UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(A)
USOL HOLDINGS, INC. (f/k/a FIRSTLINK COMMUNICATIONS, INC.)
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
903 38Y 109
- --------------------------------------------------------------------------------
(CUSIP Number)
Linda Giunta Michaelson
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th floor
Los Angeles, California 90067
(310) 728-3316
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 22, 1999
- --------------------------------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [].
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
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 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1
<PAGE>
SCHEDULE 13D
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PAGE 2 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
AGL Investments No. 8 Limited Partnership
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 4,986,250 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 4,986,250 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,986, 250 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.0% (18.8% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 2
<PAGE>
SCHEDULE 13D
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PAGE 3 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
General Motors Corporation, as Parent Holding Company of
GMAC Commercial Mortgage Corporation
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,311,250 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0 (See Response to Item 5)
OWNED BY
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
5,311,250 shares
REPORTING
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
0 (See Response to Item 5)
WITH
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,311,250 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.6% (20.1% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 3
<PAGE>
SCHEDULE 13D
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PAGE 4 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
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-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Aspen Foxtrot Investments, LLC
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 2,250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 2,250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.6% (8.5% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 4
<PAGE>
SCHEDULE 13D
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PAGE 5 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Aspen Online Investments, LLC
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,937,500 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 1,937,500 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,937,500 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.8% (7.3% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 5
<PAGE>
SCHEDULE 13D
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PAGE 6 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
German American Capital Corporation
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,750,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
1,750,000 shares
REPORTING
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
0 (See Response to Item 5)
WITH
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,750,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.2% (6.6% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 6
<PAGE>
SCHEDULE 13D
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PAGE 7 OF 99 PAGES
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CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 1, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 7
<PAGE>
SCHEDULE 13D
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PAGE 8 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 2, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 8
<PAGE>
SCHEDULE 13D
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PAGE 9 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 3, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 9
<PAGE>
SCHEDULE 13D
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PAGE 10 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 4, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 10
<PAGE>
SCHEDULE 13D
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PAGE 11 OF _ PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 5, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 11
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 12 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 6, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 12
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 13 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 7, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 13
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 14 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 8, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 14
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 15 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 9, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 15
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 16 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Equities 10, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 250,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 250,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5% (.95% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 16
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 17 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peregrine Investment Capital, L.L.C.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Oregon
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 1,000,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.5% (3.8% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 17
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 18 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Dain Rauscher Custodian f/b/o Brent Stahl S.E.P. (IRA)
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 12,500 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 12,500 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,500 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2% (.05% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 18
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 19 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Mussie Gellis
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 25,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4% (.095% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 19
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 20 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Dorothy Cohen
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 25,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4% (.095% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 20
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 21 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Angela Joy Coppola
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 12,500 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 12,500 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,500 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2% (.048% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 21
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 22 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109_
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Janet Franklin
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 5,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1% (.019% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 22
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 23 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Dennis Dautel
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 175,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 175,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
175,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5% (.66% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 23
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 24 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Ramsdell Family Trust
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 353,467 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 353,467 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
353,467 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9% (1.3% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 24
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 25 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
David Rocker
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 150,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 150,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
150,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1% (.57% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 25
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 26 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Kaylen Silverberg
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 45,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 45,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
45,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6% (.17% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 26
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 27 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Leon Horowitz
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 15,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 15,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2% (.057% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 27
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 28 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
First Madison Holdings, LLP
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 10,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 10,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1% (.038% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 28
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 29 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Irving Solomon
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 10,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 10,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1% (.038% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 29
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 30 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Rosewood Partners LP
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 125,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 125,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
125,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8% (.47% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 30
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 31 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Peter Guber
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 25,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,000 shares.
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4% (.095% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 31
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 32 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Courtney Campbell
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 5,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1% (.019% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 32
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 33 OF 99 PAGES
- --------------------------------------------------------------------------------
CSUIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Stark Investments L.P.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Washington
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 100,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 100,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.4% (.38% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 33
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 34 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Ron Barshop
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 12,500 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 12,500 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,500 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2% (.048% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 34
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 35 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Henry Gellis
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 25,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4% (.095% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 35
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 36 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
G. Tyler Runnels
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 25,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 25,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.4% (.095% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 36
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
PAGE 37 OF 99 PAGES
- --------------------------------------------------------------------------------
CUSIP NO. 903 38Y 109
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------------
1 NAME OR REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON
Paribas North America, Inc.
-----------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) []
(b) []
-----------------------------------------------------------------------------
3 SEC USE ONLY
-----------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
-----------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[]
-----------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-----------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000,000 shares
------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (See Response to Item 5)
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 1,000,000 shares
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
WITH 0 (See Response to Item 5)
-----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000,000 shares
-----------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
[ ]
-----------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7% (3.8% on a fully diluted basis, See Appendix B)
-----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
Page 37
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the common stock, no par value
(the "Common Stock"), of USOL Holdings, Inc., an Oregon corporation, f/k/a
FirstLink Communications, Inc. (the "Company"), and is being filed pursuant to
Rule 13d-1 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
The address of the principal executive offices of the Company is 10300
Metric Boulevard, Austin, Texas 78758.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Statement is hereby filed by the following named persons (collectively,
the "Reporting Persons"):
General Motors Corporation, a Delaware corporation ("GM"), as Parent
Holding Company of GMAC Commercial Mortgage Corporation, a Delaware
corporation and an indirect wholly-owned subsidiary of GM
AGL Investment No. 8 Limited Partnership
Aspen Foxtrot Investments, LLC
Aspen Online Investments, LLC
German American Capital Corporation
Peregrine Equities 1, L.L.C.
Peregrine Equities 2, L.L.C.
Peregrine Equities 3, L.L.C.
Peregrine Equities 4, L.L.C.
Peregrine Equities 5, L.L.C.
Peregrine Equities 6, L.L.C.
Peregrine Equities 7, L.L.C.
Peregrine Equities 8, L.L.C.
Peregrine Equities 9, L.L.C.
Peregrine Equities 10, L.L.C.
Peregrine Investment Capital, L.L.C.
Dain Rauscher Custodian f/b/o Brent Stahl SEP (IRA)
Mussie Gellis
Dorothy Cohen
Angela Joy Coppola
Janet Franklin
Dennis Dautel
Ramsdell Family Trust
David Rocker
Kaylen Silverberg
Leon Horowitz
First Madison Holdings, LLP
Irving Solomon
Page 38
<PAGE>
Rosewood Partners LP
Peter Guber
Courtney Campbell
Stark Investments LP
Ron Barshop
Henry Gellis
G. Tyler Runnels
Paribas North America, Inc.
(b) - (f) The information required by these items is attached hereto for
each of the Reporting Persons as Appendix A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Each of the Reporting Persons owned (a) shares of the Series A Convertible
Preferred Stock and/or Series B Convertible Preferred Stock (which is
non-voting) of USOL Holdings, Inc., a Delaware corporation ("Old USOL") and/or
(b) common stock of Old USOL and/or (c) a warrant to purchase shares of common
stock of Old USOL. Each share of Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock and common stock of Old USOL are exchangeable for a
like number of shares of the Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock and Common Stock of the Company, respectively, and
each warrant of Old USOL was converted into a warrant to purchase the same
number of shares of Common Stock of the Company (the "Warrants") in connection
with the merger of Old USOL and the Company.
ITEM 4. PURPOSE OF THE TRANSACTION.
Old USOL and the Company entered into an Agreement and Plan of Merger and
Reorganization dated as of July 21, 1999 (the "Merger Agreement"), pursuant to
which Old USOL would merge with and into the Company (the "Merger"). The Merger
was effected on December 22, 1999 by the filing of the applicable documents with
the Secretary of State of the State of Oregon and the Secretary of State of the
State of Delaware.
Under the terms of the Merger Agreement, (a) in exchange for each share of
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
common stock of Old USOL, the applicable Reporting Persons receive one share of
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and
Common Stock of the Company, respectively, and (b) for each warrant to purchase
shares of common stock of Old USOL, the applicable Reporting Persons receive
their respective Warrant. Each share of Series A Convertible Preferred Stock and
Series B Convertible Preferred Stock is convertible into that number of shares
of Common Stock obtained by dividing the liquidation preference by the then
applicable conversion price. The liquidation preference equals $25.00 and the
conversion price equals $2.00 per share, as adjusted. Each share of Series B
Convertible Preferred Stock is also convertible into one share of Series A
Convertible Preferred Stock.
As part of the Reporting Persons' acquisition of the stock of Old USOL,
each of the Reporting Persons entered into an Agreement Among Investors dated
July 21, 1999 (the "Investor Agreement"). Under the terms of the Investor
Agreement, the Reporting Persons made certain agreements relating to the voting
and transfer of their respective shares of Series A Convertible Preferred Stock
and Series B Convertible Preferred Stock of Old
Page 39
<PAGE>
USOL, which the parties further agreed would apply to their shares of Series A
Convertible Preferred Stock and Series B Convertible Preferred Stock of the
Company upon consummation of the Merger. Under the Investor Agreement, the
Reporting Persons agreed that in advance of any matter requiring the vote of the
Company's stockholders, the Reporting Persons would hold a meeting where the
holders of the Series A Convertible Preferred Stock (the "Voting Investors")
would vote among themselves to determine the collective course of action of the
Reporting Persons. The Reporting Persons holding more than 50% of all Voting
Percentage Interests (as such number is calculated in accordance with the
Investor Agreement) shall constitute a quorum at any meeting of the Reporting
Persons. A vote of more than 50% of the percentage interests held by the Voting
Investors shall be the act of the Reporting Persons at any meeting (the "Desired
Outcome").
Each of the Reporting Persons further agreed to vote its shares of the
Company consistent with the Desired Outcome. If there is no Desired Outcome
determined by the Reporting Persons, then the Reporting Persons are entitled to
vote their shares as they deem appropriate at any meeting of the stockholders of
the Company.
In addition, each of GMAC Commercial Mortgage Corporation, Aspen Foxtrot
Investments, LLC, Peregrine Equities 1, L.L.C. - Peregrine Equities 10, L.L.C.
(acting together), and AGL Investments No. 8 Limited Partnership is entitled,
subject to certain limitations, to designate an individual to serve as director
of the Company and each of the Reporting Persons has agreed to vote its shares
in favor of such director nominee.
Except for certain permitted transfers, the Investor Agreement further
provides that for a period of one year from the date of the Merger, such
Reporting Person will not transfer any of the shares of Series A Convertible
Preferred Stock or Series B Convertible Preferred Stock of the Company owned by
such Reporting Person. The "permitted transfers" include the following: a
Reporting Person may (a) subject to and in accordance with the terms of the
preferred stock, convert within the one year period following the date of the
Merger, up to 25% of its shares of preferred stock into common stock, and, to
the extent permitted under applicable securities laws, such common stock may be
sold publicly, (b) transfer all or any part of such Reporting Person's preferred
stock to one or more affiliates, employees or directors of such Reporting
Person, (c) transfer the preferred stock in connection with any exchange,
reclassification or other conversion of shares into cash, securities or other
property pursuant to a merger or consolidation of the Company or any of its
subsidiaries with, or any sale or transfer by the Company or any of its
subsidiaries of all or substantially all of its assets to any person, (d)
transfer such Reporting Person's preferred stock in connection with any
statutory share exchange or recapitalization of the Company, and (e) transfer
such Reporting Person's preferred stock in connection with the terms of the
tag-along rights provision and drag-along rights provision of the Investor
Agreement.
Other than in connection with a "permitted transfer" described above or a
transfer pursuant to an effective registration statement or pursuant to Rule 144
under the Securities Act of 1933, if at any time a Reporting Person desires to
transfer any shares of the Company, the selling investor is required to give
notice to the remaining Reporting Persons of an offer to sell. Each of the
remaining investors has 15 days to accept the offer on the terms set forth in
the notice. There is no obligation to sell any shares unless one or more of the
other investors purchases all, but not less than all, of the shares offered. If
investors deliver notices electing to purchase shares in excess of the number of
shares offered, then the accepting investors have the right to purchase the
shares on a pro rata basis. If the shares are not purchased by the remaining
investors, then the
Page 40
<PAGE>
selling investor may sell to a third party on the same terms. However, prior to
such sale, the selling investor is required to offer to each remaining investor
the opportunity to sell such investor's shares on the same terms.
Other than in connection with a "permitted transfer" described above or a
transfer pursuant to an effective registration statement or pursuant to Rule 144
under the Securities Act of 1933, if at any time Reporting Persons holding a
majority of the securities subject to the Investor Agreement, calculated on a
fully-converted basis, desire to transfer all or any part of their securities,
which would result in the sale of at least 20% of the voting stock of the
Company and the person or group acquiring the stock will become the beneficial
owner of a greater percentage of voting capital stock, determined on a
fully-converted basis, than any other person or group, each of the other
Reporting Persons shall be required to sell all, but not less than all, of their
respective shares to the same party on the same terms as the transferring
investors.
Unless otherwise provided by the Investor Agreement in certain
circumstances, the Investor Agreement applies only to the Series A Convertible
Preferred Stock and the Series B Convertible Preferred Stock of the Company.
Except in certain circumstances, upon conversion of preferred stock to common
stock, the stock so converted shall not be bound by the provisions of the
Investor Agreement.
Except as described above in this Item 4, the Reporting Persons do not
have any plans or proposals that relate to or would result in any of the actions
or events specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Notwithstanding the foregoing, the Reporting Persons may determine to change
their intent with respect to the Company at any time in the future. Each
Reporting Person reserves the right to acquire additional securities of the
Company in the open market, in privately negotiated transactions (which may be
with the Company or with third parties) or otherwise, to dispose of all or a
portion of its holdings of securities of the Company or to change its intention
with respect to any or all of the matters referred to in this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Based on information provided to the Reporting Persons by the Company, there
were 6,883,779 shares of Common Stock of the Company outstanding on December 28,
1999 (including the shares to be issued to the common stockholders of Old USOL).
By virtue of the Investor Agreement, the Reporting Persons may be deemed to
constitute a "group" (within the meaning of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). If so, each of the Reporting Persons would be
deemed part of a group beneficially owning 18,500,000 shares of the Common Stock
under the Investor Agreement. Each of the Reporting Persons, for the purposes of
Section 13(d) of the Exchange Act, expressly disclaims any beneficial ownership
of any shares of Common Stock which may be deemed beneficially owned by them as
a result of membership in a group with the other Reporting Persons.
The remaining information required by items (a)-(e) is set forth on Appendix B
attached hereto.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The following description is a summary only, and is qualified in its entirety by
reference to the agreements attached as exhibits hereto.
Page 41
<PAGE>
In addition to the contracts and agreements described in Item 4 above, the
Reporting Parties have certain registration rights with respect to the Common
Stock issuable upon conversion of the Series A Convertible Preferred Stock and
the Series B Convertible Preferred Stock and upon exercise of any Warrant held
by any Reporting Party (collectively, the "Registrable Securities"), pursuant to
a preferred stockholder registration rights agreement (the "Preferred
Registration Rights Agreement") and a common stockholder and warrant holder
registration rights agreement (the "Common and Warrant Registration Rights
Agreement"), respectively, each dated as July 21, 1999 among the Company and
each stock and warrant holder party thereto. Those Reporting Persons currently
holding Common Stock also have the benefit of the Common and Warrant
Registration Rights Agreement.
Pursuant to the Preferred Registration Rights Agreement, the Reporting
Parties holding more than 20% of the Common Stock issued or issuable upon
conversion of the Series A Convertible Preferred Stock and the Series B
Convertible Preferred Stock that has not already been registered and sold
pursuant to these registration rights, at any time after the first to occur of
(a) 180 days after the closing of the merger or (b) 180 days after a Qualified
IPO (as defined in the Preferred Registration Rights Agreement), demand
registration of the Registrable Securities relating to the Series A Convertible
Preferred Stock. The Reporting Parties are entitled to five demand
registrations.
Pursuant to the Common and Warrant Registration Rights Agreement, if
holders of the Series A Convertible Preferred Stock and the Series B Convertible
Preferred Stock exercise their demand registration rights under the Preferred
Registration Rights Agreement, those Reporting Parties holding Warrants and/or
Common Stock may demand registration of the Registrable Securities relating to
the Warrant and such Common Stock.
These demand rights are, under both the Preferred Registration Rights
Agreement and the Common and Warrant Registration Rights Agreement, subject to
the Company's right to defer the timing of a demand registration and an
underwriters' right to cut back shares in an underwritten offering. In addition,
under both the Preferred Registration Rights Agreement and the Common and
Warrant Registration Rights Agreement, the Reporting Parties party thereto have
the right to piggyback on certain registrations for public offerings of the
Company's securities.
Other than the Preferred Registration Rights Agreement and the Common and
Warrant Registration Rights Agreement and the other agreements described in Item
4 above, there are no contracts, arrangements, understandings, or relationships
between the Reporting Parties or, to the best of their knowledge, any executive
officer or director of the Reporting Parties, and any other person with respect
to any securities of the Company, including any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
securities of the Company, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies. Except for the shares held by Peregrine
Investment Capital, LLC, the securities acquired by the Reporting Persons are
not pledged or otherwise subject to a contingency the occurrence of which would
give another person voting power or investment power over such securities.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Agreement Among Investors dated July 21, 1999 by and among the Reporting
Persons.
Page 42
<PAGE>
99.2 Certificate of Designation of Series A Convertible Preferred Stock, filed
with the Oregon Secretary of State on December 21, 1999.
99.3 Certificate of Designation of Series B Convertible Preferred Stock, filed
with the Oregon Secretary of State on December 21, 1999.
99.4 Agreement and Plan of Merger and Reorganization dated July 21, 1999 by and
between FirstLink Communications, Inc. and USOL Holdings, Inc.
99.5 Preferred Stockholder Registration Rights Agreement.
99.6 Common Stockholder and Warrant Holder Registration Rights Agreement.
Page 43
<PAGE>
Agreement
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
AGL INVESTMENTS NO. 8 LIMITED PARTNERSHIP
BY: AGLP NO. 8 LIMITED PARTNERSHIP
ITS GENERAL PARTNER
BY: AGLGP NO. 8, INC.,
ITS GENERAL PARTNER
By: /S/ DAVID B. AGNEW
---------------------------
Name: David B. Agnew
Title: President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 44
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 3, 2000
GENERAL MOTORS CORPORATION, AS PARENT
HOLDING COMPANY OF GMAC COMMERCIAL MORTGAGE
CORPORATION
By: /s/ JOHN D. FINNEGAN
---------------------------------------
Name: John D. Finnegan
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 45
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
ASPEN FOXTROT INVESTMENTS, LLC
By: Aspen Enterprises, LTD.,
Its Manager
By: /S/ RONALD A. HOUSE
---------------------------------
Name: Ronald A. House
Title: Vice President/Chief
Operating Officer
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 46
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
ASPEN ONLINE INVESTMENTS, LLC
By: Aspen Enterprises, LTD.,
Its Manager
By: /S/ RONALD A. HOUSE
-------------------------------
Name: Ronald A. House
Title: Vice President/Chief
Operating Officer
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 47
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement relataing to German
American Capital Corporation or agreements to which German American Capital
Corporation is a party is true, complete and correct.
Date: January 3, 2000
GERMAN AMERICAN
CAPITAL CORPORATION
By: /s/ RICHARD FERGUSON
-------------------------------
Name: Richard Ferguson
Title: Chairman and Vice President
By: /s/ JOHN C. CIPRIANI
-------------------------------
Name: John C. Cipriani
Title: Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 48
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 1, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 48
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 2, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 50
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 3, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-----------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 51
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 4, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-----------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 52
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 5, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 53
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 6, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 54
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 7, L.L.C.
BY: PEREGRINE EQUITIES HOLDINGS, LLC, MEMBER
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 55
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 8, L.L.C.
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 56
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 9, L.L.C.
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 57
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE EQUITIES 10, L.L.C.
BY: PEREGRINE CAPITAL, INC., MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 58
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
PEREGRINE INVESTMENT CAPITAL, L.L.C.
BY: PEREGRINE HOLDINGS (OREGON), LTD.,
ITS MANAGER
By: /S/ DANIEL J. ALDERMAN
-------------------------------------------
Name: Daniel J. Alderman
Title: Executive Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 59
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
DAIN RAUSCHER CUSTODIAN
F/B/O BRENT STAHL SEP
By: /S/ BRENT STAHL
------------------------
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 60
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 3, 2000
/s/ MUSSIE GELLLIS
---------------------------
MUSSIE GELLIS
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 61
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ DOROTHY COHEN
------------------------
DOROTHY COHEN
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 62
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
/S/ ANGELA JOY COPPOLA
---------------------------
ANGELA JOY COPPOLA
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 63
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 3, 2000
/s/ HENRY GELLIS as power of attorney
---------------------------
JANET FRANKLIN
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 64
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
/S/ DENNIS DAUTEL
------------------------
DENNIS DAUTEL
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 65
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
RAMSDELL FAMILY TRUST
By: /S/ W. ROBERT RAMSDELL, TRUSTEE
-------------------------------
Name: W.Robert Ramsdell
Title: Trustee
By: /S/ MARJORIE RAMSDELL, TRUSTEE
-------------------------------
Name: Marjorie Ramsdell
Title: Trustee
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 66
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ DAVID ROCKER
-----------------------------
DAVID ROCKER
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 67
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ KAYLEN SILVERBERG
---------------------------
KAYLEN SILVERBERG
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 68
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ LEON HOROWITZ
-----------------------------
LEON HOROWITZ
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 69
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
FIRST MADISON HOLDINGS, LLP
By: /S/ TERRY JONES
-----------------------------
Name: Terry Jones
Title: Manager
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 70
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ IRVING SOLOMON
-----------------------------
IRVING SOLOMON
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 71
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 3, 2000
ROSEWOOD PARTNERS L.P.
By: /S/ SCOTT MAENTZ
-----------------------------
Scott Maentz
Its General Partner
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 72
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 1, 2000
/S/ PETER GUBER
---------------------------
PETER GUBER
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 73
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 29, 1999
/S/ COURTNEY CAMPBELL
-----------------------------
COURTNEY CAMPBELL
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 74
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
STARK INVESTMENTS L.P.
By: /S/ ROBERT STARK
-----------------------------
Name: Robert Stark
Title: General Partner
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 75
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 31, 1999
/S/ RON BARSHOP
---------------------------
RON BARSHOP
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 76
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 3, 2000
/s/ HENRY GELLIS
---------------------------
HENRY GELLIS
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 77
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 30, 1999
/S/ G. TYLER RUNNELS
---------------------------
G. TYLER RUNNELS
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 78
<PAGE>
AGREEMENT
This Schedule 13D is filed on behalf of each of the undersigned pursuant to Rule
13d-1(k)(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement relating to Paribas
North America, Inc. or agreements to which Paribas North America, Inc. is a
party is true, complete and correct.
Date: January 3, 2000
PARIBAS NORTH AMERICA, INC.
By:/s/ GEORGE T. DEASON
-----------------------------
Name: George T. Deason
Title: Vice President
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative (other than an executive
officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statements, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name of any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE
FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001)
Page 79
<PAGE>
APPENDIX A
1. (a) -(c) AGL Investments No. 8 Limited Partnership, a Colorado limited
partnership ("AGL Investments"). The principal business of AGL Investments
is investing in equity and other securities. AGL Investments' address of
its principal business and principal office is 1050 17th Street, Suite
1200, Denver, Colorado 80265. The general partner of AGL Investments is
AGLP No. 8 Limited Partnership, a Colorado limited partnership ("AGLP
L.P.") and the general partner of AGLP L.P. is AGLPGP No. 8, Inc.
(together with AGLP L.P., the "General Partners"). Set forth on Schedule I
hereto are the names, business addresses and titles of each of the
directors and executive officers of AGLPGP No. 8, Inc. The principal
business of each of the directors and executive officers of AGLPGP No. 8
is acting as executive officer of companies in the Amstar Group, Ltd. The
principal business of each of the General Partners is to act as the
general partner of investment partnerships of the Amstar Group, Ltd.. The
General Partners' address of their respective principal business and
principal office is 1050 17th Street, Suite 1200, Denver Colorado 80265.
(d) During the past five years, neither AGL Investments, nor either
General Partner, has been convicted in any criminal proceeding.
(e) During the past five years, neither AGL Investments, nor either
General Partner, has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) To the best knowledge of AGL Investments No. 8 Limited Partnership,
each of the directors and executive officers of AGLPGP No. 8, Inc.
is a citizen of the United States of America.
2. (a) This Statement is being filed by General Motors Corporation, a
Delaware corporation ("General Motors" or "GM") as Parent Holding
Company of GMAC Commercial Mortgage Corporation, a Delaware
corporation ("GMACCMC"). GMACCMC is a wholly-owned subsidiary
of GMAC Commercial Holding Corp., a Nevada corporation, which is a
wholly-owned subsidiary of GMAC Mortgage Group, Inc., a Michigan
corporation, which is a wholly-owned subsidiary of General Motors
Acceptance Corporation, a Delaware corporation, which is a
wholly-owned subsidiary of GM.
(b) GM's business address is 100 Renaissance Center, Detroit, Michigan
48243-7301. The names, business addresses and principal businesses
of each of the directors and executive officers of GM are set forth
on Schedule II hereto and incorporated by reference herein.
(c) General Motors is engaged in the design, manufacturing and marketing
of cars, trucks, locomotives, and heavy duty transmissions and
related parts and accessories, and financing and insurance
operations.
(d) During the past five years, neither GM nor, to the best of its
knowledge, any of its executive
Page 80
<PAGE>
officers or directors has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither GM nor, to the best of its
knowledge, any of its executive officers or directors has been party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceedings was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(f) To the best knowledge of GM, each of its executive officers and
directors is a United States citizen, other than Nobuyuki Idei, who
is a citizen of Japan, Percy N. Barnevik, who is a citizen of
Sweden, and Eckhard Pfeiffer, who is a citizen of Germany.
3. (a) Aspen Foxtrot Investments, LLC, a Michigan limited liability
company
(b) c/o Aspen Enterprises, Ltd., 2757 44th Street, Suite 306, Grand
Rapids, MI 49509
(c) Aspen Foxtrot Investments' principal business is its investment in
the Company
(d) During the past five years, neither Aspen Foxtrot Investments, nor,
to the best knowledge of Aspen Foxtrot Investments, managers, nor
any directors or executive officers thereof, has been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(e) The name, citizenship, business address and principal occupation or
employment of each manager of Aspen Foxtrot Investments and any
director or executive officer thereof is set forth below:
(a) Ronald A. House, member of Aspen Foxtrot; Vice President and
Chief Operating Officer of Aspen Enterprises, Ltd., a manager
of Aspen Foxtrot
(b) Ronald House is employed by Aspen Enterprises, Ltd., 2757 44th
Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) Robert A. Haveman, member and manager of Aspen Foxtrot
(b) Mr. Haveman is the President, Treasurer and Manager of EDP
Management Co., LLC, 190 S. River Avenue, Suite 300, Holland,
MI 49423
(c) United States Citizen
(a) Ronald A. Piasecki, director, vice present and secretary of
Aspen Enterprises, Ltd., a manager of Aspen Foxtrot
(b) Ronald Piasecki is employed by Aspen Enterprises, Ltd., 2757
44th Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
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<PAGE>
(a) Arlyn J. Lanting, director, vice present and treasurer of
Aspen Enterprises, Ltd., a manager of Aspen Foxtrot
(b) Arlyn Lanting is employed by Aspen Enterprises, Ltd., 2757
44th Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) James R. Lanting, director and president of Aspen Enterprises,
Ltd., a manager of Aspen Foxtrot
(b) James Lanting is employed by Aspen Enterprises, Ltd., 2757
44th Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) Leon P. DeVisser, director and vice president of Aspen
Enterprises, Ltd., a manager of Aspen Foxtrot
(b) Leon P. DeVisser is employed by Aspen Enterprises, Ltd., 2757
44th Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
3A. (a) Aspen Online Investments, LLC, a Michigan limited liability company
(b) c/o Aspen Enterprises, Ltd., 2757 44th Street, Suite 306, Grand
Rapids, MI 49509
(c) Aspen Online Investments' principal business is its investment in
the Company
(d) During the past five years, neither Aspen Online Investments, nor,
to the best knowledge of Aspen Online Investments, members,
managers, nor any directors or executive officers thereof, has been
convicted in any criminal proceeding (excluding traffic violations
or similar misdemeanors) or has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(e) The name, citizenship, business address and principal occupation or
employment of each manager of Aspen Online Investments and any
director of executive officer thereof is set forth below:
(a) Ronald A. House, member of Aspen OnLine; Vice President and Chief
Operating Officer of Aspen Enterprises, Ltd., a manager of Aspen
OnLine
(b) Ronald House is employed by Aspen Enterprises, Ltd., 2757 44th
Street, Suite 104, Grand Rapids, MI 49509
(c) United States Citizen
(a) Robert A. Haveman, member and manager of Aspen OnLine
(b) Mr. Haveman is the President, Treasurer and Manager of EDP
Management Co., LLC, 190 S. River Avenue, Suite 300, Holland, MI
49423
(c) United States Citizen
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<PAGE>
(a) Ronald A. Piasecki, director, vice present and secretary of Aspen
Enterprises, Ltd., a manager of Aspen OnLine
(b) Ronald Piasecki is employed by Aspen Enterprises, Ltd., 2757
44th Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) Arlyn J. Lanting, director, vice present and treasurer of Aspen
Enterprises, Ltd., a manager of Aspen OnLine
(b) Arlyn Lanting is employed by Aspen Enterprises, Ltd., 2757 44th
Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) James R. Lanting, director and president of Aspen Enterprises, Ltd.,
a manager of Aspen OnLine
(b) James Lanting is employed by Aspen Enterprises, Ltd., 2757 44th
Street, Suite 104, Grand Rapids, Michigan 49509
(c) United States Citizen
(a) Leon P. DeVisser, director and vice president of Aspen Enterprises,
Ltd., a manager of Aspen OnLine
(b) Leon DeVisser is employed by Aspen Enterprises, Ltd., 2757 44th
Street, Suite 104, Grand Rapids, MI 49509
(c) United States Citizen
4. (a) German American Capital Corporation, a Maryland corporation
(b) c/o Deutsche Bank Securities, Inc., 31 West 52nd Street, New York,
NY 10019
(c) The principal business of German American Capital Corporation is the
purchasing and holding of loans from financial institutions and the
securitization of loans and mortgages.
(d) During the past five years, neither German American Capital
Corporation, nor, to the best knowledge of German American Capital
Corporation, its directors or executive officers, has been convicted
in any criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Page 83
<PAGE>
(e) The name, citizenship, business address and principal occupation or
employment of each director and executive officer of German American
Capital Corporation is set forth below (the business address of each
individual is 31 West 52nd Street, New York, New York 10019):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Name/Position Citizenship Present Principal Occupation
or Employment and Name and
Address of Employer
- -------------------------------------------------------------------------------
<S> <C> <C>
Richard Ferguson/Chairman United States of Business Executive
and Vice President of America
Gary Handel/Director United States of Business Executive
and Treasurer America
Richard Uhlig/Director and United States of Business Executive
Vice President America
Joel Horne/Director and Vice United States of Business Executive
President America
Donna Milrod/Director and United States of Business Executive
President America
</TABLE>
5. (a) Peregrine Equities 1, L.L.C. - Peregrine Equities 7, L.L.C.
(inclusive).
(b) Boardwalk Plaza, 9725 SW Beaverton Hillsdale Hwy, Ste 350,
Beaverton, OR 97005
(c) The principal business of Peregrine Equities 1, L.L.C. - Peregrine
Equities 7, L.L.C. is the investment in the Company. The Manager and
sole Member of each of Peregrine Equities 1, L.L.C. - Peregrine
Equities 7, L.L.C. is Peregrine Equities Holdings, L.L.C., an Oregon
limited liability company ("PEH"). The Manager of PEH is Peregrine
Capital, Inc. ("PCI"). The sole Member of PEH is Peregrine
Investment Capital, L.L.C. ("PIC"). The Manager of PIC is Peregrine
Holdings (Oregon) Ltd. ("PHL"). The controlling member of PIC is
Hampton Holdings, L.L.C. ("HHL"). The members of HHL are Linda Rose,
Daniel J. Alderman, Rose Childrens' Trust and Alderman Childrens
Trust. Linda Rose is a consultant to PIC. The address of each member
of HHL is 9725 SW Beaverton Hillsdale Hwy, Suite 350, Beaverton,
Oregon 97005.
(d) During the past five years, neither Peregrine Equities 1, L.L.C -
Peregrine Equities 7, L.L.C. (inclusive), nor, to the best knowledge
of each such entity, its directors or executive officers, has been
convicted in any criminal proceeding (excluding traffic violations
or similar misdemeanors) or has been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(e) The name, citizenship, business address and principal occupation or
employment of each director and executive officer of Peregrine
Holdings (Oregon) Ltd. is set forth below (the citizenship of each
individual listed below is the United States):
Page 84
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Name/Position Principal Occupation Address
--------------------------------------------------------------------------------------
<S> <C> <C>
Roy Rose/Directorand Business Executive 9725 SW Beaverton
President and Chief Hillsdale Hwy, Suite 350,
Executive Officer Beaverton, Oregon 97005
Daniel J. Alderman/Director Business Executive 9725 SW Beaverton
and Executive Vice Hillsdale Hwy, Suite 350,
President, Chief Financial Beaverton, Oregon 97005
Officer and Secretary
Janet Spuck/Director WSU Instructor and 9725 SW Beaverton
Advisor Hillsdale Hwy, Suite 350,
Beaverton, Oregon 97005
Robert I. Miller/Director Business Executive 9725 SW Beaverton
Hillsdale Hwy, Suite 350,
Beaverton, Oregon 97005
</TABLE>
(f) The name, citizenship, business address and principal occupation or
employment of each director and executive officer of Peregrine
Capital, Inc. is set forth below(the citizenship of each individual
listed below is the United States):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Name/Position Principal Occupation Address
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Roy Rose/Directorand Chief Business Executive 9725 SW Beaverton Hillsdale
Executive Officer Hwy, Suite 350, Beaverton,
Oregon 97005
Daniel J. Alderman/Director Business Executive 9725 SW Beaverton Hillsdale
and Executive Vice President, Hwy, Suite 350, Beaverton,
Chief Financial Officer and Oregon 97005
Secretary
Norman P. Daniels/Director President G.I. Joe's Inc. 9805 Boeckman Road,
Wilsonville, OR 97070
Allan A. Fulsher/General General Counsel 9725 SW Beaverton Hillsdale
Counsel Hwy, Suite 350, Beaverton,
Oregon 97005
John B. DesCamp, Jr./ President and Chief 9725 SW Beaverton Hillsdale
President and Chief Operating Officer Hwy, Suite 350, Beaverton,
Operating Officer Oregon 97005
T. Renee Stemper/Controller Controller 9725 SW Beaverton Hillsdale
Hwy, Suite 350, Beaverton,
Oregon 97005
</TABLE>
(a) Peregrine Equities 8, L.L.C. - Peregrine Equities 10, L.L.C.
(inclusive).
(b) Boardwalk Plaza, 9725 SW Beaverton Hillsdale Hwy, Ste 350,
Beaverton, OR 97005
(c) The principal business of Peregrine Equities 8, L.L.C. - Peregrine
Equities 10, L.L.C. is the investment in the Company. The Manager of
each of Peregrine Equities 8, L.L.C. - Peregrine Equities 10, L.L.C.
is Peregrine Capital, Inc., an Oregon corporation. The sole member
of Peregrine Equities 8, L.L.C. - Peregrine Equities 10, L.L.C. is
Wells Fargo Bank, TTEE FBO
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Stoel Rives LLP Retirement Plan for Richard A. Hayden #008323, c/o
Wells Fargo Bank, PO Box 91070, Employee Benefit Trust, MAC
6540-066, Seattle, WA 98111
(d) During the past five years, neither Peregrine Equities 8, L.L.C -
Peregrine Equities 10, L.L.C. (inclusive), nor, to the best
knowledge of each such entity, its directors or executive officers,
has been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
6. (a) Dain Rauscher Custodian f/b/o Brent Stahl SEP (IRA)
(b) 301 Congress Avenue, Ste 2200, Austin, Texas 78701
(c) Mr. Stahl is an attorney with Stahl, Martens & Bernal, LLP, 7320 N.
MoPac, Suite 211, Austin, Texas 78731
(d) During the past five years, neither Dain Rauscher Custodian f/b/o
Brent Stahl SEP nor Brent Stahl, has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with
respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
7. (a) Mussie Gellis
(b) 215 E. 68th Street, Apt. 21E, New York, NY 10021
(c) Housewife
(d) During the past five years, Mussie Gellis has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
8. (a) Dorothy Cohen
(b) 2017 S. Ocean Drive, Apt. 1002, Hallandale, Florida 33009
(c) Retired
(d) During the past five years, Dorothy Cohen, has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
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<PAGE>
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
9. (a) Angela Joy Coppola
(b) 1000 Mason Street, San Francisco, California 94108
(c) Ms. Coppola is employed as an Apparel Manufacturer at 1000 Mason
Street, San Francisco, California 94108.
(d) During the past five years, Angela Joy Coppola has not been
convicted in any criminal proceeding (excluding traffic violations
or similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
10. (a) Janet Franklin
(b) 19 Ormadale Road, Yeronga 4104, Queensland, Australia
(c) Ms. Franklin is self-employed as a real estate investor
(d) During the past five years, Janet Franklin has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
11. (a) Dennis Dautel
(b) 248 Addie Roy Road, Austin, Texas 78746
(c) Mr. Dautel is currently employed as an Investor with Dunamis
Ventures, 248 Addie Roy Road, Austin, Texas 78746
(d) During the past five years, Dennis Dautel has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
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<PAGE>
12. (a) Ramsdell Family Trust, organized under the laws of California, the
trustees of which are Marjorie Ramsdell and W.R. Ramsdell
(b) 474 Paseo Miramar, Pacific Palisades, California 90272
(c) During the past five years, neither the Ramsdell Family Trust,
Marjorie Ramsdell or W.R. Ramsdell has been convicted in any
criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(d) See (c) above
(e) Both Marjorie Ramsdell and W.R. Ramsdell are citizens of the United
States of America
13. (a) David Rocker
(b) 43 Minnisink Road, Short Hills, NJ 07078
(c) Mr. Rocker's employment involves investments and is conducted at
Rocker Partners LP, 45 Rockefeller Plaza, Suite 1759, New York, New
York 10111.
(d) During the past five years, David Rocker has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
14. (a) Kaylen Silverberg
(b) 3705 Medical Parkway, Suite 420, Austin, Texas 78705
(c) Kaylen Silverberg is a doctor whose employment is with Vaughn,
Silverberg & Associates, 3705 Medical Parkway, Suite 420, Austin,
Texas 78705.
(d) During the past five years, Kaylen Silverberg has not been convicted
in any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
15. (a) Leon Horowitz
(b) 5239 Braesvalley Drive, Houston, Texas 77096
(c) Mr. Horowitz is presently retired.
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<PAGE>
(d) During the past five years, Leon Horowitz has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
16. (a) First Madison Holdings, LLP
(b) First Madison Holdings, LLP is a Texas limited liability
partnership.
(c) The principal business of First Madison Holdings is investments and
its address is 4840 Trail Crest, Austin, Texas 78736.
(d) During the past five years, neither First Madison Holdings, LLP nor
its general partner, Terry Jones, has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with
respect to such laws.
(e) See (d) above
(a) The general partner of First Madison Holdings is Terry Jones.
(b) Mr. Jones' address is 4840 Trail Crest, Austin, Texas 78735.
(c) Mr. Jones is employed by the Company at 10300 Metric Boulevard,
Austin, Texas 78758.
(d) Citizen of the United States of America.
17. (a) Irving Solomon
(b) 7892 Lakewood Drive, Austin, Texas 78750
(c) Mr. Solomon is an accountant and is employed by CSA Realty. Mr.
Solomon's business is conducted at 8305 Shoal Creek Boulevard,
Austin, Texas 78757.
(d) During the past five years, Irving Solomon has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
18. (a) Rosewood Partners, LP
(b) Illinois
(c) Rosewood Partners' principal business is equity investments and the
business is conducted at 500 Western Avenue, Ste. 201, Lake Forest,
Illinois 60045.
(d) During the past five years, neither Rosewood Partners, LP nor its
general partner, Scott Maentz, has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
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<PAGE>
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with
respect to such laws.
(e) See (d) above
(a) Scott Maentz is the general partner of Rosewood Partners
(b) Mr. Maentz's address is 500 Western Avenue, Ste. 201, Lake Forest,
Illinois 60045.
(c) Mr. Maentz is employed by Rosewood Partners at 500 Western Avenue,
Ste. 201, Lake Forest, Illinois 60045.
(d) Citizen of the United States.
19. (a) Peter Guber
(b) Mandalay Entertainment, 5555 Melrose Avenue, Hollywood, California
90038.
(c) Mr. Guber is Chairman of Mandalay Entertainment and his business is
conducted at 5555 Melrose Avenue, Hollywood, California 90038.
(d) During the past five years, Peter Guber has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
20. (a) Courtney Campbell
(b) 439 3rd Avenue, Peltham, New York 10803
(c) Housewife
(d) During the past five years, Ms. Campbell has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
21. (a) Stark Investments, LP
(b) Washington
(c) Stark Investments' principal business is the business of investing
and its address is 735 Northeast 198 Street, Shoreline, Washington
98155.
(d) During the past five years, neither Stark Investments, LP nor Robert
Stark, its general partner, has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with
respect to such laws.
(e) See (d) above
(a) The general partner of Stark Investments, LP is Robert Stark.
(b) Mr. Stark's address is 735 Northeast 198 Street, Shoreline,
Washington 98155.
(c) Mr. Stark is retired.
(d) Citizen of the United States of America.
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<PAGE>
22. (a) Ron Barshop
(b) Barshop & Associates, 120 Austin Highway, Suite 102, San Antonio,
Texas 78209.
(c) Principal of Barshop & Associates, 120 Austin Highway, Suite 102,
San Antonio, Texas 78209.
(d) During the past five years, Mr. Barshop has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
23. (a) Henry Gellis
(b) 14001 Palawan Way, Marina del Rey, CA 90292
(c) Mr. Gellis is an investment adviser whose business is conducted at
14001 Palawan Way, Marina del Rey, CA 90292
(d) During the past five years, Mr. Gellis has not been convicted in any
criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(e) See (d) above
(f) Citizen of the United States of America
24. (a) G. Tyler Runnels
(b) 1999 Avenue of the Stars, Suite 2530, Los Angeles, California 90067
(c) Mr. Runnels is an investment banker with T.R. Winston & Co. Inc.,
1999 Avenue of the Stars, Suite 2530, Los Angeles, California 90067.
(d) During the past five years, Mr. Runnels has not been convicted in
any criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a
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<PAGE>
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws. (e) See (d) above
(f) Citizen of the United States of America
25. (a) Paribas North America, Inc., a Delaware corporation
(b) 787 Seventh Avenue, New York, New York 10019
(c) The principal business of Paribas North America, Inc. ("PNA") is a
holding company through which its parent company, Paribas, a banking
organization established under the laws of the Republic of France
("Paribas") holds investments in the United States.
(d) During the past five years, neither Paribas North America, Inc.,
nor, to the best knowledge of Paribas North America, its directors
or executive officers, has been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
Page 92
(e) The name, citizenship, business address and principal occupation or
employment of each director and executive officer of Paribas North
America, Inc. is set forth below (Except as otherwise noted, the
address of each person below is 787 Seventh Avenue, New York, New
York 10019):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Name/Position Citizenship Present Principal Occupation
or Employment and Name and
Address of Employer
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Dominique Hoenn/Director of PNA France Member of the Board of
Management of Paribas, 3 rue
d'Antin, 75002 Paris, France
Bernard Allorent/Director of France Paribas, 3 rue d'Antin,
PNA 75002 Paris, France
Phillippe Blavior/Director of United States and Global Head of Corporate
PNA France Banking of Paribas, 3 rue
d'Antin 75002 Paris, France
David Brunner/Director of PNA United States Banker
Alain Louvel/Director of PNA France Paribas, 3 rue d'Antin 75002
Paris, France
Christian Manset/Member of the France Member of the Board of
Board of Management Management COMPAGNIE
FINANCIERE DE PARIBAS
Amaury-Daniel de Seze/Director France Member of Board of
of PNA Management PARIBAS 3, rue
d'Antin Paris France
Everett Schenk/Director of PNA United States Managing Director of
Paribas, New York Branch,
787 Seventh Avenue, New
York, New York 10019
George T. Deason/Vice United States Vice President, Secretary
President, Secretary and and General Counsel of PNA
General Counsel of PNA
Donna Kiernan/Chief Financial United States Chief Financial Officer of
Officer of PNA PNA
</TABLE>
Page 93
<PAGE>
APPENDIX B
Item 5. (a)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NO. OF NO. SHARES
NO. SHARES COMMON COMMON NO. SHARES % OWNERSHIP
PREFERRED STOCK STOCK STOCK OF COMMON (FULLY
NAME OF COMPANY(1) WARRANTS COMPANY(2) STOCK % OWNERSHIP DILUTED)(3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General Motors Corporation
As Parent Holding Company
of GMAC Commercial Mortgage
Corporation 398,900 325,000(4) 4,986,250 43.6% 20.1%
AGL Investment No. 8
Limited Partnership 398,900(5) 4,986,250 42.0% 18.8%
Aspen Foxtrot Investments,
LLC 180,000 2,250,000 24.6% 8.5%
Aspen Online Investments, LLC 625,000(7) 1,312,500 25.8% 7.3%
German American Capital
Corporation 140,000(6) 1,750,000 20.2% 6.6%
Peregrine Equities 1, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 2, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 3, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 4, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 5, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 6, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 7, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 8, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 9, 20,000 250,000 3.5% .95%
L.L.C.
Peregrine Equities 10, 20,000 250,000 3.5% .95%
L.L.C.
- ---------------------------------
<FN>
1 Unless otherwise noted, represents shares of Series A Convertible
Preferred Stock.
2 Issuable upon conversion of Series A Convertible Preferred Stock or Series
B Convertible Preferred Stock, convertible within 60 days of the date
hereof.
3 Assumes conversion of all outstanding shares of Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock and Warrants held by
persons party to the Investor Agreement.
4 Warrant is exercisable at a current exercise price of $2.00 per share.
5 David B. Agnew is the sole director, president and shareholder of AGLPGP
No. 8, Inc., the ultimate general partner of AGL Investments No. 8 Limited
Partnership. Mr. Agnew is also a manager of AGL Capital Investments, LLC,
and, accordingly, may be deemed to share voting and dispositive power with
respect to 87,000 shares of common stock of the Company issuable upon the
exercise of warrants held by AGL Capital Investments, LLC, with the other
managers thereof. Mr. Agnew disclaims beneficial ownership of shares held
of record by AGL Investments No. 8 Limited Partnership and shares issuable
upon the exercise of warrants by AGL Capital Investments LLC.
6 Consists of 65,000 Shares of voting Series A Convertible Preferred Stock,
which represents 4.9% of the total issued and outstanding shares of Series
A Convertible Preferred Stock, and 75,000 shares of Series B Convertible
Preferred Stock. The Series B Convertible Preferred Stock is non-voting.
</FN>
Page 94
<PAGE>
Peregrine Investment
Capital, LLC 1,000,000 14.5% 3.8%
Dain Rauscher Custodian
f/b/o Brent Stahl SEP 1,000 12,500 0.2% .05%
(IRA)
Mussie Gellis 2,000 25,000 0.4% .095%
Dorothy Cohen 2,000 25,000 0.4% .095%
Angela Joy Coppola 1,000 12,500 0.2% .048%
Janet Franklin 400 5,000 0.1% .019%
Dennis Dautel 14,000 175,000 2.5% .66%
Ramsdell Family Trust,
Marjorie Ramsdell & W.R.
Ramsdell, Trustees 8,000 120,167(7) 100,000 133,300 4.9% 1.3%
David Rocker 12,000 150,000 2.1% .57%
Kaylen Silverberg 3,600 45,000 0.6% .17%
Leon Horowitz 1,200 15,000 0.2% .057%
First Madison Holdings, LLP 800 10,000 0.1% .038%
Irving Solomon 800 10,000 0.1% .038%
Rosewood Partners LP 10,000 125,000 1.8% .47%
Peter Guber 2,000 25,000 0.4% .095%
Courtney Campbell 400 5,000 0.1% .019%
Stark Investments LP 8,000 100,000 1.4% .38%
Dan Bauer 10,000 125,000 1.8% .47%
Ron Barshop 1,000 12,500 0.2% .048%
Henry Gellis 2,000 25,000 0.4% .095%
G. Tyler Runnels 2,000 25,000 0.4% .095%
Paribas North America, Inc. 80,000(8) 1,000,000 12.7% 3.8%
- ------------------------
<FN>
7 Warrant is exercisable at a current exercise price of $5.50 per
share.
8 Consists of 80,000 Shares of Series B Convertible Preferred Stock. The
Series B Convertible Preferred Stock is non-voting.
</FN>
</TABLE>
Page 95
<PAGE>
(b) In the event of any conversion of the Series A Convertible Preferred Stock
or Series B Convertible Preferred Stock or the exercise of any Warrant, each of
the Reporting Persons named in response to Paragraph (a) has, subject to the
restrictions set forth in the Investor Agreement, the sole power to vote or to
direct the vote of the shares owned by such Reporting Person and the sole power
to dispose or to direct the disposition of the shares owned by such Reporting
Person. Based on the terms of the Investor Agreement, the Reporting Persons may
be deemed to share the power to vote or direct the vote and dispose or direct
the disposition of the shares subject to this Schedule 13D. However, each of the
Reporting Persons, for purposes of Section 13(d) of the Exchange Act, expressly
disclaims any shared voting power or shared disposition power over the shares
held by the other Reporting Persons.
(c) There have not been any transactions in the Common Stock effected by or for
the account of the Reporting Persons or any of the Reporting Persons' executive
officers or directors, if applicable, during the past 60 days, nor has any
Reporting Person converted the Series A Convertible Preferred Stock or Series B
Convertible Preferred Stock or exercised any Warrant at any time since their
acquisition
(d) Each of the Reporting Persons does not know of any other person having the
right to receive or the power to direct the receipt of dividends from, or the
proceeds of, the sale of the securities owned by such Reporting Persons or the
underlying shares of Common Stock. Disposition of such securities is subject to
the restrictions set forth in the Investor Agreement.
(e) Not applicable.
Page 96
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF AGLPGP NO. 8, INC.
<TABLE>
<CAPTION>
POSITION WITH
NAME AND BUSINESS ADDRESS AGLPGP NO. 8, INC.
------------------------- ------------------
<S> <C>
David G. Agnew Director and President
1050 17th Street
Suite 1200
Denver, CO 80265
Kevin J. Martin Vice President, Secretary
1050 17th Street and Treasurer
Suite 1200
Denver, CO 80265
</TABLE>
Page 97
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF
GENERAL MOTORS CORPORATION
The name, business address, present principal occupation or employment,
and the name, principal business and address of any corporation or other
organization in which such employment is conducted, of each of the directors and
executive officers of General Motors Corporation is set forth below. Unless
otherwise specified, the business address of each person listed below is 100
Renaissance Center, Detroit, Michigan 48243-7301.
<TABLE>
<CAPTION>
NAME AND BUSINESS POSITION WITH GM PRINCIPAL OCCUPATION, IF
ADDRESS OTHER THAN AS EXECUTIVE
OFFICER OF GM
<S> <C> <C>
Percy N. Barnevik Director Chairman, ABB Asea Brown
ABB Asea Brown Ltd. Boveri Ltd.
Affolternstasse 44
Box 8131
CH-8050 Zurich, Switzerland
John H. Bryan Director Chairman and Chief Executive
Sara Lee Corporation Officer, Sara Lee Corporation
Three First National Plaza,
46th Fl.
Chicago, Il 60602-4260
Thomas E. Everhart Director Professor Emeritus and Professor of
California Institute of Technology Electrical Engineering and
1200 E. California Blvd. Applied Physics, California
Mail Code 202-31 Institute of Technology
Pasadena, CA 91125
Charles T. Fischer, III Director
John D. Finnegan Executive Vice President;
General Motors Acceptance Corporation Chairman and President,
767 Fifth Avenue General Motors Acceptance
New York, NY 10153 Corporation
George M. C. Fisher Director Chairman of the Board,
Eastman Kodak Company Eastman Kodak Company
343 State Street
Rochester, NY 14650-0229
Louis R. Hughes Executive Vice President;
New Business Strategies
Nobuyuki Idei Director President and CEO, Sony
Sony Corporation Corporation
6-735 Kitashinagawa
Shinagawa-ku Tokyo 141-0001
Page 98
<PAGE>
Karen Katen Director President, Pfizer U.S.
