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As filed with the Securities and Exchange Commission on December 17, 1999.
Registration No. 333-49291
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM SB-2 ON FORM S-3
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933
FIRSTLINK COMMUNICATIONS, INC.
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(Exact name of Registrant as specified on its Charter)
Oregon 7385 93-1197477
- ------------ ---------- ----------------
State or other juris- Primary Standard I.R.S. Employer
diction of incorpor- Industrial Classification Identification
ation or organization Code Number Number
190 SW Harrison Street
Portland, Oregon 97201
(503) 306-4444
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(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
A. Roger Pease
FirstLink Communications, Inc.
190 SW Harrison Street
Portland Oregon 97201
(503) 306-4444
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(Name, address, including zip code, and telephone number
of agent for service of process)
Copies to:
David H. Drennen, Esq.
Neuman & Drennen, LLC
5445 DTC Parkway, PH-4
Englewood, Colorado 80111
(303) 221-4700
Fax: (303) 488-3454
Approximate date of commencement of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
NOTE REGARDING POST-EFFECTIVE AMENDMENT NO. 1
This Post-Effective Amendment No. 1 to Form SB-2 Registration Statement
(Registration No. 333-49291) on Form S-3 by FirstLink Communications, Inc. is
intended to cover the issuance of up to 910,000 shares of its common stock
issuable upon the exercise of common stock purchase warrants and options
issued in connection with the Company's initial public offering on July 31,
1998, and the issuance of up to 140,000 common stock purchase warrants
issuable upon the exercise of such options. The common stock and common stock
purchase warrants registered by this Post-Effective Amendment No. 1 were
initially registered in the Registration Statement.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
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FIRSTLINK COMMUNICATIONS, INC.
1. Forepart of the Registration Forepart of Registration
Statement and outside front cover of Statement and outside front
prospectus cover page of prospectus
2. Inside front and outside back cover Inside front and outside back
pages of prospectus back cover pages of prospectus
3. Summary Information, Risk Factors Summary of Offering; Risk
and Ratio of Earnings to Fixed Charges Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not applicable
6. Dilution Not applicable
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Description of Securities
Registered
10. Interest of Named Experts and Counsel Legal Matters
11. Material Changes Not applicable
12. Incorporation by Reference Where You can Find More
Information
13. Disclosure of SEC's Position on Indemnification of Officers
Indemnification for Securities and Directors
Act Liabilities
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FIRSTLINK COMMUNICATIONS, INC.
We made our initial public offering of our securities in July 1998. In
that offering we sold a total of 1,400,000 units, each unit consisting of
1,400,000 shares of common stock and 1,400,000 common stock purchase warrants.
We also issued options to purchase 140,000 of the units to the representatives
of the underwriters in our initial public offering. For the sake of clarity,
in this prospectus the warrants issued to the public in the initial public
offering will be referred as the IPO Warrants; and the options issued to the
representatives will be referred to as the Representatives' Options. This
prospectus relates to (i) 700,000 shares of our common stock issuable by us
upon the exercise of an aggregate of 1,400,000 IPO Warrants which we issued to
public investors in our initial public offering; (ii) 140,000 IPO Warrants
issuable upon exercise of the Representatives' Options; (iii) 70,000 shares of
our common stock issuable upon exercise of the IPO Warrants referred to in
(ii) above; and (iv) 140,000 shares of our common stock issuable upon exercise
of the Representatives' Options. The IPO Warrants are exercisable during the
three-year period ending July 27, 2001. The Representatives' Options are
exercisable during the four-year period ending July 27, 2003.
The Nasdaq Small Cap Market lists our shares and the warrants offered
through this prospectus under the symbols "FLCI" and "FLCIW", respectively.
On December 16, 1999, the last reported sale price of the common stock and the
IPO warrants, as reported on the Nasdaq Small Cap Market were $7.38 per share
and $1.59 per IPO Warrant, respectively.
Investing in the shares involves risks. You should not purchase the
warrants or the shares unless you can afford to lose your entire investment.
See "Risk Factors" beginning on page 3 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. It is illegal for anyone to tell you
otherwise.
The owners of IPO Warrants may purchase one share of common stock by
exercising two IPO Warrants and paying us the exercise price, $5.50 per share
of common stock. The owners of Representatives' Options may obtain shares of
common stock and IPO Warrants by exercising those Representatives' Options and
paying us the exercise price, $7.70 per share/warrant unit. If the IPO
Warrants (including the IPO Warrants issuable upon the exercise of the
Representatives' Options) are all exercised in full for a cash payment to us,
we will receive a total of $5,313,000. However, the Representatives' Options
may be exercised by surrendering Representatives' Options having a value equal
to the difference between (i) the exercise price of the Representatives'
Options (currently $7.70 per unit) and (ii) the closing prices of our common
stock and the IPO Warrants on the day prior to the day the Representatives'
Options are tendered for exchange. This is called a "cashless exercise." If
holders utilize a cashless exercise to exercise Representatives' Options, we
will not receive any cash proceeds from such exercise.
The information in this prospectus is not complete. It might change.
The shares and warrants may not be sold until the registration statement that
we have filed with the SEC becomes effective. This prospectus is not an offer
to sell the securities-and does not solicit offers to buy-in any state where
the offer or sale is not permitted.
This prospectus is dated December ____, 1999.
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PROSPECTUS SUMMARY
General Information About Us and Our Business
FirstLink Communications, Inc., an Oregon corporation, was founded in
1996. Our executive offices are at 190 SW Harrison, Portland, Oregon 97201,
telephone (503) 306-4444. We use the calendar year for our fiscal year.
We provide cable television and local and long distance telephone
services to residents in multi-family dwelling units (MDUs), primarily
apartment and condominium complexes. We offer a variety of services to
tenants including:
* Cable television
* Local telephone
* Long distance telephone
* Enhanced telephone calling features
* High speed internet access
* Telephone calling cards
We offer these services under our service mark to tenants of MDUs with
which we have exclusive contracts. We have long-term contracts with 14
residential developments in the Portland, Oregon area, all of which are on
line. We plan to increase the number of apartment and condominiums in
Portland we provide our services to, and to expand to other cities as well.
We lease telephone transmission facilities from third parties. We also
acquire bulk cable television signal from Tele-Communication, Inc. However,
since November 1998, it has become difficult for us to obtain contracts from
TCI for bulk cable service to new properties, which has prevented us from
expanding to new properties. We believe that our merger with USOL Holdings,
Inc., which is referred to below, will enable us to provide such services on
our own through Satellite Master Antenna Television System ("SMATV") headends
which receive programming signal from satellites and retransmits it throughout
the property.
On July 21, 1999, we signed a definitive agreement with USOL Holdings,
Inc., pursuant to which USOL will merge into us.
The Offering
Shares and warrants offered hereby will be issued when the IPO Warrants
and the Representatives' Options are exercised. Persons who may sell shares
and warrants must deliver a copy of this prospectus to persons who buy them.
The shares will probably be sold at the prevailing market prices, through
broker-dealers, although they are not required to do so. The persons who sell
the shares or IPO Warrants will retain all of the proceeds of their sales,
except for commissions they may pay broker-dealers. We will not receive any
money when they sell. However, we will receive the proceeds from the exercise
of the warrants or options. We are paying the costs of registering the
warrants and the shares.
Our common stock is listed on the Nasdaq Small Cap Market, under the
symbol "FLCI." Certain of our warrants, including the warrants offered hereby
and warrants into which some of the shares offered hereby are exercisable, are
also listed on the Nasdaq Small Cap Market, under the symbol "FLCIW." The
market prices of the common stock and the warrants have fluctuated
significantly since they were first traded. The last price that the shares
were sold for on December 16, 1999, was $7.38; and the last price that the
warrants were sold for on December 16, 1999, was $1.59.
We have an agreement to merge with USOL Holdings, Inc. Upon the
effectiveness of the merger, which we believe will occur in late December,
1999, we will change our name to USOL Holdings, Inc. We have requested Nasdaq
to change the trading symbols for our common stock and warrants to "USOL" and
"USOLW," respectively on the effectiveness of the merger.
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RISK FACTORS
Our Initial Business Plan Was Unsuccessful -- Our New Plan Depends on Our
Ability to Consummate Our Merger with Usol and to Operate Our New Business
Successfully
Our business plan required us to enter contracts with TCI or other cable
providers to provide cable TV service to MDUs. In November 1998, TCI informed
us that, as a result of its purchase by AT&T, it may no longer enter into such
agreements with us. We subsequently negotiated the merger agreement with
USOL, which will allow us to provide cable services to MDUs via fixed SMATV
systems, thereby bypassing local cable systems. The merger might not be
completed for various reasons, including that our stockholders do not approve
it. If the merger is not completed, we will have to consider other
alternatives which might involve the acquisition or merger with companies that
operate in industries other than the telecommunications industry. You would
have to rely on our management to formulate a new business plan or locate and
negotiate an agreement with another company.
We May Not Be Able to Integrate Our Recently Acquired Businesses in a Manner
That Is Beneficial to Us, or That Results in Additional Profits
We believe that our ultimate success and profitability depends on our
ability to expand and strengthen our market position via acquisition. We will
actively seek acquisition opportunities that complement our existing business.
We cannot assure you that the integration of our operations with those of USOL
will be completed in a manner that is efficient, effective and timely enough
to achieve the anticipated benefits of the acquisitions, or that the
acquisitions will result in additional operating cash flow. If we identify
additional appropriate acquisition candidates, we cannot assure you that we
will be able to successfully negotiate, finance or integrate the acquired
businesses. Integrating the companies will require the timely, efficient and
effective combination of management, sales and marketing development teams
that prior to the acquisitions operated in different geographic locations,
under varying management philosophies. Integration of the companies also will
require the combination of differing operating approaches. Additionally, the
time-consuming task of integrating the companies may distract our attention
from our day-to-day business operations.
We Are in an Extremely Competitive Industry That Is Dominated by Several
Companies Which Have Significantly Greater Financial, Technical, and Marketing
Resources than We Have
The telecommunications industry is highly competitive and characterized
by constant innovation and domination by large, often monopolistic entities.
Many of such companies have names that are more recognizable by consumers than
ours, which may provide such competitors with significant competitive
advantages. Entities with financial resources greater than ours may be able
to offer greater incentives to property owners, and the amount of the payments
demanded by property owners may increase, impairing our ability to operate on
a profitable basis. Some of our competitors include private cable and phone
companies, local exchange carriers, competitive local exchange carriers,
franchise cable companies, franchise cable company joint ventures and of local
exchange carrier affiliates. The regulatory environment in which we operate
continues to undergo fundamental changes that may also lead to increased
competition. The trend in the telecommunications industry has been the
convergence of traditional telephone and data services with broadcast video
services. As part of this trend, service providers are attempting to converge
network components: cable television distribution equipment is being
considered for telephone services and vice versa, and wireless distribution
equipment is being considered for both broadcast video and telephone services.
