Exhibit 10.1
Stock Purchase Agreement
Between
Hyundai Syscomm Corp.
And
US Dataworks, Inc.
Dated December 29, 2006
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Stock Purchase Agreement
     This Stock Purchase Agreement (this “Agreement”) is dated as of
December 29, 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, 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, HYUNDAI and UDW believe that the UDW Software and other software
identified by HYUNDAI for integration with the UDW Software (the “Other
Software”, and together with the UDW Software, the “Enhanced Machine Software”)
can be integrated with the Machines to make the Machines incorporating the
Enhanced Machine Software (the “Enhanced Machines”) possess enhanced
functionality and have greater value; and
     WHEREAS, UDW and Hyundai are executing and delivering a Software
Integration and Resale Agreement, substantially in the form attached hereto as
Exhibit A (the “SI&R Agreement”), dated as of the date hereof, pursuant to
which, among other things: (i) UDW agrees at its own expense to integrate the
Enhanced Machine Software into the Machines; (ii) UDW agrees to use its best
efforts to resell and lease to customers in North America and India (the “UDW
Territory”) Machines and Enhanced Machines having an aggregate resale value of
at least Twenty Five Million ($25,000,000)(such amount, the “Minimum Revenues”)
on or prior to March 31, 2008; (iii) UDW will have the exclusive right to sell
Enhanced Machines in the UDW Territory; (iv) Hyundai will install the Machines
and the Enhanced Machines resold and leased by UDW in the UDW Territory and
provide maintenance for such Machines and Enhanced Machines; (v) UDW will
provide maintenance for the Enhanced Machine Software; and (vi) HYUNDAI will
have the exclusive right to sell, lease and maintain Machines and Enhanced
Machines in all countries of the world outside of North America and India (the
“Hyundai Territory”), with UDW providing maintenance support of the Enhanced
Machine Software for an agreed maintenance fee (to be determined); and
     WHEREAS, the aforementioned Minimum Revenues of $25,000,000 are based upon
a presumed gross profit of not less than Thirty-Five Percent (35%) of the retail
value for the Machines and Enhanced Machines resold and leased by

 

