THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS. IT MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND SUCH LAWS OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND, IF REQUESTED BY THE COMPANY,
UPON DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED. THE TRANSFER OF THIS SECURITY IS ALSO SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS CONTAINED IN THAT CERTAIN NOTE PURCHASE AGREEMENT,
DATED AS OF AUGUST 13, 2008, BETWEEN THE COMPANY AND THE HOLDER.
 
 
US DATAWORKS, INC.
 
REFINANCING SECURED NOTE

Issuance Date: August 13, 2008
Original Principal Amount: U.S. $_________

 
FOR VALUE RECEIVED, US DATAWORKS, INC., a Nevada corporation (the “Company”)
hereby promises to pay to __________ or registered assigns (“Holder”) the amount
set out above as the Original Principal Amount (the “Principal”) when due,
whether upon the Maturity Date (as defined below) and to pay interest
(“Interest”) on any outstanding Principal at the applicable Interest Rate, from
the date set out above as the Issuance Date (the “Issuance Date”) until the same
becomes due and payable, whether upon an Interest Date (as defined below), the
Maturity Date, pursuant to Section (3)(c) or otherwise. This Refinancing Secured
Note (including all Refinancing Secured Notes issued in exchange, transfer or
replacement hereof, this “Note”) is one of an issue of Refinancing Secured Notes
issued pursuant to the Note Purchase Agreement dated August 13, 2008
(collectively, the “Notes”). Certain capitalized terms used herein are defined
in Section 20.
 
1. MATURITY. On the Maturity Date, the Company shall pay to the Holder an amount
in cash representing all outstanding Principal, accrued and unpaid Interest. The
“Maturity Date” shall be August 13, 2009, as may be extended at the option of
the Holder in the event that, and for so long as, an Event of Default (as
defined in Section 3(a)) shall have occurred and be continuing on the Maturity
Date (as may be extended pursuant to this Section 1) or any event shall have
occurred and be continuing on the Maturity Date (as may be extended pursuant to
this Section 1) that with the passage of time and the failure to cure would
result in an Event of Default. The Company may prepay any portion of the
outstanding Principal, accrued and unpaid Interest, without penalty.
 
2. INTEREST; INTEREST RATE. Interest on this Note shall commence accruing on the
Issuance Date and shall be computed on the basis of a 360-day year comprised of
twelve (12) thirty (30) day months and shall be payable in arrears monthly on
October 15, November 15, December 15, January 15, February 15, March 15,
April 15, May 15, June 15, July 15, August 15 and September 15 of each year
(each, an “Interest Date”) with the first Interest Date being September 15,
2008. Interest shall be payable on each Interest Date, to the record holder of
this Note on the applicable Interest Date, in cash.

 
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3. RIGHTS UPON EVENT OF DEFAULT.
 
(a) Event of Default. Each of the following events shall constitute an “Event of
Default”:
 
(i) the Company’s failure to pay to the Holder any amount of Principal, ,
Interest, or other amounts when and as due under this Note or any other
Transaction Document (as defined in the Note Purchase Agreement) or any other
agreement, document, certificate or other instrument delivered in connection
with the transactions contemplated hereby and thereby to which the Holder is a
party;
 
(ii) the Company or any of its Subsidiaries, pursuant to or within the meaning
of Title 11, U.S. Code, or any similar Federal, foreign or state law for the
relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary
case, (B) consents to the entry of an order for relief against it in an
involuntary case, (C) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official (a “Custodian”), (D) makes a general
assignment for the benefit of its creditors or (E) admits in writing that it is
generally unable to pay its debts as they become due; or
 
(iii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company or any of its
Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or
any of its Subsidiaries or (C) orders the liquidation of the Company or any of
its Subsidiaries.
 
