Exhibit 99.1
VELOCITA LETTERHEAD
May 9, 2001
To: The Warrant Holders of Velocita Corp.
Pursuant to Section 2.02(b) of the Warrant Agreement dated May 10, 2000 by
and between the Company and United States Trust Company of New York (the
"Warrant Agreement," capitalized terms used herein without definition having the
meanings given to such terms in the Warrant Agreement), Velocita Corp.
("Velocita") (formerly known as XX.Xxx Communications, Inc.) is obligated to
issue Warrants to acquire an additional 2,765,432 shares of Common Stock unless
Velocita has completed a Qualified Issuance on or prior to the Second Contingent
Warrant Issue Date. The "Second Contingent Warrant Issue Date" is defined as May
10, 2001, provided that such date shall be extended by 30 days if on such date
the Company shall have either (1) filed a registration statement with the SEC,
or (2) be engaged in negotiations with respect to a Strategic Equity Investment
or Investments, and the Company shall in either case have a reasonable and good
faith belief that such offering or Strategic Equity Investment or Investments
will be consummated and will meet the requirements of a Qualified Issuance.
On April 12, 2001, Velocita and XX.Xxx Corp., a wholly-owned subsidiary of
Velocita ("XX.Xxx") received a commitment from Cisco Systems, Inc. ("Cisco") and
its affiliate, Cisco Systems Capital Corporation ("Cisco Capital") pursuant to
which Cisco and Cisco Capital would provide an aggregate of up to $485 million
in financing to Velocita and XX.Xxx.
The effectiveness of the financing commitment is subject to various
conditions, including the approval of the lenders under Velocita's existing
credit facility. Velocita is currently engaged in negotiations with such
lenders, and has a reasonable and good faith belief that such financing will be
consummated and will meet the requirements of a Qualified Issuance. Accordingly,
Xxxxxxxx hereby notifies you that the Second Contingent Warrant Issue Date has
been extended by 30 days pursuant to the terms of the Warrant Agreement.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Assistant Treasurer