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Exhibit 4.1

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

LONG TERM COMMON STOCK PURCHASE WARRANT

To Purchase 650,000 Shares of Common Stock of

US DATAWORKS, INC.

          THIS LONG TERM COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, Crescent International, Ltd. (the “Holder”), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or
after the date that is six months after the date hereof (the “Initial Exercise Date”) and
on or prior to the close of business on the three year anniversary of the Initial Exercise Date
(the “Termination Date”) but not thereafter, to subscribe for and purchase from US
Dataworks, Inc., a Nevada corporation (the “Company”), up to 650,000 shares (the
“Warrant Shares”) of Common Stock, par value $0.0001 per share, of the Company (the
“Common Stock”). The purchase price of one share of Common Stock under this Warrant shall
be equal to the Exercise Price, as defined in Section 2(b).

     Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase Agreement (the
“Purchase Agreement”), dated June 16, 2005, among the Company and the purchasers signatory
thereto.

     Section 2. Exercise.

     a) Exercise of Warrant. Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise Form annexed hereto (or such other office
or agency of the Company as it may designate by notice in writing to the registered Holder
at the address of such Holder appearing on the books of the Company); provided,
however, within 5 Trading Days of the date said Notice of Exercise is delivered to
the Company, the Holder shall have surrendered this Warrant to the Company and the

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Company shall have received payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States bank.

     b) Exercise Price. The exercise price of the Common Stock under this Warrant
shall be $0.59, subject to adjustment hereunder (the “Exercise Price”).

     c) Cashless Exercise. If at any time after one year from the date of issuance
of this Warrant there is no effective Registration Statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the Holder, then this Warrant
may also be exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares equal to the
quotient obtained by dividing [(A-B) (X)] by (A), where:

	 	(A)	 = 	 the VWAP on the Trading Day immediately preceding the date
of such election;
	 
	 	(B)	 = 	 the Exercise Price of this Warrant, as adjusted; and
	 
	 	(X)	 = 	 the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means of a cash
exercise rather than a cashless exercise.

     Notwithstanding anything herein to the contrary, on the Termination Date, provided that
there is no effective Registration Statement registering, or no current prospectus available
for, the resale of the Warrant Shares by the Holder, this Warrant shall be automatically
exercised via cashless exercise pursuant to this Section 2(c).

     d) Exercise Limitations.

     i. Holder’s Restrictions. A Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2(c) or otherwise,
to the extent that after giving effect to such issuance after exercise, such
Holder (together with such Holder’s affiliates), as set forth on the
applicable Notice of Exercise, would beneficially own in excess of 4.99% of
the number of shares of the Common Stock outstanding immediately after
giving effect to such issuance. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by such Holder or
any of its affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including,
without limitation, any other shares of Debentures or Warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned

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by such Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(d)(i), beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with
Section 13(d) of the Exchange Act and such Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(d) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of a Holder, and the submission
of a Notice of Exercise shall be deemed to be each Holder’s determination of
whether this Warrant is exercisable (in relation to other securities owned
by such Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination.
For purposes of this Section 2(d), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (x) the Company’s most recent Form
10-QSB or Form 10-KSB, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the
Company’s Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to such Holder
the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its affiliates since the date as
of which such number of outstanding shares of Common Stock was reported.
The provisions of this Section 2(d) may be waived by such Holder, at the
election of such Holder, upon not less than 61 days’ prior notice to the
Company, and the provisions of this Section 2(d) shall continue to apply
until such 61st day (or such later date, as determined by such
Holder, as may be specified in such notice of waiver).

     ii. Trading Market Restrictions. If the Company has not
obtained Shareholder Approval (as defined below) if required by the
applicable rules and regulations of the Trading Market (or any successor
entity), then the Company may not issue upon exercise of this Warrant a
number of shares of Common Stock which, when aggregated with any shares of
Common Stock issued (A) upon conversion of the Debentures issued pursuant to
the Purchase Agreement and (B) upon prior exercise of this or any other
Warrant issued pursuant to the Purchase Agreement, would exceed 19.999% of
the number of shares of Common Stock outstanding on the Trading Day
immediately preceding the Closing Date (such number of shares, the
“Issuable Maximum”). If on any attempted exercise of this

