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) July 14, 2015

 

ELEPHANT TALK COMMUNICATIONS CORP.

(Exact name of registrant as specified in Charter)

 

Delaware   000-030061   95-4557538
         
(State or other jurisdiction of
incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

100 Park Avenue

New York, NY 10017

 

(Address of Principal Executive Offices) (Zip Code)

 

Registrant's telephone number, including area code: +31.20.653.5916

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

  

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.

 

On July 9, 2015 (the “ Amendment Closing Date ”), Elephant Talk Europe Holding B.V., an entity organized under the laws of the Netherlands (“ ET Europe ”) a wholly owned subsidiary of Elephant Talk Communications Corp. (the “ Company ”), as borrower, the Company, Elephant Talk North America Corp. a Delaware corporation (“ ET North America ”), Elephant Talk Group International B.V., an entity organized under the laws of the Netherlands (“ ET Group Netherlands ”, and collectively with the Company and ET North America, the “ Guarantors ”, collectively with the Borrower, the “ Credit Parties ”), Corbin Mezzanine Fund I, L.P., (“ Lender ”) and Atalaya Administrative LLC, a New York limited liability company (“ ATALAYA ”), as administrative agent and collateral agent for the Lender, entered into a First Amendment to Credit Agreement and Waiver (the “ Amendment ”) amending certain terms of the Credit Agreement among the parties dated November 17, 2014 (the “ Credit Agreement ”).

 

Pursuant to the Amendment, the Lender and Atalaya agreed to waive the Existing Default as defined in the Credit Agreement subject to certain terms and conditions in the Amendment. Upon repayment of approximately $5.7 million (including certain expenses and interest) to the Lender, the Amendment reduced the term loan facility (the “Amended Term Loan Facility”) to $6.5 million. Borrowings under the Amended Term Loan Facility shall bear interest at the LIBOR rate plus an applicable margin per annum equal to eleven percent (11.00%), which may be decreased by 0.5% under certain circumstances such as the Company’s achievement of certain adjusted EBITDA during certain periods. The Amended Term Loan Facility will mature on December 31, 2017. The terms of original Credit Agreement and the ancillary agreements including the Security Agreement remain in effect unless otherwise amended in the Amendment.

 

A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The description of the material terms of the Amendment are qualified in their entirety by reference to Exhibit 10.1. The Company’s press release, dated July 14, 2015, announcing the Amendment is filed as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

As of July 9, 2015, the Amended Term Loan Facility constitutes a direct financial obligation of the Company, the material terms of which are described above under Item 1.01 and are incorporated herein by reference.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

On July 9, 2015, pursuant to the terms of the Amendment, the Company issued two warrants to the Lender (the “ Corbin Warrants ”), one warrant to purchase two million shares of the Company’s common stock, par value $0.00001 (the “ Common Stock ”), exercisable upon issuance with an expiration date of 30 months from the closing of the Amendment, at a per share price of $0.02 in excess of the closing bid price as of the date of execution of the Amendment, and another warrant to purchase one million shares of Common Stock exercisable upon issuance with an expiration date of 18 months from the closing of the Amendment, at a per share price of $0.02 in excess of the closing bid price as of the date of execution of the Amendment.

 

The securities underlying the Corbin Warrants have not been registered under the Securities Act of 1933, as amended (the “ Securities Act ”), or any state securities laws, and were offered and sold to an “accredited investor” (as defined in Rule 501(a) of the Securities Act) pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated pursuant thereto.

 

The descriptions of the Corbin Warrants are qualified in their entirety by the terms and conditions of the Corbin Warrants, forms of which are filed as Exhibits 4.1 and 4.2, to this Current Report and are incorporated by reference herein.

 

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Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

4.1   Form of Corbin Warrant, dated July 9, 2015 issued to Corbin Mezzanine Fund I, L.P to purchase two million shares of Common Stock
4.2   Form of Corbin Warrant, dated July 9, 2015 issued to Corbin Mezzanine Fund I, L.P. to purchase one million shares of Common Stock
10.1   First Amendment to Credit Agreement, dated as of July 9, 2015, by and among Elephant Talk Europe Holding B.V., as the Borrower, Elephant Talk Communications Corp., as the Parent and Guarantor, the other Subsidiaries of the Parent, from time to time party hereto as Guarantors, the Lenders from time to time party hereto and Atalaya Administrative LLC, as Administrative Agent and Collateral Agent.
99.1   Press Release issued by the Company dated July 14, 2015.

 

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SIGNATURES

 

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

 

  Dated: July 14, 2015 ELEPHANT TALK COMMUNICATIONS CORP.  
       
       
  By:   /s/ Alex Vermeulen  
  Alex Vermeulen  
  General Counsel  

 

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Exhibit 4.1

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

 

ELEPHANT TALK COMMUNICATIONS CORP.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No. 2 Original Issue Date: July 9, 2015

 

Elephant Talk Communications Corp., a Delaware corporation (the “ Company ”), hereby certifies that, for value received, Corbin Mezzanine Fund I, L.P. or its permitted registered assigns (the “ Holder ”), is entitled to purchase from the Company up to a total of 2,000,000 shares of common stock, $0.00001 par value per share (the “ Common Stock ”), of the Company (each such share, a “ Warrant Share ” and all such shares, the “ Warrant Shares ”) at an exercise price per share equal to $0.38 per share (as adjusted from time to time as provided in Section 9 herein, the “ Exercise Price ”), at any time and from time to time on or after the date hereof (the “ Issue Date ”) and through and including 5:30 P.M., New York time, on January 9, 2018 (the “ Expiration Date ”), and subject to the following terms and conditions:

 

This Warrant (this “ Warrant ”) is issued pursuant to that certain senior secured credit facility, dated November 17, 2014 by and among the Company, Atalaya Administrative LLC (as agent) and the Lenders identified therein, as amended from time to time (the “ Credit Facility ”).”

 

1.            Definitions . In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Credit Facility.

 

2.            Registration of Warrant . The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

 
 

 

3.            Registration of Transfers . Subject to compliance with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the Company’s transfer agent or to the Company at its address specified in the Credit Facility and (x) delivery, at the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer of such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws and (y) delivery by the transferee of a written statement to the Company (i) certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and (ii) representing to the Company that the transferee is purchasing the Warrant (or a portion thereof) for its own account and not with a view toward a distribution within the meaning of the Securities Act, to the Company at its address specified in the Credit Facility. Notwithstanding the foregoing, no opinion of counsel shall be required in the case of a transfer by a registered Holder to an Affiliate of such Holder. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “ New Warrant ”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this Section 3 .

 

4.            Exercise and Duration of Warrant .

 

(a)          All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Issue Date and through and including 5:30 P.M. New York time, on the Expiration Date. At 5:30 P.M., New York time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding.

