<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
SCHEDULE 13D
(Rule 13d-101)
Under The Securities Exchange Act of 1934
(Amendment No. 1)(1)
Geokinetics Inc.
- --------------------------------------------------------------------------------
(Name of issuer)
Common Stock, par value $0.20 per share
- --------------------------------------------------------------------------------
(Title of class of securities)
372910 10 9
- --------------------------------------------------------------------------------
(CUSIP Number)
c/o William R. Ziegler
Parson & Brown LLP
666 Third Avenue, 9th Floor
New York, New York 10017; (212) 551-9860
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
July 18, 1997
- --------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1 (b)(3) or (4), check the following box [ ].
Note. Six copies of this statement including all exhibits, should be
filed with the Commission. See Rule 13d-1 (a) for other parties to whom copies
are to be sent.
(Continued on following pages)
- --------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 19 Pages
<PAGE>
<PAGE>
CUSIP NO. 372910 10 9 13D PAGE 2 OF 19 PAGES
--------------------- -- --
<TABLE>
<C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Steven A. Webster
- -------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
2 (b) [ ]
- -------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 BK (See Item 3)
- -------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
5 [ ]
- -------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 United States
- -------------------------------------------------------------------------------------------------
SOLE VOTING POWER
7 See Item 5(b)
NUMBER OF ----------------------------------------------------------------------------
SHARES
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 See Item 5(b)
EACH ----------------------------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON WITH 9 See Item 5(b)
----------------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10 See Item 5(b)
- -------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 10,347,914 shares (assuming the conversion of the Series A and Series B
Preferred into Common and the exercise of the Bridge Loan Warrants owned
by Webster); See Item 5(a)
- -------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES* [X]
See Item 5(a)
- -------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 64.5% (assuming the conversion of the Series A and Series B Preferred
into Common and the exercise of the Bridge Loan Warrants owned by
Webster); See Item 5(a)
- -------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 IN
- -------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 19 Pages
<PAGE>
<PAGE>
CUSIP NO. 372910 10 9 13D PAGE 3 OF 19 PAGES
--------------------- -- --
<TABLE>
<C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
William R. Ziegler
- -------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
2 (b) [ ]
- -------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 BK (See Item 3)
- -------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
5 [ ]
- -------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------------------------
SOLE VOTING POWER
7 See Item 5(b)
NUMBER OF ----------------------------------------------------------------------------
SHARES
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 See Item 5(b)
EACH ----------------------------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON WITH 9 See Item 5(b)
----------------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10 See Item 5(b)
- -------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 10,397,929 shares (assuming the conversion of the Series A and Series B
Preferred into Common and the exercise of the Bridge Loan Warrants and
Ziegler Options owned by Ziegler); See Item 5(a)
- -------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES* [X]
See Item 5(a)
- -------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 64.6% (assuming the conversion of the Series A and Series B Preferred
into Common and the exercise of the Bridge Loan Warrants and Ziegler
Options owned by Ziegler); See Item 5(a)
- -------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------------------------
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 19 Pages
<PAGE>
<PAGE>
AMENDMENT NO. 1 TO SCHEDULE 13D
INTRODUCTION.
Steven A. Webster ("Webster") and William R. Ziegler ("Ziegler";
Webster and Ziegler being sometimes hereinafter individually referred to as a
"Reporting Person" and collectively as the "Reporting Persons") are signatories
to (i) a certain Schedule 13D which was jointly filed with Securities and
Exchange Commission (the "Commission") on May 5, 1997 by the Reporting Persons
(the "Initial Group Filing") because such persons may have been deemed to
constitute a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act") by
virtue of the fact that they may have acted in concert in connection with their
acquisition of certain securities of the Company (as hereinafter defined),
inclusive of certain 12% Senior Secured Notes of the Company and certain
subsidiaries of the Company (collectively, the "Senior Notes") and Warrants to
acquire Common Stock of the Company (collectively, the "Bridge Loan Warrants"),
pursuant to the terms and conditions of a certain Securities Purchase Agreement
dated April 25, 1997 (the "Bridge Loan Securities Purchase Agreement") and (ii)
a certain new Schedule 13D, of even date herewith (the "New Schedule 13D"), that
is being jointly filed by the Reporting Persons and each of Blackhawk Investors,
LLC, a Delaware limited liability company ("Blackhawk") and Blackhawk Capital
Partners, a Texas general partnership ("BCP") with the Commission
contemporaneously with the filing of this Amendment No. 1 to Initial Group
Filing, not only because the Reporting Persons, Blackhawk and BCP may be deemed
a "group" within the meaning of Rule 13d-5(b)(1) promulgated pursuant to the
Exchange Act, by virtue of the fact that they may be deemed to have acted in
concert in connection with their acquisition of certain securities of the
Company, pursuant to the terms and conditions of a certain Securities Purchase
and Exchange Agreement dated July 18, 1997 among the Company, Blackhawk and the
Reporting Persons (the "Securities Purchase and Exchange Agreement"), but also
because the Reporting Persons, as the sole partners of BCP, which is the sole
managing member of Blackhawk, may be deemed to beneficially own the same
securities of the Company acquired by Blackhawk.
As more fully disclosed in Item 4 below, pursuant to the terms of
the Securities Purchase and Exchange Agreement, (i) the Reporting Persons
exchanged some of the securities of the Company previously acquired by them
pursuant to the Bridge Loan Securities Purchase Agreement for other securities
of the Company and (ii) Blackhawk purchased certain securities of the Company
that represent more than 5% of the outstanding Common Stock of the Company.
Since the Reporting Persons may be deemed to indirectly beneficially own the
securities of the Company acquired by Blackhawk, the Reporting Persons have
chosen to satisfy the disclosure and filing obligations triggered by their
consummation of the transactions contemplated by the Securities Purchase and
Exchange Agreement by joining in the Schedule 13D filing of Blackhawk, which is
referred to herein as the New Schedule 13D. Accordingly, the Reporting Persons
are filing this Amendment No. 1 to the Initial Group Filing, to provide for a
termination of such Initial Group Filing, effective upon the filing of the New
Schedule 13D.
