EXHIBIT 10.16
AMENDMENT NUMBER 1
TO
SETTLEMENT AGREEMENT
This Amendment Number 1 ("Amendment") is entered into as of December
31, 2002 ("Effective Date"), by and between U.S. Dataworks, Inc. f/k/a
Sonicport, Inc., a Nevada corporation ("USD"), on the one hand; and Xxxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxx , ACI Communications Holdings, Inc. f/k/a Allstate
Communications, Inc. , 0000 Xxxxxxx Xxxxxx, L.P., and Starline Communications,
Inc. and its affiliates (collectively the "ACI Parties") on the other hand.
WHEREAS, USD and the ACI Parties entered into a Settlement Agreement
dated July 25, 2002 (the "Agreement"); and
WHEREAS, USD and the ACI Parties desire to amend and modify the
Agreement;
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, the Parties hereby agree as follows:
1. Terms in initial capital letters not defined in this Amendment shall
have the same meaning as they have in the Agreement.
2. AGREEMENT, INTRODUCTORY PARAGRAPH H, is hereby amended as follows:
Delete the entire Introductory Paragraph H and replace it with the following in
its place and stead:
"H. USD is in the process of attempting to raise additional capital
funds from certain Financings. For purposes of this Agreement, the term
"Financings" shall mean USD's receipt of not less than ONE HUNDRED
THOUSAND DOLLARS ($100,000) of new capital invested into USD from any
Third Party Investor. For purposes of this Agreement, the term "Third
Party Investor" does not include any present (i) shareholder or (ii)
person or entity engaged in business activities with the USD as of even
date herewith, EXCEPT Southwest Bank of Texas, Banktech. However, if
Southwest Bank of Texas, Banktech or any other commercial lending
entity provides funding to USD for the specific purpose of facilitating
the installation of USD's products with a licensee, then such funding
shall not constitute Financings."
3. AGREEMENT, SECTION 6, is hereby amended as follows: Delete the
entire Section 6 and replace it with the following in its place and stead:
"6. PROGRESS PAYMENTS, PAYMENT TIMING AND NEW ACI PROMISSORY NOTE. USD
hereby agrees that, contemporaneously with the execution of this
Agreement, it shall enter into a new promissory note (the "New ACI
Promissory Note"), a copy of which is attached hereto, in the amount of
$1,041,481.77 bearing interest at a rate of ten percent (10%) per
annum, which shall be secured by all USD assets as set forth in a
security agreement entered into by the Parties of even date herewith
(the "Security Agreement")."
4. AGREEMENT, SECTION 15, is hereby amended as follows: Delete the
entire Section 6 and replace it with the following in its place and stead:
"15. NOTICES. All notices and communications to be given under this
Agreement shall be given or made in writing to the intended recipient
at the address specified below or, as to any Party, at such other
address as shall be designated by such Party in a notice to each other
Party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted
by facsimile or telecopier, delivered to the telegraph or cable office,
personally delivered or, in the case of mailed notice, upon receipt.
TO BORROWER: US DATAWORKS, INC.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
ATTN: Xxxxxxx Xxxxx
with a copy (which shall not constitute Notice) to:
Pillsbury Winthrop LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
ATTN: Xxxx X. Xxxxxx Esq.
TO ACI: Allstate Communications
00000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
ATTN: Xxxxx Xxxxxxxxxx and
General Counsel"
5. AGREEMENT, SECTION 20, is hereby amended as follows: Delete the
entire Section 20 and replace it with the following in its place and stead:
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"20. AGREEMENT SUPERSEDED; COUNTERPARTS. This Agreement
supersedes all prior agreements and understandings, written or oral,
among USD and the ACI Parties (collectively, the "Parties"; each
individually, a "Party") with respect to the subject matter of this
Agreement. In the event that any terms or conditions among the New ACI
Promissory Note, Security Agreement and this Agreement should conflict,
this Agreement shall govern. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute
one and the same instrument and any of the Parties to this Agreement
may execute this Agreement by signing any such counterpart. This
Agreement may be executed and delivered by facsimile and upon such
delivery the facsimile signature will be deemed to have the same effect
as if the original signature had been delivered to the other Party. The
original signature copy shall be delivered to the other Party by
express overnight delivery. The failure to deliver the original
signature copy and/or the nonreceipt of the original signature copy
shall have no effect upon the binding and enforceable nature of this
Agreement.
5. Add a new section 21 to read as follows:
"21. RESOLUTION OF DISPUTES.
