EXHIBIT 10.14
THE SECURITIES DESCRIBED IN THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
REPLACEMENT WARRANT AGREEMENT
This Warrant Agreement (the "AGREEMENT") dated as of June ___, 2003
between US Dataworks, Inc. (formerly Sonicport, Inc.) a Nevada corporation (the
"COMPANY"), and ______________________ ("WARRANT HOLDER").
WHEREAS, on or around __________, 2001, the Company issued the Warrant
Holder __________ warrants (the "ORIGINAL WARRANTS") entitling the Warrant
Holder to purchase ________share of Common Stock, $0.0001 par value per share,
of the Company (the "SHARES" or the "COMMON STOCK") at an exercise price per
share equal to one dollar ($1.00);
WHEREAS, pursuant to a certain letter agreement dated March 25, 2002
(the "LETTER AGREEMENT"), the Company issued the Warrant Holder ___________
warrants (the "ADDITIONAL WARRANTS") entitling the Warrant Holder to purchase
one share of Common Stock at an exercise price per share equal to fifty cents
($0.50). The Letter Agreement further provided that the exercise price of the
Original Warrants was adjusted to an exercise price of fifty cents ($0.50) per
share of Common Stock;
WHEREAS, pursuant to a certain Convertible Promissory Note Extension
and Warrant Agreement dated May 5, 2003 (the "NOTE AND WARRANT AGREEMENT"), the
Company issued to Warrant Holder ______________ warrants (the "NEW WARRANTS"),
each such New Warrant entitling the Warrant Holder to purchase one share of
Common Stock at an exercise price per share of twelve cents ($0.12) per share.
As provided under the Note and Warrant Agreement, the Warrant Holder agreed to
surrender all of his Original Warrants and Additional Warrants to be cancelled
by the Company.
WHEREAS, pursuant to a certain Note and Warrant Conversion Agreement,
of even date herewith (the "CONVERSION AGREEMENT") and as an inducement to cause
the Warrant Holder to exercise all of his outstanding warrants, the Company
shall issue a certain number of warrants ("REPLACEMENT WARRANTS") to replace the
Original, Additional and New Warrants with terms and conditions as set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
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1. ISSUANCE OF REPLACEMENT WARRANT CERTIFICATES AND SURRENDER OF
ORIGINAL, ADDITIONAL AND NEW WARRANTS.
The Replacement Warrant certificates to be delivered pursuant to this
Agreement (the "Replacement Warrant Certificates") shall be executed on behalf
of the Company by its Chief Executive Officer, President or any Vice President
under its corporate seal reproduced thereon and attested by its corporate
Secretary or one of its assistant Secretaries. All of Warrant Holder's
certificates representing any and all of his Original Warrants, Additional
Warrants and New Warrants are hereby terminated and void and Warrant Holder
shall surrender any such certificates in his possession and control to the
Company for cancellation. Unless otherwise set forth herein, all capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Conversion Agreement.
2. RIGHT TO EXERCISE REPLACEMENT WARRANTS.
Each Replacement Warrant shall be exercised as of the Closing Date.
Subject to the provisions of this Agreement, each Warrant Holder shall acquire
from the Company by virtue of a cashless exercise ("NET ISSUE EXERCISE"), and
the Company shall issue to each such Warrant Holder, at an exercise price per
Share of seven cents ($0.07), subject to adjustment as provided herein (the
"EXERCISE PRICE"), one fully paid and nonassessable Share upon surrender to the
Company of the Replacement Warrant Certificate evidencing such Replacement
Warrant. The Warrant Holder shall deliver to the Company the Replacement Warrant
Certificate and an executed Election to Exercise form (attached hereto) and
promptly thereafter receive, without the payment of any additional
consideration, such number of fully paid and nonassessable shares of Common
Stock as computed using the following formula:
X = Y (A-B)
-------
A
where
X = the number of Shares to be issued to the holder pursuant to
this Section 2.
Y = ___________ Shares.
A = the closing stock price of one share of Common Stock as
reported by the American Stock Exchange national market the
trading day immediately prior to the Closing Date.
B = seven cents ($0.07).
The Company agrees that such shares of Common Stock shall be deemed to be issued
to the Warrant Holder as the record holder of such shares as of the close of
business on the Closing Date. A stock certificate for the shares of Common Stock
shall be delivered to the Warrant Holder within ten (10) days following the
Closing Date. No adjustments shall be made to the number of shares issuable upon
exercise of the Replacement Warrants ("REPLACEMENT WARRANT SHARES") for any cash
dividends paid or payable to holders of record of Common Stock prior to the date
as of which the Warrant Holder shall be deemed to be the record holder of such
Replacement Warrant Shares.