Page 4 of 19 Pages
<PAGE>
<PAGE>
Capitalized terms used herein without definition shall have the
respective meanings ascribed to them in the Initial Group Filing.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.20 per
share (the "Common Stock") of Geokinetics Inc., a Delaware corporation (the
"Company"). The address of the principal executive offices of the Company is
5555 San Felipe, Suite 780, Houston, Texas 77056.
ITEM 2. IDENTITY AND BACKGROUND.
No change.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the terms and conditions of the Securities Purchase
and Exchange Agreement, on July 18, 1997, the Reporting Persons purchased from
the Company (i) 458,333 shares of Common Stock, of which 229,166 shares were
issued to Webster and 229,167 shares were issued to Ziegler, (ii) 15,625 shares
of Series A Convertible Preferred Stock (the "Series A Preferred Stock"), of
which 7,812 shares were issued to Webster and 7,813 shares were issued to
Ziegler, and (iii) Shadow Warrants to purchase up to an aggregate of 592,009
shares of Common Stock, subject to adjustment (collectively, the
"Webster/Ziegler Shadow Warrants"), consisting of (A) a Shadow Warrant issued to
Webster with respect to the right to acquire up to 296,004 shares of Common
Stock (the "Webster Shadow Warrant") and (B) a Shadow Warrant issued to Ziegler
with respect to the right to acquire up to 296,005 shares of Common Stock (the
"Ziegler Shadow Warrant"), in consideration of an aggregate purchase price of
$500,000 (the "Purchase Price"), of which $343,750 was paid in consideration of
the Common Stock ($0.75 per share) and $156,250 was paid in consideration of the
Series A Preferred Stock ($10.00 per share). The Purchase Price was paid by the
surrender and delivery by the Reporting Persons to the Company of the Senior
Notes, in the aggregate principal amount of $500,000 (Senior Note No. 1 issued
to Webster in the principal amount of $250,000 and Senior Note No. 2 issued to
Ziegler in the principal amount of $250,000).
The source of funds for the $500,000 aggregate Purchase Price for
the securities of the Company acquired by Webster and Ziegler pursuant to the
Securities Purchase and Exchange Agreement was the surrender to the Company of
the Senior Notes, in the aggregate principal amount of $500,000. As previously
disclosed in the Initial Group Filing, the source of funds for the $500,000
subscription price for the Senior Notes and Bridge Loan Warrants acquired by
Webster and Ziegler pursuant to the Bridge Loan Securities Purchase Agreement
was a draw down by Webster and Ziegler under a joint demand line of credit
facility issued by Citibank N.A. in their favor, which credit line is secured by
common stock of a company not affiliated with the Company that is owned
indirectly by Webster and Ziegler through a corporation that they own and
control.
Page 5 of 19 Pages
<PAGE>
<PAGE>
ITEM 4. PURPOSE OF TRANSACTION.
On July 18, 1997, pursuant to the terms and conditions of the
Securities Purchase and Exchange Agreement, (A) Blackhawk acquired from the
Company (x) 5,041,667 shares of Common Stock, (y) 171,875 shares of Series A
Preferred Stock and (z) a Shadow Warrant to purchase up to an aggregate of
6,512,095 shares of Common Stock, subject to adjustment (the "Initial Blackhawk
Shadow Warrant"), (B) Webster acquired from the Company (x) 229,166 shares of
Common Stock, (y) 7,812 shares of Series A Preferred Stock and (z) the Webster
Shadow Warrant, representing the right to purchase up to an aggregate of 296,004
shares of Common Stock (subject to adjustment), and (C) Ziegler acquired from
the Company (x) 229,167 shares of Common Stock, (y) 7,813 shares of Series A
Preferred Stock and (z) the Ziegler Shadow Warrant, representing the right to
purchase up to an aggregate of 296,005 shares of Common Stock (subject to
adjustment) and (ii) on September 30, 1997, pursuant to the terms and conditions
of that certain Securities Purchase Agreement dated as of July 24, 1997 between
the Company and Blackhawk (the "Subsequent Securities Purchase Agreement"),
Blackhawk acquired from the Company (A) 100,000 shares of Series B Convertible
Preferred Stock (the "Series B Preferred Stock"; the Series A Preferred Stock
and the Series B Preferred Stock are sometimes hereinafter collectively referred
to as the "Preferred Stock") and (B) a Shadow Warrant to purchase up to an
aggregate of 1,100,255 shares of Common Stock, subject to adjustment (the
"Subsequent Blackhawk Shadow Warrant"), representing the right to purchase up to
an aggregate of 1,100,255 shares of Common Stock (subject to adjustment), for an
aggregate cash purchase price of $1,000,000, all of which was paid in
consideration of the Series B Preferred Stock ($10.00 per share).
Pursuant to the terms of the Certificate of Designation of Series
A Convertible Preferred Stock of the Company (the "Series A Certificate of
Designation"), each share of the Series A Preferred Stock (i) has a liquidation
preference of $10.00 per share, (ii) has the right to vote as one class with the
shares of Common Stock, with each share of Series A Preferred Stock entitling
the holder thereof to such number of votes as shall be equal to the number of
shares of Common Stock into which such share of Series A Preferred Stock is then
convertible, (iii) is entitled to dividends at the same rate as such dividends
are declared with respect to the shares of Common Stock, with each share of
Series A Preferred Stock being deemed to represent such number of shares of
Common Stock into which it is then convertible, (iv) is not be subject to any
redemption rights in favor of the Company and (v) is subject to mandatory
conversion into 13 1/3 shares of Common Stock (subject to adjustment) upon the
filing by the Company of an amendment to its Certificate of Incorporation to
increase the number of authorized shares of its Common Stock from 15,000,000
shares to 100,000,000 shares (the "Charter Amendment"). Pursuant to a covenant
contained in the Series A Certificate of Designation, the Company is obligated
to use its best efforts to cause the Charter Amendment to be approved by its
stockholders as soon as possible following the closing of the transactions
contemplated by the Securities Purchase and Exchange Agreement and to file the
Charter Amendment with the Secretary of State of Delaware promptly following
such stockholder approval.