 

(b)          The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “ Exercise Notice ”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to Section 10 below), and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “ Exercise Date .” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

 

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5.            Delivery of Warrant Shares .

 

(a)          Upon exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder, (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“ DTC ”) or a similar organization, unless in the case of clause (i) and (ii) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144 under the Securities Act, in which case such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date; provided, that the Holder has complied with the terms of this Warrant governing the exercise of this Warrant. If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through The Depository Trust Company or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation. For purposes of this Warrant, a “ Trading Day ” means any day on which the Common Stock is traded on the NYSE MKT LLC (“ NYSE MKT ”), or, if the NYSE MKT is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided , that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day on which the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York time).

 

(b)          If by the close of the third Trading Day after delivery of a properly completed Exercise Notice and the payment of the aggregate exercise price in any manner permitted by Section 10 of this Warrant, the Company fails to deliver to the Holder a certificate representing the required number of Warrant Shares or to credit the Holder’s balance account at DTC for the required number of Warrant Shares, in each case in the manner required pursuant to Section 5(a) , and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “ Buy-In ”), then the Company shall, within three Trading Days after the Holder’s request and in the Holder’s sole discretion, either (1) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased, at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate or (2) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased in the Buy-In over the product of (A) the number of shares of Common Stock purchased in the Buy-In, multiplied by (B) the Closing Sale Price of a share of Common Stock on the Exercise Date.

 

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(c)          To the extent permitted by law (including the rules of the NYSE MKT or the Company’s principal trading market at the time and the rules and regulations promulgated by the U.S. Securities and Exchange Commission), the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject to the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

6.            Charges, Taxes and Expenses . Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however , that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrant in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

7.            Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case, a customary affidavit of loss and an indemnity and surety bond, if requested by the Company or the Company’s transfer agent, in a form that is reasonably satisfactory to the Company and its transfer agent. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

 

8.            Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9 ). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

 

9.            Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9 .

 

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(a)           Stock Dividends and Splits . If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

 

(b)           Pro Rata Distributions . If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph) or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, “ Distributed Property ”), then, upon any exercise of this Warrant that occurs after the record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such Holder would have been entitled to receive in respect of such number of Warrant Shares had the Holder been the record holder of such Warrant Shares immediately prior to such record date without regard to any limitation on exercise contained therein.

 

(c)           Number of Warrant Shares . Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9 , the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(d)           Fundamental Transactions . If, at any time while this Warrant is outstanding (i) the Company effects (A) any merger of the Company with (but not into) another Person, in which stockholders of the Company immediately prior to such transaction own less than a majority of the outstanding stock of the surviving entity, or (B) any merger or consolidation of the Company into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer approved or authorized by the Company’s Board of Directors is completed pursuant to which holders of at least a majority of the outstanding Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (in any such case, a “ Fundamental Transaction ”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “ Alternate Consideration ”), and the Holder shall no longer have the right to receive Warrant Shares upon exercise of this Warrant. The Company shall not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or Person shall assume the obligation to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to receive, and the other obligations under this Warrant (including without limitation this Section 9(d) which shall apply to subsequent transactions of an analogous type to any Fundamental Transaction).

 

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(e)           Notice of Adjustments . Upon the occurrence of each adjustment pursuant to this Section 9 , the Company at its expense shall promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in reasonable detail the facts upon which such adjustment is based. The Company shall promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

 

(f)           Notice of Corporate Events . If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company, (ii) authorizes or approves, enters into any written agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then, except if such notice and the contents thereof shall be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction at least five (5) calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction; provided, however , that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

10.          Payment of Exercise Price . The Holder shall pay the Exercise Price in immediately available funds; provided, however , the Holder may, in its sole discretion, satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

 

X = Y [(A-B)/A]

 

where:

 

X = the number of Warrant Shares to be issued to the Holder.

 

Y = the total number of Warrant Shares with respect to which this Warrant is being exercised.

 

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A = the average of the Closing Sale Prices of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five (5) Trading Days ending on the date immediately preceding the Exercise Date.

 

B = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

For purposes of this Warrant, “ Closing Sale Price ” means, for any security as of any date, the last trade price for such security on the principal securities exchange or trading market for such security, as reported by Bloomberg Financial Markets, or, if such exchange or trading market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M., New York time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the closing bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued (provided that the U.S. Securities and Exchange Commission continues to take the position that such treatment is proper at the time of such exercise).

 

11.          No Fractional Shares . No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares.

 

12.          Notices . Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Credit Facility prior to 5:30 P.M., New York time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Credit Facility on a day that is not a Trading Day or later than 5:30 P.M., New York time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the party to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set forth in the Credit Facility unless changed by such party by two (2) Trading Days’ prior notice to the other party in accordance with this Section 12 .

 

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13.          Warrant Agent . The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

 

14.          Representations and Warranties of Holder . The Holder hereby represents and warrants that (i) the Holder meets the requirements of at least one of the suitability standards for an “accredited investor” as that term is defined in Regulation D as promulgated by the United States Securities and Exchange Commission; (ii) the Holder is acquiring the Warrant Shares solely for the Holder’s account for investment purposes only and not with a view to or intent of resale or distribution thereof, in whole or in part, in violation of the Securities Act, and the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act, without prejudice, however, to the Holder’s right at all times to sell or otherwise dispose of all or any part of the Warrant Shares in compliance with applicable federal and state securities laws and in compliance with any transfer restriction to which the applicable Warrant Shares may be subject at any time or from time to time; and (iii) the Holder has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it to evaluate the merits and risks of an investment in the Company and the Warrant Shares and to make an informed investment decision with respect thereto.

 

15.          Miscellaneous .

 

(a)           No Rights as a Stockholder . The Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

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(b)           Successors and Assigns . Subject to compliance with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.

 

(c)           Amendment and Waiver . Except as otherwise provided herein, the provisions of the Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder of this Warrant.

 

(d)           Future Actions . Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body (including without limitation the NYSE MKT) having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

(e)           Acceptance . Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

(f)           Governing Law; Jurisdiction . ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER SECTION 12 HEREOF AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 

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(g)           Headings . The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

 

(h)           Severability . In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(i)           No Effect Upon Lending Relationships . Anything herein to the contrary notwithstanding, nothing contained in this Warrant shall affect, limit or impair the rights and remedies of the Administrative Agent, any of its or their affiliates, funding or financing sources or any other lenders in their capacities as lenders to the Company or any of its subsidiaries (each a “ Subject Entity ”) pursuant to any agreement under which the Company or any of its subsidiaries has or from time to time will have borrowed money. Without limiting the generality of the foregoing, neither a Subject Entity nor any such other Person, in exercising its rights as a lender or other creditor, including making its decision on whether to foreclose on any collateral security, shall have any duty to consider (a) its status as a direct or indirect equityholder of the Company, (b) the interests of the Company or any of its subsidiaries or (c) any duty it may have to any other direct or indirect equityholder of the Company, except as may be required under the applicable loan documents or by commercial law applicable to creditors generally.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant No. 2 to be duly executed by its authorized officer as of the date first indicated above.