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UDW. For this Agreement, Gross Profits (“Gross Profits”) shall mean the sum of:
(i) actual retail purchase price paid, less the Parties’ cost of goods sold (not
to exceed 35% in any instance) recognized by UDW from the sale of Machines and
Enhanced Machines by UDW in the UDW Territory, and (ii) actual lease revenues
paid, less the Parties’ financing cost of the acquiring the Machines and the
Enhanced Machines that are placed on lease recognized by UDW from the lease of
Machines and Enhanced Machines by UDW in the UDW Territory.
     WHEREAS, Hyundai wishes to acquire up to Thirty-Nine And Nine-Tenths
Percent (39.9%) of the outstanding shares of Common Stock (“Common Stock”) of
UDW and UDW is willing to sell Hyundai up to Thirty-Nine And Nine-Tenths Percent
(39.9%) of the outstanding shares of Common Stock upon the terms and subject to
the conditions set forth in this Agreement; and
     WHEREAS, the shares of UDW’s Common Stock to be delivered to the Escrow
Agent referred to below or to Hyundai as Warrant Shares referred to below shall
be evidenced by stock certificates registered in the name of Hyundai that bear a
bear a restrictive legend (the “Legend”) that indicates that the shares
evidenced thereby (i) have not been registered under the Securities Act of 1933
(the “Securities Act”), (ii) are subject to a voting agreement as set forth
herein, and (iii) are subject to a certain Minimum Revenue Adjustment as set
forth herein; and
     WHEREAS, Six Million One Hundred Thousand (6,100,000) shares of UDW’s
Common Stock (the “Escrow Shares”) are being delivered to Hirshfield Law, a
mutually acceptable third party escrow agent (the “Escrow Agent”), under an
escrow agreement (substantially in the form attached hereto as Exhibit B), to be
executed as of the date of this Agreement among UDW, Hyundai and the Escrow
Agent (the “Escrow Agreement”), subject to the terms and conditions of the
Escrow Agreement; and
     WHEREAS, the purchase price of the Escrow Shares is One Million Five
Hundred Thousand Dollars ($1,500,000) (equal to $0.2459 per share) and such
purchase price will be deposited by Hyundai with the Escrow Agent in accordance
with the Escrow Agreement; and
     WHEREAS, the Escrow Shares are duly authorized newly issued shares of
Common Stock of UDW and are evidenced by thirteen (13) stock certificates (the
“Escrow Certificates”), twelve (12) of which each evidence Five Hundred Thousand
(500,000) of the Escrow Shares and one (1) of which evidences One Hundred
Thousand (100,000) of the Escrow Shares; and
     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
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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
determined later) 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 order to permit Hyundai to become and remain a Thirty-Nine and
Nine-Tenths Percent (39.9%) holder of UDW Common Stock: (i) Hyundai and UDW have
agreed to compensate Hyundai for a portion of the Gross Profits; and (ii) UDW is
issuing and delivering to Hyundai a warrant dated the date hereof (the
“Warrant”), substantially in the form attached hereto as Exhibit C; and
     WHEREAS, Hyundai will not be able to exercise the Warrant for the purchase
of any UDW Common Stock shares issuable under the Warrant (“Warrant Shares”)
unless and until such Warrant is approved by the UDW shareholders; and
     WHEREAS, the Warrant will expire on the tenth (10th) 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, provided that UDW is able to recognize adequate levels of Gross
Profits; and
     WHEREAS, the Warrant shall contain a cashless exercise feature; 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
     WHEREAS, the formula UDW and Hyundai have agreed on provides UDW with Fifty
Percent (50%) of Gross Profits and to provide Hyundai with a credit for the
remaining Fifty Percent (50%) of such Gross Profits, except as otherwise
modified as provided herein; 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 Shares, when issued upon exercise of the Warrant, will
be duly authorized newly issued shares of UDW Common Stock issued to or upon the
direction of Hyundai; and
     WHEREAS, in the event the Minimum Revenues are not recognized by UDW by
March 31, 2008, Hyundai shall pay UDW a Minimum Revenues
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Adjustment (as such term is defined in Section 7.4, herein) over and above the
purchase price it paid for the Escrow Shares, such Minimum Revenues Adjustment
to be paid at Hyundai’s option in cash or in shares of UDW Common Stock valued
at the Adjustment Price Per Share (as such term is defined in Section 7.4); and
     WHEREAS, UDW and Hyundai are executing and delivering a registration rights
agreement, substantially in the form attached hereto as Exhibit D (the
“Registration Rights Agreement”), dated as of the date hereof, pursuant to
which, among other things, UDW has agreed to register for resale under the
Securities Act the Escrow Shares and the Warrant Shares; and
     WHEREAS, Hyundai will execute and deliver to UDW a proxy (the “Voting
Agreement”), substantially in the form attached hereto as Exhibit E, for the
voting of all Escrow Shares and Warrant Shares owned or controlled by Hyundai;
and
     WHEREAS, the issuance and delivery of the Escrow Shares to the Escrow
Agent, the execution and delivery of this Agreement, the SI&R Agreement, the
Warrant, the Voting Agreement and the Registration Rights Agreement are to take
place at a closing (the “Closing”) to be held by telephone pursuant to Article 1
of this Agreement; and
     WHEREAS, UDW and Hyundai (collectively, the “Parties” and sometimes
individually, a “Party”) desire to execute and deliver this Agreement and the
related documentation specifically contemplated hereby (collectively, the
“Transaction Documents”); and
     WHEREAS, the Parties desire to make certain representations, warranties,
and agreements in connection with the transactions contemplated hereby (the
“Transaction”);
     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:
ARTICLE 1
THE CLOSING
     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. Except
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as otherwise provided herein, all actions taken at the Closing will be deemed to
be taken simultaneously.
     1.2 Indemnification Agreements. As a condition concurrent to the Closing,
among other such conditions that are set forth in Sections 5 and 6 hereof:(i)
UDW shall execute and deliver the indemnification agreement, substantially in
the form attached hereto as Exhibit F (the “UDW Indemnification Agreement”) that
is referenced in Section 5.4(b) hereof and deposited the same into escrow for
delivery to Hyundai; and (ii) Hyundai shall have executed and delivered the
indemnification agreement, substantially in the form attached hereto as
Exhibit G (the “Hyundai Indemnification Agreement”), that is referenced in
Section 6.4(b) hereof and deposited the same into escrow for delivery to UDW.
     1.3 Escrow Agreement, Escrow Shares and Purchase Money.
          1.3.1 At the Closing, or as soon thereafter as the Escrow Agent shall
receive the Purchase Money, UDW shall deliver or cause to be delivered to the
Escrow Agent Six Million One Hundred Thousand (6,100,000) shares of Common
Stock, as evidenced by the Escrow Certificates, registered in the name of
Hyundai. The thirteen (13) Escrow Certificates shall consist of twelve (12)
certificates evidencing Five Hundred Thousand (500,000) Escrow Shares and one
(1) Escrow Certificate evidencing One Hundred Thousand (100,000) Escrow Shares.
Each of the Escrow Certificates shall bear the Legend.
          1.3.2 Hyundai shall deposit One Million Five Hundred Thousand Dollars
($1,500,000) (the “Purchase Money”) with the Escrow Agent, in accordance with
the Escrow Agreement.
          1.3.3 At the Closing or as soon thereafter as the Escrow Agent shall
receive the Purchase Money, the Escrow Agent shall release the Escrow Shares, in
accordance with the Escrow Agreement.
          1.3.4 At the Closing or as soon thereafter as the Escrow Agent shall
receive the Purchase Money, the Escrow Agent shall wire transfer the Purchase
Money to or upon the order of UDW, pursuant to the wire transfer instructions
set forth on Annex 1.3.4 hereto.
     1.4 Delivery of the Warrant. At the Closing, UDW shall deliver or cause to
be delivered to Hyundai the Warrant, substantially in the form attached hereto
as Exhibit C.
     1.5 Registration Rights Agreement. At the Closing, UDW and Hyundai shall
execute and deliver to each other the Registration Rights Agreement
substantially in the form attached hereto as Exhibit D.
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     1.6 Voting Agreement. At the Closing, Hyundai shall execute and deliver to
UDW the Voting Agreement, substantially in the form attached hereto as
Exhibit E.
     1.7 Shareholders’ Rights Agreement. Immediately prior to the Closing, UDW
shall waive its rights to purchase shares of UDW Common Stock in accordance with
its Shareholders’ Rights Agreement, as set forth in the Shareholders’ Rights
Agreement Amendment, substantially in the form attached hereto as Exhibit H.
     1.8 The SI&R Agreement. At the Closing, UDW and Hyundai shall execute and
deliver to each other the SI&R Agreement substantially in the form attached
hereto as Exhibit A.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF UDW
     Except as set forth in the UDW disclosure schedule (the “Disclosure
Schedule”); it being understood that information disclosed on the Disclosure
Schedule as an exception to a specific representation and warranty shall be
deemed to be an exception to any other representation and warranty to the extent
that it is reasonably clear from the context of such section of the Company
Disclosure Schedule that the information disclosed therein relates to such other
representation and warranty), the Company represents and warrants to Parent and
Sub as follows:
     2.1 Disclosure Schedule. The Disclosure Schedule attached hereto as Annex
2.1 is divided into sections that correspond to the sections of this Agreement.
     2.2 Corporate Organization, etc. UDW is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada with
the requisite corporate power and authority to carry on its business as it is
now being conducted and to own, operate and lease its properties and assets, is
duly qualified or licensed to do business as a foreign corporation in good
standing in the State of Texas and in every other jurisdiction in which the
character or location of the properties and assets owned, leased or operated by
it or the conduct of its business requires such qualification or licensing,
except in such jurisdictions in which the failure to be so qualified or licensed
and in good standing would not, individually or in the aggregate, have a
Material Adverse Effect (as such term is defined in Section 8.13 hereof) on UDW.
The Disclosure Schedule contains a list of all jurisdictions in which UDW is
qualified or licensed to do business and includes complete and correct copies of
UDW’s Articles of Incorporation and bylaws.
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     2.3 Capitalization. The authorized capital securities of UDW are set forth
in the Disclosure Schedule. The shares of Common Stock (“UDW Common Stock”) and
Preferred Stock (“UDW Preferred Stock”) of UDW outstanding, as of the date of