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3. RESERVATION OF SHARES.
The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Shares or
its authorized and issued Shares held in its treasury for the purpose of
enabling it to satisfy any obligation to issue Shares upon exercise of
Replacement Warrants, the full number of Shares deliverable upon the exercise of
all outstanding Replacement Warrants. The Company covenants that all Shares
which may be issued upon exercise of Replacement Warrants will be validly
issued, fully paid and nonassessable outstanding Shares of the Company.
4. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
Warrant Holder represents and warrants to the Company that Warrant
Holder is acquiring the Replacement Warrants for investment and with no present
intention of distributing or reselling any of the Replacement Warrants. The
Shares and the certificate or certificates evidencing any such Shares shall bear
the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
Certificates for Replacement Warrants or Shares shall also bear such
legends as may be required from time to time by law.
5. RULE 144.
If the Company shall be subject to the reporting requirements of
Section 13 of the 1934 Act, the Company will use its best efforts to file timely
all reports required to be filed from time to time with the Commission
(including but not limited to the reports under Section 13 and 15(d) of the 1934
Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Company under
the Act). If there is a public market for any Shares of the Company at any time
that the Company is not subject to the reporting requirements of either of said
Section 13 or 15(d), the Company will, upon the request of any holder of any
Shares or Replacement Warrants, use its best efforts to make publicly available
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the information concerning the Company referred to in subparagraph (c)(2) of
said Rule 144. The Company will furnish to each holder of any Shares or
Replacement Warrants, promptly upon request, (i) a written statement of the
Company's compliance with the requirements of subparagraphs (c)(1) or (c)(2,) as
the case may be, of said Rule 144, and (ii) written information concerning the
Company sufficient to enable such holder to complete any Form 144 required to be
flied with the Commission pursuant to said Rule 144.
6. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES AND CLASS OF
CAPITAL STOCK PURCHASABLE.
The Exercise Price and the number of Shares purchasable upon the
exercise of each Replacement Warrant are subject to adjustment from time to time
as set forth in this Section 6.
(i) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
pays a dividend or makes a distribution on its Common Stock, in each
case, in Shares of its Common Stock; subdivides its outstanding Shares
of Common Stock into a greater number of Shares; combines its
outstanding Shares of Common Stock into a smaller number of Shares;
makes a distribution on its Common Stock in Shares of its capital stock
other than Common Stock; or issues by reclassification of its Shares of
Common Stock any Shares of its capital stock; then the number and
classes of Shares purchasable upon exercise of each Replacement Warrant
in effect immediately prior to such action shall be adjusted so that
the holder of any Replacement Warrant thereafter exercised may receive
the number and classes of Shares of capital stock of the Company which
such Warrant Holder would have owned immediately following such action
if such Warrant Holder had exercised the Replacement Warrant
immediately prior to such action.
(ii) CONSOLIDATION, MERGER OR SALE OF THE COMPANY. If the
Company is a party to a consolidation, merger or transfer of assets
that reclassifies or changes its outstanding Common Stock, the
successor corporation (or corporation controlling the successor
corporation or the Company, as the case may be) shall by operation of
law assume the Company obligations under this Agreement. Upon
consummation of such transaction the Replacement Warrants shall
automatically become exercisable for the kind and amount of securities,
cash or other assets that the holder of a Replacement Warrant would
have owned immediately after the consolidation, merger or transfer if
the Warrant Holder had exercised the Replacement Warrant immediately
before the effective date of such transaction. As a condition to the
consummation of such transaction, the Company shall arrange for the
person or entity obligated to issue securities or deliver cash or other
assets upon exercise of the Replacement Warrant to, concurrently with
the consummation of such transaction, assume the Company's obligations
hereunder by executing an instrument so providing and further providing
for adjustments which shall be as nearly equivalent as may be practical
to the adjustments provided for in this Section.
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7. NOTICES TO COMPANY AND WARRANT HOLDER.
Any notice or demand authorized by this Agreement to be given or made
by any registered holder of any Replacement Warrant Certificate to or on the
Company shall be sufficiently given or made if sent by registered mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Holders) to the Company.
Any notice pursuant to this Agreement to be given by the Company to
Warrant Holder shall be sufficiently given if sent by registered mail, postage
prepaid, addressed (until another address is filed in writing by Warrant Holder
with the Company) to Warrant Holder at the address provided on page 5 of this
Agreement, with a copy thereof to: Xxxxxx & Xxxxxx, 1900 Avenue of the Stars,
00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, ATTN: Xxxxxx X. Xxxxxxx, Esq.,
facsimile: (000) 000-0000, telephone: (000) 000-0000.