 

ELEPHANT TALK COMMUNICATIONS CORP.  
   
By: /s/Alex Vermeulun  
  Name: Alex Vermeulun  
  Title: General Counsel  

 

 
 

 

SCHEDULE 1

 

FORM OF EXERCISE NOTICE

 

(To be executed by the Holder to purchase shares of
Common Stock under the foregoing Warrant)

 

Ladies and Gentlemen:

 

(1)         The undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by Elephant Talk Communications Corp., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

 

(2)         The undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.

 

(3)         The Holder intends that payment of the Exercise Price shall be made as (check one):

 

[   ] Cash Exercise

 

[   ] “Cashless Exercise” under Section 10

 

(4)         If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $____________ in immediately available funds to the Company in accordance with the terms of the Warrant.

 

(5)         Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the Warrant.

 

Dated: ________________ ____, 201__

 

Name of Holder:     

 

By:    
     
Name:     
     
Title:    

 

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

 

 
 

 

SCHEDULE 2

 

Elephant Talk Communications Corp.

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________   (the “Transferee”) the right represented by the within Warrant to purchase _____________   shares of Common Stock of Elephant Talk Communications Corp. (the “Company”) to which the within Warrant relates and appoints ____________________   attorney to transfer said right on the books of the Company with full power of substitution in the premises.

 

Dated: ____________________ __, 201__

 

   
  (Signature must conform in all respects to name of holder as specified on the face of the Warrant)
   
   
  Address of Transferee

 

In the presence of:

 

   

 

 

 

 

 

Exhibit 4.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

 

ELEPHANT TALK COMMUNICATIONS CORP.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No. 3 Original Issue Date: July 9, 2015

 

Elephant Talk Communications Corp., a Delaware corporation (the “ Company ”), hereby certifies that, for value received, Corbin Mezzanine Fund I, L.P. or its permitted registered assigns (the “ Holder ”), is entitled to purchase from the Company up to a total of 1,000,000 shares of common stock, $0.00001 par value per share (the “ Common Stock ”), of the Company (each such share, a “ Warrant Share ” and all such shares, the “ Warrant Shares ”) at an exercise price per share equal to $.38 per share (as adjusted from time to time as provided in Section 9 herein, the “ Exercise Price ”), at any time and from time to time on or after the date hereof (the “ Issue Date ”) and through and including 5:30 P.M., New York time, on January 9, 2017 (the “ Expiration Date ”), and subject to the following terms and conditions:

 

This Warrant (this “ Warrant ”) is issued pursuant to that certain senior secured credit facility, dated November 17, 2014 by and among the Company, Atalaya Administrative LLC (as agent) and the Lenders identified therein, as amended from time to time (the “ Credit Facility ”).”

 

1.            Definitions . In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Credit Facility.

 

2.            Registration of Warrant . The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “ Warrant Register ”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

 
 

 

3.            Registration of Transfers . Subject to compliance with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the Company’s transfer agent or to the Company at its address specified in the Credit Facility and (x) delivery, at the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer of such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws and (y) delivery by the transferee of a written statement to the Company (i) certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and (ii) representing to the Company that the transferee is purchasing the Warrant (or a portion thereof) for its own account and not with a view toward a distribution within the meaning of the Securities Act, to the Company at its address specified in the Credit Facility. Notwithstanding the foregoing, no opinion of counsel shall be required in the case of a transfer by a registered Holder to an Affiliate of such Holder. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “ New Warrant ”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this Section 3 .

 

4.            Exercise and Duration of Warrant .

 

(a)          All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Issue Date and through and including 5:30 P.M. New York time, on the Expiration Date. At 5:30 P.M., New York time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding.

 

(b)          The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “ Exercise Notice ”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to Section 10 below), and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “ Exercise Date .” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

 

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5.            Delivery of Warrant Shares .

 

(a)          Upon exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder, (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“ DTC ”) or a similar organization, unless in the case of clause (i) and (ii) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144 under the Securities Act, in which case such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date; provided, that the Holder has complied with the terms of this Warrant governing the exercise of this Warrant. If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through The Depository Trust Company or another established clearing corporation performing similar functions, if available; provided, that, the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation. For purposes of this Warrant, a “ Trading Day ” means any day on which the Common Stock is traded on the NYSE MKT LLC (“ NYSE MKT ”), or, if the NYSE MKT is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided , that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day on which the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00 p.m., New York time).

 

(b)          If by the close of the third Trading Day after delivery of a properly completed Exercise Notice and the payment of the aggregate exercise price in any manner permitted by Section 10 of this Warrant, the Company fails to deliver to the Holder a certificate representing the required number of Warrant Shares or to credit the Holder’s balance account at DTC for the required number of Warrant Shares, in each case in the manner required pursuant to Section 5(a) , and if after such third Trading Day and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “ Buy-In ”), then the Company shall, within three Trading Days after the Holder’s request and in the Holder’s sole discretion, either (1) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased, at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate or (2) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased in the Buy-In over the product of (A) the number of shares of Common Stock purchased in the Buy-In, multiplied by (B) the Closing Sale Price of a share of Common Stock on the Exercise Date.

 

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(c)          To the extent permitted by law (including the rules of the NYSE MKT or the Company’s principal trading market at the time and the rules and regulations promulgated by the U.S. Securities and Exchange Commission), the Company’s obligations to issue and deliver Warrant Shares in accordance with and subject to the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

6.            Charges, Taxes and Expenses . Issuance and delivery of certificates for shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however , that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrant in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

7.            Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case, a customary affidavit of loss and an indemnity and surety bond, if requested by the Company or the Company’s transfer agent, in a form that is reasonably satisfactory to the Company and its transfer agent. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

 

8.            Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9 ). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

 

9.            Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9 .

 

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(a)           Stock Dividends and Splits . If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

 

(b)           Pro Rata Distributions . If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph) or (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each case, “ Distributed Property ”), then, upon any exercise of this Warrant that occurs after the record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such Holder would have been entitled to receive in respect of such number of Warrant Shares had the Holder been the record holder of such Warrant Shares immediately prior to such record date without regard to any limitation on exercise contained therein.

