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                                                                     EXHIBIT 4.2

                                                                       EXHIBIT B


                          REGISTRATION RIGHTS AGREEMENT


         This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of June 30, 2003, by and among US Dataworks, Inc., a Nevada
corporation (the "COMPANY"), and the investors signatory hereto (each a
"PURCHASER" and collectively, the "PURCHASERS").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the "PURCHASE
AGREEMENT").

                  The Company and the Purchasers hereby agree as follows:

         1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:

                  "EFFECTIVENESS DATE" means, with respect to the Registration
         Statement required to be filed hereunder and subject to extension
         pursuant to Section 2(a), the earlier of (a) the 90th calendar day
         following the Closing Date and (b) the fifth Trading Day following the
         date on which the Company is notified by the Commission that the
         Registration Statement will not be reviewed or is no longer subject to
         further review and comments.

                  "EFFECTIVENESS PERIOD" shall have the meaning set forth in
         Section 2(a).

                  "FILING DATE" means, with respect to the Registration
         Statement required to be filed hereunder subject to extension pursuant
         to Section 2(a), the 45th calendar day following the Closing Date.

                  "HOLDER" or "HOLDERS" means the holder or holders, as the case
         may be, from time to time of Registrable Securities.

                  "INDEMNIFIED PARTY" shall have the meaning set forth in
         Section 5(c).

                  "INDEMNIFYING PARTY" shall have the meaning set forth in
         Section 5(c).

                  "LOSSES" shall have the meaning set forth in Section 5(a).

                  "PROCEEDING" means an action, claim, suit, investigation or
         proceeding (including, without limitation, an investigation or partial
         proceeding, such as a deposition), whether commenced or threatened.

                  "PROSPECTUS" means the prospectus included in the Registration
         Statement (including, without limitation, a prospectus that includes
         any information previously omitted from a prospectus filed as part of
         an effective registration statement in reliance upon Rule 430A
         promulgated under the Securities Act), as amended or supplemented by
         any prospectus supplement, with respect to the terms of the offering of
         any portion of the Registrable Securities covered by the Registration
         Statement, and all other amendments and supplements to the Prospectus,
         including post-effective amendments, and all material incorporated by
         reference or deemed to be incorporated by reference in such Prospectus.


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                  "REGISTRABLE SECURITIES" means the Shares, the Warrant Shares,
         together with any shares of Common Stock issued or issuable upon any
         stock split, dividend or other distribution, recapitalization or
         similar event with respect to the foregoing or in connection with any
         anti-dilution provisions in the Warrant.

                  "REGISTRATION STATEMENT" means the registration statements
         required to be filed hereunder, including (in each case) the
         Prospectus, amendments and supplements to the registration statement or
         Prospectus, including pre- and post-effective amendments, all exhibits
         thereto, and all material incorporated by reference or deemed to be
         incorporated by reference in the registration statement.

                  "RULE 415" means Rule 415 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  "RULE 424" means Rule 424 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

         2. REGISTRATION.

                  (a) On or prior to the Filing Date, the Company shall prepare
         and file with the Commission the Registration Statement covering the
         resale of all of the Registrable Securities for an offering to be made
         on a continuous basis pursuant to Rule 415. The Registration Statement
         required hereunder shall be on Form S-3 (except if the Company is not
         then eligible to register for resale the Registrable Securities on Form
         S-3, in which case the Registration shall be on another appropriate
         form in accordance herewith). The Registration Statement required
         hereunder shall contain (except if otherwise directed by the Holders)
         the "PLAN OF DISTRIBUTION" attached hereto as ANNEX A. The Company
         shall cause the Registration Statement to become effective and remain
         effective as provided herein. The Company shall use its commercially
         reasonable efforts to cause the Registration Statement to be declared
         effective under the Securities Act as promptly as possible after the
         filing thereof, but in any event not later than the Effectiveness Date,
         and shall use its commercially reasonable efforts to keep the
         Registration Statement continuously effective under the Securities Act
         until the date which is one year following the issuance of the
         Registrable Securities or such later date when all Registrable
         Securities covered by the Registration Statement (a) have been sold
         pursuant to the Registration Statement or an exemption from the
         registration requirements of the Securities Act or (b) may be sold
         without volume restrictions pursuant to Rule 144(k) as determined by
         the counsel to the Company pursuant to a written opinion letter to such
         effect, addressed and acceptable to the Company's transfer agent and
         the affected Holders (the "EFFECTIVENESS PERIOD").

