Document:

exv10w2

 

EXHIBIT 10.2

PROMISSORY NOTE

			
	 
	$2,000,000.00
	 	Palm Beach County, Florida

December 29, 2006
	 

FOR VALUE RECEIVED, BabyUniverse, Inc., a Florida corporation (the “Borrower”), promises to pay to
the order of Lydian Private Bank (the “Lender,” which term shall also include any subsequent holder
of this Note), the principal sum of Two Million Dollars ($2,000,000.00) (the “Loan”), with interest
until paid as set forth in this Note.

     1. Interest.

     This Note shall bear interest a floating rate of interest equal to the base rate on corporate
loans posted by at least seventy-five percent (75%) of the nation’s largest banks known as the
“Wall Street Journal Prime”, as such rate shall change from time to time. If the Wall
Street Journal Prime is no longer available, then the interest rate due under this Note shall be
based on a comparable index and spread as may be determined by Bank at its sole discretion.
Borrower acknowledges that the interest rate shall change as the Wall Street Journal Prime changes
from time to time. Interest shall be calculated on a 360-day year and paid for the actual number
of days elapsed for any whole or partial month in which interest is being calculated. The rate of
interest to be charged from time to time, pursuant to this paragraph is hereinafter called the
"Interest Rate”.

     2. Repayment.

          (a) Commencing February 1, 2007, and on the same day of each month thereafter, interest on the
outstanding principal balance of this Note shall be due and payable. All remaining unpaid
principal together with interest accrued thereon shall be due and payable on July 1, 2008.

          (b) The principal balance of this Note may be prepaid, in whole or in part, at any time by
Borrower provided, however, that any partial prepayment of principal shall be applied to the last
principal payments coming due under the Note.

     3. Late Charges. If any installment of interest or principal or any other payment due under
this Note is not paid within ten (10) days after the date that the installment or payment is due,
Borrower promises to pay Lender a “late charge” equal to the greater of Ten Dollars ($10.00) or 5%
of the past due monthly payment required by this Note.

     4. Default Rate. In the event Borrower shall fail to make any one or more payments on account
of interest, principal, charges, or premiums within five (5) days after the date the same shall
become due and payable, as provided herein, Borrower shall pay to Lender interest on any overdue
payment of principal, interest, charges and

 

 

premiums at the highest rate allowed by applicable law (the “Default Rate”), from the date the same
shall become due and payable until the date paid. Following an Event of Default hereunder, the
term “Interest Rate” as used in this Note shall be deemed to be the Default Rate until such time as
such Event of Default is cured, at which point the “Interest Rate” will no longer be deemed the
Default Rate.

     5. Security for Note. This Note is secured by, inter alia, a Security and Pledge Agreement
(the “Security Agreement”) executed by Wyndcrest Baby Universe Holdings II, LLC, and Wyndcrest
BabyUniverse Holdings III, LLC, of even date herewith.

     6. Acceleration; Remedies. Upon the failure of Borrower to make any payment of principal or
interest when due hereunder, or to timely perform any other obligation due hereunder, or upon the
occurrence of an Event of Default, as that term may be defined in the Loan Agreement (the “Loan
Agreement”) of even date herewith executed by Borrower and Lender (each such default is hereinafter
called an “Event of Default”), the unpaid principal with interest and all other sums owing
hereunder shall at the option of Lender become immediately due and payable. Failure to exercise
this option shall not constitute a waiver of the right to exercise this option in the event of any
subsequent default. In addition to the right to accelerate all principal or interest due
hereunder, upon the occurrence of an Event of Default, Lender is authorized at any time, at its
option, without notice or demand, to setoff and charge against any deposit accounts of either
Borrower or any other party liable for payment hereunder (as well as any money, instruments,
securities, documents, chattel paper, credits, claims, demands, income and any other property,
rights or interest of either Borrower or any other party liable for payment hereunder), which at
any time shall come into possession or custody or under the control of the Lender or any of its
agents, affiliates or correspondents, any and all obligations due hereunder. Lender shall also
have all rights and remedies available under the Loan Agreement, the Security Agreement and all
other documents which secure repayment hereof, available at law or in equity. Notwithstanding
anything to the contrary herein, all such Events of Default hereunder shall be governed by the
notice and cure periods, if any, set forth in the Loan Agreement.