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Warrant, the issuance of Warrant Shares would exceed the Issuable
Maximum and the Company shall not have previously obtained the vote of
shareholders (the “Shareholder Approval”), if any, as may be
required by the applicable rules and regulations of the Trading Market (or
any successor entity) to approve the issuance of shares of Common Stock in
excess of the Issuable Maximum pursuant to the terms hereof, then the
Company shall issue to the Holder requesting a Warrant exercise such number
of Warrant Shares as may be issued below the Issuable Maximum and, with
respect to the remainder of the aggregate number of Warrant Shares, this
Warrant shall not be exercisable until and unless Shareholder Approval has
been obtained.

     e) Mechanics of Exercise.

     i. Authorization of Warrant Shares. The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

     ii. Delivery of Certificates Upon Exercise. Certificates for
shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker
with the Depository Trust Company through its Deposit Withdrawal Agent
Commission (“DWAC”) system if the Company is a participant in such
system, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within 3 Trading Days from the delivery to
the Company of the Notice of Exercise Form, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth above (“Warrant
Share Delivery Date”). This Warrant shall be deemed to have been
exercised on the date the Exercise Price is received by the Company. The
Warrant Shares shall be deemed to have been issued, and Holder or any other
person so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date the Warrant
has been exercised by payment to the Company of the Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section
2(e)(vii) prior to the issuance of such shares, have been paid.

     iii. Delivery of New Warrants Upon Exercise. If this Warrant
shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase
the unpurchased Warrant Shares called for by this Warrant,

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which new Warrant shall in all other respects be identical with this
Warrant.

     iv. Rescission Rights. If the Company fails to cause its
transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the
Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.

     v. Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause its transfer agent to transmit
to the Holder a certificate or certificates representing the Warrant Shares
pursuant to an exercise on or before the Warrant Share Delivery Date, and if
after such date the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for
the shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required
to deliver to the Holder in connection with the exercise at issue times (B)
the price at which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either reinstate the
portion of the Warrant and equivalent number of Warrant Shares for which
such exercise was not honored or deliver to the Holder the number of shares
of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common
Stock with an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (1) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure
to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

     vi. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would otherwise be

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entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.

     vii. Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder or in such
name or names as may be directed by the Holder; provided,
however, that in the event certificates for Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form
attached hereto duly executed by the Holder; and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.

     viii. Closing of Books. The Company will not close its
stockholder books or records in any manner which prevents the timely
exercise of this Warrant, pursuant to the terms hereof.

     Section 3. Certain Adjustments.

     a) Stock Dividends and Splits. If the Company, at any time while this Warrant
is outstanding: (A) pays a stock dividend or otherwise make a distribution or distributions
on shares of its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company pursuant to this Warrant), (B) subdivides outstanding
shares of Common Stock into a larger number of shares, (C) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issues by reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted. Any
adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in the case of
a subdivision, combination or re-classification.

     b) Subsequent Equity Sales. If the Company or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, shall offer, sell, grant any
option to purchase or offer, sell or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person to

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acquire shares of Common Stock, at an effective price per share less than the then
Exercise Price (such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”), as adjusted hereunder (if the holder of the
Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation
of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which is issued in
connection with such issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall be deemed to have
occurred for less than the Exercise Price on such date of the Dilutive Issuance), then, the
Exercise Price shall be reduced and only reduced to equal the Base Share Price. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this
Section 3(b) in respect of an Exempt Issuance. The Company shall notify the Holder in
writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this section, indicating therein the applicable issuance price,
or of applicable reset price, exchange price, conversion price and other pricing terms (such
notice the “Dilutive Issuance Notice”). For purposes of clarification, whether or
not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon the
occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
entitled to receive Warrant Shares based upon the Base Share Price regardless of whether the
Holder accurately refers to the Base Share Price in the Notice of Exercise.

     c) Pro Rata Distributions. If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or
rights or warrants to subscribe for or purchase any security other than the Common Stock
(which shall be subject to Section 3(b)), then in each such case the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by a fraction
of which the denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then per share
fair market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common Stock as
determined by the Board of Directors in good faith. In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

     d) Fundamental Transaction. If, at any time while this Warrant is outstanding,
(A) the Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its assets in one or
a series of related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash

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or property, or (D) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have
the right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”)
receivable upon or as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event or (b) if the Company
is acquired in an all cash transaction, cash equal to the value of this Warrant as
determined in accordance with the Black-Scholes option pricing formula. For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions and
evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this
Section 3(d) and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

     e) Calculations. All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this
Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding treasury
shares, if any) issued and outstanding.

     f) Voluntary Adjustment By Company. The Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for any period of
time deemed appropriate by the Board of Directors of the Company.

     g) Notice to Holders.

     i. Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to this Section 3, the Company shall promptly mail to

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each Holder a notice setting forth the Exercise Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment. If the Company issues a variable rate security, despite the
prohibition thereon in the Purchase Agreement, the Company shall be deemed
to have issued Common Stock or Common Stock Equivalents at the lowest
possible conversion or exercise price at which such securities may be
converted or exercised in the case of a Variable Rate Transaction (as
defined in the Purchase Agreement).

     ii. Notice to Allow Exercise by Holder. If (A) the Company
shall declare a dividend (or any other distribution) on the Common Stock;
(B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock; (C) the Company shall authorize the granting
to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger
to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash
or property; (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company; then,
in each case, the Company shall cause to be mailed to the Holder at its last
address as it shall appear upon the Warrant Register of the Company, at
least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution, redemption, rights
or warrants, or if a record is not to be taken, the date as of which the
holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y)
the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided,
that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be
specified in such notice. The Holder is entitled to exercise this Warrant
during the 20-day period commencing on the date of such notice to the
effective date of the event triggering such notice.

     Section 4. Transfer of Warrant.

     a) Transferability. Subject to compliance with any applicable securities laws
and the conditions set forth in Sections 5(a) and 4(d) hereof and to the provisions of

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Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the principal office of
the Company, together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to
pay any transfer taxes payable upon the making of such transfer. Upon such surrender and,
if required, such payment, the Company shall execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees and in the denomination or denominations specified
in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.
A Warrant, if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

     b) New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any
transfer which may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

     c) Warrant Register. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name
of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.

     d) Transfer Restrictions. If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as a condition
of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or transferee
execute and deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the Securities Act or a
qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.

     Section 5. Miscellaneous.

     a) Title to Warrant. Prior to the Termination Date and subject to compliance
with applicable laws and Section 4 of this Warrant, this Warrant and all rights hereunder
are transferable, in whole or in part, at the office or agency of the Company by the Holder
in person or by duly authorized attorney, upon surrender of this Warrant together with the

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Assignment Form annexed hereto properly endorsed. The transferee shall sign an
investment letter in form and substance reasonably satisfactory to the Company.

     b) No Rights as Shareholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate
Exercise Price (or by means of a cashless exercise), the Warrant Shares so purchased shall
be and be deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.

     c) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate relating to the
Warrant Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

     d) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

     e) Authorized Shares.

     The Company covenants that during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant. The Company further covenants that its issuance
of this Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights under
this Warrant. The Company will take all such reasonable action as may be necessary
to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed.

     Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such actions as may be necessary or

11

 

appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the Company
will (a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.

     Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

     f) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.

     g) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, will have restrictions upon resale imposed
by state and federal securities laws.

     h) Nonwaiver and Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that
all rights hereunder terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

     i) Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

     j) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the Company.

12

 

     k) Remedies. Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific performance of
its rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the provisions of
this Warrant and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.

     l) Successors and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of and be binding
upon the successors of the Company and the successors and permitted assigns of Holder. The
provisions of this Warrant are intended to be for the benefit of all Holders from time to
time of this Warrant and shall be enforceable by any such Holder or holder of Warrant
Shares.

     m) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of the Company and the Holder.

     n) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of this Warrant.

     o) Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

13

 

          IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.

Dated: November 22, 2005

	 	 	 	 	 	 	 
	 	 	US DATAWORKS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John S. Reiland	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John S. Reiland	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

14

 

NOTICE OF EXERCISE

     TO: US DATAWORKS, INC.

          (1) The undersigned hereby elects to purchase ___ Warrant Shares of the Company pursuant
to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.