 

(c)           Number of Warrant Shares . Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9 , the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(d)           Fundamental Transactions . If, at any time while this Warrant is outstanding (i) the Company effects (A) any merger of the Company with (but not into) another Person, in which stockholders of the Company immediately prior to such transaction own less than a majority of the outstanding stock of the surviving entity, or (B) any merger or consolidation of the Company into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer approved or authorized by the Company’s Board of Directors is completed pursuant to which holders of at least a majority of the outstanding Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (in any such case, a “ Fundamental Transaction ”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant without regard to any limitations on exercise contained herein (the “ Alternate Consideration ”), and the Holder shall no longer have the right to receive Warrant Shares upon exercise of this Warrant. The Company shall not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof, any successor to the Company, surviving entity or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or Person shall assume the obligation to deliver to the Holder, such Alternate Consideration as, in accordance with the foregoing provisions, the Holder may be entitled to receive, and the other obligations under this Warrant (including without limitation this Section 9(d) which shall apply to subsequent transactions of an analogous type to any Fundamental Transaction).

 

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(e)           Notice of Adjustments . Upon the occurrence of each adjustment pursuant to this Section 9 , the Company at its expense shall promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in reasonable detail the facts upon which such adjustment is based. The Company shall promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

 

(f)           Notice of Corporate Events . If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company, (ii) authorizes or approves, enters into any written agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then, except if such notice and the contents thereof shall be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction at least five (5) calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction; provided, however , that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

10.          Payment of Exercise Price . The Holder shall pay the Exercise Price in immediately available funds; provided, however , the Holder may, in its sole discretion, satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

 

X = Y [(A-B)/A]

 

where:

 

X = the number of Warrant Shares to be issued to the Holder.

 

Y = the total number of Warrant Shares with respect to which this Warrant is being exercised.

 

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A = the average of the Closing Sale Prices of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five (5) Trading Days ending on the date immediately preceding the Exercise Date.

 

B = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

 

For purposes of this Warrant, “ Closing Sale Price ” means, for any security as of any date, the last trade price for such security on the principal securities exchange or trading market for such security, as reported by Bloomberg Financial Markets, or, if such exchange or trading market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M., New York time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the closing bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued (provided that the U.S. Securities and Exchange Commission continues to take the position that such treatment is proper at the time of such exercise).

 

11.          No Fractional Shares . No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares.

 

12.          Notices . Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Credit Facility prior to 5:30 P.M., New York time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Credit Facility on a day that is not a Trading Day or later than 5:30 P.M., New York time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the party to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set forth in the Credit Facility unless changed by such party by two (2) Trading Days’ prior notice to the other party in accordance with this Section 12 .

 

7
 

 

13.          Warrant Agent . The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

 

14.          Representations and Warranties of Holder . The Holder hereby represents and warrants that (i) the Holder meets the requirements of at least one of the suitability standards for an “accredited investor” as that term is defined in Regulation D as promulgated by the United States Securities and Exchange Commission; (ii) the Holder is acquiring the Warrant Shares solely for the Holder’s account for investment purposes only and not with a view to or intent of resale or distribution thereof, in whole or in part, in violation of the Securities Act, and the Holder has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act, without prejudice, however, to the Holder’s right at all times to sell or otherwise dispose of all or any part of the Warrant Shares in compliance with applicable federal and state securities laws and in compliance with any transfer restriction to which the applicable Warrant Shares may be subject at any time or from time to time; and (iii) the Holder has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it to evaluate the merits and risks of an investment in the Company and the Warrant Shares and to make an informed investment decision with respect thereto.

 

15.          Miscellaneous .

 

(a)           No Rights as a Stockholder . The Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

8
 

 

(b)           Successors and Assigns . Subject to compliance with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder. This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and assigns.

 

(c)           Amendment and Waiver . Except as otherwise provided herein, the provisions of the Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder of this Warrant.

 

(d)           Future Actions . Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body (including without limitation the NYSE MKT) having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

(e)           Acceptance . Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

(f)           Governing Law; Jurisdiction . ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER SECTION 12 HEREOF AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

 

9
 

 

(g)           Headings . The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

 

(h)           Severability . In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

(i)           No Effect Upon Lending Relationships . Anything herein to the contrary notwithstanding, nothing contained in this Warrant shall affect, limit or impair the rights and remedies of the Administrative Agent, any of its or their affiliates, funding or financing sources or any other lenders in their capacities as lenders to the Company or any of its subsidiaries (each a “ Subject Entity ”) pursuant to any agreement under which the Company or any of its subsidiaries has or from time to time will have borrowed money. Without limiting the generality of the foregoing, neither a Subject Entity nor any such other Person, in exercising its rights as a lender or other creditor, including making its decision on whether to foreclose on any collateral security, shall have any duty to consider (a) its status as a direct or indirect equityholder of the Company, (b) the interests of the Company or any of its subsidiaries or (c) any duty it may have to any other direct or indirect equityholder of the Company, except as may be required under the applicable loan documents or by commercial law applicable to creditors generally.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

 

10
 

 

IN WITNESS WHEREOF, the Company has caused this Warrant No. 3 to be duly executed by its authorized officer as of the date first indicated above.

 

ELEPHANT TALK COMMUNICATIONS CORP.
   
By: /s/Alex Vermeulun  
  Name: Alex Vermeulun  
  Title: General Counsel  

 

 
 

 

SCHEDULE 1

 

FORM OF EXERCISE NOTICE

 

(To be executed by the Holder to purchase shares of
Common Stock under the foregoing Warrant)

 

Ladies and Gentlemen:

 

(1)         The undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by Elephant Talk Communications Corp., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

 

(2)         The undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.

 

(3)         The Holder intends that payment of the Exercise Price shall be made as (check one):

 

[   ] Cash Exercise

 

[   ] “Cashless Exercise” under Section 10

 

(4)         If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $____________ in immediately available funds to the Company in accordance with the terms of the Warrant.

 

(5)         Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the Warrant.

 

Dated: ________________ ____, 201__

 

Name of Holder:     

 

By:    
     
Name:     
     
Title:    

 

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

 

 
 

 

SCHEDULE 2

 

Elephant Talk Communications Corp.

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________   (the “Transferee”) the right represented by the within Warrant to purchase _____________   shares of Common Stock of Elephant Talk Communications Corp. (the “Company”) to which the within Warrant relates and appoints ____________________   attorney to transfer said right on the books of the Company with full power of substitution in the premises.