this Agreement and as set forth in the Disclosure Schedule, represent all of the
issued and outstanding capital stock of UDW. All issued and outstanding shares
of UDW Common Stock and UDW Preferred Stock are duly authorized, validly issued,
fully paid and nonassessable and are without, and were not issued in violation
of, preemptive rights. Other than as set forth in the Disclosure Schedule, there
are no other equity securities of UDW outstanding or any securities convertible
into or exchangeable for such interests, securities or rights (“Derivative
Securities”). Other than as set forth on the Disclosure Schedule and pursuant to
this Agreement, there is no subscription, option, warrant, call, right,
contract, agreement, commitment, understanding or arrangement to which UDW is a
party, or by which it is bound, with respect to the issuance, sale, delivery or
transfer of the capital securities of UDW, including any right of conversion or
exchange under any security or other instrument. The Disclosure Statement sets
forth a complete list of all subsidiaries of UDW and the Articles of
Incorporation and By-laws of each such subsidiary.
     2.4 Authorization. UDW has all requisite power and authority to enter into,
execute, deliver, and perform its obligations under this Agreement and the
Transaction Documents. This Agreement and the Transaction Documents have been
duly and validly executed and delivered by UDW and are the valid and binding
legal obligations of UDW enforceable against UDW in accordance with their
respective terms, subject to bankruptcy, moratorium, principles of equity and
other limitations limiting the rights of creditors generally.
     2.5 Non-Contravention Except as set forth in the Disclosure Schedule,
neither the execution, delivery and performance of this Agreement and the
Transaction Documents, nor the consummation of the transactions contemplated
herein or in the Transaction Documents will:
          (a) violate, contravene or be in conflict with any provision of the
Articles of Incorporation or By-laws of UDW or any subsidiary of UDW
(“Subsidiary”) in any material respect;
          (b) be in conflict with, or constitute a default, however defined (or
an event which, with the giving of due notice or lapse of time, or both, would
constitute such a default), under, or cause or permit the acceleration of the
maturity of, or give rise to any right of termination, cancellation, imposition
of fees or penalties under any debt, note, bond, lease, mortgage, indenture,
license, obligation, contract, commitment, franchise, permit, instrument or
other agreement or obligation to which UDW or any Subsidiary is a party or by
which UDW
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or any Subsidiary or any of their respective properties or assets is or may be
bound;
          (c) result in the creation or imposition of any material pledge, lien,
security interest, restriction, option, claim or charge of any kind whatsoever
(“Encumbrances”) upon any property or assets of UDW or any Subsidiary under any
debt, obligation, contract, agreement or commitment to which UDW or any
Subsidiary is a party or by which UDW or any Subsidiary of any of their
respective assets or properties are bound; or
          (d) to UDW’s knowledge, materially violate any statute, treaty, law,
judgment, writ, injunction, decision, decree, order, regulation, ordinance or
other similar authoritative matters (referred to herein individually as a “Law”
and collectively as “Laws”) of any foreign, federal, state or local governmental
or quasi-governmental, administrative, regulatory or judicial court, department,
commission, agency, board, bureau, instrumentality or other authority (referred
to herein individually as an “Authority” and collectively as “Authorities”); or
     2.6 Consents and Approvals. Except as set forth in the Disclosure Schedule,
with respect to UDW, to UDW’s knowledge, no consent, approval, order or
authorization of or from, or registration, notification, declaration or filing
with (“Consent”) any individual or entity, including without limitation any
Authority, is required in connection with the execution, delivery or performance
of this Agreement and the Transaction Documents by UDW or the consummation by
UDW of the transactions contemplated herein and therein.
     2.7 Commission Filings; Financial Statements. (a) UDW has made available to
Hyundai accurate and complete copies (including copies of exhibits) of each
report, registration statement and definitive proxy and information statements
filed by UDW with the Commission (collectively, with all information
incorporated by reference therein or deemed to be incorporated by reference
therein, “UDW Commission Documents”). All statements, reports, schedules, forms
and other documents required to have been filed by UDW with the Commission have
been so filed on a timely basis. As of the time it was filed with the Commission
(or, if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing): (i) each UDW Commission Document complied in
all material respects with the applicable requirements of the Securities Act or
the Securities Exchange Act of 1934 (the “Exchange Act”); and (ii) no UDW
Commission Document contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
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     (b) The financial statements contained in the UDW Commission Documents:
(i) complied as to form in all material respects with the published rules and
regulations of the Commission applicable thereto; (ii) were prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered (except as may be indicated in the notes to such financial statements
and, in the case of unaudited statements, as permitted by Form 10-QSB of the
Commission); and (iii) fairly present, in all material respects, the
consolidated financial position of UDW and its consolidated subsidiaries as of
the respective dates thereof and the consolidated results of operations of UDW
and its consolidated subsidiaries for the periods covered thereby. All
adjustments considered necessary for a fair presentation of the financial
statements have been included.
     2.8 Absence of Undisclosed Liabilities. UDW does not have any liabilities,
obligations or claims of any kind whatsoever, whether secured or unsecured,
accrued or unaccrued, fixed or contingent, matured or unmatured, known or
unknown, direct or indirect, contingent or otherwise and whether due or to
become due (referred to herein individually as a “Liability” and collectively as
“Liabilities”), other than: (a) Liabilities that are fully reflected or reserved
for in the consolidated balance sheet as at March 31, 2006 included in UDW’s
Form 10-KSB, or in the consolidated balance sheet as at September 30, 2006
included in UDW’s Form 10-QSB, filed with the Commission; or (b) Liabilities
that are set forth on the Disclosure Schedule.
     2.9 Absence of Certain Changes. UDW has owned and operated its assets,
properties and business in the ordinary course of business and consistent with
past practice. Without limiting the generality of the foregoing, UDW has not
experienced any change that has had or could reasonably be expected to have a
Material Adverse Effect on UDW.
     2.10 Litigation. Except as disclosed in the Disclosure Schedule, there is
no legal, administrative, arbitration, or other proceeding, suit, claim or
action of any nature or investigation, review or audit of any kind, or any
judgment, decree, decision, injunction, writ or order pending, noticed,
scheduled, or, to the knowledge of UDW, threatened or contemplated by or against
or involving UDW, its assets, properties or business or its directors, officers,
agents or employees (but only in their capacity as such), whether at law or in
equity, before or by any person or entity or Authority, or which questions or
challenges the validity of this Agreement or any action taken or to be taken by
the Parties hereto pursuant to this Agreement or in connection with the
transactions contemplated herein.
     2.11 Contracts and Commitments; No Default. Except as disclosed in
Disclosure Schedule, UDW is not in material breach, violation or
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default, in the performance of any of its obligations under any UDW Contract,
and no facts and circumstances exist which, whether with the giving of due
notice, lapse of time, or both, would constitute such breach, violation or
default thereunder or thereof, and, to the knowledge of UDW, no other parties
thereto are in a material breach, violation or default thereunder or thereof,
and no facts or circumstances exist which, whether with the giving of due
notice, lapse of time, or both, would constitute such a material breach,
violation or default thereunder or thereof.
     2.12 No Broker or Finder. Neither UDW nor, to the knowledge of UDW, any of
its directors, officers or employees, has employed any broker, finder,
investment banker or financial advisor or incurred any liability for any
brokerage fee or commission, finder’s fee or financial advisory fee, in
connection with the Transaction contemplated hereby, nor is there any basis
known to UDW for any such fee or commission to be claimed by any person or
entity.
     No broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission in connection with the Transaction based
upon arrangements made by or on behalf of UDW.
     2.13 Intercompany And Affiliate Transactions; Insider Interests. There are
no material transactions, agreements or arrangements of any kind, direct or
indirect, between UDW, on the one hand, and any director, officer, employee,
stockholder, or affiliate of UDW, on the other hand currently in effect, not
already disclosed through UDW’s public filings with the SEC and identified on
the Disclosure by reference.
     2.14 Compliance with Law; Permits and Other Operating Rights. To the
knowledge of UDW, except as set forth in the Disclosure Schedule, the
properties, business and operations of UDW are and have been in compliance in
all respects with all Laws applicable to UDW’s assets, properties, business and
operations, except where the failure to comply would not have a Material Adverse
Effect. UDW possesses all material permits, licenses and other authorizations
from all Authorities necessary to permit it to operate its business in the
manner in which it presently is conducted and the consummation of the
transactions contemplated by this Agreement will not prevent UDW from being able
to continue to use such permits and operating rights. UDW has not received
notice of any violation of any such applicable Law, and is not in default with
respect to any order, writ, judgment, award, injunction or decree of any
Authority.
     2.15 Books and Records. The books of account, minute books, stock record
books, and other material records of UDW, all of which have been made available
to Hyundai, are complete and correct in all
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material respects and have been maintained in accordance with reasonable
business practices. The minute books of UDW contain accurate and complete
records of all formal meetings held of, and corporate action taken by, the
directors and officers and committees of the board of directors of UDW. At the
Closing, all of those books and records will be in the possession of UDW.
     2.16 Business Generally; Accuracy of Information. No representation or