(b) In the event an Event of Default occurs under Section 3(a)(i), the Interest
shall be increased to eighteen percent (18.0%) per annum. In the event that such
Event of Default is subsequently cured, the adjustment referred to in the
preceding sentence shall cease to be effective as of the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate
during the continuance of such Event of Default shall continue to apply to the
extent relating to the days after the occurrence of such Event of Default
through and including the date of cure of such Event of Default.
 
(c) In the event an Event of Default occurs under Sections 3(a)(ii) and
3(a)(iii), the Company shall within four (4) Business Days deliver written
notice thereof via facsimile and overnight courier ( an “Event of Default
Notice”) to the Holder. At any time after the earlier of the Holder’s receipt of
an Event of Default Notice and the Holder becoming aware of an Event of Default,
the Required Holders may require the Company to redeem all or any portion of
this Note by delivering written notice thereof (the “Event of Default Redemption
Notice”) to the Company, which Event of Default Redemption Notice shall indicate
the outstanding principal and accrued Interest (including any increased interest
pursuant to Section 3(b)above) (the “Redemption Amount”) of this Note the
Required Holders are electing to require the Company to redeem. Each portion of
this Note subject to redemption by the Company pursuant to this Section 3(c)
shall be redeemed by the Company at the Redemption Amount. To the extent
redemptions required by this Section 3(c) are deemed or determined by a court of
competent jurisdiction to be prepayments of the Note by the Company, such
redemptions shall be deemed to be voluntary prepayments. The parties hereto
agree that in the event of the Company’s redemption of any portion of the Note
under this Section 3(c), the Holder’s damages would be uncertain and difficult
to estimate because of the parties’ inability to predict future interest rates
and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder.

 
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4. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company
will not, by amendment of its Articles of Incorporation, Bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Note, and will at all times in good faith carry out all of the
provisions of this Note and take all action as may be required to protect the
rights of the Holder of this Note.
 
5. SECURITY. This Note is secured to the extent and in the manner set forth in
the Security Agreement and Collateral Agency Agreement (as defined in the Note
Purchase Agreement).
 
6. VOTING RIGHTS. The Holder shall have no voting rights as the holder of this
Note, except as required by law, including but not limited to the General
Corporation Law of the State of Nevada, and as expressly provided in this Note.
 
7. COVENANTS.
 
(a) Rank. All payments due under this Note shall rank senior to all Permitted
Indebtedness of the Company and its Subsidiaries under clause (ii) of the
definition of “Permitted Indebtedness” in Section 20(h).
 
(b) Indebtedness. So long as this Note is outstanding, the Company shall not,
and the Company shall not permit any of its Subsidiaries to, directly or
indirectly, incur or guarantee, assume or suffer to exist any Indebtedness,
other than (i) the Indebtedness evidenced by this Note and (ii) Permitted
Indebtedness.
 
(c) Existence of Liens. So long as this Note is outstanding, the Company shall
not, and the Company shall not permit any of its Subsidiaries to, directly or
indirectly, allow or suffer to exist any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries (collectively, “Liens”) other than Permitted Liens.
 
(d) Transactions with Affiliates. The Company shall not, nor shall it permit any
of its Subsidiaries to, enter into, renew, extend or be a party to, any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any
kind or the rendering of services of any kind) with any Affiliate, except in the
ordinary course of business in a manner and to an extent consistent with past
practice and necessary or desirable for the prudent operation of its business,
for fair consideration and on terms no less favorable to it or its Subsidiaries
than would be obtainable in a comparable arm’s length transaction with a Person
that is not an Affiliate thereof.

 
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(e) Change in Nature of Business. The Company shall not make, or permit any of
its Subsidiaries to make, any change in the nature of its business as described
in the Company’s most recent annual report filed on Form 10-KSB with the SEC.
The Company shall not modify its corporate structure or purpose.
 
(f) Preservation of Existence, Etc. The Company shall maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, its existence, rights
and privileges, and become or remain, and cause each of its Subsidiaries to
become or remain, duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary.
 
