EXHIBIT 10.26
January 31, 2000
SkyLynx Communications, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx, President and Chief Executive Officer
Re: Amendment No. 2 to Financial Services Agreement
dated July 1, 1999, as amended on December 22, 1999
Gentlemen:
Reference is made to the Financial Services Agreement between X.X.
Xxxxxxxxxx & Co., Inc. ("Xxxxxxxxxx") and SkyLynx Communications, Inc. (together
with its subsidiaries, stockholders, sister companies, parents and other
affiliates, the "Company") dated as of July 1, 1999 (the "Agreement"), as
amended by the Letter Agreement dated December 22, 1999 ("Amendment No. 1").
This letter (this "Amendment") amends certain of the terms contained in the
Agreement and terminates Amendment No. 1.
In connection with the Company's Series F Financing, which Xxxxxxxxxx
is currently in the process of obtaining on behalf of the Company, Xxxxxxxxxx
and the Company hereby agree to amend the Agreement, effective concurrently with
the consummation of the Series F Financing, as follows:
1. Amendment No. 1 shall be terminated and shall be of no further force
or effect.
2. The Company shall issue to Xxxxxxxxxx a warrant to purchase 400,000
shares of the Company's common stock (the "Common Stock") at an exercise price
of $0.01 per share, exercisable over a term of three (3) years and containing a
cashless exercise provision. In connection with the $1,950,000 raised by
Xxxxxxxxxx prior to the date hereof (which the Company and Xxxxxxxxxx agree and
acknowledge has been raised and for which a fee of 10% of the proceeds thereof
has been paid by the Company to Xxxxxxxxxx), the Company and Xxxxxxxxxx agree
and acknowledge that the Company shall issue to Xxxxxxxxxx a warrant to purchase
100,000 shares of Common Stock at an exercise price of $3.00 per share,
exercisable over a term of three (3) years. The shares of Common Stock
underlying the warrants (the "Warrant Shares") shall be registered for resale by
the Company as part of the registration statement (the "Registration Statement")
to be filed by the Company to register for resale the shares of Common Stock
underlying the Series F Convertible Preferred Stock to be sold to investors in
the Series F Financing; provided, however, that the Company shall not be
required to register such shares if such investors withhold their consent to the
inclusion of such shares as part of the Registration Statement.
SkyLynx communications, Inc.
January 31, 2000
Page 2
3. The Company shall pay Xxxxxxxxxx an amount equal to eight percent (8%)
of the Aggregate Consideration, in excess of the $1,950,000 referred to above
and less than or equal to $10,000,000, received or receivable directly or
indirectly by the Company in connection with the Series F Financing. The
Company shall pay Xxxxxxxxxx an amount equal to 10.5% of the Aggregate
Consideration, in excess of $10,000,000 and less than or equal to $20,000,0000,
received or receivable directly or indirectly by the Company in connection with
the Series F Financing. Such fees shall be in place of and supersede all fees
otherwise provided for in Section 1 of the Agreement.
4. Section 2 of the Agreement shall be amended as follows:
x. Xxxxxxxxxx'x right of first refusal referred to in the first
paragraph of Section 2 of the Agreement shall be a right to act only as co-
placement agent or co-underwriter, rather than lead placement agent or lead
underwriter, in connection with a public or private sale of equity securities.
The term of the right of first refusal referred to in the first paragraph of
Section 2 of the Agreement shall be reduced to one (1) year from the date of
this Amendment. Xxxxxxxxxx'x right of first refusal referred to in the first
paragraph of Section 2 of the Agreement shall terminate if Xxxxxxxxxx fails to
respond in writing to the Company that it accepts acting as co-placement agent
or co-underwriter in connection with a public or private sale of equity
securities within ten (10) days of the date of written notice from the Company
that the Company intends to effect a public or private sale of equity
securities.
b. The period on or prior to which a transaction referred to in the
sixth and final paragraph of Section 2 of the Agreement must be initiated shall
be reduced to December 31, 2001 and the compensation payable to Xxxxxxxxxx
thereunder shall be reduced to one-half of one percent (0.5%) of the aggregate
value of such transaction; provided, however, that Xxxxxxxxxx shall be entitled
to receive such compensation regardless of whether Xxxxxxxxxx is involved in any
capacity in such transaction. The last sentence of the sixth and final
paragraph of Section 2 of the Agreement is deleted in its entirety.
5. In the event that on or prior to one (1) year from the date of this
Agreement the Company: (i) issues warrants to purchase shares of the Company's
Common Stock pursuant to a rights offering to the Company's existing
stockholders, (ii) Xxxxxxxxxx acts as the lead placement agent for such
offering, and (iii) such warrants are exercised within twelve (12) months of the
date of their issuance, then Xxxxxxxxxx shall be entitled to receive an amount
equal to seven percent (7%) of the gross proceeds received or receivable
directly or indirectly by the Company in connection therewith.
The Company agrees that the indemnification and other provisions set
forth in the Indemnification Letter, which are hereby incorporated by reference
herein, and are in full force and effect with respect to the Agreement, as
amended by this Amendment.
SkyLynx communications, Inc.
January 31, 2000
Page 3
This Amendment amends and modifies the Agreement, which remains in
full force and effect as to matters not discussed herein. In the case of any
inconsistency or conflict between the provisions of this Amendment and the
provisions of the Agreement, the provisions of this Amendment shall govern.
Please confirm that the foregoing correctly sets forth our agreement
by signing and returning to Xxxxxxxxxx the enclosed duplicate copy of this
Amendment.
Very truly yours,
X.X. XXXXXXXXXX & CO., INC.
By:_______________________________
Name: Xxxx X. Xxxxxx
Title: Managing Director
Accepted and agreed to as of
the date first written above:
SKYLYNX COMMUNICATIONS, INC.
By:___________________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
