US Dataworks demands investors withdraw default notices on convertibles due 2010

By Devika Patel

Knoxville, Tenn., June 19 - US Dataworks, Inc. received event-of-default redemption notices from Highbridge International LLC and Cranshire Capital, LP, each a holder of the company's senior secured convertible notes due Nov. 13, 2010, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The notices were dated June 13 and June 17.

According to the filing, the alleged event of default occurred when the company failed to have a registration statement for the resale of the common shares issuable upon the notes' conversion and upon the exercise of the warrants issued along with the notes declared effective by the SEC by May 12.

The company notified the investors, on June 19, that their default claims were unfounded due to the notes' registration rights agreement stating that a registration statement is not necessary if the registrable securities can be sold in a Rule 144 deal, as the company's common shares can. The company also demanded that the investors immediately withdraw their default notices.

US Dataworks is a Houston-based developer of payment processing solutions.

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