Document:

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                                                                    EXHIBIT 10.7

                               US DATA WORKS, INC.

                  COMMON STOCK PURCHASE AND WARRANTS AGREEMENT

         THIS COMMON STOCK PURCHASE AND WARRANTS AGREEMENT (this "AGREEMENT"),
dated September 30, 2003, is entered into by and between US Dataworks, Inc., a
Nevada corporation (the "COMPANY"), and ACI Communications Holdings, Inc., a
California corporation ("PURCHASER"). The Company and Purchaser may be referred
herein as the "PARTIES" or each, a "PARTY".

         WHEREAS, the Company completed a one-for-five reverse split of the
Company's issued and outstanding common stock, effective September 29, 2003 (the
"REVERSE SPLIT");

         WHEREAS, the Company desires to sell, and Purchaser agrees to purchase
common stock of the Company, $0.0001 par value per share ("COMMON STOCK"),
subject to the terms and conditions set forth herein.

         WHEREAS, as an inducement to Purchaser to purchase the Common Stock,
the Company wishes to grant Purchaser additional warrants (the "WARRANTS")
entitling Purchaser to purchase shares of Common Stock ("WARRANTS SHARES")
pursuant to the terms of the Common Stock Purchase Warrant, which is attached
hereto as Exhibit A.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Purchaser agrees as
follows:

                                    Article I
                                   DEFINITIONS

         1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:

                  "AFFILIATE" means any Person that, directly or indirectly
         through one or more intermediaries, controls or is controlled by or is
         under common control with a Person as such terms are used in and
         construed under Rule 144. With respect to a Purchaser, any investment
         fund or managed account that is managed on a discretionary basis by the
         same investment manager as such Purchaser will be deemed to be an
         Affiliate of such Purchaser.

                  "BUSINESS DAY" means any day except Saturday, Sunday and any
         day which shall be a federal legal holiday or a day on which banking
         institutions in the State of Nevada are authorized or required by law
         or other governmental action to close.

                  "CLOSING" means the date upon which the Purchaser acquires the
         Common Stock and Warrants pursuant to Section 2.3.

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                  "CLOSING DATE" means the date of the Closing.

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON STOCK" means the common stock of the Company, $0.0001
         par value per share, and any securities into which such common stock
         may hereafter be reclassified.

                  "CONVERSION NOTICE" means notice from the Company advising
         Purchaser of the conversion of their Common Stocks effective as of the
         Conversion Date.

                  "DISCLOSURE SCHEDULES" means the Disclosure Schedules
         concurrently delivered herewith.

                  "EFFECTIVE DATE" means the date that a registration statement
         is first declared effective by the Commission.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
         amended.

                  "MATERIAL ADVERSE EFFECT" shall have the meaning as set forth
         in Section 3.1(b).

                  "LIEN" shall mean any lien, charge, security interest,
         encumbrance, right of first refusal or other restriction levied or
         secured against any tangible or intangible asset of the Company.

                  "PER SHARE PRICE " equals Two Dollars ($2.00), subject to the
         adjustment for any reverse or forward stock splits, stock dividends,
         stock combinations and other similar transactions of the Common Stock
         that may occur after the date of this Agreement. In the event that the
         average closing price for the Common Stock for the Price Reset Period
         is less than Two Dollars ($2.00), the Per Share Price shall be adjusted
         to equal the average closing price for the Common Stock for the thirty
         (30) Trading Days immediately preceding December 1, 2003, discounted by
         twenty-five percent (25%); provided, however that under no circumstance
         will the Per Share Price be less than Sixty Cents ($0.60).

                  "PERSON" means an individual or corporation, partnership,
         trust, incorporated or unincorporated association, joint venture,
         limited liability company, joint stock company, government (or an
         agency or subdivision thereof) or other entity of any kind.

                  "PRICE RESET PERIOD" shall mean the period beginning five (5)
         Trading Days immediately preceding December 1, 2003 and continuing
         until the date that is five (5) Trading Days following December 1,
         2003.

                  "REGISTRATION AGREEMENT" shall mean that certain limited
         registration rights agreement entered into by and between the Company
         and Purchaser of even date herewith.

                  "RULE 144" means Rule 144 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or

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         regulation hereafter adopted by the Commission having substantially the
         same effect as such Rule.

                  "SECURITIES" means the Common Stocks, the Common Stock Shares
         and the Warrant Shares.

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

                  "SUBSCRIPTION AMOUNT" means, as to Purchaser, the amounts set
         forth below such Purchaser's signature block on the signature page of
         the this Agreement.

                  "TRADING DAY" means (i) a day on which the Common Stock is
         traded on a Trading Market, or (ii) if the Common Stock is not listed
         on a Trading Market, a day on which the Common Stock is traded on the
         over-the-counter market, as reported by the OTC Bulletin Board, or
         (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a
         day on which the Common Stock is quoted in the over-the-counter market
         as reported by the National Quotation Bureau Incorporated (or any
         similar organization or agency succeeding to its functions of reporting
         prices); provided, that in the event that the Common Stock is not
         listed or quoted as set forth in (i), (ii) and (iii) hereof, then
         Trading Day shall mean a Business Day.

                  "TRADING MARKET" means the following markets or exchanges on
         which the Common Stock is listed or quoted for trading on the date in
         question: the American Stock Exchange, the Nevada Stock Exchange, the
         Nasdaq National Market or the Nasdaq SmallCap Market.

                  "TRANSACTION DOCUMENTS" means this Agreement, the Warrants and
         any other documents or agreements executed in connection with the
         transactions contemplated hereunder.

                  "WARRANTS" shall have the meaning ascribed to such term in
         Section 2.2.

                  "WARRANT SHARES" means the shares of Common Stock issuable
         upon exercise of the Warrants.

                                   ARTICLE II
          CONVERTIBLE COMMON STOCKS, NEW WARRANTS AND AMENDMENTS TO THE
                         REGISTRATION RIGHTS AGREEMENT

         2.1 COMMON STOCK PURCHASE. Upon the execution of this Agreement and
payment in full and in cash of the Subscription Amount, the Purchaser shall
receive 417,084 shares of Common Stock, which equals the Subscription Amount
divided by the Per Share Price of Two Dollars ($2.00). In the event that the
average closing price for the Common Stock for the Price Reset Period is less
than Two Dollars ($2.00), the Per Share Price shall be adjusted to equal the
average closing price for the Common Stock for the thirty (30) Trading Days
immediately preceding December 1, 2003, discounted by twenty-five percent (25%);
provided, however, that under no circumstance will the Per Share Price be less
than Sixty Cents ($0.60). Should the Per Share Price be adjusted as a result of
the condition described in the previous sentence, the

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Company shall issue to Purchaser the additional shares of Common Stock necessary
to give Purchaser that amount equal to the Subscription Amount divided by the
(adjusted) Per Share Price less the number of shares previously issued
hereunder.

