UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
EarthLink Network, Inc.
------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 Par Value
------------------------------------------------
(Title of Class of Securities)
270322100
---------------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-1000
------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 10, 1998
---------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following page(s)
Page 1 of 17 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 2 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QUANTUM INDUSTRIAL PARTNERS LDC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
13.46%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 3 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT INVESTOR, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
13.46%
14 Type of Reporting Person*
PN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 4 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT, INC.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
13.46%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 5 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SOROS FUND MANAGEMENT LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 1,523,180
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,523,180
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,523,180
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
13.46%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 6 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
GEORGE SOROS (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 238,145
Shares
Beneficially 8 Shared Voting Power
Owned By 1,523,180
Each
Reporting 9 Sole Dispositive Power
Person 238,145
With
10 Shared Dispositive Power
1,523,180
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,761,325
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
15.53%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 7 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
STANLEY F. DRUCKENMILLER (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 179,227
Shares
Beneficially 8 Shared Voting Power
Owned By 1,523,180
Each
Reporting 9 Sole Dispositive Power
Person 179,227
With
10 Shared Dispositive Power
1,523,180
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,702,407
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
15.04%
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 270322100 Page 8 of 17 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
DUQUESNE CAPITAL MANAGEMENT, L.L.C.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Pennsylvania
7 Sole Voting Power
Number of 154,000
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 154,000
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
154,000
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* [x]
13 Percent of Class Represented By Amount in Row (11)
1.37%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 9 of 17
This Amendment No. 2 to Schedule 13D relates to shares of common
stock, $0.01 par value per share (the "Shares"), of EarthLink Network, Inc. (the
"Issuer"). This Amendment No. 2 supplementally amends the initial statement on
Schedule 13D dated February 3, 1997 and Amendment No. 1 thereto filed September
22, 1997 (the "Initial Statement"), filed by the Reporting Persons. This
Amendment No. 2 is being filed to report that certain of the Reporting Persons,
among others, have entered into a voting agreement with the Issuer, pursuant to
which they have agreed to vote in favor of certain matters described herein.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Initial Statement. The Initial Statement is supplementally
amended as follows.
Item 2. Identity and Background.
This Statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
i) Quantum Industrial Partners LDC ("QIP");
ii) QIH Management Investor, L.P. ("QIHMI");
iii) QIH Management, Inc. ("QIH Management");
iv) Soros Fund Management LLC ("SFM LLC");
v) Mr. George Soros ("Mr. Soros");
vi) Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller"); and
vii) Duquesne Capital Management, L.L.C. ("Duquesne LLC").
This Statement relates to the Shares held for the accounts of
QIP, Mr. Soros, Mr. Druckenmiller and the Duquesne LLC Clients (as defined
herein).
Updated information concerning the Managing Directors of SFM LLC is set forth in
Annex A hereto and incorporated herein by reference.
Item 5. Interest in Securities of the Issuer.
(a) (i) Each of QIP, QIHMI, QIH Management and SFM LLC may be
deemed the beneficial owner of the 1,523,180 Shares (approximately 13.46% of the
total number of Shares which would be outstanding assuming the exercise of all
of the warrants held for the account of QIP). This number includes 991,363
Shares, 465,117 Restricted Shares (as defined herein) and 66,700 Shares issuable
upon the exercise of 66,700 currently exercisable warrants held for the account
of QIP.
(ii) Mr. Soros may be deemed the beneficial owner of
1,761,325 Shares (approximately 15.53% of the total number of Shares which would
be outstanding assuming the exercise of all of the warrants held for his
personal account and the account of QIP). This number includes (A) 214,545
Shares and 23,600 Shares issuable upon the exercise of 23,600 currently
exercisable warrants held directly for his personal account and (B) 991,363
Shares, 465,117 Restricted Shares and 66,700 Shares issuable upon the exercise
of 66,700 currently exercisable warrants held for the account of QIP.
<PAGE>
Page 10 of 17
(iii) Mr. Druckenmiller may be deemed the beneficial owner
of 1,702,407 Shares (approximately 15.04% of the total number of Shares which
would be outstanding assuming the exercise of all of the warrants held for his
personal account and the account of QIP). This number includes (A) 22,727 Shares
and 2,500 Shares issuable upon the exercise of 2,500 currently exercisable
warrants held directly for his personal account, (B) 154,000 Shares held for the
accounts of the Duquesne LLC Clients and (C) 991,363 Shares, 465,117 Restricted
Shares and 66,700 Shares issuable upon the exercise of 66,700 currently
exercisable warrants held for the account of QIP.
(iv) Duquesne LLC may be deemed the beneficial owner of the
154,000 Shares held for the accounts of the Duquesne LLC Clients (approximately
1.37% of the total number of Shares outstanding).