warranty made by UDW in this Agreement, the Disclosure Schedule, or in any
document, agreement or certificate furnished or to be furnished to Hyundai at
the Closing by or on behalf of UDW in connection with the Transaction contains
or will contain any untrue statement of material fact or omit or will omit to
state any material fact necessary in order to make the statements herein or
therein not misleading in light of the circumstances in which they are made, and
all of the foregoing completely and correctly present the information required
or purported to be set forth herein or therein.
     2.17 Gross Profitability. UDW represents and warrants that the Gross
Profits to be recognize from the sale of the UDW Software and other professional
services rendered by UDW shall not be less than Thirty-Five Percent (35%) of the
actual resale value.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF Hyundai
     Hyundai represents and warrants to UDW as follows:
     3.1 Authorization and Power. Hyundai has all power and authority to enter
into this Agreement and the Transaction Documents and to carry out the
transactions contemplated herein and therein. Hyundai has taken all action
required by law or otherwise to authorize the execution, delivery and
performance of this Agreement and the Transaction Documents and the consummation
of the transactions contemplated herein and therein. This Agreement and the
Transaction Documents are the valid and binding legal obligations of Hyundai
enforceable against Hyundai in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws that affect creditors’ rights generally.
     3.2 Non-Contravention. Neither the execution, delivery and performance of
this Agreement and the Transaction Documents nor the consummation of the
Transaction will:
     (a) be in conflict with, or constitute a default, however defined (or an
event which, with the giving of due notice or lapse of time, or
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both, would constitute such a default), under any agreement to which Hyundai is
a party; or
     (b) violate any Law of any Authority.
     3.3 Consents and Approvals. Except for the filing with the Commission of an
Initial Statement of beneficial Ownership on Form 3 and a Schedule 13D, no
Consent is required by any person or entity, including without limitation any
Authority, in connection with the execution, delivery and performance by
Hyundai, or the consummation of the transactions contemplated herein, other than
any Consent which, if not made or obtained, will not, individually or in the
aggregate, have a Material Adverse Effect on the business of Hyundai.
     3.4 Litigation. There is no legal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature or investigation, review or
audit of any kind, or any judgment, decree, decision, injunction, writ or order
pending, noticed, scheduled, or, to the knowledge of Hyundai, threatened or
contemplated by or against or involving Hyundai, its assets, properties or
business, whether at law or in equity, before or by any person or entity or
Authority, or which questions or challenges the validity of this Agreement or
any action taken or to be taken by the Parties hereto pursuant to this Agreement
and the Transaction Documents or in connection with the Transaction.
     3.5 No Broker or Finder. No broker, finder or investment banker is entitled
to any brokerage, finder’s or other fee or commission payable by UDW in
connection with the Transaction based upon arrangements made by or on behalf of
Hyundai.
     3.6 Accredited Investor Status. Hyundai is an “accredited investor” as such
term is defined in Rule 501 of Regulation D promulgated by the Commission under
the Securities Act.
     3.7 Access to UDW Information. Hyundai has had the opportunity to examine
UDW Commission Documents and the Disclosure Schedule and to obtain additional
information concerning UDW from UDW.
     3.8 Restricted Securities. Hyundai understands that the stock certificates
representing the Escrow Shares bear the Legend and that, when issued, the
Warrant Shares will also bear the Legend.
     3.9 Gross Profitability. Hyundai represents and warrants that the Gross
Profits to be recognize from the resale of the Machines and Enhanced Machines
shall not be less than Thirty-Five Percent (35%) of the actual resale value.
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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ARTICLE 4
COVENANTS OF THE PARTIES
     4.1 Filings; Consents. The Parties agree to take or cause to be taken all
actions and do or cause to be done all things necessary, proper or advisable
under applicable Laws to consummate and make effective, as soon as reasonably
practicable, the Transaction, including without limitation obtaining all
Consents of any person or entity, whether private or governmental, required in
connection with the consummation of the transactions contemplated herein. In
furtherance, and not in limitation of the foregoing, it is the intent of the
Parties to consummate the Transaction at the earliest practicable time, and they
respectively agree to exert commercially reasonable efforts to that end,
including without limitation: (i) the removal or satisfaction, if possible, of
any objections to the validity or legality of the Transaction; and (ii) the
satisfaction of the conditions to consummation of the Transactions.
     4.2 Further Assurances; Cooperation; Notification. Each of the Parties
hereto will, at and after Closing, execute and deliver such instruments and take
such other actions as the other Party may reasonably require in order to carry
out the intent of this Agreement and the Transaction Documents.
     4.3 Public Announcements. Neither of the Parties hereto will make any
public announcement with respect to the Transaction without the prior written
consent of the other Party, which consent will not be unreasonably withheld or
delayed; provided, however, that either of the Parties hereto may at any time
make any announcements that are required by applicable Law so long as the Party
so required to make an announcement promptly upon learning of such requirement
notifies the other Party of such requirement and discusses with the other Party
in good faith the exact proposed wording of any such announcement.
     4.4 Satisfaction of Conditions Concurrent. Each Party will use commercially
reasonable efforts to satisfy or cause to be satisfied all the conditions
concurrent that are applicable to them, and to cause the Transaction to be
consummated, and, without limiting the generality of the foregoing, to obtain
all material consents and authorizations of third parties and to make filings
with, and give all notices to, third parties that may be necessary or reasonably
required in order to effect the Transaction.
     4.5 Time is of the Essence. The Parties agree that time is of the essence
and therefore will take or cause to be taken all actions and do or cause to be
done all things necessary, proper or advisable under applicable Laws to
consummate and make effective this Transaction as soon as reasonably
practicable.
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF HYUNDAI
     Notwithstanding any other provision of this Agreement to the contrary, the
obligation of Hyundai to effect the Transaction is subject to the satisfaction
at the Closing, or waiver by Hyundai, of each of the following conditions:
     5.1 Representations and Warranties. The representations and warranties of
UDW contained in this Agreement and the Transaction Documents, including without
limitation in the Disclosure Schedule delivered to UDW as Annex 2.1, are true,
complete and accurate in all material respects as of the date when made and at
and as of the Closing Date as though such representations and warranties were
made at and as of such time, except for changes specifically permitted or
contemplated by this Agreement, and except insofar as the representations and
warranties relate expressly and solely to a particular date or period, in which
case they will be true and correct at the Closing with respect to such date or
period.
     5.2 Performance. UDW will have performed and complied in all material
respects with all agreements, covenants, obligations and conditions required by
this Agreement and the Transaction Documents to be performed or complied with by
UDW on the Closing.
     5.3 Required Approvals and Consents.
          5.3.1 All action required by Law to authorize the execution, delivery
and performance of this Agreement and the Transaction Documents and the
consummation of the Transaction will have been duly and validly taken.
          5.3.2 All Consents of or from all Authorities required hereunder to
consummate the Transaction will have been delivered, made or obtained, and
Hyundai will have received copies thereof.
     5.4 Agreements and Documents. Hyundai will have received the following
agreements and documents, each of which will be in full force and effect:
          5.4.1 a certificate executed by UDW confirming that the conditions set
forth in Sections 5.1, 5.2, 5.3, 5.5, 5.6, 5.7 and 5.8 have been duly satisfied.
          5.4.2 the duly executed and delivered SI&R Agreement that is attached
hereto as Exhibit A and incorporated herein by reference.
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          5.4.3 the duly executed and delivered Escrow Agreement that is
attached hereto as Exhibit B and incorporated herein by reference.
          5.4.4 the duly executed and delivered Warrant that is attached hereto
as Exhibit C and incorporated herein by reference.
          5.4.5 the duly executed and delivered Registration Rights Agreement
that is attached hereto as Exhibit D and incorporated herein by reference.
          5.4.6 the duly executed and delivered Voting Agreement that is
attached hereto as Exhibit E and incorporated herein by reference.
          5.4.7 the duly executed and delivered UDW Indemnity Agreement that is
attached hereto as Exhibit F and incorporated herein by reference.
          5.4.8 the duly executed and delivered Shareholders’ Rights Agreement
Amendment that is attached hereto as Exhibit H and incorporated herein by
reference.
     5.5 Adverse Changes. No material adverse change will have occurred in the
business, financial condition, prospects, assets or operations of UDW since
September 30, 2006, except as set forth in the Disclosure Schedule.
     5.6 No Proceeding or Litigation. No suit, action, investigation, inquiry or
other proceeding by any Authority or other person or entity will have been
instituted or threatened which delays or questions the validity or legality of
the Transaction or which, if successfully asserted, would, in the reasonable
judgment of Hyundai, individually or in the aggregate, otherwise have a Material
Adverse Effect on UDW’s business, financial condition, prospects, assets or
operations or prevent or delay the consummation of the Transaction.
     5.7 Legislation. No Law will have been enacted which prohibits, restricts
or delays the consummation of the Transaction or any of the conditions to the
consummation of the Transaction.
     5.8 Appropriate Documentation. Hyundai will have received, in a form and
substance reasonably satisfactory to Hyundai, dated the Closing Date, all
certificates and other documents, instruments and writings to evidence the
fulfillment of the conditions set forth in this Article 5 as Hyundai may