Pfizer Inc. Pharmaceuticals Group; Executive
235 East 42/nd/ Street V.P., Pfizer Pharmaceuticals
New York, NY 10017-5755 Group;
J. Michael Losh Executive Vice President;
Chief Financial Officer
J. Willard Marriott, Jr. Director Chairman and Chief Executive
Marriott International, Inc. Officer, Marriott International, Inc.
One Marriott Drive
Washington, D.C. 20058
Ann D. McLaughlin Director Chairman, The Aspen Institute
The Aspen Institute
133 New Hampshire Ave, NW
Suite 1070
Washington, D.C. 20036
Harry J. Pearce Vice Chairman of the Board
Eckhard Pfeiffer Director President and Chief Executive
Compaq Computer Corp. Officer, Compaq Computer
20555 S. H. 249 Corporation
Houston, TX 77070
John G. Smale Director
The Procter & Gamble Company
P.O. Box 599
Mailbox #16
Cincinnati, OH 45201-0599
John F. Smith, Jr. Chairman of the Board and
Chief Executive Officer
Louis W. Sullivan Director President, Morehouse School of
Morehouse School of Medicine Medicine
720 Westview Drive, S.W.
Atlanta, GA 30310-1495
G. Richard Wagoner, Jr. President, Chief Operating
Officer and Director
Dennis Weatherstone Director
c/o J. P. Morgan & Co.,
Incorporated
60 Wall Street, 21/st/ Floor
New York, NY 10260
Ronald L. Zarrella Executive Vice President;
President, GM North America
</TABLE>
Page 99
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
AGREEMENT AMONG INVESTORS
This AGREEMENT ("Agreement") is made and entered into as of the 21st day of
July, 1999, by and among USOL HOLDINGS, INC., a Delaware corporation ("USOL"),
and each of the parties listed on the signature page hereto which are
collectively referred to herein as the "Original Investors").
RECITALS
A. The Original Investors own 100% of the issued and outstanding shares of
Series A Convertible Preferred Stock and Series B Convertible Preferred Stock of
USOL identified opposite their respective names on EXHIBIT A hereto (the "USOL
Preferred Stock").
B. USOL, Inc., a Delaware corporation and a wholly-owned subsidiary of USOL
("USOL Sub"), U.S. OnLine Communications, Inc., a Delaware corporation
("OnLine"), USOL and certain stockholders of OnLine have entered into an Asset
Purchase Agreement dated as of July 21, 1999, whereby USOL Sub shall purchase
substantially all of the assets of OnLine (the "USOL Acquisition").
C. USOL and GMAC Commercial Mortgage Corporation ("GMAC-CM") have entered
into an Asset Purchase Agreement dated July 21, 1999, whereby The
ResidentClub.com, Inc., a Delaware corporation and a wholly-owned subsidiary of
USOL Sub, shall purchase certain of the assets of the Tenant Services Division
of GMAC-CM (the "TSD Acquisition").
D. USOL and FirstLink Communications, Inc., an Oregon corporation ("FLCI"),
have entered into an Agreement of Merger dated as of July 21, 1999 (the "Merger
Agreement"), whereby, subsequent to the USOL Acquisition and the TSD Acquisition
and subject to the satisfaction of conditions set forth in the Merger Agreement,
USOL shall merge with and into FLCI ("the Merger").
E. Pursuant to the Merger Agreement, each share of USOL Preferred Stock
shall be exchanged for one share of Convertible Preferred Stock of FLCI ("FLCI
Preferred Stock").
F. The Original Investors believe that it is in their best interests to
enter into an agreement pertaining to the voting and transfer of their
respective shares of the USOL Preferred Stock, and after the FirstLink Closing
the FLCI Preferred Stock, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, agreements and conditions hereinafter set forth, and intending to be
legally bound hereby, the parties hereto agree as follows:
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
1. CERTAIN DEFINITIONS
1.1 "Accredited Investor" shall have the meaning ascribed to that term
under Rule 501 of Regulation D promulgated under the Securities Act, as amended.
1.2 "Affiliate" shall mean, with respect to any party, any other Person,
directly or indirectly, Controlling, Controlled by or under direct or indirect
common Control with, such party. To the extent that any Person is a limited
liability company, each member of the limited liability company shall be deemed
an "Affiliate" of that Person.
1.3 "Affirmative Vote" shall mean the affirmative vote or consent of the
Voting Investors holding more than 50% of the Percentage Interests held by all
Voting Investors.
1.4 "Chairperson" shall mean the chairperson listed on EXHIBIT B or such
other person appointed as chairperson by the Investors pursuant to this
Agreement.
1.5 "Company" shall mean (a) USOL at all times prior to the FirstLink
Closing, and (b) FLCI upon the FirstLink Closing and at all times thereafter.
1.6 "Company Preferred Stock" shall mean (a) USOL Preferred Stock at all
times prior to the FirstLink Closing, and (b) FLCI Preferred Stock upon the
FirstLink Closing and at all times thereafter.
1.7 "Control" when used with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.
1.8 "Converted Common Stock" shall mean shares of Company common stock
which were converted from Company Preferred Stock in accordance with the
Certificates of Designation pertaining to such Company Preferred Stock.
1.9 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.10 "FirstLink Closing" shall mean the closing of the transactions
contemplated by the Merger Agreement.
1.11 "Investor" shall mean each of the owners of Company Preferred Stock
who are parties hereto and each of the parties who may hereafter become owners
of Company Preferred Stock in accordance with the terms hereof and execute a
counterpart of this Agreement.
1.12 "Investor Meeting" shall mean a meeting of the Investors held in
accordance with Section 2.
EX 99.1 - 2
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
1.13 "Original Voting Investors" shall mean, collectively, GMAC-CM, Aspen
Foxtrot Investments, LLC ("Aspen"), Peregrine Equities 1, LLC - Peregrine
Equities 10, LLC (as set forth on the signature page, collectively,
"Peregrine"), and AGL Investments No. 8 Limited Partnership ("AGL").
1.14 "Percentage Interest" shall mean, for any Investor, the Investor's
percentage interest in Company Preferred Stock held by the Investors, as set
forth as a fraction whereby (a) the numerator is equal to the number of shares
of Company Preferred Stock owned by the Investor, and (b) the denominator is the
number of shares of Company Preferred Stock owned by all Investors. Each
Investor's initial Percentage Interest is set forth on EXHIBIT A hereto.
1.15 "Persons" shall mean any individual or entity, and the heirs,
executors, administrators, legal representatives, successors, and assigns of
such "Person" where the context so permits.
1.16 "Regulated Investor" shall mean any Investor that (i) directly or
indirectly, due to its ownership by an entity subject to Regulation Y, is itself
subject to the provisions of Regulation Y and (ii) holds shares of Company
Preferred Stock or Company common stock.
1.17 "Regulation Y" shall mean Regulation Y of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Part 225 (or any successor to such
regulation).
1.18 "Regulatory Problem" shall mean, with respect to any Investor, any set
of facts, events or circumstances the existence of which could cause such
Investor to believe that there is a substantial risk of assertion by a
governmental entity (which belief shall be reasonable in light of the prevailing
regulatory environment) that such Investor is or would be in violation of any
law, regulation, rule or other requirement of any governmental authority
(including without limitation, Regulation Y).
1.19 "Securities" shall mean Company Preferred Stock and/or Converted
Common Stock, as applicable.
1.20 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.21 "Voting Investor" shall mean an Investor, to the extent that such
Investor owns Series A Company Preferred Stock.
1.22 "Voting Percentage Interest" shall mean, for any Investor, the
Investor's percentage interest in Series A Company Preferred Stock held by the
Investors, as set forth as a fraction whereby (a) the numerator is equal to the
number of shares of Series A Company Preferred Stock owned by the Investor, and
(b) the denominator is the number of shares of Series A Company Preferred Stock
owned by all Investors. Each Investor's initial Voting Percentage Interest is
set forth on EXHIBIT A hereto.
EX 99.1 - 3
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
2. INVESTOR MEETINGS
2.1 MEETINGS. In advance of any matter requiring the vote or action of the
Company's stockholders, the Investors shall hold a meeting where the Voting
Investors shall vote among themselves to determine the collective course of
action of the Investors.
2.2 QUARTERLY MEETINGS. Without limiting Section 2.1, the Investors shall
hold meetings on a quarterly basis, or on a more frequent basis as determined by
an Affirmative Vote of the Investors (the "Quarterly Meetings").
2.3 SPECIAL MEETINGS. Without limiting Section 2.1, a special meeting of
the Investors shall be held prior to each special meeting of the stockholders of
the Company. Special meetings of the Investors shall also be held as soon as
reasonably practical after the Chairperson receives notice that the stockholders
of the Company are seeking to take action by written consent. Additionally,
special meetings of the Investors, for any valid purpose or purposes, may be
called by any Investor or Investors holding at least twenty-five percent (25%)
of all Percentage Interests.
2.4 PLACE OF MEETINGS. The Chairperson may designate any place as the place
of meeting for any meeting of the Investors. Any representative of an Investor
not physically present at a meeting of the Investors may participate via
telephone conference.
2.5 NOTICE OF MEETINGS. Written notice stating the place (and, if
applicable, all pertinent information regarding the initiation of the telephone
conference), day and hour of the meeting and the purpose or purposes for which
the meeting is called shall be delivered to each Investor not less than three
(3) nor more than thirty (30) days before the date of the meeting, in accordance
with the terms of Section 12.3, by or at the direction of the Chairperson or the
Investor or Investors calling the meeting.
2.6 MEETING OF ALL INVESTORS. If all of the Investors shall meet at any
time and place (or via telephone conference), and consent to the holding of the
meeting, such meeting shall be valid without call or notice.
2.7 QUORUM. Investors holding more than fifty percent (50%) of all Voting
Percentage Interests, represented in person or by proxy, shall constitute a
quorum at any Investor Meeting. In order for an Investor to be present for
determining quorum at any Investor Meeting, representatives of the Investors may
be present in person or by telephone or other means of telecommunications,
provided that all representatives of the Investors can hear each other.
2.8 MANNER OF ACTING. If a quorum is present, an Affirmative Vote of the
Investors shall be the act of the Investors. Voting by Voting Investors at
Investor Meetings shall be in accordance with and in proportion to their
respective Voting Percentage Interests.
EX 99.1 - 4
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
2.9 REGULATED INVESTORS. Notwithstanding anything contained in this
Agreement to the contrary, insofar as a Regulated Investor owns no Series A
Company Preferred Stock, such Regulated Investor shall have no right to vote at
the Investor Meetings; except, however, so long as such Regulated Investor is an
owner of any Company Preferred Stock, that Regulated Investor shall have the
right to appoint a representative to attend and observe Investor Meetings and to
receive documents and other information distributed to the Investors.
3. CHAIRPERSON
3.1 NUMBER AND TENURE. There shall be one (1) Chairperson who shall preside
over the Investor Meetings. The initial Chairperson's name is set forth on
EXHIBIT B attached hereto. The Chairperson shall hold office until his successor
shall have been elected or the Chairperson has resigned. The Chairperson shall
be responsible, on the Investors' behalf, for (a) assembling such documents and
information that are provided by the Company to the Company's directors and
stockholders, (b) distributing such documents and information to each of the
Investors in a timely manner and (c) assisting the Investors in calling and
scheduling Investor Meetings.
3.2 REMOVAL AND VACANCIES. At a meeting called expressly for that purpose,
the Chairperson may be removed at any time, with or without cause, by an
Affirmative Vote of the Investors. Any vacancy occurring for any reason in the
office of Chairperson may be filled by an Affirmative Vote of the Investors.
4. VOTING AGREEMENT
4.1 IN THE EVENT OF AN AFFIRMATIVE VOTE. Except as provided in Section 4.4,
if an Affirmative Vote of the Investors is obtained at an Investor Meeting with
respect to any matter on which the Investors are entitled to vote as
stockholders of the Company Preferred Stock pursuant to the certificate of
incorporation or bylaws of the Company or the corporation laws of the state in
which the Company is incorporated, each Investor shall, at the applicable
meeting of the stockholders of the Company, or in connection with any written
consent of the stockholders of the Company, vote (or cause to be voted) all of
its Company Preferred Stock in accordance with, and act in a manner consistent
with, the desired outcome of the Investors with respect to such matter as
determined by the Affirmative Vote ("Desired Outcome"). No Investor shall take
any action which would impede, frustrate, prevent or nullify the Desired
Outcome. Nothing in this Section 4.1 shall be construed to limit, modify or
alter Section 14.5 hereof.
4.2 IN ABSENCE OF AN AFFIRMATIVE VOTE. In the event that an Affirmative
Vote of the Investors is not obtained, for any reason, at an Investor Meeting
with respect to any matter on which the Investors are entitled to vote as
stockholders of the Company Preferred Stock, each Investor may vote (or cause to
be voted), at the applicable meeting of the
EX 99.1 - 5
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
stockholders of the Company or in connection with any written consent, its
Company Preferred Stock in any manner it deems fit.
4.3 NO INCONSISTENT ARRANGEMENTS. Each Investor hereby covenants and agrees
that, except as contemplated by this Agreement, it shall not (a) grant any
proxy, power-of-attorney or other authorization in or with respect to the
Company Preferred Stock, (b) deposit the Company Preferred Stock into a voting
trust or enter into a voting agreement or arrangement with respect to the
Company Preferred Stock or (c) take any other action that would in any way
restrict, limit or interfere with its obligations hereunder.
4.4 BOARD REPRESENTATION.
(a) The parties hereto acknowledge and agree that each of the Original
Voting Investors (or Affiliates, directors and employees of such Original
Voting Investor) shall be entitled to (i) designate, on behalf of the
Voting Investors, an individual to serve as a director of the Company (each
a "Designated Director"), (ii) remove its Designated Director, and (iii)
replace its Designated Director in the event of a vacancy created by such
Designated Director. Such rights of designation, removal and replacement
shall terminate if the Original Voting Investor (or Affiliates, directors
and employees of such Investor) owns less than twenty-five percent (25%) of
the Securities that such Investor originally purchased from USOL pursuant
to that certain Subscription Agreement dated July 21, 1999, by and between
the Investor and USOL. Upon termination of such rights of designation,
removal and replacement, the director position originally designated by an
Original Voting Investor shall become a director position to be filled by
the holders of Company common stock. Each of the Original Voting Investors
hereby designates the individual identified opposite its name on EXHIBIT C
to act as its initial Designated Director. Each Investor entitled to vote
its shares of Company Preferred Stock shall vote its shares of Company
Preferred Stock at any regular or special meeting of stockholders of the
Company or in any written consent executed in lieu of such a meeting of
stockholders and shall take all other actions (including using its best
efforts to cause the board of directors of the Company to take all actions)
necessary to give effect to the agreements contained in this Agreement
(including, without limitation, the election of the Designated Directors
provided for herein) and to ensure that the certificate of incorporation
and bylaws of the Company as in effect at any time hereafter do not
conflict in any respect with the provisions of this Agreement. In order to
effectuate the provisions of this Agreement, each Investor hereby agrees
that when any action or vote is required to be taken by such Investor
pursuant to this Agreement, such Investor shall use its best efforts to
call, or cause the appropriate officers and directors of the Company to
call, a special or annual meeting of stockholders of the Company, as the
case may be, or execute or cause to be executed, a consent in writing in
lieu of any such meetings pursuant to applicable corporate law. To the
extent this Section 4.4(a) does not apply to the election of directors of
the Company, Sections 4.1 and 4.2
EX 99.1 - 6
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
shall govern the Investors' vote. If any Original Voting Investor transfers
less than all of its Company Preferred Stock to one or more Affiliates,
directors or employees of such Original Voting Investor, then the right to
designate, remove and replace a Designated Director shall be determined, as
among the Original Voting Investor and such Affiliates, directors or
employees, by agreement of such parties.
(b) Notwithstanding anything contained in this Agreement to the
contrary, insofar as a Regulated Investor owns no Series A Company
Preferred Stock, such Regulated Investor shall have no right to designate,
remove or replace any Company directors or otherwise participate in the
election of Company directors; except, however, so long as such Regulated
Investor is an owner of any Company Preferred Stock, that Regulated
Investor shall have the right to appoint a representative to attend and
observe Company board meetings and to receive documents and other
information distributed to the Company directors.
4.5 OTHER ACTIVITIES OF THE INVESTORS; FIDUCIARY DUTIES. It is understood
and accepted that the Investors and their Affiliates have interests in other
business ventures which may be in conflict with the activities of the Company
and its subsidiaries and that, subject to applicable law, nothing in this
Agreement shall limit the current or future business activities of the
Investors, whether or not such activities are competitive with those of the
Company and its subsidiaries. Nothing in this Agreement, express or implied,
shall relieve any officer or director of the Company or any of its subsidiaries,
or any Investor, of any fiduciary or other duties or obligations they may have
to the Company's stockholders.
5. RESTRICTION ON TRANSFER AND PERMITTED TRANSFERS OF COMPANY PREFERRED STOCK
5.1 RESTRICTIONS ON TRANSFER. Except as provided in Section 5.2 and Section
12, the Investors agree and covenant, for a period of one (1) year after the
FirstLink Closing, but in no event later than eighteen (18) months from the date
hereof, not to sell, pledge, encumber or otherwise transfer or dispose of, and
not to permit to be sold, encumbered, attached, or otherwise disposed of or
transferred in any manner, either voluntarily or by operation of law
("Transfer"), all or any portion of the shares of Company Preferred Stock that
they own or hereafter acquire in accordance with and subject to the terms of
this Agreement.
5.2 PERMITTED TRANSFERS. Notwithstanding the other provisions of this
Agreement, but subject to any restrictions that may exist under federal or state
securities laws, an Investor may (a) subject to and in accordance with the terms
of the Company Preferred Stock, convert within the one (1) year period following
the FirstLink Closing up to twenty-five percent (25%) of its shares of Company
Preferred Stock, received in the Merger or thereafter acquired, into common
stock of the Company, and, to the extent permitted under applicable securities
laws, such common stock may be sold publicly, (b) Transfer all or any part of
such Investor's Company Preferred Stock to one or more
EX 99.1 - 7
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
Affiliates, employees or directors of the Investor, (c) Transfer such Investor's
Company Preferred Stock in connection with any exchange, reclassification, or
other conversion of shares into any cash, securities, or other property pursuant
to a merger or consolidation of the Company or any of its subsidiaries with, or
any sale or transfer by the Company or any of its subsidiaries of all or
substantially all its assets to, any Person, in each case in which holders of
common stock and the Company Preferred Stock are treated substantially the same,
(d) Transfer such Investor's Company Preferred Stock in connection with any
statutory share exchange involving, or any recapitalization of, the Company or
any of its subsidiaries in which holders of common stock and the Company
Preferred Stock are treated substantially the same ((a) through (d)
collectively, "Permitted Transfers"), (e) Transfer all or any part of such
Investor's Company Preferred Stock in accordance with the terms of Sections 6 or
7, and (f) subject to compliance with applicable securities laws, Transfer for a
period of up to 45 days from the date hereof, an aggregate for all Investors of
up to $500,000 of Company Preferred Stock to a limited partner of Barington
Capital on the date hereof.
5.3 AMENDMENT TO TRANSFER RESTRICTIONS. The provisions of Section 5.1 and
5.2 may be modified to decrease or eliminate restrictions on Transfer by an
Affirmative Vote of the Investors, provided that all Transfer restrictions and
all Permitted Transfers, as modified, shall apply to each Investor equally, on a
pro rata basis based upon their respective Percentage Interests.
6. TAG-ALONG RIGHTS
(a) Other than in connection with a Permitted Transfer or a transfer
pursuant to an effective registration statement or pursuant to Rule 144
under the Securities Act or transfers under Section 7, if at any time, any
Investor (the "Selling Investor") desires to sell, transfer or otherwise
dispose of any Securities, the Selling Investor shall first be required,
prior to completing such sale, to give written notice ("Notice of
Transfer") to the remaining Investors of its intent to transfer the
Securities, which notice shall contain an offer to sell such Securities,
the proposed sale price for the Securities and the number of Securities
which the Selling Investor proposes to transfer and any other material
terms and conditions of the proposed transfer. The date on which such
notice is sent to the other Investors is referred to hereinafter as the
"Notice Date". Each of the remaining Investors shall have fifteen (15) days
following the Notice Date to notify the Selling Investor in writing
("Notice of Acceptance") of its acceptance of such offer to purchase any or
all of such Securities, on the material terms and conditions set forth in
the Notice of Transfer and at a per-share price set forth in the Notice of
Transfer. The Selling Investor shall not be obligated to sell any shares of
Securities to other Investors hereunder unless one or more of the Investors
purchases all, but not less than all, of the Securities subject to the
Notice of Transfer. The closing for the transaction set forth above shall
take place no later than 30 days from the Notice Date. If the Selling
Investor does not receive a Notice of Acceptance from an Investor within
EX 99.1 - 8
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
fifteen (15) days after the Notice Date, such Investor shall be deemed to
have declined to purchase such shares of Securities. In the event Investors
deliver Notices of Acceptance electing to purchase Securities in excess of
the Securities subject to the Notice of Transfer, the accepting Investors
shall have the right to purchase such shares on a Pro Rata basis.
(b) In the event that the remaining Investors collectively do not
elect to purchase all of the Securities being offered by the Selling
Investor pursuant to Section 6(a), the Selling Investor may transfer all of
such Securities to any third parties at not less than the sale price and
upon the other terms and conditions set forth in the Notice of Transfer;
PROVIDED, HOWEVER, that if the Selling Investor does not complete the
contemplated sale within one hundred twenty (120) days of the Notice Date,
the provisions of this Section 6(a) shall again apply. As a part of the
Notice of Transfer, prior to selling the shares of Securities to any such
third party, the Selling Investor shall also be required to offer to each
remaining Investor the opportunity to sell any, or all, of its shares of
Securities (subject to Section 6(d)) to the same party or parties upon the
same terms and conditions as the Selling Investor is selling; PROVIDED,
that, if the consideration to be received by the Selling Investor includes
any restricted securities, only Investors who have certified to the
reasonable satisfaction of the Selling Investor that they are Accredited
Investors shall be entitled to participate in such sale, unless the
transferee consents otherwise (which consent shall not be unreasonably
withheld or delayed). If, within thirty (30) days of receiving the Notice
of Transfer from the Selling Investor, any of the remaining Investors
elect, by written notice to the Selling Investor, to join the Selling
Investor and sell all or any part of their respective shares of Securities,
the Selling Investor shall be required to consummate the sale of their
Securities and the Securities of the other Investors so electing to join in
such sale on the same terms and conditions or, in the alternative, not to
sell any of their Securities. The Selling Investor shall, however, use
reasonable efforts to persuade the proposed transferee to purchase, from
all of the Investors electing to join in such sale pursuant to this Section
6(b), all of the shares of Securities that such Investors desire to sell on
the applicable terms and conditions.
(c) The term "Pro Rata" as used in this Section 6 shall be determined
as follows:
(i). To the extent that the applicable sale involves Company
Preferred Stock, the Investors' "Pro Rata" number of shares shall be
determined based on the applicable Investors' respective percentage
ownership of the then issued and outstanding Company Preferred Stock
held by all Investors.
(ii). To the extent that the applicable sale involves Converted
Common Stock, the Investors' "Pro Rata" number of shares shall be
determined based on the applicable Investors' respective percentage
ownership of the then-
EX 99.1 - 9
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
issued and outstanding number of Converted Common Stock held by all
Investors.
(d) In the event the third-party transferee declines to acquire
all of the shares of Securities being offered by the Investors in
accordance with Section 6(b), the number of shares each Investor may
sell (as set forth in Section 6(b)) shall be reduced on a Pro Rata
basis.
(e) In the event of a sale of any Securities to a third party,
made in accordance with this Section 6:
(i). No Investor shall receive any fees or compensation from
the transferee or the transferee's Affiliates (other than
reasonable and customary fees or compensation for actual services
rendered) unless each Investor electing to join in the sale
receives such fees or compensation on a pro rata basis, based on
the number of shares of Securities such Investor sells to the
transferee;
(ii). No Investor shall be required to make any
representations or warranties in connection with such sale other
than representations and warranties as to (A) such Investor's
ownership of its Securities to be transferred free and clear of
all liens, claims and encumbrances, (B) such Investor's power and
authority to effect such transfer, and (C) such matters
pertaining to compliance with applicable securities laws as the
transferee may reasonably require; and
(iii). Any agreement of indemnity for the breach of any of
the representations or warranties made in connection with such
sale shall provide that: (A) such indemnity is several (and not
joint and several), and (B) indemnity payments to be made by each
Investor shall be limited to the Investor's pro rata share of the
claim or the consideration the Investor received in connection
with the sale, whichever is less.
7. DRAG-ALONG RIGHTS
(a) Other than in connection with a Permitted Transfer or a transfer
pursuant to an effective registration statement or pursuant to Rule 144
under the Securities Act, if at any time, Investors (the "Transferring
Investors") holding a majority of the Securities, calculated on a
fully-converted basis, desire to sell, transfer or otherwise dispose of all
or any part of their Securities which would result in (i) the sale of, in
the aggregate, at least twenty percent (20%) of the voting capital stock of
the Company issued and outstanding on the date of such sale (determined as
if all of the issued and outstanding Company Preferred Stock were converted
into Converted Common Stock), and (ii) the person or group acquiring
EX 99.1 - 10
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
the stock will become the beneficial owner (as defined in Rule 13(d)(3) of
the Exchange Act) of a greater percentage of voting capital stock of the
Company, determined on a fully-converted basis, than any other person or
group, each of the other Investors shall, at the Transferring Investors'
discretion and subject to this Section 7, be required to sell all, but not
less than all, of their respective shares of Securities to the same party
or parties and upon the same terms and conditions as the Transferring
Investor. The Transferring Investors shall give at least thirty (30) days
written notice of such transaction to such other Investors. At the closing
of such sale, each Investor shall deliver certificates or other instruments
representing the Securities and other securities, if any, to be sold by
such Investor, duly endorsed for transfer, with the signature guaranteed,
to the purchaser against payment of the appropriate purchase price.
(b) In the event of a sale of any Securities made in accordance with
this Section 7:
(i). No Investor shall receive any fees or compensation from the
transferee or the transferee's Affiliates (other than reasonable and
customary fees or compensation for actual services rendered) unless
each Investor electing to join in the sale receives such fees or
compensation on a pro rata basis, based on the number of shares of
Securities such Investor sells to the transferee;
(ii). No Investor shall be required to make any representations
or warranties in connection with such sale other than representations
and warranties as to (A) such Investor's ownership of its Securities
or other securities to be transferred free and clear of all liens,
claims and encumbrances, (B) such Investor's power and authority to
effect such transfer, and (C) such matters pertaining to compliance
with applicable securities laws as the transferee may reasonably
require;
(iii). Any agreement of indemnity for the breach of any of the
representations or warranties made in connection with such sale shall
provide that: (A) such indemnity is several (and not joint and
several), and (B) indemnity payments to be made by each Investor shall
be limited to the Investor's pro rata share of the claim or the
consideration the Investor received in connection with the sale,
whichever is less;
(iv). No Regulated Investor shall be required to receive
consideration in connection with such sale that would cause a
Regulatory Problem; and
(v). One hundred percent (100%) of the consideration received by
the Investors in connection with such sale shall consist of cash
and/or publicly traded securities.
EX 99.1 - 11
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USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
8. ENDORSEMENT ON COMPANY PREFERRED STOCK CERTIFICATES
All certificates for the Company Preferred Stock owned by the Investors
shall be endorsed on the face thereof with a legend reading substantially as
follows:
"THE VOTING RIGHTS AND THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR ANY OTHER
DISPOSITION OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
RESTRICTED BY, AND SUBJECT TO, THE TERMS AND PROVISIONS OF AN AGREEMENT
AMONG INVESTORS, DATED AS OF JULY 21, 1999. BY ACCEPTANCE OF THIS
CERTIFICATE THE HOLDER HEREOF AGREES TO BE BOUND BY THE TERMS OF SAID
AGREEMENT AND ALL AMENDMENTS OR SUPPLEMENTS THERETO."
9. TRANSFEREES SUBJECT TO AGREEMENT
Shares of Company Preferred Stock transferred under any of the provisions
of this Agreement to any Person who is not a party to this Agreement shall be
subject to all of the terms and conditions of this Agreement and as a condition
to such Transfer, such Person shall execute a counterpart of this Agreement,
which shall be deemed a supplement to this Agreement. Upon the execution of such
counterpart, such Person shall become a party to this Agreement and shall be
bound hereby, together with all of the then parties to this Agreement as though
such Person were an original party hereto.
10. SPECIFIC PERFORMANCE
The parties hereby declare that it is impossible to measure in money the
damages which would accrue to any party hereto by reason of the failure to
perform any of the obligations under this Agreement, and in that event, in
addition to other remedies provided by applicable law, the non-breaching parties
shall be entitled to immediate issuance of a temporary restraining order or
preliminary injunction enforcing this Agreement.
11. REPORTING REQUIREMENTS
In the event that any party hereto is subject to the reporting requirements
of Section 13(d) of the Exchange Act, as amended (a) such party shall fully
comply with said requirements in a timely manner, (b) all parties hereto shall
cooperate in filing and amending all required reports to the extent required by
law and (c) all parties hereto shall promptly notify all other parties hereto of
any change in such party's ownership interest or beneficial ownership interest
in the Company.
EX 99.1 - 12
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
12. REGULATORY PROBLEM
Notwithstanding any other provision of this Agreement to the contrary, in
the event a Regulated Investor or any of its Affiliates shall determine that if
the Regulated Investor or such Affiliate, shall continue to hold some or all of
the shares of the Company Preferred Stock or any other securities of the Company
held by it, there is a material risk that such ownership will result in a
Regulatory Problem or the cost of continuing to hold such securities has, in the
reasonable judgment of the Regulated Investor or such Affiliate, significantly
increased, the Regulated Investor or such Affiliate, may sell, exchange or
otherwise dispose of such securities, in a prompt and orderly manner and any
periods of prior notice set forth in this Agreement shall be reduced to the
extent necessary to avoid any Regulatory Problem associated with such notice
period. In connection with the foregoing sentence, if requested by the Regulated
Investor, the Company shall cooperate with the Regulated Investor or such
Affiliate in (a) disposing of such securities to a third party or (b) exchanging
all or any portion of such securities on a share-for-share basis for shares of a
non-voting security of the Company (such non-voting security to be identical in
all respects to such voting securities or other securities, except that they
shall be non-voting and shall be convertible or exercisable into voting
securities on such conditions as are requested by the Regulated Investor in
light of the regulatory considerations prevailing). Without limiting the
foregoing, at the request of the Regulated Investor or such Affiliate, the
Company shall provide (and authorize the Regulated Investor or such Affiliate,
to provide) financial and other information concerning the Company to any
prospective purchaser of such securities owned by the Regulated Investor or such
Affiliate, and shall amend this Agreement, the certificate of incorporation of
the Company, the by-laws of the Company, and any related agreements and
instruments and shall take such additional actions in order to effectuate and
reflect the foregoing. The Company shall not be required to provide any such
information unless the recipient thereof signs a confidentiality agreement
reasonably satisfactory to the Company. This Section shall survive the
termination of this Agreement, so long as the Regulated Investor owns any
Securities.
13. TERMINATION
This Agreement shall terminate (a) upon the written agreement of the
parties hereto, or (b) in the event that the Investors, in the aggregate, hold
on a fully-diluted basis, less than twenty percent (20%) of the issued and
outstanding shares of Company common stock.
14. MISCELLANEOUS
14.1 COMMON STOCK. Unless otherwise provided herein, this Agreement shall
apply only to the Company Preferred Stock. Unless otherwise provided herein,
nothing in this Agreement shall be construed to limit, alter or otherwise affect
the rights or privileges of any Investor with respect to any shares of common
stock of the Company held by the Investor, including but not limited to an
Investor's right to sell, pledge, transfer or
EX 99.1 - 13
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
otherwise encumber the shares of common stock and to vote the shares of common
stock in such manner as such Investor deems appropriate.
14.2 ASSIGNMENT; PARTIES IN INTEREST.
(a) ASSIGNMENT. Except as expressly provided herein, the rights and
obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other parties.
(b) PARTIES IN INTEREST. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the respective successors and
permitted assigns of the parties hereto. Nothing contained herein shall be
deemed to confer upon any other Person any right or remedy under or by
reason of this Agreement.
14.3 NOTICES. Any notice or other communication required or which may be
given hereunder shall be in writing and either delivered personally to the
addressee, by facsimile to the addressee or mailed, certified or registered
mail, postage prepaid, and shall be deemed given when so delivered personally,
sent by facsimile, or if mailed, five days after the date of mailing as follows:
if to USOL:
USOL Holdings, Inc.
10300 Metric Boulevard
Austin, Texas 78758
Attention: Robert Solomon
with a copy to:
Jenkens & Gilchrist, P.C.
600 Congress Avenue
Suite 2200
Austin, Texas 78701
Attention: Roland Cook
if to AGL:
Amstar Group, Inc.
1050 17th Street
Suite 1220
Denver, Colorado 80265
Attention: David Agnew
Fax: (303) 534-6713
EX 99.1 - 14
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Glenn D. West
Fax: (714) 746-7777
if to GMAC-CM:
GMAC Commercial Mortgage Corporation
650 Dresher Road
Horsham, Pennsylvania 19044
Attention: President
Fax: (215) 328-1796
with a copy to:
General Motors Legal Staff
New Center One Building
3031 West Grand Boulevard
Detroit, Michigan 48232
Attention: Mortgage Group General Counsel
Fax: (313) 974-0685
and, with a copy to:
Newman & Associates, Inc.
904 Manhattan Avenue, Suite 2
Manhattan Beach, California
Attention: Mark Sampson
Fax: (310) 798-6167
if to Aspen:
Aspen Foxtrot Investments, LLC
c/o Aspen Enterprises, Ltd.
2757 44th Street
Suite 306
Grand Rapids, Michigan 49509
Attention: Ronald A. House
Fax: (616) 878-5605
with a copy to:
Warner Norcross & Judd
900 Old Kent Bank Building
111 Lyon Street, NW
Grand Rapids, Michigan 49503
Attention: Tim Horner
Fax: (616) 752-2500
EX 99.1 - 15
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
if to GACC:
Deutsche Bank Securities
31 West 52nd Street
New York, New York 10019
Attention: John Storck
Fax: (212) 469-3713
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attention: Dan Latham
Fax: (212) 354-8113
if to Paribas:
Paribas North America, Inc.
787 7th Avenue
New York, New York, 10019
Attention: Jeffrey Youle
Fax: (212) 841-2369
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York, 10036
Attention: John Reiss
Fax: (212) 354-8113
if to Peregrine:
Peregrine Capital, Inc.
Boardwalk Plaza
9725 SW Beaverton Hillsdale Hwy.
Suite 350
Beaverton, Oregon 97005-3366
Attention: Roy Rose
Fax: (503) 350-0672
EX 99.1 - 16
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
with a copy to:
Peregrine Capital, Inc.
Boardwalk Plaza
9725 SW Beaverton Hillsdale Hwy.
Suite 350
Beaverton, Oregon 97005-3366
Attention: Allan A. Fulsher
Fax: (503) 350-0672
if to any other
Original Investor:
To the address for such Original Investor set
forth on the books and records of USOL
14.4 LAW GOVERNING AGREEMENT. This Agreement shall be construed and
interpreted according to the internal laws of the State of Delaware, excluding
any choice of law rules that may direct the application of the laws of another
jurisdiction.
14.5 AMENDMENT AND MODIFICATION. Except as provided in Section 5.3, this
Agreement may not be amended or modified except in a writing signed by all of
the parties hereto.
14.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
become binding when all counterparts taken together shall have been executed and
delivered by the parties. A telecopied facsimile of an executed counterpart of
the Agreement shall be sufficient to endorse the binding agreement of each party
to the terms hereof. However, each party agrees to return to the other parties
an original, duly executed counterpart of this Agreement promptly after delivery
of a telecopied facsimile thereof.
14.7 HEADINGS. The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
14.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto relating to the subject matter hereof and supersedes
all prior understandings, agreements, or representations by or among the
parties, written or oral, related hereto.
EX 99.1 - 17
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
IN WITNESS WHEREOF, the parties hereto have caused their signatures, or the
signatures of their duly authorized representatives, to be set forth below on
the day and year first above written.
USOL HOLDINGS, INC.
By: /S/ ROBERT SOLOMON
-----------------------------------
Name: Robert Solomon
Title: President
INVESTORS:
AGL INVESTMENTS NO. 8 LIMITED PARTNERSHIP
By: AGLP NO. 8 LIMITED PARTNERSHIP, a
Colorado partnership, Its General
Partner
By: AGLP NO. 8, a Colorado
partnership, Its General Partner
By: /S/ DAVID B. AGNEW
-----------------------------------
Name: David B. Agnew
Title: President
ASPEN FOXTROT INVESTMENTS, LLC
By: ASPEN ENTERPRISES, LTD., Its
Manager
By: /S/ RONALD A. HOUSE
-----------------------------------
Name: Ronald A. House
Title: Vice President and Chief
Operating Officer
EX 99.1 - 18
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
GERMAN AMERICAN CAPITAL CORPORATION
By: /S/ JOHN C. CIPRIANI
-----------------------------------
Name: John C. Cipriani
Title: Vice President
GERMAN AMERICAN CAPITAL CORPORATION
By: /S/ THOMAS MENDOZA
-----------------------------------
Name: Thomas C. Mendoza
Title: Vice President
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /S/ ROBERT D. FELLER
-----------------------------------
Name: Robert D. Feller
Title: Executive Vice President
PARIBAS NORTH AMERICA, INC.
By: /S/ JOHN G. MARTINEZ
-----------------------------------
Name: John G. Martinez
Title: Financial Controller
PEREGRINE EQUITIES 1, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 2, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
EX 99.1 - 19
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
PEREGRINE EQUITIES 3, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 4, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 5, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 6, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
EX 99.1 - 20
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
PEREGRINE EQUITIES 7, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 8, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 9, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGRINE EQUITIES 10, L.L.C.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
-----------------------------------
Dennis Dautel
/S/ HENRY GELLIS
-----------------------------------
Henry Gellis
EX 99.1 - 21
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
/S/ HENRY GELLIS
-----------------------------------
Mussie Gellis
By: Henry Gellis, POA
/S/ DOROTHY COHEN
-----------------------------------
Dorothy Cohen
/S/ ROBERT STARK
-----------------------------------
Stark Investments L.P.
By: Robert Stark, General Partner
/S/ ANGELA JOY COPPOLA
-----------------------------------
Angela Joy Coppola
/S/ JANET FRANKLIN
-----------------------------------
Janet Franklin
/S/ COURTNEY CAMPBELL
-----------------------------------
Courtney Campbell
/S/ ALAN ALEXANDER
-----------------------------------
Peter Guber
By: Alan Alexander, Attorney-in-
Fact
/S/ W. ROBERT RAMSDELL
-----------------------------------
Ramsdell Family Trust
By: W. Robert Ramsdell, Trustee
/S/ DAVID ROCKER
-----------------------------------
David Rocker
/S/ KAYLEN SILVERBERG
-----------------------------------
Kaylen Silverberg
EX 99.1 - 22
<PAGE>
USOL HOLDINGS, INC. AGREEMENT AMONG INVESTORS
/S/ LEON HOROWITZ
-----------------------------------
Leon Horowitz
/S/ DAIN RAUSCHER
-----------------------------------
Brent Stahl
By: Dain Rauscher, Custodian FBO
Brent Stahl S.E.P.
/S/ RON BARSHOP
-----------------------------------
Ron Barshop
/S/ TERRY JONES
-----------------------------------
Terry Jones for FMH, LLP
/S/ IRV SOLOMON
-----------------------------------
Irv Solomon
/S/ DAN BAUER
-----------------------------------
Dan Bauer
/S/ SCOTT MAENTZ
-----------------------------------
Rosewood Partners L.P.
By: Scott Maentz
/S/ G. TYLER RUNNELS
-----------------------------------
G. Tyler Runnels
EX 99.1 - 23
<PAGE>
EXHIBIT A
INVESTORS AND
PERCENTAGE INTERESTS
<TABLE>
<CAPTION>
Voting
Percentage Percentage
Investor Interest Interest
-------- ---------- ----------
<S> <C> <C>
GMAC Commercial Mortgage Corporation 26.95% 30.11%
AGL Investment No. 8 L.P. (Amstar) 26.95% 30.11%
Aspen Foxtrot Investments, LLC 12.16% 13.58%
German American Capital Corporation 4.39% 4.90%
Peregrine Equities 1, L.L.C. 1.35% 1.51%
Peregrine Equities 2, L.L.C. 1.35% 1.51%
Peregrine Equities 3, L.L.C. 1.35% 1.51%
Peregrine Equities 4, L.L.C. 1.35% 1.51%
Peregrine Equities 5, L.L.C. 1.35% 1.51%
Peregrine Equities 6, L.L.C. 1.35% 1.51%
Peregrine Equities 7, L.L.C. 1.35% 1.51%
Peregrine Equities 8, L.L.C. 1.35% 1.51%
Peregrine Equities 9, L.L.C. 1.35% 1.51%
Peregrine Equities 10, L.L.C. 1.35% 1.51%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Voting
Percentage Percentage
Investor Interest Interest
-------- ---------- ----------
<S> <C> <C>
Ron Barshop 0.07% 0.08%
Dan Bauer 0.67% 0.75%
Courtney Campbell 0.03% 0.03%
Dorothy Cohen 0.14% 0.15%
Angela Joy Coppola 0.07% 0.08%
Dennis Dautel 0.95% 1.06%
Janet Franklin 0.03% 0.03%
Henry Gellis 0.14% 0.15%
Mussie Gellis 0.14% 0.15%
Peter Guber 0.14% 0.15%
Leon Horowitz 0.08% 0.09%
First Madison Holidays, LLP 0.05% 0.06%
Ramsdell Family Trust 0.54% 0.60%
David Rocker 0.81% 0.91%
Rosewood Partners, L.P. (Scott Maentz) 0.67% 0.75%
Kaylen Silverberg 0.24% 0.27%
Irv Solomon 0.05% 0.06%
Dain Rauscher Custodian FBO Brent Stahl S.E.P. 0.07% 0.08%
Stark Investments, L.P. 0.54% 0.60%
G. Tyler Runnels 0.14% 0.15%
German American Capital Corporation 5.07% N/A
Paribas North America, Inc. 5.41% N/A
</TABLE>
EX 99.1A - 2
<PAGE>
EXHIBIT B
INITIAL CHAIRPERSON
David Agnew
<PAGE>
EXHIBIT C
INITIAL DESIGNATED DIRECTORS
<TABLE>
<CAPTION>
INITIAL
DESIGNATED
INVESTOR DIRECTOR
-------- ----------
<S> <C>
AGL Investments No. 8 Limited Partnership David Agnew
Aspen Foxtrot Investments, LLC Ronald Piasecki
GMAC Commercial Mortgage Corporation Robert D. Feller
Peregrine Equities 1-10,L.L.C. Roy Rose
</TABLE>
CERTIFICATE OF DESIGNATIONS,
PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS
OF SERIES A CONVERTIBLE PREFERRED STOCK
OF
USOL HOLDINGS, INC.
(F/K/A FIRSTLINK COMMUNICATIONS, INC.)
1. DESIGNATION. There is hereby provided for a single series of convertible
preferred stock, the designation of which shall be the Series A Convertible
Preferred Stock (hereinafter the "Series A Preferred Stock") and the number of
authorized shares constituting the Series A Preferred Stock is 1,700,000. The
stated value of each share of Series A Preferred Stock is twenty-five dollars
($25.00). The number of authorized shares of Series A Preferred Stock may be
reduced or increased by a further resolution duly adopted by the Board of
Directors of the Corporation and by the filing of an amendment to the
Corporation's Articles of Incorporation pursuant to the provisions of the Oregon
Business Corporation Act stating that such reduction or increase has been so
authorized.
2. VOTING. Except as required by law, the shares of the Series A Preferred
Stock shall not have any voting powers, either general or special, except as
provided in this Section 2:
(a) Subject to Section 2(b), holders of Series A Preferred Stock shall
be entitled to vote on any matter on which the holders of the Corporation's
common stock (hereafter, the "Common Stock") are entitled to vote (except
for the election of directors which is governed by Section 2(b)) and the
votes of the Series A Preferred Stock shall be counted together with the
holders of the Common Stock as a single class. The Series A Preferred Stock
shall vote with the whole number of shares of Common Stock as if the Series
A Preferred Stock had been fully converted pursuant to Section 4 hereof
three (3) business days prior to the date of the vote. Any corporate action
that may require a vote of the holders of the Series A Preferred Stock as a
class shall be deemed to have been approved by that class upon the
affirmative vote by the holders of a majority of the issued and outstanding
Series A Preferred Stock unless a higher voting requirement is imposed by
the Oregon Business Corporation Act.
(b) Prior to each annual meeting of stockholders, each of AGL
Investments No. 8 Limited Partnership, a Colorado limited partnership
("Amstar"), Aspen Foxtrot Investments, LLC ("Aspen"), GMAC Commercial
Mortgage Corporation ("GMACCMC") and Peregrine Capital, Inc. ("Peregrine")
shall individually have the right to nominate one of the seven directors
(the "Preferred Directors"). The Preferred Directors shall be elected by
the holders of the Series A Preferred Stock (which for the purposes of this
paragraph shall include Common Stock issuable upon conversion of the Series
A Preferred Stock) voting together as a class and separately from all other
classes and series. If at any time the number of directors on the Board is
increased or decreased, the holders of the Series A Preferred Stock shall
have the right to nominate and elect a majority of such number. Unless
otherwise required by law, in case of any vacancy occurring among the
Preferred Directors, the holder nominating such Preferred Director may
appoint a successor to hold office for the unexpired term of the Preferred
Director whose place shall be vacant. If any of Amstar, Aspen, GMACCMC or
Peregrine or any of their respective affiliates, shareholders, partners, or
members to whom Series A Preferred Stock may be transferred cease to own
Series A Preferred Stock or Common Stock equal in the aggregate to 25% of
the number of shares of Series A Preferred Stock, on a fully converted
basis, that such person holds as of the effective date of this Certificate,
then such person shall no longer have the right to nominate a Preferred
Director and the number of Preferred Directors shall be reduced accordingly
and the number of directors to be elected by the holders of Common Stock
shall be increased by the same number.
(c) Subject to Section 10 herein, the Board of Directors without the
vote of the holders of shares of the Series A Preferred Stock may authorize
and issue additional shares of Common Stock and preferred stock ranking
junior as to dividends and upon liquidation to the shares of the Series A
Preferred Stock. No class or series of equity securities of the Corporation
may rank senior to or equal in right with the Series A Preferred Stock as
to dividends or upon liquidation except for the Series B Convertible
Preferred Stock (the "Series B Preferred Stock" and, together with the
Series A Preferred Stock, the "Preferred Stock") which shall be equal in
right.
<PAGE>
(d) Notwithstanding anything to the contrary in Section 554(3) of the
Oregon Business Corporation Act, the holders of the Series A Preferred
Stock shall be entitled to dissenters' rights pursuant to, and to the
fullest extent permitted by, Section 554(1) of said Oregon Business
Corporation Act in the event of a merger or consolidation in which the
Corporation is a constituent corporation or the sale of substantially all
of the assets of the Corporation.
3. DIVIDENDS.
(a) RATE. Holders of Series A Preferred Stock shall be entitled to
receive, out of any funds of the Corporation legally available for that
purpose, cumulative dividends from the date of issuance at the rate of 12%
per year of the Liquidation Preference (as defined in Section 5(a)below),
for each calendar quarter (pro-rated for partial quarters, based upon a 90
day quarter of three 30 day months) (each such calendar quarter, a
"Dividend Period") payable in arrears in cash, or, at the option of the
Corporation, in shares of its Common Stock (with cash in lieu of fractional
shares) based on the determination of Fair Value (defined in Section
4(e)(viii) below), on the last day of December, March, June and September
of each year, commencing December 31, 1999 (each such date being
hereinafter individually referred to as the "Dividend Payment Date" and
collectively as the "Dividend Payment Dates") PROVIDED, that no Regulated
Stockholder (as defined in Section 4(a)(iv) below) shall be required to
receive any shares of Common Stock pursuant to this Section 3(a) to the
extent that immediately prior to payment of such dividend, or as a result
of such dividend, the number of shares of Common Stock which constitute
Restricted Stock (as defined in Section 4(a)(iv) below) held by all holders
thereof would exceed the number of shares of Common Stock which such
Regulated Stockholder reasonably determines it and its Affiliates (defined
in Section 4(a)(iv) below) may own, control or have the power to vote under
any law, regulation, rule or other requirement of any governmental
authority at the time applicable to such Regulated Stockholder or its
Affiliates and such Regulated Stockholder shall be entitled to receive cash
in lieu of such dividend payable in shares of Common Stock. Should the
Corporation in its discretion determine to pay said dividends in shares of
Common Stock for any Dividend Period, then all such accrued and unpaid
dividends shall be paid in shares of Common Stock at the first to occur of
the next Dividend Payment Date or the time of conversion of the Series A
Preferred Stock, such that upon such Dividend Payment date or such
conversion of the Series A Preferred Stock by the holder thereof, the
Corporation shall pay all accrued and unpaid dividends owed for such
Dividend Period as of the date of such conversion on all then converted
shares. Each such dividend shall be paid to the holders of record of the
Series A Preferred Stock as they appear on the books of the Corporation on
the record date which shall be not less than 30 days prior to the related
Dividend Payment Date. Additional dividends, at an annual rate of 12%,
shall accrue in respect of, and compound on, any dividends in arrears and
may be payable at any time at the discretion of the Corporation.
(b) DIVIDENDS ON COMMON STOCK. No dividends (other than those payable
solely in Common Stock) shall be paid with respect to the Common Stock or
any series of preferred stock ranking junior to the Series A Preferred
Stock and the Series B Preferred Stock, which shall be pari passu with the
Series A Preferred Stock with respect to dividends, during any fiscal year
of the Corporation unless all due and unpaid dividends and the annual
current dividend on the shares of Series A Preferred Stock and the Series B
Preferred Stock for the then current and all prior Dividend Periods shall
have been declared and paid in cash. If dividends are paid partly in cash
and partly in Common Stock with respect to the Common Stock or any series
of preferred stock ranking junior to the Series A Preferred Stock and the
Series B Preferred Stock, then all due and unpaid dividends and the annual
current dividend on the shares of Series A Preferred Stock and the Series B
Preferred Stock for the then current Dividend Period and all prior Dividend
Periods shall have been declared and paid either in cash or in the same
proportion of cash and Common Stock proposed to be paid to holders of
Common Stock and any series of preferred stock ranking junior to the Series
A Preferred Stock and the Series B Preferred Stock; PROVIDED, that no
Regulated Stockholder shall be required to receive any shares of Common
Stock pursuant to this Section 3(b) to the extent that immediately prior to
payment of such dividend, or as a result of such dividend, the number of
shares of Common Stock which constitute Restricted Stock held by all
holders thereof would exceed the number of shares of Common Stock with such
Regulated Stockholder reasonably determines it and its Affiliates may own,
control or have the power or vote under any law, regulation, rule or other
requirement of any governmental authority at the time applicable to such
Regulated Stockholder or its Affiliates and such Regulated Stockholder
shall be entitled to receive cash in lieu of such dividend payable in
shares of Common Stock. No shares of Common Stock or any series of
preferred stock ranking junior to the Series A Preferred Stock and the
Series B Preferred Stock shall be purchased, redeemed or acquired by the
Corporation, and no funds shall be paid into or set aside or made available
for a sinking fund for the
EX 99.2 - 2
<PAGE>
purchase, redemption or acquisition thereof except in transactions with
employees of the Corporation aggregating not more than $100,000.00 per
year.
