UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
I-Link Incorporated
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(Name of Issuer)
Common Stock Par Value $.007 Per Share
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(Title of Class of Securities)
Niklaus F. Zenger
Chief Executive Officer
Red Cube International AG
Bahnhofstrasse 10 CH-6300 Zug
Switzerland
+33 411 271 7575
Copy to:
George H. White
Sullivan & Cromwell
St. Olave's House
9a Ironmonger Lane
London EC2V 8EY, England
+44 207 710 6570
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 30, 2000
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(Date of Event which Requires Filing of this Statement)
If a filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ x ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("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).
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CUSIP NO. NOT APPLICABLE PAGE 3 OF 12 PAGES
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RED CUBE INTERNATIONAL AG
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
WC; OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
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7. SOLE VOTING POWER
NUMBER OF 100
SHARES -----------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 51,834,003
EACH -----------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 100
WITH -----------------------------------------------------
10. SHARED DISPOSITIVE POWER
51,834,003
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
51,834,103
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.1%
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14. TYPE OF REPORTING PERSON*
HC; CO
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*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
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Item 1. Security and Issuer.
This Schedule 13D relates to the Common Stock par value $.007 per share
(the "I-Link Common Stock") of I-Link Incorporated, a Florida corporation
("I-Link") having its principal executive offices at 13751 S. Wadsworth Park
Drive, Suite 200, Draper, Utah 84020.
Item 2. Identity and Background.
This Schedule 13D is filed by Red Cube International AG, a Swiss
corporation ("Red Cube"), a provider of Internet Protocol (IP) and enhanced
Web-based communication services, having its principal executive offices at
Bahnhofstrasse 10 CH-6300 Zug, Switzerland.
Set forth in Schedule A attached hereto is certain information with
respect to the directors and executive officers of Red Cube. Red Cube is
controlled by Niklaus Zenger, its Chief Executive, either directly or indirectly
through KPR Finanz-Und Verwaltungs AG ("KPR") a family holding company.
(d) and (e). During the last five years, neither Red Cube nor any of
its directors or executive officers, to the best of Red Cube's knowledge, has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person 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.
Item 3. Source and Amount of Funds or Other Consideration.
In connection with the Securities Purchase Agreement and the Voting
Agreement, as defined and described under Item 4 hereof, Red Cube is anticipated
to (x) pay to Winter Harbor, as defined under Item 5, a total of $60,000,000 in
cash and (y) grant to Winter Harbor an option to purchase 52,499 ordinary shares
of Red Cube at an exercise price of $190.48 per share, payable in Swiss francs,
and another option to purchase 58,333 ordinary shares of Red Cube at an exercise
price of $171.43 per share, payable in Swiss francs.
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The source of the funds used in this transaction is Red Cube's working
capital and capital contributions to Red Cube by certain of Red Cube's equity
investors.
Item 4. Purpose of Transaction.
The Securities Purchase Agreement
On August 30, 2000, Red Cube entered into a Securities Purchase
Agreement with KPR and Winter Harbor (the "Securities Purchase Agreement"), to
acquire from Winter Harbor;
(x) on the First Closing Date as defined in Section 7.1(a) of the
Securities Purchase Agreement that is incorporated by reference herein:
(i) 4,400 shares of Series M Preferred Stock of I-Link, par value
$10.00 per share (the "Series M Preferred Stock"), convertible into 7,861,475
shares of I-Link Common Stock;
(ii) Promissory Notes of I-Link, in the aggregate principal amount of
$7,768,000, convertible into 5,251,233 shares of I-Link Common Stock and
warrants to purchase an additional 5,000,000 shares of I-Link Common Stock; and
(iii) Warrants of I-Link to purchase 18,800,000 shares of I-Link Common
Stock; and
(y) on the Second Closing Date as defined in Section 8.1(a) of the
Securities Purchase Agreement that is incorporated by reference herein:
(i) 14,404 shares of Series N Preferred Stock of I-Link, par value
$10.00 per share (the "Series N Preferred Stock"), convertible into 5,181,295
shares of I-Link Common Stock; and
(ii) Warrants of I-Link to purchase 9,740,000 shares of I-Link Common
Stock.
Aside from the I-Link Common Stock, none of the aforementioned classes
of securities is registered under the Securities Exchange Act. Holders of Series
M Preferred Stock and Series N Preferred Stock have voting rights including the
right to vote together with the holders of I-Link Common Stock on an "as if
converted" basis.
