EXHIBIT 10.4
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.
WARRANT AGREEMENT
This Warrant Agreement (the "AGREEMENT") dated as of June 30, 2003
between US Dataworks, Inc., a Nevada corporation (the "COMPANY"), and Societe
Financiere Privee, S.A. ("WARRANT HOLDER").
WHEREAS, pursuant to a certain Convertible Debenture and Warrant
Agreement, of even date herewith (the "DEBENTURE AGREEMENT"), the Company
proposes to issue to Warrant Holder one thousand warrants (the "WARRANTS") for
every ten thousand dollars ($10,000) of Purchase Price (as such term is defined
in the Debenture Agreement) paid to the Company, in accordance with the
Debenture Agreement. Each Warrant shall entitle the Warrant Holder to purchase
one share of Common Stock at an exercise price per share equal to 125% of the
10-day average closing bid price of the Company's Common Stock ("COMMON STOCK"
or "Shares") according to the American Stock Exchange (or any other national
securities exchange upon which the Company's common stock is primarily listed)
for the ten (10) trading days immediately prior to the execution of the
Debenture Agreement.
Unless otherwise set forth herein, all capitalized terms used herein
without definition shall have the meanings ascribed to such terms in the
Debenture Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. ISSUANCE OF WARRANT CERTIFICATES AND SURRENDER OF ORIGINAL AND
ADDITIONAL WARRANTS.
The Warrant certificates to be delivered pursuant to this Agreement
(the "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. Warrant Certificates may be exchanged, at the Warrant
Holder's option, when surrendered to the Company for another Warrant Certificate
or other Warrant Certificates of like tenor and representing in the aggregate a
like number of Warrants.
2. RIGHT TO EXERCISE WARRANTS(a)
(a) Each Warrant may be exercised from the date of this Agreement until
11:59 P.M. (Pacific Standard Time) on June 30, 2006 (the "EXPIRATION DATE"),
pursuant to the provisions set forth in this Agreement. Each Warrant not
exercised on or before the Expiration Date shall expire. Subject to the
provisions of this Agreement, the holder of each Warrant shall have the right to
purchase from the Company, and the Company shall issue and sell to each such
Warrant Holder, at an exercise price per share equal to one hundred twenty-five
percent (125%) of the ten (10) day average closing bid price of the Company's
Common Stock according to the American Stock Exchange (or any other national
securities exchange upon which the Company's common stock is primarily listed)
for the ten (10) trading days immediately prior to the execution of the
Debenture Agreement (the "EXERCISE PRICE"), one fully paid and nonassessable
Share upon surrender to the Company of the Warrant Certificate evidencing such
Warrant, with the form of election to purchase duly completed and signed and
evidence of payment of the Exercise Price.
Upon surrender of such Warrant Certificate and payment of the Exercise
Price, the Company shall cause the corresponding number of Shares ("WARRANT
SHARES") to be issued and delivered promptly to the Warrant Holder. In the event
that upon any exercise of Warrants evidenced hereby, the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised. The Warrants
evidenced by a Warrant Certificate shall be exercisable at the election of the
holder thereof, subject to the provisions of Sections 4 and 5 hereof.
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 Warrants,
the full number of Shares deliverable upon the exercise of all outstanding
Warrants. The Company covenants that all Shares which may be issued upon
exercise of 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 Warrants for investment and with no present intention of
distributing or reselling any of the 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.
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Certificates for Warrants or Shares shall also bear such legends as may
be required from time to time by law.
5. PIGGYBACK REGISTRATION RIGHTS. Should the Company propose to
register any of its common stock under the Securities Act for any reason other
than a registration of securities with respect to its employee benefit plans,
the Company shall, at such time, promptly give Warrant Holder ten (10) days'
advance written notice of such registration ("REGISTRATION NOTICE"). Only in the
instance where Warrant Holder has given the Company written notice, within five
(5) days of its receipt of the Registration Notice, directing the Company NOT to
register all of its Warrant Shares, the Company shall otherwise cause to be
registered under the Securities Act all of Warrant Holder's outstanding Warrant
Shares, subject to any adjustment or cutbacks made by the Company's underwriter
in its sole discretion. Warrant Holder agrees to promptly return to the Company
any shareholder questionnaire or other documentation the Company may require
Warrant Holder to submit as required under federal and state securities laws.
