Document:

NOTE
      PURCHASE AGREEMENT

    

    THIS
      NOTE
      PURCHASE AGREEMENT (the “Agreement”) is made as of the 13th
      day of
      August, 2008 by and between US DATAWORKS, INC., a Nevada corporation (the
“Company”), and signatories hereto (collectively, the “Investors” and
      individually, the “Investor”).

     

    WHEREAS,
      the Company desires to issue and sell to the Investor, and the Investor desires
      to purchase from the Company, refinancing secured promissory notes of the
      Company, upon the terms and subject to the conditions set forth
      herein;

     

    WHEREAS,
      the Refinancing Notes (as defined below) will rank senior to all outstanding
      and
      future indebtedness of the Company and its Subsidiaries to the extent required
      under the Refinancing Notes and will be secured by a perfected security
      interest, in all of the assets of the Company and the stock and assets of each
      of the Subsidiaries as evidenced by a Security Agreement, in the form attached
      hereto as Exhibit B
      (as
      amended, or modified from time to time in accordance with its terms, the
“Security Agreement”); and

     

    WHEREAS,
      the Investors desire to appoint Charles E. Ramey as collateral agent with
      respect to the Collateral (as defined in the Security Agreement) (in such
      capacity, the “Collateral Agent”) pursuant to a Collateral Agency Agreement in
      the form attached hereto as Exhibit
      C
      (as
      amended or modified from time to time in accordance with its terms, the
“Collateral Agency Agreement”).

     

    NOW,
      THEREFORE, the parties hereby agree as follows:

     

    1. Definitions.
      For
      purposes of this Agreement, the following terms shall have the following
      respective meanings:

     

    (a) “Affiliate”
      means, with respect to any entity, an affiliate of that entity as defined in
      Rule 12b-2 under The Securities Exchange Act of 1934, as amended to
      date.

     

    (b) “Closing”
      has the meaning specified in Section 2.2(a).

     

    (c) “Closing
      Date” has the meaning specified in Section 2.2(a).

     

    (d) “Common
      Stock” shall mean the common stock, $0.0001 par value, of the
      Company.

     

    (e) “Company”
      has the meaning specified in the preamble to this Agreement.

     

    (f) “Financial
      Statements” has the meaning specified in Section 3.7.

     

    (g) “Form
      10-KSB” has the meaning specified in Section 3.6.

     

    (h) “Governmental
      Authority” means
      any
      court, agency, department or other instrumentality of any foreign, federal,
      state, county, city or other political subdivision.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i) “Investor”
      has the meaning specified in the preamble to this Agreement.

     

    (j) “Lien”
      means, with respect to any asset, any mortgage, pledge, security interest,
      encumbrance, lien or charge of any kind in respect of such asset.

     

    (k) “Material
      Adverse Effect” shall mean individually or collectively, a material adverse
      effect on, or a material adverse change in, or group of such effects on or
      changes in, (i) the business, financial condition, results of operations, assets
      or liabilities of the Company and its Subsidiaries, taken as a whole, or (ii)
      the ability of the Company to perform its obligations under or with respect
      to
      this Agreement or any Note. 

     

    (l) “Refinancing
      Note” has the meaning specified in Section 2.1(a).

     

    (m) “Person”
      means a corporation, an association, a partnership, a limited liability company,
      an individual, a joint venture, a joint stock company, a trust, an
      unincorporated organization or a government or an agency or a political
      subdivision thereof.

     

    (n) “Purchase
      Price” has the meaning specified in Section 2.1(a).

     

    (o) “SEC”
has
      the meaning specified in Section 3.6.

     

    (p) “Securities
      Act” means the Securities Act of 1933, as amended.

     

    (q) “Subsidiary”
      means, with respect to any entity, any other entity of which securities or
      other
      ownership interest having ordinary voting power to elect a majority of the
      board
      of directors or other persons performing similar functions are owned directly
      or
      indirectly by such entity.

     

    (r) “Voting
      Securities” means any securities of the Company having the ordinary power to
      vote, in the absence of contingencies, in the election of directors of the
      Company.

     

    2. Purchase
      and Sale of Notes.

     

    2.1 Sale
      and Issuance of Notes.
      

     

    (a) Purchase
      and Sale of the Refinancing Notes.
      Subject
      to and upon the terms and conditions of this Agreement, at the Closing, the
      Company agrees to issue and sell to the Investors, and the Investors agree
      to
      purchase from the Company, refinancing senior secured promissory notes (each,
      a
“Refinancing Note” and collectively, the “Refinancing Notes”), in the aggregate
      principal amount set forth opposite each Investor’s name on the signature pages
      hereto (the “Purchase Price”). Each Purchaser shall pay the Purchase Price
      therefor in connection with the issuance of the Refinancing Notes and the
      Company’s repayment of the Senior Secured Convertible Notes due November 13,
      2010 (the “Original Notes”). The Refinancing Notes shall have a maturity date
      one (1) year from the date of their original issuance, shall be in substantially
      the form attached hereto as Exhibit
      A,
      and
      subject to adjustment pursuant to, the terms of such Refinancing
      Note.

     

    
      
         

      

      
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    2.2 Closing. 

     

    (a) The
      closing of the purchase and sale of the Refinancing Notes (the “Closing”) shall
      take place at the offices of Pillsbury Winthrop Shaw Pittman LLP, 2475 Hanover
      Street, Palo Alto, California, at 10:00 a.m. local time, or at such other time
      and place as the Company and the Investors mutually agree upon. The Closing
      shall occur on such date (the “Closing Date”) that the Company. 

