EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT, dated as of July 28, 1998, between I-Link
Incorporated, a Florida corporation (the "Company"), and JNC Opportunity Fund
Ltd., a Cayman Islands corporation (the "Purchaser").
WHEREAS, the Company and the Purchaser entered into a Convertible
Preferred Stock Purchase Agreement, dated as of June 30, 1998 (the "Purchase
Agreement"), pursuant to which the Company issued to the Purchaser 1,000
shares of its 5% Series E Convertible Preferred Stock, par value $10 per
share and stated value of $10,000 per share (the "Series E Stock"), which are
convertible into shares of the Company's common stock, par value $.007 per
share (the "Common Stock"), which shares of Series E Stock have the rights,
preferences and privileges set forth in the Certificate of Designation of the
Company filed with the Florida Secretary of State on July 7, 1998; and
WHEREAS, the Company and the Purchaser have agreed to exchange the
Series E Stock for (x) an equal number of shares of the Company's to be
created 5% Series F Convertible Preferred Stock, par value $10 per share and
stated value of $10,000 per share (the "Series F Stock"), which are
convertible into Common Stock and which have the rights, preferences and
privileges set forth in the Certificate of Designation of the Company,
attached hereto as Exhibit A, to be filed with the Florida Secretary of State
promptly following the execution of this Exchange Agreement (the "Series F
Designation"), and (y) a certain Common Stock purchase warrant described
below (the "Exchange").
NOW THEREFORE, in consideration of the mutual covenants contained in
this Exchange Agreement, and for other good and valuable consideration the
receipt and adequacy are hereby acknowledged, the Company and Purchaser,
intending to be legally bound, agree as follows:
Capitalized terms used but not defined herein that are defined in the
Purchase Agreement shall have the respective meaning ascribed to them in the
Purchase Agreement.
1. Exchange. Upon receipt of evidence satisfactory to the Purchaser of
the acceptance for filing of the Series F Designation by the Florida
Secretary of State, (A) the Company will deliver to the Purchaser (1)
stock certificates representing 1,000 shares of the Series F Stock,
registered in the name of the Purchaser (the "Shares"), (2) a Common
Stock purchase warrant, in the form of Exhibit D to the Purchase
Agreement, registered in the name of the Purchaser, pursuant to which
the Purchaser shall have the right at any time and from time to time
thereafter through the fifth anniversary of the date of the issuance
thereof to acquire 100,000 shares of Common Stock at an exercise price
per share (subject to adjustment as provided therein) of $4.00 (the
"Additional Warrant"), (3) the legal opinion of Xxxxx X. Xxxxx &
Associates, outside counsel to the Company, and (4) $10,000 to Xxxxxxxx
Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP in connection with the
preparation and
negotiation of the documents relating to the Exchange
and (B) the Purchaser shall deliver to the Company the stock
certificates evidencing its ownership of the Series E Stock.
2. Purchase Agreement and Registration Rights Agreement. The
Purchase Agreement and the Registration Rights Agreement shall be deemed
amended to the extent required to provide for the Exchange. The term
"Preferred Stock" in the Registration Rights Agreement shall hereafter
mean the Series F Stock. The term "Shares" in the Purchase Agreement
shall hereafter have the meaning ascribed to it in the Exchange
Agreement and the term "Underlying Shares" in the Purchase Agreement
shall hereafter mean the shares of Common Stock issuable upon conversion
of the Shares, as payment of dividends thereon and upon exercise of the
Warrant All references to the term "Warrant" in the Registration Rights
Agreement and the Purchase Agreement shall include the Additional
Warrant. Other than as expressly amended hereby, the Purchase Agreement
and the Registration Rights Agreement are not amended and remain in full
force and effect.
3. Representation and Warranties of the Company.The Company hereby
reaffirms the representations and warranties in Section 2.1 of the
Purchase Agreement and further represents and warrants as follows:
(a) The execution, delivery and performance by the
Company of this Exchange Agreement and the
consummation of the transactions contemplated
hereby (i) are within the power of Company and (ii)
have been duly authorized by all necessary actions
on the part of Company. Upon issuance, the Shares
and the Common Stock issuable upon conversion
thereof and upon payment of dividends thereon (if
such dividends are paid in the form of Common
Stock) will be validly issued, fully paid and non-
assessable.
(b) This Exchange Agreement has been duly executed
and delivered by the Company and constitutes a
legal, valid and binding obligation of Company,
enforceable against Company in accordance with its
terms.
(c) The Company restates the representations and
warranties in Section 2.1(e) of the Purchase
Agreement with respect to the Exchange.
(d) No consent, approval, order or authorization
of, or registration, declaration or filing with,
any governmental authority or other person is
required in connection with the execution and
delivery of this Exchange Agreement and the
performance and consummation of the transactions
contemplated thereby, other than the acceptance of
the Series F Designation with the Florida Secretary
of State and any filings that may be required by
the Commission and/or NASDAQ.
(e) The Company has paid no commission or other
remuneration directly or indirectly to any person
for soliciting the Exchange.
(f) The Exchange is not subject to the registration
requirements of the Securities Act.
4. Representation and Warranties of the Purchaser.The Purchaser hereby
reaffirms the representations and warranties in Section 2.2 of the
Purchase Agreement and further represents and warrants as follows:
(a) The execution, delivery and performance by the
Purchaser of this Exchange Agreement and the
consummation of the transactions contemplated
hereby (i) are within the power of the Purchaser
and (ii) have been duly authorized by all necessary
actions on the part of the Purchaser.
(b) This Exchange Agreement has been duly executed
and delivered by the Purchaser and constitutes a
legal, valid and binding obligation of such
Purchaser, enforceable against the Purchaser in
accordance with its terms.
5. Governing Law. This Exchange Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State
of New York without regard to the principles of conflicts of laws
thereof.
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SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
I-LINK INCORPORATED
By:_____________________________________
Name:
Title:
JNC OPPORTUNITY FUND LTD.
By:_____________________________________
Name:
Title:
