NOTE MODIFICATION AGREEMENT
THIS NOTE MODIFICATION
AGREEMENT (this “Agreement”) is entered into this 18th day of December,
2009 by and between US
Dataworks, Inc., a Nevada corporation (the “Company”) and Xxxx X. Xxxxxxxxx, M.D., a
Director of the Company (the “Holder”). All capitalized terms not
specifically defined herein shall have those meanings set forth in that certain
US Dataworks, Inc. Refinancing Secured Note dated August 13, 2008 executed by
the Company and payable to the order of the Holder in the original principal
amount of Two Million Nine Hundred Ninety Five Thousand Dollars ($2,995,000.00),
as amended by (i) that certain Note Modification Agreement dated February 19,
2009, (ii) that certain Note Modification Agreement dated May 20, 2009 and (iii)
that certain Note Modification Agreement dated June 26, 2009 (as modified,
renewed and extended to date, the “Note”).
W I T N E S S E T H:
WHEREAS,
the Company and the Holder wish to revise certain provisions of the
Note;
NOW,
THEREFORE, for and in consideration of the premises, the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Holder hereby agree as follows:
1. The
following modifications to the Note are made and agreed to effective as of May
20, 2009:
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A.
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Section
1 of the Note shall be deleted in its entirety and replaced with the
following:
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“PRINCIPAL PAYMENTS; MATURITY
DATES. Within ten (10) days after the end of each calendar
quarter beginning with June 30, 2009, the Company (A) shall make mandatory
principal payments to the Holder in an amount equal to (i) $89,850.00, or three
percent (3%) of the original principal amount of this Note, plus (ii) 80.9% of
one-fourth of the Company’s cash balance in excess of $611,105 as of the end of
such calendar quarter and (B) may, in the sole and absolute discretion of the
Board of Directors of the Company, make an additional principal payment of up to
80.9% of one-fourth of the Company’s cash balance in excess of $611,105 as of
the end of such calendar quarter; provided, however, that if the mandatory
principal payment referred to in clause (i) of clause (A) above (together with
the other like mandatory quarterly principal payment due to the other holder of
the Notes) would reduce the Company’s cash balance as of the last day of such
calendar quarter below $500,000, then the amount of the mandatory principal
payment referred to in such clause shall be reduced to 80.9% of the amount, if
any, by which the Company’s cash balance as of the last day of such quarter
exceeds $500,000 (with any such shortfall in such scheduled principal payment
not rolling
into the next scheduled principal payment). On July 1, 2010, the
Company shall pay to the Holder an amount in cash equal to (i) the outstanding
Principal on such date minus (ii) $1,800,000
plus (iii) all
accrued and unpaid Interest through such date. On January 1, 2014
(the “Maturity Date”), the Company shall pay to the Holder an amount in cash
equal to (i) the outstanding Principal on such date (the “Second Principal
Payment Amount”) plus (ii) all accrued and unpaid Interest on the Second
Principal Payment Amount. The Company may prepay any portion of the
outstanding Principal, accrued and unpaid Interest, without
penalty.
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B.
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Section
7(a) of the Note shall be deleted in its entirety and replaced with the
following:
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“All
payments due under this Note shall rank senior to all Permitted Indebtedness of
the Company and its Subsidiaries under clause (ii) of the definition of
“Permitted Indebtedness” in Section 20(h); provided, however, that the Company
may make voluntary interest payments on the Indebtedness of the Company
represented by that certain 8.75% Promissory Note dated September 25, 2007
executed by the Company and payable to the order of the Holder in the original
principal amount of Five Hundred Thousand Dollars ($500,000.00) as amended by
that certain Note Modification Agreement between the Holder and the Company of
even date herewith (as modified, renewed and extended, the “Second Xxxxx Note”) in
accordance with the terms thereof but the Company cannot make any
principal payments on the Second Xxxxx Note unless and until all amounts due and
owing under the Notes have been paid in full other than the Second Principal
Payment Amount.”
2. The
Note, as modified by this Agreement, and all of the other loan documents and
other agreements and instruments executed and delivered by the Company and the
Holder in connection with the Note shall remain in full force and
effect.
3. The
Company and the Holder represent and warrant to each other that, as of the date
hereof: (a) each such party has full power and authority to execute this
Agreement; (b) this Agreement constitutes the legal, valid and binding
obligation of such party, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally; and (c) no authorization, approval, consent or
other action by, notice to, or filing with, any governmental authority or other
person is required for the execution, delivery or performance by such party of
this Agreement.
4. The
parties hereto shall from time to time execute and deliver all such other
documents, instruments and assurances with respect to the matters described
herein, and take all such other actions as may be necessary or required to carry
into force and effect the purposes and intent of this Agreement.
5. This
Agreement, when executed by the parties hereto, shall be binding upon and inure
to the benefit of the parties hereto, and their respective heirs, executors,
administrators, personal representatives, successors and assigns.
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6. This
Agreement may be executed simultaneously in a number of identical counterparts,
each of which shall be an original and all of which together shall constitute
but one and the same instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto on the date first set forth above.
| THE COMPANY: | |||
| US DATAWORKS, INC. | |||
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By:
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/s/ Xxxxxx Xxxxxx | |
| Name: | Xxxxxx Xxxxxx | ||
| Title: | Director | ||
| THE HOLDER: | |||
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/s/ Xxxx X. Xxxxxxxxx, M.D. | ||
| Xxxx X. Xxxxxxxxx, M.D. | |||
WRITTEN CONSENT OF THE
REQUIRED HOLDERS:
In
accordance with Section 8 of the Note, the undersigned Required Holders hereby
execute this written consent to the Agreement, thereby indicating their consent
to the changes and amendments to the Note contained in this
Agreement.
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/s/ Xxxx X. Xxxxxxxxx, M.D. | ||
| Xxxx X. Xxxxxxxxx, M.D. | |||
| /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | |||
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