Exhibit 10.27

 

AMENDED AND RESTATED
DEBT RESTRUCTURING AGREEMENT

 

This Debt Restructuring Agreement is entered into this 15th day of October 2002
between I-Link Incorporated, a Florida corporation (“I-Link”), Counsel
Corporation (US), a Delaware corporation (“Counsel”), and Counsel Springwell
Communications LLC, a Delaware limited liability company formerly known as
Counsel Communications LLC (“Counsel Springwell”).

 

RECITALS:

 

A.                                   Counsel Springwell and I-Link entered into
a Senior Convertible Loan and Security Agreement dated as of March 1, 2001 as
amended (the “March 1st Loan Agreement”), pursuant to which Counsel Springwell
has advanced to I-Link the aggregate principal amount of $12,000,000.

 

B.                                     Counsel, an affiliate of Counsel
Springwell, and I-Link entered into a Loan and Security Agreement dated as of
June 6, 2001 (the “June 6th Loan Agreement”).  The June 6th Loan Agreement was
amended on June 27, 2002 to increase the total borrowing to $24,306,865.91.

 

C.                                     In addition to the principal amount
outstanding under the June 6th Loan Agreement, Counsel Springwell has advanced
additional amounts to I-Link since July 25, 2002 (the “Interim Advances”).

 

D.                                    Pursuant to a Loan and Security Agreement
dated as of June 4, 2001 (the “June 4th Loan Agreement”), Counsel advanced the
principal amount of $14,850,000 to WorldxChange Corp., a Delaware corporation
and wholly-owned subsidiary of I-Link (“WxC”), of which amount $12,350,000
remains outstanding.

 

E.                                      The Board of directors of I-Link will be
meeting in the weeks following the execution of this Agreement to adopt a new
operating plan (the “Operating Plan”).

 

F.                                      Counsel Springwell and Counsel
Corporation have committed to fund, through long-term intercompany advances or
equity contributions, all capital investment, working capital or other
operational cash requirements of I-Link through April 15, 2003 as set forth in
that certain letter to I-Link, dated April 30, 2002 (the “Keep Well Letter”).

 

G.                                     The parties previously entered into a
Debt Restructuring Agreement dated July 25, 2002 (the “Debt Restructuring
Agreement”).

 

I.                                         The parties wish to amend certain
provisions of the Debt Restructuring Agreement.

 

Accordingly, the parties hereby agree that the Debt Restructuring Agreement is
hereby amended and restated in its entirety to read as follows:

 

1.                                       Closing Date.  The closing of the
transactions contemplated by this Agreement (the “Closing”) shall take place at
the offices of I-Link, or such other place as the parties may mutually agree, on
or before the third business day (the “Closing Date”) following the day on which
the Proposals (as defined below) are approved by the stockholders of I-Link and
become effective in accordance with the Amended and Restated Articles of
Incorporation of I-Link, as amended through the date of the Stockholders Meeting
(as defined below).

 

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2.                                       Actions to be taken at the Closing. 
The parties hereby agree that, at the Closing and in exchange for and in
satisfaction of (i) the aggregate principal amount outstanding as of the Closing
Date under the June 6th Loan Agreement, and all accrued and unpaid interest
thereon through the Closing Date, (ii) the outstanding principal amount of the
Interim Advances, together with interest thereon at the rate of ten percent
(10%) per annum from the date of each such advance through the Closing Date and
(iii) the principal amount of additional advances made by Counsel Springwell to
I-Link after the date hereof pursuant to the Keep Well Letter or the Operating
Plan (as defined below), together with interest thereon at the rate of ten
percent (10%) per annum from the date of each such advance through the Closing
Date (the amounts in clauses (i), (ii) and (iii) being hereinafter referred to
as the “Aggregate Amount”) I-Link shall issue to Counsel Springwell the number
of shares of Common Stock equal to the quotient of (i) the Aggregate Amount,
divided by (ii) $0.18864 (the “Effective Price”).  Counsel represents and
warrants to I-Link that it has not assigned, pledged or otherwise transferred or
encumbered its rights under the June 6th Loan Agreement.

