EXHIBIT 4.1
FINDER'S FEE AND
PIGGYBACK REGISTRATION RIGHTS AGREEMENT
THIS FINDERS FEE AND PIGGYBACK REGISTRATION RIGHTS AGREEMENT,
dated as of June 30, 2003, is entered into by and between Bridgewater Capital
Corporation, a California corporation ("BRIDGEWATER") and US Dataworks, Inc., a
Nevada corporation (the "COMPANY").
WHEREAS, pursuant to that certain Convertible Debenture and
Warrant Purchase Agreement, dated June 30, 2003 (the "PURCHASE AGREEMENT") by
and between the Company and Societe Financiere Privee, S.A., a company of
Switzerland ("SFP"), wherein according to Section 7.11 therein, the Company
agreed to pay Bridgewater a finder's fee equal to four percent (4%) of the
Purchase Price of each Debenture purchased by SFP in common stock valued at the
closing price of the trading day immediately before the corresponding Closing
Date (such common stock paid as the finder's fee, the "FEE STOCK"). (Capitalized
terms not defined herein shall have the meanings ascribed to them in the
Purchase Agreement);
WHEREAS, in addition to paying Bridgewater the Fee Stock, the
Company agreed to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ piggyback registration rights for such Fee
Stock; and
WHEREAS, the Company desires to grant to Bridgewater the
piggyback registration rights set forth herein with respect to the Fee Stock.
NOW, THEREFORE, the parties hereto mutually agree as follows:
SECTION 1. FINDER'S FEE.
(a) The Company hereby agrees to pay Bridgewater a
finder's fee equal to four percent (4%) of the Purchase Price of each Debenture
purchased by SFP. The finder's fee shall be paid to Bridgewater in fully paid,
non-accessible shares of the Company's common stock in not less than three (3)
business days from the Company's receipt of the Purchase Price proceeds from
SFP. The value of the Fee Stock shall be the closing 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)
on the trading day immediately prior to the date of the Company's receipt of the
Purchase Price proceeds from SFP.
SECTION 2. REPRESENTATIONS. Bridgewater, hereby represents and
warrants to the Company that:
(a) AUTHORIZATION. Bridgewater has all requisite
power and authority to enter into the transactions contemplated by this
Agreement and that this Agreement constitutes a valid and legally binding
obligation of Bridgewater except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the enforcement of creditors' rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (c) to the extent the indemnification provisions
contained in this Agreement may be limited by applicable federal or state
securities laws.
(b) PURCHASE ENTIRELY FOR OWN ACCOUNT. Fee Stock will
be acquired for investment for Bridgewater's own account, and not as a nominee
or agent, and not with a view to the resale or distribution of any part thereof,
and Bridgewater has no present intention of selling, granting any participation
in, or otherwise distributing the same. Bridgewater is not a party to any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or otherwise dispose of any of the Fee Stock acquired by it.
(c) RELIANCE UPON BRIDGEWATER'S REPRESENTATIONS.
Bridgewater understands that the issuance of the Fee Stock will not be
registered under the Securities Act on the ground that such issuance and sale
will be exempt from registration under the Securities Act pursuant to Rule 506
of Regulation D and/or Section 4(2) thereof, and that the Company's reliance on
such exemption is based on Bridgewater's representations set forth herein.
Bridgewater realizes that the basis for the exemption may not be present if,
notwithstanding such representations, Bridgewater has in mind merely acquiring
the securities for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise. Bridgewater has no such present
intention.
(d) RECEIPT OF INFORMATION. Bridgewater has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the issuance and sale of the Fee Stock and the business,
properties, prospects and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to it or to which it had access. No person
other that the Company has been authorized to give any information or to give
any representation not contained in this Agreement and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company.
(e) INVESTMENT EXPERIENCE. Bridgewater is experienced
in evaluating and investing in securities of companies and acknowledges that it
is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Securities.
(f) ACCREDITED INVESTOR. Bridgewater is an
"ACCREDITED INVESTOR" as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act.
SECTION 3. RESTRICTED SECURITIES.
(a) RESTRICTED SECURITIES. Bridgewater understands
that the Fee Stock may not be sold, transferred or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Fee Stock or an
available exemption from registration under the Securities Act, the Fee Stock
must be held indefinitely. In particular, Bridgewater is aware that the Fee
Stock may not be sold pursuant to Rule 144 promulgated under the Securities Act
unless all of the conditions of that Rule are met.
