Software Integration and Resale
Agreement
Between
Hyundai Syscomm Corp.
And
US Dataworks, Inc.
© 2006 Hyundai Syscomm Corp. Software Integration
and Resale Agreement with US Dataworks, Inc.
December 28, 2006, Page 1 of 11
This Software
Integration and Resale Agreement (this “ Agreement
”) is dated as of December ___, 2006, by and
between
Hyundai
Syscomm Corp ., a California corporation with a place of
business at 1065 East Hillsdale Boulevard, Suite 247, Foster
City, California 94404 (“ Hyundai ”),
and
US Dataworks,
Inc. , a Nevada corporation with a place of business at 5301
Hollister Road, Suite 250, Houston, Texas 77040 (“
UDW ”).
WHEREAS, UDW and
Hyundai are executing and delivering a Stock Purchase Agreement,
dated as of the date hereof (the “ Stock Purchase
Agreement ”), and wish to assign the definitions of the
capitalized terms defined in the Stock Purchase Agreement to those
capitalized terms contained herein without express definition;
and
WHEREAS, Hyundai
or an affiliate of Hyundai (“ HYUNDAI ”)
manufactures automated teller machines/teller-less kiosks (the
“ Machines ”); and
WHEREAS, UDW has
developed and owns proprietary payment processing software (the
“ UDW Software ”); and
WHEREAS, UDW
shall, at its own expense, integrate the UDW Software and such
other software as Hyundai may identify (the “ Other
Software ”) with the Machines so that the Machines with
the integrated UDW Software (the “ Enhanced Machines
”) possess the increased functionality that HYUNDAI and UDW
mutually agree upon, thereby increasing the resale value of the
Enhanced Machines; and
WHEREAS, the
Parties shall put forth their respective best efforts to facilitate
the resale by UDW, through HYUNDAI, of Machines and Enhanced
Machines having an aggregate resale value of at least Twenty Five
Million ($25,000,000)(such amount, the “ Minimum
Revenues ”) from customers in UDW Territory by
March 31, 2008; and
WHEREAS, UDW shall
have the exclusive right to sell Enhanced Machines in the UDW
Territory during the term of this Agreement; and
WHEREAS, HYUNDAI
shall arrange for the manufacture, transportation, warehousing and
insurance and otherwise maintain title ownership over the Machines
until they are to be resold by UDW in the UDW Territory, at which
time, title in the Machines shall pass to UDW (as described
herein); and
WHEREAS, HUYNDAI
will install the Machines and Enhanced Machines resold and/or
leased by UDW in the UDW Territory and provide warranty and
maintenance service for such Machines and Enhanced Machines;
and
© 2006 Hyundai Syscomm Corp. Software Integration
and Resale Agreement with US Dataworks, Inc.
December 28, 2006, Page 2 of 11
WHEREAS, UDW will
provide maintenance for the UDW Software incorporated into Enhanced
Machines; and
WHEREAS, HYUNDAI
shall have the exclusive right to sell and maintain Machines and
Enhanced Machines in all countries of the world outside of UDW
Territory (the “ Hyundai Territory ”), with UDW
providing maintenance support of the UDW Software for an agreed
maintenance fee (to be determined);
WHEREAS, in order
to facilitate HYUNDAI’s ability to sell Enhanced Machines in
the Hyundai Territory, HYUNDAI shall be permitted to set up new
entities in each country in the Hyundai Territory that use the name
Hyundai UDW or a name incorporating both such names. HYUNDAI shall
be the sole owner of each such entity and HYUNDAI’s only
obligation to UDW for incorporating UDW’s name into any such
entity is, inter alia , to pay UDW a royalty (to be mutually
agreed by the Parties at such date) for the use of UDW’s
name, the incorporation of the UDW Software and the UDW transaction
fee (where applicable) in the Enhanced Machines sold in the Hyundai
Territory; and
WHEREAS, in
accordance with the Stock Purchase Agreement, UDW is issuing and
delivering to Hyundai the Warrant; and
WHEREAS, the
Warrant will expire on the tenth (10 th )
anniversary of its date and cover a number of shares that will
permit Hyundai to achieve and maintain a Thirty-Nine and
Nine-Tenths Percent (39.9%) ownership interest in UDW Common Stock
on the terms and subject to the conditions set forth in the
Warrant; and
WHEREAS, Hyundai
and UDW have agreed to share the Gross Profits to be recognized by
UDW from the sale of lease in the UDW Territory of Machines and
Enhanced Machines; and
WHEREAS, the
formula UDW and Hyundai have agreed on provides UDW with Fifty
Percent (50%) of Gross Profits and provides Hyundai with a credit
for the remaining Fifty Percent (50%) of such Gross Profits;
and
WHEREAS, UDW and
Hyundai have agreed that Hyundai may, at its election, take its
proportion of the Gross Profits in the form of cash and/or Warrant
Shares; and
WHEREAS, the
Warrant will vest and become exercisable, in accordance with its
terms, as Hyundai is credited with its proportion of the Gross
Profit; and
© 2006 Hyundai Syscomm Corp. Software Integration
and Resale Agreement with US Dataworks, Inc.