(c) LIMITATION ON AMOUNT OF DIVIDENDS. Holders of shares of the Series
A Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of full dividends for each Dividend
Period (including any dividends in arrears as provided herein), as herein
provided, on the Series A Preferred Stock. No interest, or sum of money in
lieu of interest, shall be payable in respect of any Dividend Payment or
Dividend Payments which may be in arrears.
(d) PARITY OF DIVIDEND PAYMENTS. When dividends are not paid in full
upon the Series A Preferred Stock and the shares of any other series of
capital stock ranking on a parity as to dividends with the Series A
Preferred Stock, all dividends declared upon the Series A Preferred Stock
and such other series shall be declared pro rata so that the amount of
dividends declared per share on the Series A Preferred Stock and such other
series of capital stock shall in all cases bear to each other the same
ratio that full dividends, for the then-current and all prior Dividend
Periods, per share on the Series A Preferred Stock and full dividends,
including required or permitted accumulations, if any, on such other series
of capital stock, bear to each other.
4. CONVERSION. The holders of the Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(A) AUTOMATIC CONVERSION; OPTIONAL CONVERSION; CONVERSION
PRICE.
(i) AUTOMATIC CONVERSION. Beginning July 21, 2001, each share of
the Series A Preferred Stock, without any action or payment of
additional consideration on the part of the Holder thereof, on the
earliest of (1) the closing of a firm commitment public offering after
such date pursuant to which the Corporation offers its equity
securities for gross proceeds to the Corporation in an amount equal to
or greater than $40,000,000, (2) the day that the closing sales price
of the Common Stock on a national securities exchange or the Nasdaq
Stock Market is equal to or greater than $10.00 per share for 15
consecutive trading days (taking into account any stock split or
reverse stock split or any other adjustments to the number of shares
of Common Stock outstanding after July 21, 1999, the "Reference
Date"), or (3) the seventh anniversary of the Reference Date; provided
that if the Common Stock is then trading at more than $2.00 per share,
taking into account any stock split or reverse stock split or any
other adjustments to the number of shares of Common Stock outstanding
after the Reference Date, shall convert automatically as provided in
Section 4(j) into fully paid and non-assessable shares of Common Stock
(with cash paid in lieu of fractional shares), having the powers,
relative participating rights and the qualifications, limitations or
restrictions of holders of Common Stock as set forth in the
Corporation's Articles of Incorporation and bylaws, at the Conversion
Price (as defined below); PROVIDED, that no Regulated Stockholder
shall be required to convert any shares of its Series A Preferred
Stock into Common Stock pursuant to this Section 4(a) to the extent
that immediately prior thereto, or as a result of such conversion, the
number of shares of Common Stock which constitute such Restricted
Stock held by all holders thereof would exceed the number of shares of
Common Stock which such Regulated Stockholder reasonably determines it
and its Affiliates may own, control or have the power to vote under
any law, regulation, rule or other requirement of any governmental
authority at the time applicable to such Regulated Stockholder or its
Affiliates.
(ii) OPTIONAL CONVERSION. At any time, holders of Series A
Preferred Stock may elect to convert, in whole or in part, their
Series A Preferred Stock into fully paid and non-assessable shares of
Common Stock (with cash paid in lieu of fractional shares) at the
Conversion Price by following the procedures set forth in Section 4(j)
hereof; PROVIDED, HOWEVER, that Series A Preferred Stock constituting
Restricted Stock may not be converted into Common Stock to the extent
that immediately prior thereto, or as a result of such conversion, the
number of shares of Common Stock which constitute such Restricted
Stock held by all holders thereof would exceed the number of shares of
Common Stock which such Regulated Stockholder reasonably determines it
and its Affiliates may own, control or have the power to vote under
any law, regulation, rule or other requirement of any governmental
authority at the time applicable to such Regulated Stockholder or its
Affiliates; and, PROVIDED, FURTHER, that each holder of Series A
Preferred Stock may convert such shares into Common Stock if such
holder reasonably believes that such converted shares will be
transferred within fifteen (15) days or already have been transferred
pursuant to a Conversion Event (defined below) and such holder agrees
not to vote any such shares of Common
EX 99.2 - 3
<PAGE>
Stock prior to such Conversion Event and undertakes to promptly
convert such shares back into Series A Preferred Stock if such shares
are not transferred pursuant to a Conversion Event. Each Regulated
Stockholder may provide for further restrictions upon the conversion
of any shares of Restricted Stock by providing the Corporation with
signed, written instructions specifying such additional restrictions
and legending such shares as to the existence of such restrictions.
(iii) CONVERSION PRICE. The "Conversion Price" shall initially be
$2.00 per share. The number of shares of Common Stock issuable upon
conversion is the Liquidation Preference divided by the then
applicable Conversion Price, as adjusted from time to time as provided
for in Section 4(e), multiplied by the number of shares of Series A
Preferred Stock converted.
Notwithstanding any provision of this section 4(a)(iii) to the
contrary, each holder of Series A Preferred Stock shall be entitled to
convert shares of Series A Preferred Stock in connection with any
Conversion Event if such holder reasonably believes that such
Conversion Event will be consummated, and a written request for
conversion from any holder of Series A Preferred Stock to the
Corporation stating such holder's reasonable belief that a Conversion
Event shall occur shall be conclusive and shall obligate the
Corporation to effect such conversion in a timely manner so as to
enable each such holder to participate in such Conversion Event. The
Corporation will not cancel the shares of Series A Preferred Stock so
converted before the 15th day following such Conversion Event and will
reserve such shares until such 15th day for resistance in compliance
with the next sentence. If any shares of Series A Preferred Stock are
converted into shares of Common Stock in connection with a Conversion
Event and such shares of Common Stock are not actually distributed,
disposed of or sold pursuant to such Conversion Event, such shares of
Common Stock shall be promptly converted back into the same number of
shares of Series A Preferred Stock.
(iv) DEFINED TERMS. For purposes of this Certificate of
Designations, the following terms shall be defined as set forth below:
1. "AFFILIATE" shall mean with respect to any Person, any
other person, directly or indirectly controlling, controlled by
or under common control with such Person. For the purpose of the
above definition, the term "control" (including with correlative
meaning, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities
or by contract or otherwise.
2. "CONVERSION EVENT" shall mean (a) any public offering or
public sale of securities of the Corporation (including a public
offering registered under the Securities Act of 1933 and a public
sale pursuant to Rule 144 of the Securities and Exchange
Commission or any similar rule then in force), (b) any sale of
securities of the Corporation to a person or group of persons
(within the meaning of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) if, prior to such sale, such person or
group of persons in the aggregate would own or control securities
which possess in the aggregate the ordinary voting power to elect
a majority of the Corporation's directors (provided that such
sale has been approved by the Corporation's Board of Directors or
a committee thereof), (c) any sale of Securities of the
Corporation to a person or group of persons (within the meaning
of the 1934 Act) if, after such sale, such person or group of
persons would not, in the aggregate, own, control or have the
right to acquire more than two percent (2%) of the outstanding
securities of any class of voting securities of the Corporation,
(d) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the 1934 Act) if, after
such sale, such person or group of persons in the aggregate would
own or control securities of the Corporation (excluding any
Series A Preferred Stock being converted and disposed of in
connection with such Conversion Event) which possess in the
aggregate the ordinary voting power to elect a majority of the
Corporation's directors, and (e) a merger, consolidation or
similar transaction involving the Corporation if, after such
transaction (but without taking into account the Restricted Stock
converted by the Regulated Holder) a person or group of persons
(within the meaning of the 1934 Act) in the aggregate would own
or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the
EX 99.2 - 4
<PAGE>
surviving corporation's directors (provided that the transaction
has been approved by the Corporation's Board of Directors or a
committee thereof).
3. "REGULATED STOCKHOLDER" shall mean any stockholder (i)
that, directly or indirectly, due to its ownership by an entity
subject to Regulation Y of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 225 (or any successor to such
regulation) ("Regulation Y"), is itself subject to the provisions
of Regulation Y and (ii) that holds Preferred Stock or Common
Stock of the Corporation.
4. "RESTRICTED STOCK" means, with respect to any Regulated
Stockholder, any outstanding shares of Common Stock and/or Series
A Preferred Stock and/or Series B Preferred Stock ever held of
record by such Regulated Stockholder or its Affiliates, excluding
treasury shares; provided, however, that any such shares shall
cease to be Restricted Stock when such shares are transferred in
a transaction which is a Conversion Event or are acquired by the
Corporation or any subsidiary of the Corporation; and PROVIDED,
FURTHER that the Corporation shall have no responsibility for
determining whether any outstanding shares of Common Stock and/or
Series A Preferred Stock constitute Restricted Stock with respect
to any particular Regulated Stockholder, but shall instead be
entitled to receive, and rely exclusively upon, a written notice
provided by such Regulated Stockholder designating such shares as
Restricted Stock.
(b) ISSUANCE OF SHARES OF COMMON STOCK OR OTHER SECURITIES ON
CONVERSION.
(i) Pursuant to Section 4(j) herein, the Corporation shall issue,
at its expense, and shall deliver to such holder of Series A Preferred
Stock ("Holder"), (i) a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of the Series
A Preferred Stock, and (ii) cash in lieu of fractional shares as
provided in Section 4(d).
(ii) Such conversion shall be deemed to have been effected
immediately prior to the close of business on the Conversion Date (as
defined in Section 4(j)(iii)), and at such time the rights of the
Holder shall cease and the Holder shall be deemed to have become the
holder or holders of record of the shares of Common Stock issued upon
conversion.
(c) NO ADJUSTMENTS FOR DIVIDENDS. No payment or adjustment shall be
made by or on behalf of the Corporation on account of any dividends on the
Common Stock issued upon such conversion which were declared for payment to
holders of Common Stock of record as of a date prior to the Conversion
Date.
(d) CASH PAYMENT IN LIEU OF FRACTIONAL SHARES. No fractional shares of
Common Stock shall be issued upon the conversion of the Series A Preferred
Stock. In lieu of any fraction of a share of Common Stock to which the
Holder would otherwise be entitled upon conversion of the Series A
Preferred Stock, the Corporation shall pay a cash adjustment for such
fraction in an amount equal to the same fraction of the Fair Value per
share of Common Stock at the close of business on the Conversion Date.
(e) ADJUSTMENT OF CONVERSION PRICE OF COMMON STOCK.
(i) Except as provided in Section 4(e)(vii), in case, at any time
or from time to time after the Reference Date, the Corporation shall
issue or sell any shares of any class of common stock for a
consideration per share less than the Fair Value (as defined in
Section 4(e)(viii) below), then forthwith upon such issue or sale the
Conversion Price in effect immediately prior to such issue or sale
shall be reduced to a price (calculated to the nearest cent)
determined by multiplying the Conversion Price in effect prior to the
adjustment by a fraction determined by dividing (A) an amount equal to
the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the Fair Value
per share of Common Stock immediately prior to such issue or sale, and
(2) the consideration, if any, received by the Corporation upon such
issue or sale, by (B) the total number of shares of Common Stock
outstanding immediately after such issue or sale multiplied by the
Fair Value per share of Common Stock immediately prior to such issue
or sale. No adjustment of the Conversion Price, however, shall be made
in an amount less than one cent per share, but any lesser adjustment
EX 99.2 - 5
<PAGE>
shall be carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to two cents per share or
more.
(ii) For the purposes of Subsection 4(e)(i) above, the following
paragraphs (1) to (6), inclusive, shall also be applicable:
(1) In case at any time the Corporation shall grant any
rights to subscribe for, or any rights or options or warrants to
purchase, Common Stock or any stock or other securities
convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such rights or
options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such
rights or options or upon conversion or exchange of such
Convertible Securities (determined by dividing (A) the total
amount, if any, received or receivable by the Corporation as
consideration for the granting of such rights or options or
warrants, plus the maximum aggregate amount of additional
consideration payable to the Corporation upon the exercise of
such rights or options, plus, in the case of any such rights or
options or warrants which relate to such Convertible Securities,
the maximum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such
rights or options) shall be less than the Fair Value in effect
immediately prior to the time of the granting of such rights or
options or warrants, then the total maximum number of shares of
Common Stock issuable upon the exercise of such rights or options
or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such
rights or options shall (as of the date of granting of such
rights or options) be deemed to be outstanding and to have been
issued for such price per share and the current Conversion Price
shall be adjusted as provided in Subsection 4(e)(i) above. Except
as provided in Subsection 4(e)(v), no further adjustments of the
Conversion Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of
such rights or options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.
Notwithstanding the foregoing, if at any time on or after the
Reference Date the Corporation shall grant, issue or sell any
options or rights to purchase stock, warrants, securities or
other property pro rata to the holders of Common Stock of all
classes ("Purchase Rights"), then each Holder shall be entitled
(but not obligated) to acquire, in lieu of any other adjustment
provided for in this Subsection 4(e) and upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights
which such Holder could have acquired if it had held the number
of shares of Common Stock issuable upon conversion of the Series
A Preferred Stock immediately prior to the time or times at which
the Corporation granted, issued or sold such Purchase Rights.
(2) In case at any time the Corporation shall issue or sell
any Convertible Securities, whether or not the rights to exchange
or convert thereunder are immediately exercisable, and the price
per share for which Common Stock is issuable upon such conversion
or exchange (determined by dividing (A) the total amount received
or receivable by the Corporation as consideration for the issue
or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities)
shall be less than the Fair Value immediately prior to the time
of such issue or sale, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and
to have been issued for such price per share and the Conversion
Price shall be adjusted as provided in Subsection 4(e)(i) above,
provided that (x) except as provided in Subsection 4(e)(v), no
further adjustments of the Conversion Price shall be made upon
the actual issue of such Common Stock upon conversion or exchange
of
EX 99.2 - 6
<PAGE>
such Convertible Securities, and (y) if any such issue or sale of
such Convertible Securities is made upon exercise of any rights
to subscribe for or to purchase or any option to purchase any
such Convertible Securities for which adjustments of the
Conversion Price have been or are to be made pursuant to other
provisions of Subsection 4(e)(ii), no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.
(3) With respect to any dividend or other distribution upon
any stock of the Corporation payable in Common Stock or
Convertible Securities, any Common Stock or Convertible
Securities, as the case may be, issuable in payment of such
dividend or distribution shall be deemed to have been issued or
sold without consideration and the Conversion Price shall be
adjusted as provided in Subsection 4(e)(i) above.
(4) In case at any time any shares of Common Stock or
Convertible Securities or any rights or options to purchase any
such Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be
deemed to be the amount received by the Corporation therefor,
without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts paid or
allowed by the Corporation in connection therewith. In case any
shares of Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by
the Corporation shall be deemed to be the fair value of such
consideration as determined by the Board of Directors of the
Corporation in good faith, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions
or discounts paid or allowed by the Corporation in connection
therewith. In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued in connection
with any merger of another corporation into the Corporation, the
amount of consideration therefor shall be deemed to be the fair
value of the assets of such merged corporation as determined by
the Board of Directors of the Corporation in good faith after
deducting therefrom all cash and other consideration (if any)
paid by the Corporation in connection with such merger.
(5) In case at any time the Corporation shall take a record
of the holders of Common Stock for the purpose of entitling them
(A) to receive a dividend or other distribution payable in Common
Stock or in Convertible Securities, or (B) to subscribe for or
purchase Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(6) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the
account of the Corporation or any of its subsidiaries, but the
disposition of any such shares shall be considered an issue or
sale of Common Stock for the purposes of Subsection 4(e).
(iii) In the event that the Corporation shall make any
distribution of its assets upon or with respect to its Common Stock,
as a liquidating or partial liquidating dividend, or other than as a
dividend payable out of current earnings or any surplus legally
available for dividends under the laws of the state of incorporation
of the Corporation, the Holder shall, if the Conversion Date is after
the record date for such distribution or, in the absence of a record
date, after the date of such distribution, receive, in addition to the
shares subscribed for, the amount of such assets (or, at the option of
the Corporation, a sum equal to the fair value thereof at the time of
distribution as determined by the Board of Directors of the
Corporation in good faith) which would have been distributed to such
Holder if the Conversion Date had occurred immediately prior to the
record date for such distribution or, in the absence of a record date,
immediately prior to the date of such distribution.
(iv) In case at any time the Corporation shall subdivide its
outstanding shares of Common Stock into a greater number of shares or
upon any issuance by the Corporation of a greater number of shares of
Common Stock in a pro rata exchange for all of its outstanding shares
of Common Stock, the Conversion
EX 99.2 - 7
<PAGE>
Price in effect immediately prior to such subdivision shall be
proportionately reduced and conversely, in case the outstanding shares
of Common Stock of the Corporation shall be combined into a smaller
number of shares or upon any issuance by the Corporation of a lesser
number of shares of Common Stock in a pro rata exchange for all of its
outstanding shares of Common Stock, the Conversion Price in effect
immediately prior to such combination shall be proportionately
increased.
(v) If the purchase price provided for in any right or option
referred to in paragraph (1) of Subsection 4(e)(ii), or the rate at
which any Convertible Securities referred to in paragraphs (1) or (2)
of said Subsection 4(e)(ii) are convertible into or exchangeable for
Common Stock, shall change or a different purchase price or rate shall
become effective at any time or from time to time (other than under or
by reason of provisions designed to protect against dilution), then,
upon such change becoming effective, the Conversion Price then in
effect hereunder shall forthwith be increased or decreased to such
Conversion Price as would have obtained had the adjustments made upon
the granting or issuance of such rights or options or Convertible
Securities been made upon the basis of (1) the issuance of the number
of shares of Common Stock theretofore actually delivered upon the
exercise of such options or rights or upon the conversion or exchange
of such Convertible Securities, and the total consideration received
therefor, and (2) the granting or issuance at the time of such change
of any such options, rights, or Convertible Securities then still
outstanding for the consideration, if any, received by the Corporation
therefor and to be received on the basis of such changed price. On the
expiration of any right or option referred to in paragraph (1) of
Subsection 4(e)(ii), or on the termination of any right to convert or
exchange any Convertible Securities referred to in paragraphs (1) or
(2) of said Subsection 4(e)(ii), the Conversion Price shall forthwith
be readjusted to such amount as would have obtained had the adjustment
made upon the granting or issuance of such rights or options or
Convertible Securities been made upon the basis of the issuance or
sale of only the number of shares of Common Stock actually issued upon
the exercise of such options or rights or upon the conversion or
exchange of such Convertible Securities. If the purchase price
provided for in any such right or option, or the rate at which any
such Convertible Securities are convertible into or exchangeable for
Common Stock, shall change at any time under or by reason of
provisions with respect thereto designed to protect against dilution,
then in case of the delivery of Common Stock upon the exercise of any
such right or option or upon conversion or exchange of any such
Convertible Security, the Conversion Price then in effect hereunder
shall forthwith be decreased to such Conversion Price as would have
obtained had the adjustments made upon the issuance of such right or
option or Convertible Security been made upon the basis of the
issuance of (and the total consideration received for) the shares of
Common Stock delivered as aforesaid.
(vi) For so long as shares of Series A Preferred Stock are issued
and outstanding, the Corporation may not consolidate or merge with or
into (whether or not the Corporation is the surviving entity), another
person, unless (i) the Corporation is the surviving entity, or the
person formed by or surviving any such consolidation or merger (if
other than the Corporation) is a corporation organized or existing
under the laws of the United States, any state thereof or the District
of Columbia; and (ii) the Series A Preferred Stock shall be converted
or exchanged for and shall become shares of such successor, transferee
or resulting person, having in respect of such successor, transferee
or successor person the same powers, preferences, and relative
participating, optional or other special rights and the
qualifications, limitations or restrictions thereon, that the Series A
Preferred Stock had immediately prior to such transaction.
(vii) The following events shall not effect an adjustment to the
Conversion Price pursuant to this Section 4(e):
(1) The issuance of Common Stock by the Corporation upon the
conversion of the Series A Preferred Stock or the Series B
Preferred Stock;
(2) The issuance of options to acquire shares of Common
Stock not to exceed 10% of the outstanding shares of Common
Stock, on a fully diluted basis, as of the effective date of this
Certificate, from time to time issuable or issued to employees,
consultants or directors of the Corporation granted or to be
granted with the approval of the Board of Directors of the
Corporation and the Common Stock issuable or issued upon exercise
thereof;
(3) The issuance of warrants to acquire 1,500,000 shares of
Common Stock to be issued by the Corporation in exchange for
identical warrants issued by USOL Holdings, Inc..
EX 99.2 - 8
<PAGE>
a Delaware corporation ("USOL") to former creditors of U.S.
Online Communications, Inc. in connection with the sale of assets
to USOL and the issuance by the Corporation of Common Stock
issuable or issued upon exercise thereof;
(4) The issuance of 3,175,000 shares of Common Stock by the
Corporation in exchange for 3,175,000 shares of USOL common stock
in connection with the merger between the Corporation and USOL;
(5) The issuance of warrants to acquire 325,000 shares of
Common Stock to be issued by the Corporation in exchange for
identical warrants to be issued by USOL to GMAC Commercial
Mortgage Corporation in connection with the sale of assets to
USOL, and the issuance by the Corporation of Common Stock
issuable or issued upon exercise thereof; and
(6) The issuance of warrants to acquire 259,000 shares of
Common Stock to be issued to Amstar Capital Group or its
Affiliates in connection with a financial advisory arrangement,
and the issuance by the Corporation of Common Stock issuable or
issued upon exercise thereof.
(viii) "Fair Value" of the Common Stock as of a particular date
shall mean the average of the daily closing prices for the preceding
twenty trading days before the day in question. The closing price for
each day shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported
closing bid and asked prices, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices
as reported by the National Association of Securities Dealers
Automated Quotation System. If no price can be determined by the
foregoing method, "Fair Value" shall mean the fair value thereof as
determined by mutual agreement reached by the Corporation and the
holders of a majority of the shares of Series A Preferred Stock and
Series B Preferred Stock (the "Majority of the Holders") or, in the
event the parties are unable to agree, an opinion of an independent
investment banking firm or firms in accordance with the following
procedure. In the case of any event which gives rise to a requirement
to determine "Fair Value" hereunder, the Corporation shall be
responsible for initiating the process by which Fair Value shall be
determined as promptly as practicable, but in any event within twenty
(20) days following such event and if the procedures contemplated
herein in connection with determining Fair Value have not been
complied with fully, then any such determination of Fair Value for any
purpose hereunder shall be deemed to be preliminary and subject to
adjustment pending full compliance with such procedures. Upon the
occurrence of an event requiring the determination of Fair Value, the
Corporation shall give the holders of Series A Preferred Stock and
Series B Preferred Stock notice of such event, and the Corporation and
the holders of Series A Preferred Stock and Series B Preferred Stock
shall engage in direct good faith discussions to arrive at a mutually
agreeable determination of Fair Value. In the event the Corporation
and the Majority of the Holders are unable to arrive at a mutually
agreeable determination within thirty (30) days of the notice, an
independent investment banking firm of national standing selected by
the Corporation shall make such determination and render such opinion.
The determination so made shall be conclusive and binding on the
Corporation and the holders of Series A Preferred Stock and Series B
Preferred Stock. The fees and expenses of the investment banking firm
retained for such purpose shall be shared equally by the Corporation
and the holders of Series A Preferred Stock and Series B Preferred
Stock.
(ix) If at any time or from time to time conditions arise by
reason of action taken by the Corporation which are not adequately
covered by the provisions of Subsection 4(e), and which might
materially and adversely affect the exercise rights of the Holders of
Series A Preferred Stock and Series B Preferred Stock, upon the
request of at least a Majority of the Holders, the Corporation shall
appoint a firm of independent public accountants of recognized
national standing (which may be the regular auditors of the
Corporation), which shall give their opinion upon the adjustment, if
any, of the number of shares issuable upon the conversion of the
Series A Preferred Stock and Series B Preferred Stock, on a basis
consistent with the standards established in the other provisions of
Subsection 4(e), necessary in order to preserve without diminution the
rights of the Holders of the Series A Preferred Stock and Series B
Preferred Stock. Upon receipt of such opinion, the Board of Directors
shall forthwith make the adjustments, if any, described therein.
EX 99.2 - 9
<PAGE>
(f) COVENANT TO RESERVE SHARES OF COMMON STOCK FOR CONVERSION.
(i) The Corporation covenants that it will reserve and keep
available out of its authorized Common Stock and/or shares of its
Common Stock then owned or held by or for the account of the
Corporation, solely for the purpose of delivery upon conversion of the
Series A Preferred Stock as herein provided, such number of shares of
Common Stock as shall then be deliverable upon the conversion of the
Series A Preferred Stock. All shares of Common Stock which shall be so
deliverable shall be duly and validly issued and fully paid and
nonassessable.
(ii) Before taking any action which would cause an adjustment
reducing the Conversion Price at any time in effect below the then par
value of the shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, the Corporation shall take any corporate
action which may be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of such
Common Stock at such Conversion Price as so adjusted.
(g) COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. If any shares of Common
Stock required to be reserved for purposes of conversion of the Series A
Preferred Stock hereunder require registration with or approval of any
governmental authority under any federal or state law, or listing upon any
national securities exchange, before such shares may be issued upon
conversion, the Corporation will in good faith and as expeditiously as
possible endeavor to cause such shares to be duly registered, approved or
listed, as the case may be.
(h) NOTICE OF CHANGE OF CONVERSION PRICE OF COMMON STOCK. Whenever the
Conversion Price is adjusted, as herein provided, the Corporation shall
promptly deliver to each Holder a certificate of a firm of independent
public accountants of national standing (who may be the accountants
regularly employed by the Corporation) selected by the Board of Directors
of the Corporation setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
(i) NOTICE OF TAKING OF CERTAIN ACTIONS. In case:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than out of its
earned surplus; or
(ii) the Corporation shall authorize the granting to holders of
Common Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(iii) of any capital reorganization or reclassification of the
capital stock of the Corporation or of any consolidation or merger of
the Corporation with another corporation, or of the sale of all or
substantially all of its assets to another corporation which is to be
effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities or other assets with respect to or in
exchange for Common Stock; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation; or
(v) of any other action requiring adjustment to the Conversion
Price;
then the Corporation shall promptly cause to be mailed to each Holder at its
last address as set forth on the stock transfer records of the Corporation, at
least 14 days prior to the applicable record date hereinafter specified, a
notice stating (1) the date on which a record is to be taken for the purpose of
such dividend or distribution of rights, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record would be entitled to such
dividend or distribution of rights, or (2) the date on which such capital
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that the holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other assets
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up.
EX 99.2 - 10
<PAGE>
The Corporation shall not convert or directly or indirectly redeem,
purchase or otherwise acquire any shares of Common Stock or any other class of
capital stock of the Corporation or take any other action affecting the voting
rights of such shares, if such action will increase the percentage of any class
of outstanding voting securities owned or controlled by any Regulated
Stockholder (other than any such stockholder which requested that the
Corporation take such action), or which otherwise waives in writing its rights
under this Section 4(i)), unless the Corporation gives written notice (the
"Deferral Notice") of such action to each Regulated Stockholder. The Corporation
will defer making any such conversion, redemption, purchase or other
acquisition, or taking any such other action for a period of twenty (20) days
(the "Deferral Period") after giving the Deferral Notice in order to allow each
Regulated Stockholder to determine whether it wishes to convert or take any
other action with respect to the Common Stock it owns, controls or has the power
to vote, and if any such Regulated Stockholder then elects to convert any shares
of Common Stock, it shall notify the Corporation in writing within ten (10) days
of the issuance of the Deferral Notice, in which case the Corporation shall (i)
promptly notify from time to time prior to the end of such 20-day period each
other Regulated Stockholder holding shares of each proposed conversion, and (ii)
effect the conversions requested by all Regulated Stockholders in response to
the notice issued pursuant to this Section 4(i) at the end of the Deferral
Period. Upon complying with the procedures hereinabove set forth in this Section
4(i), the Corporation may so convert or directly or indirectly redeem, purchase
or otherwise acquire any shares of Common Stock or any other class of capital
stock of the Corporation or take any other action affecting the voting rights of
such shares.
The Corporation shall not redeem, purchase, acquire or take any other
action affecting outstanding shares of Series A Preferred Stock if, after giving
effect to such redemption, purchase, acquisition or other action, a Regulated
Stockholder would own more than 4.9% of any class of voting securities of the
Corporation (other than any class of voting securities which is (or is made
prior to any such redemption, purchase, acquisition or other action))
convertible into a class of non-voting securities which are otherwise identical
to the voting securities and convertible into such voting securities on terms
reasonably acceptable to such Regulated Stockholder) or more than 24.9% of the
total equity of the Corporation or more than 24.9% of the total value of all
capital stock of the Corporation (in each case determined by assuming such
Regulated Holder (but no other holder) has exercised, converted or exchanged all
of its options, warrants and other convertible or exchangeable securities),
unless the Corporation gives the Deferral Notice set forth in the immediately
preceding paragraph.
(j) MECHANICS OF CONVERSION.
(i) OPTIONAL CONVERSION. In order to convert Series A Preferred
Stock into full shares of Common Stock, a Holder shall deliver, no
later than 11:00 a.m., Pacific Standard Time on the business day next
preceding the Conversion Date, to the office of the Corporation's
designated transfer agent for the Series A Preferred Stock (the
"Transfer Agent") (1) a fully executed notice of conversion ("Notice
of Conversion"), and (2) the original certificate or certificates
evidencing the Series A Preferred Stock being converted (a
"Certificate"), duly endorsed.
(ii) AUTOMATIC CONVERSION. Upon the satisfaction of the
conditions set forth in Section 4(a) above, the Corporation shall, by
notice to the Holders of Series A Preferred Stock (the "Automatic
Conversion Notice"), require such Holders to convert all shares of
Series A Preferred Stock into fully paid and nonassessable shares of
Common Stock at the applicable Conversion Price. Such notice shall be
delivered by first class mail, postage prepaid, shall be given to the
holders of record of the Series A Preferred Stock to be converted,
addressed to such holders at their last addresses as shown on the
Corporation's stock transfer ledger. Such notice of conversion shall
specify the date fixed for conversion; the then effective Conversion
Price; that accumulated but unpaid dividends to the date fixed for
conversion will be paid, at the Corporation's election in cash or in a
number of shares of Common Stock equal to the dividend amount divided
by the Conversion Price on the date fixed for conversion (which shall
be within thirty (30) days of the notice); and that on and after the
Conversion Date, dividends will cease to accumulate on such shares.
Tender of shares of Series A Preferred Stock by Holder shall be
required for conversion. Any notice which is mailed as herein provided
shall be conclusively presumed to have been duly given, whether or not
a Holder of the Series A Preferred Stock receives such notice; and
failure so to give such notice or any defect in such notice, shall not
affect the validity of the proceedings for the conversion.
(iii) CONVERSION DATE. The Conversion Date shall be deemed to be
(a) for an optional conversion, the date the Notice of Conversion and
the original Certificates representing the Series A
EX 99.2 - 11
<PAGE>
Preferred Stock to be converted are surrendered to the Transfer Agent
or (b) for an automatic conversion, the date specified by the
Corporation in the Automatic Conversion Notice delivered to the
Holder.
(iv) ISSUANCE OF COMMON STOCK WITHIN THREE (3) BUSINESS DAYS.
Upon receipt of the original Certificates representing the Series A
Preferred Stock to be converted, the Corporation shall use its
reasonable best efforts to cause the Transfer Agent to issue the
appropriate number of shares of Common Stock, and to send Certificates
representing such shares, postage prepaid, to each Holder at each such
Holder's address as it appears on the stock record books of the
transfer agent, no later than three (3) business days thereafter.
(v) LOST OR STOLEN CERTIFICATES. Within three (3) business days
after receipt by the Corporation of evidence of the loss, theft,
destruction or mutilation of a certificate or certificates
representing the Series A Preferred Stock, and (in the case of loss,
theft or destruction) of indemnity or security reasonably satisfactory
to the Corporation and the Transfer Agent, and upon surrender and
cancellation of the Series A Preferred Stock certificate or
certificates, if mutilated, the Corporation shall use its reasonable
best efforts to cause the execution and delivery of new Series A
Preferred Stock of like tenor and date. The Corporation shall not be
required to deliver new Series A Preferred Stock if the request for
replacement is made contemporaneously with the conversion or
redemption of such Series A Preferred Stock.
5. RIGHTS ON LIQUIDATION.
(a) Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the Holders of the shares of the Series A
Preferred Stock and the Series B Preferred Stock, which shall be pari passu
with respect to rights on liquidation, shall be entitled to receive out of
the assets of the Corporation available for distribution to stockholders
under applicable law, before any payment or distribution of assets shall be
made on the Common Stock or on any other class or series of stock of the
Corporation ranking junior to the Series A Preferred Stock and Series B
Preferred Stock upon liquidation, the amount of $25.00 per share (taking
into account any stock split or reverse stock split or any other
adjustments to the number of shares of Common Stock into which the Series A
Preferred Stock and the Series B Preferred Stock is convertible) (the
"Liquidation Preference"), plus a sum equal to all dividends accrued
(including any compound dividends) on such shares and unpaid to the date
fixed for such liquidation, dissolution or winding up.
(b) After the payment in cash to the Holders of the shares of the
Series A Preferred Stock and the Series B Preferred Stock of the full
preferential amounts for the shares of the Series A Preferred Stock and
Series B Preferred Stock, as set forth in paragraph (a) of this Section 5,
the Holders of the Series A Preferred Stock and Series B Preferred Stock
shall have no further right or claim to any of the remaining assets of the
Corporation.
(c) In the event the assets of the Corporation available for
distribution to the Holders of shares of the Series A Preferred Stock and
Series B Preferred Stock upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation shall be insufficient to pay
in full all amounts to which such holders are entitled pursuant to
paragraph (a) of this Section 5, no distribution shall be made on account
of any shares of any other series of preferred stock or any other class of
stock of the Corporation ranking on a parity with the shares of the Series
A Preferred Stock and Series B Preferred Stock upon such liquidation,
dissolution or winding up unless proportionate amounts shall be paid on
account of the shares of the Series A Preferred Stock and Series B
Preferred Stock, ratably, in proportion to the full amounts to which
holders of all such shares which are on a parity with the shares of the
Series A Preferred Stock and the Series B Preferred Stock are respectively
entitled upon such dissolution, liquidation or winding up.
(d) A merger or consolidation of the Corporation into or with any
other corporation or association (in the event that the Corporation is not
the surviving entity or the holders of shares of Common Stock prior to the
transaction do not hold a majority of the outstanding equity interests of
the surviving entity immediately after the transaction) or the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all the property and assets of
the Corporation shall be deemed to be a liquidation or winding up of the
Corporation for the purposes of this Section 5. In such event, the holders
of the Series A Preferred Stock and Series B Preferred Stock shall be
entitled to receive, before any payment or distribution of assets shall be
made on the Common Stock or on any other class or series ranking junior to
the Series A Preferred Stock and Series B Preferred Stock, an amount equal
to the greater of (i) the amount payable pursuant to
EX 99.2 - 12
<PAGE>
Section 5(a) or (ii) the amount such holders would have received if they
had converted their shares of Series A Preferred Stock and Series B
Preferred Stock into Common Stock immediately prior to such liquidation or
winding up (without giving effect to the liquidation preference of or any
distributions on any other equity interests ranking prior to the Common
Stock).
6. OPTIONAL REDEMPTION. Commencing on the earlier to occur of (x) the tenth
anniversary of the Reference Date and (y) the date on which fewer than 25% of
the aggregate of the shares of Series A Preferred Stock and Series B Preferred
Stock issued on the date of issuance remain outstanding, and at all times
thereafter, the Corporation may, at its option, redeem all (but not less than
all) outstanding shares of Series A Preferred Stock and Series B Preferred Stock
on a date specified by the Corporation (the "Optional Redemption Date") by
paying the greater of Fair Value or the Liquidation Preference plus a sum equal
to all dividends accrued on such shares and unpaid to the Optional Redemption
Date (the "Redemption Price") in cash out of funds legally available for such
purpose.
(a) NOTICE AND REDEMPTION PROCEDURES. Notice of the redemption of
shares of Series A Preferred Stock pursuant to this Section 6 (a "Notice of
Redemption") shall be sent to the Holders of record of the shares of Series
A Preferred Stock to be redeemed by first class mail, postage prepaid, at
each such Holder's address as it appears on the stock record books of the
Corporation not more than 120 nor fewer than 90 days prior to the Optional
Redemption Date, which date shall be set forth in such notice (the
"Redemption Date"); provided that failure to give such Notice of Redemption
to any Holder, or any defect in such Notice of Redemption to any Holder
shall not affect the validity of the proceedings for the redemption of any
shares of Series A Preferred Stock held by any other Holder. In order to
facilitate the redemption of shares of Series A Preferred Stock, the Board
of Directors may fix a record date for the determination of the holders of
shares of Series A Preferred Stock to be redeemed not more than 30 days
prior to the date the Notice of Redemption is mailed. On or after the
Optional Redemption Date, each Holder of the shares called for redemption
shall surrender the certificate evidencing such shares to the Corporation
at the place designated in such notice and shall thereupon be entitled to
receive payment of the Redemption Price for such shares. From and after the
Optional Redemption Date, all dividends on shares of Series A Preferred
Stock shall cease to accumulate and all rights of the Holders thereof as
Holders of Series A Preferred Stock shall cease and terminate, except to
the extent the Corporation shall default in payment thereof on the Optional
Redemption Date.
(b) DEPOSIT OF FUNDS. The Corporation shall, on or prior to the
Optional Redemption Date, deposit with its transfer agent or other
redemption agent in the State of Texas having a capital and surplus of at
least $500,000,000 selected by the Board of Directors, as a trust fund for
the benefit of the holders of the shares of Series A Preferred Stock to be
redeemed, cash that is sufficient in amount to redeem the shares to be
redeemed in accordance with the Notice of Redemption, with irrevocable
instructions and authority to such transfer agent or other redemption agent
to pay to the respective holders of such shares, as evidenced by a list of
such holders certified by an officer of the Corporation, the Redemption
Price upon surrender of their respective share certificates. Such deposit
shall be deemed to constitute full payment of the Redemption Price for such
shares to the holders, and from and after the date of such deposit, all
rights of the holders of the shares of Series A Preferred Stock that are to
be redeemed as stockholders of the Corporation with respect to such shares,
except the right to receive the Redemption Price upon the surrender of
their respective certificates, shall cease and terminate. In case holders
of any shares of Series A Preferred Stock called for redemption shall not,
within two years after such deposit, claim the cash deposited for
redemption thereof, such transfer agent or other redemption agent shall,
upon demand, pay over to the Corporation the balance so deposited.
Thereupon, such transfer agent or other redemption agent shall be relieved
of all responsibility to the holders thereof and the sole right of such
holders, with respect to shares to be redeemed, shall be to receive the
Redemption Price as general creditors of the Corporation. Any interest
accrued on any funds so deposited shall belong to the Corporation, and
shall be paid to it from time to time on demand.
7. NOTICE. Any notice required to be given to the holders of Series A
Preferred Stock or any securities issued upon conversion thereof shall be in
writing and shall be deemed to have been given upon the earlier of personal
delivery or three days after deposit in the United States mails by registered or
certified mail, return receipt requested, with postage fully prepaid, and
addressed to each holder of record at his or its address as it appears on the
stock transfer records of the Corporation. Any notice to the Corporation shall
be in writing and shall be deemed to have been given upon the earlier of
personal delivery or three days after deposit in the United States mails by
registered or certified mail, return receipt requested, with postage fully
prepaid, to the Corporation at 10300
EX 99.2 - 13
<PAGE>
Metric Boulevard, Austin, Texas 78758 or such other address as to which the
Corporation shall have given notice to each Holder in accordance with the
provisions of this Section 7.
8. LEGEND. All certificates representing the Series A Preferred Stock, all
shares of Common Stock issued upon conversion thereof and any and all securities
issued in replacement thereof or in exchange therefor shall bear such legends as
shall be required by law or contract.
9. RANK. The Series A Preferred Stock shall rank pari passu with the Series
B Preferred Stock and shall rank senior to all of the Corporation's Common
Stock, par value $0.001 per share (the "Common Stock"), and all other classes
and series of preferred or other capital stock of the Corporation hereafter
issued by the Corporation as to dividends and as to distributions of assets upon
the liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary.
10. PROTECTIVE PROVISIONS.
(a) So long as shares of Series A Preferred Stock are outstanding, the
Corporation may not waive or amend any term of this Certificate of
Designations, including but not limited to Section 4(e)(vi), without first
obtaining the approval (by vote or written consent) of a Majority of the
Holders then outstanding.
(b) So long as shares of Series A Preferred Stock are outstanding, the
Corporation shall not, without the consent of the holders of a two-thirds
of the shares the Series A Preferred Stock then-outstanding:
(i) issue any class or series of preferred or other capital stock
senior to or on parity with the Series A Preferred Stock as to payment
of dividends or senior to or on a parity with the Series A Preferred
Stock as to payments on liquidation, dissolution or winding up of the
Corporation;
(ii) amend its Articles of Incorporation or bylaws in any manner
which would impair or reduce the rights of a Holder of the Series A
Preferred Stock; or
(iii) permit a liquidation, dissolution, or winding up of the
Corporation to occur.
(c) Notwithstanding any other provision hereof to the contrary, so
long as shares of Series A Preferred Stock are outstanding, the Corporation
shall not, without the consent of the Series A Preferred Stock holder so
affected, amend its Articles of Incorporation or bylaws to impair or reduce
the economic rights of the holders of Series A Preferred Stock, including
reducing the Conversion Price or dividend rate.
(d) Notwithstanding any other provision hereof to the contrary, so
long as shares of Series A Preferred Stock are outstanding, the Corporation
shall not, without the consent of the holder of the Series A Preferred
Stock so affected, amend its Articles of Incorporation or bylaws to, or
otherwise take any action to, treat one holder of Series A Preferred Stock
differently from another holder of Series A Preferred Stock.
EX 99.2 - 14
<PAGE>
NOTICE OF CONVERSION
(To be executed by the Registered Holder
in order to convert the Series A Preferred Stock)
The undersigned hereby irrevocably elects to convert shares of Series A
Preferred Stock, represented by stock certificate No(s). `(the "Preferred Stock
Certificates") into shares of common stock ("Common Stock") of USOL Holdings,
Inc. (f/k/a FirstLink Communications, Inc.)(the "Corporation") according to the
conditions of the Certificate of Designations of Series A Preferred Stock, as of
the date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the holder for any conversion, except for transfer taxes, if any.
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the shares of Series A Preferred Stock represented by the Series A
Preferred Stock Certificates shall be made pursuant to and subject to an
effective registration statement covering the Common Stock under the Securities
Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.
Conversion Calculations:
-----------------------------------
Date of Conversion
-----------------------------------
Applicable Conversion Price
-----------------------------------
Signature
-----------------------------------
Name
Address:
-----------------------------------
-----------------------------------
No shares of Common Stock will be issued until the original Preferred Stock
Certificate(s) to be converted and the Notice of Conversion are received by the
Corporation or the Corporation's transfer agent (the "Transfer Agent") as
required by the Certificate of Designations of the Series A Preferred Stock. The
Series A Preferred Stock to be converted shall be deemed to cease to be
outstanding as of the Conversion Date (irrespective as to when the underlying
Common Stock is delivered).
EX 99.2 - 15
CERTIFICATE OF DESIGNATIONS,
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS
OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
USOL HOLDINGS, INC.
(F/K/A FIRSTLINK COMMUNICATIONS, INC.)
1. DESIGNATION. This resolution shall provide for a single series of
convertible preferred stock, the designation of which shall be the Series B
Convertible Preferred Stock (hereinafter the "Series B Preferred Stock") and the
number of authorized shares constituting the Series B Preferred Stock is
300,000. The stated value of each share of Series B Preferred Stock is
twenty-five dollars ($25.00). The number of authorized shares of Series B
Preferred Stock may be reduced or increased by a further resolution duly adopted
by the Board of Directors of the Corporation and by the filing of an amendment
to the Corporation's Articles of Incorporation pursuant to the provisions of the
Oregon Business Corporation Act stating that such reduction or increase has been
so authorized.
2. VOTING. Except as required by law, the shares of the Series B Preferred
Stock shall not have any voting powers, either general or special, except as
provided in this Section 2:
(a) Except as set forth herein or as otherwise required by law, each
outstanding share of Series B Preferred Stock shall not be entitled to vote
on any matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Series B Preferred Stock shall not be
included in determining the number of shares voting or entitled to vote on
any such matters; provided that the holders of Series B Preferred Stock
shall have the right to vote as a separate class on any merger or
consolidation of the Corporation with or into another entity or entities,
or any recapitalization or reorganization, in which shares of Series B
Preferred Stock would receive or be exchanged for consideration different
on a per share basis from consideration received with respect to or in
exchange for the shares of Common Stock or would otherwise be treated
differently from shares of Common Stock in connection with such
transaction, except that shares of Series B Preferred Stock may, without
such a separate class vote, receive or be exchanged for non-voting
securities which are otherwise identical on a per share basis in amount and
form to the voting securities received with respect to or exchanged for the
Common Stock so long as (i) such non-voting securities are convertible into
such voting securities on the same terms as the Series B Preferred Stock is
convertible into Common Stock and (ii) all other consideration is equal on
a per share basis. Notwithstanding the foregoing, holders of the shares of
the Series B Preferred Stock shall be entitled to vote as a separate class
on any amendment to this Section 2(a) and any amendment, repeal or
modification of any provision of this Articles of Incorporation that
adversely affects the powers, preferences or special rights of holders of
the Series B Preferred Stock.
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, after payment or provision for payment of
the debts and other liabilities of the Corporation, the holders of shares
of Series A Convertible Preferred Stock (the "Series A Preferred Stock,
and, together with the Series B Preferred Stock, the "Preferred Stock") and
Series B Preferred Stock shall be entitled to share ratably, share and
share alike, in the remaining net assets of the Corporation.
(b) Subject to Section 10 herein, the Board of Directors without the
vote of the holders of shares of the Series B Preferred Stock may authorize
and issue additional shares of Common Stock and preferred stock ranking
junior as to dividends and upon liquidation to the shares of the Series B
Preferred Stock. No class or series of equity securities of the Corporation
may rank senior to or equal in right with the Series B Preferred Stock as
to dividends or upon liquidation except for the Series A Preferred Stock
which shall be equal in right.
(c) Notwithstanding anything to the contrary in Section 554(3) of the
Oregon Business Corporation Act, the holders of the Series B Preferred
Stock shall be entitled to dissenters' rights pursuant to, and to the
fullest extent permitted by, Section 554(1) of said Oregon Business
Corporation Act in the event of a merger or consolidation in which the
Corporation is a constituent corporation or the sale of substantially all
of the assets of the Corporation.
<PAGE>
3. DIVIDENDS.
(a) RATE. Holders of Series B Preferred Stock shall be entitled to
receive, out of any funds of the Corporation legally available for that
purpose, cumulative dividends from the date of issuance at the rate of 12%
per year of the Liquidation Preference (as defined in Section 5(a) below),
for each calendar quarter (pro-rated for partial quarters, based upon a 90
day quarter of three 30-day months) (each such calendar quarter, a
"Dividend Period") payable in arrears in cash, or, at the option of the
Corporation, in shares of its Common Stock (with cash in lieu of fractional
shares) based on the determination of Fair Value (as defined in Section
4(e)(viii) below) on the last day of December, March, June and September of
each year commencing December 31, 1999 (each such date being hereinafter
individually referred to as the "Dividend Payment Date," and collectively
as the "Dividend Payment Dates"); PROVIDED, that no Regulated Stockholder
(as defined in Section 4(a)(iv) below) shall be required to receive any
shares of Common Stock pursuant to this Section 3(a) to the extent that
immediately prior to payment of such dividend, or as a result of such
dividend, the number of shares of Common Stock which constitute Restricted
Stock (as defined in Section 4(iv) below) held by all holders thereof would
exceed the number of shares of Common Stock with such Regulated Stockholder
reasonably determines it and its Affiliates (as defined in Section 4(a)(iv)
below) may own, control or have the power or vote under any law,
regulation, rule or other requirement of any governmental authority at the
time applicable to such Regulated Stockholder or its Affiliates and such
Regulated Stockholder shall be entitled to receive cash in lieu of such
dividend payable in shares of Common Stock. Should the Corporation in its
discretion determine to pay said dividends in shares of Common Stock for
any Dividend Period, then all such accrued and unpaid dividends shall be
paid in shares of Common Stock at the first to occur of the next Dividend
Payment Date or the time of conversion of the Series B Preferred Stock,
such that upon such Dividend Payment Date or such conversion of the Series
B Preferred Stock by the holder thereof, the Corporation shall pay all
accrued and unpaid dividends owed for such Dividend Period as of the date
of such conversion on all then converted shares. Each such dividend shall
be paid to the holders of record of the Series B Preferred Stock as they
appear on the books of the Corporation on the record date which shall be
not less than 30 days prior to the related Dividend Payment Date.
Additional dividends, at an annual rate of 12%, shall accrue in respect of,
and compound on, any dividends in arrears and may be payable at any time in
the discretion of the Corporation.
(b) DIVIDENDS ON COMMON STOCK. No dividends (other than those payable
solely in Common Stock) shall be paid with respect to the Common Stock or
any series of preferred stock ranking junior to the Series B Preferred
Stock and the Series A Preferred Stock, which shall be pari passu with the
Series B Preferred Stock with respect to dividends, during any fiscal year
of the Corporation unless all due and unpaid dividends and the annual
current dividend on the shares of Series B Preferred Stock and the Series A
Preferred Stock for the then current and all prior Dividend Periods shall
have been declared and paid in cash. If dividends are paid partly in cash
and partly in Common Stock with respect to the Common Stock or any series
of preferred stock ranking junior to the Series A Preferred Stock and the
Series B Preferred Stock, then all due and unpaid dividends and the annual
current dividend on the shares of Series A Preferred Stock and the Series B
Preferred Stock for the then current Dividend Period and all prior Dividend
Periods shall have been declared and paid either in cash or in the same
proportion of cash and Common Stock proposed to be paid to holders of
Common Stock and any series of preferred stock ranking junior to the Series
A Preferred Stock and the Series B Preferred Stock provided, that no
Regulated Stockholder shall be required to receive any shares of Common
Stock pursuant to this Section 3(b) to the extent that immediately prior to
payment of such dividend, or as a result of such dividend, the number of
shares of Common Stock which constitute Restricted Stock held by all
holders thereof would exceed the number of shares of Common Stock with such
Regulated Stockholder reasonably determines it and its Affiliates may own,
control or have the power or vote under any law, regulation, rule or other
requirement of any governmental authority at the time applicable to such
Regulated Stockholder or its Affiliates and such Regulated Stockholder
shall be entitled to receive cash in lieu of such dividend payable in
shares of Common Stock. No shares of Common Stock or any series of
preferred stock ranking junior to the Series B Preferred Stock and the
Series A Preferred Stock shall be purchased, redeemed or acquired by the
Corporation, and no funds shall be paid into or set aside or made available
for a sinking fund for the purchase, redemption or acquisition thereof
except in transactions with employees of the Corporation aggregating not
more than $100,000.00 per year.
(c) LIMITATION ON AMOUNT OF DIVIDENDS. Holders of shares of the Series
B Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of full dividends for each Dividend
Period (including any dividends in arrears as provided herein), as herein
provided, on the Series B
EX 99.3 - 2
<PAGE>
Preferred Stock. No interest, or sum of money in lieu of interest, shall be
payable in respect of any Dividend Payment or Dividend Payments which may
be in arrears.
(d) PARITY OF DIVIDEND PAYMENTS. When dividends are not paid in full
upon the Series B Preferred Stock and the shares of any other series of
capital stock ranking on a parity as to dividends with the Series B
Preferred Stock, all dividends declared upon the Series B Preferred Stock
and such other series shall be declared pro rata so that the amount of
dividends declared per share on the Series B Preferred Stock and such other
series of capital stock shall in all cases bear to each other the same
ratio that full dividends, for the then-current and all prior Dividend
Periods, per share on the Series B Preferred Stock and full dividends,
including required or permitted accumulations, if any, on such other series
of capital stock, bear to each other.
4. CONVERSION.
The holders of the Series B Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
(A) AUTOMATIC CONVERSION; OPTIONAL CONVERSION; CONVERSION PRICE.