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                  (b) If: (i) a Registration Statement is not filed on or prior
         to its Filing Date (if the Company files a Registration Statement
         without affording the Holder the opportunity to review and comment on
         the same as required by Section 3(a), the Company shall not be deemed
         to have satisfied this clause (i)); PROVIDED, HOWEVER, that if a Holder
         fails to provide the Company with any information that is required to
         be provided in the Registration Statement with respect to such Holder
         pursuant to Section 3(k), then the Filing Date shall be extended until
         two Trading Days following the date of receipt by the Company of such
         required information, or (ii) the Company fails to file with the
         Commission a request for acceleration in accordance with Rule 461
         promulgated under the Securities Act, within five Trading Days of the
         date that the Company is notified (orally or in writing, whichever is
         earlier) by the Commission that a Registration Statement will not be
         "reviewed," or not subject to further review, or (iii) prior to the
         date when such Registration Statement is first declared effective by
         the Commission, the Company fails to file a pre-effective amendment and
         otherwise respond in writing to comments made by the Commission in
         respect of such Registration Statement within ten Trading Days after
         the receipt of comments by or notice from the Commission that such
         amendment is required in order for a Registration Statement to be
         declared effective, or (iv) a Registration Statement filed or required
         to be filed hereunder is not declared effective by the Commission on or
         before the Effectiveness Date, or (v) after a Registration Statement is
         first declared effective by the Commission, it ceases for any reason to
         remain continuously effective as to all Registrable Securities for
         which it is required to be effective, or the Holders are not permitted
         to utilize the Prospectus therein to resell such Registrable
         Securities, for in any such cases ten Trading Days (which need not be
         consecutive days) in the aggregate during any 12-month period (any such
         failure or breach being referred to as an "EVENT," and for purposes of
         clause (i) or (iv) the date on which such Event occurs, or for purposes
         of clause (ii) the date on which such five Trading Day period is
         exceeded, or for purposes of clauses (iii) the date which such ten
         Trading Day period is exceeded, or for purposes of clause (v) the date
         on which such ten Trading Day period is exceeded being referred to as
         "EVENT DATE"), then in addition to any other rights the Holders may
         have hereunder or under applicable law: (x) on each such Event Date the
         Company shall pay to each Holder an amount in cash, as liquidated
         damages and not as a penalty, equal to 2% of the aggregate purchase
         price paid by such Holder pursuant to the Purchase Agreement for any
         Registrable Securities then held by such Holder; and (y) on each
         monthly anniversary of each such Event Date (if the applicable Event
         shall not have been cured by such date) until the applicable Event is
         cured, the Company shall pay to each Holder an amount in cash, as
         liquidated damages and not as a penalty, equal to 2% of the aggregate
         purchase price paid by such Holder pursuant to the Purchase Agreement
         for any Registrable Securities then held by such Holder. If the Company
         fails to pay any liquidated damages pursuant to this Section in full
         within seven days after the date payable, the Company will pay interest
         thereon at a rate of 18% per annum (or such lesser maximum amount that
         is permitted to be paid by applicable law) to the Holder, accruing
         daily from the date such liquidated damages are due until such amounts,
         plus all such interest thereon, are paid in full.


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                  (c) If during the Effectiveness Period, the number of
         Registrable Securities at any time exceeds 100% of the number of shares
         of Common Stock then registered in a Registration Statement, then the
         Company shall file as soon as reasonably practicable but in any case
         prior to the 30th day following the date such number is exceeded, an
         additional Registration Statement covering the resale of by the Holders
         of not less than all of such Registrable Securities and the Company
         shall use commercially reasonable efforts to cause such Registration
         Statement to be declared effective as soon as reasonably practicable
         thereafter.