1. (a) THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF, OR
RELATING TO, THIS AGREEMENT SHALL FIRST BE ADDRESSED BY DIRECT
NEGOTIATION, IN GOOD FAITH, BETWEEN THE PARTIES. THE DISPUTING PARTY
SHALL PROVIDE THE OTHER PARTY WITH WRITTEN NOTICE OF THE DISPUTE
("NOTICE OF DISPUTE"), CONTAINING A DETAILED DESCRIPTION OF THE MATTER
IN CONTROVERSY. THE PARTIES AGREE TO EXERCISE COMMERCIALLY REASONABLE
EFFORTS TO RESOLVE THE DISPUTE AS SOON AS PRACTICABLE. IN THE EVENT
THAT THE PARTIES CANNOT AGREE ON THE RESOLUTION OF THE DISPUTE THROUGH
DIRECT NEGOTIATIONS, BUT IN NO EVENT SOONER THAN TEN (10) BUSINESS DAYS
FOLLOWING THE OTHER PARTY'S RECEIPT OF THE NOTICE OF DISPUTE (UNLESS
OTHERWISE AGREED BY THE PARTIES), THE MATTER SHALL BE RESOLVED BY FINAL
AND BINDING ARBITRATION. THE ARBITRATION PROCEDURE CAN BE INITIATED BY
EITHER PARTY AND SHALL BE BEFORE THE AMERICAN ARBITRATION ASSOCIATION
IN LOS ANGELES, CALIFORNIA. ARBITRATION PROCEEDINGS HEREBY SHALL BE
GOVERNED BY THE AMERICAN ARBITRATION ASSOCIATION ("AAA") GUIDELINES.
2. (b) THE PARTIES SHALL ENDEAVOR TO MUTUALLY SELECT AN ARBITRATOR WHO
SHALL HEAR AND DETERMINE THE CONTROVERSY OR DISPUTE. IN THE EVENT THE
PARTIES ARE UNABLE TO AGREE UPON A MUTUALLY ACCEPTABLE ARBITRATOR
WITHIN THREE (3) BUSINESS DAYS, THE PARTIES SHALL BE ASSIGNED A PANEL
OF SEVEN (7) ARBITRATORS PROVIDED BY AAA (OR ITS DESIGNEE) FROM WHICH
THE PARTIES SHALL SELECT THE ARBITRATOR BY ALTERNATIVELY STRIKING
PANELISTS UNTIL ONE REMAINS. THE PARTIES SHALL, BY RANDOM LOT,
DETERMINE WHO SHALL MAKE THE FIRST STRIKE.
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3. (c) THE ARBITRATOR SHALL HAVE FULL AUTHORITY TO DECIDE ANY MATTERS
IN CONTROVERSY OR DISPUTE BETWEEN THE PARTIES RELATING TO THIS
AGREEMENT. ANY REMEDIES AWARDED SHALL BE AWARDED FOR THE PURPOSE OF
MAKING THE INJURED PARTY WHOLE AND SHALL BE LIMITED TO ACTUAL DAMAGES
PROXIMATELY CAUSED BY THE EVENT GIVING RISE TO LIABILITY, AND SHALL,
WHERE APPLICABLE, BE LIMITED BY THE TERMS OF THIS AGREEMENT. NO
PUNITIVE DAMAGES OR DAMAGES IN THE NATURE OF A PENALTY SHALL BE
AWARDED. THE COST OF ANY ARBITRATION PROCEEDINGS SHALL BE BORNE EQUALLY
BY THE PARTIES, EXCEPT THAT THE ARBITRATOR MAY AWARD TO THE SUCCESSFUL
OR PREVAILING PARTY SUCH PARTY'S LEGAL FEES AND COSTS IN CONNECTION
WITH SUCH ARBITRATION. EACH PARTY SHALL, HOWEVER, BEAR ITS OWN COSTS
FOR THE PREPARATION AND PRESENTATIONS OF ITS CONTENTIONS
NOTWITHSTANDING AND IRRESPECTIVE OF ANY OTHER PROVISION OR RULE OF LAW
PERTAINING TO THE MATTER TO BE ARBITRATED. THE ARBITRATOR'S DECISION
SHALL BE FINAL AND BINDING UPON THE PARTIES. THE ARBITRATION PROCEEDING
PROVIDED FOR HEREIN IS A PRIVATE PROCEEDING. NEITHER PARTY SHALL
DISCLOSE OR PUBLICIZE THE DECISION OF THE ARBITRATOR OTHER THAN AS
REQUIRED BY LAW.
6. Add a new section 22 to read as follows:
"22. WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING."
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to by
duly executed as of the Effective Date.
U.S. DATAWORKS, INC.
By: ________________________
Its: _______________________
XXXXX XXXXXXXXXX
____________________________
XXXXXX XXXXXXXXX
____________________________
0000 XXXXXXX XXXXXX, L.P.
By: 0000 Xxxxxxx Xxxxxx, Inc.
Its: General Partner
By: __________________________
Its: ________________________
STARLINE COMMUNICATIONS, INC.
By: ___________________________
Its: _________________________
ACI COMMUNICATIONS HOLDINGS, INC.
By: ____________________________
Its: __________________________
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FORM OF
NEW ACI PROMISSORY NOTE