(i) AUTOMATIC CONVERSION. Beginning July 21, 2001, each share of
the Series B Preferred Stock, without any action or payment of
additional consideration on the part of the Holder thereof, on the
earliest of (1) the closing of a firm commitment public offering after
such date pursuant to which the Corporation offers its equity
securities for gross proceeds to the Corporation in an amount equal to
or greater than $40,000,000, (2) the day that the closing sales price
of the Common Stock on a national securities exchange or the Nasdaq
Stock Market is equal to or greater than $10.00 per share for 15
consecutive trading days (taking into account any stock split or
reverse stock split or any other adjustments to the number of shares
of Common Stock outstanding after July 21, 1999, the "Reference Date")
or (3) the seventh anniversary of the Reference Date, provided that
the Common Stock is then trading at more than $2.00 per share, taking
into account any stock split or reverse stock split or any other
adjustments to the number of shares of Common Stock outstanding after
the Reference Date, shall convert automatically as provided in Section
4(j) into fully paid and non-assessable shares of Common Stock or
Series A Preferred Stock (with cash paid in lieu of fractional
shares), having the powers, relative participating rights and the
qualifications, limitations or restrictions of holders of Common Stock
or Series A Preferred Stock, as applicable, as set forth in the
Corporation's Articles of Incorporation and Bylaws, at the Conversion
Price (as defined below); PROVIDED, that no Regulated Stockholder
shall be required to convert any shares of its Series B Preferred
Stock into Common Stock or Series A Preferred Stock pursuant to this
Section 4(a) to the extent that immediately prior thereto, or as a
result of such conversion, the number of shares of Common Stock or
Series A Preferred Stock which constitute such Restricted Stock held
by all holders thereof would exceed the number of shares of Common
Stock or Series A Preferred Stock which such Regulated Stockholder
reasonably determines it and its Affiliates may own, control or have
the power or vote under any law, regulation, rule or other requirement
of any governmental authority at the time applicable to such Regulated
Stockholder or its Affiliates.
(ii) OPTIONAL CONVERSION. At any time, holders of Series B
Preferred Stock may elect to convert, in whole or in part, their
Series B Preferred Stock into fully paid and non-assessable shares of
(A) Common Stock (with cash paid in lieu of fractional shares) at the
Conversion Price by following the procedures set forth in Section 4(j)
hereof or (B) Series A Preferred Stock at a one to one ratio;
PROVIDED, HOWEVER, that Series B Preferred Stock constituting
Restricted Stock may not be converted into Common Stock or Series A
Preferred Stock to the extent that immediately prior thereto, or as a
result of such conversion, the number of shares of Common Stock or
Series A Preferred Stock which constitute such Restricted Stock held
by all holders thereof would exceed the number of shares of Common
Stock or Series A Preferred Stock which such Regulated Stockholder
reasonably determines it and its Affiliates may own, control or have
the power to vote under any law, regulation, rule or other requirement
of any governmental authority at the time applicable to such Regulated
Stockholder or its Affiliates; and, provided, further, that each
holder of Series B Preferred Stock may convert such shares into Common
Stock or Series A Preferred Stock if such holder reasonably believes
that such converted shares will be transferred within fifteen (15)
days or already have been transferred pursuant to a Conversion Event
(defined below) and such holder agrees not to vote any such shares of
Common Stock or Series A Preferred Stock prior to such Conversion
Event and undertakes to promptly convert such shares back into Series
B Preferred Stock if such shares are not transferred pursuant to a
Conversion Event. Each Regulated Stockholder may provide for further
restrictions upon the
EX 99.3 - 3
<PAGE>
conversion of any shares of Restricted Stock by providing the
Corporation with signed, written instructions specifying such
additional restrictions and legending such shares as to the existence
of such restrictions.
(iii) CONVERSION PRICE. The "Conversion Price" shall initially be
$2.00 per share. The number of shares of common Stock issuable upon
conversion is the Liquidation Preference divided by the then
applicable Conversion Price, as adjusted from time to time as provided
in Section 4(e), multiplied by the number of shares of Series B
Preferred Stock converted.
Notwithstanding any provision of this Section 4(a)(iii) to the
contrary, each holder of Series B Preferred Stock shall be entitled to
convert shares of Series B Preferred Stock in connection with any
Conversion Event if such holder reasonably believes that such
Conversion Event will be consummated, and a written request for
conversion from any holder of Series B Preferred Stock to the
Corporation stating such holder's reasonable belief that a Conversion
Event shall occur shall be conclusive and shall obligate the
Corporation to effect such conversion in a timely manner so as to
enable each such holder to participate in such Conversion Event. The
Corporation will not cancel the shares of Series B Preferred Stock so
converted before the 15th day following such Conversion Event and will
reserve such shares until such 15th day for reissuance in compliance
with the next sentence. If any shares of Series B Preferred Stock are
converted into shares of Common Stock or Series A Preferred Stock in
connection with a Conversion Event and such shares of Common Stock or
Series A Preferred Stock are not actually distributed, disposed of or
sold pursuant to such Conversion Event, such shares of Common Stock or
Series A Preferred Stock shall be promptly converted back into the
same number of shares of Series B Preferred Stock.
(iv) DEFINED TERMS. For purposes of this Certificate of
Designations, the following terms shall be defined as set forth below:
1. "AFFILIATE" shall mean with respect to any Person, any
other person, directly or indirectly controlling, controlled by
or under common control with such Person. For the purpose of the
above definition, the term "control" (including with correlative
meaning, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities
or by contract or otherwise.
2. "CONVERSION EVENT" shall mean (a) any public offering or
public sale of securities of the Corporation (including a public
offering registered under the Securities Act of 1933 and a public
sale pursuant to Rule 144 of the Securities and Exchange
Commission or any similar rule then in force), (b) any sale of
securities of the Corporation to a person or group of persons
(within the meaning of the Securities Exchange Act of 1934, as
amended (the "1934 Act")) if, prior to such sale, such person or
group of persons in the aggregate would own or control securities
which possess in the aggregate the ordinary voting power to elect
a majority of the Corporation's directors (provided that such
sale has been approved by the Corporation's Board of Directors or
a committee thereof), (c) any sale of securities of the
Corporation to a person or group of persons (within the meaning
of the 1934 Act) if, prior to such sale, such person or group of
persons would not, in the aggregate, own, control or have the
right to acquire more than two percent (2%) of the outstanding
securities of any class of voting securities of the Corporation,
(d) any sale of securities of the Corporation to a person or
group of persons (within the meaning of the 1934 Act) if, after
such sale, such person or group of persons in the aggregate would
own or control securities of the Corporation (excluding any
Series B Preferred Stock being converted and disposed of in
connection with such Conversion Event) which possess in the
aggregate the ordinary voting power to elect a majority of the
Corporation's directors, and (e) a merger, consolidation or
similar transaction involving the Corporation if, after such
transaction (but without taking into account the Restricted Stock
converted by the Regulated Holder), a person or group of persons
(within the meaning of the 1934 Act) in the aggregate would own
or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the surviving corporation's
directors (provided that the transaction has been approved by the
Corporation's Board of Directors or a committee thereof).
EX 99.3 - 4
<PAGE>
3. "REGULATED STOCKHOLDER" shall mean any stockholder (i)
that, directly or indirectly, due to its ownership by an entity
subject to Regulation Y of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 225 (or any successor to such
regulation) ("Regulation Y"), is itself subject to the provisions
of Regulation Y and (ii) that holds Preferred Stock or Common
Stock of the Corporation.
4. "RESTRICTED STOCK" means, with respect to any Regulated
Stockholder, any outstanding shares of Common Stock and/or Series
A Preferred Stock and/or Series B Preferred Stock ever held of
record by such Regulated Stockholder or its Affiliates, excluding
treasury shares; provided, however, that any such shares shall
cease to be Restricted Stock when such shares are transferred in
a transaction which is a Conversion Event or are acquired by the
Corporation or any subsidiary of the Corporation; and provided,
further, that the Corporation shall have no responsibility for
determining whether any outstanding shares of Common Stock and/or
Series B Preferred Stock constitute Restricted Stock with respect
to any particular Regulated Stockholder, but shall instead be
entitled to receive, and rely exclusively upon, a written notice
provided by such Regulated Stockholder designating such shares as
Restricted Stock.
(b) ISSUANCE OF SHARES OF COMMON STOCK OR OTHER SECURITIES ON
CONVERSION.
(i) Pursuant to Section 4(j) herein, the Corporation shall issue,
at its expense, and shall deliver to such holder of Series B Preferred
Stock ("Holder"), (i) a certificate or certificates for the number of
full shares of Common Stock or Series A Preferred Stock issuable upon
the conversion of the Series B Preferred Stock, and (ii) cash in lieu
of fractional shares as provided in Section 4(d).
(ii) Such conversion shall be deemed to have been effected
immediately prior to the close of business on the Conversion Date (as
defined in Section 4(j)(iii)), and at such time the rights of the
Holder shall cease and the Holder shall be deemed to have become the
holder or holders of record of the shares of Common Stock or Series A
Preferred Stock issued upon conversion.
(c) NO ADJUSTMENTS FOR DIVIDENDS. No payment or adjustment shall be
made by or on behalf of the Corporation on account of any dividends on the
Common Stock issued upon such conversion which were declared for payment to
holders of Common Stock of record as of a date prior to the Conversion
Date.
(d) CASH PAYMENT IN LIEU OF FRACTIONAL SHARES. No fractional shares of
Common Stock shall be issued upon the conversion of the Series B Preferred
Stock. In lieu of any fraction of a share of Common Stock to which the
Holder would otherwise be entitled upon conversion of the Series B
Preferred Stock, the Corporation shall pay a cash adjustment for such
fraction in an amount equal to the same fraction of the Fair Value per
share of Common Stock at the close of business on the Conversion Date.
(e) ADJUSTMENT OF CONVERSION PRICE OF COMMON STOCK.
(i) Except as provided in Section 4(e)(vii), in case, at any time
or from time to time after the Reference Date, the Corporation shall
issue or sell any shares of any class of common stock for a
consideration per share less than the Fair Value (as defined in
Section 4(e)(viii) below), then forthwith upon such issue or sale the
Conversion Price in effect immediately prior to such issue or sale
shall be reduced to a price (calculated to the nearest cent)
determined by multiplying the Conversion Price in effect prior to the
adjustment by a fraction determined by dividing (A) an amount equal to
the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the Fair Value
per share of Common Stock immediately prior to such issue or sale, and
(2) the consideration, if any, received by the Corporation upon such
issue or sale, by (B) the total number of shares of Common Stock
outstanding immediately after such issue or sale multiplied by the
Fair Value per share of Common Stock immediately prior to such issue
or sale. No adjustment of the Conversion Price, however, shall be made
in an amount less than one cent per share, but any lesser adjustment
shall be carried forward and shall be made at the time of and together
with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to two cents per share or
more.
EX 99.3 - 5
<PAGE>
(ii) For the purposes of Subsection 4(e)(i) above, the following
paragraphs (1) to (6), inclusive, shall also be applicable:
(1) In case at any time the Corporation shall grant any
rights to subscribe for, or any rights or options or warrants to
purchase, Common Stock or any stock or other securities
convertible into or exchangeable for Common Stock (such
convertible or exchangeable stock or securities being herein
called "Convertible Securities"), whether or not such rights or
options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such
rights or options or upon conversion or exchange of such
Convertible Securities (determined by dividing (A) the total
amount, if any, received or receivable by the Corporation as
consideration for the granting of such rights or options or
warrants, plus the maximum aggregate amount of additional
consideration payable to the Corporation upon the exercise of
such rights or options, plus, in the case of any such rights or
options or warrants which relate to such Convertible Securities,
the maximum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such
rights or options) shall be less than the Fair Value in effect
immediately prior to the time of the granting of such rights or
options or warrants, then the total maximum number of shares of
Common Stock issuable upon the exercise of such rights or options
or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such
rights or options shall (as of the date of granting of such
rights or options) be deemed to be outstanding and to have been
issued for such price per share and the current Conversion Price
shall be adjusted as provided in Subsection 4(e)(i) above. Except
as provided in Subsection 4(e)(v), no further adjustments of the
Conversion Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of
such rights or options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.
Notwithstanding the foregoing, if at any time on or after the
Reference Date the Corporation shall grant, issue or sell any
options or rights to purchase stock, warrants, securities or
other property pro rata to the holders of Common Stock of all
classes ("Purchase Rights"), then each Holder shall be entitled
(but not obligated) to acquire, in lieu of any other adjustment
provided for in this Subsection 4(e) and upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights
which such Holder could have acquired if it had held the number
of shares of Common Stock issuable upon conversion of the Series
B Preferred Stock immediately prior to the time or times at which
the Corporation granted, issued or sold such Purchase Rights.
(2) In case at any time the Corporation shall issue or sell
any Convertible Securities, whether or not the rights to exchange
or convert thereunder are immediately exercisable, and the price
per share for which Common Stock is issuable upon such conversion
or exchange (determined by dividing (A) the total amount received
or receivable by the Corporation as consideration for the issue
or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange thereof, by (B)
the total maximum number of shares of Common Stock issuable upon
the conversion or exchange of all such Convertible Securities)
shall be less than the Fair Value immediately prior to the time
of such issue or sale, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and
to have been issued for such price per share and the Conversion
Price shall be adjusted as provided in Subsection 4(e)(i) above,
provided that (x) except as provided in Subsection 4(e)(v), no
further adjustments of the Conversion Price shall be made upon
the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities, and (y) if any such issue or sale
of such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to purchase
any such Convertible Securities for which adjustments of the
Conversion
EX 99.3 - 6
<PAGE>
Price have been or are to be made pursuant to other provisions of
Subsection 4(e)(ii), no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.
(3) With respect to any dividend or other distribution upon
any stock of the Corporation payable in Common Stock or
Convertible Securities, any Common Stock or Convertible
Securities, as the case may be, issuable in payment of such
dividend or distribution shall be deemed to have been issued or
sold without consideration and the Conversion Price shall be
adjusted as provided in Subsection 4(e)(i) above.
(4) In case at any time any shares of Common Stock or
Convertible Securities or any rights or options to purchase any
such Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be
deemed to be the amount received by the Corporation therefor,
without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts paid or
allowed by the Corporation in connection therewith. In case any
shares of Common Stock or Convertible Securities or any rights or
options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by
the Corporation shall be deemed to be the fair value of such
consideration as determined by the Board of Directors of the
Corporation in good faith, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions
or discounts paid or allowed by the Corporation in connection
therewith. In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued in connection
with any merger of another corporation into the Corporation, the
amount of consideration therefor shall be deemed to be the fair
value of the assets of such merged corporation as determined by
the Board of Directors of the Corporation in good faith after
deducting therefrom all cash and other consideration (if any)
paid by the Corporation in connection with such merger.
(5) In case at any time the Corporation shall take a record
of the holders of Common Stock for the purpose of entitling them
(A) to receive a dividend or other distribution payable in Common
Stock or in Convertible Securities, or (B) to subscribe for or
purchase Common Stock or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(6) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the
account of the Corporation or any of its subsidiaries, but the
disposition of any such shares shall be considered an issue or
sale of Common Stock for the purposes of Subsection 4(e).
(iii) In the event that the Corporation shall make any
distribution of its assets upon or with respect to its Common Stock,
as a liquidating or partial liquidating dividend, or other than as a
dividend payable out of current earnings or any surplus legally
available for dividends under the laws of the state of incorporation
of the Corporation, the Holder shall, if the Conversion Date is after
the record date for such distribution or, in the absence of a record
date, after the date of such distribution, receive, in addition to the
shares subscribed for, the amount of such assets (or, at the option of
the Corporation, a sum equal to the fair value thereof at the time of
distribution as determined by the Board of Directors of the
Corporation in good faith) which would have been distributed to such
Holder if the Conversion Date had occurred immediately prior to the
record date for such distribution or, in the absence of a record date,
immediately prior to the date of such distribution.
(iv) In case at any time the Corporation shall subdivide its
outstanding shares of Common Stock into a greater number of shares or
upon any issuance by the Corporation of a greater number of shares of
Common Stock in a pro rata exchange for all of its outstanding shares
of Common Stock, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced and conversely, in
case the outstanding shares of Common Stock of the Corporation shall
be combined into a smaller number of shares or upon
EX 99.3 - 7
<PAGE>
any issuance by the Corporation of a lesser number of shares of Common
Stock in a pro rata exchange for all of its outstanding shares of
Common Stock, the Conversion Price in effect immediately prior to such
combination shall be proportionately increased.
(v) If the purchase price provided for in any right or option
referred to in paragraph (1) of Subsection 4(e)(ii), or the rate at
which any Convertible Securities referred to in paragraphs (1) or (2)
of said Subsection 4(e)(ii) are convertible into or exchangeable for
Common Stock, shall change or a different purchase price or rate shall
become effective at any time or from time to time (other than under or
by reason of provisions designed to protect against dilution), then,
upon such change becoming effective, the Conversion Price then in
effect hereunder shall forthwith be increased or decreased to such
Conversion Price as would have obtained had the adjustments made upon
the granting or issuance of such rights or options or Convertible
Securities been made upon the basis of (1) the issuance of the number
of shares of Common Stock theretofore actually delivered upon the
exercise of such options or rights or upon the conversion or exchange
of such Convertible Securities, and the total consideration received
therefor, and (2) the granting or issuance at the time of such change
of any such options, rights, or Convertible Securities then still
outstanding for the consideration, if any, received by the Corporation
therefor and to be received on the basis of such changed price. On the
expiration of any right or option referred to in paragraph (1) of
Subsection 4(e)(ii), or on the termination of any right to convert or
exchange any Convertible Securities referred to in paragraphs (1) or
(2) of said Subsection 4(e)(ii), the Conversion Price shall forthwith
be readjusted to such amount as would have obtained had the adjustment
made upon the granting or issuance of such rights or options or
Convertible Securities been made upon the basis of the issuance or
sale of only the number of shares of Common Stock actually issued upon
the exercise of such options or rights or upon the conversion or
exchange of such Convertible Securities. If the purchase price
provided for in any such right or option, or the rate at which any
such Convertible Securities are convertible into or exchangeable for
Common Stock, shall change at any time under or by reason of
provisions with respect thereto designed to protect against dilution,
then in case of the delivery of Common Stock upon the exercise of any
such right or option or upon conversion or exchange of any such
Convertible Security, the Conversion Price then in effect hereunder
shall forthwith be decreased to such Conversion Price as would have
obtained had the adjustments made upon the issuance of such right or
option or Convertible Security been made upon the basis of the
issuance of (and the total consideration received for) the shares of
Common Stock delivered as aforesaid.
(vi) For so long as shares of Series B Preferred Stock are issued
and outstanding, the Corporation may not consolidate or merge with or
into another person, unless (i) the Corporation is the surviving
entity, or the person formed by or surviving any such consolidation or
merger (if other than the Corporation) is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia; and (ii) the Series B Preferred Stock shall be
converted or exchanged for and shall become shares of such successor,
transferee or resulting person having in respect of such successor,
transferee or successor person the same powers, preferences, and
relative participating, optional or other special rights and the
qualifications, limitations or restrictions thereon, that the Series B
Preferred Stock had immediately prior to such transaction.
(vii) The following events shall not effect an adjustment to the
Conversion Price pursuant to this Section 4(e):
(1) The issuance of Common Stock by the Corporation upon the
conversion of the Series B Preferred Stock or the Series A
Preferred Stock;
(2) The issuance of options to acquire shares of Common
Stock not to exceed 10% of the outstanding shares of Common
Stock, on a fully diluted basis, as of the effective date of this
Certificate, from time to time issuable or issued to employees,
consultants or directors of the Corporation granted or to be
granted with the approval of the Board of Directors of the
Corporation and the Common Stock issuable or issued upon exercise
thereof;
(3) The issuance of warrants to acquire 1,500,000 shares of
Common Stock to be issued by the Corporation in exchange for
identical warrants issued by USOL Holdings, Inc., a Delaware
corporation ("USOL") to former creditors of U.S. Online
Communications, Inc. in connection with the sale of assets to
USOL and the issuance by the Corporation of Common Stock issuable
or issued upon exercise thereof;
EX 99.3 - 8
<PAGE>
(4) The issuance of 3,175,000 shares of Common Stock by the
Corporation in exchange for 3,175,000 shares of USOL Common Stock
in connection with the merger between USOL and the Corporation;
(5) The issuance of warrants to acquire 325,000 shares of
Common Stock to be issued by the Corporation in exchange for
identical warrants issued by USOL to GMAC Commercial Mortgage
Corporation in connection with the sale of assets to USOL and the
issuance by the Corporation of Common Stock issuable or issued
upon exercise thereof; and
(6) The issuance of warrants to acquire 259,000 shares of
Common Stock to be issued by the Corporation in exchange for
identical warrants issued by USOL to Amstar Capital Group or its
affiliates, in connection with any financial advisory
arrangements, and the issuance by the Corporation of Common Stock
issuable or issued upon exercise thereof.
(viii) "Fair Value" of the Common Stock as of a particular date
shall mean the average of the daily closing prices for the preceding
twenty trading days before the day in question. The closing price for
each day shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported
closing bid and asked prices, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices
as reported by the National Association of Securities Dealers
Automated Quotation System. If no price can be determined by the
foregoing method, "Fair Value" shall mean the fair value thereof as
determined by mutual agreement reached by the Corporation and the
holders of a majority of the shares of Series B Preferred Stock and
Series A Preferred Stock (the "Majority of the Holders") or, in the
event the parties are unable to agree, an opinion of an independent
investment banking firm or firms in accordance with the following
procedure. In the case of any event which gives rise to a requirement
to determine "Fair Value" hereunder, the Corporation shall be
responsible for initiating the process by which Fair Value shall be
determined as promptly as practicable, but in any event within twenty
(20) days following such event and if the procedures contemplated
herein in connection with determining Fair Value have not been
complied with fully, then any such determination of Fair Value for any
purpose hereunder shall be deemed to be preliminary and subject to
adjustment pending full compliance with such procedures. Upon the
occurrence of an event requiring the determination of Fair Value, the
Corporation shall give the holders of Series B Preferred Stock and
Series A Preferred Stock notice of such event, and the Corporation and
the holders of Series B Preferred Stock and Series A Preferred Stock
shall engage in direct good faith discussions to arrive at a mutually
agreeable determination of Fair Value. In the event the Corporation
and the Majority of the Holders are unable to arrive at a mutually
agreeable determination within thirty (30) days of the notice, an
independent investment banking firm of national standing selected by
the Corporation shall make such determination and render such opinion.
The determination so made shall be conclusive and binding on the
Corporation and the holders of Series B Preferred Stock and Series A
Preferred Stock. The fees and expenses of the investment banking firm
retained for such purpose shall be shared equally by the Corporation
and the holders of Series B Preferred Stock and Series A Preferred
Stock.
(ix) If at any time or from time to time conditions arise by
reason of action taken by the Corporation which are not adequately
covered by the provisions of Subsection 4(e), and which might
materially and adversely affect the exercise rights of the Holders of
Series B Preferred Stock and Series A Preferred Stock, upon the
request of at least a Majority of the Holders, the Corporation shall
appoint a firm of independent public accountants of recognized
national standing (which may be the regular auditors of the
Corporation), which shall give their opinion upon the adjustment, if
any, of the number of shares issuable upon the conversion of the
Series B Preferred Stock and Series A Preferred Stock, on a basis
consistent with the standards established in the other provisions of
Subsection 4(e), necessary in order to preserve without diminution the
rights of the Holders of the Series B Preferred Stock and Series A
Preferred Stock. Upon receipt of such opinion, the Board of Directors
shall forthwith make the adjustments, if any, described therein.
EX 99.3 - 9
<PAGE>
(f) COVENANT TO RESERVE SHARES OF COMMON STOCK AND SERIES A PREFERRED
STOCK FOR CONVERSION.
(i) The Corporation covenants that it will reserve and keep
available out of its authorized Common Stock and Series A Preferred
Stock and/or shares of its Common Stock and Series A Preferred Stock
then owned or held by or for the account of the Corporation, solely
for the purpose of delivery upon conversion of the Series B Preferred
Stock as herein provided, such number of shares of Common Stock or
Series A Preferred Stock as shall then be deliverable upon the
conversion of the Series B Preferred Stock. All shares of Common Stock
and Series A Preferred Stock which shall be so deliverable shall be
duly and validly issued and fully paid and nonassessable.
(ii) Before taking any action which would cause an adjustment
reducing the Conversion Price at any time in effect below the then par
value of the shares of Common Stock issuable upon conversion of the
Series B Preferred Stock, the Corporation shall take any corporate
action which may be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of such
Common Stock at such Conversion Price as so adjusted.
(g) COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. If any shares of Common
Stock or Series A Preferred Stock required to be reserved for purposes of
conversion of the Series B Preferred Stock hereunder require registration
with or approval of any governmental authority under any federal or state
law, or listing upon any national securities exchange, before such shares
may be issued upon conversion, the Corporation will in good faith and as
expeditiously as possible endeavor to cause such shares to be duly
registered, approved or listed, as the case may be.
(h) NOTICE OF CHANGE OF CONVERSION PRICE OF COMMON STOCK. Whenever the
Conversion Price is adjusted, as herein provided, the Corporation shall
promptly deliver to each Holder a certificate of a firm of independent
public accountants of national standing (who may be the accountants
regularly employed by the Corporation) selected by the Board of Directors
of the Corporation setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment.
(i) NOTICE OF TAKING OF CERTAIN ACTIONS. In case:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than out of its
earned surplus; or
(ii) the Corporation shall authorize the granting to holders of
Common Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(iii) of any capital reorganization or reclassification of the
capital stock of the Corporation or of any consolidation or merger of
the Corporation with another corporation, or of the sale of all or
substantially all of its assets to another corporation which is to be
effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities or other assets with respect to or in
exchange for Common Stock; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation; or
(v) of any other action requiring adjustment to the Conversion
Price.
then the Corporation shall promptly cause to be mailed to each Holder at its
last address as set forth on the stock transfer records of the Corporation, at
least 14 days prior to the applicable record date hereinafter specified, a
notice stating (1) the date on which a record is to be taken for the purpose of
such dividend or distribution of rights, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record would be entitled to such
dividend or distribution of rights, or (2) the date on which such capital
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that the holders of Common Stock of record shall be
entitled to exchange their shares of
EX 99.3 - 10
<PAGE>
Common Stock for securities or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up.
The Corporation shall not convert or directly or indirectly redeem,
purchase or otherwise acquire any shares of Common Stock or any other class of
capital stock of the Corporation or take any other action affecting the voting
rights of such shares, if such action will increase the percentage of any class
of outstanding voting securities owned or controlled by any Regulated
Stockholder (other than any such stockholder which requested that the
Corporation take such action, or which otherwise waives in writing its rights
under this Section 4(i)), unless the Corporation gives written notice (the
"Deferral Notice") of such action to each Regulated Stockholder. The Corporation
will defer making any such conversion, redemption, purchase or other
acquisition, or taking any such other action for a period of twenty (20) days
(the "Deferral Period") after giving the Deferral Notice in order to allow each
Regulated Stockholder to determine whether it wishes to convert or take any
other action with respect to the Common Stock it owns, controls or has the power
to vote, and if any such Regulated Stockholder then elects to convert any shares
of Common Stock, it shall notify the Corporation in writing within ten (10) days
of the issuance of the Deferral Notice, in which case the Corporation shall (i)
promptly notify from time to time prior to the end of such 20-day period each
other Regulated Stockholder holding shares of each proposed conversion, and (ii)
effect the conversions requested by all Regulated Stockholders in response to
the notice issued pursuant to this Section 4(i) at the end of the Deferral
Period. Upon complying with the procedures hereinabove set forth in this Section
4(i), the Corporation may so convert or directly or indirectly redeem, purchase
or otherwise acquire any shares of Common Stock or any other class of capital
stock of the Corporation or take any other action affecting the voting rights of
such shares.
The Corporation shall not redeem, purchase, acquire or take any other
action affecting outstanding shares of Series B Preferred Stock if, after giving
effect to such redemption, purchase, acquisition or other action, a Regulated
Stockholder would own more than 4.9% of any class of voting securities of the
Corporation (other than any class of voting securities which is (or is made
prior to any such redemption, purchase, acquisition or other action) convertible
into a class of non-voting securities which are otherwise identical to the
voting securities and convertible into such voting securities on terms
reasonably acceptable to such Regulated Stockholder) or more than 24.9% of the
total equity of the Corporation or more than 24.9% of the total value of all
capital stock of the Corporation (in each case determined by assuming such
Regulated Holder (but no other holder) has exercised, converted or exchanged all
of its options, warrants and other convertible or exchangeable securities)
unless the Corporation gives the Deferral Notice set forth in the immediately
preceding paragraph.
(j) MECHANICS OF CONVERSION.
(i) OPTIONAL CONVERSION. In order to convert Series B Preferred
Stock into full shares of Common Stock or Series A Preferred Stock, a
Holder shall deliver, no later than 11:00 a.m., Pacific Standard Time
on the business day next preceding the Conversion Date, to the office
of the Corporation's designated transfer agent for the Series B
Preferred Stock (the "Transfer Agent") (1) a fully executed notice of
conversion ("Notice of Conversion"), and (2) the original certificate
or certificates evidencing the Series B Preferred Stock being
converted (a "Certificate"), duly endorsed.
(ii) AUTOMATIC CONVERSION. Upon the satisfaction of the
conditions set forth in Section 4(a) above, the Corporation shall, by
notice to the Holders of Series B Preferred Stock (the "Automatic
Conversion Notice"), require such Holders to convert all shares of
Series B Preferred Stock into fully paid and nonassessable shares of
Common Stock at the applicable Conversion Price. Such notice shall be
delivered by first class mail, postage prepaid, shall be given to the
holders of record of the Series B Preferred Stock to be converted,
addressed to such holders at their last addresses as shown on the
Corporation's stock transfer ledger. Such notice of conversion shall
specify the date fixed for conversion; the then effective Conversion
Price; that accumulated but unpaid dividends to the date fixed for
conversion will be paid, at the Corporation's election in cash or in a
number of shares of Common Stock equal to the dividend amount divided
by the Conversion Price on the date fixed for conversion (which shall
be within thirty (30) days of the notice); and that on and after the
Conversion Date, dividends will cease to accumulate on such shares.
Tender of shares of Series B Preferred Stock by Holder shall be
required for conversion. Any notice which is mailed as herein provided
shall be conclusively presumed to have been duly given, whether or not
a Holder of the Series B Preferred Stock receives such notice; and
failure so to give such notice or any defect in such notice, shall not
affect the validity of the proceedings for the conversion.
EX 99.3 - 11
<PAGE>
(iii) CONVERSION DATE. The Conversion Date shall be deemed to be
(a) for an optional conversion, the date the Notice of Conversion and
the original Certificates representing the Series B Preferred Stock to
be converted are surrendered to the Transfer Agent or (b) for an
automatic conversion, the date specified by the Corporation in the
Automatic Conversion Notice delivered to the Holder.
(iv) ISSUANCE OF COMMON STOCK WITHIN THREE (3) BUSINESS DAYS.
Upon receipt of the original Certificates representing the Series B
Preferred Stock to be converted, the Corporation shall use its
reasonable best efforts to cause the Transfer Agent to issue the
appropriate number of shares of Common Stock or Series A Preferred
Stock, and to send Certificates representing such shares, postage
prepaid, to each Holder at each such Holder's address as it appears on
the stock record books of the transfer agent, no later than three (3)
business days thereafter.
(v) LOST OR STOLEN CERTIFICATES. Within three (3) business days
after receipt by the Corporation of evidence of the loss, theft,
destruction or mutilation of a certificate or certificates
representing the Series B Preferred Stock, and (in the case of loss,
theft or destruction) of indemnity or security reasonably satisfactory
to the Corporation and the Transfer Agent, and upon surrender and
cancellation of the Series B Preferred Stock certificate or
certificates, if mutilated, the Corporation shall use its reasonable
best efforts to cause the execution and delivery of new Series B
Preferred Stock of like tenor and date. The Corporation shall not be
required to deliver new Series B Preferred Stock if the request for
replacement is made contemporaneously with the conversion or
redemption of such Series B Preferred Stock.
5. RIGHTS ON LIQUIDATION.
(a) Upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the Holders of the shares of the Series B
Preferred Stock and the Series A Preferred Stock, which shall be pari passu
with respect to rights on liquidation, shall be entitled to receive out of
the assets of the Corporation available for distribution to stockholders
under applicable law, before any payment or distribution of assets shall be
made on the Common Stock or on any other class or series of stock of the
Corporation ranking junior to the Series B Preferred Stock upon
liquidation, the amount of $25.00 per share (taking into account any stock
split or reverse stock split or any other adjustments to the number of
shares of Common Stock into which the Series B Preferred Stock and the
Series A Preferred Stock is convertible) (the "Liquidation Preference"),
plus a sum equal to all dividends accrued (including any compound
dividends) on such shares and unpaid to the date fixed for such
liquidation, dissolution or winding up.
(b) After the payment in cash to the Holders of the shares of the
Series B Preferred Stock and the Series A Preferred Stock of the full
preferential amounts for the shares of the Series B Preferred Stock and the
Series A Preferred Stock, as set forth in paragraph (a) of this Section 5,
the Holders of the Series B Preferred Stock and the Series A Preferred
Stock shall have no further right or claim to any of the remaining assets
of the Corporation.
(c) In the event the assets of the Corporation available for
distribution to the Holders of shares of the Series B Preferred Stock and
the Series A Preferred Stock upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation shall be insufficient to pay
in full all amounts to which such holders are entitled pursuant to
paragraph (a) of this Section 5, no distribution shall be made on account
of any shares of any other series of preferred stock or any other class of
stock of the Corporation ranking on a parity with the shares of the Series
B Preferred Stock and the Series A Preferred Stock upon such liquidation,
dissolution or winding up unless proportionate amounts shall be paid on
account of the shares of the Series B Preferred Stock and the Series A
Preferred Stock, ratably, in proportion to the full amounts to which
holders of all such shares which are on a parity with the shares of the
Series B Preferred Stock and the Series A Preferred Stock are respectively
entitled upon such dissolution, liquidation or winding up.
(d) A merger or consolidation of the Corporation into or with any
other corporation or association (in the event that the Corporation is not
the surviving entity or the holders of shares of Common Stock prior to the
transaction do not hold a majority of the outstanding equity interests of
the surviving entity immediately after the transaction) or the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other
EX 99.3 - 12
<PAGE>
consideration) of all or substantially all the property and assets of the
Corporation shall be deemed to be a liquidation or winding up of the
Corporation for the purposes of this Section 5. In such event, the holders
of the Series B Preferred Stock and the Series A Preferred Stock shall be
entitled to receive, before any payment or distribution of assets shall be
made on the Common Stock or on any other class or series ranking junior to
the Series B Preferred Stock and the Series A Preferred Stock, an amount
equal to the greater of (i) the amount payable pursuant to Section 5(a) or
(ii) the amount such holders would have received if they had converted
their shares of Series B Preferred Stock and Series A Preferred Stock into
Common Stock immediately prior to such liquidation or winding up (without
giving effect to the liquidation preference of or any distributions on any
other equity interests ranking prior to the Common Stock).
6. OPTIONAL REDEMPTION.
Commencing on the earlier to occur of (x) the tenth anniversary of the
Reference Date and (y) the date on which fewer than 25% of the aggregate of
the shares of Series B Preferred Stock and the Series A Preferred Stock
issued on the date of issuance remain outstanding, and at all times
thereafter, the Corporation may, at its option, redeem all (but not less
than all) outstanding shares of Series B Preferred Stock and the Series A
Preferred Stock on a date specified by the Corporation (the "Optional
Redemption Date") by paying the greater of Fair Value or the Liquidation
Preference plus a sum equal to all dividends accrued on such shares and
unpaid to the Optional Redemption Date (the "Redemption Price") in cash out
of funds legally available for such purpose.
(a) NOTICE AND REDEMPTION PROCEDURES.
Notice of the redemption of shares of Series B Preferred Stock
pursuant to this Section 6 (a "Notice of Redemption") shall be sent to the
Holders of record of the shares of Series B Preferred Stock to be redeemed
by first class mail, postage prepaid, at each such Holder's address as it
appears on the stock record books of the Corporation not more than 120 nor
fewer than 90 days prior to the Optional Redemption Date, which date shall
be set forth in such notice (the "Redemption Date"); provided that failure
to give such Notice of Redemption to any Holder, or any defect in such
Notice of Redemption to any Holder shall not affect the validity of the
proceedings for the redemption of any shares of Series B Preferred Stock
held by any other Holder. In order to facilitate the redemption of shares
of Series B Preferred Stock, the Board of Directors may fix a record date
for the determination of the holders of shares of Series B Preferred Stock
to be redeemed not more than 30 days prior to the date the Notice of
Redemption is mailed. On or after the Optional Redemption Date, each Holder
of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of the Redemption
Price for such shares. From and after the Optional Redemption Date, all
dividends on shares of Series B Preferred Stock shall cease to accumulate
and all rights of the Holders thereof as Holders of Series B Preferred
Stock shall cease and terminate, except to the extent the Corporation shall
default in payment thereof on the Optional Redemption Date.
(b) DEPOSIT OF FUNDS.
The Corporation shall, on or prior to the Optional Redemption Date,
deposit with its transfer agent or other redemption agent in the State of
Texas having a capital and surplus of at least $500,000,000 selected by the
Board of Directors, as a trust fund for the benefit of the holders of the
shares of Series B Preferred Stock to be redeemed, cash that is sufficient
in amount to redeem the shares to be redeemed in accordance with the Notice
of Redemption, with irrevocable instructions and authority to such transfer
agent or other redemption agent to pay to the respective holders of such
shares, as evidenced by a list of such holders certified by an officer of
the Corporation, the Redemption Price upon surrender of their respective
share certificates. Such deposit shall be deemed to constitute full payment
of the Redemption Price for such shares to the holders, and from and after
the date of such deposit, all rights of the holders of the shares of Series
B Preferred Stock that are to be redeemed as stockholders of the
Corporation with respect to such shares, except the right to receive the
Redemption Price upon the surrender of their respective certificates, shall
cease and terminate. In case holders of any shares of Series B Preferred
Stock called for redemption shall not, within two years after such deposit,
claim the cash deposited for redemption thereof, such transfer agent or
other redemption agent shall, upon demand, pay over to the Corporation the
balance so deposited. Thereupon, such transfer agent or other redemption
agent shall be relieved of all responsibility to the holders thereof and
the sole right of such holders, with respect to shares to be redeemed,
shall
EX 99.3 - 13
<PAGE>
be to receive the Redemption Price as general creditors of the Corporation.
Any interest accrued on any funds so deposited shall belong to the
Corporation, and shall be paid to it from time to time on demand.
7. NOTICE.
Any notice required to be given to the holders of Series B Preferred Stock
or any securities issued upon conversion thereof shall be in writing and shall
be deemed to have been given upon the earlier of personal delivery or three days
after deposit in the United States mails by registered or certified mail, return
receipt requested, with postage fully prepaid, and addressed to each holder of
record at his or its address as it appears on the stock transfer records of the
Corporation. Any notice to the Corporation shall be in writing and shall be
deemed to have been given upon the earlier of personal delivery or three days
after deposit in the United States mails by registered or certified mail, return
receipt requested, with postage fully prepaid, to the Corporation at 10300
Metric Boulevard, Austin, Texas 78758 or such other address as to which the
Corporation shall have given notice to each Holder in accordance with the
provisions of this Section 7.
8. LEGEND.
All certificates representing the Series B Preferred Stock, all shares of
Series A Preferred Stock or Common Stock issued upon conversion of shares of
Series B Preferred Stock, and any and all securities issued in replacement
thereof or in exchange therefor shall bear such legends as shall be required by
law or contract.
9. RANK.
The Series B Preferred Stock shall rank pari passu with the Series A
Preferred Stock and shall rank senior to all of the Corporation's Common Stock,
par value $0.001 per share (the "Common Stock"), and all other classes and
series of preferred or other capital stock of the Corporation hereafter issued
by the Corporation as to dividends and as to distributions of assets upon the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary.
10. PROTECTIVE PROVISIONS.
(a) So long as shares of Series B Preferred Stock are outstanding, the
Corporation may not waive or amend any term of this Certificate of
Designations, including but not limited to Section 4(e)(vi), without first
obtaining the approval (by vote or written consent) of a majority of the
holders of the then-outstanding Series A Preferred Stock and the
then-outstanding Series B Preferred Stock, voting as a single class.
(b) So long as shares of Series B Preferred Stock are outstanding, the
Corporation shall not, without the consent of the holders of two-thirds of
the shares of then-outstanding Series A Preferred Stock and
then-outstanding Series B Preferred Stock:
(i) issue any class or series of preferred or other capital stock
senior to or on parity with the Series B Preferred Stock as to payment
of dividends or senior to or on a parity with the Series B Preferred
Stock as to payments on liquidation, dissolution or winding up of the
Corporation;
(ii) amend its Articles of Incorporation or bylaws in any manner
which would impair or reduce the rights of a Holder of the Series B
Preferred Stock; or
(iii) permit a liquidation, dissolution or winding up of the
Corporation to occur.
(c) Notwithstanding any other provision hereof to the contrary, so
long as shares of Series B Preferred Stock are outstanding, the Corporation
shall not, without the consent of the Series B Preferred Stock holder so
affected, amend its Articles of Incorporation or bylaws to impair or reduce
the economic rights of the holders of Series B Preferred Stock, including
reducing the Conversion Price or dividend rate.
(d) Notwithstanding any other provision hereof to the contrary, so
long as shares of Series B Preferred Stock are outstanding, the Corporation
shall not, without the consent of the holder of the Series B
EX 99.3 - 14
<PAGE>
Preferred Stock so affected, amend its Articles of Incorporation or bylaws
or take any action to treat one holder of Series B Preferred Stock
differently from another holder of Series B Preferred Stock.
EX 99.3 - 15
<PAGE>
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Series B Preferred Stock into
Series A Preferred Stock)
The undersigned hereby irrevocably elects to convert ___________ shares of
Series B Preferred Stock ("Series B Preferred Stock"), represented by stock
certificate No(s). ____________ (the "Series B Stock Certificates") into shares
of Series A Preferred Stock ("Series A Preferred Stock") of USOL Holdings, Inc.
(f/k/a FirstLink Communications, Inc.) (the "Corporation") according to the
conditions of the Certificate of Designations of Series B Preferred Stock, as of
the date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the holder for any conversion, except for transfer taxes, if any.
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Series A Preferred Stock issuable to the
undersigned upon conversion of the shares of Series B Preferred Stock
represented by the Series B Stock Certificates shall be made pursuant to an
exemption from registration under the Securities A of 1933.
Conversion Calculations:
-----------------------------------
Date of Conversion
-----------------------------------
Applicable Conversion Price
-----------------------------------
Signature
-----------------------------------
Name
Address:
-----------------------------------
-----------------------------------
No shares of Series A Preferred Stock will be issued until the original Series B
Stock Certificate(s) to be converted and the Notice of Conversion are received
by the Corporation or the Corporation's transfer agent (the "Transfer Agent") as
required by the Certificate of Designations of the Series B Preferred Stock. The
Series B Preferred Stock to be converted shall be deemed to cease to be
outstanding as of the Conversion Date (irrespective as to when the underlying
Series A Preferred Stock is delivered).
EX 99.3 - 16
<PAGE>
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Series B Preferred Stock into
Common Stock)
The undersigned hereby irrevocably elects to convert ___________ shares of
Series B Preferred Stock ("Series B Preferred Stock"), represented by stock
certificate No(s). ____________ (the "Preferred Stock Certificates") into shares
of common stock ("Common Stock") of USOL Holdings, Inc. (f/k/a FirstLink
Communications, Inc.) (the "Corporation") according to the conditions of the
Certificate of Designations of Series B Preferred Stock, as of the date written
below. If shares are to be issued in the name of a person other than
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the holder for any conversion, except for transfer taxes, if any.
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the shares of Series B Preferred Stock represented by the
Preferred Stock Certificates shall be made pursuant to and subject to an
effective registration statement covering the Common Stock under the Securities
Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.
Conversion Calculations:
-----------------------------------
Date of Conversion
-----------------------------------
Applicable Conversion Price
-----------------------------------
Signature
-----------------------------------
Name
Address:
-----------------------------------
-----------------------------------
No shares of Common Stock will be issued until the original Preferred Stock
Certificate(s) to be converted and the Notice of Conversion are received by the
Corporation or the Corporation's transfer agent (the "Transfer Agent") as
required by the Certificate of Designations of the Series B Preferred Stock. The
Series B Preferred Stock to be converted shall be deemed to cease to be
outstanding as of the Conversion Date (irrespective as to when the underlying
Common Stock is delivered).
EX 99.3 - 17
Execution Copy
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
DATED AS OF JULY 21, 1999
BY AND BETWEEN
FIRSTLINK COMMUNICATIONS, INC.
AND
USOL HOLDINGS, INC.
<PAGE>
TABLE OF CONTENTS
ARTICLE/SECTION HEADING PAGE
ARTICLE I DEFINITIONS..........................................................2
1.1 Definitions............................................................2
ARTICLE II THE MERGER.........................................................10
2.1 Merger; Effective Time................................................10
2.2 Closing...............................................................10
2.3 Effect of the Merger..................................................10
2.4 Articles of Incorporation; By-laws....................................11
2.5 Directors and Officers................................................11
2.6 Effect on Capital Stock...............................................11
2.7 Exchange of Certificates..............................................12
2.8 Stock Transfer Books..................................................14
2.9 Dissenting Shares.....................................................14
2.10 No Further Ownership Rights in USOL Stock............................14
2.11 Lost, Stolen or Destroyed Certificates...............................15
2.12 Tax and Accounting Consequences......................................15
2.13 Adjustments..........................................................15
ARTICLE III REPRESENTATIONS AND WARRANTIES OF FLCI............................15
3.1 Organization..........................................................15
3.2 Capitalization........................................................16
3.3 SEC Filings...........................................................16
3.4 Qualification in Foreign Jurisdictions................................17
3.5 Authority Relative to this Agreement..................................17
3.6 No Conflict; Required Filings and Consents............................17
3.7 Compliance with Laws; Permits.........................................18
3.8 Financial Statements..................................................18
3.9 Absence of Certain Changes or Events..................................19
3.10 Material Contracts...................................................19
3.11 Accounts Receivable..................................................20
3.12 No Undisclosed Liabilities...........................................20
3.13 Absence of Litigation................................................21
3.14 Employee Matters.....................................................21
3.15 Labor Matters........................................................22
3.16 Restrictions on Business Activities..................................22
3.17 Real Property........................................................22
3.18 Equipment and Vehicles...............................................23
3.19 Inventories..........................................................23
3.20 Taxes................................................................23
3.21 Environmental Matters................................................24
3.22 Brokers..............................................................25
EX 99.4 - i
<PAGE>
3.23 Interested Party Transactions........................................25
3.24 Insurance Policies...................................................25
3.25 Vote Required........................................................25
3.26 Other Negotiations...................................................26
3.27 Full Disclosure......................................................26
3.28 Anti-takeover Law....................................................26
3.29 Intellectual Property................................................26
3.30 Absence of Certain Business Practices................................28
3.31 Territorial Restrictions.............................................28
3.32 Year 2000 Compliance.................................................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF USOL.............................28
4.1 Organization..........................................................28
4.2 Capitalization........................................................29
4.3 Qualification in Foreign Jurisdictions................................30
4.4 Authority Relative to this Agreement..................................30
4.5 No Conflict; Required Filings and Consents............................30
4.6 Brokers...............................................................31
4.7 Other Negotiations....................................................31
4.8 Full Disclosure.......................................................31
4.9 Lockup Agreement......................................................32
4.10 Incorporation of Representations and Warranties By Reference.........33
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER..............................33
5.1 Conduct of Business by USOL and FLCI Pending the Merger...............33
5.2 No Solicitation by USOL or FLCI.......................................35
ARTICLE VI ADDITIONAL AGREEMENTS..............................................36
6.1 Proxy Statement.......................................................36
6.2 FLCI Stockholders'Meeting.............................................37
6.3 Access to Information; Confidentiality................................37
6.4 Consents, Approvals...................................................38
6.5 Stock Options.........................................................38
6.6 Warrants..............................................................39
6.7 Notification of Certain Matters.......................................39
6.8 Public Announcements..................................................40
6.9 Application For Nasdaq Approval.......................................40
6.10 Delivery of Additional Filings.......................................40
6.11 Accountant's Comfort Letters.........................................40
6.12 Indemnification; Directors'and Officers'Insurance....................40
6.13 Employee Benefits....................................................41
6.14 Stockholder Litigation...............................................42
6.15 Accredited Investors.................................................42
ARTICLE VII CONDITIONS TO THE MERGER..........................................42
7.1 Conditions to Obligation of Each Party to Effect the Merger...........42
7.2 Additional Conditions to Obligations of FLCI..........................43
EX 99.4 - ii
<PAGE>
7.3 Additional Conditions to Obligation of USOL...........................44
ARTICLE VIII TERMINATION......................................................45
8.1 Termination...........................................................45
8.2 Certain Actions Prior to Termination..................................47
8.3 Effect of Termination.................................................48
8.4 Fees and Expenses.....................................................49
ARTICLE IX ARBITRATION; CONSENT TO JURISDICTION...............................50
9.1 Submission to Jurisdiction............................................50
9.2 Waiver of Immunity and Inconvenient Forum.............................51
9.3 Arbitration Procedures................................................51
9.4 Final Arbitration Decisions...........................................51
9.5 Claims for Unpaid Balance.............................................51
ARTICLE X GENERAL PROVISIONS..................................................52
10.1 Attorney's Fees......................................................52
10.2 Effectiveness of Representations, Warranties and Agreements;
Knowledge, Etc.......................................................52
10.3 Notices..............................................................52
10.4 Amendment............................................................54
10.5 Waiver...............................................................54
10.6 Severability.........................................................54
10.7 Assignment...........................................................55
10.8 Parties in Interest..................................................55
10.9 Failure or Indulgence Not Waiver; Remedies Cumulative................55
10.10 Governing Law........................................................55
10.11 Counterparts.........................................................56
10.12 Captions.............................................................56
10.13 Time.................................................................56
ATTACHMENTS TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
SCHEDULES:
Schedule 1.1 -- USOL Permitted Liens
Schedule 2.5(a) -- Directors of Surviving Corporation
Schedule 3.1 -- FLCI Investments and Extensions of Credit
Schedule 3.2 -- FLCI Stock Options, Warrants, and Registration Rights
Schedule 3.4 -- FLCI Qualification in Foreign Jurisdictions
Schedule 3.5 -- FLCI Stockholder Consents
Schedule 3.6(a) -- FLCI Conflicts, Required Filings and Consents
Schedule 3.6(b) -- Requirements of State Government Authorities
Schedule 3.7 -- Permits of FLCI
Schedule 3.10(a) -- FLCI Material Contracts
Schedule 3.12 -- Material Liabilities not on FLCI Financial Statements
Schedule 3.14(a) -- FLCI Employee Benefit Plans
EX 99.4 - iii
<PAGE>
Schedule 3.14(b) -- Certain Employment Agreements
Schedule 3.14(c) -- Outstanding Options and Option Holders
Schedule 3.17(a) -- Legal Descriptions of FLCI Leased Real Property
Schedule 3.18-1 -- FLCI Equipment
Schedule 3.18-2 -- FLCI Personal Property Leases
Schedule 3.20(a) -- Certain Tax Matters
Schedule 3.23 -- FLCI Interested Party Transactions
Schedule 3.29(a) -- All FLCI Intellectual Property Assets
Schedule 3.29(b) -- Intellectual Property Infringements by Third Parties
Schedule 3.29(c) -- FLCI Intellectual Property Licensing Agreements
Schedule 3.29(d) -- Intellectual Property Litigation
Schedule 3.29(e) -- Filing Offices Where FLCI Intellectual Property
Assets are Registered
Schedule 4.1(b) -- USOL Subsidiaries
Schedule 4.2(a) -- USOL Stock Options, Warrants
Schedule 4.2(b) -- Terms of Senior Note Commitment
Schedule 4.2(c) -- USOL Debt Obligations
Schedule 4.3 -- USOL Qualification in Foreign Jurisdictions
Schedule 4.5(b) -- USOL Required Consents, Approvals and Permits
Schedule 4.6 -- USOL Brokers
Schedule 4.9 -- Permitted Transfers
Schedule 5.1(g) -- Normal Salary/Wage Increases
EXHIBITS:
Exhibit 1.1(a) -- Form of TSD Asset Purchase Agreement
Exhibit 1.1(b) -- Form of USOC Asset Purchase Agreement
Exhibit 2.6(b)-1 -- Form of Certificate of Designations of Preferences,
Limitations and Relative Rights of USOL Series A
Convertible Preferred Stock
Exhibit 2.6(b)-2 -- Form of Certificate of Designations of Preferences,
Limitations and Relative Rights of USOL Series B
Convertible Preferred Stock
Exhibit 2.6(c)-1 -- Form of USOL Other Warrants
Exhibit 2.6(c)-2 -- Form of USOL TSD Warrants
Exhibit 7.2(f) -- Opinion of Jenkens & Gilchrist
Exhibit 7.3(f) -- Opinion of Neuman Drennen & Stone, LLC
EX 99.4 - iv
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of July 21,
1999 (this "AGREEMENT"), is by and between FIRSTLINK COMMUNICATIONS, INC., an
Oregon corporation ("FLCI"), and USOL HOLDINGS, INC., a Delaware corporation
("USOL").
