Document:

Exhibit 10.26 (Form of Award Notice - Non-Qualified Stock Option)

    
      

    

    Exhibit
      10.26

    

    CELADON
      GROUP, INC.

    2006
      OMNIBUS INCENTIVE PLAN

    

    

    AWARD
      NOTICE

    

    

      
        	
                 

                GRANTEE:

              	 	 
	
                 

                TYPE
                  OF AWARD:

              	 	
                Non-Qualified
                  Stock Option (Non-employee Directors)

              
	
                 

                NUMBER
                  OF SHARES:

              	 	 
	
                 

                EXERCISE
                  PRICE PER SHARE:

              	 	 
	
                 

                DATE
                  OF GRANT:

              	 	 
	
                 

                EXPIRATION
                  DATE:

              	 	 

      

    

    

        1.     Grant
      of Option.
      This
      Award Notice serves to notify you that Celadon Group, Inc., a Delaware
      corporation (the “Company”),
      hereby grants to you, under the Company’s 2006 Omnibus Incentive Plan (the
“Plan”),
      an
      option (the “Option”)
      to
      purchase, on the terms and conditions set forth in this Award Notice and the
      Plan, up to the number of shares set forth above (the “Option
      Shares”)
      of the
      Company’s Common Stock, par value $0.033 per share (the “Common
      Stock”),
      at
      the price per Share set forth above. The Plan is incorporated herein by
      reference and made a part of this Award Notice. A copy of the Plan is available
      from the Company’s Accounting Department upon request. You should review the
      terms of this Award Notice and not otherwise defined herein and the Plan
      carefully. The capitalized terms used in this Award Notice are defined in the
      Plan. 

    

        2.     Term.
      Unless
      the Option is previously terminated pursuant to the terms of the Plan, the
      Option will expire at the close of business on the expiration date set forth
      above (the “Expiration
      Date”).
      

    

        3.     Vesting.
      Subject
      to the terms and conditions set forth in this Award Notice and the Plan, the
      Option will vest and become exercisable commencing on__________, in accordance
      with the following schedule: 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

              Vesting
                Date

            	 	
              Cumulative
                Percentage of 

              Option
                Shares Vested

            
	 	 	 
	 	 	 
	 	 	 
	 	 	 

    

    

        4.      Exercise.
      

    

            (a)      Method
      of
      Exercise.
      To the
      extent exercisable under Section 3, the Option may be exercised in whole or
      in
      part, provided that the Option may not be exercised for less than one (1) share
      of Common Stock in any single transaction. The Option shall be exercised by
      your
      giving written notice of such exercise to the Company specifying the number
      of
      Option Shares that you elect to purchase and the Exercise Price to be paid.
      Upon
      determining that compliance with this Award Notice has occurred, including
      compliance with such reasonable requirements as the Company may impose pursuant
      to the Plan and payment of the Exercise Price, the Company shall issue to you
      a
      certificate for the Option Shares purchased on the earliest practicable date
      (as
      determined by the Company) thereafter. 

     

            (b)     Payment
      of
      Exercise Price.
      To the
      extent permissible under the Plan, the Exercise Price may be paid as follows:
      

    

        (i)     In
      United States dollars in cash or by check, bank draft, or money order
      payable to the Company;

    

        (ii)     At
      the sole
      discretion of the Company’s Compensation Committee (the “Committee”),
      through the delivery of shares of Common Stock with an aggregate Fair Market
      Value at the date of such delivery equal to the Purchase Price;

    

        (iii)     At
      the sole
      discretion of the Committee, through the surrender of part of the Option or
      other exercisable options having a difference between (A) the exercise
      price of such surrendered Options and (B) the Fair Market Value of the
      Common Stock equal to the Exercise Price; or

    

        (iv)     At
      the sole
      discretion of the Committee, in any combination of Sections 4(b)(i),
      4(b)(ii), and 4(b)(iii) above.