(g) Maintenance of Properties, Etc. The Company shall maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, and comply, and
cause each of its Subsidiaries to comply, at all times with the provisions of
all leases to which it is a party as lessee or under which it occupies property,
so as to prevent any loss or forfeiture thereof or thereunder.
 
(h) Maintenance of Insurance. The Company shall maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any governmental
authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event in amount, adequacy and scope reasonably
satisfactory to the Collateral Agent. All policies covering the Collateral are
to be made payable to the Collateral Agent for the benefit of the Holders, as
its interests may appear, in case of loss, under a standard non-contributory
“lender” or “secured party” clause and are to contain such other provisions as
the Collateral Agent may require to fully protect the Holders’ interest in the
Collateral and to any payments to be made under such policies. All certificates
of insurance are to be delivered to the Collateral Agent and the policies are to
be premium prepaid, with the loss payable and additional insured endorsement in
favor of the Collateral Agent and such other Persons as the Collateral Agent may
designate from time to time, and shall provide for not less than 30 days’ prior
written notice to the Collateral Agent of the exercise of any right of
cancellation. If the Company or any of its Subsidiaries fails to maintain such
insurance, the Collateral Agent may arrange for such insurance, but at the
Company’s expense and without any responsibility on the Collateral Agent’s part
for obtaining the insurance, the solvency of the insurance companies, the
adequacy of the coverage, or the collection of claims. Upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall have
the sole right, in the name of the Holders, the Company and its Subsidiaries, to
file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.

 
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(i) Change in Collateral; Collateral Records. The Company shall (i) give the
Collateral Agent not less than 30 days’ prior written notice of any change in
the location of any Collateral (as defined in the Security Documents), (ii)
advise the Collateral Agent promptly, in sufficient detail, of any material
adverse change relating to the type, quantity or quality of the Collateral or
the Lien granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Collateral Agent for the benefit of
the Holders of the Senior Bonds from time to time, solely for the Collateral
Agent’s convenience in maintaining a record of Collateral, such written
statements and schedules as the Collateral Agent may reasonably require,
designating, identifying or describing the Collateral.
 
8. VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative vote at a
meeting duly called for such purpose or the written consent without a meeting of
the Required Holders shall be required for any change or amendment to this Note.
No consideration shall be offered or paid to any holder of Notes to amend or
consent to a waiver or modification of the Notes unless the same consideration
also is offered to all of the holders of Notes.
 
9. TRANSFER. This Note may not be offered, sold, assigned or transferred by the
Holder without the prior written consent of the Company.
 
10. REISSUANCE OF THIS NOTE.
 
(a) Transfer. If this Note is to be transferred, the Holder shall surrender this
Note to the Company, whereupon the Company will forthwith issue and deliver upon
the order of the Holder a new Note (in accordance with Section 10(d)),
registered as the Holder may request, representing the outstanding Principal
being transferred by the Holder and, if less then the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 10(d)) to
the Holder representing the outstanding Principal not being transferred. The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason of the provisions of this Section 10(a), the outstanding Principal
represented by this Note may be less than the Principal stated on the face of
this Note.
 
(b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver to the Holder a new Note (in accordance with
Section 10(d)) representing the outstanding Principal.
 
(c) Note Exchangeable for Different Denominations. This Note is exchangeable,
upon the surrender hereof by the Holder at the principal office of the Company,
for a new Note or Notes (in accordance with Section 10(d) and in principal
amounts of at least $100,000) representing in the aggregate the outstanding
Principal of this Note, and each such new Note will represent such portion of
such outstanding Principal as is designated by the Holder at the time of such
surrender.
 
(d) Issuance of New Notes. Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor
with this Note, (ii) shall represent, as indicated on the face of such new Note,
the Principal remaining outstanding (or in the case of a new Note being issued
pursuant to Section 10(a) or Section 10(c), the Principal designated by the
Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes),
(iii) shall have an issuance date, as indicated on the face of such new Note,
which is the same as the Issuance Date of this Note, (iv) shall have the same
rights and conditions as this Note, and (v) shall represent accrued and unpaid
Interest on the Principal and Interest of this Note, if any, from the Issuance
Date.