W I T N E S S E T H:
WHEREAS, each of the Boards of Directors of FLCI and USOL has determined
that it is advisable and in the best interests of the respective stockholders
for FLCI and USOL to enter into a strategic business combination upon the terms
and subject to the conditions set forth herein; and
WHEREAS, USOL, Inc., a Delaware corporation and a wholly-owned
subsidiary of USOL ("USOL SUB"), has acquired substantially all of the assets
and assumed substantially all of the remaining liabilities of US Online
Communications, Inc., a Delaware corporation ("USOC"), and
TheResidentClub.com,Inc., a Delaware corporation and a wholly-owned subsidiary
of USOL Sub ("TRC"), has acquired certain of the assets of the Tenant Services
Division ("TSD") of GMAC Commercial Mortgage Corporation, a California
corporation ("GMAC-CM"); and
WHEREAS, in furtherance of such combination, each of the Boards of
Directors of FLCI and USOL has approved the merger of USOL with and into FLCI
(the "MERGER") in accordance with the applicable provisions of the Oregon Law
(as defined herein) and the Delaware Law (as defined herein) and upon the terms
and subject to the conditions set forth herein; and
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to each of USOL's and FLCI's willingness to
enter into this Agreement, certain stockholders of FLCI have entered into
agreements with USOL, dated as of the date of this Agreement ("STOCKHOLDER
SUPPORT AGREEMENTS"), pursuant to which such stockholders have agreed, among
other things, to vote all voting securities of FLCI beneficially owned by them
in favor of adoption of the Merger; and
WHEREAS, FLCI and USOL intend this Agreement to be a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE"), and the regulations thereunder;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, FLCI and USOL hereby agree as
follows:
<PAGE>
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"ACQUISITION PROPOSAL" has the meaning set forth in Section 5.2(a).
"ACTION" has the meaning set forth in Section 7.2(d).
"AFFILIATE" means, with respect to a Person, a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person; including, without
limitation, any partnership or joint venture in which such Person (either alone,
or through or together with any other subsidiary) has, directly or indirectly,
an interest of ten percent or more.
"AGREEMENT" means this Agreement and includes exhibits and schedules
delivered pursuant to the terms of this Agreement.
"ARBITRATION NOTICE" has the meaning set forth in Section 9.3(b).
"ARBITRATION PANEL" has the meaning set forth in Section 9.3(a).
"ARTICLES OF MERGER" means the articles of merger filed in connection
with the Merger with the Secretary of State of the State of Oregon pursuant to
Section 60.494 of the Oregon Law.
"BALANCE SHEET DATE" means May 31, 1999.
"BENEFICIAL OWNER" means, with respect to any shares of stock, a Person
who shall be deemed to be the beneficial owner of such shares (i) which such
Person or any of its Affiliates or associates (as such term is defined in Rule
12b-2 of the Exchange Act) beneficially owns, directly or indirectly, (ii) which
such Person or any of its Affiliates or associates has, directly or indirectly,
(A) the right to acquire (whether such right is exercisable immediately or
subject only to the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding or (iii) which are beneficially owned,
directly or indirectly, by any other Persons with whom such Person or any of its
Affiliates or associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares.
"BUSINESS DAY" means any day of the year (other than any Saturday or
Sunday) on which the Federal Reserve Bank is open for business in Los Angeles,
California.
"CANCELLED SHARES" has the meaning set forth in Section 2.6(d).
EX 99.4 - 2
<PAGE>
"CASH" means all cash, certificates of deposits, bank deposits and other
cash equivalents, together with all accrued but unpaid interest thereon.
"CERTIFICATE OF MERGER" means the certificate of merger filed in
connection with the Merger with the Secretary of State of the State of Delaware
in accordance with Section 252 of the Delaware Law.
"CLOSING" has the meaning set forth in Section 2.2.
"CODE" has the meaning set forth in the Recitals.
"COMPANY" means (a) USOL at all times prior to the Effective Time, and
(b) FLCI upon the Effective Time and at all times thereafter.
"COMPANY COMMON STOCK" means (a) USOL Common Stock at all times prior to
the Effective Time, and (b) FLCI Common Stock upon the Effective Time and at all
times thereafter.
"COMPANY OTHER WARRANTS" means (a) USOL Other Warrants at all times
prior to the Effective Time, and (b) FLCI Other Warrants upon the Effective Time
and at all times thereafter.
"COMPANY PREFERRED STOCK" means (a) USOL Preferred Stock at all times
prior to the Effective Time, and (b) FLCI Preferred Stock upon the Effective
Time and at all times thereafter.
"COMPANY WARRANTS" means (a) USOL Warrants at all times prior to the
Effective Time, and (b) FLCI Warrants upon the Effective Time and at all times
thereafter.
"CONTRACT" means any contract, lease, commitment, sales order, purchase
order, agreement, indenture, mortgage, note, bond, instrument, plan, permit or
license.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise.
"DELAWARE LAW" means the Delaware General Corporation Law, Chapter 1 of
Title 8, Section 101 et seq.
"DISSENTING SHARES" has the meaning set forth in Section 2.9(a).
"EFFECTIVE TIME" has the meaning set forth in Section 2.1.
"ENVIRONMENTAL LAW" means any Law which relates to or otherwise imposes
liability or standards of conduct concerning discharges, releases or threatened
releases of noises, odors or any pollutants, contaminants or hazardous or toxic
wastes, substances or materials, whether as
EX 99.4 - 3
<PAGE>
matter or energy, into ambient air, water or land, or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants or
hazardous or toxic wastes, substances or materials, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the Toxic Substances Control
Act of 1976, as amended, the Federal Water Pollution Control Act Amendments of
1972, the Clean Water Act of 1977, as amended, any so-called "Superfund" or
"Superlien" Law (including those already referenced in this definition) and any
other Law of any Governmental Authority having a similar subject matter.
"ENVIRONMENTAL PERMIT" means any Permit required by or pursuant to any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" has the meaning set forth in Section 2.7(a).
"FCC" means the Federal Communications Commission or any successor
agency thereto.
"FLCI ACCOUNTS RECEIVABLE" has the meaning set forth in Section 3.11.
"FLCI" has the meaning set forth in the Recitals.
"FLCI BALANCE SHEETS" has the meaning set forth in Section 3.8.
"FLCI CERTIFICATES" has the meaning set forth in Section 2.7(b).
"FLCI COMMON STOCK" means the common stock, par value $.001 per share,
of FLCI.
"FLCI EMPLOYEE PLANS" has the meaning set forth in Section 3.14(a).
"FLCI EQUIPMENT" has the meaning set forth in Section 3.18.
"FLCI FCC PERMITS" has the meaning set forth in Section 3.7.
"FLCI FINANCIAL STATEMENTS" has the meaning set forth in Section 3.8.
"FLCI INTELLECTUAL PROPERTY ASSETS" has the meaning set forth in Section
3.29(a).
"FLCI MATERIAL CONTRACTS" has the meaning set forth in Section 3.10(a).
"FLCI PREFERRED STOCK" means, collectively, the FLCI Series A Preferred
Stock and the FLCI Series B Preferred Stock.
EX 99.4 - 4
<PAGE>
"FLCI REAL PROPERTY LEASES" has the meaning set forth in Section
3.17(a).
"FLCI SEC REPORTS" has the meaning set forth in Section 3.3.
"FLCI SERIES A PREFERRED STOCK" means the Series A Convertible Preferred
Stock, par value $.001 per share, of FLCI, with the identical rights,
preferences and privileges as the USOL Series A Preferred Stock.
"FLCI SERIES B PREFERRED STOCK" means the Series B Convertible Preferred
Stock, par value $.001 per share, of FLCI, with the identical rights,
preferences and privileges as the USOL Series B Preferred Stock.
"FLCI STOCK" means the shares of FLCI Common Stock and FLCI Preferred
Stock, collectively.
"FLCI STOCK OPTION PLAN" means FLCI's 1998-1999 Combined Incentive Stock
Option and Nonqualified Stock Option Plan.
"FLCI STOCKHOLDERS MEETING" has the meaning set forth in Section
3.27(b).
"FLCI TSD WARRANTS" means the separate warrants to be issued in the
Merger in exchange for the USOL TSD Warrants.
"FLCI UNAUDITED BALANCE SHEETS" has the meaning set forth in Section
3.8.
"FLCI UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.8.
"FLCI WARRANTS" means, collectively, the FLCI Other Warrants and the
FLCI TSD Warrants.
"GAAP" means U.S. generally accepted accounting principles at the time
in effect.
"GMAC-CM" has the meaning set forth in the Recitals.
"GOVERNMENTAL APPROVAL" means any consent of any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any multilateral authority or any
government authority, agency, department, board, commission or instrumentality
of the United States, any State of the United States or any political
subdivision thereof, and any tribunal or arbitrator(s) of competent
jurisdiction, and any self-regulatory organization.
"GROUP HEALTH PLAN" has the meaning set forth in Section 6.13(c).
EX 99.4 - 5
<PAGE>
"HAZARDOUS SUBSTANCES" means any natural or artificial substance,
preparation or article which if generated, transported, stored, treated, used or
disposed of (alone or combined with any other substance, preparation or article)
is harmful to water, air or land or any living organism.
"INTELLECTUAL PROPERTY" means any and all United States and foreign: (a)
patents (including design patents, industrial designs and utility models) and
patent applications (including docketed patent disclosures awaiting filing,
reissues, divisions, continuations-in-part and extensions), patent disclosures
awaiting filing determination, inventions and improvements thereto; (b)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof; (c)
copyrights (including software) and registrations thereof; (d) inventions,
processes, designs, formulae, trade secrets, know-how, industrial models,
confidential and technical information, manufacturing, engineering and technical
drawings, product specifications and confidential business information; (e)
intellectual property rights similar to any of the foregoing; and (f) copies and
tangible embodiments thereof (in whatever form or medium, including electronic
media).
"IRS" means the Internal Revenue Service.
"ISO" means an incentive stock option within the meaning of Section
422(b) of the Code.
"LAW" means any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed or imposed by any
Governmental Authority.
"LIEN" shall mean any encumbrance, lien, charge, hypothecation, pledge,
mortgage, title retention agreement, security interest of any nature, adverse
claim, exception, reservation, easement, right of occupation, any matter capable
of registration against title, option, right-of-preemption, privilege or any
agreement, indenture, contract, lease, deed of trust, license, option,
instrument or other commitment to create any of the foregoing.
"LOCKUP PERIOD" has the meaning set forth in Section 4.9(b).
"LOSSES" means any and all costs, demands, claims, liabilities, fines,
penalties, assessments, damages and expenses (including the burden and expense
of defending against all of the foregoing even if the assertions therein are
groundless, false or fraudulent), or amounts paid in settlement thereof, and
court costs (including court-awarded interest) and reasonable attorneys' fees
and disbursements of counsel (including legal or other expenses reasonably
incurred in connection with investigating or defending the same); PROVIDED, that
the term "Losses" shall not include costs, demands, claims, liabilities, fines,
penalties, assessments, damages and expenses which are indirect or consequential
in nature.
"LOST USOL CERTIFICATE" has the meaning set forth in Section 2.11.
EX 99.4 - 6
<PAGE>
"MERGER" has the meaning set forth in the Recitals.
"MERGER CONSIDERATION" has the meaning set forth in Section 2.7(b).
"NASDAQ" means the Nasdaq Stock Market, Inc.
"NOTICE" has the meaning set forth in Section 10.3.
"OREGON LAW" means the Oregon Business Corporation Act, Oregon Revised
Statutes, 60.001 ET SEQ.
"OTHER LOCKUP PERIOD" has the meaning set forth in Section 4.9(c).
"OUTSIDE DATE" means December 31, 1999.
"PERMIT" means a permit, license, consent, certificate, approval,
franchise, right, waiver, exemption, order or other authorization of a
Governmental Authority.
"PERMITTED LIENS" means
(i) liens for Taxes, assessments and governmental charges due and being
contested in good faith and diligently by appropriate proceedings (and for the
payment of which adequate provision has been made);
(ii) servitudes, easements, restrictions, rights-of-way and other
similar rights in real property or any interest therein; PROVIDED the same are
not of such nature as to materially adversely affect the use of the property
subject thereto;
(iii) liens for Taxes either not due and payable or due but for which
notice of assessment has not been given;
(iv) undetermined or inchoate liens, charges and privileges incidental
to current construction or current operations and statutory liens, charges,
adverse claims, security interests or encumbrances of any nature whatsoever
claimed or held by any governmental authority that have not at the time been
filed or registered against the title to the asset or served upon the Seller
pursuant to law or that relate to obligations not due or delinquent;
(v) liens or rights reserved in any lease for rent or for compliance
with the terms of such lease;
(vi) security given in the ordinary course of the Business to any public
utility, municipality or government or to any statutory or public authority in
connection with the operations of the Business, other than security for borrowed
money;
(vii) statutory liens in favor of a seller of personal property,
mechanic's liens or other statutory liens in favor of a provider of a service;
PROVIDED, that obligations to a secured party are not overdue or delinquent; and
EX 99.4 - 7
<PAGE>
(viii) the liens described in SCHEDULE 1.1 (with respect to USOL).
"PERSON" means any individual, corporation, trust, estate, partnership,
joint venture, company, association, governmental bureau or other entity of
whatsoever kind or nature (including as defined in Section 13(d)(3) of the
Exchange Act).
"PREDECESSOR ENTITIES" means, collectively, USOC and TSD.
"PROXY STATEMENT" has the meaning set forth in Section 3.27(b).
"RE-INCORPORATION" means the re-incorporation in the State of Delaware
of the Surviving Corporation.
"RULES OF ARBITRATION" has the meaning set forth in Section 9.3(a).
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR NOTES" has the meaning set forth in Section 4.2(b).
"STOCKHOLDER SUPPORT AGREEMENTS" has the meaning set forth in the
Recitals.
"SUBSIDIARY" or "SUBSIDIARIES" means, with respect to a Person, any
corporation, partnership, joint venture or other legal entity of such Person
(either alone or through or together with any other subsidiary of such Person)
which owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
"SUPERIOR OFFER" has the meaning set forth in Section 8.2(c).
"SURVIVING CORPORATION" has the meaning set forth in Section 2.1.
"TAX" or "TAXES" means any federal, state, local, foreign or other tax,
levy, impost, fee, assessment, imposition or other charge of any kind
whatsoever, including without limitation net income, gross income, estimated
income, gross receipts, business, occupation, value added, real property,
payroll, personal property, sales, transfer, stamp, use, employment, commercial
rent, occupancy, franchise, withholding, profits, windfall profits, deemed
profits, license, registration, lease, severance, capital stock, production,
corporation, ad valorem, social security (or similar), unemployment, disability,
alternative, add-on minimum, premium or customs duties, including without
limitation any interest, penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
information return, statement or other document required to be filed in respect
of Taxes, including without
EX 99.4 - 8
<PAGE>
limitation Tax Returns for estimated Taxes, any schedule or attachment thereto,
and any amendment to any of the above.
"TRANSFER" has the meaning set forth in Section 4.9.
"TRC" has the meaning set forth in the Recitals.
"TSD" has the meaning set forth in the Recitals.
"TSD ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement, dated
as of the date hereof, by and among USOL, TRC and GMAC-CM, in the form attached
hereto as EXHIBIT 1.1(A).
"USOC" has the meaning set forth in the Recitals.
"USOC ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement,
dated as of the date hereof, by and among USOL Sub, USOL, USOC and certain
selling shareholders, in the form attached hereto as Exhibit 1.1(b).
"USOL" has the meaning set forth in the Recitals.
"USOL CERTIFICATE" or "USOL CERTIFICATES" has the meaning set forth in
Section 2.7(b).
"USOL COMMON STOCK" means the Common Stock, $.001 par value per share,
of USOL.
"USOL MATERIAL CONTRACTS" means those Contracts of USOL set forth in
Section 5.11 of the Disclosure Memorandum to the USOC Asset Purchase Agreement.
"USOL OTHER WARRANTS" means the separate warrants, dated the date
hereof, issued by USOL, in the form attached hereto as EXHIBIT 2.6(C)-1.
"USOL PREFERRED STOCK" means, collectively, the USOL Series A Preferred
Stock and the USOL Series B Preferred Stock.
"USOL SERIES A PREFERRED STOCK" means the Series A Convertible Preferred
Stock, $0.001 par value, of USOL, with the rights, preferences and privileges
set forth in EXHIBIT 2.6(B)-1 hereto.
"USOL SERIES B PREFERRED STOCK" means the Series B Convertible Preferred
Stock, $0.001 par value, of USOL, with the rights, preferences and privileges
set forth in EXHIBIT 2.6(B)-2 hereto.
"USOL STOCK" means the USOL Common Stock and USOL Preferred Stock,
collectively.
"USOL STOCK OPTION PLAN" means the 1999 USOL Holdings, Inc. Incentive
Plan.
EX 99.4 - 9
<PAGE>
"USOL STOCKHOLDERS MEETING" has the meaning set forth in Section
3.27(b).
"USOL SUB" has the meaning set forth in the Recitals.
"USOL TSD WARRANTS" means the separate warrants issued under by USOL to
GMAC-CM, in the form attached hereto as EXHIBIT 2.6(C)-2.
"USOL UNAUDITED BALANCE SHEET" means the unaudited balance sheet of USOC
as of May 31, 1999.
"USOL WARRANTS" means, collectively, the USOL Other Warrants and the
USOL TSD Warrants.
ARTICLE II
THE MERGER
2.1 MERGER; EFFECTIVE TIME.
At the Effective Time (as defined below), and subject to and upon the
terms and conditions of this Agreement, the Delaware Law and the Oregon Law,
USOL shall be merged with and into FLCI and FLCI shall continue as the surviving
corporation. FLCI as the surviving corporation after the Merger is hereinafter
sometimes referred to as the "SURVIVING CORPORATION." At the Effective Time, the
identity and separate existence of USOL shall cease. As promptly as practicable
after the satisfaction or waiver, as the case may be, of the conditions set
forth in Article VII, USOL and FLCI shall cause the Merger to be consummated by
filing the Certificate of Merger and the Articles of Merger, together with any
required related instruments, with the Secretaries of State of the States of
Delaware and Oregon, respectively, and USOL and FLCI shall take such other
actions as may be required by Law to make the Merger effective. The time the
Merger becomes effective in accordance with applicable Law is referred to herein
as the "EFFECTIVE TIME".
2.2 CLOSING.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Section 8.1, and
subject to the satisfaction or waiver of all the conditions set forth in Article
VII, the consummation of the Merger (the "CLOSING") shall take place as promptly
as practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article VII, at the offices of USOL, 10300
Metric Boulevard, Austin, Texas 78758, unless another time or place is agreed to
in writing by USOL and FLCI.
2.3 EFFECT OF THE MERGER.
At the Effective Time, the effect of the Merger shall be as provided in
this Agreement, the Certificate of Merger, the applicable provisions of the
Delaware Law, the Articles of
EX 99.4 - 10
<PAGE>
Merger and the applicable provisions of the Oregon Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of USOL shall vest in the
Surviving Corporation, and all debts, liabilities and duties of USOL shall
become the debts, liabilities and duties of the Surviving Corporation.
2.4 ARTICLES OF INCORPORATION; BY-LAWS.
(a) The Articles of Incorporation of FLCI, as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation until thereafter amended in accordance with the Oregon Law
and said Articles of Incorporation except that said Articles of Incorporation
shall be amended as of the Effective Time to the form mutually agreed upon by
the parties.
(b) The By-laws of FLCI, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter amended
in accordance with the Oregon Law, the Articles of Incorporation of the
Surviving Corporation and said By-laws except that said By-laws shall be amended
as of the Effective Time to the form mutually agreed upon by the parties.
2.5 DIRECTORS AND OFFICERS.
(a) The seven individuals listed in SCHEDULE 2.5(A) shall comprise the
full Board of Directors of the Surviving Corporation as of the Effective Time.
(b) The officers of USOL immediately prior to the Effective Time shall
comprise the officers of the Surviving Corporation as of the Effective Time.
2.6 EFFECT ON CAPITAL STOCK.
At the Effective Time, by virtue of the Merger and without any action on
the part of FLCI or USOL or the holders of any securities issued by either of
them:
(a) Each share of USOL Common Stock issued and outstanding immediately
prior to the Effective Time shall be cancelled and converted, subject to
Sections 2.6(e), 2.7(f) and 2.13, into the right to receive one (1) share of
validly issued, fully paid and nonassessable FLCI Common Stock.
(b) Each share of USOL Series A Preferred Stock and USOL Series B
Preferred Stock issued and outstanding immediately prior to the Effective Time
shall be cancelled and converted, subject to Sections 2.6(e), 2.7(f) and 2.13,
into the right to receive one (1) share of validly issued, fully paid and
nonassessable FLCI Series A Preferred Stock or FLCI Series B Preferred Stock,
respectively. The terms of the FLCI Preferred Stock that will be issued
hereunder will be identical to the terms of the USOL Preferred Stock. EXHIBITS
2.6(B)-1 and 2.6(B)-2 set forth the forms of the Certificates of Designations of
Preferences,
EX 99.4 - 11
<PAGE>
Limitations and Relative Rights with respect to the USOL Series A Preferred
Stock and the USOL Series B Preferred Stock, respectively.
(c) Each USOL Other Warrant issued and outstanding immediately prior to
the Effective Time shall be cancelled and converted, subject to Sections 2.6(e),
2.7(f) and 2.13, into the right to receive one (1) FLCI Other Warrant to
purchase the same number of shares as the USOL Other Warrant; and each USOL TSD
Warrant issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive one (1) FLCI TSD Warrant to purchase the
same number of shares as the USOL TSD Warrant. The FLCI Other Warrants which
will be issued hereunder shall be identical to the terms of the USOL Other
Warrants. EXHIBITS 2.6(C)-1 and 2.6(C)-2 set forth the form of the USOL Other
Warrants and the USOL TSD Warrants, respectively.
(d) Each share of USOL Stock held in the treasury of USOL and each share
of USOL Stock owned by any direct or indirect subsidiary of USOL immediately
prior to the Effective Time (the "CANCELLED SHARES") shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be
outstanding and be cancelled and retired without payment of any consideration
therefor.
(e) No fraction of a share of FLCI Stock shall be issued, but in lieu
thereof, each holder of USOL Stock who would otherwise be entitled to a fraction
of a share of FLCI Stock (after aggregating all fractional shares of FLCI Stock
to be received by such holder and providing for any shares to be withheld
pursuant to Section 2.7(f), it being the intention of the parties that no holder
of USOL Stock will receive cash in an amount equal to or greater than the value
of one full share of FLCI Stock), shall receive from FLCI an amount of cash
(rounded to the nearest cent), without interest, equal to the product of (i)
such fraction, multiplied by (ii) $2.00, subject to Section 2.13.
(f) Each USOL Stock Option issued and outstanding immediately prior to
the Effective Time shall be cancelled and converted, pursuant to the provisions
of Section 6.5, into an option to acquire, on the same terms and conditions as
were applicable under such USOL Stock Option prior to the Effective Time, the
whole number of shares of FLCI Common Stock as the holder of such USOL Stock
Option would have been entitled to receive pursuant to the Merger had such
holder exercised such option in full immediately prior to the Effective Time
(not taking into account whether or not such option was in fact exercisable).
2.7 EXCHANGE OF CERTIFICATES.
(a) As of the Effective Time, FLCI shall supply, or cause to be
supplied, to or for the account of a bank or trust company to be designated by
FLCI (the "EXCHANGE AGENT"), in trust for the benefit of the holders of USOL
Stock (other than the Cancelled Shares), for exchange in accordance with this
Section 2.7, certificates evidencing the FLCI Stock issuable pursuant to
Sections 2.6(a) and 2.6(b) in exchange for outstanding USOL Stock and all cash
required to be paid pursuant to Sections 2.6(e) and 2.7(c).
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(b) As soon as reasonably practicable after the Effective Time, FLCI
shall instruct the Exchange Agent to mail to each holder of record of a
certificate or certificates (the "USOL CERTIFICATES") which immediately prior to
the Effective Time evidenced outstanding shares of USOL Stock, other than
Cancelled Shares, (i) a letter of transmittal, which letter shall specify, among
other conditions, that delivery shall be effected, and risk of loss and title to
the USOL Certificates shall pass, only upon proper delivery of the USOL
Certificates to the Exchange Agent, and (ii) instructions to effect the
surrender of the USOL Certificates in exchange for the certificates evidencing
shares of FLCI Stock (the "FLCI CERTIFICATES") and, in lieu of any fractional
shares thereof, cash. Upon surrender of a USOL Certificate for cancellation to
the Exchange Agent , together with such letter of transmittal, duly executed,
and such other customary documents as may be reasonably required by FLCI or the
Exchange Agent, the holder of such USOL Certificate shall be entitled to receive
in exchange therefor (A) FLCI Certificates evidencing that whole number of
shares of FLCI Stock which such holder has the right to receive in respect of
the shares of USOL Stock formerly evidenced by such USOL Certificate in
accordance with applicable provisions hereof; (B) any dividends or other
distributions to which such holder is entitled pursuant to Section 2.7(c); and
(C) cash in lieu of a fractional share of FLCI Stock to which such holder is
entitled pursuant to Section 2.6(e) (such FLCI Stock, rights, dividends,
distributions and cash in lieu of fractional shares together with any amounts to
be withheld pursuant to Section 2.7(f) being collectively referred to as the
"MERGER CONSIDERATION"), and the USOL Certificate so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of shares of USOL Stock
which is not registered in the transfer records of USOL as of the Effective
Time, FLCI Stock and cash may be issued and paid in accordance with this Article
II to a transferee if the applicable certificate is presented to the Exchange
Agent, accompanied by all documents required by law to evidence and effect such
transfer pursuant to this Section 2.7(b) and by evidence that any applicable
stock transfer taxes have been paid. Until so surrendered, each outstanding USOL
Certificate which represented shares of USOL Stock, shall be deemed from and
after the Effective Time, for all corporate purposes other than the payment of
dividends, to evidence the ownership of the number of full shares of FLCI Stock
into which such shares of USOL Stock may be exchanged in accordance herewith and
the right to receive an amount in cash in lieu of the issuance of any fractional
shares in accordance with Section 2.6(e).
(c) No dividends or other distributions with respect to FLCI Stock with
a record date after the Effective Time shall be paid to the holder of any
unsurrendered USOL Certificate with respect to the FLCI Stock such holder is
entitled to receive until such holder shall surrender such USOL Certificate.
Subject to applicable law, following the surrender of any such USOL Certificate,
there shall be paid to the record holder of the FLCI Certificates issued in
exchange therefor, without interest, at the time of such surrender, the amount
of dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of FLCI Stock.
(d) If any FLCI Certificate is to be issued in a name other than that in
which the USOL Certificate surrendered in exchange therefor is registered, it
shall be a condition of the issuance thereof that the USOL Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the Person requesting such exchange shall have
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paid to FLCI, or any agent designated by FLCI, any transfer or other taxes
required by reason of the issuance of an FLCI Certificate in any name other than
that of the registered holder of the USOL Certificate surrendered.
(e) FLCI and USOL shall have no liability to any holder of USOL Stock
for any Merger Consideration (or dividends or distributions with respect
thereto) which are delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(f) FLCI or the Exchange Agent shall be entitled to deduct and withhold
from the Merger Consideration otherwise payable to any holder of USOL Stock such
amounts as FLCI or the Exchange Agent may be required to deduct and withhold
with respect to any provision of Federal, state, local or foreign Tax laws. To
the extent that amounts are so withheld by FLCI or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares in respect of which such deduction and
withholding was made by FLCI or the Exchange Agent.
2.8 STOCK TRANSFER BOOKS.
At the Effective Time, the stock transfer books of USOL shall be closed,
and there shall be no further registration of transfers of USOL Stock on the
records of USOL.
2.9 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary, any
shares of FLCI Common Stock held by a holder who has exercised appraisal rights
for such shares in accordance with the applicable provisions of the Oregon Law
and who, as of the Effective Time, has not effectively withdrawn or lost such
appraisal rights (the "DISSENTING SHARES"), shall not be converted into, or
represent a right to receive, the Merger Consideration pursuant to Section
2.7(b), but the holder thereof shall be entitled only to such rights as are
granted by the Oregon Law with respect to such Dissenting Shares.
(b) FLCI shall give USOL prompt written notice of any demands received
by FLCI to require FLCI to purchase Dissenting Shares, the withdrawal of any
such demands, and any other notices or instruments served pursuant to the Oregon
Law and received by FLCI. FLCI shall not, except with the prior written consent
of USOL, voluntarily make any payment with respect to any Dissenting Shares or
offer to settle, or settle, any such demands with respect thereto.
2.10 NO FURTHER OWNERSHIP RIGHTS IN USOL STOCK.
The Merger Consideration delivered upon the surrender of USOL
Certificates in accordance with the terms hereof shall be deemed to have been
delivered in full satisfaction of all rights pertaining to such USOL
Certificates, and there shall be no further registration of transfers on the
records of the Surviving Corporation of shares of USOL Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, USOL
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<PAGE>
Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and converted as provided in this Article II.
2.11 LOST, STOLEN OR DESTROYED CERTIFICATES.
In the event any USOL Certificate shall have been lost, stolen or
destroyed (a "LOST USOL Certificate"), the Exchange Agent shall, upon the making
of an affidavit of that fact by the registered owner thereof, deliver to the
registered owner thereof such Merger Consideration as may be required pursuant
to Sections 2.6 and 2.7; PROVIDED, HOWEVER, that FLCI may, in its sole
discretion and as a condition precedent to the delivery of such Merger
Consideration, require the registered owner of such Lost USOL Certificate to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against FLCI or the Exchange Agent with respect to the
Lost USOL Certificate.
2.12 TAX AND ACCOUNTING CONSEQUENCES.
It is intended by FLCI and USOL that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the Code. FLCI and USOL
hereby adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
2.13 ADJUSTMENTS.
If, between the date of this Agreement and the Effective Time, the
outstanding shares of FLCI Common Stock shall be changed into a different number
of shares or a different class by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment, or
a stock dividend thereon shall be declared with a record date prior to the
Effective Time, the amount of consideration to be received pursuant to this
Article II in exchange for each outstanding share of USOL Stock or USOL Warrant
shall be correspondingly adjusted.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FLCI
FLCI hereby represents and warrants to USOL that each of the following
is true, correct and complete as of the date hereof:
3.1 ORGANIZATION.
(a) FLCI is a corporation duly organized, validly existing and in good
standing under the laws of Oregon. FLCI has full corporate power and authority
to own, lease and operate its properties and to carry on its business as such
business is now conducted and proposed to be conducted. The copies of the
Articles of Incorporation of FLCI, certified by the Secretary of State of
Oregon, and the By-laws of FLCI, each of which have been delivered
EX 99.4 - 15
<PAGE>
to USOL by FLCI, are true and complete copies thereof, and are in full force and
effect. FLCI is not in violation of its Articles of Incorporation or By-laws.
(b) FLCI has no subsidiaries and does not, directly or indirectly, own
or have the contractual right or obligation to acquire any equity interest in
any other corporation, partnership, joint venture, trust or other business
organization. Except as disclosed in SCHEDULE 3.1, FLCI has not made any
investment in, loan to, or advance of cash or other extension of credit to any
Person other than in the ordinary course of its business.
3.2 CAPITALIZATION.
The authorized capital stock of FLCI consists of 20,000,000 shares of
common stock, no par value per share, of which 3,615,617 shares are currently
issued and outstanding, and 1,000,000 shares of preferred stock, no par value
per share, none of which shares are currently issued or outstanding, and no
designation of any series of preferred stock has been made. All of the
outstanding shares of FLCI's capital stock have been duly authorized, are
validly issued, fully paid and non-assessable, and the holders thereof are not
entitled to cumulative voting rights or preemptive rights. There are no
obligations, contingent or otherwise, of FLCI to repurchase, redeem or otherwise
acquire any shares of FLCI's capital stock or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
entity. Except as set forth in SCHEDULE 3.2 or 3.14(C), there are no outstanding
options to purchase, registration rights, or warrants, privileges or rights to
subscribe to or purchase, any shares of FLCI's capital stock or securities
issued by FLCI convertible into or exchangeable for shares of FLCI's capital
stock or other securities of FLCI or commitments, understandings or intentions
to issue any additional shares or options, warrants, privileges or rights to
subscribe for shares of FLCI's capital stock. At the Effective Time, the
authorized capital stock of FLCI will consist of 50,000,000 shares of FLCI
Common Stock and 5,000,000 shares of FLCI Preferred Stock, 1,700,000 shares of
which shall be designated as the "FLCI SERIES A PREFERRED STOCK" and 300,000
shares of which shall be designated as the "FLCI SERIES B PREFERRED STOCK."
3.3 SEC FILINGS.
FLCI has filed all forms, reports and documents required to be filed
with the SEC under the Securities Act and the Exchange Act since the date FLCI
first registered the FLCI Common Stock under the Exchange Act and has delivered
to USOL true and complete copies of (i) its Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, (ii) its Quarterly Reports on Form 10-Q for
the periods ended September 30, 1998, and March 31, 1999, (iii) Amendment No. 3
to its Registration Statement on Form SB-2 filed with the SEC on May 14, 1998,
(iv) all other reports or registration statements filed by FLCI with the SEC
since it first registered the FLCI Common Stock under the Exchange Act, and (v)
all amendments, supplements and exhibits (including, without duplication,
exhibits incorporated by reference) to all such reports and registration
statements (the reports referred to in subsections (i) - (v), collectively, the
"FLCI SEC REPORTS"). The FLCI SEC Reports (i) were prepared in accordance with
the requirements of the Securities Act or the Exchange Act,
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<PAGE>
as applicable, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
3.4 QUALIFICATION IN FOREIGN JURISDICTIONS.
FLCI is duly qualified or licensed and in good standing as a foreign
corporation duly authorized to do business in each jurisdiction in which the
character of the properties owned or leased or the nature of the activities
conducted by it makes such qualification or licensing necessary, except for any
jurisdiction(s) in which the failure to so qualify would not have a material
adverse effect upon FLCI. SCHEDULE 3.4 lists the jurisdictions in which FLCI is
qualified to do business as a foreign corporation.
3.5 AUTHORITY RELATIVE TO THIS AGREEMENT.
FLCI has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by FLCI and the consummation by FLCI of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Board of
Directors of FLCI are necessary to authorize this Agreement or to consummate the
transactions so contemplated. FLCI has obtained, and has delivered to USOL,
separate Stockholder Support Agreements executed by, and has obtained the proxy
of, the holders of the outstanding shares of FLCI Stock listed in SCHEDULE 3.5
in favor of the approval and adoption of the Merger. The Board of Directors of
FLCI has determined that it is advisable and in the best interest of FLCI's
stockholders for FLCI to enter into the Merger with USOL upon the terms and
subject to the conditions of this Agreement. This Agreement has been duly and
validly executed and delivered by FLCI and, assuming the due authorization,
execution and delivery by USOL, constitutes a legal, valid and binding
obligation of FLCI enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws from time to time in effect that affect
creditors' rights generally, and by legal and equitable limitations on the
availability of specific remedies.
3.6 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except as set forth in SCHEDULE 3.6(A), the execution and delivery
of this Agreement by FLCI does not, and the performance of this Agreement by
FLCI will not, (i) conflict with or violate the Articles of Incorporation or
By-laws of FLCI, (ii) conflict with or violate any Law applicable to FLCI or by
which any of its properties is bound or affected, (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of time or both
would constitute a default), or impair FLCI's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any FLCI Material
Contract, (iv) result in the termination of, or accelerate the
EX 99.4 - 17
<PAGE>
payment or performance required by, or result in the creation of a Lien on any
of the properties or assets of FLCI pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which FLCI is a party or by which FLCI, or any of
its properties, is bound or affected, or (v) give any Person the right to
require FLCI to purchase assets from or sell assets to such Person or trigger a
"change of control" provision in any Contract to which FLCI is a party; except
in the case of clause (ii) for such violations or conflicts that would not,
individually or in the aggregate, have a material adverse effect on FLCI.
(b) The execution and delivery of this Agreement by FLCI does not, and
the performance of this Agreement and the transactions contemplated hereby by
FLCI will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, except (i) for
applicable requirements of any state Governmental Authorities as set forth in
SCHEDULE 3.6(B), the Securities Act, the Exchange Act, state securities laws,
Nasdaq, and the filing and recordation of appropriate merger or other documents
as required by the Oregon Law and the Delaware Law, and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Merger,
or otherwise prevent or delay FLCI from performing its obligations under this
Agreement, or would not otherwise have a material adverse effect upon FLCI.
3.7 COMPLIANCE WITH LAWS; PERMITS.
To FLCI's knowledge, the operation of its business has been and is being
conducted in accordance with all Laws applicable thereto. No investigation by
any Governmental Authority or alleged violation of or noncompliance with such
Laws is pending or, to the best knowledge of FLCI, threatened. FLCI holds all of
the Permits listed in SCHEDULE 3.7, and no other Permits are currently necessary
for the lawful operation of FLCI's business, except where the failure to possess
the same would not have a material adverse effect on the financial condition,
results of operations or business of FLCI. All Permits listed are in full force
and effect. No violation of any Permit has occurred which is continuing, and no
proceeding is pending or threatened to revoke or limit any Permit. FLCI holds
all Permits of the FCC necessary for the lawful conduct of its business (the
"FLCI FCC PERMITS"), except where failure to possess the same would not have a
material adverse effect on the financial condition, results of operations or
business of FLCI. FLCI is in compliance with the terms of all FLCI FCC Permits
and the applicable rules and regulations of the FCC in all material respects.
3.8 FINANCIAL STATEMENTS.
FLCI has delivered to USOL FLCI's audited balance sheets as at December
31, 1997 and December 31, 1998 (the "FLCI BALANCE SHEETS"), and FLCI's audited
statements of income and changes in financial position for the years then ended
(collectively, with the FLCI Balance Sheets, the "FLCI FINANCIAL STATEMENTS").
The FLCI Financial Statements have been audited by the independent public
accounting firm of KPMG Peat Marwick, LLP. FLCI has also delivered to USOL
FLCI's unaudited balance sheets as at March 31, 1998, March 31,
EX 99.4 - 18
<PAGE>
1999 and May 31, 1999 (the "FLCI UNAUDITED BALANCE SHEETS"), and FLCI's
unaudited statements of income and changes in financial position for the three
month period ended March 31, 1999 (collectively, with the FLCI Unaudited Balance
Sheets, the "FLCI UNAUDITED FINANCIAL STATEMENTS"). The FLCI Financial
Statements and the FLCI Unaudited Financial Statements were prepared in
accordance with SEC requirements and such financial statements (including the
notes thereto) were prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except for the absence of footnote
disclosures in the FLCI Unaudited Financial Statements, and except as may be
indicated in the notes thereto) and each fairly presented in all material
respects the financial position of FLCI as at the date thereof and the results
of its operations and cash flows for the periods indicated, except that the FLCI
Unaudited Financial Statements were or are subject to normal and recurring
year-end adjustments which are not in the aggregate material in amount.
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as reflected in the FLCI Financial Statements, since December 31,
1998, FLCI has conducted its business in the ordinary course and there has not
occurred: (i) any amendments or changes in the Articles of Incorporation or
By-laws of FLCI; (ii) any damage to, destruction or loss of any assets of FLCI
(whether or not covered by insurance) that could have a material adverse effect
upon FLCI; (iii) any change by FLCI in its accounting methods, principles or
practices; (iv) any revaluation by FLCI of any of its assets, including, without
limitation, the writing down of the value of capitalized software or inventory
or the writing off of promissory notes or accounts receivable other than in the
ordinary course of business in amounts that would not individually or in the
aggregate have a material adverse effect on FLCI; (v) any sale of a material
amount of property or assets of FLCI; or (vi) any other action or event that
would have required the consent of USOL pursuant to Section 5.1 had such action
or event occurred after the date of this Agreement. Since December 31, 1998,
there has been no material adverse change in the financial condition, results of
operations or business of FLCI.
3.10 MATERIAL CONTRACTS.
(a) SCHEDULE 3.10(A) sets forth a true and complete list of (i) (A) each
Contract with respect to which FLCI has any liability or obligation, contingent
or otherwise, involving more than $25,000; or which places any material
limitations on the method of conducting, or scope of, FLCI's business; (B) all
Contracts of FLCI pursuant to which benefits accrue to the other parties to such
Contracts as a result of the Merger; (C) all Contracts of FLCI with its
directors, officers, employees, agents or consultants, or its Affiliates; (D)
all Contracts to which FLCI is a party relating to the borrowing of money, or
the guaranty of any obligation for the borrowing of money; (E) all Contracts
relating to any securities of FLCI or rights in connection therewith, and (ii)
all Contracts which, as of the date hereof, would be required to be filed by
FLCI with the SEC as "material contracts" pursuant to applicable securities laws
((i) and (ii) being collectively referred to as the "FLCI MATERIAL CONTRACTS").
FLCI is not a party to any oral Contract, agreement or other arrangement which,
if reduced to written form, would be required to be listed in SCHEDULE 3.10(A).
EX 99.4 - 19
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(b) The FLCI Material Contracts set forth the entire arrangement and
understanding between FLCI and the respective third parties with respect to the
subject matter thereof, and there have been no material amendments or side or
supplemental arrangements to or in respect of any FLCI Material Contract. FLCI
has made available for review by USOL and its representatives true and correct
copies of all FLCI Material Contracts as currently in effect, and will furnish
any further information that USOL may reasonably request in connection
therewith. Each FLCI Material Contract is valid and in full force and effect and
FLCI has performed all material obligations required to be performed thereunder.
FLCI is not in default under or in breach or violation of any material term of
any FLCI Material Contract and, to the knowledge of FLCI, no third party is in
default under any material provision of any FLCI Material Contract, except, in
each such case, for such defaults, breaches or violations which would not,
individually or in the aggregate, have a material adverse effect on FLCI. Each
FLCI Material Contract is enforceable against FLCI in accordance with its terms
and, to the knowledge of FLCI, is enforceable against the other party thereto.
3.11 ACCOUNTS RECEIVABLE.
Each account receivable of FLCI summarized on the FLCI Financial
Statements and the FLCI Unaudited Financial Statements (collectively, the "FLCI
ACCOUNTS RECEIVABLE") represented, at the date of the applicable financial
statement, (a) a sale made in the ordinary course of business and which arose
pursuant to an enforceable contract for an undisputed, bona fide sale of goods
or for services performed, and FLCI had performed all of its obligations to
produce the goods or perform the services to which such FLCI Accounts Receivable
relates; (b) except as adequately reserved against in the FLCI Balance Sheets
and the FLCI Unaudited Balance Sheets, and except for any amounts the failure of
which to collect would not have, individually or in the aggregate, a material
adverse effect on FLCI, amounts owed which were not more than 30 days past due
as of the applicable date, and which were not subject to any claim or reduction,
counterclaim, set-off, recoupment or other claim for credit, allowances or
adjustments by the Person owing such amount; and (c) except as reserved against
on such balance sheets, to FLCI's knowledge, the FLCI Accounts Receivable were
collectible in full within 60 days from the date of the applicable financial
statement, in at least the amount at which they are carried on the books of
FLCI. FLCI has not sold, assigned, or otherwise encumbered the FLCI Accounts
Receivable.
3.12 NO UNDISCLOSED LIABILITIES.
Except as set forth on SCHEDULE 3.12, FLCI has no liabilities (absolute,
accrued, contingent or otherwise) which are, in the aggregate, material to the
business, operations or financial condition of FLCI, taken as a whole, except
(a) liabilities adequately provided for in the FLCI Financial Statements, (b)
contractual liabilities incurred in the ordinary course of business and not
required under GAAP to be reflected on the FLCI Financial Statements, (c)
liabilities incurred in connection with this Agreement, or (d) other liabilities
reflected on the FLCI Unaudited Balance Sheets or incurred since the Balance
Sheet Date in the ordinary
EX 99.4 - 20
<PAGE>
course of business which are not, in the aggregate, material to the business
operations or financial condition of FLCI.
3.13 ABSENCE OF LITIGATION.
There are no claims, actions, suits, proceedings or investigations
pending or, to the knowledge of FLCI, threatened against FLCI, or any properties
or rights of FLCI before any court, arbitrator or administrative or Governmental
Authority or body, domestic or foreign, that, individually or in the aggregate,
could have a material adverse effect upon FLCI.
3.14 EMPLOYEE MATTERS.
(a) Except as specifically described in SCHEDULE 3.14(A), FLCI has no
employee benefit plans (including, but not limited to, pension plans and health
or welfare plans), arrangements or understandings, whether formal or informal
("FLCI EMPLOYEE PLANS"). FLCI does not now and has never contributed to a
"multi-employer plan" as defined in Section 400(a)(3) of ERISA. FLCI has
complied with all applicable provisions of ERISA and all rules and regulations
promulgated thereunder, and neither FLCI nor any trustee, administrator,
fiduciary, agent or employee thereof has at any time been involved in a
transaction that would constitute a "prohibited transaction" within the meaning
of Section 406 of ERISA as to any covered plan of FLCI. FLCI is not a party to
any collective bargaining or other labor union agreement. FLCI has not, within
the past five (5) years had, or been threatened with, any labor union
activities, work stoppages or other labor trouble with respect to its employees.
(b) FLCI has made available for review by USOL and its representatives
and SCHEDULE 3.14(B) sets forth (i) a list of true and complete copies of all
employment agreements with officers and directors of FLCI; (ii) a list of true
and complete copies of all agreements with consultants where FLCI has
obligations to make annual cash payments in an amount exceeding $25,000; (iii) a
schedule listing all officers of FLCI who have executed a non-competition
agreement with FLCI; (iv) a list of true and complete copies of all severance
agreements, programs and policies of FLCI with or relating to its employees,
excluding programs and policies required to be maintained by law; and (v) a list
of true and complete copies of all plans, programs, agreements and other
arrangements of FLCI with or relating to its employees which contain
change-in-control provisions.
(c) SCHEDULE 3.14(C) sets forth a true and complete list of each
outstanding option to purchase FLCI Stock as of the date hereof, together with
the identity of the holder of such option, the number of shares of FLCI Stock
subject to such option, the date of grant of such option, the extent to which
such option is or will become vested, the option price of such option (to the
extent determined as of the date hereof), whether such option is intended to
qualify as an ISO, and the expiration date of such option. SCHEDULE 3.14(C) also
sets forth the total number of such ISOs and any nonqualified options.
EX 99.4 - 21
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3.15 LABOR MATTERS.
FLCI has been and currently is conducting its business in full
compliance with all Laws relating to employment and employment practices, terms
and conditions of employment, wages and hours and nondiscrimination in
employment. FLCI's relationship with its employees is good, and there is no
labor strike, dispute, slow-down or work stoppage actually pending or threatened
against or involving FLCI which might affect in any material way its business.
None of the employees of FLCI is covered by any collective bargaining agreement,
no collective bargaining agreement is currently being negotiated, and, to the
best knowledge or FLCI, no attempt is currently being made to organize any
employees of FLCI to form or enter a labor union or similar organization. FLCI
has not experienced any work stoppage or other material labor difficulty in the
last five years.
3.16 RESTRICTIONS ON BUSINESS ACTIVITIES.
Except for this Agreement, there is no material agreement, judgment,
injunction, order or decree binding upon FLCI which has or could reasonably be
expected to have the effect of prohibiting or impairing any material business
practice of FLCI, the acquisition of property by FLCI or the conduct of business
by FLCI as currently conducted or as proposed to be conducted by FLCI following
the Merger.
3.17 REAL PROPERTY.
(a) FLCI does not own any real property. SCHEDULE 3.17(A) lists all
leases pursuant to which FLCI holds any real property ("FLCI REAL PROPERTY
LEASES") and includes complete, accurate and insurable legal descriptions of
such leased real property. No parcel of land subject to an FLCI Real Property
Lease relies on or regularly makes use of access to the nearest public road or
right-of-way over land owned by others, except where such access is by means of
one or more valid recorded easements not subject to divestiture, the terms of
which have been disclosed to USOL prior to the date hereof. FLCI has delivered
to USOL true and complete copies of all FLCI Real Property Leases, together with
copies of all reports of any engineers, environmental consultants or other
consultants in its possession relating to any of the property subject to an FLCI
Real Property Lease. All of the FLCI Real Property Leases are valid, enforceable
and effective in accordance with their terms; all rentals, royalties and other
monetary obligations thereunder payable have been fully paid; there is not under
any FLCI Real Property Lease any existing or claimed default by FLCI or any
other party thereto; there is not under any FLCI Real Property Lease any event
or condition, which with or without notice or the passage of time, or both,
would constitute a default by FLCI; and FLCI enjoys peaceable and undisturbed
possession under all FLCI Real Property Leases. None of the FLCI Real Property
Leases are encumbered by any Liens, other than Permitted Liens.
(b) Each separate parcel of real estate subject to an FLCI Real Property
Lease has adequate water supply, storm and sanitary sewer facilities, access to
telephone, gas and electrical connections, fire protection, drainage and other
public utilities, and has parking facilities that meet all requirements imposed
by applicable Laws.
EX 99.4 - 22
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(c) There is no pending or, to the best knowledge of FLCI, threatened or
proposed proceeding or governmental action to modify the zoning classification
of, or to condemn or take by the power of eminent domain (or to purchase in lieu
thereof), or to classify as a landmark, or to impose special assessments on, or
otherwise to take or restrict in any way the right to use, develop or alter, all
or any part of the real property subject to the FLCI Real Property Leases.
3.18 EQUIPMENT AND VEHICLES.
SCHEDULE 3.18-1 sets forth a true and complete list of all equipment
owned by FLCI ("FLCI EQUIPMENT"), other than items acquired by FLCI in the
ordinary course of business from the date hereof through the Closing (and FLCI
will identify in writing to USOL, prior to the Closing, each item so acquired
which has a book value of $10,000 or more). SCHEDULE 3.18-2 lists all leases by
FLCI of any item of personal property used in connection with the Business
("FLCI PERSONAL PROPERTY LEASES"). All of the FLCI Equipment and all of the
other personal property leased by FLCI under the FLCI Personal Property Leases
are presently utilized by FLCI in the ordinary course of its business. FLCI has
delivered to USOL true and complete copies of all FLCI Personal Property Leases.
3.19 INVENTORIES.
FLCI does not maintain inventories.