    

    The
      Committee in its sole discretion shall determine acceptable methods for
      surrendering Common Stock or options as payment upon exercise of the Option
      and
      may impose such limitations and conditions on the use of Common Stock or options
      to exercise the Option as it deems appropriate. Among other factors, the
      Committee will consider the restrictions of Rule 16b-3 of the Exchange Act
      and Section 402 of the Sarbanes-Oxley Act, and any successor laws, rules, or
      regulations. 

    

            (c)     Withholding.
      The exercise of the Option is conditioned upon your making arrangements
      satisfactory to the Company for the payment to the Company of the amount of
      all
      taxes required by any governmental authority to be withheld and paid over by
      the
      Company to the governmental authority on account of the exercise. The payment
      of
      such withholding taxes to the Company may be made by one or any combination
      of
      the following methods: (a) in cash or by check, or (b) by the Company
      withholding such taxes from any other compensation owed to you by the Company
      or
      any Subsidiary. 

    

        5.      Effect
      of Death.
      In the
      event of your death prior to the complete exercise of the Option, the remaining
      portion of the Option may be exercised in whole or in part, subject to all
      of
      the conditions on exercise imposed by the Plan and this Award Notice, within
      one
      (1) year after the date of your death, but only: (a) by the beneficiary
      designated on your beneficiary designation form filed with the Company, or
      in
      the absence of same, by your estate or by or on behalf of the person or persons
      to whom the Option passes under your will or the laws of descent and
      distribution, (b) to the extent that the Option was vested and exercisable
      on
      the date of your death, and (c) prior to the close of business on the Expiration
      Date of the Option. 

    

        6.      Effect
      of
      Change In Control.
      

    

            (a)      In
      General.
      Upon
      the occurrence of a Change In Control (as defined below), the unvested portion
      of the Option shall immediately vest and become exercisable as of the date
      of
      the occurrence of such event. 

    

            (b)      “Change
      In Control” Defined.
      The
      term “Change
      In Control”
means
      a
      change in control of the Company of a nature that would be required to be
      reported in response to Item 5.01 of a Current Report on Form 8-K, as in effect
      on December 31, 2004, pursuant to Section 13 or 15(d) of the Exchange Act;
      provided that, without limitation, a Change In Control shall be deemed to have
      occurred at such time as: 

    

        (i)      Any
“person”
      within the meaning of Section 14(d)(2) of the Exchange Act and Section 13(d)(3)
      of the Exchange Act, other than a Permitted Holder becomes the “beneficial
      owner,” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly,
      of fifty percent (50%) or more of the combined voting power of the outstanding
      securities of the Company ordinarily having the right to vote in the election
      of
      directors; provided, however, that the following will not constitute a Change
      In
      Control: any acquisition by any corporation if, immediately following such
      acquisition, more than seventy-five percent (75%) of the outstanding securities
      of the acquiring corporation (or the parent thereof) ordinarily having the
      right
      to vote in the election of directors is beneficially owned by all or
      substantially all of those persons who, immediately prior to such acquisition,
      were the beneficial owners of the outstanding securities of the Company
      ordinarily having the right to vote in the election of directors; 

    

        (ii)      Individuals
      who constitute the Board on January 12, 2006 (the “Incumbent
      Board”)
      have
      ceased for any reason to constitute at least a majority thereof, provided that
      any person becoming a director after January 12, 2006 whose election, or
      nomination for election by
      the
      Company’s stockholders, was approved by a vote of at least three-fourths (3/4)
      of the directors comprising the Incumbent Board, either by a specific vote
      or by
      approval of the proxy statement of the Company in which such person is named
      as
      a nominee for director without objection to such nomination (other than an
      election or nomination of an 

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    individual
      whose initial assumption of office is in connection with an actual or threatened
      “election contest” relating to the election of directors of the Company, as such
      terms are used in Rule 14a-11 under the Exchange Act, as in effect on January
      23, 2000, or “tender offer,” as such term is used in Section 14(d) of the
      Exchange Act), shall be, for purposes of the Plan, considered as though such
      person were a member of the Incumbent Board; 