Pursuant to the terms of the Certificate of Designation of Series
B Convertible Preferred Stock of the Company (the "Series B Certificate of
Designation"), each share of the
Page 6 of 19 Pages
<PAGE>
<PAGE>
Series B Preferred Stock (i) has a liquidation preference of $10.00 per share,
(ii) has the right to vote as one class with the shares of Common Stock and the
shares of Series A Preferred Stock, with each share of Series B Preferred Stock
entitling the holder thereof to such number of votes as shall be equal to the
number of shares of Common Stock into which such share of Series B Preferred
Stock is then convertible, (iii) is entitled to dividends at the same rate as
such dividends are declared with respect to the shares of Common Stock and the
Series A Preferred Stock, with each share of Series B Preferred Stock being
deemed to represent such number of shares of Common Stock into which it is then
convertible, (iv) is not be subject to any redemption rights in favor of the
Company and (v) is subject to mandatory conversion into 13 1/3 shares of Common
Stock (subject to adjustment) upon the later of (A) January 1, 1998 or (B) the
filing by the Company of the Charter Amendment. Pursuant to a covenant contained
in the Series B Certificate of Designation, the Company is obligated to use its
best efforts to cause the Charter Amendment to be approved by its stockholders
as soon as possible following the closing of the transactions contemplated by
the Subsequent Securities Purchase Agreement and to file the Charter Amendment
with the Secretary of State of Delaware promptly following such stockholder
approval.
The Initial Blackhawk Shadow Warrant and the Subsequent Blackhawk
Shadow Warrant (collectively, the "Blackhawk Shadow Warrants") provide Blackhawk
the right to acquire up to an aggregate of 7,612,350 shares of Common Stock
(subject to adjustment) under certain circumstances and the Webster Shadow
Warrant and the Ziegler Shadow Warrant provide Webster and Ziegler the right to
acquire up to an aggregate of 296,004 shares of Common Stock (subject to
adjustment) and 296,005 shares of Common Stock (subject to adjustment),
respectively, in each case, under certain circumstances. The Blackhawk Shadow
Warrants and the Webster/Ziegler Shadow Warrants (collectively, the "Shadow
Warrants") are essentially anti-dilution devices that are exercisable only in
the event that certain designated warrants that were outstanding on the date of
the Bridge Loan Securities Purchase Agreement (the "Subject Warrants") are
exercised, and in such event, only with respect to such percentage of the
aggregate number of shares issuable pursuant to the Subject Warrants
(hereinafter, the "Exercise Shares") as equals, in the aggregate, approximately
65% of the sum of the maximum amount of Exercise Shares and the maximum amount
of shares issuable under the Shadow Warrants, in the aggregate. The exercise
price for the Shadow Warrants is $0.20 per share.
Pursuant to Section 1.6(i) of the Securities Purchase and
Exchange Agreement, and in satisfaction of the requirements set forth in the
Consulting Agreement, the Company and Ziegler entered into a certain stock
option agreement dated July 18, 1997 (the "Stock Option Agreement"), providing
for the Company's grant to Ziegler of stock options (the "Ziegler Options") to
acquire 50,000 shares of Common Stock. The Ziegler Options (i) are immediately
exercisable and not subject to any vesting requirements or other conditions,
(ii) expire upon the earlier of the fifth anniversary of the date of the Stock
Option Agreement or the ninetieth (90th) day after Ziegler ceases to serve as a
director of the Company or a consultant under the Consulting Agreement, (iii)
have an exercise price of $0.75 per share and (iv) are freely transferable
(subject to applicable federal and state securities laws). The Consulting
Agreement further provides that upon any request by Ziegler, the Company and
Haber shall use their best efforts to cause Ziegler to be elected as a director
of the Company so long as Ziegler and/or any
Page 7 of 19 Pages
<PAGE>
<PAGE>
person or entity controlled by or affiliated with Ziegler shall hold at least 3%
(on a fully diluted basis, including holdings of debt which may be converted
into equity securities and warrants to purchase equity securities) of the equity
securities of the Company.
It was a condition precedent to the obligations of Blackhawk and
the Reporting Persons (sometimes hereinafter collectively referred to as the
"Purchasers") to consummate the transactions contemplated by the Securities
Purchase and Exchange Agreement that prior to or contemporaneously with such
closing, the Company effect a management reorganization, consisting of several
changes in the Board of Directors and senior management. The changes at the
Board level involved the increase in the total number of directors from four to
five, the resignations of two outside directors and one management director (who
would remain as an executive officer of the Company), the election of each of
the Reporting Persons to fill two of the four vacancies caused by such
resignations and increase in the size of the Board, and the election of two
other new directors to be selected by the new Board. The changes in senior
management, which resulted in part from a repositioning of the Company from an
oil and gas exploration and production company to a provider of "3-D" seismic
services, involved (i) the addition of (A) a new President and chief operating
officer, who became responsible for the day to day operations of the Company's
seismic acquisition business, (B) a chief technology officer (elected to the
position of Vice President-Technology) and (C) a new chief financial officer
(elected to the position of Vice President and Chief Financial Officer) and (ii)
the change in title and duties of two incumbent executive officers of the
Company, including the former President of the Company becoming the Chairman and
Chief Executive Officer of the Company. In addition, as part of this management
reorganization a fourth new executive officer was added at the subsidiary level,
in connection with the Company's acquisition of a new subsidiary engaged in the
seismic acquisition services business, which acquisition was also a condition
precedent to the closing of the transactions contemplated by the Securities
Purchase and Exchange Agreement.
