Exhibit 10.12

                               USOL HOLDINGS, INC.
                               10300 Metric Blvd.
                               Austin, Texas 78758


                                  June 7, 2001



Mr. Robert G. Solomon
10300 Metric Blvd.
Austin, Texas  78758

Dear Rob:

         The   purpose  of  this   letter  is  to  amend  the   Employment   and
Non-competition  Agreement  dated July 21,  1999 by and between  USOL  Holdings,
Inc.,  an Oregon  corporation  (the  "Company")  (formerly  USOL Holdings Inc, a
Delaware corporation) and Robert G. Solomon (the "Agreement").

         The Agreement is hereby  amended to provide that  beginning on the date
of this  letter  and  continuing  for a period  of six  months  thereafter  (the
"Six-Month  Period"),  (i) that  Employee  shall no  longer  serve as the  Chief
Executive  Officer of the  Company,  (ii) that  Employee  shall  continue  as an
officer and employee of the Company and shall continue to perform the duties set
forth in the Agreement,  other than the duties of the Chief  Executive  Officer,
but shall focus his efforts on the list of tasks which are attached as Exhibit A
to this  letter,  (iii) that  Employee  shall  report  directly  to the Board of
Directors of the Company, and (iv) that, during the Six-Month Period, so long as
Employee is a member of the Board of Directors, Employee shall continue to serve
as Chairman of the Board.

         The parties  agree that during the Six-Month  Period,  either party may
terminate Employee's status as Chairman of the Board (but not as a director) and
as an officer and employee,  provided,  however,  that any such  termination  of
Employee by the Company or by Employee  during this period shall be deemed to be
a  "Termination  Other Than For Cause" under the terms of the Agreement  unless,
notwithstanding  the  provisions of the Agreement,  Employee  engages in conduct
during  the  Six-Month  Period  which is a gross and  willful  violation  of his
material  duties under the  Agreement,  as amended,  and Employee fails to cease
such  conduct  within 30 days of  receiving  a written  notice from the Board of
Directors which describes the specific conduct.

         If either the Company or Employee terminates Employee's employment with
the  Company  during the  Six-Month  Period,  the Company and the members of the
Board of Directors, shall take all reasonable action necessary to allow Employee
to remain as a member of the Board of Directors  throughout  the duration of his
present  term,  and,  in the  discretion  of the  Board,  to  consider  him  for
subsequent renomination as a management nominee.

         Effective  upon  the  termination  of  Employee's  employment  with the
Company,  if  Employee  is no  longer a member of the  Board of  Directors,  all
options held by Employee for the purchase of stock of the Company, shall vest in
their  entirety  and shall be  exercisable  for a period  of one year  after the
termination  of Employee's  employment  with the Company.  However,  if upon the
termination of Employee's  employment  with the Company,  Employee  continues to
serve on the Board of Directors of the Company,  then all stock  options held by
Employee shall  continue to vest pursuant to the terms of the  applicable  stock
option award  agreements and all incentive  stock options held by Employee shall
automatically  convert into  non-qualified  stock options.  In that case, at the
time that Employee ceases to be a member of the Board of Directors,  all options
held by Employee shall vest in their entirety and shall be exercisable for a one
year period after the date that Employee  ceases to be a member of the Company's
Board of Directors.

         All shares of stock of  TheResidentClub,  Inc., a Delaware  corporation
("TRC"),  held by Employee  shall be  transferred  by  Employee to TRC,  and all
options to purchase stock of TRC that are held by Employee shall be cancelled in
exchange for TRC's cancellation of that certain Partially  Non-Recourse  Secured
Note and Security  Agreement  (the "Note") in the original  principal  amount of
$300,000  dated July 20, 2000  executed by Employee as maker  payable to TRC. In
addition,  any  shares of the  Company's  stock  that may have been  pledged  by
Employee as security for repayment of the Note, shall be returned to Employee.

         At the end of the Six-Month  Period,  if the parties have not otherwise
agreed in writing, Employee's employment with the Company will be deemed to have
been terminated by the Company in a "Termination Other Than For Cause" under the
terms of the Agreement.

         All other terms of the Agreement shall remain in full force and effect.

         If you are in agreement  with these  terms,  please sign this letter in
the space provided below and return a copy to me.

                                     Sincerely,




                                     Donald Barlow
                                     President


Agreed:





Robert G. Solomon