    

        (iii)      Upon
      the
      consummation by the Company of a reorganization, merger, or consolidation,
      other
      than one with respect to which all or substantially all of those persons who
      were the beneficial owners, immediately prior to such reorganization, merger
      or
      consolidation, of outstanding securities of the Company ordinarily having the
      right to vote in the election of directors own, immediately after such
      transaction, more than seventy-five percent (75%) of the outstanding securities
      of the resulting corporation ordinarily having the right to vote in the election
      of directors; or 

    

        (iv)      Upon
      the
      approval by the Company’s stockholders of a complete liquidation and dissolution
      of the Company or the sale or other disposition of all or substantially all
      of
      the assets of the Company other than to a Subsidiary. 

    

        (c)      “Permitted
      Holder” Defined.
      The
      term “Permitted
      Holder”
means:
      (i) the Company or a Subsidiary or (ii) any employee benefit plan sponsored
      by
      the Company or any Subsidiary.

    

        7.      Nonassignability.
      The
      Option may not be alienated, transferred, assigned, or pledged (except by will
      or the laws of descent and distribution). Except as otherwise provided by
      Section 5 of this Award Notice, the Option is only exercisable by you during
      your lifetime.

    

        8.      Limitation
      of Rights.
      You
      will not have any rights as a stockholder with respect to the Option Shares
      until you become the holder of record of such shares by exercising the
      Option.

    

        9.      Rights
      of the Company and Subsidiaries.
      This
      Award Notice does not affect the right of the Company or any Subsidiary to
      take
      any corporate action whatsoever, including without limitation its right to
      recapitalize, reorganize, or make other changes in its capital structure or
      business, merge or consolidate, issue bonds, notes, shares of Common Stock,
      or
      other securities, including preferred stock, or options therefor, dissolve
      or
      liquidate, or sell or transfer any part of its assets or business. 

    

        10.     Restrictions
      on Issuance of Shares.
      If at
      any time the Company determines that the listing, registration, or qualification
      of the Option Shares upon any securities exchange or quotation system, or under
      any state or federal law, or the approval of any governmental agency, is
      necessary or advisable as a condition to the exercise of the Option, the Option
      may not be exercised in whole or in part unless and until such listing,
      registration, qualification, or approval shall have been effected or obtained
      free of any conditions not acceptable to the Company. 

    

        11.     Plan
      Controls.
      The
      Option is subject to all of the provisions of the Plan, which is hereby
      incorporated by reference, and is further subject to all the interpretations,
      amendments, rules, and regulations that may from time to time be promulgated
      and
      adopted by the Committee pursuant to the Plan. In the event of any conflict
      among the provisions of the Plan and this Award Notice, the provisions of the
      Plan will be controlling and determinative. 

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

        12.     Amendment.
      Except
      as otherwise provided by the Plan, the Company may only alter, amend, or
      terminate the Option with your consent. 

    

        13.     Governing
      Law.
      This
      Award Notice shall be governed by and construed in accordance with the laws
      of
      the State of Delaware, except as superseded by applicable federal law, without
      giving effect to its conflicts of law provisions. 

    

        14.     Notices.
      All
      notices and other communications to the Company required or permitted under
      this
      Award Notice shall be written, and shall be either delivered personally or
      sent
      by registered or certified first-class mail, postage prepaid and return receipt
      requested, or by telex or telecopier, addressed to the Company’s office at 9503
      East 33rd
      Street,
      One Celadon Drive, Indianapolis, Indiana 46235, Attention: Chief Financial
      Officer. Each such notice and other communication delivered personally shall
      be
      deemed to have been given when delivered. Each such notice and other
      communication delivered by mail shall be deemed to have been given when it
      is
      deposited in the United States mail in the manner specified herein, and each
      such notice and other communication delivered by telex or telecopier shall
      be
      deemed to have been given when it is so transmitted and the appropriate answer
      back is received. 