The obligations of the Purchasers to consummate the transactions
contemplated by the Securities Purchase and Exchange Agreement were also subject
to the following conditions: (i) the execution and delivery by the Company of
(A) the Registration Rights Agreement (as defined in Item 6 below) and (B) the
Monitoring Agreement, (ii) the filing by the Company with the Secretary of State
of Delaware of (A) an amendment to the Certificate of Incorporation of the
Company that was approved by the stockholders of the Company at its last annual
meeting of stockholders, providing for the creation of 2,500,000 shares of
series preferred stock, par value $10.00 per share, and (B) the Series A
Certificate of Designation, and (iii) the payment by the Company of the
reasonable legal fees and other expenses of the Purchasers' counsel. The
obligations of the Company to consummate the transactions contemplated by the
Securities Purchase and Exchange Agreement were subject to the following
conditions: (i) the surrender of the Senior Notes to the Company for
cancellation, (ii) the return to the Company of the subsidiary stock
certificates that had been pledged by the Company to secure the indebtedness
represented by the Senior Notes and (iii) the execution by the Reporting Persons
of such releases and other documents as the Company shall require to evidence
the release and termination of all liens and security interests granted to the
Reporting Persons in connection with the transactions contemplated by the Bridge
Loan Securities Purchase Agreement.
Page 8 of 19 Pages
<PAGE>
<PAGE>
The Subsequent Securities Purchase Agreement provided that the
following events would take place at or prior to the closing of the transactions
contemplated thereby: (i) the execution and delivery of an amendment to the
Registration Rights Agreement, (ii) the filing by the Company of the Series B
Certificate of Designation and (iii) the payment by the Company of the
reasonable legal fees and other expenses of Blackhawk's counsel.
As a result of the issuance of an aggregate of 5,500,000 shares
of Common Stock to the Purchasers pursuant to the Securities Purchase and
Exchange Agreement, and the issuance by the Company of an aggregate of 400,000
shares of its Common Stock to pursuant to the terms of a certain stock purchase
agreement providing for the Company's acquisition of Signature Geophysical
Services, Inc., and assuming the conversion of the Series A Preferred Stock into
Common Stock, the number of shares purchasable by each of the Reporting Persons
pursuant to the Bridge Loan Warrants previously issued by the Company to him,
was increased from 500,000 shares to 1,347,922 shares and the purchase price per
share was decreased from $0.75 to $0.2782, in each case, pursuant to the
adjustment provisions thereof. After giving effect to the adjustment to the
Bridge Loan Warrants triggered by the conversion of the shares of Series A
Preferred Stock into shares of Common Stock, the Bridge Loan Warrants are
presently exercisable, in whole or in part at any time prior to 5:30 p.m., New
York time, on December 31, 2002, for an aggregate of 2,695,844 shares of Common
Stock (the "Bridge Loan Warrant Stock") at a purchase price per share of $0.2782
(the "Bridge Loan Warrant Price"). The number of shares of Bridge Loan Warrant
Stock and the Bridge Loan Warrant Price are subject to further adjustment upon
the occurrence of specified events, in accordance with Section 4 of the Bridge
Loan Warrants. The conversion of the Series B Preferred Stock into Common Stock
will trigger further adjustment to the number of shares of Bridge Loan Warrant
Stock and the Bridge Loan Warrant Price.
The Common Stock, Series A Preferred Stock, Series B Preferred
Stock and the Shadow Warrants acquired directly and indirectly (through
Blackhawk) by the Reporting Persons pursuant to the terms and conditions of the
Securities Purchase and Exchange Agreement and the Subsequent Securities
Purchase Agreement (collectively, the "Securities Purchase Agreements"), were
acquired by the Reporting Persons not only for investment purposes, but also for
the purpose of acquiring control of the Company and influencing management.
As further described in Item 6 below, contemporaneously with the
execution and delivery of the Securities Purchase and Exchange Agreement,
Blackhawk and BCP entered into an investment monitoring agreement with the
Company (the "Monitoring Agreement").
Although there is no present intention to do so, either of the
Reporting Persons may decide to make additional purchases of Common Stock in the
future either in the open market or in private transactions, subject to his
respective evaluation of the Company's business, prospects and financial
condition, the market for the Common Stock, other opportunities available to the
Reporting Person, general economic conditions, money and stock market conditions
and other future developments.
Page 9 of 19 Pages
<PAGE>
<PAGE>
Depending upon the results of the reviews and the other factors
mentioned above, either of the Reporting Persons, at any time, may decide to
change his intention with respect to the acquisition and/or retention of shares
of Common Stock (or common stock equivalents, as the case may be), including,
without limitation, a determination to increase, decrease or entirely dispose of
his holdings of Common Stock (or common stock equivalents, as the case may be),
although, except for the direct or indirect (through Blackhawk) acquisition of
shares of Common Stock by the Reporting Persons upon the automatic conversion of
the shares of Series A Preferred Stock and/or shares of Series B Preferred
Stock, and/or upon the exercise in whole or in part of any of the Shadow
Warrants, the Bridge Loan Warrants or the Ziegler Options, in each case, in
accordance with the terms thereof, neither of the Reporting Persons has any
current intention to do so.
Either of the Reporting Persons may also seek to influence the
management of the Company in his capacity as a director of the Company and/or
approach members of the Company's management in connection with the foregoing
and/or any other matter enumerated in clauses (a) through (j) of Item 4 of
Schedule 13D.
The descriptions of the Securities Purchase and Exchange
Agreement, the Subsequent Securities Purchase Agreement, the Series A Preferred
Stock, the Series B Preferred Stock, the Shadow Warrants, the Stock Option
Agreement and the Monitoring Agreement (in each case, inclusive of the other
agreements which are exhibits thereto) contained in this Item 4 are summaries
and are subject to and qualified in their entirety by reference to the detailed
provisions of the Securities Purchase and Exchange Agreement, the Subsequent
Securities Purchase Agreement, the Series A Certificate of Designation, the
Series B Certificate of Designation, the Shadow Warrants, the Stock Option
Agreement and the Monitoring Agreement, copies of which are attached as Exhibits
to the New Schedule 13D and incorporated herein by reference, all as more fully
described in Item 7 below. The descriptions of the Bridge Loan Warrants and
the Consulting Agreement contained in this Item 4 are summaries and are
subject to and qualified in their entirety by reference to the detailed
provisions of the Form of Bridge Loan Warrant and the Consulting Agreement,
copies of which are attached as Exhibits to the Initial Group Filing and
incorporated herein by reference, all as more fully described in Item 7 below.