reasonably request, along with duly executed copies of the Transaction Documents
by the Parties.
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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ARTICLE 6
CONDITIONS TO OBLIGATIONS OF UDW
     Notwithstanding anything in this Agreement to the contrary, the obligation
of UDW to effect the transactions contemplated herein will be subject to the
satisfaction at or prior to the Closing of each of the following conditions:
     6.1 Representations and Warranties. The representations and warranties of
Hyundai contained in this Agreement and the Transaction Documents will be true,
complete and accurate in all material respects as of the date when made and at
and as of the Closing, as though such representations and warranties were made
at and as of such time, except for changes permitted or contemplated in this
Agreement, and except insofar as the representations and warranties relate
expressly and solely to a particular date or period, in which case they will be
true and correct at the Closing with respect to such date or period.
     6.2 Performance. Hyundai will have performed and complied in all material
respects with all agreements, covenants, obligations and conditions required by
this Agreement and the Transaction Documents to be performed or complied with by
Hyundai at the Closing.
     6.3 Required Approvals and Consents.
          6.3.1 All action required by Law to authorize the execution, delivery
and performance of this Agreement and the Transaction Documents and the
consummation of the Transaction will have been duly and validly taken.
          6.3.2 All Consents of or from all Authorities required hereunder to
consummate the transactions contemplated herein, will have been delivered, made
or obtained, and UDW will have received copies thereof.
     6.4 Agreements and Documents. UDW will have received the following
agreements and documents, each of which will be in full force and effect:
          6.4.1 a certificate executed by Hyundai confirming that the conditions
set forth in Sections 6.1, 6.2, 6.3, 6.5, 6.6, 6.7 and 6.8 have been duly
satisfied.
          6.4.2 the duly executed and delivered SI&R Agreement that is attached
hereto as Exhibit A and incorporated herein by reference.
          6.4.3 the duly executed and delivered Escrow Agreement that is
attached hereto as Exhibit B and incorporated herein by reference.
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          6.4.4 the duly executed and delivered Registration Rights Agreement
that is attached hereto as Exhibit D and incorporated herein by reference.
          6.4.5 the duly executed and delivered Voting Agreement that is
attached hereto as Exhibit E and incorporated herein by reference.
          6.4.6 the duly executed and delivered UDW Indemnity Agreement that is
attached hereto as Exhibit G and incorporated herein by reference.
     6.5 Adverse Changes. No material adverse change will have occurred in the
ability of Hyundai to perform its obligations under this Agreement.
     6.6 No Proceeding or Litigation. No suit, action, investigation, inquiry or
other proceeding by any Authority or other person or entity will have been
instituted or threatened which delays or questions the validity or legality of
the Transactions or which, if successfully asserted, would, in the reasonable
judgment of UDW, individually or in the aggregate, otherwise have a Material
Adverse Effect on Hyundai’s business, financial condition, prospects, assets or
operations or prevent or delay the consummation of the transactions contemplated
by this Agreement.
     6.7 Legislation. No Law will have been enacted which prohibits, restricts
or delays the consummation of the Transaction or any of the conditions to the
consummation of the Transaction.
     6.8 Appropriate Documentation. UDW will have received, in a form and
substance reasonably satisfactory to UDW, dated the Closing Date, all
certificates and other documents, instruments and writings to evidence the
fulfillment of the conditions set forth in this Article 6 as UDW may reasonably
request, along with duly executed copies of the Transaction Documents by the
Parties.
ARTICLE 7
CERTAIN POST-CLOSING AGREEMENTS
     7.1 Hyundai’s Use of the UDW Name in Hyundai Territory. 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.
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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     7.1.1 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 determined later) 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.
     7.1.2 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.
     7.1.3 Hyundai’s right to use the UDW name within the Hyundai Territory
shall terminate upon: (i) the termination of the SI&R Agreement, or (ii) thirty
(30) days following UDW’s notice to Hyundai of a material breach of this
Section 7.1 that has remained uncured for such 30-day period.
     7.2 Proxy for the Escrow Shares and the Warrant Shares. Hyundai agrees to
provide Charles E. Ramey, the present Chief Executive Officer of UDW, or, in the
event of Mr. Ramey no longer serving in such capacity, the successor Chief
Executive Officer of UDW, with a proxy covering all of the Escrow Shares and
Warrant Shares Hyundai has the right to vote, as set forth in the Voting
Agreement, substantially in the form attached hereto as Exhibit E.
     7.3 Crediting of Gross Profits to Hyundai. As provided in the Warrant,
Hyundai may, at its election, take all or any portion of its allocation of Gross
Profits in the form of cash and/or in the form of Warrant Shares becoming
exercisable under the Warrant. All Warrant Shares shall be issued and become
exercisable in accordance with the terms and conditions of the Warrant. The
Warrant shall be exercisable for a maximum number of Warrant Shares, that, when
added to the Escrow Shares, would make Hyundai an owner of up to Thirty-Nine and
Nine-Tenths Percent (39.9%) of the outstanding shares of UDW Common Stock; but
in no event to exceed Fourteen Million Three Hundred Thousand (14,300,000)
shares in the aggregate. Any Warrant Shares becoming exercisable but not issued
because of the Thirty-Nine and Nine-Tenths Percent (39.9%) maximum limit, set
forth in the preceding sentence, shall be promptly issuable to Hyundai upon
exercise of the Warrant upon the increase of UDW’s outstanding shares of Common
Stock so that, to the extent the Warrant is exercised by Hyundai, Hyundai shall
retain its up to Thirty-Nine and Nine-Tenths Percent (39.9%) of the outstanding
UDW Common Stock.
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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     7.4 Minimum Revenues Adjustment. In the event the Minimum Revenues are not
recognized by UDW by March 31, 2008, Hyundai shall pay UDW a price adjustment
(“Minimum Revenues Adjustment”) over and above the purchase price it paid for
the Escrow Shares. The Minimum Revenues Adjustment shall equal: (i) the purchase
price of the Escrow Shares ($1,500,000); (ii) plus, the number of Warrant Shares
issued, multiplied by: the Vesting Rate ($1.00) added to the Exercise Price
($0.01)(as such terms are defined in the Warrant); (iii) the sum of subsections
(i) and (ii), divided by the sum of the number of Escrow Shares (6,100,000) and
Warrants Shares issued to Hyundai under the Warrant; (iv) the quotient
calculated in subsection (iii), subtracted from Thirty-Two Cents ($0.32) (the
“Adjustment Price Per Share”); and, (v) the difference determined in subsection
(iv), multiplied by the number of Escrow Shares (6,100,000). If the Minimum
Revenues Adjustment is zero or a negative number, no additional payment is due.
Hyundai shall pay UDW the Minimum Revenues Adjustment (if any) within thirty
(30) days of Hyundai’s receipt of UDW’s written notice requesting such payment.
Hyundai shall have the option to pay the Minimum Revenue Adjustment, if any, in
cash or by surrendering to UDW shares of UDW Common Stock valued at the
Adjustment Price Per Share.
     7.5 Gross Profits Audit. Upon reasonable advance notification by Hyundai,
UDW shall, during normal business hours, make its financial records available to
Hyundai for review and audit for the purposes verifying the accurate calculation
of Gross Profits recognized by UDW from the sale or lease of Enhanced Machines
in the UDW Territory. Hyundai will cooperate with UDW to arrange any such audit
so as to be minimally disruptive to the normal business operations of UDW.
Unless otherwise agreed by the parties (i) there shall not be more than one
(1) audit during each UDW fiscal quarter, and, (ii) the costs and expenses
attributable to any such audit shall be borne by Hyundai, unless such audit
shall result in an increase of more than Five Percent (5%) in Gross Profits, in
which case the costs and expenses attributable to the audit shall be borne by
UDW.
ARTICLE 8
MISCELLANEOUS PROVISIONS
     8.1 Expenses. Except as otherwise provided herein, Hyundai and UDW will
each bear their own costs and expenses relating to the transactions contemplated
hereby, including without limitation, fees and expenses of legal counsel,
accountants, investment bankers, brokers or finders, printers, copiers,
consultants or other representatives for the services used, hired or connected
with the transactions contemplated hereby.
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     8.2 Survival. The representations and warranties of the Parties shall
survive the Closing for a period of two (2) years.
     8.3 Amendment and Modification. Subject to applicable Law, this Agreement
may be amended or modified by the Parties at any time with respect to any of the
terms contained herein; provided, however, that all such amendments and
modifications must be in writing and duly executed by all of the Parties hereto.
     8.4 Waiver of Compliance; Consents. Any failure of a Party to comply with
any obligation, covenant, agreement or condition herein may be expressly waived
in writing by the Party entitled hereby to such compliance, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition will not operate as a waiver of, or estoppel with respect
to, any subsequent or other failure. No single or partial exercise of a right or
remedy will preclude any other or further exercise thereof or of any other right
or remedy hereunder. Whenever this Agreement requires or permits the consent by
or on behalf of a Party, such consent will be given in writing in the same
manner as for waivers of compliance.
     8.5 No Third Party Beneficiaries. Nothing in this Agreement will entitle
any person or entity (other than a Party hereto and his respective successors
and assigns permitted hereby) to any claim, cause of action, remedy or right of
any kind.
     8.6 Notices. All notices, requests, demands and other communications
required or permitted hereunder will be made in writing and will be deemed to
have been duly given and effective: (i) on the date of delivery, if delivered
personally; (ii) on the earlier of the fourth (4th) day after mailing or the
date of the return receipt acknowledgement, if mailed, postage prepaid, by
certified or registered mail, return receipt requested; or (iii) on the date of
transmission, if sent by facsimile, telecopy, telegraph, telex or other similar
telegraphic communications equipment. Each Party shall afford the other Party
with advance notification of any change in address or contact information.