3.20 TAXES.
(a) Except as set forth in SCHEDULE 3.20(A), FLCI has completed and
timely filed with the appropriate taxing authority all Tax Returns required to
be filed by it through the date hereof and will timely file any Tax Returns
required to be filed on or prior to the Closing. FLCI has paid and discharged
all Taxes due in connection with or with respect to all Tax Returns and has paid
all other Taxes when due, and there are no other Taxes that would be due if
asserted by a taxing authority, except such as are being contested in good faith
by appropriate proceedings (to the extent that any such proceedings are
required) and with respect to which FLCI is maintaining reserves to the extent
currently required in all respects adequate for their payment. As of the time of
filing, all Tax Returns were (and, as to Tax Returns not filed as of the date
hereof, will be) complete and correct in all material respects. FLCI has
complied in all material respects with all applicable Laws relating to the
payment and withholding of Taxes and has timely withheld from employee wages or
other payments to creditors or independent contractors or stockholders and paid
over to the proper taxing authority all amounts required to be so withheld and
paid over. Except as set forth in SCHEDULE 3.20(A), no claim has ever been made
by a taxing authority in a jurisdiction where FLCI does not file Tax Returns
that it is or may be subject to Taxes in that jurisdiction. FLCI has disclosed
to the relevant taxing authority any position taken where the failure to make
such disclosure would enable the taxing authority to subject a taxpayer to
penalties or additions to tax that would have a material adverse effect upon
FLCI. No taxing authority or agency is now asserting or, to FLCI's knowledge, is
threatening to assert against FLCI any deficiency or claim for additional Taxes
other than additional Taxes with respect to which an adequate
EX 99.4 - 23
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reserve (in conformity with GAAP) has been established, as set forth in the most
recently filed FLCI SEC Report. FLCI is not currently being audited by any
taxing authority. There are no Tax liens on any assets of FLCI. No extension or
waiver of a statute of limitations with respect to Taxes or Tax Returns is
currently in effect for FLCI. The accruals and reserves for Taxes are in all
material respects adequate to cover all Taxes accruable and unpaid through the
Closing Date (including interest and penalties, if any, thereon and Taxes being
contested) in accordance with GAAP, consistently applied with past practice. No
material issue has been raised by a taxing authority on audit that is of a
recurring nature and that would have a material adverse effect upon the Taxes of
FLCI. FLCI has delivered to USOL for inspection all Tax Returns of, and all
examination reports and statements of deficiency assessed against or agreed to
by, FLCI for which the applicable statute of limitations has not expired. All
material elections with respect to Taxes affecting FLCI as of the date hereof
are set forth in SCHEDULE 3.20(A). FLCI has not entered into any transaction
already recharacterized or which could be recharacterized with respect to Taxes
on the grounds of tax avoidance, bad faith, or tax fraud.
(b) FLCI has not made any payments, is not obligated to make any
payments and is not a party to any agreement, contract or arrangement, including
this Agreement, that may result, separately or in the aggregate, in the payment
of any "excess parachute payment" within the meaning of Section 280G of the Code
or any payment that will not be deductible under Section 162(m) of the Code.
FLCI does not own stock in a passive foreign investment company within the
meaning of Section 1296 of the Code. FLCI has not filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of any asset owned by FLCI. No property used by FLCI is
property that FLCI is or will be required to treat as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954 as it existed prior to the enactment of the Tax Reform Act of 1986
or is "tax-exempt use property" within the meaning of Section 168(h) of the
Code. FLCI has not entered into any inter-company transaction within the meaning
of Section 1.1502-13(b)(1) of the United States Treasury Regulations as to which
deferred gains or losses have not been restored. FLCI does not have and has not
had a branch in any foreign country. FLCI is not a party to any tax allocation
or tax sharing agreements or documentation of similar arrangements. FLCI has not
been and is not a member of an affiliated group (within the meaning of Section
1504(a) of the Code or a similar group defined under a similar provision of
state, local, or foreign law, filing a consolidated tax return, and FLCI is not
liable for the Taxes of any other Person or entity under United States Treasury
Regulation Section 1.1502-6 (or any similar provision of state, foreign or local
law), or as a transferee or successor, or by contract, or otherwise. FLCI
operates at least one significant historic business line, or owns at least a
significant portion of its historic business assets, in each case within the
meaning of Section 1.368-1(d) of the United States Treasury Regulations. FLCI is
not an "investment company" as defined in Section 368(a)(2)(F) of the Code.
3.21 ENVIRONMENTAL MATTERS.
FLCI (i) has obtained all required Environmental Permits; (ii) is in
substantial compliance with all material terms and conditions of such required
Environmental Permits, and also is in substantial compliance with all other
limitations, restrictions, conditions,
EX 99.4 - 24
<PAGE>
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the Environmental Laws or contained in any regulation, code, plan,
order, decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder; (iii) as of the date hereof, is not aware of and has not
received notice of any event, condition, circumstance, activity, practice,
incident, action or plan which would interfere with or prevent continued
compliance with or which would give rise to any material common law or statutory
liability, or otherwise form the basis of any claim, action, suit or proceeding,
based on or resulting from FLCI's (or any of its agent's) manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge or release into the environment, of any
pollutant, contaminant or hazardous or toxic material or waste, and (iv) has
taken all actions necessary under applicable requirements of Laws, including the
Environmental Laws, to register any products or materials required to be
registered by FLCI (or any of its agents) thereunder.
3.22 BROKERS.
No investment bank, broker or finder is entitled to any fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of FLCI.
3.23 INTERESTED PARTY TRANSACTIONS.
Except as set forth in SCHEDULE 3.23, since the effective date of FLCI's
Registration Statement and Prospectus dated July 28, 1998, no event has occurred
that would be required to be reported as a Certain Relationship or Related
Transaction, pursuant to Item 404 of Regulation S-K promulgated by the SEC.
3.24 INSURANCE POLICIES.
There are no disputes with underwriters of FLCI's insurance policies or
bonds, and all premiums due and payable with respect thereto have been paid.
There are no pending or, to the best knowledge of FLCI, threatened terminations
or premium increases with respect to any of such insurance policies or bonds
and, to the best knowledge of FLCI, there is no condition or circumstance
applicable to FLCI's business which is likely to result in such termination or
increase. FLCI's business and the assets insured by such insurance policies are
in compliance with all material conditions contained in such insurance policies
or bonds; and such insurance policies are valid and in full force.
3.25 VOTE REQUIRED.
The affirmative vote of the holders of a majority of the outstanding
shares of FLCI Common Stock is the only vote of the holders of any class or
series of FLCI's capital stock necessary under its Articles of Incorporation,
By-laws, applicable law and the rules of the National Association of Securities
Dealers, Inc., or Nasdaq to approve the Merger and the other transactions
contemplated hereby.
EX 99.4 - 25
<PAGE>
3.26 OTHER NEGOTIATIONS.
FLCI is not engaged in discussions or negotiations with any Person or
Persons with respect to, and has not solicited or furnished any information to
any Person or Persons who, to FLCI's knowledge, is or are currently
contemplating negotiations or an offer regarding, a consolidation or merger or
other business combination, recapitalization, liquidation, or similar
transaction, or any other transaction which could be conditioned upon, or
otherwise require, the termination of this Agreement.
3.27 FULL DISCLOSURE.
(a) No statement contained in this Agreement or in any certificate or
schedule furnished or to be furnished by or on behalf of FLCI to USOL pursuant
to this Agreement, when taken together with all other statements contained
herein or in other certificates and schedules furnished pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary, in the light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
(b) The information supplied by FLCI for inclusion or incorporation by
reference in the proxy statement to be sent to the stockholders of FLCI in
connection with the meeting of the stockholders of FLCI to consider the Merger
and related matters (the "FLCI STOCKHOLDERS' MEETING") and relating to the FLCI
Stock to be issued in connection with the Merger (such proxy statement as
amended or supplemented being hereinafter referred to as the "PROXY STATEMENT")
shall not (i) at the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to holders of FLCI Stock, (ii) at the time
of the FLCI Stockholders' Meeting, and (iii) at the Effective Time, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event or circumstance relating to FLCI or any of
its Affiliates or its or their respective officers or directors should be
discovered by FLCI which should be set forth in an amendment or a supplement to
the Proxy Statement, FLCI shall promptly inform USOL of such event or
circumstance.
3.28 ANTI-TAKEOVER LAW.
Neither the entering into this Agreement nor the consummation by FLCI of
the transactions contemplated hereby will result in the prohibition of any
business combination pursuant to Sections 60.801 - 60.845 of the Oregon Law.
3.29 INTELLECTUAL PROPERTY.
(a) TITLE. SCHEDULE 3.29(A) sets forth a true and complete list of all
of the Intellectual Property that is owned by FLCI and primarily related to,
currently used in, held for current use in connection with, or currently
necessary for the conduct of, or otherwise material to its business (the "FLCI
INTELLECTUAL PROPERTY ASSETS") other than Intellectual Property that is both not
registered or subject to application or registration and not material to
EX 99.4 - 26
<PAGE>
its business as currently conducted. The FLCI Intellectual Property Assets
comprise all of the Intellectual Property necessary for FLCI to conduct and
operate its business as it is now being conducted by FLCI.
(b) NO INFRINGEMENT. The conduct of FLCI's business does not infringe or
otherwise conflict with any rights of any Person in respect of any Intellectual
Property. Except as set forth in SCHEDULE 3.29(B), to the best knowledge of
FLCI, none of the FLCI Intellectual Property Assets is being infringed or
otherwise used or available for use by any other Person.
(c) LICENSING ARRANGEMENTS. SCHEDULE 3.29(C) sets forth all agreements
or arrangements currently in effect (i) pursuant to which FLCI has licensed FLCI
Intellectual Property Assets to, or the use of FLCI Intellectual Property Assets
has been otherwise permitted (through settlement or similar agreements) by, any
other Person and (ii) pursuant to which FLCI has had Intellectual Property
licensed to it or has otherwise been permitted to use Intellectual Property
(through settlement or similar agreements). All of the agreements or
arrangements set forth in SCHEDULE 3.29(C): (x) are in full force and effect in
accordance with their terms and no default exists thereunder by FLCI, or to the
best knowledge of FLCI, by any other party thereto, (y) are free and clear of
all Liens, other than Permitted Liens and (z) do not contain any
change-in-control or other terms or conditions that will become applicable or
inapplicable as a result of the transactions contemplated by the Agreement. FLCI
has delivered to USOL true and complete copies of all licenses and arrangements
(including amendments) set forth in the SCHEDULE 3.29(C).
(d) NO INTELLECTUAL PROPERTY LITIGATION. No claim or demand of any
Person has been made nor is there any proceeding that is pending or, to the best
knowledge of FLCI, threatened, which (i) challenges the rights of FLCI in
respect of any FLCI Intellectual Property Assets, (ii) asserts that FLCI is
infringing or otherwise in conflict with, or is, required to pay any royalty,
license fee, charge or other amount with regard to any Intellectual Property, or
(iii) claims that any default exists under any agreement or arrangement listed
in SCHEDULE 3.29(C). None of the FLCI Intellectual Property Assets is subject to
any outstanding order, ruling, decree, judgment or stipulation by or with any
court, arbitrator, or administrative agency, or any Governmental Authority, or
has been the subject of any litigation, whether or not resolved in favor of
FLCI.
(e) DUE REGISTRATION, ETC. SCHEDULE 3.29(E) sets forth the filing
offices, domestic or foreign, where the FLCI Intellectual Property Assets have
been registered, issued or filed. FLCI has taken such other actions that FLCI
considers reasonably necessary to ensure full protection under any applicable
laws or regulations, and such registrations, filings, issuances and other
actions remain in full force and effect, in each case to the extent material to
its business.
(f) USE OF NAME AND MARK. There are, and immediately after the Closing
will be, no contractual restriction or limitations pursuant to any orders,
decisions, injunctions, judgments, awards or decrees of any Governmental
Authority on FLCI's right to use the name and mark "FIRSTLINK" in the conduct of
its business as presently carried on.
EX 99.4 - 27
<PAGE>
3.30 ABSENCE OF CERTAIN BUSINESS PRACTICES.
To the best knowledge of FLCI, neither FLCI nor any officer, employee or
agent of FLCI, nor any other Person acting on their behalf, has, directly or
indirectly, since January 1, 1998 given or agreed to give any gift or similar
benefit to any customer, supplier, governmental employee or other Person who is
or may be in a position to help or hinder FLCI's business (or assist FLCI in
connection with any actual or proposed transaction relating to its business) (i)
which subjected FLCI to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) which if not given in the past,
might have a material adverse effect, (iii) which if not continued in the
future, might have a material adverse effect or subject FLCI to suit or penalty
in any private or governmental proceeding, or (iv) for the purpose of
establishing or maintaining any concealed fund or concealed bank account.
3.31 TERRITORIAL RESTRICTIONS.
FLCI is not a party to any agreement or understanding, whether written
or oral, with any other Person which restricts it from carrying on its business
anywhere in the world.
3.32 YEAR 2000 COMPLIANCE.
All of the computer hardware, software and information systems,
including without limitation the financial, operational and manufacturing
systems, owned or used by FLCI (i) are prior to, during and after calendar year
2000 A.D. capable of operating in all material respects without errors relating
to date data, including errors relating to date data which represents or
references different calendar centuries or more than one century, and of
providing all date related functionalities, interfaces and data fields,
including the indication of century; (ii) are able to accurately manage and
process data and date-related data (including, but not limited to, calculating,
comparing, sequencing and sorting) from, into and between the 20th and 21st
centuries, including single and multiple centuries and leap years; and (iii)
shall not abnormally terminate or provide invalid or incorrect results due to
date or date-related data, specifically including date data which represents or
references different centuries or more than one century.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF USOL
USOL hereby represents and warrants to FLCI that each of the following
is true, correct, and complete as of the date hereof:
4.1 ORGANIZATION.
(a) USOL is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. USOL has full corporate power
and authority to own, lease and operate its properties and to carry on its
business as such business is now conducted and proposed to be conducted. The
copies of the Certificate of Incorporation of
EX 99.4 - 28
<PAGE>
USOL, certified by the Secretary of State of the State of Delaware, and the
By-laws of USOL, each of which have been delivered to FLCI by USOL, are true and
complete copies thereof, and are in full force and effect. USOL is not in
violation of its Certificate of Incorporation or its By-laws.
(b) Except as set forth in SCHEDULE 4.1(B), USOL has no subsidiaries and
does not, directly or indirectly, own or have the contractual right or
obligation to acquire any equity interest in any other corporation, partnership,
joint venture, trust or other business organization. USOL is the record and
beneficial owner of all of the capital stock of each of the corporations listed
in SCHEDULE 4.1(B). Except as disclosed in SCHEDULE 4.1(B), USOL has not made
any investment in, loan to, or advance of cash or other extension of credit to
any Person, other than in the ordinary course of its business.
4.2 CAPITALIZATION.
(a) The authorized capital stock of USOL consists of (i) 30,000,000
shares of common stock, $.001 par value per share, of which 3,175,000 shares are
currently issued and outstanding, and (ii) 2,000,000 shares of Preferred Stock,
$.001 par value per share, 1,700,000 shares of which have been designated as the
"Series A Convertible Preferred Stock," of which 1,262,000 shares are currently
issued and outstanding and 300,000 shares of which have been designated as the
"Series B Convertible Preferred Stock," of which 218,000 shares are currently
issued and outstanding. EXHIBITS 2.6(B)-1 and 2.6(B)-2 set forth the Certificate
of Designations of the USOL Series A Preferred Stock and the USOL Series B
Preferred Stock, respectively. All of the outstanding shares of capital stock of
USOL have been duly authorized, are validly issued, fully paid and
non-assessable, and the holders thereof are not entitled to cumulative voting
rights or preemptive rights. There are no obligations, contingent or otherwise,
of USOL or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of USOL Common Stock or the capital stock of any Subsidiary or to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity other than
guarantees of bank obligations of Subsidiaries entered into in the ordinary
course of business. Except as set forth in SCHEDULE 4.2(A), there are no
outstanding options to purchase or warrants, privileges or rights to subscribe
to or purchase any shares of USOL's capital stock or securities issued by USOL
convertible into or exchangeable for shares of USOL's capital stock or other
securities of USOL or commitments, understandings or intentions to issue any
additional shares or options, warrants, privileges or rights to subscribe for
shares of USOL's capital stock.
(b) USOL has obtained a commitment for $35 million of senior notes (the
"SENIOR NOTES") on the terms and conditions described in SCHEDULE 4.2(B).
(c) USOL has no short-term or long-term debt obligations, except as set
forth in SCHEDULE 4.2(C), and except for obligations incurred in the ordinary
course of business in individual amounts not greater than $25,000.
EX 99.4 - 29
<PAGE>
4.3 QUALIFICATION IN FOREIGN JURISDICTIONS.
USOL is duly qualified or licensed and in good standing as a foreign
corporation duly authorized to do business in each jurisdiction in which the
character of the properties owned or leased or the nature of the activities
conducted by it makes such qualification or licensing necessary, except for any
jurisdiction(s) in which the failure to so qualify would not have a material
adverse effect upon USOL. SCHEDULE 4.3 sets forth each state in which USOL is
qualified to do business as a foreign corporation.
4.4 AUTHORITY RELATIVE TO THIS AGREEMENT.
USOL has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by USOL and the consummation by USOL of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of USOL are
necessary to authorize this Agreement or to consummate the transactions so
contemplated. The Board of Directors of USOL has determined that it is advisable
and in the best interest of USOL's stockholders for USOL to enter into the
Merger with FLCI upon the terms and subject to the conditions of this Agreement.
This Agreement has been duly and validly executed and delivered by USOL and,
assuming the due authorization, execution and delivery by FLCI, constitutes a
legal, valid and binding obligation of USOL, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization and similar laws from time to time in
effect that affect creditors' rights generally, and by legal and equitable
limitations on the availability of specific remedies.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by USOL does not, and
the performance of this Agreement by USOL will not, (i) conflict with or violate
the Certificate of Incorporation or By-laws of USOL; (ii) conflict with or
violate any Law applicable to USOL or any of its subsidiaries or by which any of
their respective properties is bound or affected; (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of time or both
would become a default), or impair USOL's or any of its Subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any USOL
Material Contract; or (iv) result in the creation of a Lien on any of the
properties or assets of USOL or any of its Subsidiaries pursuant to, any note,
bond mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which USOL or any of its Subsidiaries is a
party or by which USOL or any of its Subsidiaries, or any of their respective
properties, is bound or affected, except in the case of clauses (ii), (iii) and
(iv) for such breaches, defaults or other occurrences that would not,
individually or in the aggregate, have a material adverse effect upon USOL.
EX 99.4 - 30
<PAGE>
(b) The execution and delivery of this Agreement by USOL does not, and
the performance of this Agreement and the transactions contemplated hereby by
USOL will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, except (i) the
consents, approvals or Permits set forth in SCHEDULE 4.5(B), (ii) for applicable
requirements, if any, of the Securities Act, the Exchange Act, state securities
laws, and the filing and recordation of appropriate merger or other documents as
required by the Delaware Law and the Oregon Law, and (iii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Merger,
or otherwise prevent or delay USOL from performing its obligations under this
Agreement, or would not otherwise have a material adverse effect on USOL.
4.6 BROKERS.
Except as set forth in SCHEDULE 4.6, no investment bank, broker or
finder is entitled to any fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
USOL. USOL has heretofore furnished to FLCI true and complete copies of all
agreements between USOL and any other Person, pursuant to which such other firm
would be entitled to any payment relating to the transactions contemplated
hereunder.
4.7 OTHER NEGOTIATIONS.
USOL is not engaged in discussions or negotiations with any Person or
Persons with respect to, and has not solicited or furnished any information to
any Person or Persons who, to USOL's knowledge, is or are currently
contemplating negotiations or an offer regarding, a consolidation or merger or
other business combination, recapitalization, liquidation, or similar
transaction, or any other transaction which could be conditioned upon, or
otherwise require, the termination of this Agreement.
4.8 FULL DISCLOSURE.
(a) No statement contained in this Agreement or in any certificate or
schedule furnished or to be furnished by or on behalf of USOL to FLCI pursuant
to this Agreement, when taken together with all other statements contained
herein or in other certificates and schedules furnished pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary, in the light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
(b) Any information supplied by USOL for inclusion or incorporation by
reference in the Proxy Statement shall not (i) at the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to holders of
FLCI Stock, (ii) at the time of the FLCI Stockholders' Meeting, or (iii) at the
Effective Time, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. If at any time prior to the Effective Time any event or
circumstance
EX 99.4 - 31
<PAGE>
relating to USOL or its officers or directors should be discovered
by USOL which should be set forth in a supplement to the Proxy Statement, USOL
shall promptly inform FLCI of such event or circumstance.
4.9 LOCKUP AGREEMENT.
(a) USOL has obtained, and has delivered to FLCI, the agreement of each
holder of any share of USOL Preferred Stock that such holder, except as provided
in SCHEDULE 4.9, for a period of one (1) year after the Effective Time, but in
no event later than eighteen (18) months from the date hereof, shall not sell,
pledge, encumber or otherwise transfer or dispose of, and shall not permit to be
sold, encumbered, attached or otherwise disposed of or transferred in any
manner, either voluntarily or by operation of law ("TRANSFER"), all or any
portion of the shares of Company Preferred Stock that such holder owns or
hereafter acquires.
(b) USOL has obtained, through execution and delivery of the Common
Stockholder and Warrant Holder Registration Rights Agreement dated as of the
date hereof, the agreement of each holder of USOL Common Stock and each holder
of a USOL Warrant that such holder, for a period of six months after the
Effective Time, but in no event later than nine (9) months from the date hereof
(the "LOCKUP PERIOD"), shall not Transfer, and shall not permit to be
Transferred, all or any portion of the shares of Company Common Stock or of the
Company Warrants that such holder owns or hereafter acquires; PROVIDED, HOWEVER,
that during the Lockup Period, each such holder may make Transfers to Qualified
Institutional Buyers (as such term is defined in Rule 144A under the Securities
Act); and PROVIDED FURTHER, that each such holder may (i) transfer all or any
part of such holder's USOL Common Stock and/or USOL Warrants to one or more
Affiliates which, for purposes of this Section 4.9(b), shall include members of
any holder which is a limited liability company, employees or directors of each
such holder; (ii) Transfer such holder's USOL Common Stock and/or USOL Warrants
in connection with any exchange, reclassification or other conversion of shares
into any cash, securities or other property pursuant to a merger or
consolidation of the Company or any of its subsidiaries with, or any sale or
transfer by the Company or any of its subsidiaries of all or substantially all
its assets to, any Person; and (iii) Transfer such holder's USOL Common Stock
and/or USOL Warrants in connection with any statutory share exchange or any
recapitalization of the Company or any of its subsidiaries; and PROVIDED
FURTHER, that if the conditions precedent for USOL to exercise the call option
under Section 8 of the USOL Other Warrants exist, then the Lockup Period with
respect to the Company Other Warrants shall terminate.
(c) USOL has obtained, through execution and delivery by Don Barlow and
Robert Solomon (for the purposes of this paragraph only, the "HOLDERS") of the
Officers Indemnification Agreement dated as of the date hereof, and has
delivered to FLCI, the agreement of each such holder with respect to the Company
Common Stock that such holder, for a period of one year after the Effective
Time, but in no event later than eighteen (18) months from the date hereof (the
"OTHER LOCKUP PERIOD"), shall not Transfer, and shall not
EX 99.4 - 32
<PAGE>
permit to be Transferred, all or any portion of the shares of Company Common
Stock that such holder owns or hereafter acquires.
4.10 INCORPORATION OF REPRESENTATIONS AND WARRANTIES BY REFERENCE.
The representations and warranties and related schedules and disclosure
memoranda of (a) USOC set forth in the USOC Asset Purchase Agreement and (b)
GMAC-CM set forth in the TSD Asset Purchase Agreement are hereby incorporated by
reference as though made by USOL and fully set forth herein.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 CONDUCT OF BUSINESS BY USOL AND FLCI PENDING THE MERGER.
During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time, unless
the other party shall otherwise agree in writing, and except as to USOL, the
actions permitted to be taken by USOL Sub pursuant to the USOC Asset Purchase
Agreement and the transactions contemplated thereby, each of USOL and FLCI shall
conduct its respective business and shall cause the businesses of its
subsidiaries to be conducted only in, and each of USOL and FLCI and its
subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and each of USOL and
FLCI shall use reasonable efforts to preserve the business organization of
itself and its subsidiaries, to keep available the services of the present
officers, key employees and consultants of itself and its subsidiaries and to
preserve the present relationships of itself and its subsidiaries with
customers, suppliers and other Persons with which it or any of its subsidiaries
has significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, neither USOL nor FLCI, nor any of
their respective subsidiaries shall, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time do, or propose to do, any of the following without the
prior written consent of the other party:
(a) propose to or amend or otherwise change its Articles or Certificate
of Incorporation or By-laws;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class (other than the sale or issuance of common stock upon the
exercise of outstanding options listed in SCHEDULE 3.2 or SCHEDULE 3.14(C)
hereto (with respect to FLCI); or in SCHEDULE 4.2(A) hereto (with respect to
USOL), or any options, warrants, convertible securities or other rights of any
kind to acquire any shares of capital stock, or any other ownership interest
(including, without limitation, any phantom interest) of FLCI or USOL, as the
case may be, or any of their respective subsidiaries (PROVIDED that consent for
grants of employee stock options to newly
EX 99.4 - 33
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hired employees pursuant to existing stock option plans consistent with past
practice shall not be unreasonably withheld);
(c) sell, pledge, mortgage, dispose of or encumber any of its assets or
any assets of its subsidiaries, except for (i) sales of products (or licenses
thereto) and services in the ordinary course of business consistent with past
practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of
immaterial assets not in excess of $10,000 in the aggregate;
(d) except as is contemplated by Section 6.5, alter the price or
accelerate, amend or change the period (or permit any acceleration, amendment or
change) of exercisability of options or restricted stock granted under the
Employee Plans (including stock option plans) or authorize cash payments in
exchange for any options granted under any of such plans;
(e) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock, except for the declaration and payment of
any required dividend by USOL on the USOL Preferred Stock, (ii) split, combine
or reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) amend the terms of, repurchase, redeem
or otherwise acquire, or permit any subsidiary to repurchase, redeem or
otherwise acquire, any of its securities or any securities of its subsidiaries,
or propose to do any of the foregoing;
(f) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof; (ii) incur any indebtedness for borrowed money (except for the issuance
of the Senior Notes), or issue any debt securities or assume, guarantee (other
than guarantees of bank debt of such party's subsidiaries entered into in the
ordinary course of business) or endorse or otherwise as an accommodation become
responsible for, the obligations of any Person, or make any loans or advances,
except in each case in the ordinary course of business consistent with past
practice; (iii) enter into or amend any USOL Material Contract or FLCI Material
Contract, as the case may be, other than in the ordinary course of business
consistent with past practice; (iv) authorize any capital expenditures or
purchase of fixed assets which are, in the aggregate, in excess of $25,000 for
such party and its subsidiaries taken as a whole; or (v) enter into or amend any
contract, agreement, commitment or arrangement to effect any of the matters
prohibited by this Section 5.1;
(g) except, as to FLCI, for increases consistent with past practice and
disclosed on SCHEDULE 5.1(G) in salary or wages of employees of FLCI or its
subsidiaries who are not officers and except, as to USOL, for Persons other than
Robert Solomon and Donald Barlow, increase the compensation payable or to become
payable to its officers or employees, or grant any severance or termination pay
to, or enter into any employment or severance agreement with any director,
officer or other employee of such party or any of its subsidiaries, or
establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, stock purchase,
pension,
EX 99.4 - 34
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retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
current or former directors, officers or employees, except, in each case, as may
be required by law, and except for ministerial updating of plans and trusts
which does not affect the benefits thereunder;
(h) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable, and collection of accounts receivable);
(i) make any material tax election inconsistent with past practices or
settle or compromise any material Federal, state, local or foreign tax liability
or agree to an extension of a statute of limitations except to the extent the
amount of any such settlement has been reserved for on the USOL Unaudited
Balance Sheet or the FLCI Unaudited Balance Sheet, each as on the Balance Sheet
Date, as the case may be;
(j) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against in
the financial statements of such party or incurred in the ordinary course of
business and consistent with past practice;
(k) take any action which would make any of the representations or
warranties of such party contained in this Agreement materially untrue or
incorrect or prevent such party from performing in all material respects or
cause such party not to perform in all material respects its covenants
hereunder;
(l) cancel or waive any claim or right of substantial value or settle
any material pending litigation;
(m) pay, discharge, or satisfy any material claim or liability before it
becomes due or fail to pay accounts payable in accordance with their terms;
(n) knowingly take or allow to be taken or fail to take any action which
act or omission would jeopardize qualification of any of the Merger as a
"reorganization" within the meaning of Section 368(a) of the Code; or
(o) agree to do any of the foregoing.
5.2 NO SOLICITATION BY USOL OR FLCI.
(a) During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Effective Time,
neither USOL nor FLCI shall, directly or indirectly, through any officer,
director, employee, representative or agent of USOL or FLCI, including, without
limitation, any investment banker, attorney, or accountant retained by FLCI or
USOL, as the case may be, or any of its subsidiaries, (i) initiate, solicit, or
encourage any inquiries or proposals that constitute, or could reasonably be
expected to lead
EX 99.4 - 35
<PAGE>
to, a proposal or offer for a merger, consolidation, business combination, sale
of assets representing a substantial portion of the assets of either USOL or
FLCI, as applicable, including a sale of shares representing 20% or more of the
outstanding USOL Stock or FLCI Stock, including, without limitation, by way of
tender offer or exchange offer other than the Merger and the other transactions
relating to this Agreement (any of the foregoing inquiries or proposals being
referred to in this Agreement as an "ACQUISITION PROPOSAL"); or, subject to the
applicable fiduciary duties of the respective directors of USOL and FLCI, as
determined by such directors in good faith after consultation with and based
upon the advice of legal counsel, (ii) engage in negotiations or discussions
concerning, or provide to any Person or entity non-public information or data
regarding FLCI or USOL or any of their respective subsidiaries, as applicable,
for the purpose of, or otherwise cooperate with or assist or participate in,
facilitate or encourage, any inquiries regarding the making of an Acquisition
Proposal, (iii) agree to, approve, or recommend any Acquisition Proposal or (iv)
take any other action inconsistent with the obligations of USOL or FLCI, as
applicable; PROVIDED, HOWEVER, that any conversations, solicitations or
negotiations conducted by either party or their respective representatives
regarding an acquisition proposal solely with respect to the Surviving
Corporation shall not be deemed to violate any of the foregoing provisions of
this Section 5.2(a).
(b) Either party shall immediately notify the other party after receipt
of any Acquisition Proposal or any request for nonpublic information relating to
such party or any of its subsidiaries in connection with an Acquisition Proposal
or for access to the properties, books or records of such party or any
subsidiary by any Person that informs the Board of Directors or officers of such
party or such subsidiary that it intends to make, or has made, an Acquisition
Proposal. Such notice to the other party shall be made orally and in writing and
shall indicate in reasonable detail the identity of the offeror and the terms
and conditions of such proposal, inquiry or contact.
(c) Both parties shall use reasonable efforts to ensure that the
officers and directors of USOL and FLCI and their respective subsidiaries and
any investment banker or other advisor or representative retained by such party
are aware of, and comply with, the restrictions described in this Section 5.2.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 PROXY STATEMENT.
(a) As promptly as practicable after the execution of this Agreement,
FLCI shall prepare and file with the SEC the Proxy Statement, which shall be in
form and substance satisfactory to USOL. FLCI shall cause the Proxy Statement to
comply in all material respects with the Securities Act, the Exchange Act and
the regulations thereunder. FLCI shall use reasonable efforts to have or cause
the Proxy Statement to be cleared as promptly as practicable, and shall take all
actions required under any applicable federal or state
EX 99.4 - 36
<PAGE>
securities laws or the rules and regulations of Nasdaq in connection with the
issuance of shares of FLCI Stock pursuant to the Merger. Without limiting the
generality of the foregoing, FLCI agrees to use all reasonable efforts, after
consulting with USOL, to respond promptly to any comments made by the SEC with
respect to the Proxy Statement (including each preliminary version thereof).
(b) Each of USOL and FLCI shall, and shall cause its respective
representatives to, fully cooperate with the other party and its respective
representatives in the preparation of the Proxy Statement, and shall, upon
request, furnish the other party with all information concerning it and its
Affiliates, directors, officers and stockholders as the other may reasonably
request in connection with the preparation of the Proxy Statement.
(c) As promptly as practicable after the Proxy Statement has been
cleared by the SEC, FLCI shall cause the Proxy Statement to be mailed to its
stockholders. Thereafter, USOL and FLCI shall each notify the other as promptly
as practicable upon becoming aware of any event or circumstance which should be
described in an amendment of, or a supplement to, the Proxy Statement. FLCI
shall notify USOL as promptly as practicable after the receipt by it of any
written or oral comments of the SEC on, or of any written or oral request by the
SEC for amendments or supplements to, the Proxy Statement, and FLCI shall
promptly supply USOL with copies of all correspondence between it or any of its
representatives and the SEC with respect to any of the foregoing filings.
6.2 FLCI STOCKHOLDERS' MEETING.
FLCI shall, in accordance with its charter documents, call and hold (i)
the FLCI Stockholders' Meeting as promptly as practicable for the purpose of
voting upon the approval of the Merger and this Agreement, (ii) the approval of
the Re-incorporation, and (iii) the approval of the increase in authorized
capital stock required to consummate the Merger, and FLCI shall use its best
efforts to hold the FLCI Stockholders' Meeting as soon as permitted by the proxy
rules under the Exchange Act. FLCI shall use its best efforts to obtain from the
stockholders owning more than 50% of the FLCI Stock, proxies in favor of the
approval of (i) the Merger and this Agreement, (ii) the Re-incorporation, and
(iii) the increase in authorized capital stock required to consummate the
Merger. Subject to the applicable fiduciary duties of FLCI's directors, as
determined by such directors in good faith after consultation with and based
upon the written advice of legal counsel, FLCI shall take all other action
necessary or advisable to secure the vote or consent of stockholders required by
the applicable Law to obtain such approvals, including, without limitation, the
inclusion in the Proxy Statement of the recommendation of its Board of Directors
that its shareholders vote in favor of the approval and adoption of this
Agreement and the transactions related hereto.
6.3 ACCESS TO INFORMATION; CONFIDENTIALITY.
Upon reasonable notice and subject to restrictions contained in
confidentiality agreements to which USOL or FLCI may be subject (from which USOL
and FLCI shall each use reasonable efforts to be released), USOL and FLCI shall
each (and USOL shall cause each of its subsidiaries to) afford to the officers,
employees, accountants, counsel and other
EX 99.4 - 37
<PAGE>
representatives of the other, reasonable access, during the period from the date
of this Agreement to the Effective Time, to all its properties, books,
contracts, commitments and records and, during such period, USOL and FLCI shall
each furnish promptly to the other all information concerning its business,
properties and personnel as such other party may reasonably request, and USOL
and FLCI shall each make available to the other the appropriate individuals
(including attorneys, accountants and other professionals) for discussion of the
other's business, properties and personnel as either FLCI or USOL may reasonably
request. Each party shall keep such information confidential in accordance with
the terms of the Confidentiality and Standstill Agreement, dated May, 1999,
entered into between FLCI and USOL.
6.4 CONSENTS, APPROVALS.
USOL and FLCI shall each use its reasonable best efforts to obtain all
consents, waivers, approvals, authorizations or orders (including, without
limitation, all Governmental Approvals), and USOL and FLCI shall make all
filings (including, without limitation, all filings with Governmental
Authorities or regulatory agencies) required in connection with the
authorization, execution and delivery of this Agreement by USOL and FLCI and the
consummation by them of the transactions contemplated hereby. USOL and FLCI
shall furnish all information required to be included in the Proxy Statement, or
for any application or other filing to be made pursuant to the rules and
regulations of any Governmental Authority in connection with the transactions
contemplated by this Agreement. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and to otherwise satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement. FLCI
and USOL shall each use reasonable efforts to cause the Merger to qualify, and
will not (either before or after consummation of the Merger) take any actions
which could prevent the Merger from qualifying, as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code.
6.5 STOCK OPTIONS.
(a) At the Effective Time, the obligation to issue shares under each
then outstanding option to purchase USOL Common Stock (each a "USOL STOCK
OPTION") granted under USOL's Stock Option Plan, as amended, shall be assumed by
FLCI and each such option shall be converted into an option to acquire, on the
same terms and conditions as were applicable under such USOL Stock Option prior
to the Effective Time, the whole number of shares of FLCI Common Stock as the
holder of such USOL Stock Option would have been entitled to receive pursuant to
the Merger had such holder exercised such option in full immediately prior to
the Effective Time (not taking into account whether or not such option was in
fact exercisable). The exercise price of the options shall be a price per share
equal to the exercise price for shares of USOL Common Stock otherwise
purchasable pursuant to such USOL Stock Option; PROVIDED, HOWEVER, that the
exercisability or the other vesting of the
EX 99.4 - 38
<PAGE>
assumed options and the underlying stock shall continue to be determined by
reference to stock option agreements executed pursuant to USOL's Stock Option
Plan; and PROVIDED FURTHER, that references in any USOL Stock Option to USOL,
the Board of Directors of USOL or any committee thereof, and any USOL Stock
Option Plan, shall, commencing at the Effective Time, unless inconsistent with
the context, be to FLCI, the board of directors of FLCI or a committee thereof,
and FLCI's 1998-1999 Combined Incentive Stock Option and Nonqualified Stock
Option Plan, respectively.
(b) As soon as practicable after the Effective Time, FLCI shall deliver
to each holder of an outstanding USOL Stock Option an appropriate notice setting
forth such holder's rights pursuant thereto and such USOL Stock Option shall
continue in effect on the same terms and conditions. FLCI shall comply with the
terms of all such USOL Stock Options and ensure, to the extent required by, and
subject to the provisions of, any USOL Stock Plan, that USOL Stock Options which
qualified for special tax treatment prior to the Effective Time continue to so
qualify after the Effective Time. FLCI shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of FLCI Common Stock for
delivery pursuant to the terms set forth in this Section 6.5.
(c) FLCI shall use its reasonable best efforts after the Effective Time
to file and maintain the effectiveness of a registration statement under the
Securities Act with respect to the issuance by FLCI of shares of FLCI Common
Stock which may be issued pursuant to the USOL Stock Options as provided for
above in this Section 6.5.
6.6 WARRANTS.
At the Effective Time, FLCI shall assume in writing all obligations
under the USOL Other Warrants and the USOL TSD Warrants, and the holders of the
USOL Other Warrants and the USOL TSD Warrants thereafter shall have the right to
acquire, on the same pricing and payment terms and conditions as are currently
applicable under the USOL Other Warrants and the USOL TSD Warrants, as
applicable, the same number of shares of FLCI Common Stock as the holders of
such warrants would have been entitled to receive in the Merger had such holder
exercised such warrants in full immediately prior to the Effective Time.
6.7 NOTIFICATION OF CERTAIN MATTERS.
USOL shall give prompt notice to FLCI, and FLCI shall give prompt notice
to USOL, of (i) the occurrence or non-occurrence of any event which would cause
any representation or warranty made by the respective parties in this Agreement
to be materially untrue or inaccurate, and (ii) any failure of USOL or FLCI, as
the case may be, to materially comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER,
that the delivery of any notice pursuant to this Section 6.7 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice, and PROVIDED FURTHER, that failure to give such notice shall not be
treated as a breach of covenant for the purposes of Sections 7.2(b) or 7.3(b)
unless the failure to give such notice results in material prejudice to the
other party.
EX 99.4 - 39
<PAGE>
6.8 PUBLIC ANNOUNCEMENTS.
FLCI and USOL shall consult with each other before issuing any press
release or other public statement with respect to the Merger or this Agreement,
and any such press release shall state that it is being made by both FLCI and
USOL. FLCI and USOL shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld; PROVIDED, HOWEVER, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the written advice of counsel be required by law if it has
used reasonable efforts to consult first with the other party, and has provided
the other party with at least 24 hours notice of such release.
6.9 APPLICATION FOR NASDAQ APPROVAL.
FLCI agrees to use its best efforts to prepare and file with Nasdaq such
applications, notices, reports and other information as may be reasonably
required to obtain the approval by Nasdaq of the continued listing of FLCI's
common stock outstanding prior to the consummation of the Merger and the FLCI
Common Stock, and FLCI's warrants outstanding prior to the Effective Time and
the FLCI Warrants that are currently listed on Nasdaq following consummation of
the transactions provided for herein. USOL agrees to provide FLCI with such
documents, information and other materials as FLCI may reasonably request in
connection with effecting such application and to otherwise cooperate with FLCI
in its efforts to obtain such Nasdaq approval. FLCI and USOL shall cooperate
with each other in applying for a new listing of the FLCI Common Stock and the
FLCI Warrants on the Nasdaq National Market and having the FLCI Common Stock and
the FLCI Warrants designated as national market system securities.
6.10 DELIVERY OF ADDITIONAL FILINGS.
Following the execution of this Agreement and until the Closing, FLCI
shall provide USOL with copies of any and all reports, filings, notices or other
information which FLCI may prepare and file with or receive from the SEC, Nasdaq
or any other Governmental Authority (and shall give USOL an opportunity to
review and comment on any such filings).
6.11 ACCOUNTANT'S COMFORT LETTERS.
USOL and FLCI shall each use reasonable efforts to cause their
respective independent public accountants to deliver to the other party a letter
covering such matters as may be requested by such other party, with respect to
such matters as are customarily addressed in certified public accountant's
"comfort" letters with respect to the type of transactions contemplated by this
Agreement.
6.12 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
All rights to indemnification now existing in favor of the present or
former directors or officers of USOL as provided in USOL's Certificate of
Incorporation or By-laws, which rights
EX 99.4 - 40
<PAGE>
are in effect as of the date hereof, shall, with respect to matters occurring
prior to the Effective Time, survive the Merger and continue in full force and
effect after the Effective Time. All rights to indemnification in respect of any
such claim or claims shall continue until disposition of such claim or claims.
FLCI and USOL further agree that all rights to indemnification now existing in
favor of the present or former directors or officers of USOL in any
indemnification agreement between such Person and USOL shall survive the Merger
and continue in full force and effect in accordance with the terms of such
agreement. Until the sixth anniversary of the Effective Time, FLCI shall
maintain in effect with respect to matters occurring prior to the Effective
Time, to the extent available, the policy of directors' and officers' liability
insurance currently maintained by USOL on behalf of its officers and directors;
PROVIDED, HOWEVER, that FLCI may substitute therefor a policy containing
coverage, terms and conditions which are no less advantageous to such present or
former directors and officers of USOL. Notwithstanding anything to the contrary
contained in this Agreement, the provisions of this Section 6.12 shall survive
the Effective Time and are intended to be for the benefit of, and shall be
enforceable by, each present and former director and officer of USOL and shall
be binding on all successors and assigns of the Surviving Corporation. In the
event the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.12.
6.13 EMPLOYEE BENEFITS
(a) FLCI will maintain without change for a period of twelve months
after the Effective Time each severance program and policy of USOL listed in
Section 5.14 of the Disclosure Memorandum attached to the USOC Asset Purchase
Agreement (including any such plan, program or policy that is subject to the
approval of the Board of Directors of USOL as of the date of this Agreement)
with respect to each FLCI employee who was employed by USOL immediately prior to
the Effective Time and for purposes of any such severance program or policy and
any severance program and policy which USOL was required to maintain by law.
FLCI will give full credit to each such FLCI employee for all service performed
for USOL by such employee. FLCI will honor all severance and retention
agreements of USOL in effect as of the Effective Time.
(b) With respect to each FLCI Employee Plan, each FLCI employee employed
by USOL immediately prior to the Effective Time shall receive credit for all
service performed for USOL; such service credit shall apply for all purposes,
including but not limited to any vacation, sick time, insurance or other
benefits and any eligibility or vesting requirements under any FLCI Employee
Plan.
(c) As of the Effective Time, each FLCI employee who was employed by
USOL immediately prior to the Effective Time shall be enrolled in the Person
Choice Account group health benefit plan for employees of FLCI, or any successor
plan thereto ("GROUP HEALTH PLAN") and shall be entitled to participate in the
Group Health Plan without limitation or
EX 99.4 - 41
<PAGE>
exclusion for any preexisting conditions applicable to any such employee or his
or her enrolled dependents, except to the extent that any such preexisting
condition limitation or exclusion applied to such individual under the group
health plan provided by USOL prior to the Effective Time. For purposes of
participation in the Group Health Plan, each FLCI employee employed by USOL
immediately prior to the Effective Time shall also receive credit for all
payments made toward deductible, co-payment and out-of-pocket limits under the
group health plan of USOL in which such employee was a participant immediately
prior to the Effective Time for the plan year which includes the Effective Time
as if such payments had been made for similar purposes for such period under the
Group Health Plan by an employee employed by FLCI immediately prior to the
Effective Time.
6.14 STOCKHOLDER LITIGATION.
Each of FLCI and USOL shall give the other the reasonable opportunity to
participate in the defense of any stockholder litigation arising in connection
with the transactions contemplated hereby against FLCI or USOL, as applicable,
and their respective directors.
6.15 ACCREDITED INVESTORS.
Prior to the Effective Time, USOL shall deliver to FLCI evidence
reasonably satisfactory to FLCI that each holder of USOL Stock is an "Accredited
Investor" as such term is defined in Regulation D of the Securities Act.
ARTICLE VII
CONDITIONS TO THE MERGER
7.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
Unless waived, in whole or in part, by the applicable party, the
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) No proceeding in respect of the Proxy Statement shall have been
initiated or threatened by the SEC.
(b) This Agreement, the Merger, the increase in the authorized capital
stock of FLCI required to consummate the Merger, and the Re-incorporation shall
have been approved by the requisite vote of the stockholders of FLCI.
(c) No statute, rule, regulation, order, decree or injunction shall have
been enacted, entered, promulgated or enforced by any court or Governmental
Authority of competent jurisdiction which restrains, enjoins or otherwise
prohibits the consummation of the Merger; PROVIDED, HOWEVER, that USOL and FLCI
shall use their reasonable best efforts to have any such order, decree or
injunction vacated.
EX 99.4 - 42
<PAGE>
(d) FLCI and USOL shall have received the written opinion of Jenkens &
Gilchrist, in form and substance reasonably satisfactory to each of them to the
effect that the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code.
(e) The shares of FLCI Common Stock to be issued in the Merger shall
have been approved for quotation on Nasdaq, subject to official notice of
issuance.
(f) All corporate and other proceedings and actions taken in connection
with this Agreement and all certificates, opinions, agreements, instruments, and
documents mentioned in this Agreement or incident to any such transactions shall
have been delivered to the appropriate party or third party, and be reasonably
satisfactory in form and substance to USOL, FLCI, and their respective counsel.
(g) There shall not have occurred and be continuing at any time within
30 days prior to the proposed Effective Time (i) any suspension in trading on
Nasdaq, any fixing of minimum or maximum prices for trading on Nasdaq by the
NASD or SEC or any other Governmental Authority, (ii) the declaration of a
banking moratorium by federal, Oregon, Colorado or Texas Governmental
Authorities; (ii) an outbreak or major escalation of hostilities between the
United States and any foreign power or other insurrection or armed conflict
involving the United States.
7.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF FLCI.
Unless waived, in whole or in part, in writing by FLCI, the obligations
of FLCI to effect the Merger are also subject to the fulfillment prior to or at
the Effective Time, of each of the following conditions:
(a) The representations and warranties of USOL contained in this
Agreement shall be true and correct in all material respects on and as of the
Effective Time, except for (i) changes contemplated or permitted by this
Agreement, (ii) those representations and warranties which address matters only
as of a specified date (which shall remain true and correct as of such date),
and (iii) where the failure to be true and correct would not have a material
adverse effect upon USOL.
(b) USOL shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by USOL on or prior to the Effective Time.
(c) No material adverse change in the business, property, prospects,
results of operations or conditions (financial or otherwise) of USOL shall have
occurred between the date of this Agreement and the Effective Time.
(d) No action or proceeding by any Governmental Authority or other
Person (an "ACTION") shall have been instituted or threatened which (i) might
have a material adverse effect on USOL; (ii) would enjoin, restrain, or
prohibit, or might result in substantial damages in respect of, this Agreement
or the complete consummation of the Merger; or (iii) seeks to
EX 99.4 - 43
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prohibit or limit the Surviving Corporation from exercising all material rights
and privileges pertaining to its ownership of all or a material portion of the
business or assets of USOL and the Predecessor Entities, and which would, in the
reasonable judgment of FLCI make it inadvisable to consummate such transactions;
PROVIDED, HOWEVER, that if an Action has been instituted, or an order issued
pursuant to an Action, that FLCI and USOL shall use their reasonable best
efforts to have any such order or Action dismissed or vacated.
(e) USOL shall have delivered to FLCI a certificate signed by USOL's
President and Chief Financial Officer, dated the date of the Closing, certifying
that the conditions specified in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) of
this Agreement have been satisfied.
(f) FLCI shall have received the opinion of Jenkens & Gilchrist, counsel
to USOL, dated the date of the Closing, containing the opinion set forth in
EXHIBIT 7.2(F) attached hereto.
(g) All corporate and other proceedings and actions taken in connection
with this Agreement and all certificates, opinions, agreements, instruments, and
documents mentioned in this Agreement or incident to any such transactions shall
be reasonably satisfactory in form and substance to FLCI and its counsel.
7.3 ADDITIONAL CONDITIONS TO OBLIGATION OF USOL.
Unless waived, in whole or in part, in writing by USOL, the obligations
of USOL to effect the Merger are also subject to the fulfillment prior to or at
the Effective Time of each of the following conditions:
(a) The representations and warranties of FLCI contained in this
Agreement shall be true and correct in all material respects on and as of the
Effective Time, except for (i) changes contemplated or permitted by this
Agreement, (ii) those representations and warranties which address matters only
as of a specified date (which shall remain true and correct as of such date),
and (iii) where the failure to be true and correct would not have a material
adverse effect upon FLCI.
(b) FLCI shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by FLCI on or prior to the Effective Time.
(c) No material adverse change in the business, property, prospects,
results of operations or conditions (financial or otherwise) of FLCI shall have
occurred between the date of this Agreement and the Effective Time.
(d) No Action shall have been instituted or threatened which (i) might
have a material adverse effect on FLCI; (ii) would enjoin, restrain, or
prohibit, or might result in substantial damages in respect of, this Agreement
or the complete consummation of the Merger; or (iii) seeks to prohibit or limit
the Surviving Corporation from exercising all
EX 99.4 - 44
<PAGE>
material rights and privileges pertaining to its ownership of all or a material
portion of the business or assets of FLCI, and which would, in the reasonable
judgment of USOL make it inadvisable to consummate such transactions; PROVIDED,
HOWEVER, that if an Action has been instituted, or an order issued pursuant to
an Action, that FLCI and USOL shall use their reasonable best efforts to have
any such order or Action dismissed or vacated.
(e) FLCI shall have delivered to USOL a certificate signed by FLCI's
President and Chief Financial Officer, dated the date of the Closing, certifying
that the conditions specified in Sections 7.3(a), 7.3(b), 7.3(c), and 7.3(d) of
this Agreement have been satisfied.
(f) USOL shall have received the opinion of Neuman Drennen & Stone, LLC,
counsel to FLCI, dated the date of the Closing, containing the opinion set forth
in EXHIBIT 7.3(F) attached hereto.