Except as discussed above in this Item 4 (inclusive of the
provisions of the documents incorporated herein by reference), neither of the
Reporting Persons has any current plans or proposals which relate to or would
result in the occurrence of any actions or events specified in clauses (a)
through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The aggregate number and percentage of shares of Common Stock
(assuming the conversion of the Series A Preferred Stock and the Series B
Preferred Stock into shares of Common Stock, although the Series A Preferred
Stock might not be converted into Common Stock within sixty (60) days of the
acquisition thereof and the Series B Preferred Stock will not be converted into
shares of Common Stock within sixty (60) days of the acquisition thereof,
Page 10 of 19 Pages
<PAGE>
<PAGE>
since both the Series A Preferred Stock and the Series B Preferred Stock
presently are entitled to dividend and voting rights as though same had been
converted into shares of Common Stock) beneficially owned by the Reporting
Persons are as follows:
The aggregate number and percentage of the Common Stock which are
owned beneficially by Webster on the date hereof are 10,347,915 shares of Common
Stock, or approximately 64.5% of the 16,034,543 shares of Common Stock that
would be issued and outstanding after giving effect to the consummation of the
transactions contemplated by the Securities Purchase Agreements (assuming the
conversion of the Series A Preferred Stock and the Series B Preferred Stock into
shares of Common Stock) and assuming the exercise of the Bridge Loan Warrants
owned by Webster to acquire 1,347,922 shares of Common Stock, which number and
percentage include the 8,666,667 shares owned of record (assuming the conversion
of the Preferred Stock into Common Stock) by Blackhawk, since Webster is a
partner of BCP and BCP is the sole managing member of Blackhawk.
The aggregate number and percentage of the Common Stock which are
owned beneficially by Ziegler on the date hereof are 10,397,929 shares of Common
Stock, or approximately 64.6% of the 16,084,543 shares of Common Stock that
would be issued and outstanding after giving effect to the consummation of the
transactions contemplated by the Securities Purchase Agreements (assuming the
conversion of the Series A Preferred Stock and the Series B Preferred Stock into
shares of Common Stock), and assuming the exercise of the Bridge Loan Warrants
owned by Ziegler and the Ziegler Options to acquire an aggregate of 1,397,922
shares of Common Stock, which number and percentage include the 8,666,667 shares
owned of record (assuming the conversion of the Preferred Stock into Common
Stock) by Blackhawk, since Ziegler is a partner of BCP and BCP is the sole
managing member of Blackhawk.
Notwithstanding the foregoing, if Webster and Ziegler are deemed
to constitute a "group" within the meaning of Section 13(d)(3) and Rule 13d-5(b)
by virtue of their action in concert in connection with the acquisition of
securities of the Company pursuant to the Securities Purchase and Exchange
Agreement, then each of Webster and Ziegler may be deemed to beneficially own an
aggregate of 12,079,177 shares of Common Stock, or approximately 69.3% of the
17,432,465 shares of Common Stock that would be issued and outstanding (assuming
the conversion of the Series A Preferred Stock and the Series B Preferred Stock
into shares of Common Stock, the exercise of the Bridge Loan Warrants owned by
Webster and Ziegler to acquire an aggregate of 2,695,844 shares of Common Stock,
and the exercise of the Ziegler Options to acquire 50,000 shares of Common
Stock). Each of Webster and Ziegler expressly disclaims beneficial ownership of
the shares of Common Stock owned of record by the other and the shares of Common
Stock issuable upon the exercise of the Bridge Loan Warrants and Ziegler Options
owned of record by the other.
The foregoing aggregate number and percentage of the Common Stock
beneficially owned by the Reporting Persons as of the date hereof does not
include any shares of Common Stock that may be issuable upon any exercise of any
of the Shadow Warrants, as any such rights to acquire shares of Common Stock
pursuant to the Shadow Warrants are not
Page 11 of 19 Pages
<PAGE>
<PAGE>
presently exercisable and are contingent upon the occurrence of events not
within the control of either of the Reporting Persons, which events may or may
not occur within 60 days of the date hereof, as the case may be.
(b) With respect to each person named in response to paragraph
(a) of this Item 5 of Schedule 13D, set forth below are the number of shares of
Common Stock (assuming the conversion of the Series A Preferred Stock and the
Series B Preferred Stock into shares of Common Stock, although the Series A
Preferred Stock might not be converted into Common Stock within sixty (60) days
of the acquisition thereof and the Series B Preferred Stock will not be
converted into shares of Common Stock within sixty (60) days of the acquisition
thereof, since both the Series A Preferred Stock and the Series B Preferred
Stock presently are entitled to dividend and voting rights as though same had
been converted into shares of Common Stock), as to which there is sole power to
vote or to direct the vote, shared power to vote or direct the vote, and sole or
shared power to dispose or direct the disposition:
Webster has the sole power to vote (and direct the vote of) and
to dispose of (and direct the disposition of) 333,326 shares of Common Stock
owned of record by him (assuming the conversion of the Series A Preferred Stock
owned by him into 104,160 shares of Common Stock) and, upon the exercise of the
Bridge Loan Warrants owned by Webster, Webster will have the sole power to vote
(and direct the vote of) and to dispose of (and direct the disposition of) the
1,347,922 shares of Common Stock issuable upon exercise of such Bridge Loan
Warrants. In addition, Webster, as a general partner of BCP, the sole managing
member of Blackhawk, may be deemed to share the power to vote (and direct the
vote of) and to dispose of (and direct the disposition of) the 8,666,667 shares
of Common Stock owned beneficially and of record by Blackhawk (assuming the
conversion of the Series A Preferred Stock and the Series B Preferred Stock
owned by Blackhawk into 3,625,000 shares of Common Stock).
