SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
August 30, 2000
Date of Report (date of earliest event reported)
I-LINK INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA
(State or Other Jurisdiction of Incorporation)
000-17973 59-2291344
(Commission File Number) (IRS Employer Identification No.)
13751 South Wadsworth Park Drive, Suite 200
Draper, UT 84020
(Address of Principal Executive Offices)
(801) 576-5000
(Registrant's Telephone Number, Including Area Code)
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
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Pursuant to a Securities Purchase Agreement dated as of August 30, 2000
(the "Purchase Agreement"), by and among Winter Harbor, L.L.C., a Delaware
limited liability company ("Winter Harbor"), Red Cube International AG, a Swiss
stock corporation ("Red Cube"), and KPR Finanz-Und Verwaltungs AG, a Swiss stock
corporation ("KPR"), Red Cube agreed to purchase from Winter Harbor (i) all
warrants to purchase common stock, $0.007 par value, of the Registrant (the
"Common Stock") held by Winter Harbor, and (ii) all debt securities and
preferred stock convertible into Common Stock held by Winter Harbor, for an
aggregate purchase price of $60 million plus options to purchase an aggregate of
110,832 ordinary shares of Red Cube.
Pursuant to the Purchase Agreement, at the first closing (the "First
Closing"), Red Cube is required to (i) pay to Winter Harbor $35 million, (ii)
grant to Winter Harbor an option to purchase from Red Cube 52,499 ordinary
shares of Red Cube at a per share purchase price of $190.48, payable in Swiss
Francs, and (iii) grant to Winter Harbor an option to purchase from Red Cube
58,333 ordinary shares of Red Cube at a per share purchase price of $171.43
payable in Swiss Francs. At the First Closing Winter Harbor is required to
deliver to Red Cube (x) 4,400 shares of Series M Preferred Stock of the
Registrant, (y) certain Promissory Notes of the Registrant in the aggregate
principal amount of $7,768,000 (with accrued and unpaid interest of
approximately $2,015,000, as of August 30, 2000), and (z) certain Warrants to
purchase an aggregate of 18,800,000 shares of Common Stock at an effective
exercise price of $2.033 per share of Common Stock, subject to certain
adjustments. The First Closing shall take place on the fifth business day
following the expiration or termination of all waiting periods under the
Hart-Scott-Rodino Antitrust Improvement Act, applicable to the Purchase
Agreement or the transactions contemplated by the Purchase Agreement to be
consummated at the closings. At the second closing (the "Second Closing"), Red
Cube is required to pay to Winter Harbor $25 million and Winter Harbor is
required to deliver to Red Cube (u) 14,404 shares of Series N Preferred Stock of
the Registrant, and (v) certain Warrants to purchase an aggregate of 9,740,000
shares of Common Stock at an effective exercise price of $2.033 per share of
Common Stock, subject to certain adjustments. The Second Closing is to take
place on the earlier of (a) the fifth business day following the date on which
ordinary shares of Red Cube commence trading on the SWX New Market and (b) April
2, 2001.
The Purchase Agreement may be terminated by either Winter Harbor or Red
Cube under certain circumstances, including if the First Closing does not occur
on or prior to October 9, 2000. Pursuant to Red Cube, by side letter dated
September 11, 2000, Winter Harbor, Red Cube and KPR amended the Purchase
Agreement by deleting this reference to October 9, 2000 and by substituting
therefor a reference to October 16, 2000.
According to Red Cube's Schedule 13D filed on September 11, 2000, the
source of the consideration used by Red Cube in the transactions contemplated by
the Purchase Agreement is Red Cube's working capital and capital contributions
to Red Cube by certain of Red Cube's equity investors.
As of September 11, 2000, Red Cube entered into a Voting Agreement with
Winter Harbor (the "Voting Agreement"). Pursuant to the terms of the Voting
Agreement, from September 11, 2000 and until the First Closing, 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 Purchase Agreement,
with
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respect to 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 securities.
The Voting Agreement terminates on the earliest of (i) the Second
Closing, (ii) the fifth business day following the date on which ordinary shares
of Red Cube commence trading on the SWX New Market, (iii) April 2, 2001, and
(iv) the termination of the Purchase Agreement.
The Purchase Agreement provides that at the First Closing Winter Harbor
will grant Red Cube an irrevocable proxy, with respect to all securities to be
transferred to Red Cube upon the Second Closing (the "Proxy"). If the Proxy
granted to Red Cube is determined to be invalid or unenforceable in any aspect,
the Voting Agreement will remain effective after the First Closing with respect
to the securities to be delivered at the Second Closing.
The Proxy terminates on the earlier of (i) the fifth business day
following the date on which ordinary shares of Red Cube commence trading on the
SWX New Market, or (ii) April 2001.
Red Cube beneficially owns an aggregate of approximately 53,840,000
shares of Common Stock, or approximately 66% of the Common Stock of the
Registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
I-LINK INCORPORATED
Date: September 14, 2000 By: /s/ John W. Edwards
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Name: John W. Edwards
Title: Chief Executive Officer