 

Dated: ____________________ __, 201__

 

   
  (Signature must conform in all respects to name of holder as specified on the face of the Warrant)
   
   
  Address of Transferee

 

In the presence of:  
   
   

 

 

 

 

Exhibit 10.1

 

FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER

 

This FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of July 9, 2015 (this “ Amendment ”), among Elephant Talk Europe Holding B.V. , a besloten vennootschap met beperkte annsprakelijkheid organized under the laws of the Netherlands (the “ Borrower ”), Elephant Talk Communications Corp. , a Delaware corporation (the “ Parent ”), Elephant Talk North America Corp. , a Delaware corporation (“ ET North America ”), Elephant Talk Group International B.V. , a a besloten vennootschap met beperkte annsprakelijkheid organized under the laws of the Netherlands (“ ET Group Netherlands ”, and collectively with Parent and ET North America, the “ Guarantors ”, and each individually, a “ Guarantor ”, collectively with the Borrower, the “ Credit Parties ”, and each individually, a “ Credit Party ”), Corbin Mezzanine Fund I, L.P. , as sole existing lender (“ Corbin ”) and ATALAYA ADMINISTRATIVE LLC , as administrative agent and collateral agent for the Lenders under the Credit Agreement described below (in such capacity, together with its successors and assigns, the “ Administrative Agent ”).

 

WHEREAS, the Credit Party have entered into a Credit Agreement dated as of November 17, 2014 with Corbin, such other financial institutions that may from time to time become party thereto (collectively with Corbin, the “ Lenders ”, and each individually, a “ Lender ”) and the Administrative Agent (as so amended and as the same may be further amended or supplemented from time to time, the “ Credit Agreement ”), pursuant to which the Lenders agreed, subject to the terms and conditions set forth therein, to make certain loans to the Borrower;

 

WHEREAS, the Borrower has informed the Administrative Agent that, as of the date hereof, certain Events of Default have occurred and are continuing under the Credit Agreement, including, without limitation, the termination of the Iusacell Agreement which constitutes an Event of Default under Section 10.01(o) of the Agreement (collectively, the “ Existing Events of Default ”);

 

WHEREAS, none of the Existing Events of Default have been cured and all of the Existing Events of Default are continuing;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders enter into this Amendment to (a) waive the Existing Events of Default and (b) amend the Credit Agreement to among other things, modify certain terms and conditions as more particularly set forth herein;

 

WHEREAS, the Lenders and the Administrative Agent have agreed to waive the Existing Events of Default and to make the foregoing amendments to the Credit Agreement as more particularly set forth herein, subject to the terms and conditions sets forth herein;

 

NOW, THEREFORE, in consideration of the promises and the mutual agreements contained in this Amendment, the Credit Parties, the Lenders party hereto and the Administrative Agent hereby agree as follows:

 

1.            Capitalized Terms . Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.

 

 
 

 

2.            Amendments to Credit Agreement . Subject to the satisfaction of the conditions precedent set forth in Section 6 below and in reliance on the representations and warranties set forth in Section 4 and the acknowledgments set forth in Section 5 , the Credit Agreement is hereby amended as follows:

 

(a)           Amendment to Section 1.01 of the Credit Agreement . Section 1.01 of the Credit Agreement is hereby amended as follows:

 

(i)          Section 1.1 of the Credit Agreement is hereby amended by deleting the definitions of “Applicable Margin”, “Prepayment Premium” and “Warrants” in their entirety and substituting the following therefor:

 

Applicable Margin ” shall mean a percentage per annum equal to eleven percent (11.00%), provided , however that:

 

(a)          in the event that either (i) Adjusted EBITDA for the Consolidated Companies for the Test Period ending on December 31, 2015, as reflected in the annual financial statements and Compliance Certificate delivered pursuant to Sections 8.01(c) and (d) exceeds $9,973,000 or (ii) the Borrower receives Net Equity Proceeds (other than as a result of an Excluded Issuance) in excess of $5,000,000 during the period from the First Amendment Closing Date through December 31, 2015 (which Net Equity Proceeds shall not be subject to prepayment as required by Section 4.02(a)(iv) ), the Applicable Margin shall be reduced by one half of one percent (0.50%) (it being understood that the Applicable Margin shall not be reduced by more than 0.50% pursuant to this clause (a)); and

 

(b)          in the event that Adjusted EBITDA for the Consolidated Companies for the Test Period ending on December 31, 2016, as reflected in the annual financial statements and Compliance Certificate delivered pursuant to Sections 8.01(c) and (d) exceeds $17,329,000, the Applicable Margin shall be reduced by one half of one percent (0.50%).

 

Reductions in the Applicable Margin resulting from (x) clauses (a)(i) or (b) of this definition shall be effective as of the first day of the calendar month immediately following delivery to the Administrative Agent of the annual financial statements and Compliance Certificate delivered pursuant to Sections 8.01(c) and (d) reflecting the required Adjusted EBITDA and (y) clause (a)(ii) of this definition shall be effective as of the first day of the calendar month immediately following the Borrower’s receipt of the required Net Equity Proceeds.

 

Prepayment Premium shall mean a prepayment premium equal to: (a) two percent (2.0%) of the amount prepaid if such prepayment occurs on or before June 30, 2016, (b) one and one-quarter percent (1.25%) of the amount prepaid if such prepayment occurs on or after July 1, 2016 and on or before March 31, 2017, and (c) zero percent (0.0%) of the amount prepaid if such prepayment occurs on or after April 1, 2017.

 

- 2 -
 

 

Warrants ” shall mean, collectively, that certain Warrant, dated as of the Closing Date, issued by Parent to Corbin Mezzanine Fund I, L.P. and the First Amendment Warrants.

 

(ii)         Section 1.01 of the Credit Agreement is hereby further amended by inserting the following new definitions therein in appropriate alphabetical order:

 

Exit Fee ” means an exit fee in the amount of $300,000.

 

First Amendment ” means the First Amendment to Credit Agreement and Waiver dated as of the First Amendment Closing Date among the Credit Parties, the Lenders party thereto and the Administrative Agent.

 

First Amendment Closing Date ” means July 9, 2015.

 

First Amendment Warrants ” shall mean the Warrants dated as of the First Amendment Closing Date issued by the Borrower to the Lenders, as the same may be amended, supplemented or otherwise modified from time to time.

 

Iusacell Settlement Agreement ” shall have the meaning given to the term “Settlement Agreement” in the Iusacell Settlement Letter Agreement.

 

Iusacell Settlement Letter Agreement ” shall mean that certain Letter Agreement dated as of June 19, 2015 by and among Agent and Borrower, as may be amended, restated or otherwise modified from time to time.

 

Liquidity ” shall mean the sum, for the Consolidated Companies, of unrestricted cash and Cash Equivalents.

 

Remaining Settlement Proceeds ” shall have the meaning given to such term in the Iusacell Settlement Letter Agreement.

 

(b)           Amendment to Section 2.06 of the Credit Agreement . Section 2.06 of the Credit Agreement is hereby amended by amending and restating clause (a) in its entirety to read as follows:

 

“(a)          The Borrower agrees to pay to the Administrative Agent, for the benefit of the Lenders, on each of the dates set forth below (each a “ Term Loan Repayment Date ”), the principal of the Term Loan in an amount set forth opposite such date (each a “ Term Loan Repayment Amount ”) (which Term Loan Repayment Amount may be reduced as a result of, and after giving effect to, the application of prepayments under Sections 4.01 and 4.02 in accordance with the order of priority set forth in Section 4.01 and Section 4.02(c) , as applicable).