 
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11. REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The remedies provided in this Note shall be cumulative and in addition
to all other remedies available under this Note and any of the other Transaction
Documents at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the Required Holders’
right to pursue actual and consequential damages for any failure by the Company
to comply with the terms of this Note. Amounts set forth or provided for herein
with respect to payments shall be the amounts to be received by the Holder and
shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the Required Holders shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
 
12. PAYMENT OF COLLECTION. ENFORCEMENT AND OTHER COSTS. If (a) this Note is
placed in the hands of an attorney for collection or enforcement or is collected
or enforced through any legal proceeding or the Required Holders otherwise takes
action to collect amounts due under this Note or to enforce the provisions of
this Note or (b) there occurs any bankruptcy, reorganization, receivership of
the Company or other proceedings affecting Company creditors’ rights and
involving a claim under this Note, then the Company shall pay the costs incurred
by the Required Holders for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other
proceeding, including, but not limited to, attorneys’ fees and disbursements.
 
13. CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by
the Company and all the Purchasers and shall not be construed against any person
as the drafter hereof. The headings of this Note are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Note.
 
14. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the
Required Holders in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

 
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15. NOTICES; PAYMENTS.
 
(a) Notices. Whenever notice is required to be given under this Note, unless
otherwise provided herein, such notice shall be given in accordance with
Section 6.4 of the Note Purchase Agreement. The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Note, including
in reasonable detail a description of such action and the reason therefore.
 
(b) Payments. Whenever any payment of cash is to be made by the Company to any
Person pursuant to this Note, such payment shall be made in lawful money of the
United States of America by a check drawn on the account of the Company and sent
via overnight courier service to such Person at such address as previously
provided to the Company in writing (which address, in the case of each of the
Purchasers, shall initially be as set forth on the Schedule of Buyers attached
to the Note Purchase Agreement); provided that the Holder may elect to receive a
payment of cash via wire transfer of immediately available funds by providing
the Company with prior written notice setting out such request and the Holder’s
wire transfer instructions. Whenever any amount expressed to be due by the terms
of this Note is due on any day which is not a Business Day, the same shall
instead be due on the next succeeding day which is a Business Day and, in the
case of any Interest Date which is not the date on which this Note is paid in
full, the extension of the due date thereof shall not be taken into account for
purposes of determining the amount of Interest due on such date.
 
16. CANCELLATION. After all Principal, accrued Interest and other amounts at any
time owed on this Note has been paid in full, this Note shall automatically be
deemed canceled, shall be surrendered to the Company for cancellation and shall
not be reissued.
 
17. WAIVER OF NOTICE. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Note Purchase Agreement.
 
18. GOVERNING LAW, JURISDICTION; JURY TRIAL. This Note shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. The Company
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address as provided in Section 15 hereof and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed or operate to preclude the
Holder from bringing suit or taking other legal action against the Company in
any other jurisdiction to collect on the Company’s obligations to the Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court ruling in favor of the Holder. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

 
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19. SEVERABILITY. If any provision of this Note is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Note
so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof
and the prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).
 
20. CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall
have the following meanings:
 
(a) “Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.
 
(b) “Closing Date” shall have the meaning set forth in the Note Purchase
Agreement, which corresponds to the date this Note and the Other Notes were
initially issued by the Company pursuant to the terms of the Note Purchase
Agreement.
 
(c) “Collateral Agent” has the meaning ascribed to such term in the Note
Purchase Agreement, and shall include all successors thereto.
 
(d) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

 
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(e) “GAAP” means United States generally accepted accounting principles,
consistently applied.
 
