NOTE MODIFICATION AGREEMENT
THIS NOTE MODIFICATION
AGREEMENT (this “Agreement”) is entered into this 20th day of May, 2009
by and between US Dataworks,
Inc., a Nevada corporation (the “Company”), and Xxxxxxx X. Xxxxx, an
individual residing in the State of Texas and the Chairman and Chief Executive
Officer of the Company (the “Holder”). All capitalized terms not
specifically defined herein shall have those meanings set forth in 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 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;
and
WHEREAS,
concurrent with the execution and delivery of this Agreement, the Company is
entering into Note Modification Agreements (the “Refinance Note Modification
Agreements”) with the holders of those certain US Dataworks, Inc. Refinancing
Secured Notes dated August 13, 2008 executed by the Company and payable to the
order of the holders thereof in the aggregate original principal amount of Three
Million Seven Hundred Three Thousand Five Hundred Dollars ($3,703,500.00), as
amended by those certain Note Modification Agreements dated February 19,
2009;
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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The
opening paragraph of the Note shall be deleted in its entirety and
replaced with the following:
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“FOR
VALUE RECEIVED, the undersigned, US Dataworks, Inc., a
Nevadacorporation (“UDW”), hereby promises to pay,
ON DEMAND made any time
on or after December
31, 2009, and if demand is not so made, then on December 31, 2010, to the
order of Xxxxxxx X. Xxxxx (“Xxxxx”), the holder, or his
assigns, in lawful money of the United States of America, and in immediately
payable funds, the principal sum of Five Hundred Thousand Dollars ($500,000)
plus interest thereon to accrue at the rate of eight and three quarters percent
(8.75%) per annum
(“Interest”). Payment of
all amounts due hereunder shall be at the address of UDW provided
herein. For the purposes hereof, the term “Buyer Notes” shall mean
those certain senior secured convertible notes issued by UDW pursuant to that
certain Securities Purchase Agreement, dated as of November 13, 2007, by and
among UDW and the Buyers listed on the Schedule of Buyers, hereto attached as
Exhibit A (the
“Buyer Notes”).”
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B.
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Section
3(a) of the Note shall be deleted in its entirety and replaced with the
following:
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“The
non-payment of any principal or Interest when such payment becomes due and
payable, which payment may be demanded (and thereby become due and payable) at
any time on or after December 31, 2009, and UDW’s failure to make such payment
for a period of ten (10) days thereafter;”
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C.
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The
following new Section 16 shall be added to the end of the
Note:
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“16. Pre-payment. UDW
shall have the right, at any time and from time to time, to prepay any amounts
owed hereunder before proper demand is made therefor without penalty provided
that any amounts so prepaid shall first be allocated to any accrued but unpaid
interest as of the prepayment date and then to reduce the principal balance
hereof.
2. The
parties hereto hereby agree that no demand has been made under the Note prior to
the date hereof and no default or Event of Default under the Note has occurred
prior to the date hereof but, in an abundance of caution, to the extent such a
default or Event of Default is deemed to have occurred, the Holder hereby waives
such deemed default or Event of Default.
3. The
Note, as modified by this Agreement, and all of the other loan documents and
other agreements and instruments executed and delivered between the Company and
the Holder in connection with the Note shall remain in full force and
effect.
4. 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.
5. 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.
6. This
Agreement, when executed by the parties hereto and subject to the execution and
delivery of the Refinance Note Modification Agreements, shall be binding upon
and inure to the benefit of the parties hereto, and their respective heirs,
executors, administrators, personal representatives, successors and
assigns.
7. 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]
IN WITNESS WHEREOF, this Agreement has
been executed and delivered by the parties hereto on the date first set forth
above.
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THE
COMPANY:
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US
DATAWORKS, INC.
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By:
/s/ J. Xxxxxxx
Xxxxxxxx, Xx.
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Name:
J. Xxxxxxx
Xxxxxxxx, Xx.
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Title:
Director
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THE
HOLDER:
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/s/
Xxxxxxx X. Xxxxx
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Xxxxxxx
X.
Xxxxx
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