EXHIBIT 10.1
SECOND ADDENDUM TO
DEBT CONVERSION AND FUNDING AGREEMENT
This Second Addendum to Debt Conversion and Funding Agreement
("2nd Addendum") shall memorialize in writing the subsequent modifications
and adjustments made to that certain Debt Conversion and Funding
Agreement dated September 30, 2004 and the Addendum to Debt Conversion
and Funding Agreement ("1st Addendum") and is between ERF Wireless, Inc.,
a Nevada corporation, ("ERFW"), Eagle R. F. International, Inc., a Texas
corporation ("Company"), and Xxxxxxx Trust, Xxxxxx Family Trust, HC1
Trust, Leopard Family Trust, Jauquine Trust and Xxxxxx Trust
(collectively, the "Investors").
WHEREAS, the Company desires to raise additional capital from
the Investors;
WHEREAS, the Investors desire to make additional cash investments from
time to time for shares of ERFW's Series A Convertible Preferred Stock;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The parties have fully performed their respective obligations under the Debt
Conversion and Funding Agreement dated September 30, 2004 and 1st Addendum and
now desire to supplement those agreements by this 2nd Addendum to allow the
Investors to purchase additional shares of ERFW's Series A Convertible Preferred
Stock on similar terms and conditions.
2. From time to time, the Investors agree to deliver up to $750,000 in
additional funds to ERFW in exchange for additional Securities.
3. ERFW shall issue the Investors one (1) share of its Series A Convertible
Preferred Stock for every One Dollar Fifty Cents ($1.50) invested on or before
December 31, 2005. For example, the Investors shall receive an additional
500,000 shares of ERFW's Series A for an investment of $750,000.
4. The Investor understands and agrees that all securities will be issued with a
restrictive legend to the effect that: "THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."
5. Private Transaction
A. PRIVATE TRANSACTION. Investors and ERFW understand each that the
sale and exchange of securities contemplated herein constitutes a private,
arms-length transaction between a willing seller and a willing buyer without the
use or reliance upon a broker, distribution or securities underwriter.
B. PURCHASE FOR INVESTMENT. Investors are not underwriters of, or
dealers in the securities to be exchanged hereunder. Further, each Investor is
acquiring the securities for investment purposes and not with a view to resell
the securities.
C. INVESTMENT RISK. Because of each Investor's financial position and
other factors, the transaction contemplated by this Agreement may involve a high
degree of financial risk, including the risk that each Investor may lose its
entire investment in the securities.
D. ACCESS TO INFORMATION. Each Investor and each Investor's advisors
have been afforded the opportunity to discuss the transaction with legal and
accounting professionals and to examine and evaluate the financial impact of the
exchange contemplated herein.
6. Representations and Warranties of Each Investor
Each Investor hereby covenants with, represents, and warrants that:
A. ABILITY. This Agreement has been duly executed and delivered by each
Investor and constitutes a binding, and enforceable obligation of the Investor;
B. THIRD PARTY CONSENT. No authorization, consent, or approval of, or
registration or filing with, any governmental authority or any other person is
required to be obtained or made by the Investor in connection with the
execution, delivery, or performance of this Agreement;
C. LITIGATION. Investor is not a defendant against whom a claim has
been made or a judgment rendered in any litigation or proceedings before any
local, state or federal government, including but not limited to the United
States, or any department, board, body or agency thereof;
7. Miscellaneous
A. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
between the parties hereto and no other prior written or oral statement or
agreement shall be recognized or enforced.
B. SEVERABILITY. If a court of competent jurisdiction determines that
any clause or provision of this Agreement is invalid, illegal or unenforceable,
the other clauses and provisions of the Agreement shall remain in full force and
effect and the clauses and provision which are determined to be void, illegal or
unenforceable shall be limited so that they shall remain in effect to the extent
permissible by law.
C. ASSIGNMENT. None of the parties hereto may assign this Agreement
without the express written consent of the other parties and any approved
assignment shall be binding on and inure to the benefit of such successor or, in
the event of death or incapacity, on assignor's heirs, executors, administrators
and successors.
D. APPLICABLE LAW. This Agreement has been negotiated and is being
contracted for in the United States, State of Texas, it shall be governed by the
laws of the United States, State of Texas, notwithstanding any conflict-of-law
provision to the contrary.
E. ATTORNEY'S FEES. If any legal action or other proceeding
(non-exclusively including arbitration) is brought for the enforcement of or to
declare any right or obligation under this Agreement or as a result of a breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, or otherwise because of a dispute among the parties hereto, the
prevailing party will be entitled to recover actual attorney's fees (including
for appeals and collection) and other expenses incurred in such action or
proceeding, in addition to any other relief to which such party may be entitled.
F. NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties hereto
and their successors, any rights or remedies under or because of this Agreement,
unless this Agreement specifically states such intent.
G. COUNTERPARTS. It is understood and agreed that this Agreement may be
executed in any number of identical counterparts, each of which may be deemed an
original for all purposes.
H. FURTHER ASSURANCES. At any time, and from time to time after the
debt for equity swap, each party hereto will execute such additional instruments
and take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement.
I. AMENDMENT OR WAIVER. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. A writing signed by all parties hereto may amend this
Agreement.
J. HEADINGS. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
K. FACSIMILE. A facsimile, telecopy or other reproduction of this
Agreement may be executed by one or more parties hereto and such executed copy
may be delivered by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen, and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of July 1, 2005.
"ERFW"
ERF WIRELESS, INC., A NEVADA CORPORATION
By: /S/ R. XXXX XXXXX
--------------------------
Name: R. Xxxx Xxxxx
Title: Chief Executive Officer
Persons referred to above as "Investors"
XXXXXXX TRUST
By: /S/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
XXXXXX FAMILY TRUST
By: /S/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
HC1 TRUST
By: /S/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
LEOPARD FAMILY TRUST
By: /S/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
JAUQUINE TRUST
By: /S/ XXXXX XXXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Trustee
XXXXXX TRUST
By: /S/ H. XXXX XXXXXX
--------------------------
Name: H. Xxxx Xxxxxx
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