 

3.                                       Commitment to Provide Additional
Funding

 

(a)                                  In addition to providing funding under the
Keep Well Letter, Counsel Springwell shall fund the operations of I-Link through
the date of adoption of the Operating Plan, and hereafter shall fund the
operating cash flow deficit, if any, inherent in the Operating Plan hereafter
adopted by the I-Link Board of Directors.  Counsel Springwell shall also (i)
subject to stockholder approval of the Proposals, advance to I-Link any and all
amounts paid or payable by I-Link to stockholders of I-Link that exercise their
dissenters’ rights in connection with the transactions subject to this Agreement
and (ii) advance to I-Link the annual premium to renew the existing Directors
and Officers insurance coverage (which is and shall be separate and distinct
from insurance policies maintained by Counsel or their affiliated entities) for
an additional one year from the current date of its expiration in November 2002,
and Counsel and Counsel Springwell represent and covenant that they will do any
and all things reasonably necessary to cause such insurance to be continued in
effect until at least November 2003 in types and amounts that are, at a minimum,
currently in force, so long as such insurance is available on commercially
reasonable terms.  In addition, Counsel Springwell shall advance to I-Link all
costs and fees incurred relating to the work of the current special committee of
I-Link’s board of directors (“Special Committee”) and its legal, accounting and
financial advisors in connection with the transaction contemplated by this
Agreement and all accounting, legal and regulatory costs, investment banking
fees and expenses, all costs incident to I-Link’s annual stockholder meeting and
any special stockholder meetings for soliciting and obtaining stockholder
approval of the transactions contemplated hereby, and all other direct costs
incurred by I-Link in connection with consummating the transaction contemplated
by this Agreement (the “Special Committee Costs”).  The parties acknowledge and
agree that Counsel Springwell’s payment of the amounts specified in the
preceding sentence of this Section 3(a) shall not reduce Counsel Springwell’s
funding obligations under this Agreement.

 

Any such funding provided by Counsel Springwell pursuant to this Section 3(a)
(other than the amounts referenced in the penultimate sentence of the prior
paragraph and any amounts advanced for acquisitions) prior to December 31, 2002
shall constitute a purchase of additional shares of Common Stock for a purchase
price per share equal to the Effective Price; provided that in the event that
the Board of Directors of I-Link hereafter determines to acquire the assets or
equity interests of any other entity, I-Link and Counsel Springwell agree that
any acquisition cost related to such acquisition will be financed, at the option
of Counsel Springwell, either by way of equity from Counsel Springwell
constituting a purchase of additional shares of Common stock for a purchase
price per share equal to the average closing transaction price of a share of
I-Link common stock on the twenty (20) trading days preceding the funding or
alternatively a purchase money loan arrangement similar in form and substance to
the June 6th Loan Agreement.  Counsel Springwell shall cause each disbursement
to be made within ten (10) calendar days of the receipt by Counsel Springwell of
a written request to fund.  I-Link shall issue certificates

 

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representing the purchased shares concurrently with or subsequent to such
fundings.  All funding referenced in this Section 3(a) shall be provided from
time to time, when, as and if requested in writing by I-Link.

 

(b)                                 Any additional funding provided by Counsel
Springwell pursuant to the Operating Plan in each month during the 2003 calendar
year shall constitute a purchase of additional shares of Common Stock for a
purchase price per share equal to the average closing transaction price of a
share of I-Link common stock on the twenty (20) trading days preceding the
funding.

 

4.                                       I-Link Financial Obligations Surviving
This Agreement.  Counsel and Counsel Springwell, jointly and severally,
represent, warrant and agree that from and after the Closing Date I-Link shall
owe no amounts to Counsel, Counsel Springwell or WxC except (i) those amounts
that will become due and owing to Counsel under the March 1st Loan Agreement and
(ii) such amounts as may be payable from time to time under the WxC Agreement;
and that there is no default under the March 1st Loan Agreement as of the date
hereof.

 

5.                                       Amendments to the March 1st Loan
Agreement.  The parties represent, warrant and agree that the issuance of Common
Stock by I-Link pursuant to this Agreement results in weighted-average
conversion price adjustment pursuant to the provisions of the March 1st Loan
Agreement and that the existing conversion price shall be adjusted in accordance
with the terms of the March 1st Loan Agreement.

 

6.                                       Securities Law Representations. 
Counsel Springwell acknowledges that the issuance of shares of Common Stock
pursuant to the terms of this Agreement (the “Shares”) has not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), the
certificates representing the Shares shall bear customary securities
registration legends.  Counsel Springwell hereby represents and warrants to
I-Link that:

 

(a)                                  The Shares will be acquired for Counsel
Springwell’s own account and not with a view to, or intention of, distribution
thereof in violation of the Securities Act, or any applicable state securities
laws, and the Shares will not be disposed of in contravention of the Securities
Act or any applicable state securities laws.

 

(b)                                 Counsel Springwell is sophisticated in
financial matters and is able to evaluate the risks and benefits of the
investment in the Shares.

 

(c)                                  Counsel Springwell is able to bear the
economic risk of its investment in the Shares for an indefinite period of time
because the Shares have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available.