      If to UDW:   With a copy to:
US Dataworks, Inc.
  Pillsbury Winthrop Shaw
5301 Hollister Road, Second Floor
  Pittman LLP
Houston, Texas 77040
  2475 Hanover Street
Attention: John J. Figone, Sr.
  Palo Alto, California 94304-1114
Vice President & General Counsel
  Attention: Richard Bebb, Esq.
Telephone: (713) 934-3855 x250
  Telephone: (650) 233-4500
Facsimile: (713) 690-1426
  Facsimile:
Email: jfigone@usdataworks.com
  Email: rbebb@pillsburylaw.com

©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
December 28, 2006, Page 21 of 42

 

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      If to Hyundai:   With a copy to:
Hyundai Syscomm Corp.
  Peter B. Hirshfield, Esq.
1065 East Hillsdale Boulevard
  Hirshfield Law
Suite 247
  1035 Park Avenue, Suite 7B
Foster City, CA 94404
  New York NY 10028-0912
Attention: Samuel Lee
  Telephone: (646) 827-9362
Chairman of the Board
  Facsimile: (646) 349-1665
Telephone: (510) 790-4500
  Email: phirshfield@hirshfieldlaw.com
Facsimile: (415) 358-4551
   
Email: jack@hyundaisyscom.com
   

     8.7 Assignment. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by UDW (whether
voluntarily, involuntarily, by operation of law or otherwise) without the prior
written consent of Hyundai.
     8.8 Governing Law. This Agreement and the legal relations among the Parties
hereto will be governed by and construed in accordance with the internal
substantive laws of the State of California (without regard to the laws of
conflict that might otherwise apply) as to all matters, including without
limitation matters of validity, construction, effect, performance and remedies.
     8.9 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
     8.10 Facsimile and Scanned Execution. Receipt by either Party of a
counterpart of this Agreement manually signed and then scanned electronically
and emailed to the other Party or manually signed and then sent by facsimile
transmission to the other Party shall, for all purposes, be deemed to be an
original counterpart with the same force and effect as the manually signed
counterpart from which it was electronically reproduced.
     8.11 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and will not constitute a part
hereof.
     8.12 Entire Agreement. This Agreement, the Disclosure Schedule and the
Exhibits and other writings referred to in this Agreement or in the Disclosure
Schedule or any such exhibit or other writing are part of this Agreement,
together they embody the entire agreement and understanding of the Parties
hereto in respect of the transactions
©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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contemplated by this Agreement and together they are referred to as this
Agreement or the Transaction Documents. There are no restrictions, promises,
warranties, agreements, covenants or undertakings, other than those expressly
set forth or referred to in this Agreement. This Agreement supersedes all prior
agreements and understandings between the Parties with respect to the
transaction or transactions contemplated by this Agreement. Provisions of this
Agreement will be interpreted to be valid and enforceable under applicable Law
to the extent that such interpretation does not materially alter this Agreement;
provided, however, that if any such provision becomes invalid or unenforceable
under applicable Law such provision will be stricken to the extent necessary and
the remainder of such provisions and the remainder of this Agreement will
continue in full force and effect.
     8.13 Definition of Material Adverse Effect. “Material Adverse Effect” with
respect to a Party means a material adverse change in or effect on the business,
operations, financial condition, properties, liabilities or prospects of that
Party taken as a whole; provided, however, that a Material Adverse Effect will
not be deemed to include (i) changes as a result of the announcement of this
Agreement or the transactions contemplated hereby, (ii) events or conditions
arising from changes in general business or economic conditions, or
(iii) changes in generally accepted accounting principles (“GAAP”).
     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                  UDW   Hyundai     US Dataworks, Inc.   Hyundai Syscomm Corp.  
 
 
               
By:
  /s/ Charles E. Ramey   By:   /s/ Samuel Lee    
 
               
 
  Charles E. Ramey       Samuel Lee    
 
  Chief Executive Officer       Chairman of the Board    
 
               
Date:
  December 29, 2006   Date:   December 30, 2006    
 
               

©2006 Hyundai Syscomm Corp. Stock Purchase Agreement with US Dataworks, Inc.
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Annex 1.3.4
Wire Transfer Instructions
Wire Transfer Instructions:
Amegy Bank N.A.
Houston, TX
ABA #: 113011258
For Credit to : US Dataworks, Inc.
Account #: 3260410

 

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Annex 2.1
Disclosure Schedule

 

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Exhibit A
Software Integration and Resale Agreement

 

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Exhibit B
Escrow Agreement

 

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Exhibit C
Warrant

 

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Exhibit D
Registration Rights Agreement

 

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Exhibit E
Voting Agreement

 

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Exhibit F
UDW Indemnity Agreement
     This Indemnification Agreement (this “Agreement”) is made as of the
                     day of December, 2006, by and between US Dataworks, Inc.
(“Indemnitor”) and Hyundai Syscomm Corp. (“Indemnitee”).
     WHEREAS, pursuant to that certain Stock Purchase Agreement (the “Stock
Purchase Agreement”) dated as of the date hereof by and between Indemnitor, as
UDW, and Indemnitee, as Hyundai, Indemnitor has agreed to sell to Indemnitee and
Indemnitee has agreed to purchase from Indemnitor Six Million One Hundred
Thousand (6,100,000) shares (the “Shares”) of Indemnitor’s Common Stock for and
aggregate purchase price of One Million Five Hundred Thousand Dollars
($1,500,000) (the “Purchase Price”); and
     WHEREAS, as a condition concurrent to the closing (the “Closing”) of the
purchase and sale of the Shares, Indemnitor has agreed to execute and deliver
this Agreement to Indemnitee; and;
     WHEREAS, Indemnitor wishes to provide this Agreement for indemnification of
and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement;
     NOW THEREFORE, Indemnitor and Indemnitee agree as follows:
     1. Indemnitor agrees that if Indemnitee is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of: (a) any action
or omission of Indemnitor or any officer, director, employee, counsel,
accountant or other agent of Indemnitor or (b) the inaccuracy or incompleteness
of the representations and warranties of Indemnitor set forth in the Stock
Purchase Agreement, Indemnitee shall be indemnified and held harmless by
Indemnitor to the fullest extent permitted or authorized by applicable law,
against all cost, expense, liability and loss (including, without limitation,
attorney’s fees, judgments, fines, excise taxes or penalties and amounts paid or
to be paid in settlement) (collectively “Expenses”) reasonably incurred or
suffered by each Indemnitee in connection therewith, and such indemnification
shall inure to the benefit of each officer, director, employee, counsel,
accountant or other agent of Indemnitee.
     2. Indemnitor shall advance to Indemnitee to the extent permitted by law
all reasonable costs and expenses incurred by Indemnitee in connection with a
Proceeding within thirty (30) days after receipt by

 