In broader terms, the telephone, cable, wireless and computer industries are
evolving to provide fully integrated multimedia services to end-users. The
opportunities offered by such convergence will present risks for us due to
enhanced competition from competitors in various industries with much greater
financial, technical, marketing and other resources. Should rates decrease,
we may be forced to lower our prices or offer additional services or features
to remain competitive. Wireless cable and telephone services may also allow
competitors to bypass property owners altogether and market their services
directly to residents of MDUs. To remain competitive with other providers, we
may be required to adopt new technologies, which are likely to entail
significant capital expenditures.
Our Failure to Manage Growth Properly could have a Material Adverse Effect
upon Our Business, Financial Condition and Results of Operations
The expansion of our operations will depend to some extent on matters
outside of our control including our ability to enter into right of entry
agreements with property owners on favorable terms, make attractive
acquisitions, and obtain required governmental permits in a timely manner, at
reasonable costs and on satisfactory terms and conditions. We may incur
substantial additional indebtedness to continue to upgrade our existing
systems and to acquire right of entry agreements from other entities that will
enable us to grow and offer our customers enhanced products and services.
Construction of new systems requires us to obtain qualified subcontractors and
may subject us to the risk of cost overruns and delays. Delays also can be
caused by weather, design changes, or material or equipment shortages, as well
as the need to obtain governmental approvals. Failure to complete
construction of new systems on a timely basis could impair our ability to
compete effectively in a particular area. In addition, we rely on our
reputation for providing superior customer service to attract customers. The
failure to continue to provide this level of service may impair our growth
strategy and may result in the loss of customers.
Our Management Information Systems May Not Be Able To Track Information About
Our Customers
Our management information systems ("MIS") and billing system are
adequate for our present level of business. However, the merger with USOL
will require us to handle a substantially larger number of customers. USOL
uses a MIS and billing system that can accurately and quickly process large
amounts of data. Each month, USOL processes over 500,000 individual phone
calls and thousands of other individual account transactions. Each of these
must be properly billed to the appropriate customer. On occasion, USOL's MIS
and billing system has not properly tracked some types of billable calls, in
part due to technology limitations and in part due to the fact that its
current MIS and billing system is limited in the number of calls that it can
accurately process at one time. Errors and delays in processing customer
calls may undermine customer confidence and may result in customers switching
their telephone service to another company. While to date these difficulties
and limitations have not been material, management estimates that
approximately $1,600,000 will be required over the next 18 months to upgrade
our MIS and billing system to accurately handle the substantial additional
transactions that will be generated if we meet our business goals. The actual
cost of implementing such an upgrade may materially exceed management's
estimates. USOL engaged a national management information system consulting
firm to assist it in its efforts to enhance its MIS and billing system.
Nonetheless, there can be no assurance that we will not encounter material
unforeseen difficulties and delays in upgrading our MIS and billing system.
Any such difficulties or delays could have a material adverse effect on our
business, financial condition and results of operations. We do not believe
that the cost of implementing year 2000 compliant software and systems will
have a material effect on our financial condition and results of operations;
however, there can be no assurance that we will not be impacted by year 2000
issues faced by major distributors, suppliers and financial service
organizations with which we interact.
We Depend upon Contracts with MDU Owners -- We may not be Able to Acquire or
Finance Additional Contracts; Additionally, Changing Regulations may
Invalidate the Exclusivity of Those Contracts
Our strategy relies in large part on our continuing ability to enter into
long-term right of entry contracts on satisfactory terms with owners of
demographically favorable MDUs. In addition, we depend upon third-party
lenders to finance the build-out of properties covered by right of entry
contracts. We may not be able to implement our growth plan as currently
contemplated if the demographics or occupancy rates of the MDUs served by us
change, if in the future we are unable to procure suitable right of entry
contracts or finance the build-out of properties covered by right of entry
contracts, or if the cost of acquiring right of entry contracts increases
substantially as a result of increased competition or otherwise. Our ability
to implement our growth plan could also be materially adversely affected if
lenders are unwilling to accept right of entry contracts as collateral for
debt financing.
Our Business is Subject to Extensive and Changing Laws and Regulations --
Changes in Current or Future Regulations Could have a Material Adverse Effect
on the Company
Extensive and changing laws and rules regulate the telecommunications
business, including those of the Federal Communications Commission ("FCC") and
state and local regulatory bodies such as public utility commissions. Many of
our operations are subject to licensing requirements of federal, state and
local law. The United States Congress, the FCC, and state and local
regulatory bodies in the past have adopted, and may in the future adopt, new
laws, regulations and policies regarding a wide variety of matters, including
rule-making by the FCC with respect to exclusive contractual rights to provide
CATV service to a Property that could affect our operations. Changes in
current or future regulations adopted by the United States Congress, the FCC,
or state or local regulatory bodies or legislative initiatives could have a
material adverse effect on the Company.
Some states have adopted "mandatory access laws," which could prevent
alternative video providers, such as private cable operators, and property
owners from enforcing exclusivity provisions such as those included in many of
our right of entry contracts. None of the states in which we currently
operate or plan to operate in the foreseeable future have mandatory access
laws. We cannot assure that mandatory access laws will not be adopted in
states where we do business, or that we will not expand our operations into
states that have mandatory access laws. In addition, the Federal
Communications Commission is reviewing the rights of various video programming
service providers to access private property, including MDUs, and is
considering various restrictions on the duration of contracts that grant
exclusive access rights.
Rapid and Significant Technological Changes may Cause Our Systems to Become
Obsolete
The cable and telecommunications industries are subject to rapid and
significant technological changes and service innovations. The effect of
these changes and innovations, including those relating to emerging hardwire
and wireless transmission and switching technologies, cannot be predicted.
However, if new methods for delivering the services we provide more cost
effectively are devised, unless we are able to adopt such methods and modify
our current systems, we may have difficulty competing profitably with
companies that utilize such methods.
Our Success Will Depend on Our Ability to Attract And Retain Key Personnel; If
We are Unable to Attract and Retain Key Personnel, We will be Unable to
Succeed in Our Business Plan
Our success will continue to be highly dependent upon the continued
services of certain key individuals. Members of the management of USOL will
replace Mr. Pease as President and CEO. The loss of the services of such
individuals could adversely affect our business, financial condition and
results of operations. We will also require the services of additional
executive personnel in the future. We have salary continuation agreements
with Messrs. Pease and Sperber and with Ramona Kelly. We will also enter into
employment agreements with new management personnel in connection with the
Merger. We cannot assure that we will be successful in attracting and
retaining the personnel it requires to develop and operate its facilities or
to expand its operations.
Oregon Law and Our By-Laws Protect Our Directors from Certain Types of
Lawsuits
Oregon law provides that our directors will not be liable to us or our
stockholders for monetary damages for all but certain types of conduct as
directors. Our Bylaws require us to indemnify our directors and officers
against all damages incurred in connection with our business to the fullest
extent provided or allowed by law. The exculpation provisions may have the
effect of preventing stockholders from recovering damages against our
directors caused by their negligence, poor judgment or other circumstances.
The indemnification provisions may require us to use our assets to defend our
directors and officers against claims, including claims arising out of their
negligence, poor judgment, or other circumstances. We have also entered into
indemnity agreements with each of our directors and officers.
We Expect to Continue to Incur Net Losses
If we never become profitable, the value of our shares may fall. We have
incurred net losses every year since we started business in 1996. Through
September 30, 1999, we had recognized cumulative losses of over $3.9 million.
As we expand our operations, we expect to incur negative cash flow. Our
ability to cover the operating costs of each new system, including the
networks utilized by USOL, will depend on our obtaining a sufficient number of
subscribers at each property. Additionally, losses will continue until we are
able to obtain a sufficient number of subscribers to cover our administrative
and over-head expenses. Virtually all of our revenues for fiscal year ended
December 31, 1998 and the nine months ended September 30, 1999, were derived
in the Portland, Oregon geographic areas. USOL's revenues are primarily
derived from properties in Dallas, San Antonio, and Austin, Texas. A
sustained economic downturn or significant increases in competition in those
regions could effect revenues.
Failure to Raise Necessary Capital Could Restrict the Development of Our
Networks, the Introduction of New Services, and the Acquisition of New
Properties
Setting up and running SMATV and telephony systems requires significant
capital. Upon completion of the Merger, we will expand and upgrade networks
to provide new and expanded services to additional MDUs. Technological change
may make even more upgrades necessary if we are to compete in our market. Our
financial resources, even with the capital injected into USOL, may not be
enough for our capital needs. We may not be able to obtain financing. Not
being able to acquire and update additional properties could harm our
operations and competitive position.
We Will Incur Substantial Indebtedness in Our Merger with USOL
USOL has obtained a commitment for a $35 million senior debt credit
facility which we will assume. That facility contains covenants which, among
other things, will restrict our ability to dispose of assets or merge, incur
debt, pay distributions, or take certain other corporate actions. If we are
not able to generate a sufficient amount of cash flow from our operations to
operate our systems and to pay the interest on our obligations, our creditors
could foreclose on our properties or otherwise deprive stockholders of their
equity interests.
We Will have Broad Discretion to Allocate Any Proceeds We Receive from the
Exercise of Warrants; We cannot Guarantee that the Monies Received will
Improve Our Operations
Any monies we may receive from the exercise of the warrants have been
allocated generally to provide working capital for operations. As such, we
will use funds as they are received for such purposes and in such proportions
as we deem advisable. While we will apply the proceeds in a manner consistent
with our fiduciary duty and in a manner consistent with our best interests, we
cannot assure you that the monies received will result in any present or
future improvement in our results of operations.
The Market Price of Our Securities Could Be Adversely Affected By Sales of
Restricted Securities
Actual sales or the prospect of future sales of shares of our common
stock under SEC Rule 144 may have a depressive effect upon the price of, and
market for, our common stock. As of October 31, 1999, 3,706,979 shares of our
common stock were issued and outstanding. 1,400,000 of those shares have been
registered and are publicly tradable. The remaining shares have been subject
to various lock-up provisions that have restricted their resale. All of the
shares have been released from the lock-ups.
We cannot predict what effect, if any, that sales of shares of common
stock, or the availability of these shares for sale, will have on the market
prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of common stock may be sold in the public market may
adversely effect prevailing prices for our common stock and could impair our
ability to raise capital in the future through the sale of equity securities.
We May Authorize the Issuance of Our Preferred Stock Without Shareholder
Approval
Our articles of incorporation, as amended, authorize the issuance of up
to 1,000,000 shares of preferred stock. We can fix and determine the relative
rights and preferences of preferred shares and may issue these shares, without
further stockholder approval. As a result, we could authorize the issuance of
a series of preferred stock which would:
1. grant to holders preferred rights to our assets upon liquidation;
2. grant to holders the right to receive dividend coupons before
dividends would be declared to common stockholders; and
3. grant to holders the right to the redemption of those shares,
together with a premium, prior to the redemption of common stock.
Common stockholders have no redemption rights.
In addition, we could issue large blocks of voting stocks to fend against
unwanted tender offers or hostile takeovers without further shareholder
approval. We have agreed to issue shares of preferred stock in the USOL
merger.
