UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 3
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person*
The Goldman Sachs Group, L.P.
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(Last) (First) (Middle)
85 Broad Street
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(Street)
New York, New York 10004
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(City) (State) (Zip)
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2. Date of Event Requiring Statement (Month/Day/Year)
01
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3. I.R.S. Identification Number of Reporting Person, if an entity (voluntary)
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4. Issuer Name and Ticker or Trading Symbol
UStel, Inc.
(USTL)
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5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
[ ] Director [ X ] 10% Owner
[ ] Officer (give title below) [ ] Other (specify below)
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6. If Amendment, Date of Original (Month/Year)
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7. Individual or Joint/Group Filing (Check applicable line)
[ ] Form Filed by One Reporting Person
[ X ] Form Filed by More than One Reporting Person
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<TABLE>
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Table I -- Non-Derivative Securities Beneficially Owned |
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| | 3. Ownership Form: | |
| 2. Amount of Securities | Direct (D) or | |
1. Title of Security | Beneficially Owned | Indirect (I) | 4. Nature of Indirect Beneficial Ownership |
(Instr. 4) | (Instr. 4) | (Instr. 5) | (Instr.5) |
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<S> <C> <C> <C>
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Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
*If the form is filed by more than one Reporting Person, see Instruction
5(b)(v).
FORM 3 (continued)
<TABLE>
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Table II -- Derivative Securities Beneficially Owned |
(e.g., puts, calls, warrants, options, convertible securities) |
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| | | | | |
| | | | 5. Owner- | |
| | 3. Title and Amount of Securities | | ship | |
| | Underlying Derivative Security | | Form of | |
|2. Date Exercisable | (Instr. 4) | | Derivative | |
| and Expiration Date | --------------------------------- | 4. Conver- | Security: | |
| (Month/Day/Year) | | Amount | sion or | Direct |6.Nature of |
|---------------------- | | or | Exercise | (D) or | Indirect |
|Date |Expira- | | Number | Price of | Indirect | Beneficial|
1. Title of Derivative |Exer- |tion | | of | Derivative| (I) | Ownership |
Security (Instr. 4) |cisable |Date | Title | Shares | Security | (Instr.5) | (Instr. 5)|
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<S> <C> <C> <C> <C> <C> <C> <C>
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Common Stock Warrants | 01 | 6/25/2003 | Common Stock | 7,891,106 | $1.00 | 02 | 02 |
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Common Stock Warrants | 01 | 6/25/2003 | Common Stock | 901,841 | $1.50 | 02 | 02 |
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Common Stock Warrants | 01 | 6/25/2003 | Common Stock | 1,803,681 | $3.00 | 02 | 02 |
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Common Stock Warrants | 01 | 6/25/2003 | Common Stock | 1,803,681 | $5.00 | 02 | 02 |
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</TABLE>
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Instruction 5(b)(v) list of other Reporting Persons:
This statement is being filed by The Goldman Sachs Group, L.P. ("GS Group") and
Goldman, Sachs & Co. ("Goldman Sachs", and together with GS Group, the
"Reporting Persons"). The principal business address of GS Group and Goldman
Sachs is 85 Broad Street, New York, New York 10004.
Explanation of Responses:
01: UStel, Inc. (the "Company") issued the Warrant to Goldman Sachs in
connection with the execution of a Loan and Security Agreement (the "Loan
Agreement"), dated as of June 25, 1998, by and among the Company, its subsidiary
Arcada Communications, Inc., Coast Business Credit, a division of Southern
Pacific Bank ("Coast"), and Goldman Sachs Credit Partners, L.P. ("GS Credit
Partners"). GS Group is the 99% owner of Goldman Sachs Global Holdings L.L.C.
("GS Global Holdings"). GS Global Holdings is the general partner of GS Credit
Partners. GS Group is the general partner of and owns a 99% interest in Goldman
Sachs. The Warrant gave Goldman Sachs the right to acquire up to 12,400,309
shares (subject to antidilutive and other adjustments) of the Common Stock of
the Company on the following terms: (i) 7,891,106 shares at an exercise price of
$1.00 per share, (ii) 901,841 shares at an exercise price of $1.50 per share,
(iii) 1,803,681 shares at an exercise price of $3.00 per share, and (iv)
1,803,681 shares at an exercise price of $5.00 per share (such exercise prices
in each case subject to certain antidilutive and other adjustments). The Warrant
was not immediately exercisable, but was exercisable beginning on the earliest
to occur of (a) March 25, 1999, (b) the date upon which an Event of Default
under the Loan Agreement (as defined in Article 8 of the Loan Agreement)
occurred and (c) thirty days prior to the consummation of a merger, sale or
similar transaction involving the Company. The Warrant provided for an original
term of five years, terminating on June 25, 2003.
As a result of adverse changes in the Company's financial condition and various
other factors, certain Events of Default occurred under the Loan Agreement. In
response to these events, in November 1998 GS Credit Partners and Coast (the
"Lenders") agreed with the Company to a restructuring of their obligations and
relationship under the Loan Agreement, whereby the Company and the Lenders would
enter into an amendment to the Loan Agreement and revise the terms of the
Warrant. In addition, the Lenders agreed to waive the Company's Events of
Default under the Loan Agreement as to which the Lenders had actual knowledge.
In connection with the restructuring, effective November 25, 1998 the Company
amended and restated the Warrant, revising the number of shares subject to the
Warrant and the applicable exercise prices, and providing for immediate
exercisability of the Warrant. The Reporting Persons intend to file with the
Commission, shortly after filing this Form 3, a Statement on Form 4 reporting
the amendment of the Warrant.
02: Goldman Sachs may be deemed to own beneficially and directly and GS Group
may be deemed to own beneficially and indirectly up to 12,400,309 shares of
Common Stock of the Company because of Goldman Sachs' beneficial ownership of
the Warrant to purchase i) 7,891,106 shares of Common Stock at an exercise price
of $1.00 per share, (ii) 901,841 shares of Common Stock at an exercise price of
$1.50 per share, (iii) 1,803,681 shares of Common Stock at an exercise price of
$3.00 per share, and (iv) 1,803,681 shares of Common Stock at an exercise price
of $5.00 per share (such exercise prices in each case subject to certain
antidilutive and other adjustments). GS Group is the general partner of and owns
a 99% interest in Goldman Sachs. GS Group disclaims beneficial ownership of the
securities reported herein as indirectly owned except to the extent of its
pecuniary interest therein.
Signatures:
THE GOLDMAN SACHS GROUP, L.P.
By: s/ Hans-Linhard Reich
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Name: Hans-Linhard Reich
Title: Attorney-in-fact
GOLDMAN, SACHS & CO.
By: s/ Hans-Linhard Reich
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Name: Hans-Linhard Reich
Title: Attorney-in-fact
Date: December 4, 1998
** Intentional misstatements or omissions of facts constitute Federal Criminal
Violations.
See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed.
If space provided is insufficient, See Instruction 6 for procedure.
Alternatively, this form is permitted to be submitted to the
Commission in electronic format at the option of the reporting person
pursuant to Rule 101(b)(4) of Regulation S-T.
