EXHIBIT 10.15
No._______ Offeree Name_______________________
NETSOURCE INTERNATIONAL TELECOMMUNICATIONS, INC.
REGULATION S
10% SERIES A SECURED CONVERTIBLE NOTES AND WARRANTS
TO PURCHASE COMMON STOCK
SUBSCRIPTION AGREEMENT
MAY 31, 1996
THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS ("BLUE SKY LAWS"), AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S) WITHOUT REGISTRATION UNDER THE SECURITIES ACT, AND AS
REQUIRED BY BLUE SKY LAWS IN EFFECT AS TO SUCH OFFER OR SALE, UNLESS AN
EXEMPTION FROM SUCH REGISTRATION UNDER STATE AND FEDERAL LAW IS AVAILABLE.
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INSTRUCTIONS FOR SUBSCRIPTION
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NETSOURCE INTERNATIONAL TELECOMMUNICATIONS, INC.
A DELAWARE CORPORATION
To Subscribe:
1. Subscription Agreement.
Please execute the Subscription Agreement at Page 9, complete the
Registration Statement and Offeree Questionnaire at Pages 10 and 11,
respectively, and the United States Treasury Department Form W-8 attached
as Schedule 3, and return the entire Subscription Agreement to Yorkton
Securities Inc. at the following address:
Yorkton Securities Inc.
00xx Xxxxx, Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 00000
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X0X0
Attn. Xxxx X. Xxxxxx
(000) 000-0000
2. Please request wire transfer instructions from Yorkton Securities
Inc. for delivery of the Purchase Price.
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THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS ("BLUE SKY LAWS"), AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN
REGULATION S) WITHOUT REGISTRATION UNDER THE SECURITIES ACT, AND AS
REQUIRED BY BLUE SKY LAWS IN EFFECT AS TO SUCH OFFER OR SALE, UNLESS AN
EXEMPTION FROM SUCH REGISTRATION UNDER STATE AND FEDERAL LAW IS AVAILABLE.
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is made effective for reference purposes only
as of May 31, 1996, by and between NetSource International Telecommunications,
Inc., a Delaware corporation (the "Corporation") and the Investor whose
signature appears on the signature page to this Subscription Agreement (the
"Investor").
R E C I T A L
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The Investor desires to purchase from the Corporation, and the Corporation
desires to sell to the Investor, securities of the Corporation, on the terms
and conditions hereinafter set forth.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained in this Subscription Agreement, the
parties hereby agree as follows:
1. Purchase and Sale of Unit(s).
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a. Sale and Issuance of Unit(s). Subject to the terms and
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conditions of this Subscription Agreement, the undersigned Investor agrees to
purchase at the Closing (as defined in that certain Confidential Private
Placement Offering Memorandum dated for reference purposes as of May 31, 1996,
(the "Memorandum")) and the Corporation agrees to sell and issue to the Investor
at the Closing, that number of Unit(s) (the "Units") set forth on the
Registration Statement and signature page attached to this Subscription
Agreement; each Unit consisting of one (1) $10,000 10% Series A Secured
Convertible Note due May 31, 1998 (the "Series A Note") secured by certain of
the Corporation's assets as set forth in the Security Agreement dated of even
date herewith (the "Security Agreement") and a Warrant exercisable through May
31, 1999 to purchase eighty (80) shares of Common Stock of the Corporation for
each one thousand (1,000) shares of Common Stock into which each $10,000 Series
A Note is convertible at an initial exercise price equal to the conversion price
established under the Series A Note and as such exercise price is adjusted under
the terms of the Warrant (the "Warrant"); each such instrument in the form as
attached to the Memorandum, and incorporated herein by reference at a per Unit
purchase price of $10,000 (the "Purchase Price"). Any future reference herein
to a Unit shall also mean the Series A Note, the Warrant, all stock issuable
upon conversion of the Note (the "Note Shares") and all common stock issuable
upon exercise of the Warrant (the "Warrant Shares"). The Unit(s) offered to the
Investor are part of a larger private placement of units by the Corporation for
minimum aggregate gross proceeds of $10,000,000 and maximum aggregate gross
proceeds of $20,000,000 (the "Placement").
b. Payment and Delivery. The Investor shall pay the Purchase Price
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for the Unit(s) in cash, by wire transfer of funds to Yorkton Securities Inc.
