EXHIBIT 10.18 LOAN RESTRUCTURE AND SUBSCRIPTION AGREEMENT This Agreement is made as of July 26, 1999, between GLOBAL MEDIA CORP., a Washington corporation (the "Company"), and BENJAMIN METCALFE (the "Lender"). BACKGROUND A. Between October 1, 1998 and December 1, 1998, the Lender advanced funds to the Company on an open account (the "Advances"), and the Company made partial payments against the Advances, in the amounts listed on the attached EXHIBIT A. B. In connection with the Company's recent convertible debt offering, the Company and the Lender agreed to restructure and document the Advances as set forth in this Agreement. AGREEMENT In consideration of the terms and conditions of this Agreement, the parties agree as follows: 1. CONFIRMATION OF AMOUNT AND TITLE. The Lender confirms and agrees that the outstanding principal amount of the Advances as of the date of this Agreement is $220,552. The Lender represents and warrants that it is the sole owner of the Advances and that it has not transferred, assigned, pledged, mortgaged, or conveyed any of its interest in the Advances. 2. RESTRUCTURE. Upon execution and delivery of this Agreement, the Company shall execute and deliver to the Lender: 2.1 NOTE. A Note in the initial principal amount of $127,000, in substantially the form attached as EXHIBIT B (the "Note"). The initial Note amount is equal to $110,276 (one-half of the current balance of the Advances) plus $16,724 in accrued interest. 2.2 SHARES. Instructions to the Company's Transfer Agent to issue a certificate representing 15,631 shares of the Company's common stock (the "Shares"), subject to Section 5.4, below. The number of Shares is equal to $110,276 (one-half of the current balance of the Advances) plus $16,724 in accrued interest, divided by $8.125. 3. CANCELLATION OF ADVANCES. The Lender hereby accepts the Note and the Shares as payment in full of the Advances, and cancels any obligation of the Company to repay the Advances, except as set forth in the Note. 4. SUBSCRIPTION. The Lender hereby irrevocably subscribes for the Shares at a price of $8.125 per share, for a total purchase price of $127,000. The Lender certifies that it is an "Accredited Investor" as defined in Regulation D of the Securities Act of 1933, as amended. 5. OTHER SECURITIES ISSUES. 5.1 RISK OF LOSS. The Lender recognizes that an investment in the Company involves certain substantial risks which could result in the loss of the Lender's entire investment. 1 5.2 INVESTMENT INTENT. The Lender certifies that it is purchasing the Note and the Shares for investment for its own account and not on behalf of any other person, nor with a view to, or for resale or other distribution of the Note or the Shares. 5.3 NO REGISTRATION. The Lender acknowledges and understands that: (a) the Note and the Shares have not been registered under either federal or state securities laws; (b) the Note and the Shares are being offered and sold to the Lender pursuant to Section 4(2) or other exemption available under the Securities Act of 1933, as amended, and comparable state securities exemptions; and (c) no federal or state agency has made any finding or determination as to the fairness of this offering for investment, nor any recommendation or endorsement of the Note or the Shares. 5.4 LEGEND. The Lender consents to the placement of a legend on the Note and all certificates representing the Shares in substantially the following form: These securities have not been registered under the Securities Act of 1933, the Securities Act of Washington, or the securities act of any other state. They may not be sold or offered for sale in the absence of an effective registration statement under the applicable act, or an opinion of counsel satisfactory to the issuer of the securities that an exemption under the applicable act is available and that such registration is not required. 5.5 RESTRICTIONS ON TRANSFER. The Lender understands and acknowledges that: (a) no assignment, sale, transfer, exchange or other disposition of the Note or the Shares can be made except in accordance with applicable federal and state securities laws; (b) the Note and the Shares cannot be sold or otherwise distributed in the absence of registration or an exemption from the registration requirements of federal and state securities laws; and (c) the Company is not obligated to take any actions to register the Note or the Shares or make available any exemptions from federal or state registration requirements. 5.6 RESIDENCE. The Lender certifies that it is a resident of the jurisdiction set forth beneath its signature. 6. GENERAL PROVISIONS. 6.1 ASSIGNMENT; BENEFIT. No party may voluntarily or involuntarily assign its interest under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall be for the benefit of the parties and their respective successors and assigns. 6.2 AMENDMENT; WAIVER. The provisions of this Agreement, or of any agreement or document executed in connection with this Agreement, may be amended or waived only in a written agreement signed by the party against which enforcement of such amendment or waiver is sought. Any waiver of any right or breach under this Agreement shall not be construed as a waiver of any other or any subsequent right or breach. 6.3 SEVERABILITY. If any portion of this Agreement is held to be invalid by a court of competent jurisdiction, the remaining terms of this Agreement shall remain in full force and effect to the extent possible. 2 6.4 GOVERNING LAW; VENUE. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, other than its conflict of law rules. The parties consent to the jurisdiction of and venue in any appropriate court in King County, Washington. 6.5 INDEPENDENT COUNSEL. The Lender acknowledges that it has been represented by independent legal counsel with regard to this Agreement, and has had an adequate opportunity to seek independent legal counsel with regard to all documents executed in connection with this Agreement. The Lender acknowledges that Davis Wright Tremaine LLP has represented the Company and has not represented the Lender. 