         2.2 WARRANTS. Contemporaneously with execution of this Agreement,
Company shall execute the Common Stock Purchase Warrant attached as Exhibit A
and shall grant Warrants to Purchaser as described in Exhibit A., The Warrants
shall have a term of three (3) years.

         2.3 CLOSING. At the Closing, Purchaser shall accept payment in full of
an existing debt equal to the Subscription Amount, which constitutes all
principal and interest Company owes Purchaser pursuant to a certain promissory
note dated December 31, 2002 (the "NOTE"), for 417,084 shares of the Company's
Common Stock. The Company shall deliver to the Purchaser, as soon as
practicable, a certificate representing 417,084 shares of Common Stock In
addition and in consideration for the purchase of the Common Stock, Purchaser
shall be issued Warrants pursuant to the Common Stock Purchase Warrant attached
hereto as Exhibit A. Upon satisfaction of the conditions set forth in Section
2.4, the Closing shall occur at the offices of the Company or such other
location as the parties shall mutually agree.

         2.4 CLOSING CONDITIONS.

                  (a) At the Closing (unless otherwise specified below) the
         Company shall deliver or cause to be delivered on behalf of Purchaser
         the following:

                           (i) this Agreement duly executed by the Company;

                           (ii) the Common Stock Purchase Warrant duly executed
                  by the Company; and

                           (iii) a Registration Agreement duly executed by the
                  Company.

                  (b) At the Closing, Purchaser shall deliver or cause to be
         delivered the following:

                           (i) this Agreement duly executed by Purchaser;

                           (ii) the canceled Note; and

                           (iii) a Registration Agreement duly executed by
                  Purchaser.

                  (c) All representations and warranties of the other party
         contained herein shall remain true and correct as of the Closing Date.

                  (d) As of the Closing Date, there shall have been no Material
         Adverse Effect with respect to the Company since the date hereof.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
under the corresponding section of the Disclosure Schedules delivered
concurrently herewith, the

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Company hereby makes the following representations and warranties as of the date
hereof and as of the Closing Date to Purchaser:

                  (a) SUBSIDIARIES. The Company has no direct or indirect
         subsidiaries. If the Company has no subsidiaries, any references to
         subsidiaries in the Transaction Documents shall be disregarded.

                  (b) ORGANIZATION AND QUALIFICATION. The Company is an entity
         duly incorporated or otherwise organized, validly existing and in good
         standing under the laws of the jurisdiction of its incorporation or
         organization (as applicable), with the requisite corporate power and
         authority to own and use its properties and assets and to carry on its
         business as currently conducted. The Company is not in violation of any
         of the provisions of its respective certificate or articles of
         incorporation, bylaws or other organizational or charter documents and
         is duly qualified to conduct business and is in good standing as a
         foreign corporation or other entity in each jurisdiction in which the
         nature of the business conducted or property owned by it makes such
         qualification necessary, except where the failure to be so qualified or
         in good standing, as the case may be, would not have or reasonably be
         expected to result in (i) a material adverse effect on the legality,
         validity or enforceability of any Transaction Document, (ii) a material
         adverse effect on the results of operations, assets, business or
         financial condition of the Company, taken as a whole, or (iii) a
         material adverse effect on the Company's ability to perform in any
         material respect on a timely basis its obligations under any
         Transaction Document (any of (i), (ii) or (iii), a "MATERIAL ADVERSE
         EFFECT").

                  (c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
         corporate power and authority to enter into and to consummate the
         transactions contemplated by each of the Transaction Documents and
         otherwise to carry out its obligations thereunder, including issuing
         the Common Stock Shares and the Warrant Shares. The execution and
         delivery of each of the Transaction Documents by the Company and the
         consummation by it of the transactions contemplated thereby have been
         duly authorized by all necessary action on the part of the Company and
         no further action is required by the Company in connection therewith.
         Each Transaction Document has been (or upon delivery will have been)
         duly executed by the Company and, when delivered in accordance with the
         terms hereof; will constitute the valid and binding obligation of the
         Company enforceable against the Company in accordance with its terms
         except (i) as limited by applicable bankruptcy, insolvency,
         reorganization, moratorium and other laws of general application
         affecting enforcement of creditors' rights generally and (ii) as
         limited by laws relating to the availability of specific performance,
         injunctive relief or other equitable remedies, and (iii) with respect
         to the indemnification provisions set forth in the Registration Rights
         Agreement, as limited by public policy.

                  (d) NO CONFLICTS. The execution, delivery and performance of
         the Transaction Documents by the Company and the consummation by the
         Company of the transactions contemplated thereby do not and will not
         (i) conflict with or violate any provision of the Company's certificate
         or articles of incorporation, bylaws or other organizational or charter
         documents, or (ii) conflict with, or constitute a default (or an event
         that with notice or lapse of time or both would become a default)
         under, or give to others any rights of termination, amendment,
         acceleration or cancellation (with or without notice, lapse of

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         time or both) of, any agreement, credit facility, debt or other
         instrument (evidencing a Company debt or otherwise) or other
         understanding to which the Company is a party or by which any property
         or asset of the Company is bound or affected, or (iii) result in a
         violation of any law, rule, regulation, order, judgment, injunction,
         decree or other restriction of any court or governmental authority to
         which the Company is subject (including federal and state securities
         laws and regulations), or by which any property or asset of the Company
         is bound or affected; except in the case of each of clauses (ii) and
         (iii), such as would not have or reasonably be expected to result in a
         Material Adverse Effect.

                  (e) FILINGS. CONSENTS AND APPROVALS. The Company is not
         required to obtain any consent, waiver, authorization or order of, give
         any notice to, or make any filing or registration with, any court or
         other federal, state, local or other governmental authority or other
         Person in connection with the execution, delivery and performance by
         the Company of the Transaction Documents, other than (a) the filing
         with the Commission of the Registration Statement, the application(s)
         to each Trading Market for the listing of the Shares and Warrant Shares
         for trading thereon in the time and manner required thereby, and
         applicable Blue Sky filings and (b) such as have already been obtained
         or such exemptive filings as are required to be made under applicable
         securities laws.