The Exercise of Outstanding Options and Warrants And/or Our Ability to Issue
Additional Securities Without Shareholder Approval Could Have Substantial
Dilutive and Other Adverse Effects on Existing Stockholders and Investors in
this Offering
We have the authority to issue additional shares of common stock and to
issue options and warrants to purchase shares of our common stock without
shareholder approval. We could issue large blocks of voting stock to fend off
unwanted tender offers or hostile takeovers without further shareholder
approval. At October 31, 1999, we had outstanding options exercisable to
purchase up to 593,666 shares of common stock at a weighted average exercise
price of $1.60 per share, and outstanding options and warrants exercisable to
purchase up to 1,412,917 shares of common stock at a weighted average exercise
price of $4.69 per share. Holders of the options or warrants can be expected
to exercise them at a time when we would, in all likelihood, be able to obtain
any needed capital on terms which are more favorable to us than the exercise
terms provided by such options or warrants. Exercise of these warrants and
options could have a further dilutive effect on existing stockholders and you
as an investor in this Offering.
Our common stock and warrants have been thinly traded on the Nasdaq Small
Cap Market under the symbols FLCI and FLCIW, respectively. While there
currently exists a limited and sporadic public trading market for our
securities, the prices are subject to high degrees of volatility and we cannot
assure you that the market will improve in the future. Factors discussed in
this prospectus may have a significant impact on the market prices of our
common stock and warrants.
The over-the-counter markets for securities such as the shares offered
hereby historically have experienced extreme price and volume fluctuations
during certain periods. These broad market fluctuations and other factors,
such as new product developments and trends in our industry and investment
markets generally, as well as economic conditions and quarterly variations in
our results of operations, may adversely affect the market price of our common
stock. Although our common stock is currently included in Nasdaq Small Cap
Market, there can be no assurance that they will remain eligible to be
included in Nasdaq. In the event that our common stock were no longer
eligible to be included in Nasdaq, trading in our common stock could be
subject to rules adopted by the SEC regulating broker-dealer practices in
connection with transactions in "penny stocks" which could materially,
adversely affect the liquidity of our securities. The regulations define a
penny stock as any equity security not listed on a regional or national
exchange or Nasdaq that has a market price of less than $5.00 per share,
subject to certain exceptions. The material, adverse effects of such
designation could include, among other things, impaired liquidity with respect
to our securities and burdensome transactional requirements associated with
transactions in our securities, including, but not limited to, waiting
periods, account and activity reviews, disclosure of additional personal
financial information and substantial written documentation. These
requirements could lead to a refusal of certain broker-dealers to trade or
make a market in our securities.
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WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information that we
file with the SEC will automatically update and supercede this information.
We incorporate by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Act of 1934. This prospectus is part of a registration statement we filed
with the SEC.
(a) Annual Report on Form 10-KSB for the fiscal year ended December 31,
1998.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999, and September 30, 1999.
(c) Current Report on Form 8-K for event occurring on July 21, 1999.
(d) Definitive Proxy Statement on Form 14-A dated November 8, 1999.
You may request a copy of these filings at no charge by a written or oral
request to Roger Pease, FirstLink Communications, Inc., 190 SW Harrison
Street, Portland, Oregon 97201 (503) 306-4444. In addition, you can obtain
this filing electronically at the SEC's worldwide web site at
http://www.sec.gov/edgarhp/htm.
You should rely only on the information provided in this prospectus or
any supplement to this prospectus. We have not authorized anyone else to
provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any supplement to this
prospectus is accurate as of any date other than the date on the front of
those documents.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 that are prospective.
These statements are subject to risks, uncertainties, and other factors which
could cause actual results to differ materially from the information contained
in the forward-looking statements. We cannot control many of those risks and
uncertainties which include competitive pressures, changing economic
conditions and other factors.
<PAGE>
<PAGE>
CAPITAL STOCK INFORMATION
The following table sets forth our capitalization as of September 30,
1999. This section should be read in conjunction with the financial
statements and notes to the financial statements that are incorporated by
reference into this prospectus.
<TABLE>
<CAPTION>
September 30, 1999
------------------
(Unaudited)
<S> <C>
Long term debt, net of current portion $ 24,574
Stockholders' equity:
Preferred stock, no par value, 1,000,000
shares authorized; no shares outstanding $ -
Common stock, no par value, 20,000,000
shares authorized; 3,706,979 shares issued
and outstanding 8,538,796
Retained deficit (3,988,460)
-------------
Total stockholders' equity 4,550,336
-------------
Total capitalization $ 4,674,910
=============
</TABLE>
- ----------------
(1) Does not include (i) 556,668 shares of Common Stock which have been
granted under our stock option plans, having exercise prices ranging from
$1.13 to $2.31 per share, and of which 299,446 are subject to future
vesting; and (ii) 1,412,917 shares of Common Stock reserved for issuance
upon exercise of outstanding options and warrants having a weighted
average exercise price of $4.69 per share.
<PAGE>
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the offer and sale of the
IPO Warrants or the shares; however, the IPO Warrants and the shares being
offered are issuable upon the exercise of warrants and options. If all of
those warrants and options were exercised, we would receive proceeds of
$5,313,000. The sellers of the shares or warrants will not pay any of the
expenses that are expected to be incurred in connection with the registration
of the shares and warrants, but they will pay all commissions, discounts and
other compensation to any securities broker-dealers through whom they sell any
of the shares or warrants.
We will utilize the net proceeds, if any, realized from the exercise of
the warrants and options for working capital and for general corporate
purposes, at our discretion. Actual expenditures may vary substantially
depending upon economic conditions and opportunities we are unable to identify
at this time.
THE MARKET FOR OUR SECURITIES
Our common stock and certain common stock purchase warrants trade on the
Nasdaq Small Cap Market under the symbols "FLCI" and "FLCIW", respectively.
The following table sets forth the high and low closing prices for each
quarter since we completed our initial public offering on July 27, 1998.
There was no public market for our stock or warrants prior to that date. The
quotations represent inter-dealer quotations without retail markups, markdowns
or commissions, and may not represent actual transactions.
<TABLE>
<CAPTION>
Common Stock Warrants
--------------- ---------------
Quarter Ended High Low High Low
------ ------ ------ ------
<S> <C> <C> <C> <C>
September 30, 1998 $ 4.50 $ 1.50 $ 0.56 $ .13
December 31, 1998 $ 2.31 $ 1.13 $ 0.25 $ .06
March 31, 1999 $ 2.94 $ 1.19 $ 0.41 $ .06
June 30, 1999 $ 7.50 $ 1.69 $ 1.88 $ .19
September 30, 1999 $ 6.63 $ 4.00 $ 1.47 $ .81
December 31, 1999 (through
December 16, 1999) $ 8.25 $ 3.81 $ 1.81 $ .88
</TABLE>
There were approximately 1,400 beneficial owners of record of our common
stock as of October 29, 1999.
We have not declared any dividends on our common or preferred stock, nor
do we anticipate paying cash dividends on shares of common stock in the
foreseeable future.
<PAGE>
<PAGE>
SELLING SHAREHOLDERS
Common Stock
The following table sets forth:
* The name of each of the owners of Representatives' Options;
* The number of shares of our common stock owned by each of them as of
November 30, 1999;
* The number of shares offered by this prospectus that may be sold
from time to time by each of them;
* The number of shares of our common stock that will be beneficially
owned by each of them if all of the shares offered by them are sold;
* The percentage of our total shares outstanding that will be owned by
each of them at the completion of this offering, if he sells all of
the warrants and shares included in this prospectus.
<TABLE>
<CAPTION>
Shares
that
Shares Number Will Be Percentage
Beneficially of Beneficially of
Name of Owned Shares Owned Ownership
Beneficial Prior to Offered After After the
Owner Offering Hereby Offering Offering
- ----------- ------------------- --------- -----------
<S> <C> <C> <C> <C>
Joseph Gunnar & Co. 10,500 10,500 0 0
Don Porter 40,500 35,500 5,000 0
Scott Elliott 10,500 10,500 0 0
Kashner Davidson
Securities Corp. 207,297 122,469 84,828 *
James Hosch 15,000 15,000 0 0
Victor Kashner 207,297 122,469 84,828 *
Matthew Meister 207,297 122,469 84,828 *
Timothy Collins 3,000 3,000 0 0
Joseph Dillon & Company, Inc. 21,000 21,000 0 0
*Less than 1%
</TABLE>
- ---------------
(1) Messrs.Kashner and Meister are affiliates of Kashner Davidson. For the
purpose of this table only, their shares are aggregated with those of
Kashner Davidson. Includes the following shares (1) 66,078 shares of
common stock, 9.000 shares underlying 6,000 Representatives' Options, and
5,468 shares underlying IPO Warrants held of record by Kashner Davidson;
(b) 18,750 shares of common stock and 63,750 shares of common stock
underlying 42,500 Representatives' Options held of record by Victor
Kashner; and 44,400 shares of common stock underlying 29,600
Representatives' Options held of record by Matthew Meister.
Warrants
The following table sets forth:
* The name of each of owners of Representatives' Options who may sell
IPO Warrants;
* The number of IPO Warrants owned by each of them as of October 31,
1999;
* The number of IPO Warrants offered by this prospectus that may be
sold from time to time by each of them;
At the completion of the offering, except as noted below, the sellers
listed will not own any warrants.
<TABLE>
<CAPTION>
Warrants Number of
Beneficially Warrants
Owned Prior Offered
Name of Beneficial Owner to Offering Hereby
- --------------------------- ----------- ----------
<S> <C> <C>
Joseph Gunnar & Co. 7,000 7,000
Don Porter 7,000 7,000
Scott Elliott 15,000 15,000
Kashner Davidson Securities Corp. 6,000 6,000
James Hosch 10,000 10,000
Victor Kashner 42,400 42,400
Matthew Meister 29,600 29,600
Timothy Collins 2,000 2,000
Joseph Dillon & Company, Inc. 14,000 14,000
</TABLE>
- ---------------
<PAGE>
PLAN OF DISTRIBUTION
The shares and warrants may be sold through the Nasdaq Small Cap Market
or other over-the-counter markets or otherwise at prices and at terms then
prevailing or at prices related to the then current market price or in
negotiated transactions. These shares may be sold by one or more of the
following:
* A block trade in which the broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a
portion of the block as principal to facilitate the transaction.
* Purchases by a broker or dealer as principal and resale by a broker
or dealer for its account in accordance with this prospectus.
* Ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
* In privately negotiated transactions not involving a broker or
dealer.
In effecting sales, brokers or dealers engaged to sell the securities may
arrange for other brokers or dealers to participate. Brokers or dealers
engaged to sell the securities will receive compensation in the form of
commissions or discounts in amounts to be negotiated immediately prior to each
sale. Those brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933 in connection with these sales. We anticipate that the brokers or
dealers, if any, participating in the sales of the securities will receive the
usual and customary selling commissions.