(f) “Indebtedness” of any Person means, without duplication (i) all indebtedness
for borrowed money, (ii) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services, including (without limitation)
“capital leases” in accordance with GAAP (other than trade payables entered into
in the ordinary course of business), (iii) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (iv) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (v) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (vi) all monetary
obligations under any leasing or similar arrangement which, in connection with
GAAP, consistently applied for the periods covered thereby, is classified as a
capital lease, (vii) all indebtedness referred to in clauses (i) through (vi)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (viii) all Contingent Obligations in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii) above.
 
(g) “Interest Rate” means twelve percent (12.0%). The Interest Rate shall be
re-calculated as of the first day of each month or, initially, as of the
Issuance Date.
 
(h) “Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and
the Other Notes, (ii) other unsecured Indebtedness incurred by the Company
and/or any of its Subsidiaries that is made expressly subordinate in right of
payment to the Indebtedness evidenced by this Note, as reflected in a written
agreement acceptable to the Holder and approved by the Holder in writing, and
which Indebtedness does not provide at any time for (A) the payment, prepayment,
repayment, repurchase or defeasance, directly or indirectly, of any principal or
premium, if any, thereon until ninety-one (91) days after the Maturity Date or
later and (B) total interest and fees at a rate in excess of the maximum
applicable Interest Rate hereunder, (iii) Indebtedness secured by Permitted
Liens, (iv) Indebtedness to trade creditors incurred in the ordinary course of
business and not outstanding for more than 120 days after the date such payable
was created, and (v) extensions, refinancings and renewals of any items of
Permitted Indebtedness, provided that the principal amount is not increased or
the terms modified to impose more burdensome terms upon the Company or its
Subsidiary, as the case may be.

 
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(i) “Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, (ii) any statutory Lien
arising in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens,
arising in the ordinary course of business with respect to a liability that is
not yet due or delinquent or that are being contested in good faith by
appropriate proceedings, (iv) Liens (A) upon or in any equipment (as defined in
the Security Agreement) acquired or held by the Company or any of its
Subsidiaries to secure the purchase price of such equipment or Indebtedness
incurred solely for the purpose of financing the acquisition or lease of such
equipment, or (B) existing on such equipment at the time of its acquisition,
provided that the Lien is confined solely to the property so acquired and
improvements thereon, and the proceeds of such equipment, (v) Liens incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by Liens of the type described in clauses (i) and (iv) above, provided
that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) Liens securing the
obligations under the Notes; (vii) leases or subleases and licenses and
sublicenses granted to others in the ordinary course of the Company’s business,
not interfering in any material respect with the business of the Company and its
Subsidiaries taken as a whole, (ix) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payments of custom duties in
connection with the importation of goods and (viii) Liens arising from
judgments, decrees or attachments.
 
(j) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.
 
(k) “Required Holders” means the holders of Notes representing 100% of the
aggregate principal amount of the Notes then outstanding.
 
(l) “SEC” means the United States Securities and Exchange Commission.
 
(m) “Note Purchase Agreement” means that certain Note Purchase Agreement dated
as of the Subscription Date by and among the Company and the initial holders of
the Notes pursuant to which the Company issued the Notes.
 
(n) “Security Documents” has the meaning ascribed to such term in the Note
Purchase Agreement, and shall include all successors thereto.
 
(o) “Subscription Date” means August 13, 2008.
 
(p) “Subsidiary” means any entity in which the Company, directly or indirectly,
owns any of the capital stock or holds an equity or similar interest.
 
21. DISCLOSURE. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Note, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its Subsidiaries, the Company
shall within four (4) Business Daya after any such receipt or delivery publicly
disclose such material, nonpublic information on a Current Report on Form 8-K or
otherwise. In the event that the Company believes that a notice contains
material, nonpublic information, relating to the Company or its Subsidiaries,
the Company shall indicate to the Holder contemporaneously with delivery of such
notice, and in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its Subsidiaries.
 
[Signature Page Follows]

 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
the Issuance Date set out above.
 
US DATAWORKS, INC.
       
By
 
   
Name
 
   
Title
 

 
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