         3. REGISTRATION PROCEDURES

         In connection with the Company's registration obligations hereunder,
the Company shall:

                  (a) Not less than three Trading Days prior to the filing of
         the Registration Statement or any related Prospectus or any amendment
         or supplement thereto, the Company shall, (i) furnish to the Holders
         copies of all such documents proposed to be filed (including documents
         incorporated or deemed incorporated by reference to the extent
         requested by such Person) which documents will be subject to the review
         of such Holders, and (ii) cause its officers and directors, counsel and
         independent certified public accountants to respond to such inquiries
         as shall be necessary, in the reasonable opinion of respective counsel
         to conduct a reasonable investigation within the meaning of the
         Securities Act. The Company shall not file the Registration Statement
         or any such Prospectus or any amendments or supplements thereto to
         which the Holders of a majority of the Registrable Securities shall
         reasonably object in good faith.

                  (b) (i) Prepare and file with the Commission such amendments,
         including post-effective amendments, to the Registration Statement and
         the Prospectus used in connection therewith as may be necessary to keep
         the Registration Statement continuously effective as to the applicable
         Registrable Securities for the Effectiveness Period and prepare and
         file with the Commission such additional Registration Statements in
         order to register for resale under the Securities Act all of the
         Registrable Securities; (ii) cause the related Prospectus to be amended
         or supplemented by any required Prospectus supplement, and as so
         supplemented or amended to be filed pursuant to Rule 424; (iii) respond
         as promptly as reasonably possible, and in any event within ten Trading
         Days, to any comments received from the Commission with respect to the
         Registration Statement or any amendment thereto and, as promptly as
         reasonably possible, upon request, provide the Holders true and
         complete copies of all correspondence from and to the Commission
         relating to the Registration Statement; and (iv) comply in all material
         respects with the provisions of the Securities Act and the Exchange Act
         with respect to the disposition of all Registrable Securities covered
         by the Registration Statement during the applicable period in
         accordance with the intended methods of disposition by the Holders
         thereof set forth in the Registration Statement as so amended or in
         such Prospectus as so supplemented.

                  (c) Notify the Holders of Registrable Securities to be sold as
         promptly as reasonably possible (and, in the case of (i)(A) below, not
         less than two Trading Days prior to such filing) and (if requested by


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         any such Person) confirm such notice in writing promptly following the
         day (i)(A) when a Prospectus or any Prospectus supplement or
         post-effective amendment to the Registration Statement is proposed to
         be filed; (B) when the Commission notifies the Company whether there
         will be a "review" of the Registration Statement and whenever the
         Commission comments in writing on the Registration Statement (the
         Company shall upon request provide true and complete copies thereof and
         all written responses thereto to each of the Holders); and (C) with
         respect to the Registration Statement or any post-effective amendment,
         when the same has become effective; (ii) of any request by the
         Commission or any other Federal or state governmental authority during
         the period of effectiveness of the Registration Statement for
         amendments or supplements to the Registration Statement or Prospectus
         or for additional information; (iii) of the issuance by the Commission
         or any other federal or state governmental authority of any stop order
         suspending the effectiveness of the Registration Statement covering any
         or all of the Registrable Securities or the initiation of any
         Proceedings for that purpose; (iv) of the receipt by the Company of any
         notification with respect to the suspension of the qualification or
         exemption from qualification of any of the Registrable Securities for
         sale in any jurisdiction, or the initiation or threatening of any
         Proceeding for such purpose; and (v) of the occurrence of any event or
         passage of time that makes the financial statements included in the
         Registration Statement ineligible for inclusion therein or any
         statement made in the Registration Statement or Prospectus or any
         document incorporated or deemed to be incorporated therein by reference
         untrue in any material respect or that requires any revisions to the
         Registration Statement, Prospectus or other documents so that, in the
         case of the Registration Statement or the Prospectus, as the case may
         be, it will not contain any untrue statement of a material fact or omit
         to state any material fact required to be stated therein or necessary
         to make the statements therein, in light of the circumstances under
         which they were made, not misleading.

                  (d) Use its commercially reasonable efforts to avoid the
         issuance of, or, if issued, obtain the withdrawal of (i) any order
         suspending the effectiveness of the Registration Statement, or (ii) any
         suspension of the qualification (or exemption from qualification) of
         any of the Registrable Securities for sale in any jurisdiction, at the
         earliest practicable moment.

                  (e) Furnish to each Holder, without charge, at least one
         conformed copy of the Registration Statement and each amendment
         thereto, including financial statements and schedules, all documents
         incorporated or deemed to be incorporated therein by reference to the
         extent requested by such Person, and all exhibits to the extent
         requested by such Person (including those previously furnished or
         incorporated by reference) promptly after the filing of such documents
         with the Commission.