Ziegler has the sole power to vote (and direct the vote of) and
to dispose of (and direct the disposition of) 333,340 shares of Common Stock
owned of record by him (assuming the conversion of the Series A Preferred Stock
owned by him into 104,173 shares of Common Stock) and, upon the exercise of the
Bridge Loan Warrants and Ziegler Options owned by Ziegler, Ziegler will have the
sole power to vote (and direct the vote of) and to dispose of (and direct the
disposition of) the 1,397,922 shares of Common Stock issuable upon exercise of
such Bridge Loan Warrants and Ziegler Options. In addition, Ziegler, as a
general partner of BCP, the sole managing member of Blackhawk, may be deemed to
share the power to vote (and direct the vote of) and to dispose of (and direct
the disposition of) the 8,666,667 shares of Common Stock owned beneficially and
of record by Blackhawk (assuming the conversion of the Series A Preferred Stock
and the Series B Preferred Stock owned by Blackhawk into 3,625,000 shares of
Common Stock).
In addition, notwithstanding the foregoing, if Webster and
Ziegler are deemed to constitute a "group" within the meaning of Section
13(d)(3) and Rule 13d-5(b) by virtue of their action in concert in connection
with the acquisition of the securities of the Company pursuant to the Securities
Purchase Agreements, then (i) Webster may be deemed to share with Ziegler the
power to vote (and direct the vote of) and to dispose of (and direct the
disposition of) the 333,340
Page 12 of 19 Pages
<PAGE>
<PAGE>
shares of Common Stock owned of record by Ziegler (assuming the conversion of
the Series A Preferred Stock owned by Ziegler into 104,173 shares of Common
Stock) and, upon the exercise of the Bridge Loan Warrants and Ziegler Options
owned by Ziegler, the 1,397,922 shares of Common Stock issuable upon the
exercise of such Bridge Loan Warrants and Ziegler Options and (ii) Ziegler may
be deemed to share with Webster the power to vote (and direct the vote of) and
to dispose of (and direct the disposition of) the 333,326 shares of Common Stock
owned of record by Webster (assuming the conversion of the Series A Preferred
Stock owned by Webster into 104,160 shares of Common Stock) and, upon the
exercise of the Bridge Loan Warrants owned by Webster, the 1,347,922 shares of
Common Stock issuable upon the exercise of such Bridge Loan Warrants. Each of
Webster and Ziegler expressly disclaims beneficial ownership of the shares of
Common Stock (inclusive of the shares of Common Stock issuable upon the
conversion of the Series A Preferred Stock) owned of record, and the shares of
Common Stock issuable upon the exercise of the warrants and options (as the case
may be) owned of record, by the other.
(c) Except for the direct and indirect (through Blackhawk)
acquisition of the shares of Common Stock, Series A Preferred Stock, Series B
Preferred Stock and Ziegler Options, pursuant to the terms of the Securities
Purchase Agreements (inclusive of the adjustments to the number of shares of
Common Stock issuable upon exercise of the Bridge Loan Warrants triggered by the
consummation of the transactions contemplated by the Securities Purchase and
Exchange Agreement), all as more fully disclosed in response to Items 3 and 4
above, during the past 60 days, neither of the Reporting Persons has effected
any transaction in the Common Stock. See Items 3 and 4 above and subsection (a)
and (b) of this Item 5 for further details in connection with the acquisition of
the shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock
and Ziegler Options pursuant to the Securities Purchase Agreements and the
adjustments to the number of shares of Common Stock issuable upon exercise of
the Bridge Loan Warrants.
(d) As more fully described below in Item 6, (i) BCP, as the
Managing Member of Blackhawk, is entitled to receive 25% of any and all
distributions of cash (which may include proceeds from the sale of securities of
the Company) and securities made by Blackhawk to its members after its members
have received distributions equal to the sum of their investment in Blackhawk
plus a specified preferred return thereon and (ii) BCP has entered into
contractual arrangements with certain members of Blackhawk, including Ziegler,
pursuant to which it agreed to pay to such persons a specified percentage of the
distributions it received from Blackhawk.
(e) Although neither of the Reporting Persons has ceased to be
the beneficial holder of greater than 5% of the Common Stock of the Company,
there will be no further amendments to the Initial Group Filing, as the
Reporting Persons have joined in the Schedule 13D filing of Blackhawk and BCP,
which filing is referred to herein as the New Schedule 13D. Any future change in
the beneficial ownership of the securities of the Company by the Reporting
Persons, or other material change with respect to the information set forth
herein, will be disclosed by the Reporting Persons in an amendment to the New
Schedule 13D.
Page 13 of 19 Pages
<PAGE>
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
As previously disclosed in Item 4 above, (i) the Reporting
Persons and Blackhawk are (A) parties to the Securities Purchase and Exchange
Agreement, which provided for the sale and issuance of the Common Stock, Series
A Preferred Stock and Shadow Warrants to the Reporting Persons and Blackhawk (B)
holders of the Series A Preferred Stock, which will be automatically converted
into shares of Common Stock upon the filing of the Charter Amendment and (C)
holders of the Shadow Warrants (inclusive of the New Blackhawk Shadow Warrant)
which are exercisable for an aggregate of up to 8,204,359 shares of Common
Stock, but only in the event that the Subject Warrants are exercised, (ii)
Blackhawk is a (A) party to the Subsequent Securities Purchase Agreement, which
provided for the sale and issuance of the Series B Preferred Stock and New
Blackhawk Shadow Warrant to Blackhawk and (B) holder of the Series B Preferred
Stock, which will be automatically converted into shares of Common Stock upon
the later of the filing of the Charter Amendment or January 1, 1998, (iii) the
Reporting Persons are holders of the Bridge Loan Warrants which are exercisable
for an aggregate of 2,695,844 shares of Common Stock (after adjustment to give
effect to the conversion of the Series A Preferred Stock into shares of Common
Stock) and (iv) Ziegler is a party to the Stock Option Agreement which provided
for the grant of the Ziegler Options to acquire 50,000 shares of Common Stock.
See Item 4 above for further details with respect to the provisions of the
Securities Purchase and Exchange Agreement, the Subsequent Securities Purchase
Agreement, the Series A Preferred Stock, the Series B Preferred Stock, the
Shadow Warrants, the Bridge Loan Warrants and the Ziegler Options.