To comply with the securities laws of some states, if applicable, the
securities will be sold in those states only through brokers or dealers. In
addition, in some states, the securities may not be sold in those states
unless they have been registered or qualified for sale in those states or an
exemption from registration or qualification is available and is complied
with.
<PAGE>
<PAGE>
LIMITATION ON DIRECTORS' LIABILITY; INDEMNIFICATION
Our articles of incorporation limit the liability of a directors for
monetary damages for his conduct as a director, except for:
* Any breach of his duty of loyalty to FirstLink or its shareholders,
* Acts or omissions not in good faith or that involved intentional
misconduct or a knowing violation of law,
* Dividends or other distributions of corporate assets from which the
director derives an improper personal benefit.
* Liability under federal securities law
The effect of this provisions is to eliminate our right and the right of
our shareholders (through shareholder's derivative suits on our behalf) to
recover monetary damages against a director for breach of his fiduciary duty
of care as a director, except for the acts described above. This provisions
does not limit or eliminate our right or the right of a shareholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's duty of care. Our by-laws provide that if Oregon law
is amended, in the case of alleged occurrences of actions or omissions
preceding any such amendment, the amended indemnification provisions shall
apply only to the extent that the amendment permits us to provide broader
indemnification rights than the law permitted prior to such amendment.
Our articles of incorporation and by-laws also provide that we shall
indemnify, to the full extent permitted by Oregon law, any of our directors,
officers, employees or agents who are made, or threatened to be made, a party
to a proceeding by reason of the fact that he or she is or was one of our
directors, officers, employees or agents. The indemnification is against
judgments, penalties, fines, settlements and reasonable expenses incurred by
the person in connection with the proceeding if certain standards are met.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons in
accordance with these provisions, or otherwise, we have been advised that, in
the opinion of the SEC, indemnification for liabilities arising under the
Securities Act of 1933 is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
<PAGE>
<PAGE>
DESCRIPTION OF SECURITIES
We are authorized to issue up to 20,000,000 shares of common stock and
1,000,000 shares of preferred stock. The shares of common stock covered by
this prospectus, when they are received upon exercise of warrants or options,
will be fully paid and nonassessable.
Common Stock
Each holder of our common stock is entitled to one vote for each share
held of record. Voting rights in the election of directors are not cumulative,
and, therefore, the holders of more than 50% of our common stock could, if
they chose to do so, elect all of the directors.
The shares of common stock are not entitled to preemptive rights and are
not subject to redemption or assessment. Subject to the preferences which may
be granted to holders of preferred stock, each share of common stock is
entitled to share ratably in distributions to shareholders and to receive
ratably such dividends as we may declare. Upon our liquidation, dissolution
or winding up, subject to prior liquidation or other preference rights of
holders of preferred stock, if any, the holders of common stock are entitled
to receive pro rata those assets which are legally available for distribution
to shareholders. The issued and outstanding shares of common stock are
validly issued, fully paid and nonassessable.
Preferred Shares
Our articles of incorporation authorize issuance of a maximum of
1,000,000 preferred shares. No shares preferred stock have been issued. The
articles of incorporation give the board of directors the authority to divide
the class of preferred shares into series and to fix and determine the
relative rights and preferences of the shares of any such series so
established to the full extent permitted by the laws of the State of Oregon
and those articles of incorporation in respect of, among other things, the
number of preferred shares to constitute such series, and the distinctive
designations thereof, the rate and preference of dividends, if any, the time
of payment of dividends, whether dividends are cumulative and the date from
which any dividend shall accrue; whether preferred shares may be redeemed and,
if so, the redemption price and the terms and conditions of redemption; the
liquidation preferences payable on preferred shares in the event of
involuntary or voluntary liquidation; sinking fund or other provisions, if
any, for redemption or purchase of preferred shares; the terms and conditions
by which preferred shares may be converted, if the preferred shares of any
series are issued with the privilege of conversion; and voting rights, if any.
No series has been designated by the board of directors. However, preferred
stock will be issued in the merger with USOL.
In the event of a proposed merger, tender offer, proxy contest or other
attempt to gain control of us, which we have not approved, we could authorize
the issuance of one or more series of preferred stock with voting rights or
other rights and preferences which would impede the success of the proposed
merger, tender offer, proxy contest or other attempt to gain control of us.
Such issuance would be subject to any limitations imposed by applicable law,
our Articles of Incorporation, the terms and conditions of any outstanding
class or series of preferred shares and the applicable rules of any securities
exchanges upon which our securities are at any time listed or of other markets
on which our securities are at any time listed. The issuance of preferred
stock may have an adverse effect on the rights (including voting rights) of
holders of common stock.
Warrants
Two IPO Warrants entitle the owner to purchase one share of Common Stock
at a price of $5.50 during the period ending on July 27, 2001. They are
redeemable upon forty-five days prior written notice at a redemption price of
$.05 per Warrant if (a) the closing high bid price of the Common Stock has
exceeded $8.25 for at least 20 of the 30 trading days immediately preceding
the date of mailing of the notice of redemption, and (b) we have a current
registration statement in effect for the underlying shares.
The exercise price, number and kind of common shares to be received upon
exercise of the IPO Warrants are subject to adjustment on the occurrence of
certain events, such as stock splits, stock dividends or recapitalization. In
the event of our liquidation, dissolution or winding up, the holders of the
IPO Warrants will not be entitled to participate in the distribution of our
assets. Additionally, holders of the IPO Warrants have no voting, preemptive,
liquidation or other rights of shareholders, and no dividends will be declared
on the warrants or the shares underlying the warrants.
The exercise price of the IPO Warrants was determined at the time they
were issued and bear no relationship to the market price of our common stock,
prevailing market conditions, our operating results in recent periods, our
book value, or other recognized criteria of value.
State Legislation
We are subject to the Oregon Control Share Act (the "Control Share Act").
As it pertains to us, the Control Share Act generally provides that a person
(the "Acquirer") who acquires our voting stock in a transaction which results
in the Acquirer holding more than each of 20%, 33 1/3% or 50% of the our total
voting power (a "Control Share Acquisition") cannot vote the shares it
acquires in the Control Share Acquisition ("Control Shares") unless voting
rights are accorded to the Control Shares by (i) a majority of each voting
group entitled to vote and (ii) the holders of a majority of the outstanding
voting shares, excluding the Control Shares held by the Acquirer and shares
held by the corporation's officers and inside directors. The term "Acquirer"
is broadly defined to include persons acting as a group.
The Acquirer may, but is not required to, submit to the corporation an
"Acquiring Person Statement" setting forth certain information about the
Acquirer and its plans with respect to the corporation. The Acquiring Person
Statement may also request that the corporation call a special meeting of
stockholders to determine whether the voting rights will be restored to the
Control Shares. If the Acquirer does not request a special meeting of
stockholders, the issue of voting rights of Control Shares will be considered
at the next annual or special meeting of stockholders. If the Acquirer's
Control Shares are accorded voting rights and represent a majority or more of
all voting power, Stockholders who do not vote in favor of the restoration of
such voting rights will have the right to receive the appraised "fair value"
of their shares, which may not be less than the highest price paid per share
by the Acquirer for the Control Shares.
This provision will not apply to the USOL acquisition, since no new
shares will be issued until our shareholders have approved the transaction.
Transfer and Warrant Agent
American Securities Transfer & Trust, Incorporated, 1825 Lawrence Street,
Denver, Colorado 80202 is our transfer agent and registrar for our common
stock and the warrant agent for the IPO Warrants.
Shares Eligible for Future Sale
Future sales of substantial amounts of our common stock in the public
market could adversely affect prevailing market prices.
We have 3,706,979 shares of common stock outstanding as of October 31,
1999. Of these shares, 1,400,000 shares are freely tradable without
restriction under the Securities Act. The remaining 2,306,979 shares are
"restricted securities" as defined in Rule 144 and may be sold under Rule 144.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of 1% of the then
outstanding shares of the issuer's common stock or the average weekly trading
volume during the four calendar weeks preceding such sale, provided that
certain public information about the issuer as required by Rule 144 is then
available and the seller complies with certain other requirements. In
general, shares issued in compliance with Rule 701 promulgated under the 1933
Act may be sold by non-affiliates subject to the manner of sale requirements
of Rule 144, but without compliance with the other requirements of Rule 144.
Affiliates may sell such shares in compliance with Rule 144, other than the
holding period requirement. A person who is not an affiliate, has not been an
affiliate within three months prior to sale, and has beneficially owned the
restricted securities for at least two years is entitled to sell such shares
under Rule 144 without regard to any of the limitations described above.
We have previously filed a registration statement with the SEC, which
became effective on November 1, 1999, under which we registered 213,889 IPO
Warrants and 512,917 shares of common stock underlying certain warrants and
options. All of those securities may be sold under that registration
statement.
LEGAL MATTERS
Our legal counsel, Neuman & Drennen, LLC, 5445 DTC Parkway, PH-4,
Englewood, Colorado will issue an opinion regarding the legality of the
shares. David H. Drennen, a member of the firm, owns warrants to purchase
13,999 shares of our common stock.
EXPERTS
The financial statements and related financial statement schedule of
FirstLink Communications, Inc. as of December 31, 1998 and 1997, and for each
of the years in the two-year period ended December 31, 1998, have been
incorporated by reference herein in reliance upon the reports of KPMG LLP,
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing.
<PAGE>
<PAGE>
You should rely only on the information
incorporated by reference or provided
in this prospectus. We have not FIRSTLINK COMMUNICATIONS, INC.
authorized anyone to provide you with
different information. We are not
making an offer of these securities in 910,000
any state where the offer would not be Shares of Common Stock
permitted. You should not assume that
the information contained in this 140,000
prospectus is accurate as of any date Common Stock
other than the date on the front of this Purchase Warrants
document or the date of documents
incorporated by reference.
TABLE OF CONTENTS
Page
Prospectus Summary _
Risk Factors _
Where You Can Find More
Information _
Forward-Looking Statements _
Capital Stock Information _ -------------------------------
Use of Proceeds _
The Market for Our Securities _ Prospectus
Selling Shareholders _
Plan of Distribution _ -------------------------------
Limitation on Directors'
Liability; Indemnification _
Description of Securities _
Legal Matters _
Experts _ ________________, 1999
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.Other Expenses of Issuance and Distribution.
The estimated expenses of the offering, all of which are to be borne by
us, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Printing Expenses* $ 600
Accounting Fees and Expenses* 1,000
Legal Fees and Expenses* 1,000
Miscellaneous* 400
---------
Total* $ 3,000
</TABLE>
- ---------------
* Estimated
Item 15. Indemnification of Director and Officers.
The only statute, charter provision, by-law, contract, or other
arrangement under which any controlling person, director or officers of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is as follows:
Our articles of incorporation permit and its By-laws require us to
indemnify officers and directors to the fullest extent permitted by the Oregon
Business Corporation Law (OBCA). We have also entered into agreements to
indemnify our directors and executive officers to provide the maximum
indemnification permitted by Oregon law. These agreements, among other
provisions, provide indemnification for certain expenses (including attorney
fees), judgments, fines and settlement amounts incurred in any action or
proceeding, including any action by or in our right.