          (2) Payment shall take the form of (check applicable box):

o in lawful money of the United States; or

o the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

          (3) Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:

                                                                                

     The Warrant Shares shall be delivered to the following:

                                                                                

                                                                                

                                                                                

          (4) Accredited Investor. The undersigned is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

	 	 	 
	Name of Investing Entity:
	 	 
	 

	 	 

	 	 	 
	Signature of Authorized Signatory of Investing Entity:
	 	 
	 

	 	 

	 	 	 
	Name of Authorized Signatory:
	 	 
	 

	 	 

	 	 	 
	Title of Authorized Signatory:
	 	 
	 

	 	 

	 	 	 
	Date:
	 	 
	 

	 	 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

                                                                                                                                                                whose address is

                                                                                                                                                                                                                            .

                                                                                                                                                                                                                            

     Dated: ___, ___

	 	 	 	 	 	 	 
	 

	 	Holder’s Signature:
	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Holder’s Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Signature Guaranteed:                                                                                                     

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatsoever, and must be
guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign the foregoing
Warrant.exv4w2

 

Exhibit 4.2

REGISTRATION AGREEMENT

     REGISTRATION AGREEMENT, dated as of November 22, 2005, between US DATAWORKS, INC. a Nevada
corporation (the “Company”), and the purchasers signatory hereto (each such purchaser is a
“Purchaser” and collectively, the “Purchasers”).

WITNESSETH

     Purchaser is acquiring from the Company a warrant, of even date herewith (the “Warrant”),
exercisable into shares (“Warrant Shares”) of the Company’s common stock, par value $0.0001 per
share (the “Common Stock”) pursuant to the terms of a Letter Agreement dated November 22, 2005.
The Warrant Shares will be “restricted securities” as defined in Rule 144 under the Securities Act
of 1933, as amended. As a result, there will be substantial restrictions on the ability of the
Holders (as defined below) to sell the Warrant Shares in the absence of registration under the
Securities Act of 1933 and applicable state securities laws. In order to enable the Holder to sell
all or a portion of the Warrant Shares, the Company has agreed to the terms of this Agreement.

     NOW THEREFORE, in consideration of the premises, and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties, the parties
hereby agree as follows:

1 REGISTRATION

     1.1 Definitions. As used in this Agreement, the following terms shall have the following
meanings:

          (a) The term “Act” means the Securities Act of 1933, as amended.

          (b) The term “AMEX” means the American Stock Exchange.

          (c) The term “Blackout Period” means any period: (i) beginning on the date on which the
Company notifies Holder in writing that the Board of Directors of the Company, in its good faith
judgment, has determined that the Company proposes to engage in a material acquisition,
consolidation, tender offer or other material transaction, including a primary underwritten
offering of its securities, in each case not in the ordinary course of business, such that
registration or qualification of the Registrable Securities would have a material adverse effect on
the Company and its shareholders, and (ii) ending as promptly as practicable but in any event not
more than 90 days after the date on which the Company notifies Holder of the Board of Directors’
determination.

          (d) The terms “Closing” and “Closing Date” have the meanings ascribed to such terms in the
Agreement.

          (e) The term “Common Stock” has the meaning ascribed to such term in the Agreement.

          (f) The term “Warrant Shares” means the shares of Common Stock issued to Holder pursuant to
the exercise of the Warrant.

          (g) The term “Registration Deadline” means the one hundred and eightieth (180th)
calendar day following the date hereof.

 

 

          (h) The term “Holder” means any person owning or having the right to acquire, through exercise
of the Warrant or otherwise, Registrable Securities.

          (i) The terms “register,” “registered” and “registration” each refer to a registration
effected by preparing and filing a registration statement or similar document in compliance with
the Act, and the declaration or ordering of effectiveness of such registration statement or
document.

          (j) The terms “Registrable Security” and “Registrable Securities” refer to: (i) all of the
Warrant Shares issuable pursuant to the exercise of the Warrant, and (ii) any shares of Common
Stock or other securities of the Company that may be issued or issuable with respect to the Warrant
Shares as a result of a stock split or dividend or any securities into which the Warrant Shares may
thereafter be changed as a result of merger, consolidation, recapitalization or otherwise. As to
any particular Registrable Securities, such securities will cease to be Registrable Securities when
they have been (1) distributed to the public pursuant to an offering registered under the Act, (2)
sold to the public in compliance with Rule 144 (as defined below) or (3) eligible for sale without
restriction under Rule 144(k) under the Act.

          (k) The term “Rule 144” means Rule 144 promulgated under the Act, as such rule may be amended
from time to time, or any similar rule or regulation thereafter adopted by the Commission.