                  (f) ISSUANCE OF THE SECURITIES. The Securities are duly
         authorized and, when issued and paid for in accordance with the
         Transaction Documents, will be duly and validly issued, fully paid and
         nonassessable, free and clear of all Liens. The Company has reserved
         from its duly authorized capital stock the maximum number of shares of
         Common Stock issuable pursuant to this Agreement and the Warrants.

                  (g) CAPITALIZATION. The capitalization of the Company is as
         described in the Company's most recent periodic report filed with the
         Commission. The Company has not issued any capital stock since such
         filing other than pursuant to the exercise of employee stock options
         under the Company's stock option plans and pursuant to the conversion
         or exercise of Common Stock Equivalents outstanding on the date hereof.
         No Person has any right of first refusal, preemptive right, right of
         participation, or any similar right to participate in the transactions
         contemplated by the Transaction Documents. Except as a result of the
         purchase and sale of the Securities and except for employee stock
         options under the Company's stock option plans, there are no
         outstanding options, warrants, script rights to subscribe to, calls or
         commitments of any character whatsoever relating to, or securities,
         rights or obligations convertible into or exchangeable for, or giving
         any Person any right to subscribe for or acquire, any shares of Common
         Stock, or contracts, commitments, understandings or arrangements by
         which the Company is or may become bound to issue additional shares of
         Common Stock, or securities or rights convertible or exchangeable into
         shares of Common Stock. The issue and sale of the Securities will not
         obligate the Company to issue shares of Common Stock or other
         securities to any Person (other than the Purchasers) and will not
         result in a right of any holder of Company securities to adjust the
         exercise, conversion, exchange or reset price under such securities.

                  (h) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
         all reports required to be filed by it under the Securities Act and the
         Exchange Act, including

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         pursuant to Section 13(a) or 15(d) of the Exchange Act, for the two
         years preceding the date hereof (or such shorter period as the Company
         was required by law to file such material) (the foregoing materials,
         including the exhibits thereto, being collectively referred to herein
         as the "SEC REPORTS" and, together with the Disclosure Schedules to
         this Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has
         received a valid extension of such time of filing and has filed any
         such SEC Reports prior to the expiration of any such extension. As of
         their respective dates, the SEC Reports complied in all material
         respects with the requirements of the Securities Act and the Exchange
         Act and the rules and regulations of the Commission promulgated
         thereunder, as applicable, and none of the SEC Reports, when filed,
         contained any untrue statement of a material fact or omitted to state a
         material fact required to be stated therein or necessary in order to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading. The financial statements of the Company
         included in the SEC Reports comply in all material respects with
         applicable accounting requirements and the rules and regulations of the
         Commission with respect thereto as in effect at the time of filing.
         Such financial statements have been prepared in accordance with
         generally accepted accounting principles applied on a consistent basis
         during the periods involved ("GAAP"), except as may be otherwise
         specified in such financial statements or the notes thereto and except
         that unaudited financial statements may not contain all footnotes
         required by GAAP, and fairly present in all material respects the
         financial position of the Company and its consolidated subsidiaries as
         of and for the dates thereof and the results of operations and cash
         flows for the periods then ended, subject, in the case of unaudited
         statements, to normal, immaterial, year-end audit adjustments.

                  (i) MATERIAL CHANGES. Since the date of the latest audited
         financial statements included within the SEC Reports, except as
         disclosed in the SEC Reports, (i) there has been no event, occurrence
         or development that has had or that could reasonably be expected to
         result in a Material Adverse Effect, (ii) the Company has not incurred
         any liabilities (contingent or otherwise) other than (A) trade payables
         and accrued expenses incurred in the ordinary course of business
         consistent with past practice and (B) liabilities not required to be
         reflected in the Company's financial statements pursuant to GAAP or
         required to be disclosed in filings made with the Commission, (iii) the
         Company has not altered its method of accounting, (iv) the Company has
         not declared or made any dividend or distribution of cash or other
         property to its stockholders or purchased, redeemed or made any
         agreements to purchase or redeem any shares of its capital stock and
         (v) the Company has not issued any equity securities to any officer,
         director or Affiliate, except pursuant to existing Company stock option
         plans. The Company does not have pending before the Commission any
         request for confidential treatment of information.

                  (j) LITIGATION. Except as disclosed in the SEC Reports, there
         is no action, suit, inquiry, notice of violation, proceeding or
         investigation pending or, to the knowledge of the Company, threatened
         against or affecting the Company, any subsidiary or any of their
         respective properties before or by any court, arbitrator, governmental
         or administrative agency or regulatory authority (federal, state,
         county, local or foreign) (collectively, an "ACTION") which (i)
         adversely affects or challenges the legality, validity or
         enforceability of any of the Transaction Documents or the Securities or
         (ii) could, if there were an unfavorable decision, have or reasonably
         be expected to result in a Material Adverse

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         Effect. Neither the Company nor any subsidiary, nor, to the knowledge
         of the Company, any director or officer thereof, is or has been the
         subject of any Action involving a claim of violation of or liability
         under federal or state securities laws or a claim of breach of
         fiduciary duty. There has not been, and to the knowledge of the
         Company, there is not pending or contemplated, any investigation by the
         Commission involving the Company or any current or former director or
         officer of the Company. The Commission has not issued any stop order or
         other order suspending the effectiveness of any registration statement
         filed by the Company under the Exchange Act or the Securities Act.

                  (k) LABOR RELATIONS. No material labor dispute exists or, to
         the knowledge of the Company, is imminent with respect to any of the
         employees of the Company that could reasonably be expected to result in
         a Material Adverse Effect.

                  (l) COMPLIANCE. Except as disclosed in the SEC Reports,
         neither the Company nor any subsidiary (i) is in default under or in
         violation of (and no event has occurred that has not been waived that,
         with notice or lapse of time or both, would result in a default by the
         Company under), nor has the Company received notice of a claim that it
         is in default under or that it is in violation of, any indenture, loan
         or credit agreement or any other agreement or instrument to which it is
         a party or by which it or any of its properties is bound (whether or
         not such default or violation has been waived), (ii) is in violation of
         any order of any court, arbitrator or governmental body, or (iii) is or
         has been in violation of any statute, rule or regulation of any
         governmental authority, including without limitation all foreign,
         federal, state and local laws applicable to its business, except in the
         case of clauses (i), (ii) and (iii) as would not have or reasonably be
         expected to result in a Material Adverse Effect.