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Exhibit A to the Securities Purchase Agreement, which is incorporated
by reference herein, sets forth details of the Promissory Notes and the various
series of Warrants that are to be purchased by Red Cube in this transaction.
Pursuant to the Securities Purchase Agreement Winter Harbor also
assigns to Red Cube all its rights under the Shareholders Agreement, dated as of
October 10, 1997, among Winter Harbor and other I-Link shareholders named
therein (the "Shareholders Agreement"). As a result of such assignment and upon
completion of the purchase of the Series M Preferred Stock, I-Link would be
required to obtain Red Cube's approval rights with respect to any action
proposed by I-Link to:
(i) amend, modify or repeal the charter or by- laws of I-Link or the
articles of incorporation, by- laws, or other organizational document of
any subsidiary, or to create, authorize, designate or issue any class or
series of equity securities of I-Link or any subsidiary or any option,
warrants or other rights to receive any class or series of equity
securities of I-Link or any subsidiary;
(ii) effect any merger, recapitalization or consolidation with or into
another entity, or enter into any binding share exchange or similar
transaction with any entity;
(iii) sell, transfer, lease or dispose of all or substantially all of
its assets in one transaction or a series of related transactions, or
liquidate, dissolve or wind-up its affairs;
(iv) sell, transfer, dispose of, lease, pledge or encumber (a
"disposition"), or engage in a series of related dispositions, of any of
its assets (including rights) having a value, in the aggregate for such
transaction or series of transactions, in excess of $250,000;
(v) lease or otherwise acquire any assets having a value, in the
aggregate, in excess of $250,000;
(vi) incur or prepay any indebtedness (or guarantee obligations of
others or enter into any other guarantee or credit support arrangement);
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(vii) pay any dividend or make other distributions or redemption
payments with respect to any of its equity interests;
(viii) conduct or engage in any business other than the business in
which it is presently engaged (and such other businesses as are reasonably
ancillary thereto);
(ix) form and own, in whole or in part, one or more corporations,
trusts, partnerships or other subsidiary entity;
(x) acquire, own or hold for investment any equity interests in another
entity or any option, warrant, or other debt or equity interest convertible
into or evidencing the right to acquire (whether or not for additional
consideration) any equity interest in such entity;
(xi) enter into any transaction or agreement (or amend any agreement)
with any affiliate of I-Link or any of the I-Link shareholders;
(xii) adopt or amend its annual budget;
(xiii) hire, employ or discharge any of its executive officers,
managers or key employees;
(xiv) engage or discharge its independent certified public accountants;
(xv) initiate or settle any litigation involving an amount in
controversy in excess of $250,000;
(xvi) adopt or amend any employee benefit plan or program;
(xvii) enter into any commitment or series of related commitments
involving a payment or payments of an aggregate amount in excess of
$500,000.
(xviii) file for voluntary or involuntary protection under federal or
state bankruptcy or insolvency laws or make any assignment for the benefit
of creditors; or
(xix) take any action that would make it impossible for I-Link or any
of its subsidiaries to
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carry on its ordinary business or take any action that is in contravention
of I-Link's Amended and Restated Articles of Incorporation.
When the purchase of the Series M Preferred Stock is completed and as
long as Red Cube holds a majority of shares of the Series M Preferred Stock, Red
Cube will have the right to elect two individuals in I-Link's board of directors
and the sole power to remove them.
During the period from the execution of the Securities Purchase
Agreement and until its termination, Winter Harbor agrees not to remove, or
cause the removal of, or cause to resign, the two directors elected to I-Link's
board of directors pursuant to Winter Harbor's rights under the Shareholders
Agreement and as the sole holder of the Series M Preferred Stock without the
prior written consent of Red Cube.
The Voting Agreement and the Proxy
As of September 11, 2000, Red Cube has entered into a Voting Agreement
with Winter Harbor (the "Voting Agreement"). Pursuant to the terms of the Voting
Agreement from the date thereof and until the First Closing Date, Red Cube has
the right to direct the vote of any securities entitled to vote or that can be
converted to voting securities and that are subject to the Securities Purchase
Agreement, with respect to any matter not in the ordinary course of business.
Pursuant to the terms of the Voting Agreement, Winter Harbor is also restricted
during the same period from transferring, converting or in any other way
disposing of any such securities. Sections 1 and 2 of the Voting Agreement,
attached hereto as Exhibit 2, are incorporated by reference herein.