The Company's obligations pursuant to this Section 5 shall terminate on the
earlier to occur of: (a) the second anniversary of the date of issuance of the
Warrant Shares and (b) such time when all Warrant Shares held by Warrant Holder
may be sold pursuant to Rule 144 under the Securities Act during any three (3)
month period.
6. 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 Warrants, use its best efforts to make publicly available 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 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.
7. 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 Warrant are subject to adjustment from time to time as set
forth in this Section 6.
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(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 Warrant in effect
immediately prior to such action shall be adjusted so that the holder
of any 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 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 Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other
assets that the holder of a Warrant would have owned immediately after
the consolidation, merger or transfer if the Warrant Holder had
exercised the 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 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.
8. 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 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.
9. 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.
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10. 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.
11. GOVERNING LAW.
This Agreement and each 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.
12. 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.
13. ATTORNEYS FEES.
In the event of any action by the Warrant Holder of 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.
______________________________ _____________________________
Societe Financiere Privee, S.A. Its authorized representative
_____________________________
Address: _____________________ Title
______________________________
______________________________
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US DATAWORKS, INC
WARRANT CERTIFICATE
NO. _____ ________________ WARRANTS
This Warrant Certificate certifies that SFP or registered assigns, is
the registered holder of a total of
_____________________________________________ (___________) warrants (the
"WARRANTS"), which shall expire on June 30, 2006 (the "EXPIRATION DATE"), to
purchase Common Stock, par value $.0001 per share (the "COMMON STOCK") of US
Dataworks, Inc., a Nevada corporation (the "COMPANY"). Each Warrant entitles the
holder to purchase from the Company before 11:59 p.m. (Pacific Standard Time) on
the "EXPIRATION DATE" one fully paid and nonassessable share of Common Stock of
the Company at the exercise price for each Warrant, subject to adjustment in
certain events (the "EXERCISE PRICE"), provided that upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Company, but only 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 Warrant as provided for in the Agreement upon the happening of certain events.
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 Exercise Price and the number of Shares and classes of capital
stock purchasable upon exercise of the Warrants are subject to adjustment upon
the occurrence of certain events set forth in the Agreement. In the event that
upon any exercise of Warrants evidenced hereby, the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there shall be
issued to the holder hereof or his or her assignee a new Warrant Certificate
evidencing the number of Warrants not exercised. No adjustment shall be made for
any cash dividends on any Shares issuable upon exercise of this Warrant.
No Warrant may be exercised after 11:59 P.M. (Pacific Standard Time) on
the corresponding Expiration Date. All Warrants evidenced hereby shall
thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated as of
June 30, 2003 (the "WARRANT AGREEMENT") duly executed by the Company and Holder.
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 Warrant Certificates).
The Company may deem and treat the person(s) registered in the
Company's register as the absolute owner(s) of this 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 Warrant Certificate to
be duly executed under its corporate seal.
US Dataworks, Inc. Attested
_______________________________________ ______________________________
Xxxxxxx Xxxxx, Chief Executive Officer
______________________________
Printed Name and Title
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ELECTION TO PURCHASE
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _______ Shares and herewith
includes the payment for such Shares in the amount of $____________________ all
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
_______________________________________. If said number of Shares is less than
all of the Shares purchasable hereunder, the undersigned requests that a new
Warrant Certificate representing the remaining balance of the Shares be
registered in the name of ___________________________ whose address is
___________________ and that such Certificates be delivered to
__________________________________________ whose address is ______________.
Dated: __________________ Signature: __________________________
(SIGNATURE MUST CONFORM IN ALL RESPECTS TO NAME OF HOLDER AS SPECIFIED ON A THE
FACE OF THE WARRANT CERTIFICATE)