     7. Payment of Costs. In the event this Note is turned over to an attorney at law for
collection after the occurrence of an Event of Default, in addition to the principal, interest,
late charges, and/or premiums due hereunder, Lender shall be entitled to collect all costs of
collection including but not limited to reasonable attorneys’ fees, incurred in connection with
protection of or realization of collateral or in connection with any of Lender’s collection
efforts, whether or not suit on this Note or any foreclosure proceeding is filed, and all such
costs and expenses shall be payable on demand.

     8. Waiver. As to this Note, the Loan Agreement, the Security Agreement, and any other
documents or instruments evidencing or securing the indebtedness (the “Loan Documents”),
Borrower and all guarantors, if any, severally waive all applicable exemption rights, whether under
any state constitution, homestead laws or otherwise, and also severally waive valuation and
appraisement presentment, protest and demand, notice of protest, demand and dishonor and nonpayment
of this Note, and expressly

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agree that the maturity of this Note, or any payment under this Note, may be extended from
time to time without in any way affecting the liability of Borrower and all guarantors, to the
extent permitted by Section 7.Q. of the Loan Agreement.

     9. Waiver of Jury Trial. BORROWER AND LENDER WAIVE ALL RIGHTS TO TRIAL BY JURY OF ANY SUITS,
CLAIMS, COUNTERCLAIMS, AND ACTIONS OF ANY KIND ARISING UNDER OR RELATING TO THIS NOTE. BORROWER
AND LENDER ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND REPRESENT TO ONE ANOTHER THAT
THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY. BORROWER AND LENDER AGREE THAT ALL SUCH SUITS,
CLAIMS, COUNTERCLAIMS, AND ACTIONS SHALL BE TRIED BEFORE A JUDGE OF A COURT OF COMPETENT
JURISDICTION, WITHOUT A JURY.

     10. Usury Limitations. It is the intention of the parties to conform strictly to applicable
usury laws from time to time in force, and all agreements between Borrower and Lender, whether now
existing or hereafter arising and whether oral or written, are hereby expressly limited so that in
no contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall
the amount paid or agreed to be paid to Lender, or collected by Lender, for the use, forbearance or
detention of the money to be loaned hereunder or otherwise, exceed the maximum amount permissible
under applicable usury laws. If under any circumstances whatsoever fulfillment of any provision
hereof or any other Loan Documents, at the time performance of such provision shall be due, shall
involve an amount or any portion thereof in excess of the limit of validity prescribed by law, then
ipso facto, the payment to be made or the amount to be delivered to be fulfilled shall be reduced
to the limit of such validity; and if under any circumstances Lender shall ever receive an amount
deemed interest, by applicable law, which would exceed the highest lawful rate, such amount that
would be excessive interest under applicable usury laws shall be applied to the reduction of the
principal amount owing hereunder and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal and other indebtedness, the excess shall be deemed to have
been a payment made by mistake and shall be refunded to Borrower or to any other person making such
payment on Borrower’s behalf. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness of Borrower evidenced hereby, outstanding from time to
time shall, to the extent permitted by applicable law, be amortized, pro-rated, allocated and
spread from the date of disbursement of the proceeds of this Note until payment in full of such
indebtedness so that the actual rate of interest on account of such indebtedness is uniform through
the term hereof. The terms and provisions of this paragraph shall control and supersede every
other provision of all agreements between Lender and Borrower and any endorser or guarantor of this
Note.

     11. Severability. In case any provision (or any part of any provision) contained in this Note
shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part
of the affected provision) of this Note, but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had never been contained herein but only to
the extent it is invalid, illegal, or unenforceable.

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     12. Governing Law. Borrower hereby acknowledges, consents and agrees (i) that the provisions
of this Note and the rights of all parties mentioned herein shall be governed by the laws of the
State of Florida and interpreted and construed in accordance with such laws (excluding the conflict
of laws for the State of Florida) and (ii) that venue for any proceeding instituted to enforce this
Note shall lie in Palm Beach County, Florida, and any objections to such jurisdiction or venue are
hereby waived.