          (l) The term “Rule 415” means Rule 415 promulgated under the Act, as such rule may be amended
from time to time, or any similar rule or regulation thereafter adopted by the Commission.

          (m) The term “Commission” means the Securities and Exchange Commission.

          (n) The term “1934 Act” means the Securities Exchange Act of 1934, as amended.

     1.2 Filing of Registration.

          (a) Registration Statement. The Company agrees to use its commercially reasonable
efforts to prepare and file with the Commission a registration statement under the Act of Form S-1,
S-2 or S-3 (or any other appropriate form that may be reasonably used for the registration of
Registrable Securities) covering one hundred and percent (100%) of the number of shares of Common
Stock issuable on the exercise of the Warrant (such number to be determined using the exercise
price without regard to any restriction on the ability of any Holder to exercise such Holder’s
Warrant as of such date). The Registration Statement shall state, to the extent permitted by Rule
416 under the Securities Act, that it also covers such indeterminate number of additional shares of
Common Stock as may become issuable upon exercise of the Warrant in order to prevent dilution
resulting from stock splits, stock dividends or similar events.

          (b) Effectiveness. The Company shall use its commercially reasonable efforts to cause
the Registration Statement to become effective prior to the Registration Deadline. The Company
shall respond promptly to any and all comments made by the staff of the Commission on the
Registration Statement, and shall submit to the Commission, within two (2) Business Days after the
Company learns that no review of the Registration Statement will be made by the staff of the
Commission or that the staff of the Commission has no further comments on the Registration
Statement, as the case may be, a request for acceleration of the effectiveness of the Registration
Statement to a time and date not later than forty-eight (48) hours after the submission of such
request.

 

 

The Company will maintain the effectiveness of the Registration Statement until the earlier to
occur of (i) the date on which all of the Registrable Securities eligible for resale thereunder
have been publicly sold pursuant to either the Registration Statement or Rule 144 and (ii) the date
on which all of the Registrable Securities remaining to be sold under the Registration Statement
(in the reasonable opinion of counsel to the Holder) may be immediately sold to the public under
Rule 144(k) or any successor provision, assuming that all Warrant Shares are issued by means of a
cashless exercise of the Warrants (the period beginning on the Closing Date and ending on the
earlier to occur of (i) or (ii) above being referred to herein as the “Registration
Period”).

     1.3 Obligations of the Company. In addition to performing its obligations hereunder,
including without limitation those pursuant to Sections 1.2(a) and (b) above, the Company shall:

          (a) prepare and file with the Commission such amendments and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement as may be necessary
to comply with the provisions of the Securities Act or to maintain the effectiveness of the
Registration Statement during the Registration Period, or as may be reasonably requested by a
Holder in order to incorporate information concerning such Holder or such Holder’s intended method
of distribution;

          (b) as soon as practicable, secure the listing of all Registrable Securities on the AMEX, and
provide each Holder with reasonable evidence thereof;

          (c) upon the effectiveness of the Registration Statement, furnish to each Holder such number
of copies of the prospectus included in the Registration Statement, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
such Holder may reasonably request in order to facilitate the disposition of such Holder’s
Registrable Securities;

          (d) use all commercially reasonable efforts to register or qualify the Registrable Securities
under the securities or “blue sky” laws of such jurisdictions within the United States as shall be
reasonably requested in writing from time to time by a Holder, and do any and all other acts or
things which may be necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; provided that the Company
shall not be required in connection therewith or as a condition thereto to qualify to do business,
to subject itself to taxation in any such jurisdiction or to file a general consent to service of
process in any such jurisdiction;

          (e) in the event of an underwritten public offering of the Registrable Securities, enter into
(together with all Holders proposing to distribute Registrable Securities through such
underwriting) and perform its obligations under an underwriting agreement, in usual and customary
form reasonably acceptable to the Company, with the managing underwriter of such offering;

          (f) notify each Holder immediately after becoming aware of the occurrence of any event (but
shall not, without the prior written consent of such Holder, disclose to such Holder any facts or
circumstances constituting material non-public information) as a result of which the prospectus
included in the Registration Statement, as then in effect, contains an untrue statement of material
fact or omits to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing, and (except during
an Allowed Delay (as hereinafter defined)) as promptly as practicable prepare, file with the
Commission and

 

 

furnish to each Holder a reasonable number of copies of a supplement or an amendment to such
prospectus as may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then existing.

