**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.


1


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.


2


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.


3


(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.


4


(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.


5


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.


6


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.**


7


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.


8


(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.ByNameTitle


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