                  (m) REGULATORY PERMITS. The Company possess all certificates,
         authorizations and permits issued by the appropriate federal, state,
         local or foreign regulatory authorities necessary to conduct their
         respective businesses as described in the SEC Reports, except where the
         failure to possess such permits would not have or reasonably be
         expected to result in a Material Adverse Effect ("MATERIAL PERMITS"),
         and neither the Company nor any subsidiary has received any notice of
         proceedings relating to the revocation or modification of any Material
         Permit.

                  (n) TITLE TO ASSETS. The Company has good and marketable title
         in fee simple to all real property owned by them that is material to
         the business of the Company, taken as a whole, and good and marketable
         title in all personal property owned by them that is material to the
         business of the Company, taken as a whole, in each case free and clear
         of all Liens, except for Liens as do not materially affect the value of
         such property and do not materially interfere with the use made and
         proposed to be made of such property by the Company and Liens for the
         payment of federal, state or other taxes, the payment of which is
         neither delinquent nor subject to penalties. Any real property and
         facilities held under lease by the Company are held by it under valid,
         subsisting and enforceable leases with which the Company is in material
         compliance.

                  (o) PATENTS AND TRADEMARKS. To the knowledge of the Company,
         the Company has, or has rights to use, all patents, patent
         applications, trademarks, trademark applications, service marks, trade
         names, copyrights, licenses and other similar rights that

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         are necessary or material for use in connection with their respective
         businesses as described in the SEC Reports and which the failure to so
         have could have or reasonably be expected to result in a Material
         Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS").
         Neither the Company nor any subsidiary has received a written notice
         that the Intellectual Property Rights used by the Company violates or
         infringes the rights of any Person. To the knowledge of the Company,
         all such Intellectual Property Rights are enforceable.

                  (p) INSURANCE. The Company is insured by insurers of
         recognized financial responsibility against such losses and risks and
         in such amounts as is prudent and customary in the businesses in which
         the Company is engaged. Neither the Company nor any subsidiary has any
         reason to believe that it will not be able to renew its existing
         insurance coverage as and when such coverage expires or to obtain
         similar coverage from similar insurers as may be necessary to continue
         its business without a significant increase in cost.

                  (q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set
         forth in the SEC Reports, none of the officers or directors of the
         Company and, to the knowledge of the Company, none of the employees of
         the Company is presently a party to any transaction with the Company
         (other than for services as employees, officers and directors),
         including any contract, agreement or other arrangement providing for
         the furnishing of services to or by, providing for rental of real or
         personal property to or from, or otherwise requiring payments to or
         from any officer, director or such employee or, to the knowledge of the
         Company, any entity in which any officer, director, or any such
         employee has a substantial interest or is an officer, director, trustee
         or partner, in each case in excess of $60,000 other than (a) for
         payment of salary or consulting fees for services rendered, (b)
         reimbursement for expenses incurred on behalf of the Company and (c)
         for other employee benefits, including stock option agreements under
         any stock option plan of the Company.

                  (r) INTERNAL ACCOUNTING CONTROLS. The Company maintains a
         system of internal accounting controls sufficient to provide reasonable
         assurance that (i) transactions are executed in accordance with
         management's general or specific authorizations, (ii) transactions are
         recorded as necessary to permit preparation of financial statements in
         conformity with GAAP and to maintain asset accountability, (iii) access
         to assets is permitted only in accordance with management's general or
         specific authorization, and (iv) the recorded accountability for assets
         is compared with the existing assets at reasonable intervals and
         appropriate action is taken with respect to any differences. The
         Company has established disclosure controls and procedures (as defined
         in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed
         such disclosure controls and procedures to ensure that material
         information relating to the Company is made known to the certifying
         officers by others within those entities, particularly during the
         period in which the Company's Form 10-K (or 10-KSB) or 10-Q (or
         10-QSB), as the case may be, is being prepared. The Company's
         certifying officers have evaluated the effectiveness of the Company's
         controls and procedures as of a date within 90 days prior to the filing
         date of the Form 10-Q (or 10-QSB) for the quarter ended December 31,
         2002 (such date, the "EVALUATION DATE"). The Company presented in its
         Form 10-Q (or 10-QSB) for the quarter ended December 31, 2002 the
         conclusions of the certifying officers about

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         the effectiveness of the disclosure controls and procedures based on
         their evaluations as of the Evaluation Date. Since the Evaluation Date,
         there have been no significant changes in the Company's internal
         controls (as such term is defined in Item 307(b) of Regulation S-K
         under the Exchange Act) or, to the Company's knowledge, in other
         factors that could significantly affect the Company's internal
         controls.

                  (s) PRIVATE PLACEMENT. Assuming the accuracy of the Purchasers
         representations and warranties set forth in Section 3.2, no
         registration under the Securities Act is required for the offer and
         sale of the Securities by the Company to the Purchasers as contemplated
         hereby. The issuance and sale of the Securities hereunder does not
         contravene the rules and regulations of the Trading Market.

                  (t) INVESTMENT COMPANY. The Company is not, and is not an
         Affiliate of, an "investment company" within the meaning of the
         Investment Company Act of 1940, as amended.

                  (u) FORM S-3 ELIGIBILITY. Subject to the Company's continued
         listing on the American Stock Exchange, the Company is eligible to
         register the resale of its Common Stock by the Purchasers under Form
         S-3 promulgated under the Securities Act.

                  (v) LISTING AND MAINTENANCE REQUIREMENTS. The Company has not,
         in the 12 months preceding the date hereof, received notice from any
         Trading Market on which the Common Stock is or has been listed or
         quoted to the effect that the Company is not in compliance with the
         listing or maintenance requirements of such Trading Market. The Company
         is, and has no reason to believe that it will not in the foreseeable
         future continue to be, in compliance with all such listing and
         maintenance requirements.

                  (w) APPLICATION OF TAKEOVER PROTECTIONS. The Company and its
         Board of Directors have taken all necessary action, if any, in order to
         render inapplicable any control share acquisition, business
         combination, poison pill (including any distribution under a rights
         agreement) or other similar anti-takeover provision under the Company's
         Certificate of Incorporation (or similar charter documents) or the laws
         of its state of incorporation that is or could become applicable to the
         Purchasers as a result of the Purchasers and the Company fulfilling
         their obligations or exercising their rights under the Transaction
         Documents, including without limitation the Company's issuance of the
         Securities and the Purchasers' ownership of the Securities.