Article VI of the our by-laws permits us to indemnify our directors,
officers, employees and agent to the maximum extent permitted by the OBCA.
Section 317 of the OBCA provides that a corporation has the power to indemnify
and hold harmless a director, officer, employer, or agent of the corporation
who is or is made a party or is threatened to be made a party to any
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, against all expense, liability and loss actually and
reasonably incurred by such person in connection with such a proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in the best interest of the corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe that the conduct was unlawful.
If it is determined that the conduct of such person meets these standards,
such person may be indemnified for expenses incurred and amounts paid in such
proceeding if actually and reasonably in connection therewith.
If such a proceeding is brought by or on behalf of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually
and reasonably incurred if such person acted in good faith and in a manner
reasonably believed to be in the best interest of the corporation and its
shareholders. There can be no indemnification with respect to any matter as
to which such person is adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite such adjudication but in view
of all of the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
Where any such person is successful in any such proceeding, such person
is entitled to be indemnified against expenses actually and reasonably
incurred by him or her. In all other cases (unless order by a court),
indemnification is made by the corporation upon determination by it that
indemnification of such person is proper in the circumstances because such
person has met the applicable standard or conduct.
A corporation may advance expenses incurred in defending any such
proceeding upon receipt of an undertaking to repay any amount so advanced if
it is ultimately determined that the person is not eligible for
indemnification.
The indemnification rights provided in Section 317 of the OBCA are not
exclusive of additional rights to indemnification for breach of duty to the
corporation and its shareholders to the extent additional rights are
authorized in the corporation's articles of incorporation and are not
exclusive of any other rights to indemnification under any by-law, agreement,
vote of shareholders or disinterested directors or otherwise, with as to
action in his or her office and as to action in another capacity which holding
such office.
Item 16. Exhibits.
a. The following Exhibits are filed as part of this Registration
Statement pursuant to Item 601 of Regulation S-B:
<TABLE>
<CAPTION>
<S> <C>
Exhibit No. Title
- ---------- -----
4.2.1 Form of Warrant Agreement (with Form of Warrant Certificate) (1)
5.1 Opinion of Neuman & Drennen, LLC
23.1 Consent of Neuman & Drennen, LLC
23.2 Consent of KPMG LLP
24 Power of Attorney (included on page II-4)
</TABLE>
- ------------------
(1) Incorporated by reference from the Registrants Amendment No.4 to
Registration Statement on Form SB-2, File No. 333-49291
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel that the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the Offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the Offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing the Form SB-2 Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, in the City
of Portland, State of Oregon on the 17th day of December, 1999.
FIRSTLINK COMMUNICATIONS, INC.,
an Oregon Corporation
By: /s/ A. Roger Pease
------------------------------
A. Roger Pease, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints A. Roger Pease and Jeffrey S. Sperber, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and re-substitution, for him and in his name, place, and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement on Form SB-2 has been signed by the following persons
in the capacities with FirstLink Communications, Inc. and on the dates
indicated.
Signature Title Date
- --------- ----- ----
/s/ A. Roger Pease President, Chief Executive 12/17/99
- ----------------------------- Officer and Director
A. Roger Pease
/s/ Jeffrey S. Sperber Chief Financial Officer 12/17/99
- ----------------------------- and Secretary
Jeffrey S. Sperber
/s/ Thomas E. McChesney Director 12/17/99
- ------------------------------
Thomas E. McChesney
/s/ Robert F. Olsen Director 12/17/99
- ------------------------------
Robert F. Olsen
/s/ James F. Twaddell Director 12/17/99
- ------------------------------
James F. Twaddell
<PAGE>
Exhibit 4.2.1
NO SALE OR TRANSFER OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT
MAY BE MADE UNTIL THE EFFECTIVENESS OF A REGISTRATION STATEMENT OR OF A POST-
EFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
COVERING THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT, OR UNTIL THE
COMPANY IS IN RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. TRANSFER OF THIS WARRANT IS RESTRICTED UNDER
PARAGRAPH 2 BELOW.
UNDERWRITER'S WARRANT TO PURCHASE UNITS
(COMMON STOCK AND REDEEMABLE WARRANTS)
FIRSTLINK COMMUNICATIONS, INC.
(an Oregon corporation)
Void After 5 P.M. Portland, Oregon time
on July 27, 2003
Dated: July 31, 1998
Warrant to Purchase 140,000 Units
THIS CERTIFIES THAT, for value received, ______________________ (the
"Underwriter") or its registered assigns (the "Holder") is the owner of
warrants ("Underwriter's Warrants") to purchase from FirstLink Communications,
Inc., an Oregon corporation (the "Company"), during the period and at the
prices hereinafter specified, up to 140,000 Units, each unit consisting of one
share of the Company's common stock, no par value per share (the "Common
Stock"), and one common stock purchase warrant (the "Warrants"), (the Units,
and the Common Stock and Warrants underlying the Units, collectively referred
to as the "Securities").
This Underwriter's Warrant is issued pursuant to an Underwriting
Agreement dated July 27, 1998, between the Company and the Underwriter in
connection with a public offering through the Underwriter (the "Public
Offering"), of 1,400,000 Units and, pursuant to the Underwriter's
overallotment option, an additional 210,000 Units. The Warrants (including
those issuable pursuant to the exercise of the Underwriter's Warrant) will be
issued pursuant to and subject to the terms and conditions set forth in an
agreement between the Company, the Underwriter and American Securities
Transfer & Trust, Incorporated (the "Warrant Agreement").
1. Exercise of the Underwriter's Warrant.
-------------------------------------
(a) The rights represented by this Underwriter's Warrant shall be
exercisable at the prices and during the period specified below, upon the
terms and subject to the conditions as set forth herein:
(i) During the period from July 31, 1998 to July 27, 1999,
inclusive, the Holder shall have no right to purchase any Securities
hereunder.
(ii) Between July 28, 1999 and July 27, 2003, inclusive, the
Holder shall have the option to purchase Units hereunder at a price of $7.70
per Unit, the purchase price of the Units being 140% of the public offering
prices for the Securities set forth in the Prospectus forming a part of the
registration statement on Form SB-2 (File No. 33-49291) of the Company, as
amended (the "Registration Statement").
(iii) After July 17, 2003, the Holder shall have no right to
purchase any Securities hereunder and this Underwriter's Warrant shall expire
effective at 5:00 p.m., Portland, Oregon time on such date.
(b) The rights represented by this Underwriter's Warrant may be
exercised at any time within the period above specified, in whole or in part,
by (i) the surrender of this Underwriter's Warrant (with the purchase form at
the end hereof properly executed) at the principal executive office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); (ii) payment to the Company of the exercise price then
in effect for the number of shares of Common Stock and Warrants specified in
the above-mentioned purchase form together with applicable stock transfer
taxes, if any; and (iii) delivery to the Company of a duly executed agreement
signed by the person(s) designated in the purchase form to the effect that
such person(s) agree(s) to be bound by the provisions of Paragraph 5 and
subparagraphs (b), (c) and (d) of Paragraph 6 hereof. This Underwriter's
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Underwriter's Warrant is surrendered and payment is made in accordance with
the foregoing provisions of this Paragraph 1, and the person or persons in
whose name or names the certificates for the Securities shall be issuable upon
such exercise shall become the holder or holders of record of such Common
Stock and Warrants at that time and date. The Common Stock and Warrants so
purchased shall be delivered to the Holder within a reasonable time, not
exceeding ten (10) business days, after the rights represented by this
Underwriter's Warrant shall have been so exercised.
(c) Notwithstanding anything to the contrary contained in
subparagraph (b) of paragraph 1, the Holder may elect to exercise this
Underwriter's Warrant in whole or in part by receiving Shares and Warrants
equal to the value (as determined below) of this Underwriter's Warrant at the
principal office of the Company together with notice of such election, in
which event the Company shall issue to the Holder a number of Shares and/or
Warrants computed using the following formula:
X = Y(A-B)
----------
A
-
Where: X = the number of Shares and/or Warrants to be issued to the
Holder;
Y = the number of Shares and/or Warrants to be exercised under
this Underwriter's Warrant;
A = the current fair market value of one share of Common Stock
and one Warrant (calculated as described below); and
B = the Share Exercise Price and/or the Warrant Exercise
Price, as the case may be.
As used herein, the current fair market value of one share of Common
Stock shall mean the greater of (x) the average of the closing prices of the
Company's Common Stock sold on all securities exchanges on which the Common
Stock may at the time be listed and the NASDAQ National Market or the Nasdaq
Small Cap Market, or, if there have been no sales on any such exchange or the
Nasdaq National Market or the Nasdaq Small Cap Market on such day, the average
of the highest bid and lowest asked price on such day in the domestic
over-the-counter market as reported by the Nasdaq Stock Market, the electronic
bulletin board operated by the Nasdaq, or the National Quotation Bureau,
Incorporated, or any similar successor organization (the "Market Price"), on
the trading day immediately preceding the date notice of exercise of this
Underwriter's Warrant is given or (y) the average of the Market Price per
share of Common Stock for the five trading days immediately preceding the date
notice of exercise of this Underwriter's Warrant is given. If on any date for
which the Market Price per share of Common Stock is to be determined the
Common Stock is not listed on any securities exchange or quoted on the NASDAQ
National Market or on The Nasdaq Stock Market or otherwise in the
over-the-counter market, the Market Price per share of Common Stock shall be
the highest price per share which the Company could then obtain from a willing
buyer (not a current employee or director) for shares of Common Stock sold by
the Company, from authorized but unissued shares, as determined in good faith
by the Board of Directors of the Company, unless prior to such date the
Company has become subject to a merger, acquisition or other consolidation
pursuant to which the Company is not the surviving party, in which case the
Market Price per share of Common Stock shall be deemed to be the value
received by the holders of the Company's Common Stock for each share thereof
pursuant to the Company's acquisition.
The current fair market value of one Warrant shall be determined in a
like manner, with reference to the prices per Warrant.
2. Restrictions on Transfer.
------------------------
This Underwriter's Warrant shall not be transferred, sold, assigned or
hypothecated for a period of one year commencing July 27, 1998, except that it
may be transferred to successors of the Holder, and may be assigned in whole
or in part to any person who is an officer of the Underwriter or an officer or
partner of any other member of the selling group during such period. Any such
assignment shall be effected by the Holder by (i) completing and executing the
transfer form at the end hereof and (ii) surrendering this Underwriter's
Warrant with such duly completed and executed transfer form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or
agency of the Company referred to in Paragraph 1 hereof, accompanied by a
certificate (signed by a duly authorized representative of the Holder),
stating that each transferee is a permitted transferee under this Paragraph 2;
whereupon the Company shall issue, in the name or names specified by the
Holder (including the Holder), a new Underwriter's Warrant or Underwriter's
Warrants of like tenor and representing in the aggregate rights to purchase
the same number of Securities as are then purchasable hereunder. The Holder
acknowledges that this Underwriter's Warrant may not be offered or sold except
pursuant to an effective registration statement under the Act or an opinion of
counsel satisfactory to the Company that an exemption from registration under
the Act is available.