 

Term Loan Repayment Date   Term Loan Repayment Amount  
Each of January 1, 2016, April 1, 2016, July 1, 2016 and October 1, 2016   $ 85,000  
Each of January 1, 2017, April 1, 2017, July 1, 2017 and October 1, 2017   $ 275,000  

 

- 3 -
 

 

For the avoidance of doubt, the Administrative Agent and the Lenders agree that all Term Loan Repayment Amounts are payable without Prepayment Premium.”

 

(c)           Amendment to Section 2.09 of the Credit Agreement . Section 2.09 of the Credit Agreement is hereby amended by amending and restating clause (c) in its entirety to read as follows:

 

“(c)          (i) From and after the occurrence and during the continuance of any Event of Default, upon notice by the Administrative Agent or the Collateral Agent to the Borrower or (ii) automatically upon the Consolidated Companies’ failure to comply with the Liquidity covenant contained in Section 9.13(c) , the Borrower shall pay interest on the principal amount of all Loans and all other unpaid Obligations, to the extent permitted by Applicable Law, at the Default Rate, which Default Rate shall accrue (x) with respect to clause (i) above, from the date of such Event of Default (regardless of the date of notice of the imposition of the Default Rate) until waived in writing and (y) with respect to clause (ii) above, from the last day of the calendar month for which Consolidated Companies fail to comply with Section 9.13(c) , through and including the last day of the first calendar month for which the Consolidated Companies are in compliance with Section 9.13(c) , and, in all cases, shall be payable on demand and in cash. All such interest shall be payable on demand and in cash. Nothing in this clause (c) shall be deemed to cause a Default or Event of Default solely as a result of the Consolidated Companies failure to comply with Section 9.13(c) ; provided, however, that the failure to pay the amounts required by clause (ii) above shall constitute a Default (and, if such failure continues beyond any applicable grace, cure or notice period, an Event of Default) pursuant to Section 10.01(a)(ii) .”

 

(d)           Amendment to Section 3.01 of the Credit Agreement . Section 3.01 of the Credit Agreement is hereby amended by (i) amending and restating clause (b) in its entirety to read as follows and (ii) adding the following clause (c) to the end thereof:

 

“(b)          The Borrower agrees to pay to the Administrative Agent, for the account of each Lender that holds a Term Loan, upon a prepayment of all or a portion of such Term Loan of such Lender (other than a prepayment made pursuant to Sections 4.02(a)(iii) or 4.02(a)(v)), and including, without limitation, upon payment of the Remaining Settlement Proceeds, the Prepayment Premium on the amount so prepaid whether such payment is made before or after an Event of Default or an acceleration of all or any part of the Obligations.

 

(c)          The Borrower agrees to pay to the Administrative Agent, for the account of each Lender that holds a Term Loan, upon repayment in full of the Term Loans, the Exit Fee, whether such payment is made before or after and Event of Default or an acceleration of all or any part of the Obligations.”

 

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(e)           Amendment to Section 9.13 of the Credit Agreement . Section 9.13 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

“(a) Maximum Total Leverage Ratio . The Total Leverage Ratio, as of the last day of each Test Period set forth below, to be greater than the Total Leverage Ratio set forth below opposite such Test Period:

 

Test Period   Total Leverage Ratio
June 30, 2015   1.20:1.00
September 30, 2015 and the last day of each fiscal quarter thereafter   1.60:1.00

 

(b)           Minimum Fixed Charge Coverage Ratio . The Fixed Charge Coverage Ratio, as of the last day of each Test Period set forth below, to be less than the Fixed Charge Coverage Ratio set forth below opposite such Test Period:

 

Test Period   Fixed Charge Coverage Ratio
June 30, 2015   1.30:1.00
September 30, 2015   0.50:1.00
December 31, 2015   1.10:1.00
March 31, 2016   1.40:1.00
June 30, 2016   1.70:1.00
September 30, 2016 and the last day of each fiscal quarter thereafter   2.25:1.00

 

(c)           Maximum Consolidated Maintenance Capital Expenditures . Consolidated Maintenance Capital Expenditures, for each Test Period ending on each date set forth below, to be greater than the amount set forth below opposite such Test Period:

 

Test Period   Consolidated Maintenance
Capital Expenditures Amount
December 31, 2015   $6,000,000
December 31, 2016   $6,000,000
December 31, 2017   $6,000,000

 

(d)           Minimum Adjusted EBITDA . The Adjusted EBITDA, for each Test Period ending on each date set forth below, to be less than the amount set forth below opposite such Test Period:

 

Test Period   Adjusted EBITDA Amount
June 30, 2015   $7,500,000
September 30, 2015   $6,750,000
December 31, 2015   $7,650,000
March 31, 2016   $8,000,000
June 30, 2016   $8,250,000
September 30, 2016 and the last day of each fiscal quarter thereafter   $9,000,000

 

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In addition, the Credit Parties will not permit Adjusted EBITDA for any Test Period to be less than 75% of Adjusted EBITDA for the immediately preceding Test Period.

 

(e)           Minimum Liquidity . As of the last day of each calendar month, commencing on July 31, 2015, the Consolidated Companies shall have Liquidity of at least $2,000,000; provided , however , that (i) the failure of the Consolidated Companies to satisfy this Liquidity requirement shall not alone result in a Default or Event of Default and (ii) any such failure shall be subject to Section 2.09(c) .”

 

3.            Waiver of Existing Events of Default . Subject to the satisfaction of the conditions precedent set forth in Section 6 below and in reliance on the representations and warranties set forth in Section 4 and the acknowledgments set forth in Section 5, the Administrative Agent and the Lenders hereby waive the Existing Events of Default. The parties hereby acknowledge and agree that the foregoing waiver is limited to the Existing Events of Default and shall not constitute a waiver of any other presently existing or future Default or Event of Default.

 

4.            No Default; Representations and Warranties, Etc . Each Credit Party hereby represents, warrants, confirms and covenants that: (a) the representations and warranties of the Credit Parties contained in Article VII of the Credit Agreement, as amended hereby, are true and correct on and as of the date hereof and deemed to be made as of the date hereof (except to the extent that such representations and warranties expressly relate to an earlier date, in which case, such representations were true and correct as of such date); (b) after giving effect to this Amendment, the Credit Parties are in compliance with all of the terms and provisions set forth in the Credit Agreement and the other Loan Documents to be observed or performed thereunder and no Default or Event of Default has occurred and is continuing; and (c) the execution, delivery and performance by the Borrower of this Amendment, the First Amendment Warrant Documents and all other documents, instruments and agreements executed and delivered in connection herewith or therewith, and the consummation of the transactions contemplated hereby or thereby (i) have been duly authorized by all necessary organizational action on the part of the Credit Parties (including any necessary shareholder consents or approvals), (ii) have not violated, conflicted with or resulted in a default under and will not violate or conflict with or result in a default under any applicable law or regulation, any term or provision of the organizational documents of the Credit Parties or any term or provision of any material indenture, agreement or other instrument binding on the Credit Parties or any of its assets, (iii) do not require any consent, waiver or approval of or by any Person which has not been obtained, and (iv) have not violated or conflicted with and will not violate or conflict with any pre-emptive rights of any Person.