    

    

    

    *
      * * * * * * * * *

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    ACKNOWLEDGEMENT

    

    The
      undersigned acknowledges receipt of, and understands and agrees to be bound
      by,
      this Award Notice and the Plan. The undersigned further acknowledges that this
      Award Notice and the Plan set forth the entire understanding between him or
      her
      and the Company regarding the incentive stock options granted by this Award
      Notice and that this Award Notice and the Plan supercede all prior oral and
      written agreements on that subject. 

    

    

    
      	
              Dated:
                _______________, 20___

            	 
	 	 
	 	
              Grantee:

            
	 	 
	 	 
	 	 
	 	 
	 	
              Celadon
                Group, Inc.

            
	 	 
	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    Back
      to Form 10-Q

    
 

    
      
        
        

      

      
        5d -- Converted by S, created by BCL Technologies Inc., for SEC Filing

THIS DEBENTURE HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.

	U.S. $100,000

	SECURED 6% CONVERTIBLE
      DEBENTURE
DUE JUNE 30,
      2008

     FOR VALUE
RECEIVED, SkyLynx Communications, Inc. (the “Company”) promises to pay to John
McKenzie, the registered holder hereof (the "Holder"), the principal sum of
One-Hundred Thousand and 00/100 Dollars (US $100,000) on or before June 30, 2008
(the “Maturity Date”) and to pay interest on the principal sum outstanding from
time to time in arrears at the rate of 6% per annum, accruing from May 25, 2005,
the date of initial issuance of this Debenture (the “Issue Date”). Accrual of
interest shall commence on the first such business day to occur after the Issue
Date and shall continue to accrue on a daily basis until payment in full of the
principal sum has been made or duly provided for. Interest shall be payable in
arrears in cash on each anniversary of the Issue Date (the “Interest Payment
Date”). The Company shall pay principal and any accrued and unpaid interest on
the earlier of (i) the Conversion Date or (ii) the Maturity Date.

     This Debenture is
subject to the following additional provisions.

     Section 1. No
Collateral.

     There is no
collateral securing the repayment of this Debenture.

     Section
2 No Sale
or Transfer. This Debenture may not be sold,
transferred, assigned, hypothecated or divided into two or more Debentures of
smaller denominations except to the extent such sale, transfer, assignment,
hypothecation or division is in compliance with federal and applicable state
securities laws, the compliance with which must be established to the reasonable
satisfaction of the Company.

     Section
3. No
Limitations on Debt; Limitation on Equity.
The existence of this Debenture does not preclude the Company from incurring
other indebtedness (including secured debt and including other debentures which
may, by their terms, be senior to the Debentures).

     Section
4. Provisions Regarding Payment of Interest. Interest hereunder will be paid to the Holder on each Interest Payment
Date. An Interest Payment Date will be the date, from time-to-time, that the
Company determines to make an Interest Payment. If not paid previously, all
interest will be payable at the Maturity Date.

     Section
5. (a) “Event of Default” wherever used
herein, means any one of the following events
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):

	1

       (i)
Any default in the payment of the principal of or interest on this Debenture as
and when the same shall become due and payable, (whether on the Maturity Date or
by acceleration or otherwise);

       (ii)
The Company shall fail to observe or perform any other covenant, agreement or
warranty contained in, or otherwise commit any breach of, this Debenture or and
such failure or breach shall not have been remedied within 30 days after the
date on which notice of such failure or breach shall have been given;