(b) (i) Each of QIP, QIHMI, QIH Management and SFM LLC (by
virtue of the QIP contract) may be deemed to have the sole power to direct the
voting and disposition of the 1,523,180 Shares held for the account of QIP
(assuming the exercise of all of the warrants held for the account of QIP).
(ii) Each of Mr. Soros and Mr. Druckenmiller, as a result of
their positions with SFM LLC, may be deemed to have shared power to direct the
voting and disposition of the 1,523,180 Shares held for the account of QIP
(assuming the exercise of all of the warrants held for the account of QIP).
(iii) Mr. Soros has the sole power to vote and dispose of
the 238,145 Shares held for his personal account (assuming the exercise of all
of the warrants held for his personal account).
(iv) Mr. Druckenmiller has the sole power to vote and
dispose of the 25,227 Shares held for his personal account (assuming the
exercise of all of the warrants held for his personal account).
(v) Pursuant to contracts with the Duquesne LLC Clients, and
as a result of the position held by Mr. Druckenmiller with Duquesne LLC, each of
Duquesne LLC and Mr. Druckenmiller may be deemed to have the sole power to
direct the voting and disposition of the 154,000 Shares held for the accounts of
the Duquesne LLC Clients.
(c) There have been no transactions effected with respect
to the Shares since December 20, 1997 (60 days prior to the date hereof) by any
of the Reporting Persons or the accounts of the Duquesne LLC Clients.
(d) (i) The shareholders of QIP, including Quantum Industrial
Holdings, Ltd., a British Virgin Islands international business company, have
the right to participate in the receipt of dividends from, or proceeds from the
sale of, the Shares held for the account of QIP in accordance with their
ownership interests in QIP.
(ii) Mr. Soros has the sole right to participate in the
receipt of dividends from, or proceeds from the sale of, the Shares held for his
personal account.
(iii) Mr. Druckenmiller has the sole right to participate in
the receipt of dividends from, or proceeds from the sale of, the Shares held for
his personal account.
(iv) The Duquesne LLC Clients have the right to participate
in the receipt of dividends from, or proceeds from the sale of, the Shares held
for their accounts.
<PAGE>
Page 11 of 17
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On February 10, 1998, the Issuer, Sprint Corporation ("Sprint"),
Sprint Communications Company L.P. ("Sprint L.P."), Dolphin, Inc. ("Newco"), and
a subsidiary of Newco, Dolphin Sub, Inc. ("Newco Sub") entered into an
Investment Agreement (the "Investment Agreement"), a form of which is
incorporated by reference hereto as Exhibit J and incorporated herein by
reference. The Investment Agreement contemplates a strategic relationship in the
area of Internet access and related services, and addresses the terms and
conditions of a proposed investment by Sprint in the Issuer and related
transactions. Pursuant to the Investment Agreement, Sprint proposes to make a
tender offer to purchase 1,250,000 shares of common stock of the Issuer, for an
aggregate cash consideration of $56,250,000 (the "Tender Offer"), upon the terms
and subject to the conditions set forth in the Investment Agreement. Immediately
following the closing of the Tender Offer, Sprint L.P. proposes to purchase
4,102,291 shares of Series A Convertible Preferred Stock of Newco in exchange
for (i) an aggregate cash consideration of $23,750,000, (ii) the assignment to
Newco of 100% of the Sprint L.P.'s "Sprint Internet Passport" subscribers, and
(iii) the entering into of a network agreement whereby Newco and the Issuer
agree to utilize Sprint L.P.'s long-distance network under specified terms and
conditions. Sprint also agreed to provide Newco and the Issuer with up to $25
million of convertible senior debt financing on or after the closing of the
transaction, with such amount to increase to up to $100 million over time, such
indebtedness to be evidenced by one or more convertible senior promissory notes.
