UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
Amendment No. 1
I-Link Incorporated
(Name of Issuer)
Common Stock Par Value $.007 Per Share
(Title of Class of Securities)
Niklaus F. Zenger
Chief Executive Officer
Red Cube International AG
Bahnhofstrasse 10 CH-6300 Zug
Switzerland
+33 411 500 5000
Copy to:
George H. White
Sullivan & Cromwell
St. Olave's House
9a Ironmonger Lane
London EC2V 8EY, England
+44 207 710 6570
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 24, 2000
(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/A, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
CUSIP NO. NOT APPLICABLE PAGE 2 OF 13 PAGES
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RED CUBE INTERNATIONAL AG
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC; OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
7. SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 51,834,103
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
10. SHARED DISPOSITIVE POWER
51,834,103
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
51,834,103
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.8%
14. TYPE OF REPORTING PERSON
HC; CO
2
CUSIP NO. NOT APPLICABLE PAGE 3 OF 13 PAGES
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KPR FINANZ-UND VERWALTUNGS AG
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
7. SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 51,834,103
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
10. SHARED DISPOSITIVE POWER
51,834,103
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
51,834,103
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.8%
14. TYPE OF REPORTING PERSON
HC; CO
3
CUSIP NO. NOT APPLICABLE PAGE 4 OF 13 PAGES
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
NIKLAUS F. ZENGER
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
7. SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 51,834,103
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH
10. SHARED DISPOSITIVE POWER
51,834,103
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
51,834,103
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
64.8%
14. TYPE OF REPORTING PERSON
HC; IN
4
Item 1. Security and Issuer.
This Schedule 13D/A 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 and amends and restates in its entirety
Schedule 13D filed with the Securities and Exchange Commission on September 11,
2000.
Item 2. Identity and Background.
This Schedule 13D/A is filed by (i) Red Cube International AG, a Swiss
corporation ("Red Cube")and provider of Internet Protocol (IP) and enhanced
Web-based communication services, having its principal executive offices at
Bahnhofstrasse 10 CH-6300 Zug, Switzerland, (ii) KPR Finanz-Und Verwaltungs AG,
a Swiss corporation ("KPR") and a family holding company, having its principal
executive offices at Baarerstasse 110a, Zug CH-6300, Switzerland, and (iii) Mr.
Niklaus F. Zenger ("Mr. Zenger")Chief Executive of Red Cube, with the same
business address as Red Cube (together the "Reporting Persons"). Mr. Zenger
controls Red Cube either directly or indirectly through KPR.
Set forth in Schedule A attached hereto is certain information with
respect to the directors and executive officers of Red Cube and KPR.
(d) and (e). During the last five years, neither of the Reporting
Persons, nor any of the executive officers or directors of Red Cube or KPR, to
the best of knowledge of Red Cube and KPR respectively, 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.
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(f) Mr. Zenger is a citizen of Switzerland.
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, L.L.C., a Delaware limited liability company
("Winter Harbor"), a total of $60,000,000 in cash and (y) grant 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,
also payable in Swiss francs.
The source of the funds used to make the advance payment on October 25,
2000, as described below under Item 4 hereof, were capital contributions to Red
Cube by certain of Red Cube's equity investors. Red Cube expects to finance the
remaining of the purchase price payable upon the First Closing and the Second
Closing (as such terms are defined below under Item 4), through additional
equity financing and working capital.
Item 4. Purpose of Transaction.
The Securities Purchase Agreement
On October 25, 2000, Red Cube disbursed to Winter Harbor $20,000,000 in
the form of an advance payment towards the purchase price for the acquisition of
the I-Link securities Red Cube has agreed to purchase pursuant to the Securities
Purchase Agreement, dated August 30, 2000, among Red Cube, KPR and Winter Harbor
(such agreement, as amended from time to time, the "Securities Purchase
Agreement").