     13. No Waiver by Lender. No failure on the part of Lender to exercise any right or remedy
hereunder, whether before or after the happening of a default shall constitute a waiver thereof,
and no waiver of any past default shall constitute a waiver of any future default or of any other
default. No failure to accelerate the debt evidenced hereby by reason of default hereunder, or
acceptance of a past due installment, or indulgence granted from time to time shall be construed to
be a waiver of the right to insist upon prompt payment thereafter or to impose late charges
retroactively or prospectively, or shall be deemed to be a novation of this Note or as a
reinstatement of the debt evidenced hereby or as a waiver of such right or acceleration or any
other right, or be construed so as to preclude the exercise of any right that Lender may have,
whether by the laws of the State of Florida, by agreement, or otherwise. This Note may not be
changed orally, but only by an agreement in writing signed by the party against whom such agreement
is sought to be enforced.

     14. No Offsets. No indebtedness evidenced by this Note shall be deemed to have been offset or
shall be offset or compensated by all or part of any claim, cause of action, counterclaim or
cross-claim, whether liquidated or unliquidated, which Borrower may have or claim to have against
Lender now or hereafter. Furthermore, in respect to the present indebtedness of, or any future
indebtedness incurred by, Borrower to Lender, Borrower waives, to the fullest extent permitted by
law, the benefits of any applicable law, regulation or procedure that substantially provides that,
if (i) cross-demands for money have existed between persons at any point in time and (ii) neither
demand was barred by the applicable statute of limitations and (iii) an action is thereafter
commenced by one such person, then the other may assert in his answer the defense of payment in
that the two demands are compensated so far as they equal each other, notwithstanding that an
independent action asserting the claim would at the time of filing the answer be barred by the
applicable statute of limitations.

     15. Loss, Theft, Destruction or Mutilation of Note. In the event of the loss, theft or
destruction of this Note, upon Lender’s written request, accompanied by an indemnification and/or
security reasonably satisfactory to Borrower, or in the event of the mutilation of this Note, upon
Lender’s surrender to the Borrower of the mutilated Note, Borrower shall execute and deliver to
Lender a new promissory note in form and content identical to this Note in lieu of the lost,
stolen, destroyed or mutilated Note.

     16. Relationship of Parties. THE RELATIONSHIP BETWEEN BORROWER AND LENDER IS, AND AT ALL
TIMES SHALL REMAIN, SOLELY THAT OF DEBTOR AND CREDITOR, AND SHALL NOT BE, OR BE CONSTRUED TO BE, A

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JOINT VENTURE, EQUITY VENTURE, PARTNERSHIP OR OTHER RELATIONSHIP OF ANY NATURE.

     17. Unconditional Payment. If any payment received by Lender hereunder shall be deemed by a
court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under
any bankruptcy, insolvency or other debtor relief law, then the obligation to make such payment
shall survive any cancellation or satisfaction of this Note or return thereof to Borrower and shall
not be discharged or satisfied with any prior payment thereof or cancellation of this Note, but
shall remain a valid and binding obligation enforceable in accordance with the terms and provisions
hereof, and such payment shall be immediately due and payable upon demand. No release of any
security for this Note or any party liable for payment of this Note shall release or affect the
liability of Borrower or any other party who may become liable for payment of all or any part of
the indebtedness evidenced by this Note. Lender may release any guarantor, surety or indemnitor of
this Note from liability, in every instance without the consent of Borrower hereunder and without
waiving any rights which Lender may have hereunder or under any of the other Loan Documents or
under applicable law or in equity.

     18. Ambiguity and Construction of Certain Terms. Neither this Note nor any uncertainty or
ambiguity herein shall be construed or resolved against Lender by virtue of the fact that such
document has originated with Lender as drafter. Borrower acknowledges that it has reviewed this
Note and has had the opportunity to consult with counsel on same. This Note, therefore, shall be
construed and interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto. All personal pronouns used herein,
whether used in the masculine, feminine or neuter gender, shall be deemed to include all other
genders; the singular shall include the plural and vice versa. Titles of articles and sections are
for convenience only and in no way define, limit, amplify or describe the scope or intent of any
provisions hereof. “Herein,” “hereof” and “hereunder” and other words of similar import refer to
this Note as a whole and not to any particular section, paragraph or other subdivision; “Section”
refers to the entire section and not to any particular subsection, paragraph of other subdivision.
Reference to days for performance shall mean calendar days unless business days are expressly
indicated.

     19. Time of the Essence. Time is of the essence to each and every provision of this Note.

     20. Loan Agreement. The advance under this Note is and shall be subject to the terms and
conditions of the Loan Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, Borrower has caused this Note to be executed and delivered on its behalf
under seal on the date first written above.