In connection with the Investment Agreement, QIP and Mr. Soros
entered into an Agreement to Vote Stock (the "Voting Agreement"), dated February
10, 1998, among Sprint, Sprint L.P. and certain shareholders of Sprint named on
Schedule A of the Voting Agreement (the "Granting Stockholders"), a form of
which is incorporated by reference hereto as Exhibit K and incorporated herein
by reference. Pursuant to the terms and subject to the conditions of the Voting
Agreement, QIP and Mr. Soros agreed to vote all Shares which they own in the
Issuer in favor of the following matters only: (a) the merger of a wholly-owned
subsidiary of Newco into the Issuer (the "Merger"), (b) the issuance and sale of
Newco's Convertible Preferred Stock, Convertible Notes and Shares in accordance
with the Investment Agreement and other specified Ancillary Agreements (as
defined in the Investment Agreement), (c) the transactions contemplated by the
Investment Agreement and the Ancillary Agreements and (d) any related matter
necessary for the transactions contemplated by the Investment Agreement or any
Ancillary Agreement to be consummated, so long as any such matter is not
inconsistent with the Investment Agreement and the Ancillary Agreements. The
obligations of QIP and Mr. Soros terminate upon the earlier of (a) the Merger,
(b) the termination of the Investment Agreement pursuant to Section 6.01
thereof, (c) the modification, waiver or amendment, in any manner, adverse to
the Granting Stockholders, of the Investment Agreement or the Ancillary
Agreements, and (d) June 15, 1998 (the "Termination Date"). In addition, each of
QIP and Mr. Soros agreed that, prior to the Termination Date, they would not (a)
sell or otherwise dispose of any of the Shares, (b) grant any proxy, power of
attorney or interest with respect to the Shares, or (c) enter into a voting
agreement with respect to the Issuer's shares prior to the closing of the Merger
(unless in connection with bona fide margin facilities).
In connection with the Investment Agreement, the Issuer, Newco,
Sprint and Sprint L.P. entered into a Governance Agreement (the "Governance
Agreement") a copy of which is incorporated by reference hereto as Exhibit L and
incorporated herein by reference, which relates to the corporate governance of
Newco. In connection with the Governance Agreement, QIP and Mr. Soros entered
into a Stockholders' Agreement (the "Stockholders' Agreement"), dated February
10,
<PAGE>
Page 12 of 17
1998, among the Issuer, Newco, Sprint, Sprint L.P. and the persons identified on
Schedule I to the Stockholders' Agreement, a form of which is incorporated by
reference hereto as Exhibit M and incorporated herein by reference. Pursuant to
the Stockholders' Agreement, QIP and Mr. Soros executed, or agreed to execute,
irrevocable proxies appointing Sprint and Sprint L.P. as proxy with respect to
the shares of Newco common stock to be held by QIP and the shares of Newco
common stock to be held by Mr. Soros as a result of the Merger, and granting
Sprint and Sprint L.P. the power to vote such shares in favor of the following
matters only: (a) the Sprint Offer (as such offer is defined in the
Stockholders' Agreement), (b) a Qualified Offer (as defined in the Stockholders'
Agreement), and (c) any related matter that is required to be approved by the
stockholders to effect the transactions contemplated by the Stockholders'
Agreement. The obligations of QIP and Mr. Soros under the Stockholders'
Agreement become effective only after the closing of the transactions
contemplated by the Investment Agreement.
The descriptions of the Investment Agreement, Voting Agreement
and related proxies, Governance Agreement and Stockholders' Agreement are
qualified in their entirety by reference to the actual agreements, which are
incorporated by reference as Exhibits hereto.
From time to time, each of the Reporting Persons, the SFM Clients
and/or the Duquesne LLC Clients may lend portfolio securities to brokers, banks
or other financial institutions. These loans typically obligate the borrower to
return the securities, or an equal amount of securities of the same class, to
the lender and typically provide that the borrower is entitled to exercise
voting rights and to retain dividends during the term of the loan. From time to
time, to the extent permitted by applicable laws or otherwise permitted by the
Letter Agreement (filed as Exhibit H to the Initial Statement), each of such
persons or entities may borrow securities, including the Shares, for the purpose
of effecting, and may effect, short sale transactions, and may purchase
securities for the purpose of closing out short positions in such securities.
Except as described above, the Reporting Persons, the SFM Clients
and/or the Duquesne LLC Clients do not have any contracts, arrangements,
understandings or relationships with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
A. Power of Attorney dated as of January 1, 1997 granted by Mr.
Soros in favor of Mr. Sean C. Warren and Mr. Michael C. Neus (filed as Exhibit A
to the Initial Statement and incorporated herein by reference).
B. Power of Attorney dated as of January 1, 1997 granted by Mr.
Druckenmiller in favor of Mr. Sean C. Warren and Mr. Michael C. Neus (filed as
Exhibit B to the Initial Statement and incorporated herein by reference).
C. Joint Filing Agreement dated February 3, 1997 by and among
QIP, QIHMI, QIH Management, SFM LLC, Mr. Soros, Mr. Druckenmiller and Duquesne
LLC (filed as Exhibit C to the Initial Statement and incorporated herein by
reference).
D. Power of Attorney dated May 23, 1996 granted by QIP in favor
of Mr. Gary Gladstein, Mr. Sean Warren and Mr. Michael Neus (filed as Exhibit D
to the Initial Statement and incorporated herein by reference).
E. Amended and Restated Stock Purchase Agreement dated
September 10, 1996 among the Issuer, QIP, Mr. Soros, Mr. Druckenmiller et al.