       (iii)
The Company shall commence a voluntary case under the United States Bankruptcy
Code or insolvency laws as now or hereafter in effect or any successor thereto
(the “Bankruptcy Code”); or an involuntary case is commenced against the Company
under the Bankruptcy Code and the petition is not controverted within 30 days,
or is not dismissed within 60 days, after commencement of such involuntary case;
or a “custodian” (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or any substantial part of the property of the Company or the
Company commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
the Company or there is commenced against the Company any such proceeding which
remains undismissed for a period of 60 days; or the Company is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company suffers any appointment of any
custodian or the like for it or any substantial part of its property which
continues undischarged or unstayed for a period of 60 days; or the Company makes
a general assignment for the benefit of creditors; or the Company shall fail to
pay, or shall state that it is unable to pay its debts generally as they become
due; or the Company shall call a meeting of all of its creditors with a view to
arranging a composition or adjustment of its debts; or the Company shall by any
act or failure to act indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Company
for the purpose of effecting any of the foregoing.

     (b)
Remedies.
The Holder, together with all other holders of Debentures based on a majority
vote by principal amount of the Holders of all other Debentures (a “Majority of
the Holders”), may declare a default under Section 5(a)(i) upon not less than 15
days’ written notice to the Company. If the Company fails to cure an Event of
Default within such period (or if the cure cannot be reasonably completed within
such period, commence the cure of the Event of Default and diligently pursue
such cure), a Majority of the Holders may:

    
(i)      Declare all amounts due under the Debentures
immediately due and owing and exercise all rights with respect thereto permitted
by law;

    
(ii)      Apply to a court with its seat in Colorado
that has jurisdiction over the Company for the appointment of a receiver to
manage the assets and operations of the Company;

	   
      (iii)      	Convert all of the Debentures
      into Series A Preferred stock of the Company; or 
	 
	   
      (iv)      	Assert any other remedy available
      at law or in equity. 
	 

     Section 6.
Prepayment. The Company may prepay this
Debenture in whole or in part at any time prior
to the Maturity Date upon not less than 30 days’ written notice to the
Holder.

     Section
7. Definitions. For the purposes hereof, the
following terms shall have the following meanings:

	2

“Business Day” means any day except
Saturday, Sunday and any day which shall be a legal holiday or a day on which
banking institutions in the State of Colorado are authorized or required by law
or other government action to close.

“Company” means SkyLynx Communications,
Inc, a Delaware Corporation.

“Conversion Amount” shall mean the
total of unpaid principal at the date such amount is determined.

“Conversion Price” shall mean $8.5748
per share, as adjusted as set forth in Section 8(e), below.

“Conversion Shares” shall mean Series A
Preferred stock issued or issuable upon conversion of the Debentures.

“Debentures” means the Debentures, or
any of them, as the context may require.

“Holder” means any Person who is a
registered holder of this Debenture as listed in the books of the
Company.

“Interest Payment Date” is as defined
in the paragraph entitled “FOR VALUE RECEIVED,” above.

“Material Adverse Effect” means a
material adverse effect upon the business, operations, properties, assets or
condition (financial or otherwise) of the Company taken as a whole.

“Maturity Date” means the date defined
in the first paragraph or (if earlier) the date of any prepayment or
acceleration.

“Person” means a corporation, an
association, a partnership, organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.

“Strike
Price” means the Conversion Price of $8.5748
per share, as adjusted as set forth in Section 8(e), below.

Section 8.  
Conversion.

     a.     Voluntary
Conversion. At any time before this
Debenture has been paid, upon written notice to the Company, the Holder may
convert the Conversion Amount into shares of the Company’s Series A Preferred
shares by dividing the Conversion Amount by the Conversion Price. The Conversion
Shares shall not exceed 11,662 of the Company’s Series A Preferred
shares.

     b.     Limitation on Conversion. Notwithstanding any other provision hereof, in no event (except (i) as
specifically provided herein as an exception to this provision, or (ii) while
there is outstanding a tender offer for any or all of the shares of the
Company’s Common Stock) shall the Holder be entitled to convert any portion of
this Debenture, or shall the Company have the obligation to convert such
Debenture (and the Company shall not have the right to pay interest hereon in
shares of Common Stock) to the extent that, after such conversion, the sum of
(1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debentures or other convertible securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the conversion of the Series A Preferred shares at
the time of conversion with respect to which the determination of this proviso
is being made, would result in beneficial ownership by the Holder and its
affiliates of more than 9.99% of the outstanding shares of Common Stock (after
taking into account the shares to be issued to the Holder upon