 

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5.            Acknowledgment, Ratification and Confirmation .

 

(a)          The Borrower hereby confirms and acknowledges that, as of the date hereof and after giving effect to this Amendment, (i) the Borrower is indebted to the Lenders for Term Loans in an aggregate outstanding principal amount equal to $6,500,000 plus accrued and unpaid interest thereon, as provided in the Credit Agreement; and (ii) the Borrower is indebted to the Administrative Agent and the Lenders for all accrued and unpaid fees and expenses of the Administrative Agent and the Lenders (including but not limited to, reasonable fees and disbursements of counsel) and other Obligations, as provided in the Loan Documents.

 

(b)          Each of the Credit Parties hereby confirms and acknowledges that, as of the date hereof (i) there exists no defense to the repayment by each such Person of all amounts and Obligations owing under and in respect of the Credit Agreement or any of the other Loan Documents, as amended and otherwise modified hereby, and (ii) such Person has no claim against any Lender or the Administrative Agent in respect of any matter relating to or arising under this Amendment, the Credit Agreement or any of the other Loan Documents, the Warrants or any of the transactions contemplated hereby or thereby.

 

(c)          The Borrower hereby acknowledges, ratifies and confirms that it remains obligated to pay all principal, interest, fees and other amounts owing to the Administrative Agent and the Lenders under and in respect of the Credit Agreement, as amended hereby, and the other Loan Documents when due and payable in accordance with the terms thereof.

 

(d)          Each of the Credit Parties confirms and acknowledges that Credit Agreement, the Security Documents and each of the other Loan Documents, as amended and otherwise modified by the amendments and other modifications specifically provided herein, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

 

(e)          Without limiting the generality of the foregoing clause (d), each of the Guarantors hereby acknowledges and confirms that all obligations and liabilities of the Borrower in respect of the principal amount of the Term Loans under the Credit Agreement, as amended hereby, including without limitation, all obligations and liabilities of the Borrower for principal in respect of the Term Loans, (whether now outstanding or hereafter arising or incurred) constitute “Guaranteed Obligations” under and as defined in the Guaranties and are guarantied by and entitled to the benefits of the Guaranties.

 

(f)          Each of the Credit Parties hereby confirms and acknowledges that all obligations, liabilities and Obligations of the Borrower under the Credit Agreement, as amended hereby, including without limitation, all obligations of the Borrower for principal, interest and all other amounts payable in respect of the Term Loans constitute “Secured Obligations” under and as defined in each Security Document and are secured by and entitled to the benefits of the Security Documents, and the liens and security interests granted in favor of the Administrative Agent for the benefit of itself and the Lenders under the terms of the Security Documents are perfected, effective, enforceable and valid and such liens and security interests are, in each case, a first priority lien and security interest (except to the extent otherwise expressly permitted by the Loan Documents) and such liens and security interests are hereby in all respects ratified and confirmed.

 

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6.            Conditions to this Amendment . The effectiveness of this Amendment shall be subject to the satisfaction of the following conditions precedent:

 

(a)           Counterparts of Amendment . The Agent shall have received from each party hereto either (a) a counterpart of this Amendment signed on behalf of such party or (b) written evidence satisfactory to the Agent (which may include telecopy or electronic mail transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment.

 

(b)           Organizational Matters . The Administrative Agent shall have received such resolutions, certificates and other documents as the Administrative Agent may require to evidence the authority of the Credit Parties to enter into this Amendment and the First Amendment Warrant Documents as the Administrative Agent may request, all of which shall be satisfactory in form and substance to the Administrative Agent.

 

(c)           First Amendment Warrants . The Administrative Agent shall have received from each party thereto counterparts of the First Amendment Warrants duly executed by each such party, each such document to be in form and substance satisfactory to the Administrative Agent

 

(d)           Fees and Expenses . The Agent shall have received all fees and other amounts due and payable to the Administrative Agent and the Lenders in connection with this Amendment, including, without limitation, reimbursement or payment of all out-of-pocket expenses required to be reimbursed by the Borrower hereunder or under the Credit Agreement (including without limitation, the fees and disbursements of counsel to the Agent in connection herewith).

 

(e)           Release of Remaining Settlement Amount . The Remaining Settlement Amount shall, simultaneously with the effectiveness of this Amendment, be released from the Administrative Agent and paid into an account of the Credit Parties which is subject to a Control Agreement.

 

(f)           Other Documents . The Administrative Agent shall have received such other documents as the Administrative Agent shall have reasonably requested, all of which shall be satisfactory in form and substance to the Administrative Agent.

 

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7.            RELEASE . EACH OF THE CREDIT PARTIES HEREBY ACKNOWLEDGES AND CONFIRMS THAT (A) IT DOES NOT HAVE ANY GROUNDS, AND HEREBY AGREES NOT TO CHALLENGE (OR TO ALLEGE OR TO PURSUE ANY MATTER, CAUSE OR CLAIM ARISING UNDER OR WITH RESPECT TO), IN ANY CASE BASED UPON ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER, THE EFFECTIVENESS, GENUINENESS, VALIDITY, COLLECTIBILITY OR ENFORCEABILITY OF THIS AMENDMENT, THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS, THE LIENS SECURING SUCH OBLIGATIONS, OR ANY OF THE TERMS OR CONDITIONS OF ANY LOAN DOCUMENT AND (B) IT DOES NOT POSSESS (AND HEREBY FOREVER WAIVES, REMISES, RELEASES, DISCHARGES AND HOLDS HARMLESS THE ADMINISTRATIVE AGENT, EACH LENDER AND THEIR RESPECTIVE AFFILIATES, STOCKHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS AND REPRESENTATIVES AND EACH OF THEIR RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE " INDEMNIFIED PARTIES ") FROM AND AGAINST, AND AGREES NOT TO ALLEGE OR PURSUE) ANY ACTION, CAUSE OF ACTION, SUIT, DEBT, CLAIM, COUNTERCLAIM, CROSS-CLAIM, DEMAND, DEFENSE, OFFSET, OPPOSITION, DEMAND AND OTHER RIGHT OF ACTION WHATSOEVER, WHETHER IN LAW, EQUITY OR OTHERWISE (WHICH IT, ALL THOSE CLAIMING BY, THROUGH OR UNDER IT, OR ITS SUCCESSORS OR ASSIGNS, HAVE OR MAY HAVE) AGAINST THE INDEMNIFIED PARTIES, OR ANY OF THEM, BY REASON OF, ANY MATTER, CAUSE OR THING WHATSOEVER, WITH RESPECT TO EVENTS OR OMISSIONS OCCURRING OR ARISING ON OR PRIOR TO THE DATE HEREOF AND RELATING TO THIS AMENDMENT, THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO THE PAYMENT, PERFORMANCE, VALIDITY OR ENFORCEABILITY OF THE OBLIGATIONS, THE LIENS SECURING THE OBLIGATIONS OR ANY OR ALL OF THE TERMS OR CONDITIONS OF ANY LOAN DOCUMENT) OR ANY TRANSACTION RELATING THERETO.