("Yorkton") as trustee of the Corporation prior to the "Closing Date" (as
defined below).
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2. Closing. The Closing of the transactions provided for in this
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Subscription Agreement shall be on the terms and subject to the conditions set
forth in the Memorandum, which are incorporated herein by this reference.
3. Corporation's Representations, Warranties and Covenants. The
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Corporation hereby represents, warrants and covenants to the Investor as
follows:
a. Corporate Organization and Standing. The Corporation is a
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corporation duly organized, validity existing and in good standing under the
laws of the State of Delaware. The Corporation is duly qualified to do business
in the jurisdictions where it is currently doing business. The Corporation has
the requisite corporate power to carry on its business as presently conducted,
and as proposed or contemplated to be conducted in the future, and to enter into
and carry out the provisions of this Subscription Agreement and the transactions
contemplated hereby.
b. Authorization. All corporate action on the part of the
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Corporation, its directors and shareholders necessary for the authorization,
execution, delivery and performance of this Subscription Agreement by the
Corporation and the performance of all of the Corporation's obligations
hereunder has been taken. This Subscription Agreement, when executed and
delivered by the Corporation, shall constitute a valid and binding obligation of
the Corporation, enforceable in accordance with its terms, except as may be
limited by principles of public policy, and subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies. The Unit(s), when issued in compliance with the provisions
of this Subscription Agreement, will be validly issued, fully paid and
nonassessable.
c. No Breach. The issue and sale of the Unit(s) by the Corporation
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does not and will not conflict with and does not and will not result in a breach
of any of the terms of the Corporation's incorporating documents or any
agreement or instrument to which the Corporation is a party. The consummation
of the transactions or performance of the obligations contemplated by this
Subscription Agreement will not result in a breach of any term of, or constitute
a default under, any statute, indenture, mortgage, or other agreement or
instrument to which the Corporation or any of its subsidiaries is or are a party
or by which any of them is or are bound, or any order, writ, judgment or decree.
d. Pending or Threatened Claims. Neither the Corporation nor any of
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its subsidiaries is a party to any action, suit or proceeding which could
materially affect its business or financial condition, and no such actions,
suits or proceedings are contemplated or have been threatened.
e. No Preemptive Rights. There are no preemptive rights of any
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shareholder of the Corporation with respect to the Unit(s).
f. Disclosure. With respect to statements of the Corporation, the
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Memorandum, including all exhibits and schedules to the Memorandum, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they have been made, not misleading.
g. Authorized Shares. The Corporation has sufficient authorized and
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unissued shares of Common Stock to provide for the issuance and delivery of the
Note Shares upon conversion of the Series A Note and the Warrant Shares upon
exercise of the Warrant.
4. Investor Representations and Warranties. The Investor represents and
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warrants to the Corporation that:
a. Account/Regulation S. The Investor is acquiring the Unit(s) for
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investment for its own account, and not with a view to, or for resale in
connection with, any distribution thereof, and it has no present intention of
selling or distributing any of the Unit(s). The Investor understands that the
Unit(s) have not been registered under the Securities Act of 1933, as amended
(the "Securities Act") by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment as expressed herein. The Investor
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understands that the Corporation is relying on the rules and regulations
governing offers and sales made outside the United States to non-"U.S. Persons"
pursuant to Regulation S under the Securities Act.
b. Not A "U.S. Person." The Investor hereby certifies that (i) it
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is not a "U.S. Person" as defined under Rule 902, Section (o) of Regulation S
promulgated under the Securities Act (a copy of which is attached hereto as
Schedule 1) and is not acquiring the Unit(s) for the account or benefit of any
U.S. Person, and (ii) it is acquiring the Unit(s) in an "offshore transaction"
as defined under Section (i) of such Rule 902 (a copy of which is attached
hereto as Schedule 2).