          The Company may delay the disclosure of material non-public information, and suspend the
availability of the Registration Statement, for no more than (i) ten (10) consecutive Business Days
or (ii) thirty (30) calendar days in any twelve (12) month period, in the event (A) of a proposed
merger, reorganization or similar transaction involving the Company, as long as its board of
directors (x) has determined, upon the advice of counsel, that such information would be required
to be disclosed in an offering registered under the Securities Act and (y) reasonably deems it in
the Company’s best interests not to disclose such information publicly; or (B) the Company deems it
in its best interest to delay the disclosure of material non-public information (each, an
“Allowed Delay”).

          (g) use all commercially reasonable efforts to prevent the issuance of any stop order or other
order suspending the effectiveness of the Registration Statement and, if such an order is issued,
to obtain the withdrawal thereof at the earliest possible time and to notify each Holder of the
issuance of such order and the resolution thereof;

          (h) provide to each Holder and its representatives, upon reasonable prior notice, the
opportunity to conduct a reasonable inquiry of the Company’s financial and other records during
normal business hours and make available its officers for questions regarding information which
such Holder may reasonably request in order to fulfill any due diligence obligation on its part;

          (i) in the event that, at any time, the number of shares available under the Registration
Statement is insufficient to cover one hundred percent 100% of the Registrable Securities issuable
under the Warrant (such number to be determined using the Exercise Price in effect at such time and
without regard to any restriction on the ability of any Holder to exercise such Holder’s Warrant)
the Company shall promptly amend the Registration Statement or file a new registration statement,
in any event as soon as practicable, but not later than the tenth (10th) day following notice from
a Holder of the occurrence of such event, so that the Registration Statement or such new
registration statement, or both, covers no less than one hundred percent (100%) of the Registrable
Securities eligible for resale thereunder and issuable under the related Warrant (such number to be
determined using the exercise price in effect at the time of such amendment or filing and without
regard to any restriction on the ability of any Holder to exercise such Holder’s Warrant). The
Company shall use its best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof. Any Registration Statement
filed pursuant to this Section 1.3(i) shall state that, to the extent permitted by Rule 416 under
the Securities Act, such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of the Preferred Stock and exercise
of the Warrants in order to prevent dilution resulting from stock splits, stock dividends or
similar events.

     1.4 Obligations of Holders. In connection with the registration of Registrable Securities
pursuant to a Registration Statement, each holder shall:

          (a) timely furnish to the Company in writing such information regarding itself and the
intended method of disposition of such Registrable Securities as the Company shall reasonably
request in order to effect the registration thereof;

 

 

          (b) upon receipt of any notice from the Company of the happening of any event of the kind
described in Sections 1.3(f) or (g), immediately discontinue any sale or other disposition of such
Registrable Securities pursuant to such Registration Statement until the filing of an amendment or
supplement as described in Section 1.3(f) or withdrawal of the stop order referred to in Section
1.3(g), and use commercially reasonable efforts to maintain the confidentiality of such notice and
its contents;

          (c) in the event of an underwritten offering of such Registrable Securities in which such
Holder participates, enter into a customary and reasonable underwriting agreement and execute such
other documents as the Company and the managing underwriter for such offering may reasonably
request;

          (d) notify the Company when it has sold all of the Registrable Securities held by it; and

          (e) notify the Company in the event that any information supplied by such Holder in writing
for inclusion in such Registration Statement or related prospectus is untrue or omits to state a
material fact required to be stated therein or necessary to make such information not misleading in
light of the circumstances then existing; immediately discontinue any sale or other disposition of
such Registrable Securities pursuant to such Registration Statement until the filing of an
amendment or supplement to such prospectus as may be necessary so that such prospectus does not
contain an untrue statement of material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of the circumstances
then existing; and use commercially reasonable efforts to assist the Company as may be appropriate
to make such amendment or supplement effective for such purpose.

     1.5 Expenses of Registration. The Company shall bear and pay all expenses, other than
underwriting discounts and commissions and fees and expenses of counsel and other advisors to each
Holder, incurred in connection with registrations, filings or qualifications described herein,
including (without limitation) all registration , filing and qualification fees, printers’ and
accounting fees, the fees and disbursements of counsel for the Company, with respect to Registrable
Securities included in such registration.