                  (f) Promptly deliver to each Holder, without charge, as many
         copies of the Prospectus or Prospectuses (including each form of
         prospectus) and each amendment or supplement thereto as such Persons
         may reasonably request in connection with resales by the Holder of
         Registrable Securities. The Company hereby consents to the use of such
         Prospectus and each amendment or supplement thereto by each of the
         selling Holders in connection with the offering and sale of the
         Registrable Securities covered by such Prospectus and any amendment or
         supplement thereto, except after the giving on any notice pursuant to
         Section 3(c).


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                  (g) Prior to any resale of Registrable Securities by a Holder,
         use its commercially reasonable efforts to register or qualify or
         cooperate with the selling Holders in connection with the registration
         or qualification (or exemption from the Registration or qualification)
         of such Registrable Securities for the resale by the Holder under the
         securities or Blue Sky laws of such jurisdictions within the United
         States as any Holder reasonably requests in writing, to keep each the
         Registration or qualification (or exemption therefrom) effective during
         the Effectiveness Period and to do any and all other acts or things
         reasonably necessary to enable the disposition in such jurisdictions of
         the Registrable Securities covered by the Registration Statement;
         PROVIDED, that the Company shall not be required to qualify generally
         to do business in any jurisdiction where it is not then so qualified,
         subject the Company to any material tax in any such jurisdiction where
         it is not then so subject or file a general consent to service of
         process in any such jurisdiction.

                  (h) If requested by the Holders, cooperate with the Holders to
         facilitate the timely preparation and delivery of certificates
         representing Registrable Securities to be delivered to a transferee
         pursuant to the Registration Statement, which certificates shall be
         free, to the extent permitted by the Purchase Agreement, of all
         restrictive legends, and to enable such Registrable Securities to be in
         such denominations and registered in such names as any such Holders may
         request.

                  (i) Upon the occurrence of any event contemplated by Section
         3(c)(v), as promptly as reasonably possible, prepare a supplement or
         amendment, including a post-effective amendment, to the Registration
         Statement or a supplement to the related Prospectus or any document
         incorporated or deemed to be incorporated therein by reference, and
         file any other required document so that, as thereafter delivered,
         neither the Registration Statement nor such Prospectus will contain an
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                  (j) Comply with all applicable rules and regulations of the
         Commission.

                  (k) The Company may require each selling Holder to furnish to
         the Company a certified statement as to the number of shares of Common
         Stock beneficially owned by such Holder and, if required by the
         Commission, the person thereof that has voting and dispositive control
         over the Shares.

         4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or


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Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

         5. INDEMNIFICATION

                  (a) INDEMNIFICATION BY THE COMPANY. The Company shall,
         notwithstanding any termination of this Agreement, indemnify and hold
         harmless each Holder, the officers, directors, agents and employees of
         each of them, each Person who controls any such Holder (within the
         meaning of Section 15 of the Securities Act or Section 20 of the
         Exchange Act) and the officers, directors, agents and employees of each
         such controlling Person, to the fullest extent permitted by applicable
         law, from and against any and all losses, claims, damages, liabilities,
         costs (including, without limitation, reasonable attorneys' fees) and
         expenses (collectively, "LOSSES"), as incurred, to the extent arising
         out of or relating to any untrue or alleged untrue statement of a
         material fact contained in the Registration Statement, any Prospectus
         or any form of prospectus or in any amendment or supplement thereto or
         in any preliminary prospectus, or arising out of or relating to any
         omission or alleged omission of a material fact required to be stated
         therein or necessary to make the statements therein (in the case of any
         Prospectus or form of prospectus or supplement thereto, in light of the
         circumstances under which they were made) not misleading, except to the
         extent, but only to the extent, that (1) such untrue statements or
         omissions are based solely upon information regarding such Holder
         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in the Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto
         (it being understood that the Holder has approved Annex A hereto for
         this purpose) or (2) in the case of an occurrence of an event of the
         type specified in Section 3(c)(ii)-(v), the use by such Holder of an
         outdated or defective Prospectus after the Company has notified such
         Holder in writing that the Prospectus is outdated or defective and
         prior to the receipt by such Holder of the Advice contemplated in
         Section 6(d). The Company shall notify the Holders promptly of the
         institution, threat or assertion of any Proceeding of which the Company
         is aware in connection with the transactions contemplated by this
         Agreement.