3

such conversion). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Debenture, further agrees that if the
Holder transfers or assigns any of the Debentures to a party who or which would
not be considered such an affiliate, such assignment shall be made subject to
the transferee’s or assignee’s specific agreement to be bound by the provisions
of this Section 8(b) as if such transferee or assignee were the original Holder
hereof. Nothing herein shall preclude the Holder from disposing of a sufficient
number of other shares of Common Stock beneficially owned by the Holder so as to
thereafter permit the continued conversion of this Debenture.

     c.   Manner of Conversion.
Conversion shall be effectuated by faxing
a Notice of Conversion (as defined below) to the Company as provided in this
paragraph. The Notice of Conversion shall be executed by the Holder of this
Debenture and shall evidence such Holder's intention to convert this Debenture
or a specified portion hereof in the form annexed hereto as Exhibit A. No
fractional shares of Series A Preferred stock or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable shall be
rounded to the nearest whole share. The date on which notice of conversion is
given (the "Conversion Date") shall be deemed to be the date on which the Holder
faxes or otherwise delivers the conversion notice ("Notice of Conversion") to
the Company so that it is received by the Company on or before such specified
date, provided that, if such conversion would convert the entire remaining
principal of this Debenture, the Holder shall deliver to the Company the
original Debentures being converted no later than five (5) business days
thereafter. Facsimile delivery of the Notice of Conversion shall be accepted by
the Company at facsimile number 714-242-7740: Attention K. Bryan Shobe.
Certificates representing Series A Preferred Stock upon conversion (“Conversion
Certificates”) will be delivered to the Holder at the address specified in the
Notice of Conversion (which may be the Holder’s address for notices as
contemplated by the Subscription Agreement or a different address), via express
courier, by electronic transfer or otherwise, as provided in Section 8(d)(iii)
below. The Holder shall be deemed to be the holder of the shares issuable to it
in accordance with the provisions of this Section 8(c) on the Conversion Date.

	d.   
        	Nature of Series A
      Preferred Stock Issued. 
	 
	 	(i) When issued upon conversion
      of the Debentures pursuant to Section 8(a) hereof, the
      Conversion Shares will be legally and validly issued, fully-paid and
      non-assessable.

       (ii)
Upon any conversion, this Debenture will be deemed cancelled and of no further
force and effect, representing only the right to receive the Conversion Shares,
regardless whether the Holder delivers this Debenture to the Company for
cancellation.

        (iii) As soon as possible after a conversion has been effected (and
subject to the Holder having returned the Debenture to the Company for
cancellation), the Company will deliver to the converting holder a certificate
or certificates representing the Conversion Shares issuable by reason of such
conversion in such name or names and such denomination or denominations as the
converting holder has specified. If any fractional share of Series A Preferred
stock would be issuable upon any conversion, the Company will pay the holder of
the Conversion Shares an amount equal to the stated value of such fractional
share.

        
(iv)  The issuance of certificates for shares of Conversion Shares will be
made without  charge.

        (v)   
The Company will not close its books against the transfer of the Conversion
Shares issued or issuable in any manner which interferes
with the conversion of this Debenture.

4

     e. Conversion Price Dilution Adjustment.  In order to prevent dilution of the conversion rights granted under
this Section, the Conversion Price and the Strike Price will be subject to adjustment from time to time pursuant to this Section 8e.