                  (x) DISCLOSURE. The Company confirms that, neither the Company
         nor any other Person acting on its behalf has provided any of the
         Purchasers or their agents or counsel with any information that
         constitutes or might constitute material, non-public information. The
         Company understands and confirms that the Purchasers will rely on the
         foregoing representations and covenants in effecting transactions in
         securities of the Company. All disclosure provided to the Purchasers
         regarding the Company, its business and the transactions contemplated
         hereby, including the Disclosure Schedules to this Agreement, furnished
         by or on behalf of the Company is true and correct and do not contain
         any untrue statement of a material fact or omit to state any material
         fact necessary in order to make the statements made therein, in light
         of the circumstances under which they were made, not misleading.

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<PAGE>

                  (y) NO INTEGRATED OFFERING. Neither the Company, nor any of
         its affiliates, nor any Person acting on its or their behalf has,
         directly or indirectly, made any offers or sales of any security or
         solicited any offers to buy any security, under circumstances that
         would cause this offering of the Securities to be integrated with prior
         offerings by the Company for purposes of the Securities Act or any
         applicable shareholder approval provisions, including, without
         limitation, under the rules and regulations of any exchange or
         automated quotation system on which any of the securities of the
         Company are listed or designated.

                  (z) SOLVENCY. Based on the financial condition of the Company
         as of the Closing Date, (i) the Company's fair saleable value of its
         assets exceeds the amount that will be required to be paid on or in
         respect of the Company's existing debts and other liabilities
         (including known contingent liabilities) as they mature; (ii) the
         Company's assets do not constitute unreasonably small capital to carry
         on its business for the current fiscal year as now conducted and as
         proposed to be conducted including its capital needs taking into
         account the particular capital requirements of the business conducted
         by the Company, and projected capital requirements and capital
         availability thereof, and including the anticipated proceeds of the
         sale of the Securities; and (iii) the current cash flow of the Company,
         together with the proceeds the Company would receive, were it to
         liquidate all of its assets, after taking into account all anticipated
         uses of the cash, would be sufficient to pay all amounts on or in
         respect of its debt when such amounts are required to be paid. The
         Company does not intend to incur debts beyond its ability to pay such
         debts as they mature (taking into account the timing and amounts of
         cash to be payable on or in respect of its debt).

                  (aa) MOST FAVORED NATION. Between September 1, 2003 and
         October 4, 2003 Company has not and shall not enter into an agreement
         or arrangement for new debt or equity financing or the restructuring of
         an existing debt on terms more favorable than the terms granted to
         Purchaser under this Agreement, the Common Stock Purchase Warrant and
         Registration Agreement (all of which are dated September 30, 2003).

         3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

                  (a) ORGANIZATION; AUTHORITY. Purchaser has the power and
         authority to enter into and to consummate the transactions contemplated
         by the Transaction Documents and otherwise to carry out its obligations
         thereunder. Each Transaction Document to which Purchaser is a party has
         been duly executed by Purchaser, and when delivered by Purchaser in
         accordance with the terms hereof, will constitute the valid and legally
         binding obligation of such Purchaser, enforceable against it in
         accordance with its terms.

                  (b) INVESTMENT INTENT. Such Purchaser understands that the
         Securities are "restricted securities" and have not been registered
         under the Securities Act or any applicable state securities law and is
         acquiring the Securities as principal for its own account for
         investment purposes only and not with a view to or for distributing or
         reselling such Securities or any part thereof, has no present intention
         of distributing any of such Securities and has no arrangement or
         understanding with any other persons

                                       11
<PAGE>

         regarding the distribution of such Securities (this representation and
         warranty not limiting such Purchaser's right to sell the Securities
         pursuant to the registration statement or otherwise in compliance with
         applicable federal and state securities laws). Such Purchaser is
         acquiring the Securities hereunder in the ordinary course of its
         business. Such Purchaser does not have any agreement or understanding,
         directly or indirectly, with any Person to distribute any of the
         Securities.

                  (c) PURCHASER STATUS. At the time such Purchaser was offered
         the Securities, it was, and at the date hereof it is an "accredited
         investor" as defined in Rule 501(a) under the Securities Act. Such
         Purchaser is not required to be registered as a broker-dealer under
         Section 15 of the Exchange Act.

                  (d) EXPERIENCE OF PURCHASER. Purchaser, either alone or
         together with its representatives, has such knowledge, sophistication
         and experience in business and financial matters so as to be capable of
         evaluating the merits and risks of the prospective investment in the
         Securities, and has so evaluated the merits and risks of such
         investment. Such Purchaser is able to bear the economic risk of an
         investment in the Securities and, at the present time, is able to
         afford a complete loss of such investment.

                  (e) GENERAL SOLICITATION. Such Purchaser is not purchasing the
         Securities as a result of any advertisement, article, notice or other
         communication regarding the Securities published in any newspaper,
         magazine or similar media or broadcast over television or radio or
         presented at any seminar or any other general solicitation or general
         advertisement.

         The Company acknowledges and agrees that Purchaser does not make or has
not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in the Security
Purchase Agreement and this Section 3.2.

                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 TRANSFER RESTRICTIONS.

                  (a) The Securities may only be disposed of in compliance with
         state and federal securities laws. In connection with any transfer of
         Securities other than pursuant to an effective registration statement,
         to the Company, to an Affiliate of a Purchaser or in connection with a
         pledge as contemplated in Section 4.1(b), the Company may require the
         transferor thereof to provide to the Company an opinion of counsel
         selected by the transferor, the form and substance of which opinion
         shall be reasonably satisfactory to the Company, to the effect that
         such transfer does not require registration of such transferred
         Securities under the Securities Act. As a condition of transfer, any
         such transferee shall agree in writing to be bound by the terms of this
         Agreement and shall have the rights of a Purchaser under this Agreement
         and the Registration Rights Agreement.