3. Covenants of the Company
------------------------
(a) The Company covenants and agrees that all Common Stock issuable
upon the exercise of this Underwriter's Warrant will, upon issuance thereof
and payment therefor in accordance with the terms hereof, and all Common Stock
issuable upon exercise of the Warrants underlying this Underwriter's Warrant,
will upon the issuance thereof and payment therefor in accordance with the
terms of the Warrant Agreement, be duly and validly issued, fully paid and
nonassessable and no personal liability will attach to the holder thereof by
reason of being such a holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period within
which this Underwriter's Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common
Stock to provide for the exercise of this Underwriter's Warrant and the
Warrants included therein.
(c) The Company covenants and agrees that for so long as the
Securities shall be outstanding (unless the Securities shall no longer be
registered under Paragraph 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended) the Company shall use its best efforts to cause all shares
of Common Stock issuable upon the exercise of the Underwriter's Warrant and
the Warrants contained therein, to be quoted by the NASDAQ Stock Market or
listed on a national securities exchange.
4. No Rights of Stockholder.
------------------------
This Underwriter's Warrant shall not entitle the Holder to any voting
rights or other rights as a stockholder of the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Underwriter's Warrant and are not enforceable against the Company except to
the extent set forth herein.
5. Registration Rights.
-------------------
(a) During the four year period following July 27, 1999, the
Company shall advise the Holder, whether the Holder holds this Underwriter's
Warrant or has exercised this Underwriter's Warrant and holds Common Stock and
Warrants underlying the Units, or Common Stock underlying the Warrants (the
"Warrant Shares"), by written notice at least 30 days prior to the filing of
any post-effective amendment to the Registration Statement or of any new
registration statement or post-effective amendment thereto under the Act,
covering any securities of the Company, for its own account or for the account
of others, and upon the request of the Holder made during such four-year
period, include in any such post-effective amendment or registration statement
such information as may be required to permit a public offering of any of the
Common Stock or Warrants issuable hereunder, and/or the Warrant Shares (the
"Registrable Securities"); provided, that this Paragraph 5(a) shall not apply
to any registration statement filed pursuant to Paragraph 5(b) hereof or to
registrations of shares in connection with an employee benefit plan or a
merger, consolidation or other comparable acquisition or solely for
registration of non-convertible debt or preferred equity securities of the
Company; and provided, further, that, notwithstanding the foregoing, the
Holder shall have no right to include any Registrable Securities in any new
registration statement or post-effective amendment thereto unless as of the
effective date thereof the Registration Statement (as it may hereafter be
amended or supplemented) or any new registration statement under which the
Registrable Securities are registered shall have ceased to be effective or the
prospectus contained in such Registration Statement shall have ceased to be
current. The Company shall supply prospectuses in order to facilitate the
public sale or other disposition of the Registrable Securities, use its
reasonable efforts to register and qualify any of the Registrable Securities
for sale in such states in which the Common Stock and Warrants are offered and
sold in the Public Offering as such Holder reasonably designates and do any
and all other acts and things which may be necessary to enable such Holder to
consummate the public sale of the Registrable Securities, provided that,
without limiting the foregoing, the Company shall not be obligated to execute
or file any general consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction, and
furnish indemnification in the manner provided in Paragraph 6 hereof. The
Holder shall furnish information reasonably requested by the Company in
accordance with such post-effective amendments or registration statements,
including its intentions with respect thereto, and shall furnish
indemnification as set forth in Paragraph 6. The Company shall continue to
advise the Holders of the Registrable Securities of its intention to file a
registration statement or amendment pursuant to this Paragraph 5(a) until the
earliest of (i) July 27, 2003; or (ii) such time as all of the Registrable
Securities have been registered and sold under the Act; or (iii) all of the
Registrable Securities have been otherwise transferred, new certificates for
them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of them shall not
require registration or qualification of them under the Act, or (iv) in the
opinion of legal counsel for the Company, the Registrable Securities may be
offered and sold by the holders thereof without being registered under the Act
and such securities, upon receipt by the purchasers thereof pursuant to such
sale, will not constitute "restricted securities" as such term is defined in
Rule 144 under the Act.
(b) If any fifty-one (51%) percent holder (as defined below) shall
give notice to the Company at any time during the four (4) year period
beginning July 27, 1999 to the effect that such holder desires to register
under the Act any Registrable Securities, under such circumstances that a
public distribution (within the meaning of the Act) of any such Registrable
Securities will be involved (and the Registration Statement or any new
registration statement under which such Registrable Securities are registered
shall have ceased to be effective or the Prospectus contained therein shall
have ceased to be current), then the Company will as promptly as practicable
after receipt of such notice, but not later than thirty (30) days after
receipt of such notice, at the Company's option, file a post-effective
amendment to the current Registration Statement or a new registration
statement pursuant to the Act to the end that the Registrable Securities may
be publicly sold under the Act as promptly as practicable thereafter and the
Company will use its reasonable efforts to cause such registration to become
and remain effective as provided herein (including the taking of such steps as
are reasonably necessary to obtain the removal of any stop order); provided,
that such fifty-one (51%) percent holder shall furnish the Company with
appropriate information in connection therewith as the Company may reasonably
request; and provided, further, that the Company shall not be required to file
such a post-effective amendment or registration statement pursuant to this
Paragraph 5(b) on more than one occasion; and provided, further, that, the
registration rights of the 51% holder under this Paragraph 5(b) shall be
subject to the "piggyback" registration rights of other holders of securities
of the Company to include such securities in any registration statement or
post-effective amendment filed pursuant to this Paragraph 5(b). The Company
will maintain such registration statement or post-effective amendment current
under the Act for a period of at least nine months from the effective date
thereof. The Company shall supply prospectuses in order to facilitate the
public sale of the Registrable Securities, use its reasonable efforts to
register and qualify any of the Registrable Securities for sale in such states
in which the Common Stock and Warrants are offered and sold in the Public
Offering as such holder reasonably designates and furnish indemnification in
the manner provided in Paragraph 6 hereof, provided that, without limiting the
foregoing, the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(c) The Holder may, in accordance with Paragraphs 5(a) or (b), at
his or its option, and subject to the limitations set forth in Paragraph 1(a)
hereof, request the registration of any of the Registrable Securities in a
filing made by the Company prior to the acquisition of the Securities upon
exercise of this Underwriter's Warrant. The Holder may thereafter exercise
this Underwriter's Warrant at any time or from time to time subsequent to the
effectiveness under the Act of the registration statement in which the Common
Stock underlying the Underwriter's Warrants and Warrants were included.
(d) The term "51% holder," as used in this Paragraph 5, shall
include any owner or combination of owners of Underwriter's Warrants or
Registrable Securities if the aggregate number of shares of Common Stock and
Warrant Shares included in and underlying the Underwriter's Warrants and
Registrable Securities held of record by it or them, would constitute a
majority of the aggregate of such shares of Common Stock and Warrant Shares
underlying the Underwriter's Warrant and Registrable Securities as of the date
of the initial issuance of the Underwriter's Warrant.
(e) The following provisions of this Paragraph 5 shall also be
applicable:
(i) Within ten (10) days after receiving any notice pursuant
to Paragraph 5(b), the Company shall give notice to the other Holders of
Underwriter's Warrants or Registrable Securities, advising that the Company is
proceeding with such post-effective amendment or registration and offering to
include therein the Registrable Securities of such other Holders, provided
that they shall furnish the Company with all information in connection
therewith as shall be necessary or appropriate and as the Company shall
reasonably request in writing. Following the effective date of such post-
effective amendment or registration, the Company shall, upon the request of
any Holder of Registrable Securities, forthwith supply such number of
prospectuses meeting the requirements of the Act, as shall be reasonably
requested by such Holder. The Company shall use its reasonable efforts to
qualify the Registrable Securities for sale in such states in which the Common
Stock and Warrants are offered and sold in the Public Offering as the 51%
holder shall reasonably designate at such times as the registration statement
is effective under the Act, provided that, without limiting the foregoing, the
Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(ii) The Company shall bear the entire cost and expense of any
registration of securities initiated by it under Paragraph 5(a) hereof
notwithstanding that the Registrable Securities subject to this Underwriter's
Warrant may be included in any such registration. The Company shall also
comply with the one request for registration made by the 51% holder pursuant
to Paragraph 5(b) hereof at the Company's own expense and without charge to
any holder of the Registrable Securities. Notwithstanding the foregoing, any
Holder whose Registrable Securities are included in any such registration
statement pursuant to this Paragraph 5 shall, however, bear the fees of any
counsel retained by him and any transfer taxes or underwriting discounts or
commissions applicable to the Registrable Securities sold by him pursuant
thereto and, in the case of a registration pursuant to Paragraph 5(a) hereof,
any additional registration or "blue sky" or state securities fees
attributable to the registration or qualification of such Holder's Registrable
Securities.
(iii) If the underwriter or managing underwriter in any
underwritten offering made pursuant to Paragraph 5(a) hereof shall advise the
Company that it declines to include a portion or all of the Registrable
Securities requested by the Holders to be included in the registration
statement, then distribution of all or a specified portion of the Registrable
Securities shall be excluded from such registration statement (in case of an
exclusion as to a portion of such Registrable Securities, such portion to be
allocated among such Holders in proportion to the respective numbers of
Registrable Securities requested to be registered by each such Holder). In
such event the Company shall give the Holder prompt notice of the number of
Registrable Securities excluded. Further, in such event the Company shall,
commencing six (6) months after the completion of such underwritten offering,
file and use its best efforts to have declared effective, at its sole expense
(subject to the last sentence of Paragraph 5(a)(ii)), a registration statement
relating to such excluded securities.
(iv) Notwithstanding anything to the contrary contained herein,
the Company shall have the right at any time after it shall have given written
notice pursuant to Paragraph 5(a) or 5(b) (irrespective of whether a written
request for inclusion of any Registrable Securities shall have been made) to
elect not to file or to delay any such proposed registration statement or
post-effective amendment thereto, or to withdraw the same after the filing but
prior to the effective date thereof. In addition, the Company may delay the
filing of any registration statement or post-effective amendment requested
pursuant to Paragraph 5(b) hereof by not more than 120 days if the Company,
prior to the time it would otherwise have been required to file such
registration statement or post-effective amendment thereto, determines in good
faith that the filing of the registration statement would require the
disclosure of non-public material information that, in its judgment, would be
detrimental to the Company if so disclosed or would otherwise adversely affect
a financing, acquisition, disposition, merger or other material transaction.
(v) If a registration pursuant to Paragraph 5(a) hereof
involves an underwritten offering, the Company shall have the right to select
the investment banker or investment bankers and manager or managers that will
serve as underwriter with respect to the underwritten offering. No Holder of
Registrable Securities may participate in any underwritten offering under this
Agreement unless such holder completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwritten offering, in each case, in the form and
upon terms reasonably acceptable to the Company and the underwriters. The
requested registration pursuant to Paragraph 5(b) hereof shall not involve an
underwritten offering unless the Company shall first give its written approval
of each underwriter that participates in the offering, such approval not to be
unreasonably withheld.