December 28, 2006, Page 3 of 11
WHEREAS, in the
event the Minimum Revenues are not recognized by UDW by
March 31, 2008, Hyundai shall pay UDW a Minimum Revenues
Adjustment (as such term is defined in Section 7.4 of the
Stock Purchase Agreement) over and above the purchase price it paid
for the Escrow Shares;
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual
representations, warranties, covenants, and agreements contained
herein, the adequacy and legal sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1.1 The
Closing . The Closing will take place on the date of this
Agreement (the “ Closing Date ”). The Closing
will be held by telephone, at which time the documents and
instruments necessary or appropriate to effect the transactions
contemplated herein to occur at the Closing will be exchanged by
email or facsimile transmission, with original counterparts to
follow by next business day courier delivery.
1.2 The
Closing of the Related Transactions . The Transaction and
the other Transaction Documents contemplated by the Stock Purchase
Agreement will also be closing on the Closing Date except as
otherwise provided in any other Transaction Document.
ARTICLE 2
INTEGRATION OF THE UDW SOFTWARE
2.1 UDW
Responsibilities . HYUNDAI shall make its engineers
available for consultation with UDW and shall suggest the
functionality to be added to the Machines with UDW Software and the
Other Software.
2.2 Hyundai
Responsibilities . As promptly as commercially reasonable
after UDW and HYUNDAI shall have agreed on the functionality for
the Enhanced Machines, UDW, at its own expense, shall integrate the
UDW Software and the Other Software with the Machines to endow them
with the functionality agreed upon to make them into Enhanced
Machines.
ARTICLE 3
RESALE OF THE ENHANCED MACHINES; GROSS PROFITS
ALLOCATION
3.1 The UDW
Territory . UDW shall have the exclusive right to resell
and lease Machines and Enhanced Machines to customers in the UDW
Territory. HYUNDAI shall refer all sales leads that come to its
attention for actual and potential customers for Machines and
Enhanced Machines in the UDW Territory to UDW.
© 2006 Hyundai Syscomm Corp. Software Integration
and Resale Agreement with US Dataworks, Inc.
December 28, 2006, Page 4 of 11
3.2 The
Hyundai Territory . HYUNDAI shall have the exclusive right
to sell and lease Machines and Enhanced Machines to customers in
the Hyundai Territory. UDW shall refer to UDW all sales leads that
come to its attention for actual and potential customers for
Machines and Enhanced Machines in the Hyundai Territory.
(a) In order
to facilitate HYUNDAI’s ability to sell Enhanced Machines in
the Hyundai Territory, UDW hereby grants to HYUNDAI a paid up
license to use the UDW name in connection with establishing new
entities within the Hyundai Territory using any combination of the
names Hyundai Syscomm Corp. and US Dataworks, Inc. ,
or any other name acceptable to the Parties. HYUNDAI shall be the
sole owner of each such entity and HYUNDAI’s only obligation
to UDW for incorporating UDW’s name into any such entity is,
inter alia , to pay UDW a royalty (to be mutually agreed by
the Parties at such date) for the use of UDW’s name, the
incorporation of the UDW Software and the UDW transaction fee
(where applicable) in the Enhanced Machines sold in the Hyundai
Territory.
(b) HYUNDAI
shall be obligated to provide an explicit statement that the marks
US Dataworks ® and Clearingworks
® are the registered U.S. trademarks of UDW and
any usage of such marks require the express written consent of UDW.
HYUNDAI shall provide UDW with advance written notice of any use of
UDW’s trademarks and UDW shall have the right to monitor such
use to ensure proper usage of its marks.
(c) HYUNDAI’s
right to use the UDW name within the Hyundai Territory shall
terminate upon: (i) the termination of this Agreement, or
(ii) thirty (30) days following UDW’s notice to
HYUNDAI of a material breach of this Section 3.2 that has
remained uncured for such 30-day period.
3.3 Minimum
Revenues Adjustment . In the event the Minimum Revenues are
not recognized by UDW by March 31, 2008, Hyundai shall pay UDW
the Mini
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