                  (b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
         and not jointly, indemnify and hold harmless the Company, its
         directors, officers, agents and employees, each Person who controls the
         Company (within the meaning of Section 15 of the Securities Act and


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         Section 20 of the Exchange Act), and the directors, officers, agents or
         employees of such controlling Persons, to the fullest extent permitted
         by applicable law, from and against all Losses, as incurred, to the
         extent arising out of or based upon: (x) such Holder's failure to
         comply with the prospectus delivery requirements of the Securities Act
         or (y) any untrue or alleged untrue statement of a material fact
         contained in any Registration Statement, any Prospectus, or any form of
         prospectus, or in any amendment or supplement thereto or in any
         preliminary prospectus, or arising out of or relating to any omission
         or alleged omission of a material fact required to be stated therein or
         necessary to make the statements therein not misleading (i) to the
         extent, but only to the extent, that such untrue statement or omission
         is contained in any information so furnished in writing by such Holder
         to the Company specifically for inclusion in the Registration Statement
         or such Prospectus or (ii) to the extent that (1) such untrue
         statements or omissions are based solely upon information regarding
         such Holder furnished in writing to the Company by such Holder
         expressly for use therein, or to the extent that such information
         relates to such Holder or such Holder's proposed method of distribution
         of Registrable Securities and was reviewed and expressly approved in
         writing by such Holder expressly for use in the Registration Statement
         (it being understood that the Holder has approved Annex A hereto for
         this purpose), such Prospectus or such form of Prospectus or in any
         amendment or supplement thereto or (2) in the case of an occurrence of
         an event of the type specified in Section 3(c)(ii)-(v), the use by such
         Holder of an outdated or defective Prospectus after the Company has
         notified such Holder in writing that the Prospectus is outdated or
         defective and prior to the receipt by such Holder of the Advice
         contemplated in Section 6(d). In no event shall the liability of any
         selling Holder hereunder be greater in amount than the dollar amount of
         the net proceeds received by such Holder upon the sale of the
         Registrable Securities giving rise to such indemnification obligation.

                  (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
         shall be brought or asserted against any Person entitled to indemnity
         hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall
         promptly notify the Person from whom indemnity is sought (the
         "INDEMNIFYING PARTY") in writing, and the Indemnifying Party shall have
         the right to assume the defense thereof, including the employment of
         counsel reasonably satisfactory to the Indemnified Party and the
         payment of all fees and expenses incurred in connection with defense
         thereof; provided, that the failure of any Indemnified Party to give
         such notice shall not relieve the Indemnifying Party of its obligations
         or liabilities pursuant to this Agreement, except (and only) to the
         extent that it shall be finally determined by a court of competent
         jurisdiction (which determination is not subject to appeal or further
         review) that such failure shall have prejudiced the Indemnifying Party.

                  An Indemnified Party shall have the right to employ separate
         counsel in any such Proceeding and to participate in the defense
         thereof, but the fees and expenses of such counsel shall be at the
         expense of such Indemnified Party or Parties unless: (1) the
         Indemnifying Party has agreed in writing to pay such fees and expenses;
         (2) the Indemnifying Party shall have failed promptly to assume the
         defense of such Proceeding and to employ counsel reasonably
         satisfactory to such Indemnified Party in any such Proceeding; or (3)


                                      -8-
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         the named parties to any such Proceeding (including any impleaded
         parties) include both such Indemnified Party and the Indemnifying
         Party, and such Indemnified Party shall have been advised by counsel
         that a conflict of interest is likely to exist if the same counsel were
         to represent such Indemnified Party and the Indemnifying Party (in
         which case, if such Indemnified Party notifies the Indemnifying Party
         in writing that it elects to employ separate counsel at the expense of
         the Indemnifying Party, the Indemnifying Party shall not have the right
         to assume the defense thereof and the reasonable fees and expenses of
         one separate counsel shall be at the expense of the Indemnifying
         Party). The Indemnifying Party shall not be liable for any settlement
         of any such Proceeding effected without its written consent, which
         consent shall not be unreasonably withheld. No Indemnifying Party
         shall, without the prior written consent of the Indemnified Party,
         effect any settlement of any pending Proceeding in respect of which any
         Indemnified Party is a party, unless such settlement includes an
         unconditional release of such Indemnified Party from all liability on
         claims that are the subject matter of such Proceeding.