6. Indemnification.
---------------
(a) Whenever pursuant to Paragraph 5, a registration statement
relating to any Registrable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Registrable Securities covered by such registration statement, amendment or
supplement (such holder hereinafter referred to as the "Distributing Holder"),
each person, if any, who controls (within the meaning of the Act) the
Distributing Holder, and each officer, employee, partner or agent of the
Distributing Holder, if the Distributing Holder is a broker or dealer, and
each underwriter (within the meaning of the Act) of such securities and each
person, if any, who controls (within the meaning of the Act) any such
underwriter and each officer, employee, agent or partner of such underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Distributing Holder, any such underwriter or any other person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading; and will reimburse the Distributing Holder and each such
underwriter or such other person for any legal or other expenses reasonably
incurred by the Distributing Holder, or underwriter or such other person, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case (i) to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by such
Distributing Holder, any other Distributing Holder or any such underwriter for
use in the preparation thereof, or (ii) such losses, claims, damages or
liabilities arise out of or are based upon any actual or alleged untrue
statement or omission made in or from any preliminary prospectus, but
corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement
relating to the Registrable Securities is filed under the Act, or is amended
or supplemented, the Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or any
such director, officer or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in any such
registration statement or any preliminary prospectus or final prospectus
constituting a part thereof, or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in said registration statement, said preliminary
prospectus, said final prospectus or said amendment or supplement in reliance
upon and in conformity with written information furnished by such Distributing
Holder for use in the preparation thereof; and will reimburse the Company or
any such director, officer or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Paragraph 6.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. Adjustments of Price and Number of Shares of Common Stock.
---------------------------------------------------------
The number and kind of securities purchasable upon the exercise of the
Warrants and the Warrant Price shall be subject to adjustment from time to
time upon the happening of certain events, as follows:
a. ADJUSTMENTS. The number of Units purchasable upon the exercise
of the Warrants shall be subject to adjustments as follows:
(1) In case the Company shall (i) pay a dividend in Common
Stock or securities convertible into Common Stock or make a distribution to
its stockholders in Common Stock or securities convertible into Common Stock;
(ii) subdivide its outstanding Common Stock; (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock; or (iv) issue by
reclassification of its Common Stock other securities of the Company; then the
number of Units purchasable upon exercise of the Warrants immediately prior
thereto shall be adjusted so that the Warrant Holder shall be entitled to
receive the kind and number of Units or other securities of the Company which
it would have owned or would have been entitled to receive immediately after
the happening of any of the events described above, had such Warrants been
exercised immediately prior to the happening of such event or any record date
with respect thereto. Any adjustment made pursuant to this subsection 7.(a)1
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(2) If, prior to the expiration of the Warrants by exercise,
by their terms, or by redemption, the Company shall be recapitalized by
reclassifying its outstanding shares of Common Stock into shares with a
different par value, or by changing its outstanding shares of Common Stock
into shares without par value or in the event of any other material change of
the capital structure of the Company or of any successor corporation by reason
of any reclassification, recapitalization or conveyance, prompt,
proportionate, equitable, lawful and adequate provision shall be made whereby
any Warrant Holder shall thereafter have the right to purchase, on the basis
and the terms and conditions specified in this Agreement, in lieu of the Units
theretofore purchasable on the exercise of any Warrant, such securities or
assets as may be issued or payable with respect to or in exchange for the
number of Units theretofore purchasable on exercise of the Warrants had such
reclassification, recapitalization or conveyance not taken place; and in any
such event, the rights of any Warrant Holder to any adjustment in the number
of Units purchasable on exercise of such Warrant, as set forth above, shall
continue to be preserved in respect of any stock, securities or assets which
the Warrant Holder becomes entitled to purchase.
(3) In case the Company shall issue rights, options, warrants,
or convertible securities to all or substantially all holders of its Common
Stock, without any charge to such holders, entitling them to subscribe for or
purchase Common Stock at a price per share which is lower at the record date
mentioned below than the then Current Market Price, the number of Units
thereafter purchasable upon the exercise of each Warrant shall be determined
by multiplying the number of Units theretofore purchasable upon exercise of
the Warrants by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding immediately prior to the issuance of such
rights, options, warrants or convertible securities plus the number of
additional shares of Common Stock offered for subscription or purchase, and of
which the denominator shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such rights, options,
warrants, or convertible securities plus the number of shares which the
aggregate offering price of the total number of shares offered would purchase
at such Current Market Price. Such adjustment shall be made whenever such
rights, options, warrants, or convertible securities are issued, and shall
become effective immediately and retroactively to the record date for the
determination of shareholders entitled to receive such rights, options,
warrants, or convertible securities.
(4) In case the Company shall distribute to all or
substantially all holders of its Common Stock evidences of its indebtedness or
assets (excluding cash dividends or distributions out of earnings) or rights,
options, warrants, or convertible securities containing the right to subscribe
for or purchase Common Stock (excluding those referred to in subsection
7(a)(2) above), then in each case the number of Units thereafter purchasable
upon the exercise of the Warrants shall be determined by multiplying the
number of Units theretofore purchasable upon exercise of the Warrants by a
fraction, of which the numerator shall be the then Current Market Price on the
date of such distribution, and of which the denominator shall be such Current
Market Price on such date minus the then fair value (determined as provided in
subsection 7(a)(8)(y) below) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options, warrants,
or convertible securities applicable to one share. Such adjustment shall be
made whenever any such distribution is made and shall become effective on the
date of distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution.
(5) No adjustment in the number of Units purchasable pursuant
to the Warrants shall be required unless such adjustment would require an
increase or decrease of at least one percent in the number of Units then
purchasable upon the exercise of the Warrants or, if the Warrants are not then
exercisable, the number of Units purchasable upon the exercise of the Warrants
on the first date thereafter that the Warrants become exercisable; provided,
however, that any adjustments which by reason of this subsection 7(a)(5) are
not required to be made immediately shall be carried forward and taken into
account in any subsequent adjustment.
(6) Whenever the number of Units purchasable upon the exercise
of the Warrant is adjusted, as herein provided, the Exercise Price payable
upon exercise of the Warrant shall be adjusted by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Units purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of Units so purchasable immediately thereafter.
(7) For the purpose of this subsection 7(a), the term "Common
Stock" shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par value,
or from no par value to par value. In the event that at any time, as a result
of an adjustment made pursuant to this Section 7, the Warrant Holder shall
become entitled to purchase any securities of the Company other than Common
Stock, (y) if the Warrant Holder's right to purchase is on any other basis
than that available to all holders of the Company's Common Stock, the Company
shall obtain an opinion of an independent investment banking firm valuing such
other securities; and (z) thereafter the number of such other securities so
purchasable upon exercise of the Warrants shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Units contained in this Section 7.
(8) Upon the expiration of any rights, options, warrants, or
conversion privileges, if such shall have not been exercised, the number of
Units purchasable upon exercise of the Warrants, to the extent the Warrants
have not then been exercised, shall, upon such expiration, be readjusted and
shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may
be) on the basis of (i) the fact that the only shares of Common Stock so
issued were the shares of Common Stock, if any, actually issued or sold upon
the exercise of such rights, options, warrants, or conversion privileges, and
(ii) the fact that such shares of Common Stock, if any, were issued or sold
for the consideration actually received by the Company upon such exercise plus
the consideration, if any, actually received by the Company for the issuance,
sale or grant of all such rights, options, warrants, or conversion privileges
whether or not exercised; provided, however, that no such readjustment shall
have the effect of decreasing the number of Units purchasable upon exercise of
the Warrants by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale, or grant of such rights, options,
warrants, or conversion rights.
(b) NO ADJUSTMENT FOR DIVIDENDS. Except as provided in subsection
7(a), no adjustment in respect of any dividends or distributions out of
earnings shall be made during the term of the Warrants or upon the exercise of
the Warrants.
(c) NO ADJUSTMENT IN CERTAIN CASES. No adjustments shall be made
pursuant to Section 7 hereof in connection with the issuance of the Common
Stock sold as part of the Public Offering sale or the issuance of Units upon
exercise of the Warrants. No adjustments shall be made pursuant to Section 7
hereof in connection with the grant or exercise of presently authorized or
outstanding options to purchase, or the issuance of shares, of Common Stock
under the Company's director or employee benefit plans disclosed in the
Registration Statement relating to the Public Offering.
(d) PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or
merger of the Company into another corporation, or in case of any sale or
conveyance to another corporation of the property, assets, or business of the
Company as an entirety or substantially as an entirety, the Company or such
successor or purchasing corporation, as the case may be, shall execute an
agreement that the Warrant Holder shall have the right thereafter upon payment
of the Exercise Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale, or conveyance
had the Warrants been exercised immediately prior to such action. In the
event of a merger described in Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, in which the Company is the surviving corporation, the right to
purchase Units under the Warrants shall terminate on the date of such merger
and thereupon the Warrants shall become null and void, but only if the
controlling corporation shall agree to substitute for the Warrants, its
Warrants which entitle the holder thereof to purchase upon their exercise the
kind and amount of shares and other securities and property which it would
have owned or been entitled to receive had the Warrants been exercised
immediately prior to such merger. Any such agreements referred to in this
subsection 7(d) shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section 7
hereof. The provisions of this subsection 10.4 shall similarly apply to
successive consolidations, mergers, sales, or conveyances.
(e) PAR VALUE OF SHARES OF COMMON STOCK. Before taking any action
which would cause an adjustment effectively reducing the portion of the
Exercise Price allocable to each Share in such Unit below the par value per
share of the Common Stock issuable upon exercise of the Warrants, the Company
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Common Stock upon exercise of the Warrants.
(f) INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a firm
of independent public accountants of recognized national standing (which may
be any such firm regularly employed by the Company) to make any computation
required under this Section 7, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 7.
(g) STATEMENT ON WARRANT CERTIFICATES. Irrespective of any
adjustments in the number of securities issuable upon exercise of the
Warrants, Warrant Certificates theretofore or thereafter issued may continue
to express the same number of securities as are stated in the similar Warrant
Certificates initially issuable pursuant to this Agreement. However, the
Company may, at any time in its sole discretion (which shall be conclusive),
make any change in the form of Warrant Certificate that it may deem
appropriate and that does not affect the substance thereof; and any Warrant
Certificate thereafter issued, whether upon registration of transfer of, or in
exchange or substitution for, an outstanding Warrant Certificate, may be in
the form so changed.
(h) TREASURY STOCK. For purposes of this Section 7, shares of
Common Stock owned or held at any relevant time by, or for the account of, the
Company, in its treasury or otherwise, shall not be deemed to be outstanding
for purposes of the calculations and adjustments described.