ARTICLE VIII
TERMINATION
8.1 TERMINATION.
(a) This Agreement may be terminated at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of either USOL or
FLCI:
(i) by mutual written consent of the parties hereto duly
authorized by the Boards of Directors of FLCI and USOL;
or
(ii) by either FLCI or USOL if the Merger shall not have been
consummated by the Outside Date, PROVIDED that the right
to terminate this Agreement under this Section
8.1(a)(ii) shall not be available to any party whose
willful failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the
failure of the Merger to occur on or before such date;
or
(iii) by either FLCI or USOL if a court of competent
jurisdiction or Governmental Authority shall have issued
a non-appealable final order, decree or ruling or taken
any other action, in each case having the effect of
permanently restraining, enjoining or otherwise
prohibiting the Merger, except if the party relying on
such order, decree or ruling or other action has not
complied with its obligations under Section 6.4; or
(iv) by either FLCI or USOL, if, at the FLCI Stockholders'
Meeting (including any adjournment or postponement
thereof), the requisite vote of the stockholders of FLCI
shall not have been obtained; or
EX 99.4 - 45
<PAGE>
(v) by FLCI, upon a breach of any representation, warranty,
covenant or agreement on the part of USOL set forth in
this Agreement such that the conditions set forth in
Section 7.3(a) or 7.3(b) would not be satisfied, or by
USOL, upon a breach of any representation, warranty,
covenant or agreement on the part of FLCI set forth in
this Agreement such that the conditions set forth in
Section 7.2(a) or 7.2(b), would not be satisfied (any of
such breaches by either party, a "TERMINATING BREACH");
PROVIDED, HOWEVER, that if such Terminating Breach is
curable prior to the Outside Date, by FLCI or USOL, as
the case may be, through the exercise of its reasonable
efforts and for so long as FLCI or USOL, as the case may
be, continues to exercise such reasonable efforts,
neither USOL nor the FLCI, respectively, may terminate
this Agreement under this Section 8.1(a)(v); or
(vi) by FLCI, if (A) the Board of Directors of USOL shall
fail to recommend the Merger or shall withdraw, modify
or change its recommendation of the Merger in a manner
adverse to FLCI or shall have resolved to do any of the
foregoing; (B) after the receipt by USOL of an
Acquisition Proposal, FLCI requests in writing that the
Board of Directors of USOL reconfirm its recommendation
of this Agreement and the Merger to the stockholders of
USOL and the Board of Directors of USOL fails to do so
within 10 business days after its receipt of FLCI's
request; (C) the Board of Directors of USOL shall have
recommended to the stockholders of USOL an Alternative
Transaction (as defined in Section 8.4(e)); or (D) a
tender offer or exchange offer for 20% or more of the
outstanding shares of USOL Stock is commenced (other
than by FLCI or an Affiliate of FLCI) and the Board of
Directors of USOL recommends that the stockholders of
USOL tender their shares in such tender or exchange
offer; or
(vii) by USOL, if (A) the Board of Directors of FLCI shall
fail to recommend the Merger or shall withdraw, modify
or change its recommendation of the Merger in a manner
adverse to USOL or shall have resolved to do any of the
foregoing; (B) after the receipt by FLCI of an
Acquisition Proposal, USOL requests in writing that the
Board of Directors of FLCI reconfirm its recommendation
of this Agreement and the Merger to the stockholders of
USOL and the Board of Directors of FLCI fails to do so
within 10 business days after its receipt of USOL's
request; (C) the Board of Directors of FLCI shall have
recommended to the stockholders of FLCI an Alternative
Transaction; (D) a tender offer or exchange offer for
20% or
EX 99.4 - 46
<PAGE>
more of the outstanding shares of FLCI Common Stock is
commenced (other than by USOL or an Affiliate of USOL)
and the Board of Directors of FLCI recommends that the
stockholders of FLCI tender their shares in such tender
or exchange offer; or (E) for any reason FLCI fails to
call and hold the FLCI Stockholders' Meeting by the
Outside Date (PROVIDED that USOL's right to terminate
this Agreement under this clause (E) shall not be
available if at such time FLCI would be entitled to
terminate this Agreement under Section 8.1(a)(v) without
giving effect to the cure period); or
(viii) by USOL, subject to Section 8.2(a), if the Board of
Directors of USOL shall concurrently approve, and USOL
shall concurrently enter into, a definitive agreement
providing for the implementation of a Superior Offer (as
hereinafter defined); PROVIDED, HOWEVER, that (A) USOL
is not then in breach of Section 5.2, (B) the Board of
Directors of USOL shall have complied with Section
8.2(a) in connection with such Superior Offer, and (C)
USOL shall simultaneously make the payment required by
Section 8.4(b); and PROVIDED FURTHER, that USOL agrees
to use its commercially reasonable efforts to have such
Superior Offer include the Surviving Corporation and to
consummate the Merger.
(b) This Agreement may be terminated by FLCI at any time prior to the
approval thereof by the stockholders of FLCI, subject to Section 8.2(b), if the
Board of Directors of FLCI shall concurrently approve, and FLCI shall
concurrently enter into, a definitive agreement providing for the implementation
of a Superior Offer; PROVIDED, HOWEVER, that (i) FLCI is not then in breach of
Section 5.2, (ii) the Board of Directors of FLCI shall have complied with
Section 8.2(b) in connection with such Superior Offer, and (iii) FLCI shall
simultaneously make the payment required by Section 8.4(c); and PROVIDED
FURTHER, that FLCI agrees to use its commercially reasonable efforts to have
such Superior Offer include the Surviving Corporation and to consummate the
Merger.
8.2 CERTAIN ACTIONS PRIOR TO TERMINATION.
(a) USOL shall provide to FLCI written notice of its intention to
terminate this Agreement pursuant to Section 8.1(a)(viii) advising FLCI (i) that
the Board of Directors of USOL has determined, by action of a majority of the
members of the Board of Directors of USOL who are not affiliated with either
FLCI or the Person making such Acquisition Proposal or their respective
affiliates, that such Acquisition Proposal is a Superior Offer and that, in the
exercise of its good faith judgment as to fiduciary duties to stockholders under
applicable law, after consultation with USOL's outside legal counsel, failure by
the Board of Directors to terminate this Agreement could reasonably be expected
to result in a breach of such duties and (ii) as to the material terms of any
such Acquisition Proposal. At any time after the fifth
EX 99.4 - 47
<PAGE>
business day following receipt of such notice by FLCI, USOL may terminate this
Agreement as provided in Section 8.1(a)(viii) only if the Board of Directors of
USOL who are not affiliated with either FLCI or the Person making such
Acquisition Proposal or their respective affiliates, determines that failure by
the Board of Directors to terminate this Agreement continues to be reasonably
expected to result in a breach of its fiduciary duties to stockholders under
applicable law (which determination shall be made in light of any revised
proposal made by FLCI prior to the expiration of such five business day period)
and concurrently enters into a definitive agreement providing for the
implementation of such Acquisition Proposal.
(b) FLCI shall provide to USOL written notice of its intention to
terminate this Agreement pursuant to Section 8.1(b) advising USOL (i) that the
Board of Directors of FLCI has determined, by action of a majority of the
members of the Board of Directors of FLCI who are not affiliated with either
USOL or the Person making such Acquisition Proposal or their respective
affiliates, that such Acquisition Proposal is a Superior Offer and that, in the
exercise of its good faith judgment as to fiduciary duties to stockholders under
applicable law, after consultation with FLCI's outside legal counsel, failure by
the Board of Directors to terminate this Agreement could reasonably be expected
to result in a breach of such duties and (ii) as to the material terms of any
such Acquisition Proposal. At any time after the fifth business day following
receipt of such notice by USOL, FLCI may terminate this Agreement as provided in
Section 8.1(b) only if the Board of Directors of FLCI who are not affiliated
with either USOL or the Person making such Acquisition Proposal or their
respective affiliates, determines that failure by the Board of Directors to
terminate this Agreement continues to be reasonably expected to result in a
breach of its fiduciary duties to stockholders under applicable law (which
determination shall be made in light of any revised proposal made by USOL prior
to the expiration of such five business day period) and concurrently enters into
a definitive agreement providing for the implementation of such Acquisition
Proposal.
(c) For purposes of this Agreement, "SUPERIOR OFFER" means an
Acquisition Proposal which is superior from a financial point of view to (i)
FLCI's stockholders (other than any stockholders affiliated with USOL) or (ii)
USOL's stockholders (other than any stockholders affiliated with FLCI), as
applicable, to the Merger and for which financing, to the extent required, is
then committed or which, in the good faith judgment of FCLI's or USOL's board of
directors, as applicable, after consultation with FLCI's or USOL's financial
advisors is reasonably capable of being obtained.
8.3 EFFECT OF TERMINATION.
In the event of the termination of this Agreement pursuant to Section
8.1, this Agreement shall immediately become void and there shall be no
liability on the part of any party hereto or any of its Affiliates, directors,
officers or stockholders, except as provided in Section 8.4; PROVIDED, HOWEVER,
that termination of this Agreement shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other party
resulting from any breach of this Agreement.
EX 99.4 - 48
<PAGE>
8.4 FEES AND EXPENSES.
(a) Except as set forth in this Section 8.4, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses if the Merger is not
consummated and by the Surviving Corporation if the Merger is consummated, to
the extent such expenses are solely and directly related to such Merger in
accordance with the guidelines established in Revenue Ruling 73-54, 1973-1 C.B.
187; PROVIDED, HOWEVER, that, if the Merger is not consummated, FLCI and USOL
shall share equally all fees and expenses, other than attorneys' fees, incurred
in relation to the printing of the Proxy Statement (including any preliminary
materials related thereto) and any amendments or supplements thereto.
(b) USOL shall pay FLCI a termination fee of $1,000,000 upon the earlier
to occur of the following events:
(i) the termination of this Agreement by FLCI pursuant to
Section 8.1(a)(vi); or
(ii) the termination of this Agreement by USOL pursuant to
Section 8.1(a)(viii).
USOL's payment of a termination fee pursuant to this subsection shall be
the sole and exclusive remedy of FLCI against USOL and its directors, officers,
employees, agents, advisors, and other representatives with respect to the
occurrences giving rise to such payment; PROVIDED that this limitation shall not
apply in the event of a willful breach of this Agreement by USOL.
(c) FLCI shall pay USOL a termination fee of $1,000,000 upon the
earliest to occur of the following events:
(i) the termination of this Agreement by either FLCI or USOL
pursuant to Section 8.1(a)(iv) if (A) the requisite
votes of the stockholders of FLCI to approve the Merger
shall not have been obtained, (B) a proposal for an
Alternative Transaction (as defined below) involving
FLCI shall have been publicly announced prior to the
FLCI Stockholders' Meeting, and (C) either a definitive
agreement for an Alternative Transaction involving FLCI
is entered into, or an Alternative Transaction involving
FLCI is consummated, within eighteen months of such
termination;
(ii) the termination of this Agreement by either FLCI or USOL
pursuant to Section 8.1(a)(iv) if (A) the requisite vote
of the stockholders of FLCI to approve the Merger shall
not have been obtained because one or more of the
stockholders party to the Stockholder Support Agreements
failed to approve the Merger in
EX 99.4 - 49
<PAGE>
breach of such agreement, and (B) if such stockholder
had voted for the Merger or not otherwise breached, the
Merger would have been approved by the FLCI
stockholders;
(iii) the termination of this Agreement by USOL pursuant to
Section 8.1(a)(vii); or
(iv) the termination of this Agreement by FLCI pursuant to
Section 8.1(b).
FLCI's payment of a termination fee pursuant to this subsection shall be
the sole and exclusive remedy of USOL against FLCI and any of its subsidiaries
and their respective directors, officers, employees, agents, advisors or other
representatives with respect to the occurrences giving rise to such payment;
provided that this limitation shall not apply in the event of a willful breach
of this Agreement by FLCI.
(d) The fees payable pursuant to Section 8.4(b) or 8.4(c) shall be paid
concurrently with the first to occur of the events described in Section
8.4(b)(i) or (ii) or 8.4(c)(i), (ii), (iii) or (iv), respectively.
(e) As used in this Agreement, "ALTERNATIVE TRANSACTION" means either
(i) a transaction pursuant to which any third party acquires more than 20% of
the outstanding shares of USOL Stock or FLCI Stock, as the case may be, pursuant
to a stock purchase, tender offer or exchange offer or otherwise, (ii) a merger
or other business combination involving USOL or FLCI pursuant to which any third
party (or the stockholders of a third party) acquires more than 20% of the
outstanding shares of USOL Stock or FLCI Stock, as the case may be, or the
entity surviving such merger or business combination, (iii) any other
transaction pursuant to which any third party acquires control of assets
(including for this purpose the outstanding equity securities of subsidiaries of
USOL, and the entity surviving any merger or business combination including any
of them) of USOL or FLCI having a fair market value (as determined by the Board
of Directors of USOL or FLCI, as the case may be, in good faith) equal to more
than 20% of the fair market value of all the assets of USOL or FLCI, as the case
may be, and their respective subsidiaries, taken as a whole, immediately prior
to such transaction.
EX 99.4 - 50
<PAGE>
ARTICLE IX
ARBITRATION; CONSENT TO JURISDICTION
9.1 SUBMISSION TO JURISDICTION.
FLCI and USOL each hereby agree that any and all disputes, legal
actions, suits, or proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby may be brought in any state or federal
court located in Portland, Oregon. By their signature to this Agreement, FLCI
and USOL each irrevocably submit to the jurisdiction of the courts located in
Portland, Oregon, in any dispute, legal action, suit, or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
9.2 WAIVER OF IMMUNITY AND INCONVENIENT FORUM.
FLCI and USOL each hereby irrevocably waives all immunity from
jurisdiction, attachment and execution, whether on the basis of sovereignty or
otherwise, to which it might otherwise be entitled in any legal action or
proceeding brought in any state or federal court located in Portland, Oregon,
and further irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to any dispute, legal action, suit,
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby being brought in any federal or state court located in
Portland, Oregon, and hereby further irrevocably waives any claim that any such
dispute, legal action, suit, or proceeding brought in any such court has been
brought in an inconvenient forum.
9.3 ARBITRATION PROCEDURES.
(a) All disputes arising in connection with this Agreement or any
contract of sale hereunder shall be finally settled by arbitration in Portland,
Oregon, in accordance with the International Arbitration Rules of the American
Arbitration Association (the "RULES OF ARBITRATION"). Judgment on the award
rendered by the arbitration panel (the "ARBITRATION PANEL") may be entered in
any court of competent jurisdiction.
(b) Any party which desires to initiate arbitration proceedings may do
so by delivering written notice to the other party (the "ARBITRATION NOTICE")
specifying (x) the nature of the dispute or controversy to be arbitrated; (y)
the name and address of the arbitrator appointed by the party initiating such
arbitration; and (z) such other matters as may be required by the Rules of
Arbitration. The party who receives an Arbitration Notice shall appoint an
arbitrator and notify the initiating party of such arbitrator's name and address
within 30 days after delivery of the Arbitration Notice; otherwise, a second
arbitrator shall be appointed by the American Arbitration Association at the
request of the party who delivered the Arbitration Notice. The two arbitrators
so appointed shall appoint a third arbitrator who shall be chairman of the
Arbitration Panel and the "neutral arbitrator" for purposes of the Rules of
Arbitration.
9.4 FINAL ARBITRATION DECISIONS.
All decisions of the Arbitration Panel shall be final, conclusive and
binding on all parties and shall not be subject to judicial review. The parties
expressly waive the provisions of any state statute or regulation that permits a
party to an arbitration in which an award has been made to petition a court of
competent jurisdiction to vacate an arbitration award.
9.5 CLAIMS FOR UNPAID BALANCE.
Notwithstanding anything to the contrary contained in this Article IX,
any claim by either party for a "provisional remedy" as defined in Section
1281.8 of the Rules of
EX 99.4 - 51
<PAGE>
Arbitration, may be brought in any court of competent jurisdiction, and any
judgment, order or decree relating thereto shall have precedence over any
arbitral award or proceeding.
ARTICLE X
GENERAL PROVISIONS
10.1 ATTORNEY'S FEES.
In any action at law or in equity or in any arbitration proceeding, for
declaratory relief or to enforce any of the provisions or rights or obligations
under this Agreement, the unsuccessful party to such proceeding, shall pay the
successful party or parties all statutorily recoverable costs, expenses and
reasonable attorneys' fees incurred by the successful party or parties including
without limitation costs, expenses, and fees on any appeals and the enforcement
of any award, judgment or settlement obtained, such costs, expenses and
attorneys' fees shall be included as part of the judgment. The successful party
shall be that party who obtained substantially the relief or remedy sought,
whether by judgment, compromise, settlement or otherwise.
10.2 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
KNOWLEDGE, ETC.
Except as otherwise provided in this Section 10.2, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the other party hereto, any Person controlling any such party or any of their
respective officers or directors, whether prior to or after the execution of
this Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time, except that the agreements set forth in
Sections 6.4, 6.5, 6.6, 6.8, 6.12, 6.13, 6.14 and 8.4 shall survive the
Effective Time. The Confidentiality/Standstill Agreement shall survive
termination of this Agreement as therein provided.
10.3 NOTICES.
(a) Any notice, communication, offer, acceptance, request, consent,
reply, or advice (herein severally and collectively, for convenience, called
"NOTICE"), in this Agreement provided or permitted to be given, served, made, or
accepted by any party or Person to any other party or parties, Person or
Persons, hereunder must be in writing, addressed to the party to be notified at
the address set forth below, or such other address as to which one party
notifies the other in writing pursuant to the terms of this Section, and must be
served by (1) telefax or other similar electronic method, or (2) depositing the
same in the United States mail, certified, return receipt requested and postage
paid to the party or parties, Person or Persons to be notified or entitled to
receive same, or (3) delivering the same in Person to such party. Any party
receiving a facsimile transmission shall be entitled to rely upon a facsimile
transmission to the same extent as if it were the original.
EX 99.4 - 52
<PAGE>
(b) All notices and other communications given or made pursuant hereto
shall be deemed to have been given immediately when sent by telefax and
confirmed received or other electronic method or when personally delivered in
the manner hereinabove described, and seventy-two hours after being deposited in
the United States mail. Notice provided in any manner not specified above shall
be effective only if and when received by the party or parties, person or
persons to be, or provided to be notified.
(c) All notices, requests, demands, and other communications required or
permitted under this Agreement shall be addressed as set forth below:
(i) If to FLCI:
FirstLink Communications, Inc.
190 SW Harrison
Portland, Oregon 97201
Telecopier No. (503) 306-4442
Attn: A. Roger Pease, President
With a copy to:
Neuman Drennen & Stone, LLC
5445 DTC Boulevard, PH-4
Englewood, CO 80111
Telecopier No. (303) 488-3454
Attention: David H. Drennen, Esq.
(ii) If to USOL:
USOL Holdings, Inc.
10300 Metric Boulevard
Austin, Texas 78758
Telecopier No. (512) 651-3768
Attn: Rob Solomon, Chief Executive Officer
With a copy to:
Jenkens & Gilchrist
600 Congress Avenue
Suite 2200
Austin, Texas 78701
Telecopier No. (512) 404-3520
Attention: J. Rowland Cook, Esq.
(iii) Copies to:
EX 99.4 - 53
<PAGE>
GMAC Commercial Mortgage Corporation
650 Drescher Road
Horsham, PA 19044
Attention: Dave E. Creamer
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, IL 60611-3608
Attention: Edwin D. Mason
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th Floor
Los Angeles, CA 90067
Attention: Linda Giunta Michaelson
10.4 AMENDMENT.
This Agreement may be amended by the parties hereto by action taken by
or on behalf of their respective Boards of Directors at any time prior to the
Effective Time; PROVIDED, HOWEVER, that after approval of the Merger by the
stockholders of USOL and FLCI, no amendment may be made which by law requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed by USOL
and FLCI.
10.5 WAIVER.
At any time prior to the Effective Time, any party hereto may, with
respect to any other party hereto, (a) extend the time for the performance of
any of the obligations or other acts, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
10.6 SEVERABILITY.
If any term or other provision of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
EX 99.4 - 54
<PAGE>
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
10.7 ASSIGNMENT.
Neither party may directly or indirectly assign or delegate, by
operation of law or otherwise, all or any portion of its rights, obligations or
liabilities under this Agreement without the prior written consent of the other
party, which consent may be withheld at the other party's sole and absolute
discretion. Any purported assignment or delegation without such consent shall be
null and void.
For purposes of this Section, the term "AGREEMENT" shall include this
Agreement and the exhibits, schedules, and other documents attached hereto or
described in this Section 10.7. This Agreement, and other documents delivered
pursuant to this Agreement, contain all of the terms and conditions agreed upon
by the parties relating to the subject matter of this Agreement and supersede
all prior and contemporaneous agreements, letters of intent, representations,
warranties, disclosures, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting that subject matter,
including, without limitation, the letter of intent dated May 3, 1999, among
USOC, FLCI, and others, as amended prior to the date hereof.
10.8 PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement (other than Sections 6.5, 6.6
and 6.13), express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
10.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach by the other party of any representation,
warranty or agreement herein, nor shall any single or partial exercise of any
such right preclude other or further exercise thereof or of any other right. All
rights and remedies existing under this Agreement are cumulative and in addition
to, and not exclusive of, any rights or remedies otherwise available.
10.10 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CHOICE OF LAW
PROVISIONS THEREOF.
EX 99.4 - 55
<PAGE>
10.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. This Agreement shall become binding when
all counterparts taken together shall have been executed and delivered by the
parties. A telecopied facsimile of an executed counterpart of this Agreement
shall be sufficient to evidence the binding agreement of each party to the terms
hereof. However, each party agrees to return to the other parties an originally
executed counterpart of this Agreement promptly after delivery of a telecopied
facsimile thereof.
10.12 CAPTIONS.
The caption and heading of various sections and paragraphs of this
Agreement are for convenience only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.
10.13 TIME.
Time is of the essence with respect to this Agreement and each of its
provisions.
EX 99.4 - 56
<PAGE>
IN WITNESS WHEREOF, FLCI and USOL have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
FIRSTLINK COMMUNICATIONS, INC.
By: /S/ A. ROGER PEASE
-----------------------------------
Name: A. Roger Pease
Title: President and Chief
Executive Officer
USOL HOLDINGS, INC.
By: /S/ ROB SOLOMON
-----------------------------------
Name: Rob Solomon
Title: President
EX 99.4 - 57
-------------------------------------------
PREFERRED STOCKHOLDER
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 21, 1999
BY AND AMONG
USOL HOLDINGS, INC.,
FIRSTLINK COMMUNICATIONS, INC.
AND
THE ENTITIES SET FORTH IN SCHEDULE A HERETO
(EACH, A "SHAREHOLDER")
-------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE/SECTION HEADING PAGE
- --------------- ------- ----
ARTICLE I DEFINITIONS..........................................................2
1.1 Defined Terms...........................................................2
ARTICLE II TRANSFERS OF SHARES.................................................3
2.1 Shareholder Common Stock Unregistered...................................3
2.2 Rule 144 Reporting......................................................4
ARTICLE III REGISTRATION RIGHTS................................................4
3.1 Demand Registration.....................................................4
3.2 Right to Include Securities.............................................6
3.3 Priority in Incidental Registration.....................................6
3.4 Registration Procedures.................................................7
3.5 Incidental Underwritten Offerings......................................10
3.6 Preparation; Reasonable Investigation..................................10
3.7 Limitations, Conditions and Qualifications to Obligations under
Registration Covenants.................................................11
3.8 Expenses...............................................................12
3.9 Indemnification........................................................12
3.10Participation in Underwritten Registrations............................15
ARTICLE IV MISCELLANEOUS......................................................15
4.1 Recapitalizations, Exchanges, Etc., Affecting Shareholder Common
Stock..................................................................15
4.2 Binding Effect.........................................................15
4.3 Amendment; Waiver......................................................16
4.4 Notices................................................................16
4.5 Governing Law..........................................................16
4.6 Counterparts...........................................................16
4.7 Invalidity.............................................................16
4.8 Cumulative Remedies....................................................17
4.9 Assumption by FirstLink................................................17
EX 99.5 - i
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of July 21, 1999, by and among USOL
Holdings, Inc., a Delaware corporation ("USOL"), FirstLink Communications, Inc.,
an Oregon corporation ("FirstLink") and each of the entities set forth on
Schedule A attached hereto and any permitted transferee of the shares of Series
A Preferred Stock (as defined below) and Series B Preferred Stock (as defined
below) held by such entities (each such entity and transferee, a "Shareholder").
W I T N E S S E T H:
WHEREAS, pursuant to separate Subscription Agreements, each dated as of
July 21, 1999, by and between USOL and each of the Shareholders (the
"Subscription Agreements"), the Shareholders have purchased an aggregate of
1,325,000 shares of USOL's Series A Convertible Preferred Stock, par value
$0.001 per share ("Series A Preferred Stock") which shall be convertible into
shares of USOL's common stock, par value $0.001 per share ("Common Stock"); and
155,000 shares of USOL's Series B Convertible Preferred Stock, par value $0.001
per share ("Series B Preferred Stock") which shall be convertible into shares of
Series A Preferred Stock or Common Stock; and
WHEREAS, the Subscription Agreements provide that the Shareholders will
have certain registration rights and it is a condition to the consummation of
the purchase and sale of the Series A Preferred Stock and Series B Preferred
Stock that each of the Shareholders and USOL enter into this Registration Rights
Agreement; and
WHEREAS, USOL, Inc., a Delaware corporation ("USOL Sub"), USOL, U.S. OnLine
Communications, Inc., a Delaware corporation ("OnLine") and certain shareholders
of Online have entered into an Asset Purchase Agreement dated the date hereof,
whereby USOL Sub shall purchase substantially all of the assets of OnLine (the
"USOL Acquisition") concurrently with the execution of this Agreement; and
WHEREAS, TheResidentClub.com, Inc., a Delaware corporation ("TRC"), GMAC
Commercial Mortgage Corporation ("GMAC-CM") and USOL have entered into an Asset
Purchase Agreement dated the date hereof, whereby TRC shall purchase certain of
the assets of the Tenant Services Division of GMAC-CM (the "TSD Acquisition")
concurrently with the execution of this Agreement; and
WHEREAS, USOL and FirstLink Communications, Inc., an Oregon corporation
("FirstLink") have entered into an Agreement and Plan of Merger and
Reorganization dated as of July 21, 1999 (the "Merger Agreement"), whereby,
subsequent to the USOL Acquisition and the TSD Acquisition and subject to the
satisfaction of conditions set forth in the Merger Agreement, USOL shall merge
with and into FirstLink (the "Merger"); and
WHEREAS, pursuant to the Merger Agreement, each share of Series A Preferred
Stock and Series B Preferred Stock shall be exchanged for one share of Series A
Convertible
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
Preferred Stock of FirstLink (the "FirstLink Series A Preferred Stock") and
Series B Convertible Preferred Stock of FirstLink (the "Firstlink Series B
Preferred Stock"), respectively having equivalent rights and preferences as the
USOL Series A Preferred Stock and Series B Preferred Stock (together, "FirstLink
Preferred Stock"); and
WHEREAS, USOL, FirstLink and the Shareholders believe that it is in their
best interests to enter into this Agreement pertaining to the registration of
their respective shares of USOL, and after the closing of the Merger, their
respective shares of FirstLink, on the terms and conditions set forth below;
NOW, THEREFORE, in order to implement the foregoing and in consideration of
the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. Capitalized terms used herein but not otherwise defined
shall have the meaning given to such terms in the Subscription Agreements.
"CLOSING" shall mean the consummation of the Subscription Agreements and
the transactions contemplated thereby by the Company and the Shareholders.
"COMPANY" shall mean (a) USOL at all times prior to the closing of the
Merger and (b) FirstLink upon the closing of the Merger and at all times
thereafter.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder as the same may be amended
from time to time.
"EXCLUDED REGISTRATION" means a registration under the Securities Act of
(i) securities pursuant to the demand registration rights pursuant to SECTION
3.1.1 hereof, (ii) securities registered on Form S-8 under the Securities Act or
any similar successor form and (iii) securities registered to effect the
acquisition of or combination with another Person.
"PERSON" shall mean any individual, partnership, joint venture,
corporation, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or any
department or agency thereof or other entity of any nature whatsoever.
"QUALIFIED IPO" means a firm commitment underwritten public offering of
Common Stock pursuant to a registration statement under the Securities Act where
both (i) the proceeds to USOL (prior to deducting any underwriters' discounts
and commissions) equal or exceed Twenty-Five Million Dollars ($25,000,000) and
(ii) upon consummation of such offering, the Common Stock is listed on the New
York Stock Exchange or authorized to be quoted and/or listed on the Nasdaq
National Market.
EX 99.5 - 2
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder as the same may be amended from
time to time.
"SELLING SECURITYHOLDER" shall mean any seller of Shareholder Common Stock
covered by a registration statement.
"SHAREHOLDER COMMON STOCK" shall mean shares of Common Stock issued or
issuable to the Shareholders upon conversion of the Series A Preferred Stock and
Series B Preferred Stock.
"WARRANTS" shall mean collectively the warrants dated the date hereof
issued by USOL to certain of the creditors of Online and the warrants dated the
date hereof issued by USOL to GMAC-CM.
ARTICLE II
TRANSFERS OF SHARES
2.1 SHAREHOLDER COMMON STOCK UNREGISTERED. Each Shareholder acknowledges
and represents that he has been advised by the Company that:
(a) the offer and sale of the Shareholder Common Stock have not been
registered under the Securities Act;
(b) the Shareholder Common Stock must be held and the Shareholder must
continue to bear (and is able to bear) the economic risk of the investment
in the Shareholder Common Stock, subject to the terms and conditions of the
Subscription Agreements until (i) the Shareholder Common Stock is
registered pursuant to an effective registration statement under the
Securities Act and all applicable state securities laws or (ii) an
exemption from such registration is available;
(c) when and if shares of the Shareholder Common Stock may be disposed
of without registration under the Securities Act in reliance on Rule 144
thereunder ("Rule 144"), such disposition can be made only in limited
amounts in accordance with the terms and conditions of such Rule;
(d) if the Rule 144 exemption is not available, any offer or sale of
Shareholder Common Stock without registration will require compliance with
some other exemption under the Securities Act;
(e) a restrictive legend in the form set forth in Section 7.2 of the
Subscription Agreements shall be placed on the certificates representing
the Shareholder Common Stock; and
(f) a notation shall be made in the appropriate records of the Company
indicating that the Shareholder Common Stock is subject to restrictions on
transfer, and
EX 99.5 - 3
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
appropriate stop-transfer instructions will be issued to the Company's
transfer agent with respect to the Shareholder Common Stock.
2.2 RULE 144 REPORTING. The Company agrees that to the extent reasonably
necessary to permit the Shareholders to sell shares of the Shareholder Common
Stock in accordance with and in reliance on Rule 144, and for so long as such
shares are owned by the Shareholders and such shares are not registered for
resale under the Securities Act, the Company will use its reasonable best
efforts to:
(a) make and keep public information available within the meaning of
Rule 144 under the Securities Act, at all times from and after the Closing
Date;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(c) so long as any Shareholder owns any Shareholder Common Stock,
inform such person upon request as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act,
and provide a copy of the most recent annual or quarterly report of the
Company and such other reports and documents filed with the SEC and
available to the public as may reasonably be requested in availing such
Shareholder of any rule or regulation of the SEC allowing a sale of any
such securities without registration.
Anything to the contrary contained in this Section 2.2 notwithstanding, the
Company may deregister any of its securities under the Exchange Act if it is
then permitted to do so pursuant to the Exchange Act in which case the
provisions of this Section 2.2 insofar as they relate to obligations to make
filings under the Exchange Act that would no longer be required as a result of
such delisting shall be of no further force or effect. Nothing in this Section
shall be deemed to limit in any manner the restriction on sales of Shareholder
Common Stock contained in this Agreement.
ARTICLE III
REGISTRATION RIGHTS
3.1 DEMAND REGISTRATION.
3.1.1 DEMAND RIGHTS. At any time after the first to occur of (i) 180
days after the date of the Closing of the Merger or (ii) 180 days after a
Qualified IPO, the holders of more than 20% of the Shareholder Common Stock
that has not been registered and sold pursuant to this Article III, may
submit a written request that the Company effect a registration of
Shareholder Common Stock; PROVIDED HOWEVER, that the Company need effect
only five (5) demand registrations pursuant to this Section 3.1.1. Upon
receipt of such request, the Company will:
(a) promptly give written notice of the proposed registration to
all other Shareholders and to the holders of Common Stock and Warrants
issued on the date of this Agreement (the "Other Shareholders") who
are parties to the Common Stockholder and Warrant Holder Registration
Rights Agreement dated as of the date hereof; and
EX 99.5 - 4
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
(b) file a registration statement on Form S-1 or Form S-3 or any
successor form with the SEC as expeditiously as possible but in any
case within 60 days after the selection of an investment banking firm
pursuant to Section 3.1.3 and use its best efforts to effect the
registration of the Shareholder Common Stock and the Common Stock of
the Other Shareholders ("Other Common Stock") (including, without
limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit the sale
and distribution by the Shareholders and the Other Shareholders of
such shares of Shareholder Common Stock and Other Common Stock under
applicable law, together with all Shareholder Common Stock and Other
Common Stock of any Shareholders and Other Shareholders joining in
such request as are specified in a written request received by the
Company within 30 days after receipt of such written notice from the
Company; provided, however that the Company shall not be obligated to
take any action to effect any such registration, qualification or
compliance pursuant to this Section 3.1.1:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities
Act; or
(ii) with respect to any of the Shareholder Common Stock or
Other Common Stock that has been transferred to any holder who is
not one of the Shareholders or Other Shareholders listed above or
a family member of any such Shareholder or Other Shareholder or a
trust for the benefit of any such Shareholder or Other
Shareholder or family member, unless such transferee has executed
and delivered to the Company a valid undertaking and becomes
bound by the terms of this Agreement.
3.1.2 EFFECTIVE REGISTRATION. A registration will not count as a
demand registration until it has become effective; PROVIDED, that if, after
it has become effective, an offering of Shareholder Common Stock pursuant
to a registration is interfered with by any stop order, injunction, or
other order or requirement of the SEC or other governmental agency or
court, such registration will be deemed not to have been effected and will
not count as a demand registration.
3.1.3 SELECTION OF UNDERWRITERS. The offering of Shareholder Common
Stock pursuant to a demand registration shall be in the form of a "firm
commitment" underwritten offering. The Shareholders holding a majority of
the Shareholder Common Stock to be registered in a demand registration
shall select the investment banking firm or firms to manage the
underwritten offering; PROVIDED, that such selection shall be subject to
the consent of USOL, which consent shall not be unreasonably withheld or
delayed.
3.1.4 PRIORITY OF DEMAND REGISTRATIONS. All Shareholder Common Stock
and Other Common Stock requested to be included in the registration shall
be included in a demand registration unless the managing underwriter or
underwriters shall advise the Company or the Shareholders and the Other
Shareholders in writing that the inclusion of such securities will
EX 99.5 - 5
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
materially and adversely affect the price or success of the offering (a
"MATERIAL ADVERSE EFFECT"). In the event the managing underwriter or
underwriters shall advise the Company or the Shareholders and the Other
Shareholders that the amount of Shareholder Common Stock and Other Common
Stock proposed to be included in such demand registration by Shareholders
and Other Shareholders is sufficiently large to cause a Material Adverse
Effect, the Shareholder Common Stock and Other Common Stock to be included
in such registration shall equal the number of shares which the Company is
so advised can be sold in such offering without a Material Adverse Effect
and such shares shall be allocated pro rata among the Shareholders and the
Other Shareholders on the basis of the number of shares of Shareholder
Common Stock and Other Common Stock requested to be included in such
registration.
3.2 RIGHT TO INCLUDE SECURITIES. If at any time all of the shares of
Shareholder Common Stock are not then registered under the Securities Act, and
the Company proposes to register any shares of its Common Stock under the
Securities Act (other than pursuant to an Excluded Registration), whether or not
for sale for its own account, it will each such time as soon as practicable give
written notice of its intention to do so to the Shareholders. In such event,
upon the written request (which request shall specify the total number of shares
of Shareholder Common Stock intended to be disposed of by the requesting
Shareholder) of any Shareholder made within 15 days after the receipt of any
such notice (10 days if the Company gives telephonic notice with written
confirmation to follow promptly thereafter), stating that (i) such registration
will be on Form S-3 and (ii) such shorter period of time is required because of
a planned filing date, the Company will use all reasonable efforts to effect the
registration under the Securities Act in the manner initially proposed by the
Company of all Shareholder Common Stock held by the Shareholders which the
Company has been so requested to register for sale. If the Company thereafter
determines for any reason in its sole discretion not to register or to delay
registration of the Common Stock, the Company may, at its election, give written
notice of such determination to the Shareholder and (i) in the case of a
determination not to register, shall be relieved of the obligation to register
any Shareholder Common Stock in connection with such registration and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Shareholder Common Stock of the Shareholder for the same period
as the delay in registration of such other securities. The exercise by a
Shareholder of any right under this Section 3.2 will not relieve the Company of
its obligations to such Shareholder under Section 3.1.
3.3 PRIORITY IN INCIDENTAL REGISTRATION. In a registration pursuant to
Section 3.2 hereof, if the managing underwriter of any such underwritten
offering to which Section 3.2 pertains shall inform the Company by letter of its
belief that the number of shares of Shareholder Common Stock and Other Common
Stock to be included in such registration would have a Material Adverse Effect,
then the Company will be required to include in such registration only that
number of shares of Shareholder Common Stock and Other Common Stock which it is
so advised can be included in such offering without causing such Material
Adverse Effect. With respect to a registration that is the subject of Section
3.2 hereof, shares of Common Stock proposed by the Company to be registered for
issuance by the Company or for sale by any Person exercising "demand"
registration rights shall have the first priority and all shares of Shareholder
Common Stock owned by the Shareholders exercising incidental registration rights
and all shares of Other Common Stock owned by the Other Shareholders
EX 99.5 - 6
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
exercising incidental rights shall be given second priority without preference
among the relevant Shareholders and Other Shareholders. If less than all of the
shares of Shareholder Common Stock and Other Common Stock duly requested to be
included in such registration are to be registered therein, such shares of
Shareholder Common Stock and Other Common Stock shall be included in the
registration PRO RATA based on the total number of such shares sought to be
registered other than for issuance by the Company or sale by third parties
exercising "demand" registration rights in accordance with the preceding
sentence. If, as a result of the provisions of this Section 3.3, any Shareholder
or Other Shareholder shall not be entitled to include all of such Shareholder's
shares of Shareholder Common Stock or Other Common Stock in such registration,
such shareholder may withdraw such shareholder's request to include Shareholder
Common Stock or Other Common Stock, as applicable, in such registration.
3.4 REGISTRATION PROCEDURES. In connection with the Company's obligations
to register the Shareholder Common Stock pursuant to this Article III, the
Company will use its reasonable best efforts to effect such registration in
accordance herewith and the Company will promptly:
(a) prepare and file with the SEC as expeditiously as possible, but in
any case within 60 days after the selection of an investment banking firm
pursuant to Section 3.1.3 the requisite registration statement to effect
such registration and use its reasonable best efforts to cause such
registration statement to become effective and to remain continuously
effective until the earlier to occur of (x) 180 days following the date on
which such registration statement is declared effective (the "Effective
Date") or (y) the termination of the offering being made as set forth
thereunder;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective as set
forth above and to comply with the provisions of the Securities Act with
respect to the disposition of all shares of Shareholder Common Stock
covered by such registration statement until such Shareholder Common Stock
has been sold;
(c) furnish to the managing underwriter, if any, and to the
Shareholders, at least one executed original of the registration statement
and to each of the Selling Securityholders such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, as may reasonably be requested by such
Selling Securityholder (it being understood that the Company consents to
the use of the prospectus and any amendment or supplement thereto by each
seller of Shareholder Common Stock and the underwriters in connection with
the offering and sale of the Shareholder Common Stock covered by the
registration of which such prospectus, amendment or supplement is a part).
(d) use its reasonable best efforts (i) to register or qualify, to the
extent
EX 99.5 - 7
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
necessary, all shares of Common Stock covered by such registration
statement under the securities or "blue sky" laws of such jurisdictions
where an exemption is not available as the Selling Securityholders shall
reasonably request, (ii) to keep such registration or qualification in
effect for so long as such registration statement remains in effect and
(iii) to take any other action which may be reasonably necessary or
advisable to enable the Selling Securityholders to consummate the
disposition in such jurisdictions of such Common Stock, provided that the
Company will not be required to qualify generally to do business or as a
dealer in any jurisdiction where it is not then so qualified, subject
itself to taxation in any such jurisdiction or take any action which would
subject it to general service of process in any such jurisdiction;
(e) notify the Selling Securityholders and the managing underwriter,
if any, promptly, and confirm such advice in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed,
and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
SEC for amendments or supplements to a registration statement or related
prospectus or for additional information, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of a registration statement
or the initiation of any proceedings for that purpose, (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of any of the registered securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event or information becoming known
which requires the making of any changes in a registration statement or
related prospectus so that such documents will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading and (vi) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
(f) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of
any suspension of the qualification of any of the registered securities for
sale in any jurisdiction, at the earliest possible moment;
(g) upon the occurrence of any event contemplated by clause (e)(v)
above, prepare a supplement or post-effective amendment to the applicable
registration statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the Shareholders of the securities being sold
thereunder, such prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(h) use its reasonable best efforts to furnish to the Selling
Securityholders a signed counterpart, addressed to the Selling
Securityholders and the underwriters, if any, of an opinion of counsel for
the Company as to the effectiveness of the registration statement
registering the resale of the Shareholder Common Stock under the Securities
Act;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC in connection with a registration pursuant
hereto;
EX 99.5 - 8
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
(j) cooperate with the Selling Securityholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Shareholder Common Stock to be sold;
and enable such shares of Shareholder Common Stock to be in such
denominations and registered in such names as the Selling Securityholders
or the managing underwriters, if any, may request at least two business
days prior to any sale of shares of Shareholder Common Stock to the
underwriters;
(k) cause all shares of Common Stock covered by the registration
statement to be listed on each securities exchange, if any, or Nasdaq, on
which securities of such class, series and form issued by the Company, if
any, are then listed or traded if requested by the managing underwriters,
if any, or the holders of a majority of the shares of Common Stock covered
by the registration statement and entitled hereunder to be so listed;
(l) make generally available to the Company's securityholders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than thirty (30) days after the end of the twelve
(12) month period beginning with the first day of the Company's first
fiscal quarter commencing after the effective date of a registration
statement, which earnings statement shall cover said twelve (12) month
period, and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on the Form 10-Q, 10-K and
8-K under the Exchange Act and otherwise complies with Rule 158 under the
Securities Act; and
(m) cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter
(including any qualified independent underwriter that is required to be
retained in accordance with the rules and regulations of the NASD).
The Company may require each Selling Securityholder to furnish to the
Company such information and documents regarding such Selling Securityholder and
the distribution of such securities as the Company may from time to time
reasonably request in writing in order to comply with the Securities Act.
Each of the Selling Securityholders agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.4(e)(ii), (iii), (iv), (v) or (vi) hereof, it will forthwith discontinue
disposition pursuant to such registration statement of any shares of Common
Stock covered by such registration statement or prospectus until its receipt of
the copies of the supplemented or amended prospectus relating to such
registration statement or prospectus or until it is advised in writing by the
Company that the use of the applicable prospectus may be resumed (and the period
of such discontinuance shall be excluded from the calculation of the period
specified in clause (x) of Section 3.4(a)) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in their possession, of the prospectus covering such
securities in effect at the time of receipt of such notice. Each of the Selling
Securityholders agrees to furnish the Company a signed counterpart, addressed to
the Company and the underwriters, if any, of an opinion of counsel covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) as are
EX 99.5 - 9
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
customarily covered in opinions of selling stockholder's counsel delivered to
the underwriters in underwritten public offerings of securities (and dated the
dates such opinions are customarily dated) and such other legal matters as the
Company or the underwriters may reasonably request.
3.5 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time proposes
to register any shares of its common stock under the Securities Act as
contemplated by Section 3.2 and such shares are to be distributed by or through
one or more underwriters, the Company and, if the managing underwriter shall
elect in writing to include the shares of Shareholder Common Stock sought to be
included in such registration, the Securityholders who hold Shareholder Common
Stock to be distributed by such underwriters in accordance with Section 3.2
hereof shall be parties to the underwriting agreement between the Company and
such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of them and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to their obligations. The Company may, at its option, require that any
or all of the representations and warranties by, and the other agreements on the
part of the Selling Securityholders to and for the benefit of such underwriters
shall also be made to and for the benefit of the Company. Notwithstanding the
foregoing, no Shareholder shall be required to make any representations or
warranties in connection with the registration other than representations and
warranties as to (i) such Shareholder's ownership of his or its Shareholder
Common Stock to be transferred free and clear of all liens, claims, and
encumbrances, (ii) such Shareholder's power and authority to effect such
transfer, and (iii) such matters pertaining to compliance with securities laws
as may be reasonably requested; PROVIDED FURTHER, HOWEVER, that the obligation
of such Shareholder to indemnify pursuant to any such underwriting arrangements
shall be several, not joint and several, among such Shareholders selling
Shareholder Common Stock, and the liability of each such Shareholder will be in
the proportion thereto, and PROVIDED FURTHER that such liability will be limited
to, the allocable share of claim net amount received by such Shareholder from
the sale of his or its Shareholder Common Stock pursuant to such registration.
3.6 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Selling Securityholders,
the underwriters, if any, and their respective counsel and accountants the
opportunity (but such Persons shall not have the obligation except as set forth
herein) to participate (in the case of a registration pursuant to Section 3.2
hereof such participation shall be at their expense) in the preparation of such
registration statement, each prospectus included therein or filed with the SEC,
and, to the extent practicable, each amendment thereof or supplement thereto,
and will give each of them such access to its books and records (to the extent
customarily given to the underwriters of the Company's securities) and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Selling Securityholders, and the
underwriters' respective outside counsel to conduct a reasonable investigation
within the meaning of the Securities Act.
EX 99.5 - 10
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
3.7 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company to use its reasonable
efforts to cause the Shareholder Common Stock to be registered under the
Securities Act are subject to each of the following limitations, conditions and
qualifications:
(a) The Company shall be entitled to postpone for a reasonable period
of time the filing or effectiveness of (but not the preparation of) any
registration statement otherwise required to be prepared, filed and made
and kept effective by it hereunder if:
(i) the Board of Directors of the Company determines in good
faith that there is a material undisclosed development in the business
or affairs of the Company (including any pending or proposed
financing, recapitalization, acquisition or disposition), the
disclosure of which at such time would be adverse to the Company's
interests (but the duration of such postponement may not exceed the
earlier to occur of (u) 30 days after the cessation of the
circumstances described in this clause (i) or (v) 90 days after the
date of the determination of the Board of Directors to postpone the
filing or effectiveness of a registration, and the duration of such
postponement shall be excluded from the calculation of the period
specified in clause (x) of Section 3.4(a)); or
(ii) the Company has filed a registration statement with the SEC,
such registration statement has not yet been declared effective, the
Company is using its reasonable best efforts to have such registration
statement declared effective, and the underwriters with respect to
such registration advise that such registration would be adversely
affected (but the duration of such postponement or suspension may not
exceed the earlier to occur of (u) 30 days after the effectiveness of
the previously filed registration statement, or (v) 90 days after the
determination of the Board of Directors to postpone filing a
registration statement required to be filed hereunder), and the
duration of such postponement or suspension shall be excluded from the
calculation of the period specified in clause (x) of Section 3.4(a);
or
(iii) the Board of Directors of the Company determines in good
faith prior to the receipt of a request for demand registration to
effect a registered underwritten public offering of the Company's
equity securities for the Company's account and the Company had taken
substantial steps (including, but not limited to, selecting a managing
underwriter for such offering) and is proceeding with reasonable
diligence to effect such offering (but the duration of such
postponement may not exceed the earlier to occur of (u) 30 days after
the effectiveness of the previously prepared registration statement,
or (v) 90 days after the determination by the Board of Directors to
postpone the filing of a registration statement required to filed
hereunder).
(iv) If the Company shall delay the filing of a registration
statement as described in (i), (ii) or (iii) above, it shall, as
promptly as practicable, notify the Selling Securityholders of such
determination, and the Selling Securityholders shall have the right in
the case of a postponement of the filing or effectiveness of a
registration statement to withdraw the request for registration by
giving written notice to the Company within 10 days after receipt of
the Company's notice. Notwithstanding the foregoing, the Company may
make such
EX 99.5 - 11
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
postponement or suspension no more than one time in any 18 month
period.
(b) The Company's obligations shall be subject to the obligations of
the Selling Securityholders, which each of the Shareholders hereby
acknowledges, to furnish all information and materials and to take any and
all actions as may be required under applicable federal and state
securities laws and regulations to permit the Company to comply with all
applicable requirements of the SEC and state securities regulations and to
obtain any acceleration of the effective date of such registration
statement or maintain the effectiveness or currency thereof.
(c) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant hereto unless
such audit is requested by the underwriters with respect to such
registration.
(d) Each Shareholder agrees that, in connection with any underwritten
public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, including
a Qualified IPO, the Shareholder shall not publicly sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the repurchase of,
or otherwise publicly dispose or transfer for value or otherwise agree to
engage in any of the foregoing transactions with respect to any equity
securities of the Company without the prior written consent of the
Company's underwriters, for such period of time from and after the
effective date of such registration statement as may be requested by the
Company's underwriters, such period of time is not to exceed 180 days in
the case of a Qualified IPO and 90 days in the case of a secondary offering
by the Company.
3.8 EXPENSES. The Company will pay its own actual expenses (including legal
fees) incurred in connection with each demand and incidental registration of
Shareholder Common Stock pursuant to Sections 3.1 or 3.2 of this Agreement,
including, without limitation, any and all filing fees payable to the SEC, fees
with respect to filings required to be made with stock exchanges, Nasdaq and the
NASD, fees and expenses of compliance with state securities or blue sky laws,
printing expenses, fees and disbursements of counsel and accountants of the
Company, including costs associated with comfort letters, and fees and expenses
of other Persons retained by the Company, and, in the case of a demand
registration pursuant to Section 3.1 of this Agreement, all reasonable costs,
expenses and fees of one legal counsel for the Selling Securityholders (which
legal counsel shall be chosen by the majority-in-interest of the Selling
Securityholders in their discretion), but each Selling Securityholder shall pay
its own underwriters' expenses (such as but not limited to discounts,
commissions and fees of underwriters and expenses included therein of selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the securities being registered) and legal expenses
(except as set forth above). The Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), and the expense of securities
law liability insurance and rating agency fees, if any.
3.9 INDEMNIFICATION.
EX 99.5 - 12
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
(a) INDEMNIFICATION BY THE COMPANY. In connection with any
registration pursuant hereto in which Shareholder Common Stock is to be
disposed of, the Company shall indemnify and hold harmless, to the fullest
extent permitted by law, each Shareholder and, when applicable, its
officers, directors, agents and employees and each Person who controls (or
is controlled by or under common control with) any of the Shareholders
(within the meaning of the Securities Act or the Exchange Act) against all
losses, claims, damages, liabilities and expenses (including, without
limitation, all attorneys' fees and expenses) based upon, arising out of or
related to, any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary
prospectus or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, including, without limitation, any loss, claim,
damage, liability or expense resulting from the failure to keep a
prospectus current as required hereunder, except insofar as the same (i)
are caused by or contained in any information furnished in writing to the
Company by or on behalf of any Shareholder expressly for use therein or
(ii) are caused by the failure of any of the Shareholders to deliver a copy
of the current required prospectus after the Company has furnished any such
Shareholders with a sufficient number of copies of such prospectus as
requested hereunder or (iii) arise in respect of any offers to sell or
sales made during any period when any Shareholder is required to
discontinue sales under Section 3.4(e) or otherwise under applicable law.
The Company shall also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals (if any),
participating in the distribution of the Shareholder Common Stock, their
officers and directors and each person who controls such Persons (within
the meaning of the Securities Act and the Exchange Act) to the same extent
(and subject to the same exceptions) as provided above with respect to the
indemnification of the Shareholders and shall enter into an indemnification
agreement with such Persons containing such terms, if requested. The
reimbursements required by this SECTION 3.9(A) will be made by periodic
payments during the course of the investigation or defense, as and when
bills are received or expenses incurred.
(b) INDEMNIFICATION BY THE SHAREHOLDERS. In connection with each
registration statement effected pursuant hereto in which Shareholder Common
Stock is to be disposed of, each of the Selling Securityholders shall,
severally but not jointly, indemnify and hold harmless, to the fullest
extent permitted by law, the Company, each other Selling Securityholder and
their respective directors, officers, agents and employees and each Person
who "controls" the Company and each other Selling Securityholder (within
the meaning of the Securities Act and the Exchange Act) and the managing
underwriter if any, and its directors, officers, agents, and employees and
each Person who "controls" such underwriter (within the meaning of the
Securities Act and Exchange Act), in each case against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in
such registration statement or prospectus or preliminary prospectus or
necessary to make the statements therein not misleading, to the extent but
only to the extent, that such untrue statement or omission is contained in
any information furnished in writing by such Shareholder to the Company
expressly for inclusion in such registration statement or prospectus;
PROVIDED, HOWEVER, that such seller of Shareholder Common Stock shall not
be liable in any such case to the extent that, prior to the filing of any
such registration statement or prospectus or amendment thereof or
supplement thereto, such seller of Shareholder Common Stock has furnished
in writing to the Company information
EX 99.5 - 13
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
expressly for use in such registration statement or prospectus or any
amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company. In no event
shall the liability of any Shareholder hereunder be greater in amount than
the dollar amount of the proceeds received or to be received by such
Shareholder upon the sale of the securities giving rise to such
indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder shall give prompt written notice to the
indemnifying party of any claim with respect to which it shall seek
indemnification and shall permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the
indemnified party; PROVIDED, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel
and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such Person unless (i) the
indemnifying party shall have agreed to pay such fees or expenses, or (ii)
the indemnifying party shall have failed to assume the defense of such
claim and to employ counsel reasonably satisfactory to such Person or (iii)
such assumption would constitute an actual conflict of interest (in which
case, if the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such claim on behalf of such Person). If such defense is not
assumed by the indemnifying party, the indemnifying party shall not be
subject to any liability for any settlement made without its consent (but
such consent shall not be unreasonably withheld). No indemnified party
shall be required to consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a written
release in form and substance reasonably satisfactory to such indemnified
party from all liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of
more than one firm of counsel (and, if necessary, local counsel) for all
parties indemnified by such indemnifying party with respect to such claim,
unless a conflict of interest as to the subject matter exists between such
indemnified party and another indemnified party with respect to such claim,
in which event the indemnifying party shall be obligated to pay the fees
and expenses of additional counsel for such indemnified party.