     (i) If, for as long as this Debenture remains outstanding, the Company enters into a merger (other than where the Company is the surviving entity) or consolidation with another corporation or
other entity or a sale or transfer of all or substantially all of the assets of the Company to another person (collectively, a "Sale"), the Company will require, in the agreements reflecting such transaction, that the surviving entity expressly
assume the obligations of the Company hereunder. Notwithstanding the foregoing, if the Company enters into a Sale and the holders of the Series A Preferred shares are entitled to receive stock, securities or property in respect of or in exchange for
Series A Preferred shares, then as a condition of such Sale, the Company and any such successor, purchaser or transferee will agree that the Debenture may thereafter be converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger, consolidation, sale or transfer by a holder of the number of shares of Series A Preferred stock into which this Debenture might have been converted immediately before such
merger, consolidation, sale or transfer, subject to adjustments which shall be as nearly equivalent as may be practicable. In the event of any such proposed Sale, (i) the Holder hereof shall have the right to convert by delivering a Notice of
Conversion to the Company within fifteen (15) days of receipt of notice of such Sale from the Company.

     (ii) If, at any time while any portion of this Debenture remains outstanding, the Company spins off or otherwise divests itself of a part of its business or operations or disposes of all or of
a part of its assets in a transaction (the “Spin Off”) in which the Company, in addition to or in lieu of any other compensation received and retained by the Company for such business, operations or assets, causes securities of another
entity (the “Spin Off Securities”) to be issued to security holders of the Company, the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the
Holder’s Debentures outstanding on the record date (the “Record Date”) for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the “Outstanding Debentures”) been
converted as of the close of business on the trading day immediately before the Record Date (the “Reserved Spin Off Shares”), and (ii) to be issued to the Holder on the conversion of all or any of the Outstanding Debentures, such amount of
the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the principal amount of the Outstanding Debentures then being converted, and (II) the denominator is the principal
amount of the Outstanding Debentures.

     (iii) If, at any time while any portion of this Debenture remains outstanding, the Company effectuates a stock split or reverse stock split of its Common Stock or issues a dividend on its
Common Stock consisting of shares of Common Stock, the Conversion Price and any other amounts calculated as contemplated hereby shall be equitably adjusted to reflect such action.  By way of illustration, and not in limitation, of the foregoing,
(i) if the Company effectuates a 2:1 split of its Common Stock, thereafter, with respect to any conversion for which the Company issues shares after the record date of such split, the Conversion Price shall be deemed to be one-half of what it had
been immediately prior to such split; (ii) if the Company effectuates a 1:10 reverse split of its Common Stock, thereafter, with respect to any conversion for which the Company issues shares after the record date of such reverse split, the
Conversion Price shall be deemed to be ten times what it had been calculated to be immediately prior to such split; and (iii) if the Company declares a stock dividend of one share of Common Stock for every 10 shares outstanding, thereafter, with
respect to any conversion for which the Company issues shares after the record date of such dividend, the Conversion Price shall be deemed to be such amount multiplied by a fraction, of which the numerator is the number of shares (10 in the example)
for which a dividend share will be issued and the denominator is such number of shares plus the dividend share(s) issuable or issued thereon (11 in the example).

5

     Section
9.   No Impairment. Except
as expressly provided herein, no provision of this Debenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, and interest on, this Debenture at the time, place, and
rate, and in the coin or currency, herein prescribed. This Debenture is a direct
obligation of the Company.

     Section
10.    No Rights as a Shareholder. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Company, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings.

     Section
11.   No recourse shall be had for
the payment of the principal of, or the interest on, this Debenture, or for any
claim based hereon, or otherwise in respect hereof, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

     Section
12.    All payments
contemplated hereby to be made “in cash” shall be made in immediately available
good funds of United States of America currency by wire transfer to an account
designated in writing by the Holder to the Company (which account may be changed
by notice similarly given). All payments of cash and each delivery of shares of
Series A Preferred stock issuable to the Holder as contemplated hereby shall be
made to the Holder at the address last appearing on the Debenture Register of
the Company as designated in writing by the Holder from time to time; except
that the Holder can designate, by notice to the Company, a different delivery
address for any one or more specific payments or deliveries.