(i) OFFICERS' CERTIFICATE. Whenever the Exercise Price or that
aggregate number of Units purchasable pursuant to this Warrant shall be
adjusted as required by the provisions of this Section 7, the Company shall
promptly file with the Warrant Agent an officers' certificate executed by the
Company's President and Secretary or Assistant Secretary, describing the
adjustment and setting forth, in reasonable detail, the facts requiring such
adjustment and the basis for and calculation of such adjustment in accordance
with the provisions of this Warrant Agreement. Each such officers'
certificate shall be made available to the Holders for inspection at all
reasonable times, and the Company, after each such adjustment, shall promptly
deliver a copy of the officers' certificate relating to that adjustment to the
Holders. If the officers' certificate is not accompanied by the Certificate
described in Section 7(f), the officers' certificate described in this Section
7(i) shall be deemed to be conclusive as to the correctness of the adjustment
reflected therein if, and only if, no Holder delivers written notice to the
Company of an objection to the adjustment within 30 days after the officers'
certificate is delivered to the Holders. The Company will make its books and
records available for inspection and copying during normal business hours by
the Holder so as to permit a determination as to the correctness of the
adjustment. If written notice of an objection is delivered by a Holder to the
Company and the parties cannot reconcile the dispute, the Holder and the
Company shall submit the dispute to arbitration pursuant to the rules of the
American Arbitration Association. Failure to prepare or provide the officers'
certificates shall not modify the parties' rights hereunder.
(j) For the purposes of this Section 7, the "Market Price" shall be
determined as follows:
(1) if the security at issue is listed on a national
securities exchange or admitted to unlisted trading privileges on such an
exchange or quoted on either the Nasdaq National Market or on the Nasdaq Small
Cap Market, the Market Price shall be the last reported sale price of that
security on such exchange or system on the day for which the Market Price is
to be calculated; or, if no such sale is made on such day, the average of the
highest closing bid and lowest asked price for such day on such exchange or
system; or
(2) if the security at issue is not so listed or quoted or
admitted to unlisted trading privileges, the Market Price shall be the last
reported sale price of that security on the OTC Bulletin Board on the day for
which the Market Price is to be calculated; or if no such sale is made on such
day, the average of the last reported highest bid and lowest asked prices
quoted on the OTC Bulletin Board on such day; or
(3) if the security at issue is not so listed or quoted or
admitted to unlisted trading privileges and bid and asked prices are not
reported, the Market Price shall be determined in such reasonable manner as
may be prescribed in good faith from time to time by the Board of Directors of
the Company, based on the best information available to it for the day
immediately preceding such determination.
8. Fractional Shares.
-----------------
(a) The Company shall not be required to issue fractions of shares
of Common Stock or fractional Warrants on the exercise of this Underwriter's
Warrant, provided, however, that if the Holder exercises the Underwriter's
Warrant in full, any fractional shares of Common Stock shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common
Stock.
(b) The Holder of this Underwriter's Warrant, by acceptance hereof,
expressly waives his right to receive any fractional share of Common Stock or
fractional Warrant upon exercise of this Underwriter's Warrant.
9. Redemption of Warrants underlying the Underwriter's Option.
-----------------------------------------------------------
The Warrants underlying the Underwriter's Option are redeemable by the
Company at a redemption price of $.05 per Warrant, in whole or in part,
commencing 14 months after the date hereof and prior to their expiration upon
not less than thirty (30) days' prior written notice to the holders of the
Warrants; provided that the average closing bid quotation of the Common Stock
as reported on The Nasdaq Stock Market, if traded thereon, or if not traded
thereon, the average closing sale price if listed on a national securities
exchange (or other reporting system that provides last sales prices), has been
at least 150% of the then current Exercise Price for a period of 20
consecutive trading days ending on the third day prior to the date on which
the Company gives notice of redemption. Any redemption in part shall be made
pro rata to all Warrant holders. The redemption notice shall be mailed to the
holders of the Warrants at their respective addresses appearing in the Warrant
register. Holders of the Warrants will have exercise rights until the close
of business on the day immediately preceding the date fixed for redemption (at
which time this Underwriter's Option shall no longer be exercisable for
Warrants).
10. Miscellaneous.
-------------
(a) This Underwriter's Warrant shall be governed by and in
accordance with the laws of the State of Colorado without regard to the
conflicts of law principles thereof.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, 190 SW Harrison, Portland, OR
97201.
(c) The Company and the Underwriter may from time to time
supplement or amend this Underwriter's Warrant without the approval of any
other Holders in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem not to
materially adversely affect the interest of the Holders.
(d) All the covenants and provisions of this Underwriter's Warrant
by or for the benefit of the Company and the Holders shall bind and inure to
the benefit of their respective successors and assigns hereunder.
(e) Nothing in this Underwriter's Warrant shall be construed to
give to any person or corporation other than the Company and the Underwriter
and any other registered Holder or Holders, any legal or equitable right, and
this Underwriter's Warrant shall be for the sole and exclusive benefit of the
Company and the Underwriter and any other Holder or Holders.
(f) This Underwriter's Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the Company has caused this Underwriter's Warrant to
be signed by its duly authorized officer and this Underwriter's Warrant to be
dated July 31,1998.
FIRSTLINK COMMUNICATIONS, INC.
By: /s/ A. Roger Pease
---------------------------------
A. Roger Pease
<PAGE>
<PAGE>
PURCHASE FORM
-------------
(To be signed only upon exercise of the Underwriter's Warrant)
The undersigned, the Holder of the foregoing Underwriter's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Underwriter's Warrant for, and to purchase thereunder, ______ Units, each
consisting one share of Common Stock and one Warrant of FirstLink
Communications, Inc. and herewith makes payment of $________ therefor, and
requests that the certificates for Common Stock and Warrants be issued in the
name(s) of, and delivered to ________________________________ whose
address(es) is (are)_______________________________________ and whose social
security or taxpayer identification number is _____________________.
Dated: __________________
_________________________*
_________________________
Address
*Signature must conform in all respects to name of registered Holder.
<PAGE>
<PAGE>
WARRANT CONVERSION EXERCISE FORM
TO:
Pursuant to Section 4.6 of the Warrant Agreement, the Holder hereby
irrevocably elects to convert Warrants into ___________________ Shares and/or
________________________ Warrants of the Company. A conversion calculation is
attached hereto as Exhibit B-1.
The undersigned requests that certificates for such Shares and/or
Warrants be issued as follows:
Name: _____________________________________________________
Address: _____________________________________________________
Deliver to:____________________________________________________
and that a new Certificate for the balance remaining of the Warrants, if any,
be registered in the name of, and delivered to, the undersigned at the address
stated above.
Signature _________________________* Dated____________________________
*Signature must conform in all respects to name of registered Holder.
<PAGE>
<PAGE>
Exhibit B-1
CALCULATION OF WARRANT CONVERSION
---------------------------------
Converted Securities(1) = Y(A-B)
------
A
A = $_______________
B = $ ___________ per Share
= $ ___________ per Warrant
Converted Securities(1) = ____________ Shares
____________ Warrants
Fractional Converted Shares = ________________(2)
__________________________
[FN]
(1) Y = the number of Shares and/or Warrants to be exercised under this
Underwriter's Warrant;
A = the current fair market value of one share of Common Stock and one
Warrant (calculated as described below;
B = the Share Exercise Price and/or the Warrant Exercise Price, as the
case may be.
(2) ____________________ to pay for fractional Shares in cash at $_____ per
share.
</FN>
<PAGE>
<PAGE>
TRANSFER FORM
-------------
(To be signed only upon transfer of the Underwriter's Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________ the right to purchase Units consisting of shares of
Common Stock and Warrants of FirstLink Communications, Inc. represented by the
foregoing Underwriter's Warrant to the extent of __________ Units (i.e.,
____shares of Common Stock and _______________ Warrants), and appoints
________________, attorney to transfer such rights on the books of FirstLink
Communications, Inc., with full power of substitution in the premises.
Dated: __________________
_________________________
(name of holder)
_________________________
Address
_________________________
In the presence of:
_________________________
_________________________
<PAGE>
EXHIBIT 5.1
NEUMAN & DRENNEN, LLC
5445 DTC Parkway, Penthouse 4
Englewood, Colorado 80111
Telephone: (303) 221-4700
Facsimile: (303) 448-3454
December 17, 1999
FirstLink Communications, Inc.
190 SW Harrison Street
Portland, Oregon 97201
Re: S.E.C. Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to FirstLink Communications, Inc. (the
"Company")in connection with a Registration Statement to be filed with the
United Stated Securities and Exchange Commission, Washington, D.C., pursuant
to the Securities Act of 1933, as amended, relating to the registration of an
aggregate of 910,000 shares "the "Shares") of the Company's no par value
common stock (the "Common Stock") issuable upon exercise of warrants of the
Company ("Warrants") and 140,000 Common Stock Purchase Warrants issuable upon
exercise of options of the Company ("Options"). In connection with such
representation of the Company, we have examined such corporate records, and
have made such inquiry of government officials and Company officials and have
made such examination of the law as we deemed appropriate in connection with
delivering this opinion.
Based upon the foregoing, we are of the opinion as follows:
1. The Company has been duly incorporated and organized under the laws
of the State of Oregon and is validly existing as a corporation in good
standing under the laws of that state.
2. All necessary corporate action has been duly taken to authorize the
establishments of the Plans and the issuance of the Shares under the Plans;
3. The shares registered for resale and offered by the Selling
Shareholders have been lawfully and validly issued, fully paid and
nonassessable shares of the Company's common stock; and
4. The Shares, when issued in accordance with the terms of the
Warrants and Options will be legally issued, fully paid and nonassessable.
Sincerely,
David H. Drennen
<PAGE>
Exhibit 23.1
NEUMAN & DRENNEN, LLC
5445 DTC Parkway, Penthouse 4
Englewood, Colorado 80111
Telephone: (303) 221-4700
Facsimile: (303) 448-3454
December 17, 1999
FirstLink Communications, Inc.
190 SW Harrison Street
Portland, Oregon 97201
Re: Post-Effective Amendment No. 1 to Form SB-2 on Form S-3
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion regarding the legality
of the securities being registered by the Registration Statement to be filed
as Exhibit 5.1 of the Registration Statement on Form S-3 with the United
Stated Securities and Exchange Commission, Washington, D.C., pursuant to the
Securities Act of 1933, as amended, by FirstLink Communications, Inc., an
Oregon corporation, (the "Company").
We further consent to the reference in such Registration Statement to our
having given such opinions.
Sincerely,
David H. Drennen
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
FirstLink Communications, Inc.
We consent to the use of our report, dated January 29, 1999, except for note 1
which is at March 11, 1999, relating to the balance sheet of FirstLink
Communications, Inc. as of December 31, 1998, and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
two-year period ended December 31, 1998 which report is incorporated herein by
reference in the Registration Statement on Form S-3, dated December 17, 1999,
of FirstLink Communications, Inc., and the reference to our form under the
heading "Experts " in the Registration Statement.
/s/ KPMG LLP
Portland, Oregon
December 17, 1999