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Indemnitor of a written request, with appropriate documentation, for such
advance. Such request shall include an undertaking by Indemnitee to repay the
amount of such advance if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such costs and expenses.
     3. Promptly after receipt by Indemnitee of notice of any claim or the
commencement of any Proceeding with respect to which Indemnitee is entitled to
indemnity hereunder, Indemnitee or a representative of Indemnitee shall notify
Indemnitor in writing of such claim or the commencement of such Proceeding, and
Indemnitor shall (i) assume the defense of such Proceeding, (ii) employ counsel
reasonably satisfactory to Indemnitee and (iii) pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, Indemnitee, at
its own expense, shall be entitled to employ counsel separate from counsel for
Indemnitor and from any other party in such action; provided, however, if
Indemnitee reasonably determines that a conflict of interest exists which makes
representation by counsel chosen by Indemnitor not advisable or if Indemnitor
fails to employ counsel to assume the defense of such proceeding, the reasonable
fees and disbursements of such separate counsel for Indemnitee shall be paid by
Indemnitor to the extent permitted by law; provided, however, that Indemnitor
shall not be required to pay for more than one such separate counsel for
Indemnitee. In addition, Indemnitee shall give Indemnitor such information and
cooperation with regard to such Proceeding as Indemnitor may reasonably require
and as shall be in the Indemnitee’s power.
     4. Indemnitor shall not be required to indemnify Indemnitee against
settlements entered into without the consent of Indemnitor. Indemnitor shall not
settle any Proceeding in any manner that would impose any penalty, limitation or
admission on Indemnitee without the Indemnitee’s written consent. Neither
Indemnitor nor Indemnitee shall unreasonably withhold its consent to any
proposed settlement.
     5. If Indemnitee is entitled under any provision of this Agreement to
indemnification by Indemnitor for some or a portion of the Expenses, but not,
however, for the total amount thereof, Indemnitor shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled. Both
Indemnitor and Indemnitee acknowledge that in certain instances, federal or
state law or applicable public policy may prohibit Indemnitor from indemnifying
Indemnitee under this Agreement or otherwise.
     6. If Indemnitee has not received full indemnification within thirty
(30) days after making a written demand on Indemnitor for indemnification,
Indemnitee shall have the right to enforce it indemnification rights under this
Agreement by commencing litigation in any court in the State of California
having subject matter
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jurisdiction thereof and in which venue is proper seeking an initial
determination by the court. Indemnitor hereby consents to service of process and
to appear in any such proceeding. The remedy provided for in this Section 6
shall be in addition to any other remedies available to Indemnitee in law or
equity.
     7. It shall be a defense to any action brought by Indemnitee against
Indemnitor to enforce this Agreement for Expenses incurred in defending a
Proceeding in advance of its final disposition that it is not permissible under
applicable law or under this Agreement for Indemnitor to indemnify Indemnitee
for the amount claimed. In connection with any such action or any determination
by Indemnitor as to whether Indemnitee is entitled to be indemnified hereunder,
the burden of proving such a defense or determination shall be on Indemnitor.
Neither the failure of Indemnitor to have made a determination prior to the
commencement of such action by Indemnitee that indemnification of the claimants
is proper under the circumstances because it has met the standard of conduct set
forth in applicable law, nor an actual determination by Indemnitor that
Indemnitee had not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct. For purposes of this Agreement, the termination of any
claim, action, suit, or proceeding, by judgment, order, settlement (whether with
or without court approval), conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
     8. Indemnitor shall indemnify Indemnitee against any and all Expenses that
are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification of Expenses by Indemnitor under this Agreement or any other
agreement or under applicable law. In addition, Indemnitor shall, if so
requested by Indemnitee, advance the foregoing Expenses to the Indemnitee.
     9. The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under applicable law, or otherwise. To the extent
that a change in applicable law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under applicable law, or this Agreement, it is the intent of the parties that
Indemnitee enjoy by this Agreement the greater benefits so afforded by such
change. The indemnification rights afforded to Indemnitee under this Agreement
are contract rights.
     10. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by Indemnitor and
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Indemnitee. No waiver of any of the provisions of this Agreement shall be
binding unless in the form of a writing signed by the party against whom
enforcement of the waiver is sought, and no such waiver shall operate as a
waiver of any other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver. Except as specifically provided herein,
no failure to exercise or any delay in exercising any right or remedy hereunder
shall constitute a waiver thereof.
     11. In the event of payment under this Agreement, Indemnitor shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers reasonably required and shall do
everything that may be reasonably necessary to secure such rights, including the
execution of such documents necessary to enable Indemnitor effectively to bring
suit to enforce such rights.
     12. This Agreement shall be binding upon and inure to the benefit of and be
enforceable by Indemnitor and Indemnitee and their respective successors and
assigns.
     13. If any provision (or portion thereof) of this Agreement shall be held
by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
this Agreement containing a provision held to be invalid, void, or otherwise
unenforceable that is not itself invalid, void, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, void, or unenforceable.
     14. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California applicable to contracts made
and to be performed in such State without giving effect to the principles of
conflicts of laws.
     15. This Agreement may be executed in one or more counterparts, all of
which shall be deemed to constitute one and the same instrument.
     16. Receipt by either Indemnitor or Indemnitee of a counterpart of this
Agreement manually signed and then scanned electronically and emailed to the
other or manually signed and then sent by facsimile transmission to the other
shall, for all purposes, be deemed to be an original counterpart with the same
force and effect as the manually signed counterpart from which it was
electronically reproduced.
     17. All notices, demands, and other communications required or permitted
hereunder shall be made in writing and shall be deemed to
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have been duly given if delivered by hand, against receipt, or mailed, postage
prepaid, certified or registered mail, return receipt requested, and addressed
as follows:

      If to Indemnitee:   With a copy to:
Hyundai Syscomm Corp.
  Peter B. Hirshfield, Esq.
1065 East Hillsdale Boulevard
  Hirshfield Law
Suite 247
  1035 Park Avenue, Suite 7B
Foster City, CA 94404
  New York NY 10028-0912
Attention: Samuel Lee
  Telephone: (646) 827-9362
Chairman of the Board
  Facsimile: (646) 349-1665
Telephone: (510) 790-4500
  Email: phirshfield@hirshfieldlaw.com
Facsimile: (415) 358-4551
   
Email: jack@hyundaisyscom.com
   

      If to Indemnitor:   With a copy to:
US Dataworks, Inc.
  Pillsbury Winthrop Shaw Pittman LLP
5301 Hollister Road, Second Floor
  2475 Hanover Street
Houston, Texas 77040
  Palo Alto, California 94304-1114
Attention: John J. Figone, Sr.
  Attention: Richard Bebb, Esq.
Vice President & General Counsel
  Telephone: (650) 233-4500
Telephone: (713) 934-3855 x250
  Facsimile:
Facsimile: (713) 690-1426
  Email: rbebb@pillsburylaw.com
Email: jfigone@usdataworks.com
   

Notice of change of address shall be effective only when done in accordance with
this Section 17. All notices complying with this Section 17 shall be deemed to
have been received on the earlier of the date of delivery or on the third
business day after mailing.
     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                      UDW   Hyundai
   
 
                US Dataworks, Inc.   Hyundai Syscomm Corp.    
 
               
By:
      By:        
 
               
 
  Charles E. Ramey       Samuel Lee    
 
  Chief Executive Officer       Chairman of the Board    
 
               
Date:
      Date:        
 
               

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Exhibit G
Hyundai Indemnity Agreement
     This Indemnification Agreement (this “Agreement”) is made as of the
                     day of December, 2006, by and between US Dataworks, Inc.
(“Indemnitee”) and Hyundai Syscomm Corp. (“Indemnitor”).
     WHEREAS, pursuant to that certain Stock Purchase Agreement (the “Stock
Purchase Agreement”) dated as of the date hereof by and between Indemnitor, as
Hyundai, and Indemnitee, as UDW, Indemnitor has agreed to purchase from
Indemnitee and Indemnitee has agreed to sell to Indemnitor Six Million One
Hundred Thousand (6,100,000) (the “Shares”) of Indemnitee’s Common Stock for and
aggregate purchase price of One Million Five Hundred Thousand Dollars
($1,500,000) (the “Purchase Price”); and
     WHEREAS, as a condition concurrent to the closing (the “Closing”) of the
purchase and sale of the Shares, Indemnitor has agreed to execute and deliver
this Agreement to Indemnitee; and;
     WHEREAS, Indemnitor wishes to provide this Agreement for indemnification of
and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement;
     NOW THEREFORE, Indemnitor and Indemnitee agree as follows:
     1. Indemnitor agrees that if Indemnitee is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of: (a) any action
or omission of Indemnitor or any officer, director, employee, counsel,
accountant or other agent of Indemnitor or (b) the inaccuracy or incompleteness
of the representations and warranties of Indemnitor set forth in the Stock
Purchase Agreement, Indemnitee shall be indemnified and held harmless by
Indemnitor to the fullest extent permitted or authorized by applicable law,
against all cost, expense, liability and loss (including, without limitation,
attorney’s fees, judgments, fines, excise taxes or penalties and amounts paid or
to be paid in settlement) (collectively “Expenses”) reasonably incurred or
suffered by each Indemnitee in connection therewith, and such indemnification
shall inure to the benefit of each officer, director, employee, counsel,
accountant or other agent of Indemnitee.
     2. Indemnitor shall advance to Indemnitee to the extent permitted by law
all reasonable costs and expenses incurred by

