security Number (Joint-owner)                         Address   Address
(Joint-owner)       _________Joint Tenancy   _________Tenants in Common

 

 S-1 

 

 

Signature Page for Partnerships Corporations or Other Entities:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

 

$   $       Total Purchase Price    Aggregate Amount of Investment

            Print or Type Name of Entity                 Address                
Taxpayer I.D. No. (if applicable)   Date             Signature   Print or Type
Name and Indicate     Title or Position with Entity             Signature (other
authorized signatory)   Print or Type Name and Indicate     Title or Position
with Entity

 

 S-2 

 

 

Acceptance:

 

IN WITNESS WHEREOF, the Company has caused this Subscription Agreement to be
executed, and the foregoing subscription accepted, as of the date indicated
below.

 

  ELEPHANT TALK COMMUNICATION CORP.         By:     Name: Robert Harold (Hal)
Turner   Title: Executive Chairman of the Board

 

Date:__________________________, 2015

 

 S-3