USTEL INC 3
3 · USTEL INC · Filed Dec 4, 1998
Insider Transaction Report
Form 3
Holdings
- 7,891,106
Common Stock Warrants
[01][02]Exercise: $1.00Exp: 2003-06-25→ Common Stock (7,891,106 underlying) - 901,841
Common Stock Warrants
[01][02]Exercise: $1.50Exp: 2003-06-25→ Common Stock (901,841 underlying) - 1,803,681
Common Stock Warrants
[01][02]Exercise: $3.00Exp: 2003-06-25→ Common Stock (1,803,681 underlying) - 1,803,681
Common Stock Warrants
[01][02]Exercise: $5.00Exp: 2003-06-25→ Common Stock (1,803,681 underlying)
Footnotes (2)
- [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.