(d) CONTRIBUTION. If for any reason the indemnification provided for
herein is unavailable to an indemnified party or is insufficient to hold it
harmless as contemplated hereby, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations, provided that in no event shall the
liability of any Shareholder for such contribution and indemnification
exceed, in the aggregate, the dollar amount of the proceeds received or to
be received by such Shareholder upon the sale of securities giving rise to
such indemnification and contribution obligation. The relative fault of
such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying
EX 99.5 - 14
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
party or indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this SECTION 3.9(D) were determined
by pro rata allocation referred to in this SECTION 3.9(D). No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. If indemnification is
available under this SECTION 3.9, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in SECTION 3.9(A) and
SECTION 3.9(B) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided
for in this SECTION 3.9(D); subject, in the case of the Holders, to the
limited dollar amounts set forth herein.
(e) INDEMNIFICATION AND CONTRIBUTION IN FULL FORCE AND EFFECT. The
indemnification and contribution provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director, or controlling
person of such indemnified party.
3.10 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. None of the Shareholders
may participate in any underwritten registration hereunder unless the
Shareholder which is a Selling Securityholder (a) agrees to sell its Shareholder
Common Stock on the basis provided in and in compliance with any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and to comply with Regulation M under the Exchange Act, and (b)
completes and executes all questionnaires, appropriate and limited
powers-of-attorney, escrow agreements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements; PROVIDED that all such documents shall be consistent with the
provisions hereof.
ARTICLE IV
MISCELLANEOUS
4.1 RECAPITALIZATIONS, EXCHANGES, ETC., AFFECTING SHAREHOLDER COMMON STOCK.
The provisions of this Agreement shall apply, to the fullest extent set forth
herein with respect to Shareholder Common Stock, to any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution of the Shareholder Common Stock,
by reason of any stock dividend, stock split, stock issuance, reverse stock
split, combination recapitalization, reclassification, merger, consolidation or
otherwise; provided, however, that such provisions shall apply only to any class
or classes of stock which have the right, without limitation as to amount,
either to all or a share of the balance of current dividends and liquidating
dividends after payment of dividends and distributions on any shares entitled to
preference so issued or issuable upon the conversion, exchange or exercise, as
the case may be, of securities of the Company so issued.
4.2 BINDING EFFECT. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns. In the case of a transferee
permitted under this Agreement, such
EX 99.5 - 15
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
transferee shall be deemed the Shareholder hereunder; PROVIDED, however, that no
transferee shall derive any rights under this Agreement unless and until such
transferee has executed and delivered to the Company a valid undertaking and
becomes bound by the terms of this Agreement.
4.3 AMENDMENT; WAIVER. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by either party hereto of any
of the provisions hereof shall be effective unless set forth in a writing
executed by the party so waiving.
4.4 NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (E.G., Federal Express) and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
(a) If to USOL, addressed to:
USOL Holdings, Inc.
10300 Metric Boulevard
Austin, Texas 78758
Attn: President
(b) If to FirstLink, addressed to:
FirstLink Communications, Inc.
190 Southwest Harrison Street
Portland, Oregon 97201
Attn: President
(c) If to a Shareholder, to such Shareholder at the address set forth
on the signature pages hereto.
4.5 GOVERNING LAW. This Agreement shall be governed by and construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware without regard to the choice of law principles thereof.
4.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. This Agreement shall
become binding when all counterparts taken together shall have been executed and
delivered by the parties. A telecopied facsimile of an executed counterpart of
the Agreement shall be sufficient to evidence the binding agreement of each
party to the terms thereof. However, each party agrees to return to the other
parties an original, duly executed counterpart of this Agreement promptly after
delivery of a telecopied facsimile thereof.
EX 99.5 - 16
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
4.7 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
4.8 CUMULATIVE REMEDIES.
All rights and remedies of the parties hereto are cumulative of each other
and of every other right or remedy each such party may otherwise have at law or
in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.
4.9 ASSUMPTION BY FIRSTLINK. Upon the consummation of the Merger by and
between FirstLink and USOL, pursuant to which all shares of Series A Preferred
Stock and Common Stock will be exchanged for shares of FirstLink preferred stock
and common stock, FirstLink agrees to assume all of the obligations hereunder.
EX 99.5 - 17
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
USOL HOLDINGS, INC.
By: /S/ ROBERT G. SOLOMON
-----------------------------------
Name: Robert G. Solomon
Title: President
FIRSTLINK COMMUNICATIONS, INC.
By: /S/ A. ROGER PEASE
-----------------------------------
Name: A. Roger Pease
Title: President and Chief
Executive Officer
EX 99.5 - 18
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
AGL INVESTMENTS NO. 8 LIMITED
PARTNERSHIP, A COLORADO LIMITED
PARTNERSHIP
By: AGLP NO. 8 Limited Partnership,
a Colorado limited partnership,
its General Partner
By: AGLGP NO. 8, Inc., a Colorado
limited partnership, its General
Partner
BY: /S/ DAVID B. AGNEW
-----------------------------------
David B. Agnew,
President
ASPEN FOXTROT INVESTMENTS, LLC
By: Aspen Enterprises, Ltd. Its Manager
/S/ RONALD A. HOUSE
-----------------------------------
Name: Ronald A. House
Title: Vice President and Chief
Operating Officer
GERMAN AMERICAN CAPITAL CORPORATION
By: /S` / JOHN C. CIPRIANI
-----------------------------------
Name: John C. Cipriani
Title: Vice President
By: /S/ THOMAS MENDOZA
-----------------------------------
Name: Thomas Mendoza
Title: Vice President
EX 99.5 - 19
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /S/ ROBERT D. FELLER
-----------------------------------
Name: Robert D. Feller
Title: Executive Vice President
PARIBAS NORTH AMERICA, INC.
By: /S/ JOHN G. MARTINEZ
-----------------------------------
Name: John G. Martinez
Title: Financial Controller
PEREGINE EQUITIES 1, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 2, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 3, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 4, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
EX 99.5 - 20
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
PEREGINE EQUITIES 5, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 6, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 7, L.L.C.
By: Peregrine Equities Holdings, LLC,
Member
By: Peregrine Capital, Inc., Member
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 8, L.L.C.
By: Peregrine Capital, Inc., Manager
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 9, L.L.C.
By: Peregrine Capital, Inc., Manager
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
PEREGINE EQUITIES 10, L.L.C.
By: Peregrine Capital, Inc., Manager
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: President
EX 99.5 - 21
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
/S/ DENNIS DAUTEL
-----------------------------------
Dennis Dautel
/S/ DAN BAUER
-----------------------------------
Dan Bauer
/S/ SCOTT MAENTZ
-----------------------------------
Rosewood Partners L.P.
By: W. Scott Maentz, General
Partner
/S/ HENRY GELLIS
-----------------------------------
Henry Gellis
/S/ W. ROBERT RAMSDELL
-----------------------------------
Ramsdell Family Trust UAD 7/7/94
By: W. Robert Ramsdell, Trustee
/S/ DAVID ROCKER
-----------------------------------
David Rocker
/S/ KAYLEN SILVERBERG
-----------------------------------
Kaylen Silverberg
/S/ RON BARSHOP
-----------------------------------
Ron Barshop
/S/ TERRY JONES
-----------------------------------
Terry Jones for FMH LLP
/S/ IRV SOLOMON
-----------------------------------
Irv Solomon
EX 99.5 - 22
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
/S/ LEON HOROWTIZ
-----------------------------------
Leon Horowitz
/S/ DAIN RAUSCHER
-----------------------------------
By: Dain Rauscher, Custodian FBO
Brent Stahl S.E.P.
/S/ COURTNEY CAMPBELL
-----------------------------------
Courtney Campbell
/S/ ANGELA COPPOLA
-----------------------------------
Angela Coppola
/S/ JANET FRANKLIN
-----------------------------------
Janet Franklin
/S/ MUSSIE GELLIS
-----------------------------------
Mussie Gellis
/S/ ALLAN ALEXANDER
-----------------------------------
Peter Guber
By: Allan Alexander, Attorney-in-
Fact
/S/ BOB STARK
-----------------------------------
Stark Investment, L.P.
By: Bob Stark
/S/ DOROTHY COHEN
-----------------------------------
Dorothy Cohen
/S/ G. TYLER RUNNELS
-----------------------------------
G. Tyler Runnels
EX 99.5 - 23
<PAGE>
USOL HOLDINGS, INC. PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
SCHEDULE A
SHAREHOLDERS
SERIES A PREFERRED STOCK Janet Franklin
AGL Investments No. 8 Limited Partnership Henry Gellis
Aspen Foxtrot Investments, LLC Mussie Gellis
German American Capital Corporation Peter Guber
GMAC Commercial Mortgage Corporation Leon Horowitz
Paribas North American, Inc. Terry Jones
Peregrine Equities 1, L.L.C. Ramsdell Family Trust
Peregrine Equities 2, L.L.C. David Rocker
Peregrine Equities 3, L.L.C. Rosewood Partners, L.P.
Peregrine Equities 4, L.L.C. Kaylen Silverberg
Peregrine Equities 5, L.L.C. Irv Solomon
Peregrine Equities 6, L.L.C. Dain Rauscher, Custodian FBO
Brent Stahl S.E.P.
Peregrine Equities 7, L.L.C. Stark Investments, L.P.
Peregrine Equities 8, L.L.C. G. Tyler Runnels
Peregrine Equities 9, L.L.C.
Peregrine Equities 10, L.L.C.
Ron Barshop
Dan Bauer
Courtney Campbell
Dorothy Cohen
Angela Coppola
Dennis Dautel
<PAGE>
SERIES B PREFERRED STOCK
German American Capital Corporation
Paribas North America, Inc.
EX 99.5A - 2
Execution Copy
-------------------------------------------
COMMON STOCKHOLDER AND WARRANT HOLDER
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 21, 1999
BY AND AMONG
USOL HOLDINGS, INC.,
FIRSTLINK COMMUNICATIONS, INC.
AND
THE ENTITIES SET FORTH IN SCHEDULE A HERETO
(EACH, A "SHAREHOLDER")
-------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE/SECTION HEADING PAGE
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ARTICLE I DEFINITIONS..........................................................1
1.1 Defined Terms...........................................................1
ARTICLE II TRANSFERS OF SHARES.................................................3
2.1 Shareholder Common Stock Unregistered...................................3
2.2 Rule 144 Reporting......................................................3
ARTICLE III REGISTRATION RIGHTS................................................4
3.1 Participation in Demand Registrations...................................4
3.2 Right to Include Securities.............................................4
3.3 Priority in Incidental Registration.....................................5
3.4 Registration Procedures.................................................5
3.5 Incidental Underwritten Offerings.......................................8
3.6 Preparation; Reasonable Investigation...................................9
3.7 Limitations, Conditions and Qualifications to Obligations under
Registration Covenants..................................................9
3.8 Expenses...............................................................11
3.9 Indemnification........................................................11
3.10Participation in Underwritten Registrations............................14
ARTICLE IV MISCELLANEOUS......................................................14
4.1 Recapitalizations, Exchanges, Etc., Affecting Shareholder Common
Stock..................................................................14
4.2 Binding Effect.........................................................14
4.3 Amendment; Waiver......................................................14
4.4 Notices................................................................15
4.5 Governing Law..........................................................15
4.6 Counterparts...........................................................15
4.7 Invalidity.............................................................15
4.8 Lock-Up Agreement......................................................16
4.9 Cumulative Remedies....................................................16
4.10Assumption by FirstLink................................................16
SIGNATURE PAGES...............................................................17
SCHEDULE A...................................................................A-1
EX 99.6 - i
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of July 21, 1999, by and among USOL
HOLDINGS, Inc., a Delaware corporation ("USOL"), FirstLink Communications, Inc.,
an Oregon corporation ("FirstLink") and each of the entities set forth on
Schedule A attached hereto and any permitted transferee of the shares of Common
Stock (as defined below) held by such entities (each such entity and transferee,
a "Shareholder").
W I T N E S S E T H:
WHEREAS, Shareholder owns that number of shares of USOL capital stock
and/or warrants set forth opposite Shareholder's name on Schedule A hereto.
WHEREAS, USOL and FirstLink Communications, Inc., an Oregon corporation
("FirstLink") have entered into an Agreement and Plan of Merger and
Reorganization dated as of the date hereof (the "Merger Agreement"), whereby,
subject to the satisfaction of the conditions set forth therein, USOL shall
merge with and into FirstLink (the "Merger"); and
WHEREAS, pursuant to the Merger Agreement, each share of Series A
Convertible Preferred Stock, par value $0.001 per share ("USOL Series A
Preferred Stock"), USOL Series B Convertible Preferred Stock, par value $0.001
per share ("USOL Series B Preferred Stock"), and Common Stock, par value $0.001
per share ("USOL Common Stock") shall be exchanged for one share of Series A
Convertible Preferred Stock, one share of Series B Convertible Preferred Stock
and one share of Common Stock of FirstLink, respectively, having equivalent
rights and preferences as the USOL Series A Preferred Stock, USOL Series B
Preferred Stock, and USOL Common Stock (together, "FirstLink Preferred Stock");
and
WHEREAS, USOL, FirstLink and the Shareholders believe that it is in their
best interests to enter into this Agreement pertaining to the registration of
their respective shares of USOL, and after the closing of the Merger, their
respective shares of FirstLink, on the terms and conditions set forth below;
NOW, THEREFORE, in order to implement the foregoing and in consideration of
the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. "CLOSING" shall mean the consummation of the
transactions contemplated by the Asset Purchase Agreement dated as of the date
hereof by and among USOL, Inc. ("USOL Sub"), USOL, U.S. Online Communications,
Inc. ("USOnline") and
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
certain shareholders of USOnline, and the other transactions contemplated by in
the Letter of Intent dated as May 3, 1999, as amended.
"COMPANY" shall mean (a) USOL at all times prior to the closing of the
Merger and (b) FirstLink upon the closing of the Merger and at all times
thereafter.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder as the same may be amended
from time to time.
"EXCLUDED REGISTRATION" means a registration under the Securities Act of
(i) securities pursuant to the demand registration rights pursuant to SECTION
3.1.1 hereof, (ii) securities registered on Form S-8 under the Securities Act or
any similar successor form and (iii) securities registered to effect the
acquisition of or combination with another Person.
"PERSON" shall mean any individual, partnership, joint venture,
corporation, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or any
department or agency thereof or other entity of any nature whatsoever.
"QUALIFIED IPO" means a firm commitment underwritten public offering of
Common Stock pursuant to a registration statement under the Securities Act where
both (i) the proceeds to USOL (prior to deducting any underwriters' discounts
and commissions) equal or exceed Twenty-Five Million Dollars ($25,000,000) and
(ii) upon consummation of such offering, the Common Stock is listed on the New
York Stock Exchange or authorized to be quoted and/or listed on the Nasdaq
National Market.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder as the same may be amended from
time to time.
"SELLING SECURITYHOLDER" shall mean any seller of Shareholder Common Stock
covered by a registration statement.
"SERIES A PREFERRED STOCK" shall mean (a) USOL Series A Preferred Stock at
all times prior to the closing of the Merger and (b) FirstLink Series A
Preferred Stock upon the closing of the Merger and at all times thereafter.
"SERIES B PREFERRED STOCK" shall mean (a) USOL Series B Preferred Stock at
all times prior to the closing of the Merger and (b) FirstLink Series B
Preferred Stock upon the closing of the Merger and at all times thereafter.
"SHAREHOLDER COMMON STOCK" shall mean shares of Common Stock outstanding
and shares of Common Stock issued or issuable to the Shareholders upon exercise
of the Warrants.
"WARRANTS" shall mean the warrants to acquire 2,084,000 shares of the
Common Stock listed on Schedule A.
EX 99.6 - 2
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
ARTICLE II
TRANSFERS OF SHARES
2.1 SHAREHOLDER COMMON STOCK UNREGISTERED. The Company advises Shareholder
that:
(a) the offer and sale of the Shareholder Common Stock have not been
registered under the Securities Act;
(b) the Shareholder Common Stock must be held and the Shareholder must
continue to bear (and is able to bear) the economic risk of the investment
in the Shareholder Common Stock, until (i) the Shareholder Common Stock is
registered pursuant to an effective registration statement under the
Securities Act and all applicable state securities laws or (ii) an
exemption from such registration is available;
(c) when and if shares of the Shareholder Common Stock may be disposed
of without registration under the Securities Act in reliance on Rule 144
thereunder ("Rule 144"), such disposition can be made only in limited
amounts in accordance with the terms and conditions of such Rule;
(d) if the Rule 144 exemption is not available, any offer or sale of
Shareholder Common Stock without registration will require compliance with
some other exemption under the Securities Act;
(e) a restrictive legend shall be placed on the certificates
representing the Shareholder Common Stock; and
(f) a notation shall be made in the appropriate records of the Company
indicating that the Shareholder Common Stock is subject to restrictions on
transfer, and appropriate stop-transfer instructions will be issued to the
Company's transfer agent with respect to the Shareholder Common Stock.
2.2 RULE 144 REPORTING. The Company agrees that to the extent reasonably
necessary to permit the Shareholders to sell shares of the Shareholder Common
Stock in accordance with and in reliance on Rule 144, and for so long as such
shares are owned by the Shareholders and such shares are not registered for
resale under the Securities Act, the Company will use its reasonable best
efforts to:
(a) make and keep public information available within the meaning of
Rule 144 under the Securities Act, at all times from and after the Closing
Date;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(c) so long as any Shareholder owns any Shareholder Common Stock,
inform such person upon request as to its compliance with the reporting
requirements of Rule
EX 99.6 - 3
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
144 and of the Securities Act and the Exchange Act, and provide a copy of
the most recent annual or quarterly report of the Company and such other
reports and documents filed with the SEC and available to the public as may
reasonably be requested in availing such Shareholder of any rule or
regulation of the SEC allowing a sale of any such securities without
registration.
Anything to the contrary contained in this Section 2.2 notwithstanding, the
Company may deregister any of its securities under the Exchange Act if it
is then permitted to do so pursuant to the Exchange Act in which case the
provisions of this Section 2.2 insofar as they relate to obligations to
make filings under the Exchange Act that would no longer be required as a
result of such delisting shall be of no further force or effect. Nothing in
this Section shall be deemed to limit in any manner the restriction on
sales of Shareholder Common Stock contained in this Agreement. ARTICLE III
REGISTRATION RIGHTS
3.1 PARTICIPATION IN DEMAND REGISTRATIONS. If holders (the "Other
Shareholders") of Series A Preferred Stock or Series B Preferred Stock demand
registration of the shares of Common Stock issued or issuable upon conversion
(the "Other Common Stock") pursuant to that certain Preferred Stock Registration
Rights Agreement of even date herewith, the Company will promptly give written
notice of the proposed registration to the Shareholders. All Shareholder Common
Stock and Other Common Stock requested to be included in the registration shall
be included in a demand registration unless the managing underwriter or
underwriters shall advise the Company or the Shareholders and the Other
Shareholders in writing that the inclusion of such securities will materially
and adversely affect the price or success of the offering (a "Material Adverse
Effect"). In the event the managing underwriter or underwriters shall advise the
Company or the Shareholders and the Other Shareholders that the amount of
Shareholder Common Stock and Other Common Stock proposed to be included in such
demand registration by Shareholders and Other Shareholders is sufficiently large
to cause a Material Adverse Effect, the Shareholder Common Stock and Other
Common Stock to be included in such registration shall equal the number of
shares which the Company is so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Shareholders and the Other Shareholders on the basis of the number of shares of
Shareholder Common Stock and Other Common Stock requested to be included in such
registration.
3.2 RIGHT TO INCLUDE SECURITIES. If at any time all of the shares of
Shareholder Common Stock are not then registered under the Securities Act, and
the Company proposes to register any shares of its Common Stock under the
Securities Act (other than pursuant to an Excluded Registration), whether or not
for sale for its own account, it will each such time as soon as practicable give
written notice of its intention to do so to the Shareholders. In such event,
upon the written request (which request shall specify the total number of shares
of Shareholder Common Stock intended to be disposed of by the requesting
Shareholder) of any Shareholder made within 15 days after the receipt of any
such notice (10 days if the Company gives telephonic notice with written
confirmation to follow promptly thereafter), stating that (i) such registration
will be on Form S-3 and (ii) such shorter period of time is required because
EX 99.6 - 4
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
of a planned filing date), the Company will use all reasonable efforts to effect
the registration under the Securities Act in the manner initially proposed by
the Company of all Shareholder Common Stock held by the Shareholders which the
Company has been so requested to register for sale. If the Company thereafter
determines for any reason in its sole discretion not to register or to delay
registration of the Common Stock, the Company may, at its election, give written
notice of such determination to the Shareholder and (i) in the case of a
determination not to register, shall be relieved of the obligation to register
any Shareholder Common Stock in connection with such registration and (ii) in
the case of a determination to delay registering, shall be permitted to delay
registering any Shareholder Common Stock of the Shareholder for the same period
as the delay in registration of such other securities. The exercise by a
Shareholder of any right under this Section 3.2 will not relieve the Company of
its obligations to such Shareholder under Section 3.1.
3.3 PRIORITY IN INCIDENTAL REGISTRATION. In a registration pursuant to
Section 3.2 hereof, if the managing underwriter of any such underwritten
offering to which Section 3.2 pertains shall inform the Company by letter of its
belief that the number of shares of Shareholder Common Stock and Other Common
Stock to be included in such registration would have a Material Adverse Effect,
then the Company will be required to include in such registration only that
number of shares of Shareholder Common Stock and Other Common Stock which it is
so advised can be included in such offering without causing such Material
Adverse Effect. With respect to a registration that is the subject of Section
3.2 hereof, shares of Common Stock proposed by the Company to be registered for
issuance by the Company or for sale by any Person exercising "demand"
registration rights shall have the first priority and all shares of Shareholder
Common Stock owned by the Shareholders exercising incidental registration rights
and all shares of Other Common Stock owned by the Other Shareholders exercising
incidental rights shall be given second priority without preference among the
relevant Shareholders and Other Shareholders. If less than all of the shares of
Shareholder Common Stock and Other Common Stock duly requested to be included in
such registration are to be registered therein, such shares of Shareholder
Common Stock and Other Common Stock shall be included in the registration PRO
RATA based on the total number of such shares sought to be registered other than
for issuance by the Company or sale by third parties exercising "demand"
registration rights in accordance with the preceding sentence. If, as a result
of the provisions of this Section 3.3, any Shareholder or Other Shareholder
shall not be entitled to include all of such Shareholder's shares of Shareholder
Common Stock or Other Common Stock in such registration, such shareholder may
withdraw such shareholder's request to include Shareholder Common Stock or Other
Common Stock, as applicable, in such registration.
3.4 REGISTRATION PROCEDURES. In connection with the Company's obligations
to register the Shareholder Common Stock pursuant to this Article III, the
Company will use its reasonable best efforts to effect such registration in
accordance herewith and the Company will promptly:
(a) prepare and file with the SEC, in accordance with the provisions
of the Preferred Stockholder Registration Rights Agreement dated as of the
date hereof among
EX 99.6 - 5
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
USOL, FirstLink and the shareholders that are parties thereto, the
requisite registration statement to effect such registration and use its
reasonable best efforts to cause such registration statement to become
effective and to remain continuously effective until the earlier to occur
of (x) 180 days following the date on which such registration statement is
declared effective (the "Effective Date") or (y) the termination of the
offering being made as set forth thereunder;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective as set
forth above and to comply with the provisions of the Securities Act with
respect to the disposition of all shares of Shareholder Common Stock
covered by such registration statement until such Shareholder Common Stock
has been sold;
(c) furnish to the managing underwriter, if any, and to the
Shareholders, at least one executed original of the registration statement
and to each of the Selling Securityholders such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, as may reasonably be requested by such
Selling Securityholder (it being understood that the Company consents to
the use of the prospectus and any amendment or supplement thereto by each
seller of Shareholder Common Stock and the underwriters in connection with
the offering and sale of the Shareholder Common Stock covered by the
registration of which such prospectus, amendment or supplement is a part);
(d) use its reasonable best efforts (i) to register or qualify, to the
extent necessary, all shares of Common Stock covered by such registration
statement under the securities or "blue sky" laws of such jurisdictions
where an exemption is not available as the Selling Securityholders shall
reasonably request, (ii) to keep such registration or qualification in
effect for so long as such registration statement remains in effect and
(iii) to take any other action which may be reasonably necessary or
advisable to enable the Selling Securityholders to consummate the
disposition in such jurisdictions of such Common Stock, provided that the
Company will not be required to qualify generally to do business or as a
dealer in any jurisdiction where it is not then so qualified, subject
itself to taxation in any such jurisdiction or take any action which would
subject it to general service of process in any such jurisdiction;
(e) notify the Selling Securityholders and the managing underwriter,
if any, promptly, and confirm such advice in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed,
and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
SEC for amendments or supplements to a registration statement or related
prospectus or for additional information, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of a registration statement
or the initiation of any proceedings for that purpose, (iv) of the receipt
by the Company of any notification with respect to the
EX 99.6 - 6
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
suspension of the qualification of any of the registered securities for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, (v) of the happening of any event or information becoming
known which requires the making of any changes in a registration statement
or related prospectus so that such documents will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading and (vi) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
(f) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of
any suspension of the qualification of any of the registered securities for
sale in any jurisdiction, at the earliest possible moment;
(g) upon the occurrence of any event contemplated by clause (e)(v)
above, prepare a supplement or post-effective amendment to the applicable
registration statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the Shareholders of the securities being sold
thereunder, such prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(h) use its reasonable best efforts to furnish to the Selling
Securityholders a signed counterpart, addressed to the Selling
Securityholders and the underwriters, if any, of an opinion of counsel for
the Company as to the effectiveness of the registration statement
registering the resale of the Shareholder Common Stock under the Securities
Act;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC in connection with a registration pursuant
hereto;
(j) cooperate with the Selling Securityholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Shareholder Common Stock to be sold;
and enable such shares of Shareholder Common Stock to be in such
denominations and registered in such names as the Selling Securityholders
or the managing underwriters, if any, may request at least two business
days prior to any sale of shares of Shareholder Common Stock to the
underwriters;
(k) cause all shares of Common Stock covered by the registration
statement to be listed on each securities exchange, if any, or Nasdaq, on
which securities of such class, series and form issued by the Company, if
any, are then listed or traded if requested by the managing underwriters,
if any, or the holders of a majority of the shares of Common Stock covered
by the registration statement and entitled hereunder to be so listed;
(l) make generally available to the Company's securityholders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than thirty (30) days after the end of the twelve
(12) month period beginning with the first day of the Company's first
fiscal quarter commencing after the effective date of a registration
statement, which earnings statement shall cover said twelve (12) month
period, and which requirement
EX 99.6 - 7
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
will be deemed to be satisfied if the Company timely files complete and
accurate information on the Form 10-Q, 10-K and 8-K under the Exchange Act
and otherwise complies with Rule 158 under the Securities Act; and
(m) cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter
(including any qualified independent underwriter that is required to be
retained in accordance with the rules and regulations of the NASD).
The Company may require each Selling Securityholder to furnish to the
Company such information and documents regarding such Selling Securityholder and
the distribution of such securities as the Company may from time to time
reasonably request in writing in order to comply with the Securities Act.
Each of the Selling Securityholders agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.4(e)(ii), (iii), (iv), (v) or (vi) hereof, it will forthwith discontinue
disposition pursuant to such registration statement of any shares of Common
Stock covered by such registration statement or prospectus until its receipt of
the copies of the supplemented or amended prospectus relating to such
registration statement or prospectus or until it is advised in writing by the
Company that the use of the applicable prospectus may be resumed (and the period
of such discontinuance shall be excluded from the calculation of the period
specified in clause (x) of Section 3.4(a)) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in their possession, of the prospectus covering such
securities in effect at the time of receipt of such notice. Each of the Selling
Securityholders agrees to furnish the Company a signed counterpart, addressed to
the Company and the underwriters, if any, of an opinion of counsel covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) as are customarily covered in opinions of
selling stockholder's counsel delivered to the underwriters in underwritten
public offerings of securities (and dated the dates such opinions are
customarily dated) and such other legal matters as the Company or the
underwriters may reasonably request.
3.5 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time proposes
to register any shares of its common stock under the Securities Act as
contemplated by Section 3.2 and such shares are to be distributed by or through
one or more underwriters, the Company and, if the managing underwriter shall
elect in writing to include the shares of Shareholder Common Stock sought to be
included in such registration, the Securityholders who hold Shareholder Common
Stock to be distributed by such underwriters in accordance with Section 3.2
hereof shall be parties to the underwriting agreement between the Company and
such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of them and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to their obligations. The Company may, at its option,
EX 99.6 - 8
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
require that any or all of the representations and warranties by, and the other
agreements on the part of the Selling Securityholders to and for the benefit of
such underwriters shall also be made to and for the benefit of the Company.
Notwithstanding the foregoing, no Shareholder shall be required to make any
representations or warranties in connection with the registration other than
representations and warranties as to (i) such Shareholder's ownership of his or
its Shareholder Common Stock to be transferred free and clear of all liens,
claims, and encumbrances, (ii) such Shareholder's power and authority to effect
such transfer, and (iii) such matters pertaining to compliance with securities
laws as may be reasonably requested; PROVIDED FURTHER, HOWEVER, that the
obligation of such Shareholder to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Shareholders
selling Shareholder Common Stock, and the liability of each such Shareholder
will be in the proportion thereto, and PROVIDED FURTHER that such liability will
be limited to, the allocable share of claim net amount received by such
Shareholder from the sale of his or its Shareholder Common Stock pursuant to
such registration.
3.6 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Selling Securityholders,
the underwriters, if any, and their respective counsel and accountants the
opportunity (but such Persons shall not have the obligation except as set forth
herein) to participate (in the case of a registration pursuant to Section 3.2
hereof such participation shall be at their expense) in the preparation of such
registration statement, each prospectus included therein or filed with the SEC,
and, to the extent practicable, each amendment thereof or supplement thereto,
and will give each of them such access to its books and records (to the extent
customarily given to the underwriters of the Company's securities) and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of the Selling Securityholders, and the
underwriters' respective outside counsel to conduct a reasonable investigation
within the meaning of the Securities Act.
3.7 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company to use its reasonable
efforts to cause the Shareholder Common Stock to be registered under the
Securities Act are subject to each of the following limitations, conditions and
qualifications:
(a) The Company shall be entitled to postpone for a reasonable period
of time the filing or effectiveness of (BUT NOT THE PREPARATION OF) any
registration statement otherwise required to be prepared, filed and made
and kept effective by it hereunder if:
(i) The Board of Directors of the Company determines in good
faith that there is a material undisclosed development in the business
or affairs of the Company (including any pending or proposed
financing, recapitalization, acquisition or disposition), the
disclosure of which at such time would be adverse to the Company's
interests (but the duration of such postponement may not exceed the
earlier to occur of (u) 30 days after the cessation of the
circumstances described in this clause (i) or (v) 90 days after the
date of the determination of the Board of Directors to postpone the
filing or effectiveness of a registration, and the
EX 99.6 - 9
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
duration of such postponement shall be excluded from the calculation
of the period specified in clause (x) of Section 3.4(a)); or
(ii) the Company has filed a registration statement with the SEC,
such registration statement has not yet been declared effective, the
Company is using its reasonable best efforts to have such registration
statement declared effective, and the underwriters with respect to
such registration advise that such registration would be adversely
affected (but the duration of such postponement or suspension may not
exceed the earlier to occur of (u) 30 days after the effectiveness of
the previously filed registration statement, or (v) 90 days after the
determination of the Board of Directors to postpone filing a
registration statement required to be filed hereunder), and the
duration of such postponement or suspension shall be excluded from the
calculation of the period specified in clause (x) of Section 3.4(a);
or
(iii) the Board of Directors of the Company determines in good
faith prior to the receipt of a request for demand registration to
effect a registered underwritten public offering of the Company's
equity securities for the Company's account and the Company had taken
substantial steps (including, but not limited to, selecting a managing
underwriter for such offering) and is proceeding with reasonable
diligence to effect such offering (but the duration of such
postponement may not exceed the earlier to occur of (u) 30 days after
the effectiveness of the previously prepared registration statement,
or (v) 90 days after the determination by the Board of Directors to
postpone the filing of a registration statement required to be filed
hereunder); or
(iv) the Company shall delay the filing of a registration
statement as described in (i), (ii) or (iii) above, it shall, as
promptly as practicable, notify the Selling Securityholders of such
determination, and the Selling Securityholders shall have the right in
the case of a postponement of the filing or effectiveness of a
registration statement to withdraw the request for registration by
giving written notice to the Company within 10 days after receipt of
the Company's notice. Notwithstanding the foregoing, the Company may
make such postponement or suspension no more than one time in any 18
month period.
(b) The Company's obligations shall be subject to the obligations of
the Selling Securityholders, which each of the Shareholders hereby
acknowledges, to furnish all information and materials and to take any and
all actions as may be required under applicable federal and state
securities laws and regulations to permit the Company to comply with all
applicable requirements of the SEC and state securities regulations and to
obtain any acceleration of the effective date of such registration
statement or maintain the effectiveness or currency thereof.
(c) The Company shall not be obligated to cause any special audit to
be undertaken in connection with any registration pursuant hereto unless
such audit is requested by the underwriters with respect to such
registration.
(d) Each Shareholder agrees that, in connection with any underwritten
public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, including
a Qualified IPO, the Shareholder shall not publicly
EX 99.6 - 10
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USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
sell, make any short sale of, loan, hypothecate, pledge, grant any option
for the repurchase of, or otherwise publicly dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions with
respect to any equity securities of the Company without the prior written
consent of the Company's underwriters, for such period of time from and
after the effective date of such registration statement as may be requested
by the Company's underwriters, such period of time is not to exceed 180
days in the case of a Qualified IPO and 90 days in the case of a secondary
offering by the Company.
3.8 EXPENSES. The Company will pay its own actual expenses (including legal
fees) incurred in connection with each demand and incidental registration of
Shareholder Common Stock pursuant to Sections 3.1 or 3.2 of this Agreement,
including, without limitation, any and all filing fees payable to the SEC, fees
with respect to filings required to be made with stock exchanges, Nasdaq and the
NASD, fees and expenses of compliance with state securities or blue sky laws,
printing expenses, fees and disbursements of counsel and accountants of the
Company, including costs associated with comfort letters, and fees and expenses
of other Persons retained by the Company, and, in the case of a demand
registration requested by the Other Shareholders, all reasonable costs, expenses
and fees of one legal counsel for Shareholders and Other Shareholders (which
legal counsel shall be chosen by the majority in interest of the Shareholders
and Other Shareholders in their discretion), but each Selling Securityholder
shall pay its own underwriters' expenses (such as but not limited to discounts,
commissions and fees of underwriters and expenses included therein of selling
brokers, dealer managers or similar securities industry professionals relating
to the distribution of the securities being registered) and legal expenses
(except as set forth above). The Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), and the expense of securities
law liability insurance and rating agency fees, if any.
3.9 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In connection with any
registration pursuant hereto in which Shareholder Common Stock is to be
disposed of, the Company shall indemnify and hold harmless, to the fullest
extent permitted by law, each Shareholder and, when applicable, its
officers, directors, agents and employees and each Person who controls (or
is controlled by or under common control with) any of the Shareholders
(within the meaning of the Securities Act or the Exchange Act) against all
losses, claims, damages, liabilities and expenses (including, without
limitation, all attorneys' fees and expenses) based upon, arising out of or
related to, any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary
prospectus or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, including, without limitation, any loss, claim,
damage, liability or expense resulting from the failure to keep a
prospectus current as required hereunder, except insofar as the same (i)
are caused by or contained in any information furnished in writing to the
Company by or on behalf of any Shareholder expressly for use therein or
(ii) in the event such Shareholder has had the obligation to deliver a
prospectus, are caused by the failure of any of the Shareholders to deliver
a copy of the current required
EX 99.6 - 11
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
prospectus after the Company has furnished any such Shareholders with a
sufficient number of copies of such prospectus as requested hereunder or
(iii) if such Shareholder has been notified in writing by the Company,
arise in respect of any offers to sell or sales made during any period when
any Shareholder is required to discontinue sales under Section 3.4(e) or
otherwise under applicable law. The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar securities
industry professionals (if any), participating in the distribution of the
Shareholder Common Stock, their officers and directors and each person who
controls such Persons (within the meaning of the Securities Act and the
Exchange Act) to the same extent (and subject to the same exceptions) as
provided above with respect to the indemnification of the Shareholders and
shall enter into an indemnification agreement with such Persons containing
such terms, if requested. The reimbursements required by this SECTION
3.9(A) will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses
incurred.
(b) INDEMNIFICATION BY THE SHAREHOLDERS. In connection with each
registration statement effected pursuant hereto in which Shareholder Common
Stock is to be disposed of, each of the Selling Securityholders shall,
severally but not jointly, indemnify and hold harmless, to the fullest
extent permitted by law, the Company, each other Selling Securityholder and
their respective directors, officers, agents and employees and each Person
who "controls" the Company and each other Selling Securityholder (within
the meaning of the Securities Act and the Exchange Act) and the managing
underwriter if any, and its directors, officers, agents, and employees and
each Person who "controls" such underwriter (within the meaning of the
Securities Act and Exchange Act), in each case against any losses, claims,
damages, liabilities and expenses resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in
such registration statement or prospectus or preliminary prospectus or
necessary to make the statements therein not misleading, to the extent but
only to the extent, that such untrue statement or omission is contained in
any information furnished in writing by such Shareholder to the Company
expressly for inclusion in such registration statement or prospectus;
provided, HOWEVER, that such seller of Shareholder Common Stock shall not
be liable in any such case to the extent that, prior to the filing of any
such registration statement or prospectus or amendment thereof or
supplement thereto, such seller of Shareholder Common Stock has furnished
in writing to the Company information expressly for use in such
registration statement or prospectus or any amendment thereof or supplement
thereto which corrected or made not misleading information previously
furnished to the Company. In no event shall the liability of any
Shareholder hereunder be greater in amount than the dollar amount of the
proceeds received or to be received by such Shareholder upon the sale of
the securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder shall give prompt written notice to the
indemnifying party of any claim with respect to which it shall seek
indemnification and shall permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the
indemnified party; PROVIDED, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel
and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such Person unless (i) the
EX 99.6 - 12
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
indemnifying party shall have agreed to pay such fees or expenses, or (ii)
the indemnifying party shall have failed to assume the defense of such
claim and to employ counsel reasonably satisfactory to such Person or (iii)
such assumption would constitute an actual conflict of interest (in which
case, if the Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such claim on behalf of such Person). If such defense is not
assumed by the indemnifying party, the indemnifying party shall not be
subject to any liability for any settlement made without its consent (but
such consent shall not be unreasonably withheld). No indemnified party
shall be required to consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a written
release in form and substance reasonably satisfactory to such indemnified
party from all liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim shall not be obligated to pay the fees and expenses of
more than one firm of counsel (and, if necessary, local counsel) for all
parties indemnified by such indemnifying party with respect to such claim,
unless a conflict of interest as to the subject matter exists between such
indemnified party and another indemnified party with respect to such claim,
in which event the indemnifying party shall be obligated to pay the fees
and expenses of additional counsel for such indemnified party.
(d) CONTRIBUTION. If for any reason the indemnification provided for
herein is unavailable to an indemnified party or is insufficient to hold it
harmless as contemplated hereby, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault
of the indemnified party and the indemnifying party, as well as any other
relevant equitable considerations, provided that in no event shall the
liability of any Shareholder for such contribution and indemnification
exceed, in the aggregate, the dollar amount of the proceeds received or to
be received by such Shareholder upon the sale of securities giving rise to
such indemnification and contribution obligation. The relative fault of
such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this SECTION 3.9(D) were determined by pro rata
allocation referred to in this SECTION 3.9(D). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. If indemnification is
available under this SECTION 3.9, the indemnifying parties shall indemnify
each indemnified party to the full extent provided in SECTION 3.9(A) and
SECTION 3.9(B) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided
for in this SECTION 3.9(D); subject, in the case of the Holders, to the
limited dollar amounts set forth herein.
EX 99.6 - 13
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
(e) INDEMNIFICATION AND CONTRIBUTION IN FULL FORCE AND EFFECT. The
indemnification and contribution provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director, or controlling
person of such indemnified party.
3.10 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. None of the Shareholders
may participate in any underwritten registration hereunder unless the
Shareholder which is a Selling Securityholder (a) agrees to sell its Shareholder
Common Stock on the basis provided in and in compliance with any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and to comply with Regulation M under the Exchange Act, and (b)
completes and executes all questionnaires, appropriate and limited
powers-of-attorney, escrow agreements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements; PROVIDED that all such documents shall be consistent with the
provisions hereof.
ARTICLE IV
MISCELLANEOUS
4.1 RECAPITALIZATIONS, EXCHANGES, ETC., AFFECTING SHAREHOLDER COMMON STOCK.
The provisions of this Agreement shall apply, to the fullest extent set forth
herein with respect to Shareholder Common Stock, to any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution of the Shareholder Common Stock,
by reason of any stock dividend, stock split, stock issuance, reverse stock
split, combination recapitalization, reclassification, merger, consolidation or
otherwise; provided, however, that such provisions shall apply only to any class
or classes of stock which have the right, without limitation as to amount,
either to all or a share of the balance of current dividends and liquidating
dividends after payment of dividends and distributions on any shares entitled to
preference so issued or issuable upon the conversion, exchange or exercise, as
the case may be, of securities of the Company so issued.
4.2 BINDING EFFECT. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns. In the case of a transferee
permitted under this Agreement, such transferee shall be deemed the Shareholder
hereunder; PROVIDED, however, that no transferee shall derive any rights under
this Agreement unless and until such transferee has executed and delivered to
the Company a valid undertaking and becomes bound by the terms of this
Agreement.
4.3 AMENDMENT; WAIVER. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by either party hereto of any
of the provisions hereof shall be effective unless set forth in a writing
executed by the party so waiving.
EX 99.6 - 14
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
4.4 NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (E.G., Federal Express) and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
(a) If to USOL, addressed to:
USOL Holdings, Inc.
10300 Metric Boulevard
Austin, Texas 78758
Attn: President
(b) If to FirstLink, addressed to:
FirstLink Communications, Inc.
190 Southwest Harrison Street
Portland, Oregon 97201
Attn: President
(c) If to a Shareholder, to such Shareholder at the address set forth
on the Company's books and records.
4.5 GOVERNING LAW. This Agreement shall be governed by and construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware without regard to the choice of law principles thereof.
4.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. This Agreement shall
become binding when all counterparts taken together shall have been executed and
delivered by the parties. A telecopied facsimile of an executed counterpart of
this Agreement shall be sufficient to evidence the binding agreement of each
party to the terms thereof. However, each party agrees to return to the other
parties an original, duly executed counterpart of this Agreement promptly after
delivery of a telecopied facsimile thereof.
4.7 INVALIDITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
EX 99.6 - 15
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
4.8 LOCK-UP AGREEMENT. Each party hereby agrees (this "Lock-Up"), for a
period of six months from the closing of the Merger (but no later than nine
months from the date hereof), not to sell, pledge, encumber or otherwise
transfer or dispose of (a "Transfer"), and shall not permit to be sold,
encumbered, attached or otherwise disposed of or transferred in any manner,
either voluntarily or by operation of law, all or any portion of the Shareholder
Common Stock or Warrants covered by this Agreement; provided, however, that such
party may Transfer any Shareholder Common Stock or Warrants (i) to a Qualified
Institutional Buyer as defined in Rule 144A of the Securities Act, (ii) to
employees and directors of such party; (iii) to one or more Persons directly or
indirectly controlling, controlled by, or under common control with, such party,
and to the extent such party is a limited liability company, each member of that
party, (iv) in connection with any exchange, reclassification, or other
conversion of shares into any cash, securities, or other property pursuant to a
merger or consolidation of the Company or any of its subsidiaries with, or any
sale or transfer by the Company or any of its subsidiaries of all or
substantially all of its assets to, any Person and (v) in connection with any
statutory share exchange or any recapitalization to the Company or any of its
subsidiaries; provided further, however, that to the extent that the Company may
exercise its call under Section 8 of the Warrants, this Lock-Up shall terminate
with respect to the holders of the Warrants.
4.9 CUMULATIVE REMEDIES.
All rights and remedies of the parties hereto are cumulative of each other
and of every other right or remedy each such party may otherwise have at law or
in equity, and the exercise of one or more rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of other rights or
remedies.
4.10 ASSUMPTION BY FIRSTLINK. Upon the consummation of the Merger by and
between FirstLink and USOL, pursuant to which all shares of USOL Series A
Preferred Stock, USOL Series B Preferred Stock and Common Stock will be
exchanged for shares of FirstLink series A preferred stock, series B preferred
stock and common stock, FirstLink agrees to assume all of the obligations
hereunder. This Agreement shall not apply to any Shareholder Common Stock
issuable under any Warrants which have been the subject of a registration
statement.
EX 99.6 - 16
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
USOL HOLDINGS, INC.
By: /S/ ROBERT SOLOMON
-----------------------------------
Name: Robert Solomon
Title: President
FIRSTLINK COMMUNICATIONS, INC.
By: /S/ A. ROGER PEASE
-----------------------------------
Name: A. Roger Pease
Title: President and Chief
Executive Officer
EX 99.6 - 17
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
SHAREHOLDERS/WARRANTHOLDERS:
---------------------------
GMAC COMMERCIAL MORTGAGE CORPORATION
By: /S/ ROBERT D. FELLER
-----------------------------------
Name: Robert D. Feller
Title: Executive Vice President
ASPEN ONLINE INVESTMENTS, LLC
By: /S/ RONALD A. HOUSE
-----------------------------------
Name: Ronald A. House
Title: Member/Vice President/Chief
Operating Officer of Aspen
Enterprises Ltd., Its
Manager
PEREGRINE CAPITAL, INC.
By: /S/ ROY ROSE
-----------------------------------
Name: Roy Rose
Title: Chief Executive Officer
U.S. ONLINE COMMUNICATIONS, LLC
By: /S/ JOHN M. OREHEK
-----------------------------------
Name: John M. Orehek
Title:
AGL CAPITAL INVESTMENTS LLC
By: DAVID B. AGNEW
-----------------------------------
Name: David B. Agnew
Title: Manager
-----------------------------------
Leonard J. Adams
-----------------------------------
Ronald B. Alec
EX 99.6 - 18
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Paul R. Alter
-----------------------------------
David Babiarz
-----------------------------------
Marvin G. Barish
BARON ASSOCIATES
By:
-----------------------------------
Name:
Title:
-----------------------------------
Jerome Baruffi
-----------------------------------
Sonia Bernat Blanch
-----------------------------------
Paul M. Bower
-----------------------------------
Kathleen Bower
-----------------------------------
Howard I. Bulos
-----------------------------------
Linda Tedjaksuma
EX 99.6 - 19
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Eldon P. Burdo
CASTLE VENTURES LTD.
By:
-----------------------------------
Name:
Title:
CENTRAL INVESTMENTS LIMITED
By:
-----------------------------------
Name:
Title:
CLFS EQUITIES LLP
By:
-----------------------------------
Name:
Title:
-----------------------------------
Robert J. Cotter
D. STAKE MILL, INC.
By:
-----------------------------------
Name:
Title:
-----------------------------------
Edwin K. Dimes
EX 99.6 - 20
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Alastair Douglas McDougal
-----------------------------------
Larry P. Downey
-----------------------------------
Connie K. Downey
-----------------------------------
Dennis Drebsky
-----------------------------------
Albert W. Duffield
-----------------------------------
Glen E. Emig
-----------------------------------
Roger L. Erickson
-----------------------------------
James Fastovsky
-----------------------------------
Phillip Fauver
DAVID & MAGDA FRIED, TRUSTEES
UA MICHAEL LANTOS TRUST DTD 12/14/90
EX 99.6 - 21
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
By:
-----------------------------------
Name:
Title:
-----------------------------------
Harry Friedman, IRA R/O
-----------------------------------
Douglas F. Gill
-----------------------------------
Stuart W. Gold
-----------------------------------
T. L. Hudson
DR. JOHN A. HUNT, INC. PENSION PLAN TRUST
By:
-----------------------------------
Name:
Title:
INTERVEST GROUP L.P.
By:
-----------------------------------
Name:
Title:
-----------------------------------
Alan Jablon
EX 99.6 - 22
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Joyce Johnson
-----------------------------------
James P. Johnson
-----------------------------------
Frank T. Juranich
-----------------------------------
Robert Katz
-----------------------------------
Owen L. Kilgannon
-----------------------------------
Richard S. Koreyva IRA
-----------------------------------
Barry H. Levites
-----------------------------------
John James Magill
-----------------------------------
David Maltry
-----------------------------------
Paul Matusow
-----------------------------------
John McMaster
EX 99.6 - 23
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Robert Moses
-----------------------------------
Alonzo Mourning
-----------------------------------
Samuel Muskinow
-----------------------------------
Dennis J. Mykytyn
NANO-CAP HYPER GROWTH PARTNERSHIP, L.P.
By:
-----------------------------------
Name:
Title:
-----------------------------------
Steven M. Ostner
-----------------------------------
Peter J. Pappas
-----------------------------------
Eric Partch
-----------------------------------
Susan Partch
-----------------------------------
Mohan S. Phanse
EX 99.6 - 24
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
-----------------------------------
Frances Fox Piven
-----------------------------------
Michael Pizitz
-----------------------------------
Myron H. Reinhart
-----------------------------------
Ronald Roth
-----------------------------------
Lawrence Rothberg
-----------------------------------
Alois Rupp
-----------------------------------
Joseph G. Russonielo
-----------------------------------
Wayne Saker
PAUL H. & LINDA B. SALSGIVER REVOCABLE
TRUST DATED NOVEMBER 13, 1996
By:
-----------------------------------
Name:
Title:
-----------------------------------
Michael Schwartzbard
-----------------------------------
Stewart A. Shiman
EX 99.6 - 25
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
SIEGEL, SOMERS & SCHWARTZ LLP
PROFIT SHARING PLAN DTD 11/1/84
By:
-----------------------------------
Name:
Title:
-----------------------------------
Paul Silpe
-----------------------------------
Beverly Silpe
-----------------------------------
Dr. Satbir Singh
-----------------------------------
C. M. Solomon
-----------------------------------
Dr. George Spiegel
SPITZER LIVING TRUST
By:
-----------------------------------
Name:
Title:
-----------------------------------
Dewey R. Tedder
-----------------------------------
Dora F. Tedder
EX 99.6 - 26
<PAGE>
USOL HOLDINGS, INC. COMMON AND WARRANT REGISTRATION RIGHTS AGREEMENT
PAUL N. TEMPLE REVOCABLE TRUST
U/A/D 2/11/80
By:
-----------------------------------
Name:
Title:
-----------------------------------
Jack M. Threadgill
-----------------------------------
Stella Zimmer
-----------------------------------
Cynthia Zimmer
EX 99.6 - 27
<PAGE>
SCHEDULE A
<TABLE>
SHAREHOLDERS
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK
NAME SECURITY COVERED BY REGISTRATION RIGHTS
---- -------- -------------------------------
<S> <C> <C>
GMAC Commercial Mortgage Warrants 325,000
Corporation
Aspen Online Investments, LLC Common Stock 1,312,500
Warrants 625,000
Peregrine Capital, Inc. Common Stock 1,000,000
U.S. Online Communications, LLC Common Stock 125,000
Warrants 250,000
Barington Investors (as a group) Common Stock 312,500
Warrants 625,000
AGL Capital Investments LLC Warrants 259,000
</TABLE>