8. SUPPLEMENTS AND AMENDMENTS.
The Company and Warrant Holder may from time to time supplement or
amend this Agreement in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and Warrant Holder may deem
necessary or desirable and which the Company and Warrant Holder deem shall not
adversely affect the interests of other Warrant Holders.
9. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or Warrant Holder shall bind and inure to the benefit of
their respective successors and assigns hereunder.
10. GOVERNING LAW.
This Agreement and each Replacement Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Nevada and for all proposes shall be governed by and construed in accordance
with the laws of said State.
11. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all proposes be deemed to be an original, and
such counterparts shall together constitute one and the same instrument.
12. ATTORNEYS FEES.
In the event of any action by the Warrant Holder under or pursuant to
this Agreement or any certificate issued pursuant hereto to enforce the terms
hereof, the Company shall pay all of the Warrant Holder's reasonable attorneys'
fees and costs in connection therewith.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the date and year first above written.
US Dataworks, Inc.
___________________________ _____________________________
Xxxxxxx Xxxxx
Its: Chief Executive Officer
Address:___________________
___________________________
___________________________
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US DATAWORKS, INC
NEW WARRANT CERTIFICATE
NO. _____ ______________ REPLACEMENT WARRANTS
This Replacement Warrant Certificate certifies that _____________ or
registered assigns, is the registered holder of a total of ______________
warrants (the "REPLACEMENT WARRANTS") to purchase Common Stock, par value $.0001
per share (the "COMMON STOCK") of US Dataworks, Inc., a Nevada corporation (the
"COMPANY"). Each Replacement Warrant entitles the holder to acquire from the
Company, without the payment of any additional consideration by Net Issue
Exercise, such number of fully paid and nonassessable shares of Common Stock as
computed using the formula set forth in the Warrant Agreement (the "EXERCISE
PRICE") upon surrender of this Replacement Warrant Certificate and delivery of
the Election to Exercise Form at an office or agency of the Company, subject to
the terms and conditions set forth herein. As used herein, "SHARE" or "SHARES"
refers to the Common Stock of the Company and, where appropriate, to the other
securities or property issuable upon exercise of a Replacement Warrant as
provided for in that certain Warrant Agreement, of even date herewith (the
"WARRANT AGREEMENT"). Unless otherwise set forth herein, all capitalized terms
used herein without definition shall have the meanings ascribed to such terms in
the Warrant Agreement.
The number of Shares and classes of capital stock issuable upon
exercise of the Replacement Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement. No adjustment
shall be made for any cash dividends on any Shares issuable upon exercise of
this Replacement Warrant.
All Replacement Warrants shall be exercised on the Closing Date. All
Replacement Warrants evidenced hereby shall thereafter be void.
The Replacement Warrants evidenced by this Replacement Warrant
Certificate are part of a duly authorized issue of Replacement Warrants issued
pursuant to the Warrant Agreement, duly executed by the Company and Xxxxx
Xxxxxxx. The Warrant Agreement is hereby incorporated by reference in and made a
part of this instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder of
the Company and the holders (the words "HOLDERS" or "HOLDER" meaning the
registered holders or registered holder of the Replacement Warrant
Certificates).
The Company may deem and treat the person(s) registered in the
Company's register as the absolute owner(s) of this Replacement Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, and of any distribution
to the holder(s) hereof, and for all purposes, and the Company shall not be
affected by any notice to the contrary.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES, AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND ANY APPLICABLE STATE LAWS, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER
THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER
THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
IN WITNESS WHEREOF, the Company has caused this Replacement Warrant
Certificate to be duly executed under its corporate seal.
US Dataworks, Inc. Attested
_______________________________________ ________________________________
Xxxxxxx Xxxxx, Chief Executive Officer
________________________________
Printed Name and Title
-2-
ELECTION TO EXERCISE
(To be executed upon exercise of the Replacement Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Replacement Warrant Certificate, to acquire
__________________________________________ Shares in accordance with the terms
hereof. The undersigned requests that certificates for such Shares be registered
in the name of _________________________________________________ whose address
is ________________________________________________________________ and that
such certificates be delivered to _____________________________________________
whose address is ________________________________________________.
Dated: __________________ Signature: __________________________
Printed Name: _______________________
(SIGNATURE MUST CONFORM IN ALL RESPECTS TO NAME OF HOLDER AS SPECIFIED ON A THE
FACE OF THE REPLACEMENT WARRANT CERTIFICATE)