Term Sheet
$4,000,000 New Loan
April 15, 1999
This Term Sheet, dated April 15, 1999, represents the basic terms agreed
to between I-Link Incorporated ("I-Link") and Winter Harbor, LLC ("Winter
Harbor"), relative to the agreement of Winter Harbor to make a new loan to I-
Link of up to Four Million Dollars ($4,000,000). It is the intent of the
parties that this Term Sheet be binding upon the parties.
In consideration of the mutual covenants and promises contained herein,
and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the parties agree as follows:
Winter Harbor agrees to lend to I-Link and I-Link agrees to borrow the
additional sum of $4,000,000 (the "New Loan") upon the terms and conditions
set forth herein. The terms and conditions of the New Loan shall be
substantially identical to the terms and conditions set forth in the Loan
Agreement between the parties, dated as of January 15, 1999, as amended by
the First Amendment thereto dated as of March 4, 1999, and the Second
Amendment dated as of April 15, 1999 (the "Second Amendment") (collectively
referred to as the "January 15, 1999 Loan Agreement"), with the exception of
the following provisions. Capitalized terms used herein and not defined
herein shall have the meaning set forth in the January 15, 1999 Loan
Agreement.
1. The outstanding principal balance of the New Loan plus any accrued and
unpaid interest thereon shall be due and payable on September 30,
1999.
2. No additional warrants shall be issued to Winter Harbor in
consideration of the New Loan, except as provided in Paragraph 4
below.
3. As partial consideration for (i) the New Loans and (ii) the Second
Amendment, I-Link has agreed to hold a meeting of the shareholders
(whether annual or special) as soon as practicable at which I-Link
shall seek shareholder approval of a modification to the conversion
terms of the Series N Stock in substantially the same form as Exhibit
B attached hereto, and, if approved by the shareholders, shall so
amend the designation of preferences of the Series N Stock..
4. I-Link shall have the right at its election to extend the due date of
the New Loan past September 30, 1999, to April 15, 2000; provided,
however, that in the event I-Link's shareholders fail to approve the
modification to the conversion price of the Series N Preferred Stock
as provided in Paragraph 3 above, as additional consideration for such
extension I-Link shall be required to issue to Winter Harbor one
warrant for each $1 of principal outstanding on the New Loan as of the
date of such extension (the "Extension Warrants"), which Extension
Warrants shall be issued on the same terms and conditions as the
Series K warrants issued in connection with the January 15, 1999 Loan
Agreement.
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5. I-Link may cause the New Loan to be exchanged for Series N Stock upon
consummation of the Rights Offering in accordance with the provisions
of Section 1.6(b)(iii) of the January 15, 1999 Loan Agreement.
6. With respect to the New Loan, should any Event of Default (as
defined in the January 15, 1999 Loan Agreement) occur on or after
the due date (or if extended, the extended due date), Winter Harbor
may at its option by written notice to I-Link declare the entire
unpaid principal amount of the note or notes evidencing the New
Loan (collectively the "Note"), together with all unpaid interest
and all other amounts payable in connection therewith and every
other obligation of I-Link to Winter Harbor, immediately due and
payable, whereupon the Note and all such obligations shall become
and be forthwith due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by I-Link, anything contained herein or in the
Note or in such other note or evidence of indebtedness to the
contrary notwithstanding. Winter Harbor shall not have this right
prior to the due date, or if extended, prior to the extended due
date.
7. The above terms and conditions shall take precedence over any
conflicting terms and conditions in January 15, 1999 Loan Agreement
with respect to the New Loan.
8. The parties shall execute a written loan agreement consistent with the
above provisions (the "New Loan Agreement"), and such other ancillary
instruments as shall be required to carry out the purposes of this
Term Sheet.
DATED April 15, 1999. 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
The undersigned, First Media, L.P., the sole member of Winter Harbor,
L.L.C. (the "Lender"), hereby consents to the terms and provisions of this
Term Sheet and unconditionally promises to make available to Winter Harbor
sufficient funds in order for Winter Harbor to lend the entire New Loan as
provided hereunder.
FIRST MEDIA, L.P.
By: First Media Corporation, its sole
general partner
By: /s Xxxxx X. Xxxxx, Xx.
Xxxxx X. Xxxxx Xx., Secretary
Exhibit A
FORM OF PROMISSORY NOTE
$4,000,000 April 16, 1999
FOR VALUE RECEIVED, the undersigned, I-LINK INCORPORATED, a Florida
corporation (the "Maker"), promises to pay to the order of WINTER HARBOR,
L.L.C., a Delaware limited liability company (the "Payee"), on or before
September 30, 1999 (or April 15, 2000 if extended by Xxxxx as provided in
Section ___ of the [New Loan Agreement]) (the "Maturity Date"), the
principal sum of $4,000,000, or if less, the outstanding principal balance
of the loans ("Loans") made by Payee to Maker in connection with this Note
pursuant to the [New Loan Agreement], together with interest thereon as
provided herein. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the [New Loan
Agreement].