At the First Closing Winter Harbor will grant Red Cube an irrevocable
proxy, pursuant to Section 5.6(a) of the Securities Purchase Agreement, with
respect to all securities to be transferred to Red Cube upon the Second Closing
(the "Proxy"). Section 5.6(a) of the Securities Purchase Agreement, attached
hereto as Exhibit 1, and the terms "First Closing" and "Second Closing" as
defined in such agreement are incorporated by reference herein.
If the Proxy granted to Red Cube is determined to be invalid or
unenforceable in any respect, the Voting Agreement will remain effective after
the First Closing Date
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with respect to the securities to be delivered at the Second Closing Date.
The Voting Agreement shall terminate on the earliest of (i) the Second
Closing Date, (ii) the fifth business day following the date on which ordinary
shares of Red Cube commence trading on SWX Market, (iii) April 2, 2000 and (iv)
the termination of the Securities Purchase Agreement. The Proxy shall terminate
on the earlier of (i) the fifth business day following the date on which
ordinary shares of Red Cube commence trading on the SWX Market, or (ii) April 2,
2000.
Changes in I-Link's Capitalization
Red Cube intends to assist I-Link in gaining access to the financial
resources it may need. Such assistance is expected to include the exercise for
cash of the Warrants Red Cube will acquire upon the First and Second Closing.
Exhibit 3 and Exhibit 4 hereto are incorporated by reference herein.
Item 5. Interest in Securities of the Issuer.
(a) and (b). Red Cube beneficially owns 51,834,103 shares of I-Link
Common Stock representing a 65.1% of shares of I-Link Common Stock outstanding,
based on the number of shares of I-Link Common Stock outstanding as contained in
the Definitive Proxy Statement filed by I-Link with the Securities and Exchange
Commission on August 29, 2000 and, pursuant to Rule 13d-3(d)(1), considering as
"outstanding" all shares of I-Link Common Stock beneficially owned by Red Cube
that are subject to warrants, conversion rights and other similar rights.
Pursuant to the Securities Purchase Agreement and the Voting Agreement
Red Cube has shared voting control and shared dispositive power over all
51,834,003 shares of I- Link Common Stock which Winter Harbor has a right to
acquire under the terms of the convertible securities, warrants and other
similar rights that are to be purchased by Red Cube under the Securities
Purchase Agreement. Such securities are described under Item 4 hereof and in
Exhibit A to the Securities Purchase Agreement which is attached to this
Schedule 13D as Exhibit 1, and is incorporated herein by reference. Red Cube
shares such voting control and dispositive power with Winter Harbor L.L.C., a
Delaware limited liability company, engaged in private investment,
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mainly, in the area of media and communications and having its principal
offices at 11400 Skipwith Lane, Potomac, Maryland 20854.
Red Cube has sole voting power and sole dispositive power over 100
shares of I-Link Common Stock that were acquired by Richard Lin on behalf of Red
Cube as described below under Item 5(c).
(c) Neither Red Cube nor, to the best knowledge of Red Cube, any person
set forth in Schedule A, has effected any transaction in I-Link Common Stock
during the past 60 days, except as disclosed herein, other than the purchase on
September 8, 2000, of 100 shares of I-Link Common Stock by Richard Lin on behalf
of Red Cube in an open market transaction at a price of $4.875 per share.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings, or
Relationships With Respect to Securities of
the Issuer.
Except as set forth above, neither Red Cube nor, to the best knowledge
of Red Cube, any of its directors or executive officers, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of I-Link, including but not limited to,
transfer or voting of any securities of I-Link, finder's fees, joint ventures,
loan or option agreements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit Description
1 Securities Purchase Agreement (including all
exhibits thereto), dated as of August 30, 2000,
among Red Cube, KPR and Winter Harbor.
2 Voting Agreement, dated as of September
11, 2000, between Red Cube and Winter
Harbor.
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3 Press Release dated as of September 5,
2000
4 Letter from Red Cube to I-Link, dated as
of September 5, 2000
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SIGNATURES
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.
Dated: September 11, 2000 Red Cube International AG
a Swiss corporation
By: /s/ Markus Mueller
Name: Markus Mueller
Title: Executive Vice President
and CFO
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SCHEDULE A
EXECUTIVE OFFICERS AND DIRECTORS
NAME POSITION
Niklaus F. Zenger Chairman of the Board and
Chief Executive Officer
Markus Mueller Executive Vice President
and CFO
Alexander Nill Director
Marino Magdalena Director
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