 

8.            Miscellaneous .

 

(a)          Except as otherwise expressly set forth herein, nothing herein shall be deemed to constitute an amendment, modification or waiver of any of the provisions of the Credit Agreement or the other Loan Documents, all of which remain in full force and effect as of the date hereof and are hereby ratified and confirmed. The Borrower acknowledges and agrees that nothing contained herein shall be deemed to entitle the Credit Parties to a consent to, or a waiver, amendment or modification of, any of the terms, conditions, obligations, covenants or agreements contained in the Loan Documents in similar or different circumstances.

 

(b)          This Amendment may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, but all counterparts shall together constitute one instrument.

 

(c)          Whenever the terms or sections amended hereby shall be referred to in the Credit Agreement, Loan Documents or such other documents (whether directly or by incorporation into other defined terms), such defined terms shall be deemed to refer to those terms or sections as amended by this Amendment.

 

(d)          This Amendment shall be governed by the laws of the State of New York and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

(e)          The Borrower agrees to pay all reasonable expenses, including legal fees and disbursements incurred by the Administrative Agent in connection with this Amendment and the transactions contemplated hereby.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment which shall be deemed to be a sealed instrument as of the date first above written.

 

  BORROWER :
   
  ELEPHANT TALK EUROPE HOLDING B.V.
     
  By: /s/Alex Vermeulun
    Name: Alex Vermeulun
    Title: Director
     
  GUARANTORS :
   
  ELEPHANT TALK COMMUNICATIONS CORP.
     
  By: /s/Alex Vermeulun
    Name: Alex Vermeulun
    Title: General Counsel
     
  ELEPHANT TALK NORTH AMERICA CORP.
     
  By: /s/Alex Vermeulun
    Name: Alex Vermeulun
    Title: CEO
     
  ELEPHANT TALK GROUP INTERNATIONAL B.V.
     
  By: /s/Alex Vermeulun
    Name: Alex Vermeulun
    Title:  Director

 

[First Amendment to Credit Agreement and Waiver]

 

 
 

 

  ADMINISTRATIVE AGENT AND COLLATERAL AGENT :
   
  ATALAYA ADMINISTRATIVE LLC
     
  By: / s/Michael Bogdan
    Name: Michael Bogdan
    Title: Authorized Signatory
     
  LENDERS :
   
  CORBIN MEZZANINE FUND I, L.P.
     
  By:   Corbin Capital Partners Management, LLC,
    its General Partner
     
  By: /s/ Anthony Anselmo
    Name: Anthony Anselmo
    Title: COO

 

[First Amendment to Credit Agreement and Waiver]

 

 

 

Exhibit 99.1

 

   

 

Elephant Talk Enters into Amended $6.5 Million Credit Agreement

 

- Existing Default Waived; Company Reduces Outstanding Debt -

 

NEW YORK, July 14, 2015 -- Elephant Talk Communications Corp. (NYSE MKT: ETAK) ("Elephant Talk" or the "Company"), a global provider of Software Defined Network Architecture (ET Software DNA® 2.0) platforms and cyber security solutions, today announced as of July 9, 2015, it has entered into an amended Credit Agreement with its existing lender for a Term Loan Facility of $6.5 million.

 

Steven van der Velden, Chairman and CEO of Elephant Talk stated, "We are pleased to enter into an amended long-term credit agreement with our existing lender for a Term Loan Facility of $6.5 million. With the completion of this agreement and our recent settlement with Grupo lusacell which included $12.6 million in cash that was partially used to retire $5.7 million of the lender’s original 2014 $12 million term loan and certain expenses in connection with the amended $6.5 million loan, we are well positioned to execute on our strategic growth initiatives currently underway in North America, Latin America, Europe and the Middle East. We want to thank our creditors and our shareholders for their patience and support during this process.”

 

As part of the amendment dated July 9, 2015, Elephant Talk and its subsidiaries collectively and the Administrative Agent entered into a First Amendment to the Credit Agreement and Waiver, amending certain terms of the Credit Agreement between the parties dated November 17, 2014. Pursuant to the Amendment, the Lender and Administrative Agent agreed to waive the Existing Default as defined in the Credit Agreement subject to certain terms and conditions in the Amendment. The Amendment reduced the term loan facility to $6.5 million that shall bear interest at the LIBOR rate plus an applicable margin per annum, which may be decreased under certain circumstances such as the Company’s achievement of certain adjusted EBITDA during certain periods. The terms of the original Credit Agreement and the ancillary agreements including the Security Agreement remain in effect unless otherwise amended in the Amendment.

 

For further information please review the Company's 8K filed on July 14, 2015 at www.sec.gov.

 

About Elephant Talk Communications Corp.:

Elephant Talk Communications Corp. (NYSE MKT: ETAK), is a global provider of mobile proprietary Software Defined Network Architecture (ET Software DNA® 2.0) platforms for the telecommunications industry. The Company empowers Mobile Network Operators (MNOs), Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, reliable industry expertise and high quality customer service without the need for substantial upfront investment. Elephant Talk counts several of the world’s leading MNOs and technology companies amongst its customers and partners, including Vodafone, T-Mobile, Zain, HP and Affirmed Networks. Visit: www.elephanttalk.com .

 

 
 

   

 

Forward-Looking Statements:

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Elephant Talk's plans and objectives, projections, expectations and intentions. These forward-looking statements are based on current expectations, estimates and projections about Elephant Talk's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of Elephant Talk may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Elephant Talk also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from those projected or suggested in Elephant Talk's filings with the Securities and Exchange Commission (the "SEC"), copies of which are available from the SEC or may be obtained upon request from Elephant Talk.

 

Contacts:

 

Investor Relations:

Valter Pinto

Capital Markets Group

(914) 669-0222 x201

valter@capmarketsgroup.com

 

Public Relations:

Michael Glickman

MWGCO, Inc.

917-397-2272

mike@mwgco.net