 

7.                                       PROXY STATEMENT.

 

(A)                                  SUBJECT TO SECTION 7(B) HEREOF, I-LINK,
ACTING THROUGH ITS BOARD OF DIRECTORS, SHALL:

 

(I)                                     DULY CALL, GIVE NOTICE OF, CONVENE AND
HOLD AN ANNUAL OR SPECIAL MEETING OF ITS STOCKHOLDERS (THE “STOCKHOLDERS
MEETING”) AS SOON AS PRACTICABLE FOLLOWING THE DATE HEREOF FOR THE PURPOSE OF
CONSIDERING AND TAKING ACTION UPON THE FOLLOWING PROPOSALS (THE “PROPOSALS”):
(A) AN AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF I-LINK
TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM

 

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300,000,000 SHARES TO 900,000,000 SHARES AND (B) AN AMENDMENT TO THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION OF I-LINK DELETING ARTICLE VI THEREOF.

 

(II)                                  PREPARE AND FILE WITH THE SEC A
PRELIMINARY PROXY RELATING TO THIS AGREEMENT AS SOON AS REASONABLY PRACTICABLE
AND OBTAIN AND FURNISH THE INFORMATION REQUIRED TO BE INCLUDED BY THE SEC IN THE
PROXY STATEMENT AND, AFTER CONSULTATION WITH COUNSEL SPRINGWELL, USE ITS BEST
EFFORTS TO RESPOND PROMPTLY TO ANY COMMENTS MADE BY THE SEC WITH RESPECT TO THE
PRELIMINARY PROXY AND CAUSE A DEFINITIVE PROXY (AS AMENDED OR SUPPLEMENTED, THE
“PROXY STATEMENT”) TO BE MAILED TO ITS STOCKHOLDERS;

 

(III)                               INCLUDE IN THE DEFINITIVE PROXY STATEMENT
THE WRITTEN OPINION OF THE FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS OF I-LINK THAT THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT ARE FAIR TO THE STOCKHOLDERS OF I-LINK FROM A FINANCIAL POINT OF VIEW;

 

(IV)                              AFFORD TO ALL OF THE STOCKHOLDERS OF I-LINK
DISSENTERS’ RIGHTS UNDER FLORIDA LAW RELATING TO THE MATTERS TO BE PRESENTED TO
THEM FOR CONSIDERATION AT THE STOCKHOLDER MEETING AND RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT; AND

 

(V)                                 USE ITS REASONABLE BEST EFFORTS TO OBTAIN
THE APPROVAL OF THE PROPOSALS BY THE HOLDERS OF THE REQUISITE NUMBER OF ISSUED
AND OUTSTANDING SHARES OF CAPITAL STOCK OF I-LINK.

 

(B)                                 THE BOARD OF DIRECTORS OF I-LINK SHALL
RECOMMEND APPROVAL AND ADOPTION OF THE PROPOSALS BY I-LINK’S STOCKHOLDERS.  THE
BOARD OF DIRECTORS OF I-LINK SHALL NOT BE PERMITTED TO WITHDRAW, AMEND OR MODIFY
IN A MANNER ADVERSE TO COUNSEL AND COUNSEL SPRINGWELL SUCH RECOMMENDATION (OR
ANNOUNCE PUBLICLY ITS INTENTION TO DO SO), EXCEPT THAT PRIOR TO THE STOCKHOLDER
MEETING, THE BOARD OF DIRECTORS OF I-LINK SHALL BE PERMITTED TO WITHDRAW, AMEND
OR MODIFY ITS RECOMMENDATION (OR ANNOUNCE PUBLICLY ITS INTENTION TO DO SO) BUT
ONLY IF THE BOARD OF DIRECTORS OF I-LINK SHALL HAVE DETERMINED IN ITS GOOD FAITH
JUDGMENT, BASED UPON THE ADVICE OF OUTSIDE COUNSEL, THAT IT IS OBLIGATED BY ITS
FIDUCIARY OBLIGATIONS UNDER APPLICABLE LAW TO WITHDRAW, AMEND OR MODIFY SUCH
RECOMMENDATION.  IF THE STOCKHOLDER MEETING IS BEING HELD, THE RECOMMENDATION OF
THE BOARD OF DIRECTORS OF I-LINK SHALL BE INCLUDED IN THE PROXY STATEMENT.

 

(C)                                  EACH OF COUNSEL AND COUNSEL SPRINGWELL
AGREES THAT IT WILL PROVIDE I-LINK WITH THE INFORMATION REQUIRED TO BE INCLUDED
IN THE PROXY STATEMENT AND WILL VOTE, OR CAUSE TO BE VOTED, ALL OF THE SHARES OF
THE COMMON STOCK THEN OWNED BY IT, DIRECTLY OR INDIRECTLY, OR OVER WHICH IT HAS
THE POWER TO VOTE, IN FAVOR OF APPROVAL OF THE PROPOSALS.  COUNSEL AND COUNSEL
SPRINGWELL SHALL HAVE THE RIGHT TO REVIEW IN ADVANCE ALL CHARACTERIZATIONS AND
INFORMATION RELATED TO THEM, THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY WHICH APPEAR IN THE PROXY STATEMENT.