                  (b) The Purchaser agrees to the imprinting, so long as is
         required by this Section 4.1(b), of a legend on any of the Securities
         in the following form:

                                       12
<PAGE>

                  THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES
                  AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
                  STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
                  AND, ACCORDINGLY, MAY NOT BE OH BRED OR SOLD EXCEPT PURSUANT
                  TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                  ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
                  SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
                  THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
                  REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE
                  PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
                  REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
                  INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
                  RULE 501 (a) UNDER THE SECURITIES ACT.

                  The Company acknowledges and agrees that a Purchaser may from
         time to time pledge pursuant to a bona fide margin agreement with a
         registered broker-dealer or grant a security interest in some or all of
         the Securities to a financial institution that is an "accredited
         investor" as defined in Rule 501(a) under the Securities Act and, if
         required under the terms of such arrangement, such Purchaser may
         transfer pledged or secured Securities to the pledgees or secured
         parties. Such a pledge or transfer would not be subject to approval of
         the Company and no legal opinion of legal counsel of the pledgee,
         secured party or pledgor shall be required in connection therewith.
         Further, no notice shall be required of such pledge. At the appropriate
         Purchaser's expense, the Company will execute and deliver such
         reasonable documentation as a pledgee or secured party of Securities
         may reasonably request in connection with a pledge or transfer of the
         Securities, including the preparation and filing of any required
         prospectus supplement under Rule 424(b)(3) under the Securities Act or
         other applicable provision of the Securities Act to appropriately amend
         the list of Selling Stockholders thereunder.

                  (c) Certificates evidencing the Common Stocks Shares and
         Warrant Shares shall not contain any legend (including the legend set
         forth in Section 4.1(b)), (i) while a registration statement covering
         the resale of such security is effective under the Securities Act, or
         (ii) following any sale of such Common Stocks Shares or Warrant Shares
         pursuant to Rule 144, or (iii) if such Common Stocks Shares or Warrant
         Shares are eligible for sale under Rule 144(k), or (iv) if such legend
         is not required under applicable requirements of the Securities Act
         (including judicial interpretations and pronouncements issued by the
         Staff of the Commission). The Company shall cause its counsel to issue
         a confirming statement to the Company's transfer agent promptly after
         the Effective Date if required by the Company's transfer agent to
         effect the removal of the legend hereunder. If all or any portion of a
         Warrant is exercised at a time when there is an effective registration
         statement to cover the resale of the Warrant Shares, such Warrant
         Shares shall be issued free of all legends. The Company agrees that
         following the Effective Date or at such time as such legend is no
         longer required under this Section 4.1(c), it will, no

                                       13
<PAGE>

         later than three Trading Days following the delivery by a Purchaser to
         the Company or the Company's transfer agent of a certificate
         representing Common Stocks Shares or Warrant Shares, as the case may
         be, issued with a restrictive legend, deliver or cause to be delivered
         to such Purchaser a certificate representing such Securities that is
         free from all restrictive and other legends. The Company may not make
         any notation on its records or give instructions to any transfer agent
         of the Company that enlarge the restrictions on transfer set forth in
         this Section.

                  (d) Purchaser agrees that the removal of the restrictive
         legend from certificates representing Securities as set forth in this
         Section 4.1 is predicated upon the Company's reliance that Purchaser
         will sell any Securities pursuant to either the registration
         requirements of the Securities Act, including any applicable prospectus
         delivery requirements, or an exemption therefrom. Purchaser hereby
         holds the Company harmless from any and all losses, liabilities,
         obligations, claims, contingencies, damages, costs and expenses,
         including all judgments, amounts paid in settlements, court costs and
         reasonable attorneys' fees and costs of investigation that the Company
         may suffer or incur as a result of or relating to Purchaser's sale of
         certificates representing Securities, without the restrictive legend,
         in violation of the registration requirements of the Securities Act
         (unless under an exemption therefrom).

         4.2 FURNISHING OF INFORMATION. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any such holder of Securities, the Company
shall deliver to such holder a written certification of a duly authorized
officer as to whether it has complied with the preceding sentence. As long as
any Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchaser and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchaser to sell the Securities under Rule 144. The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

         4.3 INTEGRATION. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Purchaser or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market.

         4.4 LIMITED DEMAND REGISTRATION RIGHTS. Purchaser shall have certain
limited registration rights as set forth in that certain Registration Agreement
entered into by and between the Company and Purchaser of even date herewith (the
"REGISTRATION AGREEMENT"). A copy of the Registration Agreement is attached
hereto as Exhibit B.

         4.5 DISCLOSURE; PUBLICITY. The Company and Purchaser shall consult with
each other in issuing any press releases with respect to the transactions
contemplated hereby, and neither the

                                       14
<PAGE>

Company nor any Purchaser shall issue any such press release or otherwise make
any such public statement without the prior consent of the Company, with respect
to any press release of any Purchaser, or without the prior consent of
Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld, except if such disclosure is required by law, in
which case the disclosing party shall promptly provide the other party with
prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
the registration statement contemplated by the Registration Rights Agreement and
(ii) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchaser with prior
notice of such disclosure permitted under subclause (i) or (ii).

         4.6 SHAREHOLDERS RIGHTS PLAN. No claim will be made or enforced by the
Company or any other Person that any Purchaser is an "Acquiring Person" under
any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and the Purchaser.

         4.7 NON-PUBLIC INFORMATION. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

         4.8 REIMBURSEMENT. If any Purchaser becomes involved in any capacity in
any legal proceeding by or against any Person who is a stockholder of the
Company (except as a result of sales, pledges, margin sales and similar
transactions by such Purchaser to or with any current stockholder), solely as a
result of such Purchaser's acquisition of the Securities under this Agreement,
the Company will reimburse such Purchaser for its reasonable legal and other
expenses (including the cost of any investigation preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of the Company under this paragraph
shall be in addition to any liability which the Company may otherwise have,
shall extend upon the same terms and conditions to any Affiliates of the
Purchaser who are actually named in such action, proceeding or investigation,
and partners, directors, agents, employees and controlling persons (if any), as
the case may be, of the Purchaser and any such Affiliate, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchaser and any such Affiliate and any
such Person. The Company also agrees that neither the Purchaser nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement.