     1.6 Indemnification. In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

          (a) The Company will indemnify and hold harmless, to the full extent permitted by law, each
Holder, the officers, directors, employees, affiliates and agents of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act (each, an “Indemnified Holder”), against
any losses, claims, damages and liabilities (joint or several), and expenses (including costs of
investigation and legal expenses) incurred in connection with investigating, preparing or defending
against such losses, claims, damages and liabilities (collectively, “Losses”) to which such
Indemnified Holder may become subject under the Act, the 1934 Act, or other federal, state, local,
foreign or other law, insofar as such Losses arise out of or are based upon any of the following
statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or
alleged untrue statement of a material fact contained in any registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments or supplements
thereto, or (ii) the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided,
however, that the indemnity agreement contained in this

 

 

Section 1.6(a) shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of the Company, which consent shall not be unreasonably
withheld or delayed, nor shall the Company be liable in any such Loss to the extent that it arises
out of or is based upon (i) a Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by such Indemnified
Holder, or (ii) the failure of such Indemnified Holder to deliver a copy of the registration
statement or the prospectus, or any amendments or supplements thereto, after the Company has
furnished such person with a sufficient number of copies of the same.

          (b) Each selling Holder will indemnify and hold harmless, to the full extent permitted by law,
the Company and each of its officers, directors, employees, affiliates and agents, and each person,
if any, who controls the Company within the meaning of the Act or the 1934 Act (each, a “Company
Indemnitee”), against any Losses to which any such Company Indemnitee may become subject under the
Act, the 1934 Act, or other federal, state, local, foreign or other law, insofar as such Losses
arise out of or are based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written information furnished by
such Holder expressly for use in connection with such registration; provided,
however, that the indemnity agreement contained in this Section 1.6(b) shall not apply to
amounts paid in settlement of any such Losses if such settlement is effected without the consent of
such Holder, which consent shall not be unreasonably withheld or delayed. Notwithstanding anything
to the contrary herein contained, a Holder’s indemnity obligation, in such person’s capacity as a
Holder, shall be limited to the net proceeds received by such Holder from the offering out of which
the indemnity obligation arises.

          (c) Promptly after receipt by an indemnified party under this Section 1.6 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnified party, except that such fees and expenses shall be paid by the indemnifying
party if representation of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests between such indemnified
party and any other party represented by such counsel in such proceedings. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section 1.6, but the
omission so to deliver written notice to the indemnifying party will not otherwise relieve it of
any liability that it may have to any indemnified party under this Section 1.6.

          (d) The indemnification provided by this Section 1.6 shall be a continuing right to
indemnification and shall survive the registration and sale of any of the Registrable Securities
hereunder and the expiration or termination of this Agreement.

     1.7 Reports Under Securities Exchange Act of 1934. With a view to making available to each
Holder the benefits of Rule 144 and any other similar rule or regulation of the Commission that may
at anytime permit such Holder to sell securities of the Company to the public without registration,
the Company agrees to use commercially reasonable efforts to:

 

 

          (a) make and keep public information available, as those terms are understood and
defined in Rule 144;

          (b) file with the Commission in a timely manner all reports and other documents required of
the Company under the Act and the 1934 Act; and

          (c) furnish to any Holder, as long as the Holder owns any Registrable Securities, promptly
upon written request (i) a written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Act and the 1934 Act, (ii) to the extent not publicly
available through the Commission’s EDGAR database, a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested by such Holder’s compliance with any rule or
regulation of the Commission which permits the selling of any such securities without registration.

2 MISCELLANEOUS

     2.1 No Inconsistent Agreements. The Company shall not on or after the date of this Agreement
enter into any other agreement with respect to any of its securities that is inconsistent with the
rights granted to Holder or otherwise conflicts with the provisions of this Agreement.

     2.2 Adjustments Affecting Registrable Securities. Except as may be required by any federal or
state securities laws, the Company shall not take any action or permit any change to occur with
respect to the Registrable Securities that would (i) adversely affect the ability of Holder to
include such Registrable Securities in a registration undertaken pursuant to this Agreement or (ii)
adversely affect the marketability or pricing of such Registrable Securities in any such
registration.