                  All reasonable fees and expenses of the Indemnified Party
         (including reasonable fees and expenses to the extent incurred in
         connection with investigating or preparing to defend such Proceeding in
         a manner not inconsistent with this Section) shall be paid to the
         Indemnified Party, as incurred, within ten Trading Days of written
         notice thereof to the Indemnifying Party; PROVIDED, that the
         Indemnified Party shall promptly reimburse the Indemnifying Party for
         that portion of such fees and expenses applicable to such actions for
         which such Indemnified Party is not entitled to indemnification
         hereunder, determined based upon the relative faults of the parties.

                  (d) CONTRIBUTION. If a claim for indemnification under Section
         5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
         public policy or otherwise), then each Indemnifying Party, in lieu of
         indemnifying such Indemnified Party, shall contribute to the amount
         paid or payable by such Indemnified Party as a result of such Losses,
         in such proportion as is appropriate to reflect the relative fault of
         the Indemnifying Party and Indemnified Party in connection with the
         actions, statements or omissions that resulted in such Losses as well
         as any other relevant equitable considerations. The relative fault of
         such Indemnifying Party and Indemnified Party shall be determined by
         reference to, among other things, whether any action in question,
         including any untrue or alleged untrue statement of a material fact or
         omission or alleged omission of a material fact, has been taken or made
         by, or relates to information supplied by, such Indemnifying Party or
         Indemnified Party, and the parties' relative intent, knowledge, access
         to information and opportunity to correct or prevent such action,
         statement or omission. The amount paid or payable by a party as a
         result of any Losses shall be deemed to include, subject to the
         limitations set forth in Section 5(c), any reasonable attorneys' or
         other reasonable fees or expenses incurred by such party in connection
         with any Proceeding to the extent such party would have been
         indemnified for such fees or expenses if the indemnification provided
         for in this Section was available to such party in accordance with its
         terms.

                  The parties hereto agree that it would not be just and
         equitable if contribution pursuant to this Section 5(d) were determined
         by pro rata allocation or by any other method of allocation that does
         not take into account the equitable considerations referred to in the
         immediately preceding paragraph. Notwithstanding the provisions of this


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         Section 5(d), no Holder shall be required to contribute, in the
         aggregate, any amount in excess of the amount by which the proceeds
         actually received by such Holder from the sale of the Registrable
         Securities subject to the Proceeding exceeds the amount of any damages
         that such Holder has otherwise been required to pay by reason of such
         untrue or alleged untrue statement or omission or alleged omission,
         except in the case of fraud by such Holder. The indemnity and
         contribution agreements contained in this Section are in addition to
         any liability that the Indemnifying Parties may have to the Indemnified
         Parties.

         6. MISCELLANEOUS

                  (a) REMEDIES. In the event of a breach by the Company or by a
         Holder, of any of their obligations under this Agreement, each Holder
         or the Company, as the case may be, in addition to being entitled to
         exercise all rights granted by law and under this Agreement, including
         recovery of damages, will be entitled to specific performance of its
         rights under this Agreement. The Company and each Holder agree that
         monetary damages would not provide adequate compensation for any losses
         incurred by reason of a breach by it of any of the provisions of this
         Agreement and hereby further agrees that, in the event of any action
         for specific performance in respect of such breach, it shall waive the
         defense that a remedy at law would be adequate.

                  (b) COMPLIANCE. Each Holder covenants and agrees that it will
         comply with the prospectus delivery requirements of the Securities Act
         as applicable to it in connection with sales of Registrable Securities
         pursuant to the Registration Statement.

                  (c) DISCONTINUED DISPOSITION. Each Holder agrees by its
         acquisition of such Registrable Securities that, upon receipt of a
         notice from the Company of the occurrence of any event of the kind
         described in Section 3(c), such Holder will forthwith discontinue
         disposition of such Registrable Securities under the Registration
         Statement until such Holder's receipt of the copies of the supplemented
         Prospectus and/or amended Registration Statement or until it is advised
         in writing (the "ADVICE") by the Company that the use of the applicable
         Prospectus may be resumed, and, in either case, has received copies of
         any additional or supplemental filings that are incorporated or deemed
         to be incorporated by reference in such Prospectus or Registration
         Statement. The Company may provide appropriate stop orders to enforce
         the provisions of this paragraph.

