Exhibit 10.39
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of March 4, 1999, by and between I-LINK INCORPORATED, a
Florida corporation (the "Borrower"), and WINTER HARBOR, L.L.C., a
Delaware limited liability company (the "Lender").
RECITALS:
A. The Borrower and Lender entered into a Loan Agreement, dated as
of January 15, 1999, pursuant to which Lender agreed to make available to
the Borrower up to $8,000,000 (the "Original Agreement").
B. The Borrower has requested and the Lender has agreed to amend
certain provisions of the Original Agreement as provided herein. The
Original Agreement, as amended hereby, shall be referred to as the "Loan
Agreement." Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in the Loan Agreement.
AGREEMENTS
In consideration of the foregoing Recitals and of the covenants
and representations contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Bank, intending to be legally bound,
hereby agree as follows:
1. Amendments.
(a) Section 1.6(b)(iii) of the Original Agreement shall be amended in
its entirety to read as follows:
(iii) Rights Offering. Borrower shall make a rights
offering (the "Rights Offering") to all of its existing
shareholders for $20,000,000 of a newly created class of Series N
Convertible Preferred Stock (the "Series N Stock") having the
terms and conditions set forth on Schedule I attached hereto and
such other terms and conditions as may be reasonably acceptable
to Borrower and Lender. Borrower shall file the documents
relating to the Rights Offering with the Securities and Exchange
Commission (the "SEC") no later than January 15, 1999. If
Borrower mails the Rights Offering materials to its shareholders
by the earlier of April 22, 1999 and that business day which is
three business days following the receipt of clearance from the
SEC (the "Mailing Date"), and consummates the Rights Offering by
the earlier of May 29, 1999 and that business day which is the
first business day following the 35th calendar day from the
Mailing Date (the "Consummation Date"), then, so long as Borrower
shall have notified Lender of such conversion on or prior to
April 26, 1999, Borrower shall cause the outstanding principal
amount of the Loans, together with all accrued interest to be
converted into Series N Stock. Lender shall have the right, but
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not the obligation, to subscribe for any Series N Stock not
otherwise subscribed for as part of the Rights Offering.
(b) The third sentence of Section 1.9 of the Original Agreement shall
be amended in its entirety and replaced with the following:
At the Lender's option, the amount of Lender's commitment in
Section 1 shall be reduced by the aggregate stated amount of any
Standby Letters of Credit issued pursuant to this Section.
(c) Section 1.10(a) of the Original Agreement shall be amended in its
entirety to read as follows:
Section 1.10 Warrants.
(a) As further consideration for Lender's commitment to
make available the Loans and to arrange the Standby Letter of
Credit, Borrower will grant to Lender warrants ("Warrants") to
purchase a certain number of shares of the Borrower's common
stock pursuant to the terms of a Warrant Agreement (the "Warrant
Agreement"). Such Warrant Agreement shall have an exercise
period of 7.5 years from the date hereof and shall grant the
Lender the right to acquire (i) one Warrant for (A) every $10 in
Loan proceeds made available to the Borrower hereunder and (B)
every $10 of the aggregate stated amount of the Standby Letters
of Credit and (ii) an additional nine Warrants for (A) every $10
in Loan proceeds made available to the Borrower hereunder upon
the occurrence of an Event of Default or if the Loan is not paid
in full on or before April 26, 1999 and (B) every $10 of the
aggregate stated amount of the Standby Letters of Credit upon the
occurrence of an Event of Default or if the Loan is not paid in
full on or before April 26, 1999 or if there is a draw on any
Standby Letter of Credit; provided, however, in the event that a
Equity Transaction (as defined below) occurs on or after February
1, 1999 and on or before April 26, 1999, then the Borrower shall
issue to the Lender the additional Warrants referenced in
subclauses (ii) (A) and (B) of this Section 1.10 prior to such
Equity Transaction. As used herein, "Equity Transaction" shall
mean (pursuant to a single transaction or a series of related
transactions by a single party or related parties (other than the
Lender)) (i) the acquisition of 20% or more of the Borrower's
capital stock; (ii) the sale of all or substantially all of the
assets of the Borrower; (iii) repayment, directly or indirectly,
of all or any portion of the Loan in connection with the sale of
the Borrower's capital stock or the sale or license of the
Borrower's technology or (iv) repayment, directly or indirectly,
of all or any portion of the Loan in connection with the Rights
Offering.
2. Additional Amendment to Warrant Agreement. The Borrower and the
Lender are parties to that certain Series K Warrant Agreement, dated as of
January 15, 1999 (the "Series K Warrant Agreement"). The Borrower and Lender
hereby agree that each reference to "March 15, 1999" contained in the Series K
Warrant Agreement shall be deleted and replaced in lieu thereof with "April 26,
1999".
3. Issuance of New Promissory Note. In the event that the
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Borrower is deemed to have borrowed more than $8,000,000 pursuant to Section 1.9
of the Loan Agreement upon the draw of any Standby Letter of Credit, the
Borrower agrees to immediately deliver a new note (the "New Note") to the Lender
in the amount deemed borrowed pursuant to the Loan Agreement. The New Note
shall be in substantially the same form as the Note, dated as of November 10,
1998, executed in connection with the Original Agreement.
4. Representations and Warranties. Each and every
representation and warranty set forth in the Original Agreement is hereby
confirmed and ratified, in all material respects, by the Borrower, and such
representations and warranties as so confirmed and ratified shall be deemed
to have been made and undertaken as of the date of this Amendment as well
as at the time they were made and undertaken.
5. Counterparts. This Amendment may be executed in as many
counterparts as may be convenient and shall become binding when the Lender
and the Borrower have each executed at least one counterpart. This
Amendment may be delivered to such other party via fax. Any party's faxed
signature shall be deemed an original and binding signature as of the date
set forth above.
6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware with the
exception of its conflicts of laws provisions.
7. Binding Effect. This Amendment shall be binding upon and
shall inure to the benefit of the Lender and the Borrower and their
respective successors and assigns.
8. Reference to Original Agreement. Except as amended hereby,
the Original Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects. On and after the effectiveness of
the Amendment to the Original Agreement accomplished hereby, each reference
in the Original Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference to the Original
Agreement in the other agreements, documents or instruments executed and
delivered pursuant to the Loan Agreement, shall be deemed a reference to
the Original Agreement, as amended hereby.
9. No Other Modifications. Except as expressly provided in this
Amendment, all of the terms and conditions of the Original Agreement shall
remain unchanged and in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the date first
above written.
I-LINK INCORPORATED
By: /s Xxxx Xxxxxxx
Xxxx Xxxxxxx, President
WINTER HARBOR, L.L.C.
By: First Media, L.P., its member
By: First Media Corporation,
its sole general partner
By: /s Xxxxx X. Xxxxx Xx.
Xxxxx X. Xxxxx Xx., Secretary
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