This advance payment was made pursuant to a Letter Agreement, dated as
of October 24, 2000, among Red Cube, KPR and Winter Harbor providing that:
(a) First Closing shall take place on such date as Red Cube shall
designate to Winter Harbor on not less than five business days written notice
but no later than December 31, 2000 (the "First Closing"); and
(b) Red Cube will make a non-refundable advance payment to Winter
Harbor in the amount of $20,000,000 on October 25, 2000 and pay the balance
($15,000,000) of the purchase price payable on the First Closing, when the First
Closing occurs as described under (a) above.
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Pursuant to the Securities Purchase Agreement, Red Cube will acquire
from Winter Harbor the following securities of I-Link:
(x) At the First Closing,
(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) At the Second Closing as defined in the "Definitions" Section of the
Securities Purchase Agreement that is incorporated by reference herein and upon
payment of $25,000,000 to Winter Harbor:
(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.
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 will also
assign to Red Cube at the First Closing 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 with respect to any
action proposed by I-Link to:
7
(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);
(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;
8
(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 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 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, Red Cube
9
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 of I-link. 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 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 is
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 with respect to the securities to be delivered at the Second
Closing.
The Voting Agreement shall terminate on the earliest of (i) the Second
Closing Date, as such term is defined in Section 8.1 of the Securities Purchase
Agreement that is incorporated by reference herein, (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 Closing and the Second
Closing.
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 64.8% of shares of I-Link Common Stock outstanding,
based on the number of shares (28,095,794) of I-Link Common Stock outstanding as
contained in the Quarterly Report on Form 10-Q filed by I-Link with the
Securities and Exchange Commission on October 19, 2000 and, pursuant to Rule
13d-3(d)(1), considering as "outstanding" all shares of I-Link
10
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 incorporated by
reference herein. Red Cube shares such voting control and dispositive power with
Winter Harbor L.L.C., a Delaware limited liability company, engaged in private
investment, mainly, in the area of media and communications and having its
principal offices at 11400 Skipwith Lane, Potomac, Maryland 20854.
Because of certain business relationships among the Reporting Persons,
KPR and Mr. Zenger may be deemed to be the beneficial owners of, and share with
Red Cube voting and dispositive power over the securities of I-Link acquired by
Red Cube as described in Item 4 and in Item 5(c) hereof. The filing of this
Schedule 13D/A is not an admission by the Reporting Persons that they constitute
a "group" for purposes of Section 13(d)(3) of the Securities Exchange Act, as
amended, or Rule 13d-5 thereunder and they file this Schedule 13D/A jointly
solely for informational purposes. KPR and Mr. Zenger disclaim beneficial
ownership of, or pecuniary interest in, any securities of I-Link owned by Red
Cube.
(c) Neither of the Reporting Persons, nor any of the executive officers
or directors of Red Cube or KPR, to the best of knowledge of Red Cube and KPR
respectively, has effected any transaction in I-Link Common Stock during the
past 60 days, except as disclosed under Item 4 hereof, 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 of the Reporting Persons, nor any of
the executive officers or
11
directors of Red Cube or KPR, to the best of knowledge of Red Cube and KPR
respectively, 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.*
3 Letter Agreement, dated as of October
24, 2000, among Red Cube, KPR and Winter
Harbor.
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: November 7, 2000 Red Cube International AG
a Swiss corporation
By: /s/Niklaus F. Zenger
Name: Nikalus F. Zenger
Title: Chief Executive Officer
* Incorporated herein by reference to Schedule 13D filed with the Securities and
Exchange Commission on September 11, 2000.
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KPR Finanz-Und Verwaltungs AG
a Swiss corporation
By: /s/Niklaus F. Zenger
Name: Nikalus F. Zenger
By: /s/Niklaus F. Zenger
Name: Nikalus F. Zenger
13
SCHEDULE A
EXECUTIVE OFFICERS AND DIRECTORS OF RED CUBE
NAME POSITION
Niklaus F. Zenger Chairman of the Board and
Chief Executive Officer
Markus Mueller Executive Vice President,
CFO and COO
Marino Magdalena Director
Felix Goedhart Director
Fabrizio di Luggo di Avini Director
EXECUTIVE OFFICERS AND DIRECTORS OF KPR
NAME POSITION
Marino Magdalena Director
14