     2.3 Amendment and Waiver. Any amendment or waiver of any provision under this Agreement may
be effected only with the written consent of the Company and the Holders of at least a majority of
the Registrable Securities then outstanding.

     2.4 Remedies. The parties hereto acknowledge and agree that the breach of any part of this
Agreement may cause irreparable harm and that monetary damages alone may be inadequate. The
parties hereto therefore agree that any party shall be entitled to injunctive relief or such other
applicable remedy as a court of competent jurisdiction may provide. Nothing contained herein will
be construed to limit any party’s right to any remedies at law, including recovery of damages for
breach of any part of this Agreement.

     2.5 Controlling Law. This Agreement, and all questions relating to its validity,
interpretation, performance and enforcement, shall be governed by and construed in accordance with
the laws of the state of Nevada, notwithstanding any Nevada or other conflict-of-law provisions to
the contrary.

     2.6 Notices. All notices, requests, demands and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly given, made and
received when delivered against receipt, 12 hours after being sent by facsimile or e-mail, or 72
hours after being sent by registered or certified mail, postage prepaid, as set forth below:

	 	 	 	 	 
	 

	 	(a)
	 	If to the Company:
	 
	 	 	 	 
	 

	 	 	 	5301 Hollister Road
	 

	 	 	 	Suite 250

 

 

	 	 	 	 	 
	 

	 	 	 	Houston, TX 77040
	 

	 	 	 	Attention: CEO
	 

	 	 	 	Phone: (713) 934-3855
	 

	 	 	 	Fax: (713) 934-8127
	 
	 	 	 	 
	 

	 	b)
	 	If to any Holder:
	 
	 	 	 	 
	 

	 	 	 	Crescent International Ltd
	 

	 	 	 	C/O Cantara (Switzerland) SA
	 

	 	 	 	84, av. Louis-Casaï,
	 

	 	 	 	1216 Cointrin
	 

	 	 	 	Geneva
	 

	 	 	 	Switzerland

     Any party may alter the address to which communications or copies are to be sent by
giving notice of such change to each of the other parties hereto in conformity with the provisions
of this Section for the giving of notice.

     2.7 Holder of Record. A person is deemed to be a Holder whenever such person owns or is
deemed to own of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or election received from
the record owner of such Registrable Securities.

     2.8 Binding Nature of Agreement. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives, successors and
assigns.

     2.9 Entire Agreement. This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing by the parties hereto.

     2.10 Construction. The Section headings in this Agreement are for convenience of reference
only, do not constitute a part of this Agreement and shall not affect its interpretation. Words
used herein, regardless of the number and gender specifically used, shall be deemed and construed
to include any other number, singular or plural, and any other gender, masculine, feminine or
neuter. The words “include” or “including” shall be deemed to be followed by “without limitation”
whether or not they are followed by such phrases or words of like import. The words “hereof,”
“herein,” “hereby,” “hereunder” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. All references to Section in this
Agreement are to those portions of this Agreement unless otherwise specified.

     2.11 Indulgences, Not Waivers. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or any other right, remedy, power or privilege, nor shall
any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as
a waiver of such right,

 

 

remedy, power or privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such waiver.

     2.12 Execution in Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories. Any photographic or
xerographic copy of this Agreement, with all signatures reproduced on one or more sets of signature
pages, shall be considered for all purposes as of it were an executed counterpart of this
Agreement.

     2.13 Severability. Each and every provision set forth in this Agreement is independent and
severable from the others, and no provision shall be rendered unenforceable by virtue of the fact
that, for any reason, any other or others of them may be unenforceable in whole or in part. The
parties hereto agree that if any provision of this Agreement shall be declared by a court of
competent jurisdiction to be unenforceable for any reason whatsoever, the court may appropriately
limit or modify such provision, and such provision shall be given effect to the maximum extent
permitted by applicable law.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date and year
first above written.

	 	 	 	 	 	 	 
	 	 	US DATAWORKS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John S. Reiland
 

Name: John S. Reiland
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

	 	 	 	 	 	 	 
	 

	 	PURCHASER:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	CRESCENT INTERNATIONAL LTD	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/ Mel Craw
	 	/s/ Max Brezzi	 	 
	 

	 	 

Mel Craw
	 	 

Max Brezzi

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