(b) LEGENDS. Each certificate or other document
evidencing the Fee Stock shall be endorsed with the legends set forth below, and
Bridgewater covenants that, except to the extent such restrictions are waived by
the Company, Bridgewater shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in the
legends endorsed on such certificate:
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The following legend under the Act:
"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."
Such other legends as may be required under state securities
laws.
SECTION 4. 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 Bridgewater ten
(10) days' advance written notice of such registration ("REGISTRATION NOTICE").
Only in the instance where Bridgewater 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 Fee Stock, the Company shall otherwise cause
to be registered under the Securities Act all of Bridgewater's Fee Stock,
subject to any adjustment or cutbacks made by the Company's underwriter in its
sole discretion. Bridgewater agrees to promptly return to the Company any
shareholder questionnaire or other documentation the Company may require
Bridgewater to submit as required under federal and state securities laws. The
Company's obligations pursuant to this Section 5.2 shall terminate on the
earlier to occur of: (a) the second anniversary of the date of issuance of the
common stock upon conversion of the Debenture and (b) such time when all common
stock held by Bridgewater may be sold pursuant to Rule 144 under the Securities
Act during any three (3) month period.
SECTION 5. MISCELLANEOUS.
(a) REASONABLE EFFORTS; OTHER ACTIONS. Subject to the
terms and conditions herein provided and applicable law, the Company and
Bridgewater shall use all commercially reasonable efforts promptly to take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or appropriate under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
(b) INTERPRETATION. The words "include," "includes"
and "including" when used herein shall be deemed in each case to be followed by
the words "without limitation." In this Agreement, any reference to any event,
change, condition or effect being "material" with respect to any entity or group
of entities means any material event, change, condition or effect related to the
condition (financial or otherwise), properties, assets (including intangible
assets), liabilities, business, operations or results of operations of such
entity or group of entities. The phrase "made available" in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available. The phrases "the
date of this Agreement", "the date hereof", and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to June 30, 2003. The
headings and subheadings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Any reference in this Agreement to a statutory provision or rule or
regulation promulgated thereunder shall be deemed to include any similar
successor statutory provision or rule or regulation promulgated thereunder.
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(c) SUCCESSORS AND ASSIGNS. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Neither the Company nor Bridgewater shall
assign this Agreement or any rights hereunder or delegate any duties hereunder
without the prior written consent of the other except as otherwise provided
herein.
(d) NOTICES. Unless otherwise provided, any notice,
request, demand or other communication required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified, or when sent by Facsimile (with
receipt confirmed and promptly confirmed by personal delivery, U.S. first class
mail, or courier), or overnight courier service, or upon deposit with the United
States Post Office, by registered or certified mail, postage prepaid and
addressed as follows (or at such other address as a party may designate by
notice to the other):
IF TO THE COMPANY: IF TO BRIDGEWATER:
US Dataworks, Inc. Bridgewater Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 610 Newport center Drive, Suite 830
Houston, Texas 77040 ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Partner
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(e) SURVIVAL. All representations and warranties
contained or provided for herein shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the party
benefiting from any such representation or warranty, and shall survive the
Closing to the extent of applicable statutes of limitations.
(f) AMENDMENTS AND WAIVERS. This Agreement may be
amended or modified only by a written instrument signed by the Company and
Bridgewater hereunder. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party against whom such
waiver is sought to be enforced. No waiver by either party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be
a continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
(g) SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable, invalid or void by a court of competent
jurisdiction, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
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(h) ENTIRE AGREEMENT. This Agreement and the
documents referred to herein contain the entire understanding of the parties
with respect to the matters covered herein and supersedes all prior agreements
and understandings, written or oral, between the parties relating to the subject
matter hereof.
(i) GOVERNING LAW. This Agreement shall be governed
by and construed under the laws of the State of Nevada (irrespective of its
choice of law principles); provided, however, that neither this Agreement nor
any provision hereof shall be construed for or against any party on the basis
that such party drafted this Agreement or any provision hereof.
(j) COUNTERPARTS. This Agreement may be executed by
facsimile copies and in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
US DATAWORKS, INC. BRIDGEWATER CAPITAL
CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: CHIEF EXECUTIVE OFFICER Title: PARTNER
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