6.6 NOTICES. The parties shall deliver any notices required under this Agreement in writing by personal or courier delivery, facsimile transmission, or by registered or certified mail, return receipt requested, postage prepaid, to the addresses set forth below, or to such other address as specified by a party in writing. Notices shall be deemed effective as of the date of personal or courier delivery, confirmed facsimile transmission, or three days after the date on the postmark affixed to the notice. 6.7 ASSIGNMENT; BENEFIT. No party may voluntarily or involuntarily assign its interest under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall insure to the benefit of the parties and their respective successors and assigns. ------------------------------------- --------------------------------------- IF TO THE COMPANY: WITH A COPY TO: ------------------------------------- --------------------------------------- Global Media Corp. Davis Wright Tremaine LLP 400 Robson Street 2600 Century Square Vancouver, BC Canada V6B 2B4 1501 Fourth Avenue FACSIMILE: (604) 688-9996 Seattle, Washington 98101-1688 ATTENTION: James L. Porter, FACSIMILE: (206) 386-7500 Chief Financial Officer ATTENTION: Eugenie D. Mansfield, Esq. ------------------------------------- --------------------------------------- IF TO LENDER: WITH A COPY TO: ------------------------------------- --------------------------------------- ___________________________________ ____________________________________ ___________________________________ ____________________________________ FACSIMILE:_________________________ FACSIMILE:__________________________ ATTENTION: ________________________ ATTENTION: _________________________ ------------------------------------- --------------------------------------- 6.8 ATTORNEY FEES. The prevailing party in any arbitration or litigation concerning this Agreement is entitled to reimbursement of its reasonable attorneys' fees, costs and expenses from the non-prevailing party, including fees, costs and expenses incurred on appeal or in bankruptcy proceedings. 6.9 ENTIRE AGREEMENT. This Agreement, its attached schedules and exhibits, and the documents executed in connection with this Agreement, contain the entire agreement of the parties with respect to the subject matter of this Agreement, and supersede any and all prior agreements, written or oral, relating to their subject matter. 6.10 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute the same instrument. 3 Executed as of the first date written above. LENDER: BENJAMIN METCALFE /s/ BENJAMIN METCALFE ------------------------------------ Jurisdiction of Residence: ---------- COMPANY: GLOBAL MEDIA CORP. By: /s/ L. JAMES PORTER ------------------------------- Name: L. James Porter Title: Chief Financial Officer 4 EXHIBIT A ADVANCE AND PAYMENT HISTORY DATE CDN FUNDS EXCHANGE RATE US FUNDS CUMULATIVE TOTAL (US FUNDS) $ $ $ $ 10/01/98 50,407 1.47 34,290.48 34,290 10/13/98 (31,250) 1.47 (21,258.50) 13,032 10/23/98 (15,575 1.47 (10,595.20) 2,437 11/20/98 150,000 1.47 102,040.80 104,478 12/08/98 100,000 1.47 68,027.21 172,506 12/09/98 30,000 202,505 12/29/98 (11,000) 191,505 12/01/98 28,890 220,395 5 EXHIBIT B THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, THE SECURITIES ACT OF WASHINGTON, OR THE SECURITIES ACT OF ANY OTHER STATE. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE APPLICABLE ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THE SECURITIES THAT AN EXEMPTION UNDER THE APPLICABLE ACT IS AVAILABLE AND THAT SUCH REGISTRATION IS NOT REQUIRED. NOTE PRINCIPAL: $127,000.00 DATE: July 26, 1999 1. PROMISE TO PAY. In return for value received, GLOBAL MEDIA CORP. ("Borrower") promises to pay to the order of Benjamin Metcalfe ("Lender"), at the address below the Lender's signature, or at such other place as Lender may designate, the principal amount of One Hundred Twenty-Seven Thousand Dollars ($127,000.00), plus interest and all other sums due under this Note. 2. INTEREST. Interest on the unpaid principal balance of this Note shall accrue daily at rate 9% per annum, until all sums due under this Note are paid in full. 3. PAYMENTS. Borrower shall make payments of $31,750.00 in principal plus accrued and unpaid interest to Lender on October 31, 1999, January 31, 2000, April 30, 2000, and July 31, 2000 (the "Due Date"). On the Due Date, the Borrower shall also pay to Lender all outstanding principal, accrued interest, and any other unpaid sums due under this Note. The Borrower may completely or partially prepay this Note at any time. The Borrower, however, must continue to make all payments when due, despite any prepayments. Lender shall apply every payment or prepayment first to Lender's charges and costs, then to unpaid accrued interest due under this Note, and then to the principal balance. 4. DEFAULT. Lender may declare the Borrower to be in default, and all amounts due under this Note immediately due in full if the Borrower fails to make any payment when due under this Note. However, Lender's failure to exercise any right available to it upon the Borrower's default, or to strictly enforce any term of this Note, the Loan Agreement or the Security Documents, does not constitute a waiver of that right or term. 5. USURY. Lender and the Borrower specifically intend this Note to bear a lawful rate of interest. If any competent court finds that this Note's rate of interest is unlawful, the interest rate shall be reduced to the highest legal rate. Lender shall apply any excess interest previously collected to this Note's unpaid principal balance, or, if this Note is fully repaid, return it to the Borrower. 6. WAIVERS. The Borrower and all other persons liable or to become liable on this Note waive presentment, demand of payment, notice of dishonor, protest, notice of nonpayment, and all other notices and demands. 7. APPLICABLE LAW, JURISDICTION; VENUE. This Note shall be governed by, construed, and enforced under the laws of the state of Washington. The Borrower submits to the jurisdiction and venue of any court located in King County, Washington. 8. ATTORNEY FEES AND COSTS. The Borrower agrees to pay all of Lender's reasonable costs incurred, with or without legal action, in collecting any amounts due under this Note, or 6 upon appeal or bankruptcy proceedings, including attorneys' fees incurred as a result of a lawsuit, appeal and/or bankruptcy proceeding. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. GLOBAL MEDIA CORP. By: /s/ L. JAMES PORTER ------------------------------ Name: L. James Porter Title: Chief Financial Officer 7