c. Access to Data. The Investor has had an opportunity to discuss
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the Corporation's business, management and financial affairs with its management
and Yorkton Securities Inc. ("Yorkton") and to obtain any additional information
which the Investor has deemed necessary or appropriate for deciding whether or
not to purchase the Unit(s), including the Memorandum, all incorporated herein
by reference, together with all exhibits referenced therein. The Investor
acknowledges that no other representations or warranties, oral or written, have
been made by the Corporation or any agent thereof except as set forth in this
Subscription Agreement.
d. No Fairness Determination. The Investor is aware that no
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federal, state or other agency has made any finding or determination as to the
fairness of the investment, nor made any recommendation or endorsement of the
Unit(s).
e. Knowledge and Experience. The Investor has such knowledge and
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experience in financial and business matters, including investments in other
start-up companies, that it is capable of evaluating the merits and risks of the
investment in the Unit(s), and it is able to bear the economic risk of such
investment. Further, the individual executing this Agreement has such knowledge
and experience in financial and business matters that he is capable of utilizing
the information made available to him in connection with the offering of the
Unit(s), of evaluating the merits and risks of an investment in the Unit(s) and
of making an informed investment decision with respect to the Unit(s), including
assessment of the Risk Factors set forth in the Memorandum and specifically
incorporated herein by reference.
f. Suitability. The Investor has carefully considered, and has, to
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the extent the Investor deems it necessary, discussed with the Investor's own
professional legal, tax and financial advisers the suitability of an investment
in the Unit(s) for the Investor's particular tax and financial situation, and
the Investor has determined that the Unit(s) are a suitable investment.
g. Private Offering. The offer to sell the Unit(s) was directly
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communicated to the Investor by the Corporation or Yorkton. At no time was the
Investor presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer.
h. Reliance on Own Advisers. In connection with the Investor's
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subscription for the Unit(s), the Investor has not relied upon the Corporation
or Yorkton or their respective legal and tax advisers for legal or tax advice,
and has, if desired, in all cases sought the advice of the Investor's own
personal legal counsel and tax advisers.
i. Limited Public Market. The Investor is aware that there is no
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public market for the Corporation's securities. There is no guarantee that a
public market will develop at any time in the future. The Investor understands
that the Unit(s) are all unregistered and may not be publicly sold without
registration or an available exemption from registration. The Investor
understands that the Unit(s) cannot be readily sold or liquidated in case of an
emergency or other financial need. The Investor has sufficient liquid assets
available so that the purchase and holding of the Unit(s) will not cause it
undue financial difficulties.
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j. Commissions/Finders Fees. The Investor acknowledges that
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commissions/finders fees will be payable by the Corporation to Yorkton for sales
of the Unit(s), as disclosed in the Memorandum.
k. Investment Experience. The Investor is an institutional
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"accredited investor" as that term is defined in Regulation D promulgated by the
Securities and Exchange Commission. More specifically, the Investor fits within
one or more of the following categories:
(i) Any bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity; any broker or dealer registered pursuant to Section 15 of the Exchange
Act; insurance Corporation as defined in Section 2(13) of the Securities Act;
investment Corporation registered under the Investment Corporation Act of 1940;
or a business development Corporation as defined in Section 2(a)(48) of that
Act; Small Business Investment Corporation licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance Corporation, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decision made solely by
persons that are accredited investors;
(ii) Any private business development Corporation as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
(iii) Any organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
(iv) Any trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Unit(s) offered, whose purchase
is directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment; or
(v) Any entity in which all of the equity owners are accredited
investors.
l. IITSSA Compliance. The Investor shall provide to the
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Corporation, if applicable, all such information as is necessary to complete the
forms required to be filed by the Corporation with the U.S. Department of
Commerce, Bureau of Economic Analysis, under the International Investment and
Trade in Services Survey Act, as amended, and regulations issued thereunder.