(filed as Exhibit 10.18 to Amendment No. 2 to the Issuer's Form S-1
(Registration No. 333-1578) and incorporated herein by reference).
<PAGE>
Page 13 of 17
F. Registration Rights Agreement dated June 1, 1996, and all
amendments thereto, executed by the Issuer for the benefit of QIP, Mr. Soros and
Mr. Druckenmiller, among others (filed as Exhibit 4.4 to Amendment No. 2 to the
Issuer's Form S-1 (Registration No. 333-1578) and incorporated herein by
reference).
G. Form of Warrant issued to each of QIP, Mr. Soros, Mr.
Druckenmiller et al. (filed as Exhibit 10.18(a) to Amendment No. 2 to the
Issuer's Form S-1 (Registration No. 333-1578) and incorporated herein by
reference).
H. Form of the Letter Agreement addressed to the Issuer and
Invemed, from each of QIP, Mr. Soros and Mr. Druckenmiller et al (filed as
Exhibit H to the Initial Statement and incorporated herein by reference).
I. Form of Stock Subscription Agreement among the Issuer and
QIP (filed as Exhibit I to Amendment No. 1 to the Initial Statement and
incorporated herein by reference).
J. Form of Investment Agreement (filed as Exhibit 2.1 to the
Issuer's 8-K (Registration No. 000-20799) and incorporated herein by reference).
K. Form of Voting Agreement (filed as Exhibit 99.3 to the
Issuer's 8-K (Registration No. 000-20799) and incorporated herein by reference).
L. Governance Agreement among the Issuer, Newco, Sprint and
Sprint L.P. (filed as Exhibit 10.1 to the Issuer's 8-K (Registration No.
000-20799) and incorporated herein by reference).
M. Form of Stockholders Agreement (filed as Exhibit 99.2 to the
Issuer's 8-K (Registration No. 000-20799) and incorporated herein by reference).
<PAGE>
Page 14 of 17
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Date: February 18, 1998
QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ MICHAEL C. NEUS
-----------------------------
Michael C. Neus
Vice President
QIH MANAGEMENT, INC.
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Assistant General Counsel
GEORGE SOROS
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
<PAGE>
Page 15 of 17
STANLEY F. DRUCKENMILLER
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
DUQUESNE CAPITAL MANAGEMENT, L.L.C.
By: /S/ GERALD KERNER
----------------------------------
Gerald Kerner
Managing Director
<PAGE>
Page 16 of 17
ANNEX A
The following is a list of all of the persons (other than Stanley
Druckenmiller) who serve as Managing Directors of SFM LLC, as well as the number
of Shares, if any, held for the account of each:
Number of Shares
----------------
Scott K. H. Bessent
Walter Burlock
Brian J. Corvese
Jeffrey L. Feinberg
Arminio Fraga.................................................. 2,523/1/
Gary Gladstein................................................. 7,443/2/
Ron Hiram
Robert K. Jermain.............................................. 2,523/3/
David N. Kowitz
Alexander C. McAree
Paul McNulty................................................... 504/4/
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren................................................. 2,018/5/
Each of the above-listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM LLC, and each has a business
address c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd Floor, New York,
New York 10106.
To the best of the Reporting Persons' knowledge:
(a) The consideration used for purchasing the Shares reported above
was the personal funds of each of the Managing Directors who purchased
such Shares.
(b) All of the Shares reported above were acquired for investment
purposes.
(c) Each of the Managing Directors (i) holds the Shares reported above
as being held for his or her own account, (ii) has the sole power to
vote or dispose of such Shares and has the right to receive the
dividends from, or proceeds from the sale of, the Shares, and (iii)
has not effected any transactions in the Shares since December 20,
1997 (60 days prior to the date hereof).
- --------
/1/ This number includes 2,273 Shares and 250 currently exercisable warrants.
/2/ This number includes 6,818 Shares and 625 currently exercisable warrants.
/3/ This number includes 2,273 Shares and 250 currently exercisable warrants.
/4/ This number includes 454 Shares and 50 currently exercisable warrants.
/5/ This number includes 1,818 Shares and 200 currently exercisable warrants.
<PAGE>
Page 17 of 17
(d) Except as set forth in the Initial Statement and for the
Subscription Agreement, which is incorporated herein by reference,
none of the Managing Directors has any contracts, arrangements,
understandings or relationships with respect to the securities of the
Issuer.
An aggregate of 45,455 Shares and 5,000 Warrants are held in five
separate irrevocable trusts for the children of Mr. Soros, one of the trustees
of which is Mr. Gary Gladstein. The Reporting Persons disclaim beneficial
ownership of any shares held in the aforementioned trusts for the benefit of the
children of Mr. Soros.