The Payee may, and is hereby authorized by the Borrower to, set
forth on the grid attached hereto, or in other comparable records
maintained by it, the amount of each Loan, all payments and prepayments of
principal and interest received, the current outstanding principal balance,
and other appropriate information. The aggregate unpaid amount of any Loan
set forth in any records maintained by the Payee with respect to this Note
shall be presumptive evidence of the principal amount owing and unpaid on
this Note. Failure of the Payee to record the principal amount of any Loan
on the grid attached hereto shall not limit or otherwise affect the
obligation of the Borrower hereunder to repay the principal amount of such
Loan and all interest accruing thereon.
1. Interest. The unpaid principal balance of this Note shall bear
interest at the rates determined in accordance with the provisions of [the
New Loan Agreement] between the Maker and the Payee (as the same may be
amended, modified, extended or restated, the "Loan Agreement"). Interest
accrued hereunder shall be paid monthly on the last business day of each
calendar month until all principal and interest hereunder is paid in full
at the repayment or maturity of the Loan.
2. Principal Repayment. The aggregate principal balance of this Note
shall be due and payable as provided in Section ___ of the Loan Agreement.
3. Prepayments. This Note may be voluntarily prepaid in whole or in
part without premium or penalty at any time and from time to time;
provided, however, that each partial prepayment shall be in the aggregate
principal amount of not less than $100,000 or an integral multiple of
$50,000 in excess thereof. In making a prepayment in whole, the Maker
shall pay all accrued interest through the date of such prepayment. The
Maker shall make a mandatory prepayment of the outstanding principal amount
of the Note together with all accrued interest on and subject to the terms
and conditions of the Loan Agreement.
4. Payment on Business Days. If any payment of principal or interest
on this Note shall become due on a Saturday, Sunday or public holiday, such
payment may be made on the next succeeding business day, and such extension
of time in such case shall be included in the computation of interest in
connection with such payment.
5. Form of Payment. All payments made pursuant to the terms of this
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Note shall be made in lawful money of the United States of America and
shall be payable to the Payee at its principal office located at 00000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000 or at such other place as the Payee
shall have designated to the Maker in writing.
6. Choice of Law. This Note shall be governed by and construed in
accordance with the laws of the State of Delaware with the exception of the
conflicts of laws provisions thereof.
7. Collection Expenses. If at any time the indebtedness evidenced by
this Note is collected through legal proceedings or this Note is placed in
the hands of attorneys for collection, the Maker and each endorser of this
Note hereby jointly and severally agree to pay all costs and expenses
(including reasonable attorneys' fees) incurred by the holder of this Note
in collecting or attempting to collect such indebtedness.
8. Waivers. To the extent permitted by law, except as otherwise
provided herein or in the Loan Agreement, the Maker and each endorser of
this Note, and their respective heirs, successors, legal representatives
and assigns, hereby severally waive presentment; protest and demand; notice
of protest, demand, dishonor and nonpayment; diligence in collection, and
any relief whatever from the valuation or appraisement laws of any state.
IN WITNESS WHEREOF, the Maker has executed this Note as of the date
and year first above written.
I-LINK INCORPORATED,
a Florida corporation
By: _______________________________
Xxxx Xxxxxxx, President
PAYMENT INFORMATION
AMOUNT AMOUNT UNPAID OFFICER'S
DATE BORROWED PAID BALANCE INITIALS
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Exhibit B
Conversion Price. The Conversion Price at which shares of Common Stock shall
be deliverable upon conversion of Series N Preferred Stock without the
payment of additional consideration by the holder thereof shall initially be
$2.78 (the "Conversion Price"). The Conversion Price shall reset ("Reset") to
the lowest of, but not lower than $1.25, (i) 110% of the average trading
price for any 20 day period subsequent to issuance, (ii) the price at which
common stock or common stock equivalent is issued (whether by conversion,
exercise or otherwise and whether any such security is outstanding on the
date hereof), (iii) the exercise price or conversion rate of any new options,
warrants, preferred stock or other convertible security and (iv) if at any
the "Conversion Price" set forth in Section III(j)(5)(c) for which the Series
F Convertible Preferred Stock may be converted into the Corporation's Common
Stock is less than the applicable Conversion Price for the Series N Preferred
Stock then in effect, then and in any such event, the Conversion Price for
the Series N Preferred Stock shall be reduced to equal the Conversion Price
of the Series F Convertible Preferred Stock. Such Conversion Price, and the
rate at which shares of Series N Preferred Stock may be converted into shares
of Common Stock, shall be subject to further adjustment as provided in this
Section III(k)(4).