m. Portfolio Interest Obligation. Under penalties of perjury, the
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Investor hereby certifies that either:
(i) upon purchase of the Unit(s), it will be the beneficial owner of
the Series A Note(s) included in such Unit(s) and further certifies (A) that it
is neither a citizen nor a resident of the United States, (B) that it has
provided to the Corporation or will provide to the Corporation no later than the
first interest payment date of the Series A Notes(s) an executed Treasury
Department Form W-8 on substantially the form attached hereto as Schedule 3, (C)
that it will provide to the Corporation updated Treasury Department Forms W-8
upon the Corporation's request and (D) that it will notify the Corporation
within 30 days of any change in any of the information on the Treasury
Department Form W-8 most recently provided to the Corporation; or
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(ii) it is a securities clearing organization, a bank or another
financial institution that holds customers' securities in the ordinary course of
its trade or business and further certifies (A) that the individual(s) signing
this Subscription Agreement on behalf of the Investor are duly authorized to do
so, (B) that either (1) the Investor has received from the beneficial owner of
the Series A Note(s) an executed Treasury Department Form W-8 on substantially
the form attached hereto as Schedule 3 or (2) the Investor has received from
another financial institution a similar statement that it, or another financial
institution acting on behalf of the beneficial owner, has received from the
beneficial owner an executed Treasury Department Form W-8 on substantially the
form attached hereto as Schedule 3, (C) that it has provided to the Corporation
or will provide to the Corporation no later than the first interest payment date
of the Series A Note(s) a copy of the executed Treasury Department Form W-8 from
the beneficial owner which indicates the beneficial owner's name and address,
(D) that it will use its best efforts to provide to the Corporation updated
copies of the beneficial owner's Treasury Department Forms W-8 upon the
Corporation's request and (E) that it will promptly notify the Corporation of
any change in any of the information on the Treasury Department Form W-8 most
recently provided to the Corporation, whether such changes are furnished by the
beneficial owner or whether the Investor obtains actual knowledge of such a
change.
5. Restrictions On Transfer Re Regulation S.
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a. Transfer Restrictions. The Investor shall not attempt to have
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registered any transfer of the Unit(s) not made in accordance with the
provisions of Regulation S. In addition to any other restrictions on transfer
set forth in this Agreement, the Investor agrees to transfer the Unit(s) only
(i) in accordance with the provisions of Regulation S, pursuant to registration
under the Securities Act, or pursuant to an available exemption from
registration, and (ii) in accordance with any applicable state securities laws.
Unless so registered or exempt therefrom, such transfer restrictions shall
include but not be limited to and the Investor warrants and represents the
following:
(i) The Investor shall not sell the Unit(s) publicly or privately, or
through any short sale, or other hedging transaction to any U.S. Person, whether
directly or indirectly, or for the account or benefit of any such U.S. Person
for the restrictive period mandated by Regulation S after the purchase of the
Unit(s) unless registered or exempt from registration;
(ii) Any other offer or sale of the Unit(s) shall be made only if (A)
during the restrictive period any subsequent purchaser certifies in writing that
it is not a U.S. Person and is not acquiring the Unit(s) for the account or
benefit of any U.S. Person, or (B) after the restrictive period the Unit(s) are
purchased in a transaction that did not require registration under the
Securities Act and applicable Blue Sky laws; and
(iii) Any transferee of the Unit(s) shall agree in writing to
resell the Unit(s) only in accordance with the provisions of Regulation S,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration.
b. Restrictions On Resales In the United States. The Investor
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understands and acknowledges that the Securities Act prohibits resales of
securities in the United States except pursuant to an effective registration
statement or an exemption from registration for which the securities and the
Investor holding such securities qualifies. The Investor understands and
acknowledges the requirements for qualifying for an exemption from registration
afforded by Section 4 of the Securities Act and that there can be no assurance
that the Investor will be able to qualify for such an exemption from
registration.
6. Registration Rights. The Investor shall be entitled to the
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registration rights which are described in the Memorandum and incorporated
herein by this reference.
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7. Public Offering Lock-Up. In connection with the first underwritten
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public registration of the Corporation's securities, the Investor agrees, upon
the request of the Corporation or the underwriters managing such underwritten
offering of the Corporation's securities, not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any Unit(s)
(other than those included in the registration) without the prior written
consent of the Corporation and such underwriters, as the case may be, for a
period of time, not to exceed one hundred eighty (180) days from the effective
date of such registration. Such agreement shall be in writing in the form
reasonably satisfactory to the Corporation and such underwriter. The
Corporation may impose stop-transfer instructions with respect to the shares
subject to the foregoing restrictions until the end of said 180-day period.
8. Restrictive Legends. Each instrument evidencing the Unit(s) which
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the Investor may purchase hereunder and any other securities issued upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event (unless no longer required in the opinion of the counsel for the
Corporation) shall be imprinted with legends substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED OR SOLD WITHOUT REGISTRATION UNDER THE ACT UNLESS THE CORPORATION
RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION, THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE OR SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO REGULATION S UNDER THE ACT.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN MAY 31, 1996,
SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL HOLDER HEREOF AND THE
CORPORATION.
The Corporation shall be entitled to enter stop transfer notices on its transfer
books with respect to the Unit(s) during periods when transfers are restricted
under the terms of this Subscription Agreement.
9. Authorization of Yorkton.
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a. Related Agreements. The Investor hereby irrevocably authorizes
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Yorkton to negotiate and settle the form of any other document or agreement to
be entered into in connection with the Placement.
b. Agency Agreement. The Investor hereby acknowledges and agrees
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that Yorkton and the Corporation may agree to vary, amend, alter or waive, in
whole or in part, one or more of the conditions set forth in that certain Agency
Agreement entered into by and between Yorkton and the Corporation with respect
to the Placement, in such manner and on such terms and conditions as they may
determine, acting reasonably, without affecting in any way the Investor's
obligations hereunder; provided, however, that Yorkton shall not vary, amend,
alter or waive any such condition where to do so would result in a material
change to any of the material terms of the transactions provided for in this
Subscription Agreement.
c. Closing; Termination. The Investor hereby acknowledges and
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agrees that Yorkton may waive, in whole or in part, or extend the time for
compliance with, any of the conditions for the Closing in such manner and on
such terms and conditions as Yorkton may determine, acting reasonably, without
in any way affecting the Investor's obligations, and may terminate this
Subscription Agreement on behalf of the Investor in the event that any condition
for the Closing has not been satisfied.
10. Reliance. The Investor is aware that the Corporation and Yorkton are
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relying on the accuracy of the above representations to establish compliance
with Federal and State securities laws. If any such warranties or
representations are not true and accurate in any respect as of the date of the
Closing, Investor shall so notify the Corporation in writing immediately and
shall be cause for rescission
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by the Corporation at its sole election. The Investor shall indemnify the
Corporation and Yorkton and their respective affiliates, legal counsel and
agents against all losses, claims, costs, expenses and damages or liabilities,
including reasonable attorneys' fees, which such parties may suffer or incur
caused or in connection with or arising out of, directly or indirectly, from
their reliance on such warranties and representations.
11. Miscellaneous.
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a. Survival. The representations, warranties, covenants and
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agreements made herein shall survive the closing of the transactions
contemplated hereby.
b. Successors and Assigns. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
c. Entire Agreement. This Subscription Agreement and the Schedules
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attached hereto constitute the entire agreement and understanding between the
parties with respect to the subject matters herein, and supersede and replace
any prior agreements and understandings, whether oral or written between and
among them with respect to such matters. The provisions of this Subscription
Agreement may be waived, altered, amended or repealed, in whole or in part, only
upon the written consent of both the Corporation and the Investor.
d. Title and Subtitles. The titles of the Sections and subsections
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of this Subscription Agreement are for the convenience of reference only and are
not to be considered in construing this Subscription Agreement.
e. Counterparts. This Subscription Agreement may be executed in any
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number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
f. Applicable Law. This Subscription Agreement shall be governed by
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and construed in accordance with laws of the State of California, applicable to
contracts between California residents entered into and to be performed entirely
within the State of California.
g. Venue. Any action, arbitration, or proceeding arising directly
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or indirectly from this Subscription Agreement or any other instrument or
security referenced herein shall be litigated or arbitrated, as appropriate, in
the County of Sonoma, State of California.
h. Authority. If Investor is a corporation, partnership, trust or
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estate: (i) the individual executing and delivering this Agreement on behalf of
the Investor has been duly authorized and is duly qualified to execute and
deliver this Agreement on behalf of Investor in connection with the purchase of
the Unit(s) and (ii) the signature of such individual is binding upon Investor.