	 	 	 	 	 
	 	BabyUniverse, Inc.,

a Florida corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

6exv4w2

 

Exhibit 4.2

AMENDMENT NO. 1

TO

RIGHTS AGREEMENT

     Amendment No. 1 to Rights Agreement (this “Rights Agreement Amendment”), dated as of
December 29, 2006, between US Dataworks, Inc., a Nevada corporation (the “Company”), and
American Stock Transfer & Trust, as Rights Agent (the “Rights Agent”).

RECITALS:

     WHEREAS, the Company and the Rights Agent’s predecessor are parties to a Rights Agreement,
dated as of July 24, 2003 (the “Rights Agreement”);

     WHEREAS, the Company and Hyundai Syscomm Corp., a California corporation (“Hyundai”),
are entering into a Stock Purchase Agreement of even date herewith (the “Stock Purchase
Agreement”), pursuant to which Hyundai will acquire Six Million One Hundred Thousand
(6,100,000) shares of the Company’s common stock (“Common Stock”) through escrow (the
“Escrow Shares”) and up to Fourteen Million Three Hundred Thousand (14,300,000) shares of
Common Stock through a warrant (the “Warrant Shares”);

     WHEREAS, the Company desires to amend the Rights Agreement in certain respects in order to
permit Hyundai to acquire the Escrow Shares and the Warrant Shares without causing Hyundai to
become an Acquiring Person (as defined in the Rights Agreement) and thereby trigger the occurrence
of a Distribution Date (as defined in the Rights Agreement);

     WHEREAS, under the Rights Agreement, the Company and the Rights Agent may amend the Rights
Agreement at any time prior to a Distribution Date (which has yet to occur); and

     WHEREAS, Hyundai is entering into the Stock Purchase Agreement in reliance on and in
consideration of the terms of this Rights Agreement Amendment.

     WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company and the Rights Agent
hereby enter into this Rights Agreement Amendment and agree as follows:

     1. Amendment of “Acquiring Person” definition. Effective upon the date hereof, the definition
of the term “Acquiring Person” set forth in Section 1(a) of the Rights Agreement is amended
and restated in its entirety to read as follows:

     ”(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who
or which, together with all Affiliates (as such term is hereinafter defined) and Associates
(as such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as such
term is hereinafter defined) of fifteen percent (15%) or more of the shares of Common Stock
then outstanding or who was such a Beneficial Owner at any time on or after July 24, 2003
(i.e., the original date of this Agreement), whether or not such Person continues to
be the Beneficial Owner of fifteen percent (15%) or more of the outstanding shares of Common
Stock. Notwithstanding the foregoing:

 

 

     (i) in no event shall a Person who or which, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of less than fifteen percent
(15%) of the outstanding shares of Common Stock become an Acquiring Person solely as
a result of a reduction of the number of shares of outstanding Common Stock,
including repurchases of outstanding shares of Common Stock by the Company, which
reduction increases the percentage of outstanding shares of Common Stock
Beneficially Owned (as such term is hereinafter defined) by such Person;
provided, however, that any subsequent increase in the amount of
Common Stock Beneficially Owned by such Person, together with all Affiliates and
Associates of such Person, without the prior written approval of the Board shall
cause such Person to be an Acquiring Person (unless, measured at such time, such
Person would not be an Acquiring Person);

     (ii) the term Acquiring Person shall not mean:

     (A) the Company;

     (B) any Subsidiary (as such term is hereinafter defined) of the Company;

     (C) any employee benefit plan of the Company or any of its Subsidiaries;

     (D) any entity holding securities of the Company organized, appointed or
established by the Company or any of its Subsidiaries for or pursuant to the terms
of any such plan;

     (E) any underwriter acting in good faith in a firm commitment underwriting of
an offering of the Company’s securities pursuant to arrangements with the Company
that have been approved by the Board (however, the exception provided by this
clause (E) shall no longer be available in the event that any such
underwriter is otherwise an Acquiring Person on or after the date which is forty
(40) days after the date of initial acquisition of the Company’s securities by such
underwriter in connection with such offering);