                  (d) PIGGY-BACK REGISTRATIONS. If at any time during the
         Effectiveness Period there is not an effective Registration Statement
         covering all of the Registrable Securities and the Company shall
         determine to prepare and file with the Commission a registration
         statement relating to an offering for its own account or the account of
         others under the Securities Act of any of its equity securities, other
         than on Form S-4 or Form S-8 (each as promulgated under the Securities
         Act) or their then equivalents relating to equity securities to be
         issued solely in connection with any acquisition of any entity or


                                      -10-
<PAGE>

         business or equity securities issuable in connection with the stock
         option or other employee benefit plans, then the Company shall send to
         each Holder a written notice of such determination and, if within
         fifteen days after the date of such notice, any such Holder shall so
         request in writing, the Company shall include in such registration
         statement all or any part of such Registrable Securities such Holder
         requests to be registered, subject to customary underwriter cutbacks
         applicable to all holders of registration rights.

                  (e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
         including the provisions of this sentence, may not be amended, modified
         or supplemented, and waivers or consents to departures from the
         provisions hereof may not be given, unless the same shall be in writing
         and signed by the Company and each Holder of the then outstanding
         Registrable Securities.

                  (f) NOTICES. Any and all notices or other communications or
         deliveries required or permitted to be provided hereunder shall be in
         writing and shall be deemed given and effective on the earliest of (i)
         the date of transmission, if such notice or communication is delivered
         via facsimile at the facsimile number provided for below prior to 6:30
         p.m. (New York City time) on a Trading Day, (ii) the Trading Day after
         the date of transmission, if such notice or communication is delivered
         via facsimile at the facsimile number provided for below later than
         6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
         (New York City time) on such date, (iii) the Trading Day following the
         date of mailing, if sent by nationally recognized overnight courier
         service, or (iv) upon actual receipt by the party to whom such notice
         is required to be given. The address for such notices and
         communications shall be delivered and addressed as set forth in the
         Purchase Agreement

                  (g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
         benefit of and be binding upon the successors and permitted assigns of
         each of the parties and shall inure to the benefit of each Holder. Each
         Holder may assign their respective rights hereunder in the manner and
         to the Persons as permitted under the Purchase Agreement.

                  (h) EXECUTION AND COUNTERPARTS. This Agreement may be executed
         in any number of counterparts, each of which when so executed shall be
         deemed to be an original and, all of which taken together shall
         constitute one and the same Agreement. In the event that any signature
         is delivered by facsimile transmission, such signature shall create a
         valid binding obligation of the party executing (or on whose behalf
         such signature is executed) the same with the same force and effect as
         if such facsimile signature were the original thereof.

                  (i) GOVERNING LAW. All questions concerning the construction,
         validity, enforcement and interpretation of this Agreement shall be
         governed by and construed and enforced in accordance with the internal
         laws of the State of New York, without regard to the principles of
         conflicts of law thereof. Each party agrees that all legal proceedings
         concerning the interpretations, enforcement and defense of the
         transactions contemplated by this Agreement (whether brought against a
         party hereto or its respective affiliates, directors, officers,
         shareholders, employees or agents) shall be commenced exclusively in
         the state and federal courts sitting in the City of New York, New York.
         Each party hereto hereby irrevocably submits to the exclusive


                                      -11-
<PAGE>

         jurisdiction of the state and federal courts sitting in the City of New
         York, New York for the adjudication of any dispute hereunder or in
         connection herewith or with any transaction contemplated hereby or
         discussed herein (including with respect to the enforcement of the any
         of this Agreement), 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 improper. Each party hereto hereby
         irrevocably waives personal service of process and consents to process
         being served in any such suit, action or proceeding by delivering a
         copy thereof via overnight delivery (with evidence of delivery) to such
         party at the address in effect for notices to it under this Agreement
         and agrees that such service shall constitute good and sufficient
         service of process and notice thereof. Nothing contained herein shall
         be deemed to limit in any way any right to serve process in any manner
         permitted by law. Each party hereto hereby irrevocably waives, to the
         fullest extent permitted by applicable law, any and all right to trial
         by jury in any legal proceeding arising out of or relating to this
         Agreement or the transactions contemplated hereby. If either party
         shall commence an action or proceeding to enforce any provisions of
         this Agreement, then the prevailing party in such action or proceeding
         shall be reimbursed by the other party for its attorneys fees and other
         costs and expenses incurred with the investigation, preparation and
         prosecution of such action or proceeding.