In addition, contemporaneously with the execution and delivery of
the Securities Purchase and Exchange Agreement, (i) the Company, the Reporting
Persons and Blackhawk entered into a Registration Rights Agreement (the
"Registration Rights Agreement"), that requires the Company, upon the occurrence
of certain events, to register for resale under the Securities Act of 1933, as
amended (the "Securities Act"), the shares of Common Stock owned or to be owned
(whether pursuant to the conversion of the Series A Preferred Stock, any
exercise of the Shadow Warrants, or otherwise acquired) by the Reporting
Persons, Blackhawk, their affiliates or permitted transferees of the Series A
Preferred Stock or Shadow Warrants and (ii) the Company, Blackhawk and BCP
entered into the Monitoring Agreement, providing for the payment by the Company
to BCP of an annual investment monitoring fee of $25,000 (the "Investment
Monitoring Fee") for services to be performed by BCP with respect to the
monitoring on behalf of Blackhawk of the investment in the Company made
by Blackhawk pursuant to the Securities Purchase and Exchange Agreement. The
Investment Monitoring Fee is payable quarterly in arrears on the last business
day of March, June, September and December of each year, commencing on September
30, 1997. Contemporaneously with closing of the transactions contemplated by the
Subsequent Securities Purchase Agreement, the Company, the Reporting Persons and
Blackhawk entered into an Amendment to the Registration Rights Agreement (the
"Amendment"; the Registration Rights Agreement, as amended by the Amendment,
being sometimes hereinafter collectively referred to as the "Blackhawk
Registration Rights Agreement"), pursuant to which the definition of Registrable
Securities was amended to
Page 14 of 19 Pages
<PAGE>
<PAGE>
include the shares of Common Stock issuable upon the conversion of the Series B
Preferred Stock and the exercise of the New Blackhawk Shadow Warrant.
As previously disclosed in Item 4 above and in the Initial Group
Filing, contemporaneously with the execution and delivery of the Bridge Loan
Securities Purchase Agreement, (i) the Company and the Reporting Persons entered
into a certain registration rights agreement (the "Bridge Loan Registration
Rights Agreement") and (ii) the Company entered into the Consulting Agreement
with Ziegler. The Bridge Loan Registration Rights Agreement requires the
Company, upon the occurrence of certain events, to register for resale under the
Securities Act, the shares of Common Stock owned or to be owned (whether
pursuant to any exercise of the Bridge Loan Warrants, the issuance of certain
PIK Stock Interest under the Senior Notes, the conversion of the principal
amount of the Senior Notes, or otherwise acquired) by the Reporting Persons,
their affiliates or permitted transferees of the Bridge Loan Warrants or Senior
Notes. As part of the consummation of the transactions contemplated by the
Securities Purchase and Exchange Agreement, the Senior Notes were surrendered to
the Company by the Reporting Persons for cancellation, in exchange for shares of
Common Stock, shares of Series A Preferred Stock and the Webster/Ziegler Shadow
Warrants; however, the Bridge Loan Registration Rights Agreement remains in full
force and effect with respect to any other Registrable Securities (as defined
therein) covered thereby. The Consulting Agreement provides that in
consideration of certain strategic planning and other consulting services to be
provided to the Company and its subsidiaries by Ziegler, as determined from time
to time by Ziegler and the President of the Company, Ziegler shall be paid a
quarterly consulting fee (the "Consulting Fee") equal to one half of 1% of the
total investment made by Ziegler and certain other persons in debt and equity
securities of the Company that is outstanding as of the end of each quarter
during the three year term of such agreement. The Consulting Fee is to be paid
quarterly in arrears on the last business day of March, June, September and
December, commencing on September 30, 1997. The Consulting Agreement further
provides that upon any request by Ziegler, the Company and Haber shall use their
best efforts to cause Ziegler to be elected as a director of the Company so long
as Ziegler and/or any person or entity controlled by or affiliated with Ziegler
shall hold at least 3% (on a fully diluted basis, including holdings of debt
which may be converted into equity securities and warrants to purchase equity
securities) of the equity securities of the Company. The securities issued to
the Reporting Persons and Blackhawk pursuant to the Securities Purchase and
Exchange Agreement and the securities issued to Blackhawk pursuant to the
Subsequent Securities Purchase Agreement are includable for purposes of
calculating both the Consulting Fee and the three percent (3%) threshold for the
director election provision described above. The execution and delivery by the
Company of the Stock Option Agreement, and the grant to Ziegler of the Ziegler
Options thereunder, satisfied another provision of the Consulting Agreement.
Pursuant to Article V of that certain Limited Liability Company
Agreement of Blackhawk dated as of July 18, 1997 (the "Blackhawk LLC
Agreement"), once the members of Blackhawk have received distributions of cash
and/or securities equal in value to the sum of a specified priority return on
their investment in Blackhawk and the amount of such investment ("Payout"), BCP,
as the managing member of Blackhawk, is entitled to receive 25% of all
subsequent distributions made by Blackhawk of (i) available cash flow from
Blackhawk (which
Page 15 of 19 Pages
<PAGE>
<PAGE>
may include proceeds from the sale of Common Stock or other securities of the
Company) and (ii) securities of the Company (the "BCP Contingent Interest"). As
previously disclosed above, the Reporting Persons are the sole partners of BCP.
BCP is a party to certain profit sharing agreements
(individually, a "Profit Sharing Agreement" and collectively, the Profit Sharing
Agreements"), pursuant to which it agreed to pay a specified percentage
(individually, an "Allocation Percentage" and collectively, the "Allocation
Percentages") of the net distributions that it receives from Blackhawk under the
terms of the Blackhawk LLC Agreement to certain persons and entities who are
members of Blackhawk (collectively, the "Special Participants"). In some
instances, such payments to Special Participants involve consideration, while
other such payments do not involve consideration. The aggregate Allocation
Percentages under the Profit Sharing Agreements is approximately twenty percent
(20%) of the BCP Contingent Interest, or approximately five percent (5%) of all
distributions to be made by Blackhawk under the Blackhawk LLC Agreement after
Payout. Ziegler is one of the Special Participants, with an Allocation
Percentage of 0.67%.
