Exhibit 10.29
DATA RACE, INC.
6509 Windcrest, Suite 120
Plano, Texas 75024
(972) 265-4000
October 18, 2001
ALPHA CAPITAL AG STONESTREET L.P.
Lettstrasse 32 260 Town Centre Blvd.
Furstentum 9490 Suite 201
Vaduz, Liechtenstein Markham, ON L3R 8H8 Canada
Attn: Konrad Ackermann Attn: Michael Finkelstein
FELDMAN & ASSOCIATES, MELLON INVESTOR SERVICES
Attorneys at Law, P.C. 600 N. Pearl Street, Suite 1010
36 West 44th Street Dallas, Texas 75201
New York, New York 10036 Attn: Mona Vorhees
Attn: Robert F. Charron
Re: Second Amendment to the Convertible Debentures and
Warrants Purchase Agreement
Ladies and Gentlemen:
Reference is made to that certain Convertible Debentures and Warrants
Purchase Agreement (the "Purchase Agreement"), as amended, dated June 20, 2001,
between Data Race, Inc. (the "Company"), Alpha Capital AG and Stonestreet L.P.
(collectively, the "Investors"), and the exhibits entered into pursuant thereto.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Purchase Agreement.
In consideration of the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Purchase Agreement. Section 1.1(a)(ii)(3) of the Purchase Agreement
(as set forth in the first amendment to the Purchase Agreement) shall be
amended to provide that such purchase shall occur within 3 Trading Days of
the date hereof, not within 5 calendar days of the Effective Date and the
principal amount of Convertible Debentures purchased by the Investors shall
be increased to $277,499 ($184,166 from Stonestreet and $93,333 from Alpha
of which $4,166 and $3,333 constitute fees owed to Stonestreet and Alpha,
respectively, by the Company, which the Investors have agreed to accept in
the form of Convertible Debentures and $10,000 represents an original
issuance discount to Stonestreet for the purchase of the Convertible
Debenture). All references to such Closing and the aggregate principal
amount of the Convertible Debentures in the Purchase Agreement or any other
agreements in connection therewith are hereby adjusted accordingly.
RACE Letter Agreement
October 18, 2001
Page 2
2. Escrow Agreement. Section 1.3(d) of the Escrow Agreement shall be
amended such that, upon the Closing referred to in Section 1 above, the
Escrow Agent shall wire, out of the Company's portion of the proceeds,
$40,000 to Lazar Levine & Felix, $21,717.29 to Transamerica and $10,000 to
Feldman & Associates, Counselors at Law, P.C. for future legal services to
the Company.
3. Acknowledgement. Notwithstanding any failure by the Investors to
fund a Closing, the Company hereby acknowledges and agrees that it will
comply with the Purchase Agreement and this Agreement with respect to the
registration of the shares of Common Stock underlying the then issued
Convertible Debentures and already converted Conversion Shares and the
delivery of Conversion Shares upon the conversion of the then issued
Convertible Debentures.
4. Security Agreement. For value received, and to induce the Investors
to extend the additional credit and other financial accommodations to the
Company hereunder, the parties hereby agree to enter into the Security
Agreement, attached hereto as Exhibit A.
5. Instructions to Transfer Agent. The Company hereby instructs the
transfer agent for its Common Stock (the "Transfer Agent") that the
additional principal amount of Convertible Debentures and the underlying
Conversion Shares are subject to the Instructions to Transfer Agent, dated
June 12, 2001, issued to the Transfer Agent by the Company (the
"Instructions") and, subject to the terms and conditions contained therein,
hereby instructs the Transfer Agent to deliver to the Investor such
additional Conversion Shares issuable hereunder not bearing a legend
without requiring further advice or instruction or additional documentation
from the Company or its counsel or the Investor or its counsel. The Company
and the Transfer Agent acknowledge and agree that the Investors are each an
express third party beneficiary of these instructions and shall be entitled
to rely upon, and enforce, the provisions hereof. These instructions shall
be issued, with the Instructions, to any substitute or replacement transfer
agent for the Common Stock upon the Company's appointment of any such
substitute or replacement transfer agent. These instructions shall be
irrevocable by the Company from and after the date hereof and from and
after the issuance hereof to any such substitute or replacement transfer
agent, as the case may be.
6. Authorization. The Purchaser has the requisite power and authority
to enter into and perform this letter agreement, to sell the Convertible
Debentures, and to issue the Conversion Shares upon conversion of the
Convertible Debentures. The execution, delivery and performance of this
letter agreement by the Company and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and shall constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms.
RACE Letter Agreement
October 18, 2001
Page 3
7. Representations and Warranties. Except as set forth on the
schedules attached hereto or the SEC Documents, the representations and
warranties of the Company set forth in the Purchase Agreement are true and
correct in all material respects as though made on and as of the date
hereof and all SEC Documents are as represented in the Purchase Agreement.
8. Covenants. Except as set forth on the schedules hereto, the Company
has performed in all material respects all covenants and agreements to be
performed by the Company under the Purchase Agreement on or prior to the
date hereof and has complied and will comply in all material respects with
all of the Company's obligations and conditions contained in the Purchase
Agreement.
Except as specifically amended by the terms of this amendment, the Purchase
Agreement and its exhibits shall remain unmodified and in full force and effect,
and shall not be in any way changed, modified or superseded by the terms set
forth herein.
This amendment may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the
other parties hereto, it being understood that all parties need not sign the
same counterpart. Execution may be made by delivery by facsimile.
[SIGNATURE PAGE FOLLOWS]
RACE Letter Agreement
October 18, 2001
Page 4
If the foregoing correctly sets forth our understanding and agreement,
please so indicate by signing where indicated below.
DATA RACE, INC.
By: /s/ James G. Scogin
James G. Scogin, President and CFO
ACCEPTED AND AGREED TO:
ALPHA CAPITAL AG
By: /s/ Konrad Ackermann
Konrad Ackermann, Authorized Signatory
STONESTREET L.P.
By: /s/ Michael Finckelstein
Michael Finkelstein, Authorized Signatory
FELDMAN & ASSOCIATES,
COUNSELORS AT LAW, P.C.
By: /s/ David N. Feldman
David N. Feldman, President