                  (j) CUMULATIVE REMEDIES. The remedies provided herein are
         cumulative and not exclusive of any remedies provided by law.

                  (k) SEVERABILITY. If any term, provision, covenant or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, illegal, void or unenforceable, the
         remainder of the terms, provisions, covenants and restrictions set
         forth herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated, and the parties hereto shall use
         their commercially reasonable efforts to find and employ an alternative
         means to achieve the same or substantially the same result as that
         contemplated by such term, provision, covenant or restriction. It is
         hereby stipulated and declared to be the intention of the parties that
         they would have executed the remaining terms, provisions, covenants and
         restrictions without including any of such that may be hereafter
         declared invalid, illegal, void or unenforceable.

                  (l) HEADINGS. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (m) INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.
         The obligations of each Purchaser hereunder is several and not joint
         with the obligations of any other Purchaser hereunder, and no Purchaser
         shall be responsible in any way for the performance of the obligations
         of any other Purchaser hereunder. Nothing contained herein or in any
         other agreement or document delivered at any closing, and no action
         taken by any Purchaser pursuant hereto or thereto, shall be deemed to
         constitute the Purchasers as a partnership, an association, a joint
         venture or any other kind of entity, or create a presumption that the
         Purchasers are in any way acting in concert with respect to such
         obligations or the transactions contemplated by this Agreement. Each
         Purchaser shall be entitled to protect and enforce its rights,
         including without limitation the rights arising out of this Agreement,
         and it shall not be necessary for any other Purchaser to be joined as
         an additional party in any proceeding for such purpose.

                            *************************



                                      -12-
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                            US DATAWORKS, INC.

                                            By: /S/ JOHN S. REILAND
                                                --------------------------------
                                                Name: John S. Reiland
                                                Title: CFO

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]


<PAGE>


                       [SIGNATURE PAGE OF HOLDERS TO RRA]

                                        BONANZA MASTER FUND LTD.



                                        By: /S/ BRIAN LADIN
                                            -----------------------------
                                            Name: Brian Ladin
                                            Title: Managing Director


                                        MERRIMAN CURHAN FORD & CO.



                                        By: /S/ D. JONATHAN MERRIMAN
                                            -----------------------------
                                            Name: DJM
                                            Title: CEO


<PAGE>



                       [SIGNATURE PAGE OF HOLDERS TO RRA]

                                        BONANZA MASTER FUND LTD.



                                        By:
                                            --------------------------------
                                            Name:
                                            Title:


                                        D. JONATHAN MERRIMAN



                                        By: /S/ D. JONATHAN MERRIMAN
                                            --------------------------------
                                            Name: D. Jonathan Merriman
                                            Title:


<PAGE>



                       [SIGNATURE PAGE OF HOLDERS TO RRA]

                                        BONANZA MASTER FUND LTD.



                                        By:
                                            -------------------------------
                                            Name: Brian Ladin
                                            Title: Managing Director


                                        KENNETH R. WERNER



                                        By: /S/ KENNETH R. WERNER
                                            ------------------------------
                                            Name: Kenneth R. Werner
                                            Title:


<PAGE>



                       [SIGNATURE PAGE OF HOLDERS TO RRA]

                                        BONANZA MASTER FUND LTD.



                                        By:
                                            ------------------------------------
                                            Name: Brian Ladin
                                            Title: Managing Director


                                        GREGORY CURHAN


                                        By: /S/ GREGORY CURHAN
                                            ------------------------------------
                                            Name: Gregory Curhan
                                            Title:




<PAGE>


                                     ANNEX A
                              PLAN OF DISTRIBUTION

         The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

         o        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         o        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        settlement of short sales;

         o        broker-dealers may agree with the Selling Stockholders to sell
                  a specified number of such shares at a stipulated price per
                  share;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

         The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus.


<PAGE>

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.