         4.9 INDEMNIFICATION OF PURCHASER. The Company will indemnify and hold
the Purchaser and their directors, officers, shareholders, partners, employees
and agents (each, a

                                       15
<PAGE>

"PURCHASER PARTY") harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to: (a) any misrepresentation, breach or inaccuracy, or
any allegation by a third party that, if true, would constitute a breach or
inaccuracy, of any of the representations, warranties, covenants or agreements
made by the Company in this Agreement or in the other Transaction Documents; or
(b) any cause of action, suit or claim brought or made against such Purchaser
Party and arising solely out of or solely resulting from the execution,
delivery, performance or enforcement of this Agreement or any of the other
Transaction Documents and without causation by any other activity, obligation,
condition or liability pertaining to such Purchaser. The Company will reimburse
such Purchaser for its reasonable legal and other expenses (including the cost
of any investigation, preparation and travel in connection therewith) incurred
in connection therewith, as such expenses are incurred.

         4.10 RESERVATION OF COMMON STOCK. The Company shall use its
commercially reasonable efforts to reserve and continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock for the purpose of enabling the Company to issue Common Stock
Shares pursuant to this Agreement and Original Warrants Shares and Warrants
Shares pursuant to the Original Warrants and Warrants, respectively.

                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 FEES AND EXPENSES. Each party shall pay all other fees and expenses
of its advisers, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all stamp and
other taxes and duties levied in connection with the sale of the Securities.

         5.2 ENTIRE AGREEMENT. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         5.4 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 (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 5:30 p.m. (Central
Standard time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (Central Standard time) on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

                                       16
<PAGE>

         5.5 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

         5.6 CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

         5.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Purchaser. Any Purchaser may assign any or
all of its rights under this Agreement to any Person, provided such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions hereof that apply to the "Purchaser".

         5.8 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Sections 4.9.

         5.9 GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Nevada, 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 and any other
Transaction Documents (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 Houston, Texas.
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in Houston, Texas, 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 any of the Transaction Documents), 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. 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 (including its Affiliates, agents, officers, directors and
employees) 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 a Transaction Document, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its reasonable
attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

                                       17
<PAGE>

         5.10 SURVIVAL. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and shall continue to
survive for a period of one (1) year following the Closing Date.

         5.11 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         5.12 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.13 REPLACEMENT OF SECURITIES. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

         5.14 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchaser and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         5.15 PAYMENT SET ASIDE. To the extent that a Party makes a payment or
payments to any other Party pursuant to any Transaction Document or a Party
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the paying Party, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

         5.16 INDEPENDENT NATURE OF PURCHASER'S OBLIGATIONS AND RIGHTS. The
obligations of Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the

                                       18
<PAGE>

obligations of any other Purchaser sunder any Transaction Document. Nothing
contained herein or in my Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchaser as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchaser are in any way acting in concert or as a
group wine respect to such oblations or the bona contemplated by the Transaction
Document. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation, the rights arising out of thus
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

US DATAWORKS, INC.                                ADDRESS FOR NOTICE:
                                                  -------------------
                                                  5301 Hollister Road, Suite 250
                                                  Houston, TX 77040
                                                  Attn:  CEO
                                                  Tel:  (713) 934-3855
                                                  Fax:  (713) 934-8127
By:           /S/ CHARLES E. RAMEY
   --------------------------------------------
      Name:  Charles E. Ramey
      Title:  CEO

With a copy to (which shall not constitute notice:"

                           [SIGNATURE PAGE CONTINUES]

                                       19
<PAGE>

                            PURCHASER SIGNATURE PAGE

         IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.

PURCHASER         ACI COMMUNICATIONS HOLDINGS, INC.

                                            ADDRESS FOR NOTICE:
                                            -------------------
                                            ACI Communications Holdings, Inc.
                                            Frank Montelione and General Counsel
                                            21621 Nordhoff Street
                                            Chatsworth, CA 91311
By:          /S/ RICHARD SHAPIRO
   ------------------------------------
    Name:  Richard Shapiro
    Title:  CFO

SUBSCRIPTION AMOUNT:          $834,167.73
                              [Amount of debt to be converted to Common Stock]

WARRANT SHARES:                       208,542
                              [50% of the Subscription Amount, divided by $2.00
                               per share]

With a copy to:
Sonnenschein Nath & Rosenthal LLP.
601 S. Figueroa Street
Suite 1500
Los Angeles, CA 90017
Fax: 213-623-9924
ATTN: Shirley E. Curfman, Esq.

                                       20<PAGE>

                                                                    EXHIBIT 10.8

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 208,542 Shares of Common Stock of

                               US DATAWORKS, INC.

         This common stock purchase warrant (the "WARRANT") certifies that, for
value received, ACI COMMUNICATIONS HOLDINGS, INC., A CALIFORNIA CORPORATION (the
"HOLDER"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after the
Initial Exercise Date (as defined in Section 4, below) and on or prior to the
close of business on September 30, 2006 (the "TERMINATION DATE") but not
thereafter, to subscribe for and purchase from US Dataworks, Inc., a corporation
incorporated in the State of Nevada (the "COMPANY"), one thousand dollars
($1,000) of shares of common stock, par value $0.0001 per share, of the Company
(the "COMMON STOCK") for every two thousand dollars ($2,000) such Holder paid of
Subscription Amount as such term is defined in that certain Common Stock
Purchase and Warrants Agreement entered into by and between the Company and the
Holder of even date herewith (the "PURCHASE AGREEMENT"). Capitalized terms used
and not otherwise defined herein shall have the meanings set forth in the
Purchase Agreement.

         1. EXERCISE PRICE. The purchase price of one share of Common Stock (the
"EXERCISE PRICE") under this Warrant shall be Two Dollars ($2.00), subject to
the adjustments described in this Paragraph 1, including, but not limited to
adjustments for any reverse or forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that may occur
after the date of this Agreement. In addition, if the average closing price for
the Common Stock for the thirty (30) Trading Days immediately preceding the
Conversion Date is less than Two Dollars ($2.00) (as adjusted pursuant to the
Reverse Split), then, the Per Share Conversion Price shall equal the lesser of
either Two Dollars ($2.00) or the average closing price for the Common Stock for
the thirty (30) Trading Days immediately preceding the Conversion Date,
discounted by twenty-five percent (25%). Under no circumstance will the Per
Share Conversion Price be less than Sixty Cents ($0.60). The Exercise Price and
the number of shares of Common Stock for which the Warrant is exercisable (such
shares, "WARRANT SHARES") shall be subject to adjustment as provided herein.