     Section
13.    The Holder of the
Debenture, by acceptance hereof, agrees that this Debenture is being acquired
for investment and that such Holder will not offer, sell or otherwise dispose of
this Debenture or the shares of Series A Preferred stock issuable upon
conversion thereof except under circumstances which will not result in a
violation of the Act or any applicable state Blue Sky or foreign laws or similar
laws relating to the sale of securities.

     Section
14.    The Debentures will
initially be issued in denominations determined by the Company, but are
exchangeable for an equal aggregate principal amount of Debentures of different
denominations, as requested by the Holder surrendering the same. No service
charge will be made for such registration or transfer or exchange.

     Section
15.    The Company shall be
entitled to withhold from all payments of principal of, and interest on, this
Debenture any amounts required to be withheld under the applicable provisions of
the United States income tax laws or other applicable laws at the time of such
payments, and Holder shall execute and deliver all required documentation in
connection therewith.

     Section
16    This Debenture has been
issued subject to investment representations of the original purchaser hereof
and may be transferred or exchanged only in compliance with the Securities Act
of 1933, as amended (the "Act"), and other applicable state and foreign
securities laws and the terms of the Subscription Agreement. In the event of any
proposed transfer of this Debenture, the Company may require, prior to issuance
of a new Debenture in the name of such other person, that it receive reasonable
transfer documentation that is sufficient to evidence that such proposed
transfer complies with the Act and other applicable state and foreign securities
laws and the terms of the Subscription Agreement. Prior to due presentment for
transfer of this Debenture, the Company and any agent of the Company may treat
the person in whose name this Debenture is duly registered on the Company's
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected by notice
to the contrary.

6

     Section
17. Mutilated, Lost or Stolen Debentures. If
this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated Debenture, or in lieu of or in substitution for a lost, stolen or
destroyed debenture, a new Debenture for the principal amount of this Debenture
so mutilated, lost, stolen or destroyed but only upon receipt of evidence of
such loss, theft or destruction of such Debenture, and of the ownership hereof,
and adequate indemnity, if requested, all reasonably satisfactory to the
Company.

     Section
18. Governing Law. This Debenture shall be
governed by and construed in accordance with the laws of the State of Delaware.
To the extent determined by such court, the Company shall reimburse the Holder
for any reasonable legal fees and disbursements incurred by the Holder in
enforcement of or protection of any of its rights under any of this
Debenture.

     Section
19. Waiver of Jury Trial; No Other Waivers. The Company and the Holder hereby waive the right to a trial by jury in
any action, proceeding or counterclaim in respect of any matter arising out or
in connection with this Debenture. Any waiver by the Company or the Holder of a
breach of any provision of this Debenture shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any
other provision of this Debenture. The failure of the Company or the Holder to
insist upon strict adherence to any term of this Debenture on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Debenture. Any waiver must be in writing.

     Section
20. Severability. If any provision of this
Debenture is invalid, illegal or unenforceable, the balance of this Debenture
shall remain in effect, and if any provision is inapplicable to any Person or
circumstance, it shall nevertheless remain applicable to all other Persons and
circumstances.

     Section
21. Obligations Due on a Business Day. Whenever any payment or other obligation hereunder shall be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day (or, if such next succeeding Business Day falls in the next
calendar month, the preceding Business Day in the appropriate calendar
month).

     IN
WITNESS WHEREOF, the Company has caused this
instrument to be duly executed by an officer duly authorized for such purpose,
as of the date first above indicated.

	SKYLYNX COMMUNICATIONS,
      INC.

                                                                                                         
By:/s/ Gary L. Brown

                                                                                                     
    Name: Gary L. Brown

                                                                                                          Title:
CEO

Accepted this 26th day of April, 2006 by
the undersigned.

	By:/s/ John McKenzie
John
      McKenzie

	Tax Identification/ SS Number:
      ###-##-####

7

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