The descriptions of the Securities Purchase and Exchange
Agreement, the Subsequent Securities Purchase Agreement, the Series A Preferred
Stock, the Series B Preferred Stock, the Shadow Warrants, the Stock Option
Agreement, the Monitoring Agreement, the Blackhawk Registration Rights
Agreement, the Blackhawk LLC Agreement and the Profit Sharing Agreements (in
each case, inclusive of the other agreements which are exhibits thereto)
contained in this Item 6 are summaries and are subject to and qualified in their
entirety by reference to the detailed provisions of the Securities Purchase and
Exchange Agreement, the Subsequent Securities Purchase Agreement, the Series A
Certificate of Designation, the Series B Certificate of Designation, the Shadow
Warrants, the Stock Option Agreement, the Monitoring Agreement, the Blackhawk
Registration Rights Agreement, the Blackhawk LLC Agreement and the Form of
Profit Sharing Agreement (inclusive of a Schedule of the Special Participants
and their Allocation Percentages), copies of which are attached as Exhibits to
the New Schedule 13D and incorporated herein by reference, all as more fully
described in Item 7 below. The descriptions of the Bridge Loan Warrants, the
Consulting Agreement and the Bridge Loan Registration Rights Agreement contained
in this Item 6 are summaries and are subject to and qualified in their entirety
by reference to the detailed provisions of the Form of Bridge Loan Warrant, the
Consulting Agreement and the Bridge Loan Registration Rights Agreement, copies
of which are attached as Exhibits to the Initial Group Filing and incorporated
herein by reference, all as more fully described in Item 7 below.
Except as discussed in this Item 6 and in Item 4 above (in each
case, inclusive of the provisions of the documents incorporated herein by
reference), neither of the Reporting Persons is a party to any contract,
arrangement, understanding or relationship (legal or otherwise) between the
Reporting Persons or among either of the Reporting Persons and any other person
with respect to any securities of the Company, including, without limitation,
those relating to the transfer or voting of any securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, the giving or withholding of proxies, the pledge of
securities or any other arrangement involving a contingency the occurrence of
which would give another person voting power or investment power over such
securities.
Page 16 of 19 Pages
<PAGE>
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
I. Securities Purchase and Exchange Agreement referred to in the
Introduction and in Items 3, 4, 5 and 6 (Incorporated by
reference to Exhibit II to the New Schedule 13D being filed
contemporaneously by Blackhawk, BCP and the Reporting Persons
with the Commission).
II. Subsequent Securities Purchase Agreement referred to in Items 3,
4, 5 and 6 (Incorporated by reference to Exhibit III to the New
Schedule 13D being filed contemporaneously by Blackhawk, BCP and
the Reporting Persons with the Commission).
III. Series A Certificate of Designation referred to in Items 4 and 6
(Incorporated by reference to Exhibit IV to the New Schedule 13D
being filed contemporaneously by Blackhawk, BCP and the Reporting
Persons with the Commission)
IV. Series B Certificate of Designation referred to in Items 4 and 6
(Incorporated by reference to Exhibit V to the New Schedule 13D
being filed contemporaneously by Blackhawk, BCP and the Reporting
Persons with the Commission).
V. Shadow Warrants referred to in Items 3, 4, 5 and 6 (Incorporated
by reference to Exhibits VI(a), VI(b), VI(c) and VI(d) to the New
Schedule 13D being filed contemporaneously by Blackhawk, BCP and
the Reporting Persons with the Commission).
VI. Stock Option Agreement referred to in Items 4 and 6 (Incorporated
by reference to Exhibit VII to the New Schedule 13D being filed
contemporaneously by Blackhawk, BCP and the Reporting Persons
with the Commission).
VII. Monitoring Agreement referred to in Items 4 and 6 (Incorporated
by reference to Exhibit VIII to the New Schedule 13D being filed
contemporaneously by Blackhawk, BCP and the Reporting Persons
with the Commission).
VIII. Form of Bridge Loan Warrant referred to in the Introduction and
in Items 3, 4, 5 and 6 (Incorporated by reference to Exhibit IV
to the Initial Group Filing filed by the Reporting Persons with
the Commission on May 5, 1997).
IX. Consulting Agreement referred to in Items 4 and 6 (Incorporated
by reference to Exhibit VI to the Initial Group Filing filed by
the Reporting Persons with the Commission on May 5, 1997).
X. Blackhawk Registration Rights Agreement referred to in Item 6
(Incorporated by reference to Exhibits XI(a) and XI(b) to the New
Schedule 13D being filed contemporaneously by Blackhawk, BCP and
the Reporting Persons with the Commission).
Page 17 of 19 Pages
<PAGE>
<PAGE>
XI. Bridge Loan Registration Rights Agreement referred to in Item 6
(Incorporated by reference to Exhibit V to the Initial Group
Filing filed by the Reporting Persons with the Commission on May
5, 1997).
XII. Blackhawk LLC Agreement referred to in Item 6 (Incorporated by
reference to Exhibit XIII to the New Schedule 13D being filed
contemporaneously by Blackhawk, BCP and the Reporting Persons
with the Commission).
XIII. Form of Profit Sharing Agreement (inclusive Schedule of Special
Participants and their respective Allocation Percentages)
referred to in Item 6 (Incorporated by reference to Exhibit XIV
to the New Schedule 13D being filed contemporaneously by
Blackhawk, BCP and the Reporting Persons with the Commission).
Page 18 of 19 Pages
<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of
the undersigned, each of the undersigned hereby certifies that the information
set forth in this statement is true, complete and correct.
Dated: October 16, 1997 /s/ STEVEN A. WEBSTER
--------------------------------- ------------------------------------
Steven A. Webster, Individually
Dated: October 16, 1997 /s/ WILLIAM R. ZIEGLER
--------------------------------- ------------------------------------
William R. Ziegler, Individually
Page 19 of 19 Pages