                                       1
<PAGE>

         2. TITLE TO WARRANT. Prior to the Termination Date and subject to
compliance with applicable laws and Section 8 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

         3. AUTHORIZATION OF SHARES. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

         4. EXERCISE OF WARRANT.

         (a) Exercise of the purchase rights represented by this Warrant may be
made at any time or times on or after the Initial Exercise Date and on or before
the Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank (or,
alternatively, by cashless exercise as described in subsection (c) below), the
Holder shall be entitled to receive a certificate for the number of Warrant
Shares so purchased. The "Initial Exercise Date" shall mean the Trading Day
immediately following the earlier of either (i) the approval by the Company's
shareholders and implementation of the Reverse Split, the result of which
causing enough authorized but not issued Common Stock to accommodate the full
conversion of the Debentures and exercise of the Warrants held by each of the
signatories to the Purchase Agreement; (ii) the approval and implementation of
an increase to the authorized Common Stock, such increase in the authorized
number of Common Stock substantial enough to accommodate the full conversion of
the Debentures and full exercise of the Warrants held by each of the signatories
to the Purchase Agreement; or (iii) December 15, 2003. Certificates for shares
purchased hereunder shall be delivered to the Holder within three (3) Trading
Days after the date on which this Warrant shall have been exercised as
aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder
or any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised by payment to the Company of the Exercise Price and
all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior
to the issuance of such shares, have been paid. If the Company fails to deliver
to the Holder a certificate or certificates representing the Warrant Shares
pursuant to this Section 3(a) by the close of business on the third Trading Day
after the date of exercise, then the Holder will have the right to rescind such
exercise. In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise by the close of business
on the third Trading Day after the date of exercise, and if after such third
Trading Day the Holder is required by its broker to purchase (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a "Buy-In"), then the Company shall (1) pay in cash

                                      -2-
<PAGE>

to the Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.

         (b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.

         (c) This Warrant may also be exercised by means of a "cashless
exercise" in which the Holder shall be entitled to receive a certificate for the
number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:

                  (A) = the greater of (i) thirty (30) day average closing
                        price of the Common Stock on the Trading Day
                        immediately preceding the date of such election or
                        (ii) the closing price of the Common Stock on the
                        Trading Day immediately preceding the date of such
                        election;

                  (B) = the Exercise Price of the Warrants, as adjusted; and

                  (X) = the number of Warrant Shares issuable upon exercise of
                        the Warrants in accordance with the terms of this
                        Warrant.

         5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share that Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

         6. CHARGES, TAXES AND EXPENSES. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such

                                      -3-
<PAGE>

certificates shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event
certificates for Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

         7. CLOSING OF BOOKS. The Company will not close its stockholder books
or records in any manner that prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

         8. TRANSFER, DIVISION AND COMBINATION.

         (a) Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 2 and 8(e) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the Trading
office of the Company, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a warrant or warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of Warrant Shares without having a new warrant
issued.

         (b) This Warrant may be divided or combined with other warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 8(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new warrant or
warrants in exchange for the Warrant to be divided or combined in accordance
with such notice.

         (c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new warrant or warrants under this Section 8.

         (d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.

         (e) If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and
substance reasonably acceptable to the Company.

                                      -4-
<PAGE>

         9. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

         10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

         11. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

         12. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing by the number of Warrant Shares or other securities of
the Company resulting from such adjustment. An adjustment made pursuant to this
paragraph shall become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event. No adjustment of
the Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be made,
but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price. In no instance shall any adjustment made pursuant to this
subsection 11(b) cause the Exercise Price to be reduced to a price less than
seven cents ($0.07) per share.

                                      -5-
<PAGE>

         13. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event, or (b) cash
equal to the value of this Warrant as determined in accordance with the
Black-Sholes option pricing formula. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

         14. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

         15. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

                                      -6-
<PAGE>

         16. NOTICE OF CORPORATE ACTION. If at any time:

         (a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or

         (b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,

         (c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;

         then, in any one or more of such cases, the Company shall give to
Holder (i) at least 20 days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 20 days' prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

         17. AUTHORIZED SHARES. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. Except and to the extent as waived or
consented to by the Holder, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, 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 Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of

                                      -7-
<PAGE>

all such actions as may be necessary or appropriate to protect the rights of
Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares upon the exercise of this
Warrant, and (c) use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant. Before taking any action which would result in
an adjustment in the number of Warrant Shares for which this Warrant is
exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

         18. MISCELLANEOUS.

         (a) Jurisdiction. This Warrant shall constitute a contract under the
laws of Nevada, without regard to its conflict of law, principles or rules.

         (b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

         (c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

         (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement;
provided upon any permitted assignment of this Warrant, the assignee shall
promptly provide the Company with its contact information.

         (e) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

                                      -8-
<PAGE>

         (f) Remedies. Holder in addition to being to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any Loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.

         (g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

         (h) Amendment. This warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

         (i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

         (j) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  September 30, 2003
                                              US DATAWORKS, INC.

                                              By:     /S/ CHARLES E. RAMEY
                                                  ------------------------------
                                                    Name:  CHARLES E. RAMEY
                                                          ----------------------
                                                    Title:        CEO
                                                          ----------------------

                                      -9-
<PAGE>

                               NOTICE OF EXERCISE

TO:      US DATAWORKS, INC.

                  (1) The undersigned hereby elects to purchase ______ Warrant
Shares of US Dataworks, Inc. pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.

                  (2) Payment shall take the form in lawful money of the United
States.

                  (3) Please issue a certificate or certificates representing
said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

                  (4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

                                             By:________________________________
                                                   Name:________________________
                                                   Title:_______________________

                                             Dated:_____________________________

                                      -10-
<PAGE>

                                 ASSIGNMENT FORM

                        (To assign the foregoing warrant,
                      execute this form and supply required
                      information. Do not use this form to
                             exercise the warrant.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to ________________________________________________
whose address is _____________________________________________________________.

                                                    Dated: ____________, ______

                           Holder's Signature:  ________________________________

                           Holder's Address:  __________________________________

Signature Guaranteed:  _________________________________________________________

NOTE: THE SIGNATURE TO THIS ASSIGNMENT FORM MUST CORRESPOND WITH THE NAME AS IT
APPEARS ON THE FACE OF THE WARRANT, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK OR TRUST COMPANY. OFFICERS
OF CORPORATIONS AND THOSE ACTING IN A FIDUCIARY OR OTHER REPRESENTATIVE CAPACITY
SHOULD FILE PROPER EVIDENCE OF AUTHORITY TO ASSIGN THE FOREGOING WARRANT.

                                      -11-

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