Exhibit 99.1
VELOCITA LETTERHEAD
June 8, 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 ▇▇.▇▇▇ Communications, Inc.) was obligated to
issue Warrants to acquire an additional 2,765,432 shares of Common Stock unless
Velocita completed a Qualified Issuance on or prior to the Second Contingent
Warrant Issue Date. The "Second Contingent Warrant Issue Date" was May 10, 2001,
provided that such date was extended by 30 days in accordance with the Warrant
Agreement because ▇▇▇▇▇▇▇▇ was engaged in negotiations with respect to a
Strategic Equity Investment and Velocita had a reasonable and good faith belief
that such Strategic Equity Investment would be consummated and would meet the
requirements of a Qualified Issuance. Velocita notified you on May 9, 2001 that
the Second Contingent Warrant Issue Date had been extended by 30 days pursuant
to the terms of the Warrant Agreement.
On May 24, 2001, Velocita consummated a Strategic Equity Investment
whereby Cisco Systems, Inc. ("Cisco") purchased $200.0 million in aggregate
initial liquidation preference of a new series of Velocita's senior cumulative
convertible preferred stock. Velocita also issued to Cisco warrants that may
become exercisable for shares of Velocita's common stock, at times and in
amounts to be determined based on the occurrence of certain events.
On June 7, 2001, the Company's Board of Directors made a determination,
based on an opinion from a nationally recognized investment bank, that the
equity valuation of the Company following the $200.0 million preferred equity
investment by Cisco was at least $1.5 billion. Accordingly, the Company hereby
notifies you that the Company is not required to issue additional warrants
exercisable for 2,765,432 shares of the Common Stock in accordance with the
terms of the Warrant Agreement.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Treasurer