 

--------------------------------------------------------------------------------

 

Indemnitee in connection with a Proceeding within thirty (30) days after receipt
by Indemnitor of a written request, with appropriate documentation, for such
advance. Such request shall include an undertaking by Indemnitee to repay the
amount of such advance if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such costs and expenses.
     3. Promptly after receipt by Indemnitee of notice of any claim or the
commencement of any Proceeding with respect to which Indemnitee is entitled to
indemnity hereunder, Indemnitee or a representative of Indemnitee shall notify
Indemnitor in writing of such claim or the commencement of such Proceeding, and
Indemnitor shall (i) assume the defense of such Proceeding, (ii) employ counsel
reasonably satisfactory to Indemnitee and (iii) pay the reasonable fees and
expenses of such counsel. Notwithstanding the preceding sentence, Indemnitee, at
its own expense, shall be entitled to employ counsel separate from counsel for
Indemnitor and from any other party in such action; provided, however, if
Indemnitee reasonably determines that a conflict of interest exists which makes
representation by counsel chosen by Indemnitor not advisable or if Indemnitor
fails to employ counsel to assume the defense of such proceeding, the reasonable
fees and disbursements of such separate counsel for Indemnitee shall be paid by
Indemnitor to the extent permitted by law; provided, however, that Indemnitor
shall not be required to pay for more than one such separate counsel for
Indemnitee. In addition, Indemnitee shall give Indemnitor such information and
cooperation with regard to such Proceeding as Indemnitor may reasonably require
and as shall be in the Indemnitee’s power.
     4. Indemnitor shall not be required to indemnify Indemnitee against
settlements entered into without the consent of Indemnitor. Indemnitor shall not
settle any Proceeding in any manner that would impose any penalty, limitation or
admission on Indemnitee without the Indemnitee’s written consent. Neither
Indemnitor nor Indemnitee shall unreasonably withhold its consent to any
proposed settlement.
     5. If Indemnitee is entitled under any provision of this Agreement to
indemnification by Indemnitor for some or a portion of the Expenses, but not,
however, for the total amount thereof, Indemnitor shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled. Both
Indemnitor and Indemnitee acknowledge that in certain instances, federal or
state law or applicable public policy may prohibit Indemnitor from indemnifying
Indemnitee under this Agreement or otherwise.
     6. If Indemnitee has not received full indemnification within thirty
(30) days after making a written demand on Indemnitor for indemnification,
Indemnitee shall have the right to enforce it
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indemnification rights under this Agreement by commencing litigation in any
court in the State of California having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court.
Indemnitor hereby consents to service of process and to appear in any such
proceeding. The remedy provided for in this Section 6 shall be in addition to
any other remedies available to Indemnitee in law or equity.
     7. It shall be a defense to any action brought by Indemnitee against
Indemnitor to enforce this Agreement for Expenses incurred in defending a
Proceeding in advance of its final disposition that it is not permissible under
applicable law or under this Agreement for Indemnitor to indemnify Indemnitee
for the amount claimed. In connection with any such action or any determination
by Indemnitor as to whether Indemnitee is entitled to be indemnified hereunder,
the burden of proving such a defense or determination shall be on Indemnitor.
Neither the failure of Indemnitor to have made a determination prior to the
commencement of such action by Indemnitee that indemnification of the claimants
is proper under the circumstances because it has met the standard of conduct set
forth in applicable law, nor an actual determination by Indemnitor that
Indemnitee had not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct. For purposes of this Agreement, the termination of any
claim, action, suit, or proceeding, by judgment, order, settlement (whether with
or without court approval), conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
     8. Indemnitor shall indemnify Indemnitee against any and all Expenses that
are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification of Expenses by Indemnitor under this Agreement or any other
agreement or under applicable law. In addition, Indemnitor shall, if so
requested by Indemnitee, advance the foregoing Expenses to the Indemnitee.
     9. The rights of Indemnitee hereunder shall be in addition to any other
rights Indemnitee may have under applicable law, or otherwise. To the extent
that a change in applicable law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under applicable law, or this Agreement, it is the intent of the parties that
Indemnitee enjoy by this Agreement the greater benefits so afforded by such
change. The indemnification rights afforded to Indemnitee under this Agreement
are contract rights.
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     10. No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by Indemnitor and Indemnitee. No waiver of
any of the provisions of this Agreement shall be binding unless in the form of a
writing signed by the party against whom enforcement of the waiver is sought,
and no such waiver shall operate as a waiver of any other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
Except as specifically provided herein, no failure to exercise or any delay in
exercising any right or remedy hereunder shall constitute a waiver thereof.
     11. In the event of payment under this Agreement, Indemnitor shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers reasonably required and shall do
everything that may be reasonably necessary to secure such rights, including the
execution of such documents necessary to enable Indemnitor effectively to bring
suit to enforce such rights.
     12. This Agreement shall be binding upon and inure to the benefit of and be
enforceable by Indemnitor and Indemnitee and their respective successors and
assigns.
     13. If any provision (or portion thereof) of this Agreement shall be held
by a court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, the remaining provisions shall remain enforceable to the fullest
extent permitted by law. Furthermore, to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of
this Agreement containing a provision held to be invalid, void, or otherwise
unenforceable that is not itself invalid, void, or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, void, or unenforceable.
     14. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California applicable to contracts made
and to be performed in such State without giving effect to the principles of
conflicts of laws.
     15. This Agreement may be executed in one or more counterparts, all of
which shall be deemed to constitute one and the same instrument.
     16. Receipt by either Indemnitor or Indemnitee of a counterpart of this
Agreement manually signed and then scanned electronically and emailed to the
other or manually signed and then sent by facsimile transmission to the other
shall, for all purposes, be deemed to be an
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original counterpart with the same force and effect as the manually signed
counterpart from which it was electronically reproduced.
     17. All notices, demands, and other communications required or permitted
hereunder shall be made in writing and shall be deemed to have been duly given
if delivered by hand, against receipt, or mailed, postage prepaid, certified or
registered mail, return receipt requested, and addressed as follows:

      If to Indemnitor:   With a copy to:
Hyundai Syscomm Corp.
  Peter B. Hirshfield, Esq.
1065 East Hillsdale Boulevard
  Hirshfield Law
Suite 247
  1035 Park Avenue, Suite 7B
Foster City, CA 94404
  New York NY 10028-0912
Attention: Samuel Lee
  Telephone: (646) 827-9362
Chairman of the Board
  Facsimile: (646) 349-1665
Telephone: (510) 790-4500
  Email: phirshfield@hirshfieldlaw.com
Facsimile: (415) 358-4551
   
Email: jack@hyundaisyscom.com
   

      If to Indemnitee:   With a copy to:
US Dataworks, Inc.
  Pillsbury Winthrop Shaw Pittman LLP
5301 Hollister Road, Second Floor
  2475 Hanover Street
Houston, Texas 77040
  Palo Alto, California 94304-1114
Attention: John J. Figone, Sr.
  Attention: Richard Bebb, Esq.
Vice President & General Counsel
  Telephone: (650) 233-4500
Telephone: (713) 934-3855 x250
  Facsimile:
Facsimile: (713) 690-1426
  Email: rbebb@pillsburylaw.com
Email: jfigone@usdataworks.com
   

Notice of change of address shall be effective only when done in accordance with
this Section 17. All notices complying with this Section 17 shall be deemed to
have been received on the earlier of the date of delivery or on the third
business day after mailing.
     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                  Indemnitee:   Indemnitor:     US Dataworks, Inc.   Hyundai
Syscomm Corp.    
 
               
By:
      By:        
 
               
 
  Charles E. Ramey       Samuel Lee    
 
  Chief Executive Officer       Chairman of the Board    
 
                Date:   Date:        
 
               

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Exhibit H
Shareholders’ Rights Agreement Amendment