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i. Execution and Delivery of Subscription Agreement. The Corporation
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and Yorkton shall be entitled to rely on delivery by facsimile machine of an
executed copy of this Subscription Agreement, and acceptance by the Corporation
of such facsimile copy shall be equally effective to create a valid and binding
agreement between the Investor and the Corporation in accordance with the terms
hereof.
j. Execution and Delivery of Other Documents. The Investor agrees
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that it will execute and deliver such other documents as may be reasonably
requested by the Corporation to complete the transactions contemplated hereby.
k. Severability. The invalidity or unenforceability of any
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particular provision of this Subscription Agreement shall not affect or limit
the validity or enforceability of the remaining provisions of this Subscription
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of May 31, 1996.
INVESTOR NETSOURCE INTERNATIONAL
____________________________________ TELECOMMUNICATIONS, INC.
(print Name)
By:_________________________________ By:_________________________________
(Signature) (Signature)
____________________________________ ____________________________________
(Print Name and Title) (Print Name and Title)
Dollar Amount: $_____________
No. of Unit(s): _____________
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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REGISTRATION STATEMENT
NETSOURCE INTERNATIONAL TELECOMMUNICATIONS, INC.
TOTAL SUBSCRIPTION: Dollar Amount $_________________ No. of Units ____________
REGISTRATION:
Please print name in which your units are to be registered
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DOMICILE/PRINCIPAL PLACE OF BUSINESS ADDRESS:
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Entity Name
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Street
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City Country Postal Code
MAILING ADDRESS: if different from domicile/principal place of business address
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Entity Name
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Street
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City Country Postal Code
Business Telephone Phone Business Facsimile Phone
( ) ( )
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CHECK ONE:
___ Corporate Ownership
___ Partnership Ownership
___ Other Form of Ownership: Describe _________________________________________
FOR TRUST:
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_______________________________ Trust
____________________ Date Established
______________________________________
Name of Trustee or other Administrator
FOR ALL INVESTORS:
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______________________________________
(Name of Person With Right To Control
the Voting of Securities on Behalf of Entity)
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OFFEREE QUESTIONNAIRE
NETSOURCE INTERNATIONAL TELECOMMUNICATIONS, INC.
Gentlemen:
The undersigned understands that: (i) you will rely on the information contained
herein for purposes of securities law compliance and determination; and (ii) the
securities will not be registered under the Securities Act of 1933, as amended
(the "Securities Act") in reliance upon the exemption from registration provided
by Regulation S promulgated under the Securities Act. The undersigned further
represents to you that: (i) the information contained herein is complete and
accurate and may be relied upon by you; and (ii) the undersigned will notify you
immediately of any material change in any of such information occurring prior to
the purchase of such securities, if any purchase is made, by the undersigned.
THE UNDERSIGNED UNDERSTANDS AND AGREES THAT ALTHOUGH THIS QUESTIONNAIRE WILL BE
KEPT STRICTLY CONFIDENTIAL, NETSOURCE INTERNATIONAL TELECOMMUNICATIONS, INC.
MAY PRESENT THIS QUESTIONNAIRE TO SUCH PARTIES AS IT DEEMS ADVISABLE IF CALLED
UPON TO ESTABLISH THE AVAILABILITY UNDER ANY FEDERAL OR STATE SECURITIES LAWS OF
AN EXEMPTION FROM REGISTRATION OF THIS OFFERING OR ANY OTHER COMPLIANCE WITH
STATE OR FEDERAL SECURITIES LAWS.