     (F) Societe Financiere Privee, S.A. (referred to collectively with its
Affiliates and Associates as “SFP”), so long as SFP is not the Beneficial Owner of a
percentage of the outstanding shares of Common Stock that is greater (by more than
one percent (1%) of the outstanding shares of Common Stock) than the percentage of
the outstanding shares of Common Stock as to which SFP has or is deemed to have
Beneficial Ownership, from time to time, by reason of its ownership of (1) shares of
Series A Preferred Stock acquired directly from the Company; (2) shares of Common
Stock issued to SFP directly from the Company upon conversion by SFP of the Series A
Preferred Stock referred to in the foregoing clause (1); (3) any other
securities (whether convertible debt or equity and including, without limitation,

 

 

any warrants or similar derivative securities) of the Company purchased by SFP,
after July 24, 2003 (i.e., the original date of this Agreement), directly
from the Company in a transaction approved by the Board; and (4) shares of Common
Stock issued to SFP directly from the Company upon conversion, exercise or exchange
by SFP of any securities referred to in the foregoing clause (3); or

     (G) Hyundai Syscomm Corp., a California corporation (referred to collectively
with its Affiliates and Associates as “Hyundai”), so long as Hyundai is not the
Beneficial Owner of a percentage of the outstanding shares of Common Stock that is
greater (by more than one percent (1%) of the outstanding shares of Common Stock)
than the percentage of the outstanding shares of Common Stock as to which Hyundai
has or is deemed to have Beneficial Ownership, from time to time, by reason of its
ownership of (1) shares of Common Stock acquired by Hyundai directly from the
Company pursuant to a Stock Purchase Agreement between Hyundai and the Company dated
as of December 29, 2006 (the “Hyundai Agreement”), including shares of Common Stock
issued or issuable to Hyundai pursuant to the terms of the Warrant (as defined in
the Hyundai Agreement); (2) any other securities (whether convertible debt or equity
and including, without limitation, any warrants or similar derivative securities) of
the Company purchased by Hyundai, after December 29, 2006, directly from the Company
in a transaction approved by the Board; and (3) shares of Common Stock issued to
Hyundai directly from the Company upon conversion, exercise or exchange by Hyundai
of any securities referred to in the foregoing clause (2); and

     (iii) no Person shall be deemed to be an Acquiring Person if: (A) (1) any
Schedule 13D under the Exchange Act (as defined below), or any comparable or
successor report, filed (or required to be filed) by such Person does not (or would
not) state any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions specified in
Item 4 (or any comparable or successor Item) of such Schedule 13D (other than the
disposition of Common Stock), (2) either (x) within two (2) Business Days of being
requested by the Company to advise the Company regarding the same, such Person
certifies in writing to the Company that such Person acquired Beneficial Ownership
of fifteen percent (15%) or more of the outstanding shares of Common Stock
inadvertently or without knowledge of the terms of the Rights, or (y) the Board
determines in good faith that such Person has become an Acquiring Person
inadvertently, (3) such Person divests as promptly as practicable (as determined in
good faith by the Board) a sufficient number of securities so that such Person would
not be deemed to be an Acquiring Person pursuant to the first sentence of this
Section 1(a) (or such other provisions of this Section 1(a) as may
be applicable), and (4) promptly following such Person’s divestiture of such
securities, such Person certifies to the Board that such Person would no longer be
deemed to be an Acquiring Person pursuant to the first sentence of this Section
1(a) (or such other provisions of this Section 1(a) as may be
applicable); or (B) by reason of such Person’s Beneficial Ownership of fifteen
percent (15%) or more of the outstanding shares of Common Stock on July 24, 2003
(i.e., the original date of this Agreement) if prior to the Record Date such

 

 

Person notified the Board that such Person was no longer the Beneficial Owner
of fifteen percent (15%) or more of the then outstanding shares of Common Stock.”

     2. Effectiveness. This Rights Agreement Amendment shall be deemed effective as of the date
first written above. Except as amended hereby, the Rights Agreement shall remain in full force and
effect and shall be otherwise unaffected hereby.

     3. Severability. If any term, provision, covenant or restriction of this Rights Agreement
Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement Amendment shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.

     4. Governing Law. This Rights Agreement Amendment shall be deemed to be a contract made under
the laws of the State of Nevada and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be performed entirely
within such State.

     5. Counterparts. This Rights Agreement Amendment may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement Amendment to be duly
executed by their respective authorized officers, all as of the day and year first above written.

	 	 	 	 	 
	 	US DATAWORKS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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