 

(D)                                 EACH OF COUNSEL, COUNSEL SPRINGWELL AND
I-LINK AGREES PROMPTLY TO CORRECT ANY INFORMATION PROVIDED BY IT FOR USE IN THE
PROXY STATEMENT AS AND TO THE EXTENT IT SHALL HAVE BECOME FALSE OR MISLEADING IN
ANY MATERIAL RESPECT AND TO SUPPLEMENT THE INFORMATION PROVIDED BY IT
SPECIFICALLY FOR USE IN THE PROXY STATEMENT TO INCLUDE ANY INFORMATION THAT
SHALL HAVE BECOME NECESSARY, IN ORDER TO MAKE STATEMENTS CONTAINED THEREIN, IN
LIGHT OF THE CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT MISLEADING, AND  EACH OF
COUNSEL, COUNSEL SPRINGWELL AND I-LINK FURTHER AGREES TO TAKE ALL STEPS
NECESSARY TO CAUSE THE PROXY STATEMENT, AS SO CORRECTED OR SUPPLEMENTED, TO BE
FILED WITH THE SEC AND TO BE DISSEMINATED TO ITS STOCKHOLDERS IN EACH CASE AS
AND TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS.

 

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8.                                       Covenant.  Counsel Springwell hereby
agrees that, if the Proposals are approved by the stockholders at the
Stockholders Meeting, it shall not take any action under Section 607.1104 of the
Florida Business Corporation Act prior to June 30, 2003.

 

9.                                       Expenses.  Counsel Springwell shall
bear all costs, fees and expenses in connection with this Agreement and the
transactions contemplated hereby.

 

10.                                 Notices.  All notices and other
communications hereunder shall be in writing and shall be deemed given when
delivered personally or when received if sent by registered or certified mail,
return receipt requested, by facsimile (with confirmation of receipt) or by
reputable overnight delivery service, to the parties at the following addresses
(or at such other address as a party may specify by like notice):

 

(a)                                  If to I-Link:

 

13751 S. Wadsworth Park Dr.
Draper, UT 84020
Attention:                                         Chief Executive Officer
Facsimile:                                            (801) 576-4295

 

with copy to:

 

13751 S. Wadsworth Park Dr.
Draper, UT 84020
Attention:                                         Legal Department
Facsimile:                                            (801) 553-6890

 

(b)                                 If to Counsel or Counsel Springwell:

 

Counsel Corporation
The Exchange Tower
Suite 1300, P.O. Box 435
130 King Street West
Toronto, Ontario M5X 1E3
Attention:                                         Chief Executive Officer
Facsimile:                                            (416) 866-3061

 

with a copy to:

 

Counsel Springwell Communications LLC
One Landmark Square
Suite 320
Stamford, CT 06901
Attention:                                         Managing Director
Facsimile:                                            (203) 961-9001

 

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11.                                 No Waiver.  The failure of any party hereto
to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its rights to exercise any such or other
right, power or remedy or to demand such compliance.

 

12.                                 Amendment.  Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
the parties.

 

13.                                 Entire Agreement.  Except as specifically
provided elsewhere in this Agreement, this Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
thereof and supersedes all prior agreements, representations and understandings
among the parties with respect to the subject matter hereof.

 

14.                                 Further Assurances.  I-Link, Counsel
Springwell and Counsel agree to deliver or cause to be delivered to each other
any such additional instrument or take any action as any of them may reasonably
request for the purpose of carrying out transactions contemplated by this
Agreement.

 

15.                                 Assignment.  This Agreement shall inure to
the benefit of, and be binding upon, the parties and their respective successors
and assigns.  This Agreement may not be assigned by a party without the prior
written consent of the other party.

 

16.                                 Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the Florida Business Corporation Act is applicable.

 

17.                                 Headings.  The headings and captions in this
Agreement are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.

 

18.                                 Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

 

 

I-LINK INCORPORATED

 

By

/s/ Henry Y.L. Toh

 

Name:

Henry Y.L. Toh

 

Title:

Director

 

 

COUNSEL CORPORATION (US)

 

By

/s/ Allan Silber

 

Name:

Allan Silber

 

Title:

President

 

 

COUNSEL SPRINGWELL COMMUNICATIONS LLC

 

By

/s/ Mufit Cinali

 

Name:

Mufit Cinali

 

Title:

Managing Director

 

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