The following information is to be provided by the individual who is making the
investment decision on behalf of the corporate, partnership, trust or other
entity investor purchasing the Unit(s):
________________________________________________________________________________
(Print Name and Title)
1. Current employment position and responsibility:
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2. Details of any training or experience in financial or business investment
matters:
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3. I have previously purchased securities on behalf of the Investor or on my
own behalf which were sold in reliance on Regulation S or a private offering
exemption from registration under the Securities Act of 1933, as amended:
_______ Yes _______ No
Initial Initial
If yes, please give several examples:
Type of Amount
Investment Invested
------------ --------
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4. Total assets of Investor exceed: $________________________________________.
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SCHEDULE 1
DEFINITION OF "U.S. PERSON"
"Reg. (S)230.902. As used in Regulation S, the following terms shall have
the meanings indicated:
(o) U.S. Person.
(1) "U.S. person" means:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or incorporated under
the laws of the United States;
(iii) any estate of which any executor or administrator is a U.S.
person;
(iv) any trust of which any trustee is a U.S. person;
(v) any agency or branch of a foreign entity located in the United
States;
(vi) any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. person;
(vii) any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized, incorporated, or
(if an individual) resident in the United States; and
(viii) any partnership or corporation if:
(A) organized or incorporated under the laws of any foreign
jurisdiction; and
(B) formed by a U.S. person principally for the purpose of investing
in securities not registered under the Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule 501(a)
under the Act ((S)230.501(a) of this chapter)) who are not natural persons,
estates or trusts.
(2) Notwithstanding paragraph (o)(1) of this section, any discretionary
account or similar account (other than an estate or trust) held for the benefit
or account of a non-U.S. person by a dealer or other professional fiduciary
organized, incorporated, or (if an individual) resident in the United States
shall not be deemed a "U.S. person."
(3) Notwithstanding paragraph (o)(1) of this section, any estate of which
any professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:
(i) an executor or administrator of the estate who is not a U.S.
person has sole or shared investment discretion with respect to the assets of
the estate; and
(ii) the estate is governed by foreign law.
(4) Notwithstanding paragraph (o)(1) of this section, any trust of which
any professional fiduciary acting as trustee is a U.S. person shall not be
deemed a U.S. person if a trustee who is not a U.S. person has sole or shared
investment discretion with respect to the trust assets, and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding paragraph (o)(1) of this section, an employee benefit
plan established and administered in accordance with the law of a country other
than the United States and customary practices and documentation of such country
shall not be deemed a U.S. person.
(6) Notwithstanding paragraph (o)(1) of this section, any agency or branch
of a U.S. person located outside the United States shall not be deemed a "U.S.
person" if:
(i) the agency or branch operates for valid business reasons; and
(ii) the agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking regulation,
respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be deemed
"U.S. persons."
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SCHEDULE 2
DEFINITION OF "OFFSHORE TRANSACTION"
"Reg. (S)230.902. As used in Regulation S, the following terms shall have
the meanings indicated:
(i) Offshore Transaction.
(1) An offer or sale of securities is made in an "offshore transaction" if:
(i) the offer is not made to a person in the United States; and
(ii) either:
(A) at the time the buy order is originated, the buyer is outside the
United States, or the seller and any person acting on its behalf reasonably
believe that the buyer is outside the United States; or
(B) for purposes of:
(1) (S)230.903, the transaction is executed in, on or through a
physical trading floor of an established foreign securities exchange that is
located outside the United States; or
(2) (S)230.904, the transaction is executed in, on or through the
facilities of a designated offshore securities market described in paragraph (a)
of this section, and neither the seller nor any person acting on its behalf
knows that the transaction has been pre-arranged with a buyer in the United
States.
(2) Notwithstanding paragraph (i)(1) of this section, offers and sales of
securities specifically targeted at identifiable groups of U.S. citizens abroad,
such as members of the U.S. armed forces serving overseas, shall not be deemed
to be made in "offshore transactions."
(3) Notwithstanding paragraph (i)(1) of this section, offers and sales of
securities to persons excluded from the definition of "U.S. person" pursuant to
paragraph (o)(7) of this section or persons holding accounts excluded from the
definition of "U.S. person" pursuant to paragraph (o)(2) of this section, solely
in their capacities as holders of such accounts, shall be deemed to be made in
"offshore transactions."
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