Exhibit 10.3
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Fullnet Communications, Inc.
200 North Harvey Street, Suite 1704
Oklahoma City, OK 73102
Attn: Mr. Timothy J. Kilkenny, President and Chief Executive Officer
Re: Amendments to Financial Advisory Services and
Private Placement Engagement Agreements
Dear Tim:
This letter serves as an amendment ("Amendment") to the Financial
Advisory Services Engagement Agreement and the Private Placement/Financings
Engagement Agreement both dated September 17, 1999 (the "Agreements") entered
into by and between National Securities Corporation ("National") and Fullnet
Communications, Inc. ("FullNet"). Capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto as set forth in the Agreements.
This Amendment confirms that in consideration of the change in scope of
services provided to Fullnet by National (the sufficiency and receipt of such
services and their change in scope is hereby acknowledged by Fullnet), that the
parties hereto mutually agree and intend to be legally bound, for themselves and
their respective heirs, legal representatives, successors and assigns, to amend
such Agreements as follows:
1. Upon execution of this Amendment, that the Financial Advisory
Services Agreement will be amended to include Section 3
Subsection A.(ix) which shall read as follows: "Provide advice
on market-makers and listing assistance for the NASD Bulletin
Board, which may include such services as due diligence, peer
group valuation analysis, negotiations, coordination and
strategic advice to the Company."
2. Upon execution of this Amendment, that the Financial Advisory
Services Agreement will be amended to include Section 3
Subsection A.(x) which shall read as follows: "Provide opinion
letters, valuation opinions and fairness opinion for which
National will be separately compensated."
3. Upon execution of this Amendment, that the Financial Advisory
Services Agreement will be amended to include Section 3
Subsection A.(xi) which shall read as follows: "Provide such
other services as shall be agreed between the parties from
time to time."
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4. Upon execution of this Amendment, that Section 3 B.(i) of the
Financial Advisory Services Agreement will be partially
amended to provide for the issuance of 200,000 Shares of
Common Stock of the Company to National, not 100,000 Shares as
that the Financial Advisory Services Agreement presently
states in compensation for services previously rendered under
the services set forth in item one and two of this Amendment
and in Section 3(a) of the Private Placement/Financing
Agreement.
5. Upon execution of this Amendment, that the Financial Advisory
Services Agreement will be amended to include Section 3
Subsection B.(iii) which shall read as follows: "The Company
agrees to pay National additional fees for any and all
services performed by National at the request of the Company
that are not specifically included as Financial Advisory
Services as provided for in Section 3 A. of this Agreement.
Such additional fees shall be set forth in an additional
engagement letter to be executed by the parties hereto at the
commencement of services to be rendered by National."
6. Upon execution of this Amendment, that the Financial Advisory
Services Agreement will be amended to include Section 4
Subsection B.(v) which shall read as follows: "The Company
agrees to pay National additional fees for any and all
services performed by National at the request of the Company
that are not specifically included as Merger/Acquisition
Services as provided for in Section 4 A. of this Agreement.
Such additional fees shall be set forth in an additional
engagement letter to be executed by the parties hereto at the
commencement of services to be rendered by National."
7. Upon execution of this Amendment, that Section 3.(a) of the
Private Placement/Financings Agreement will be amended to
include the following sentences to be inserted after the last
previously existing sentence: "By no means shall such initial
Financing of equity or equity-related mezzanine debt exceed
$10 million or a separate transaction for senior debt
securities exceed $10 million. Any amounts to be raised or
placed in excess of $10 million for each Financing shall be
attributed to an additional Financing and be subject to a
additional engagement letter to be executed by the parties
hereto at the commencement of services to be rendered."
8. Upon execution of this Amendment, that Section 3.(b) and 3.c)
of the Private Placement/Financings Agreement are hereby
deleted in their entirety and replaced by the following:
"(b) Upon consummation of the Initial Private
Placement of $10 million contemplated by this Agreement, the
Company shall pay to National a cash placement fee (the
"Placement Fee") equal to seven percent (7.0%) of the dollar
value of the Initial Private Placement and a five-year warrant
for 70,000 shares of common stock with an exercise price equal
to the equity related share price paid by the investors in the
Initial Private Placement. The Company agrees that National
shall have a first right of refusal to represent the Company
in any dditional Private Placements and/or public offerings
and that such Private Placements or public offerings shall be
subject to a separate engagement letter to be executed by the
parties hereto at the commencement of services to be
rendered."
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"(c) National shall be paid three per cent (3%) on
the initial senior debt financing of $10 million ("Initial
Senior Debt Financing"). Additionally, National and the
Company agree that National shall have a first right of
refusal to represent the Company in its undertaking of any and
all additional Debt Financings. Such Debt Financings shall be
subject to a separate ngagement letter to be executed by the
parties hereto at the commencement of services to be rendered
by National."
[Signature Page to Follow]
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In all other respects, the Agreements shall remain unchanged and in
full force and effect. Please signify your agreement with the foregoing by
countersigning this letter in the space provided below.
Very truly yours,
NATIONAL SECURITIES CORPORATION
By: /s/ Steven A. Rothstein
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Steven A. Rothstein
Chairman
Agreed to and Accepted this day of , 2000.
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FULLNET COMMUNICATIONS, INC.
By: /s/ Timothy J. Kilkenny
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Name: Timothy J. Kilkenny
Title: President and CEO