     

    3. Representations,
      Warranties and Agreements of the Company.
      The
      Company hereby represents and warrants to, and agrees with, each Investor
      that:

     

    3.1 Organization.
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Nevada, has the corporate power and
      authority to own, lease and operate its properties and to carry on its business
      as currently conducted, and is duly qualified to transact business and is in
      good standing in each jurisdiction in which the conduct of its business or
      its
      ownership or leasing of property requires such qualification, except to the
      extent that the failure to be so qualified or be in good standing would not
      be
      reasonably expected to have a Material Adverse Effect. The Company has all
      requisite corporate power and authority to own, lease and operate its properties
      and to carry on its business as currently conducted.

     

    3.2 Authorization.
      All
      corporate action on the part of the Company necessary for the authorization,
      execution and delivery of this Agreement and the Refinancing Note, the
      performance of all obligations of the Company hereunder and thereunder has
      been
      taken. This Agreement constitutes a legal, valid and binding agreement of the
      Company, enforceable against the Company in accordance with its terms, except
      for the effect of bankruptcy, insolvency, reorganization, moratorium and other
      similar laws relating to or affecting the rights of creditors generally and
      by
      equitable principles of general applicability. 

     

    3.3 Valid
      Issuance.
      When
      delivered to and paid for by the Investors in accordance with the terms of
      this
      Agreement, each Refinancing Note will be a valid and binding obligation of
      the
      Company, enforceable against the Company in accordance with its terms, except
      for the effect of bankruptcy, insolvency, reorganization, moratorium and other
      similar laws relating to or affecting the rights of creditors generally and
      by
      equitable principles of general applicability. Based in part upon the
      representations of the Investors in this Agreement, the Refinancing Notes will
      be issued in compliance with all applicable federal and state securities laws.
      

     

    3.4 Non-Contravention.
      The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby and thereby will not (a) conflict with, or
      result in any breach or violation of the Certificate of Incorporation or the
      Bylaws of the Company or (b) conflict with or constitute a breach of, or default
      (or an event which 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 of, or result in the creation of a Lien on any property or asset
      of
      the Company or any of its Subsidiaries pursuant to any contract, indenture,
      mortgage, loan agreement, note, lease or other instrument to which the Company
      or any of its Subsidiaries is a party or by which it or any of its properties
      may be bound, or (c) to the Company’s knowledge violate any law, administrative
      regulation or court decree, except in the case of clauses (b) and (c) for
      conflicts, breaches, defaults, violations or Liens which, either individually
      or
      in the aggregate, would not be reasonably expected to have a Material Adverse
      Effect. 

     

    
      
         

      

      
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    3.5 Governmental
      Consents.
      No
      consent, approval, order or authorization of, or registration, qualification,
      designation, declaration or filing with, any federal, state, or local
      governmental authority on the part of the Company is required in connection
      with
      the consummation of the transactions contemplated by this Agreement, except
      for
      such filings as may be required to be made pursuant to applicable federal or
      state securities laws, and except for such consents, approvals, authorizations
      or orders the absence of which, either individually or in the aggregate, would
      not be reasonably expected to have a Material Adverse Effect.

     

    3.6 Litigation.
      Except
      as disclosed in the Company’s Annual Report on Form 10-KSB filed with the
      Securities and Exchange Commission (“SEC”) for the year ended March 31, 2008
      (the “Form 10-KSB”), or any other filings by the Company with the SEC, there is
      no action, suit or proceeding before or by any court or governmental agency
      or
      body, domestic or foreign, now pending, or, to the knowledge of the Company,
      threatened, against or adversely affecting the Company that would, if determined
      adversely to the Company, be reasonably expected to have a Material Adverse
      Effect.

     

    3.7 SEC
      Filings and Financial Statements.
      The
      Company has previously made available to the Investors true and complete copies
      of the Form 10-KSB. The financial statements included in such reports are
      hereafter collectively referred to as the “Financial Statements.” Each of the
      balance sheets included in the Financial Statements (including any related
      notes
      and schedules) presents fairly the financial position of the Company as of
      its
      date, and the other financial statements included in the Financial Statements
      (including any related notes and schedules) present fairly the results of
      operations or other information included therein of the Company for the periods
      or as of the dates therein set forth (subject, in the case of interim financial
      statements, to changes resulting from audits and year-end adjustments), and
      each
      of the Financial Statements was prepared in accordance with generally accepted
      accounting principles consistently applied during the periods involved (except
      as otherwise stated therein and except, in the case of interim financial
      statements, to the extent they may not include footnotes or may be condensed
      or
      summary statements). None of the documents filed with the SEC and referred
      to in
      this Section 3.7
      contained, as of its date, any untrue statement of a material fact or omitted
      to
      state a material fact required to be stated therein or necessary in order to
      make the statements therein, in the light of the circumstances under which
      they
      were made, not misleading.

     

    3.8 No
      Material Adverse Change.
      Since
      June 30, 2008, except as otherwise disclosed by the Company in writing to the
      Investors or as set forth in the Company’s SEC filings, in each case on or prior
      to the date hereof, (a) there has been no change or development that
      individually or in the aggregate would reasonably be expected to have a Material
      Adverse Effect, (b) there have been no material transactions entered into by
      the
      Company, and (c) there has been no dividend or distribution of any kind
      declared, paid or made by the Company on any class of its capital
      stock.

     

    3.9 General
      Solicitation.
      Neither
      the Company nor any other person or entity authorized by the Company to act
      on
      its behalf has engaged in a general solicitation or general advertising (within
      the meaning of Regulation D of the Securities Act) of investors with respect
      to
      offers or sales of the Refinancing Notes.

     

    
      
         

      

      
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    3.10 Indemnification.
      The
      Company agrees and undertakes to indemnify and hold harmless each Investor
      against and from all costs, losses, damages, actions, proceedings, claims,
      demands, liabilities, charges and expenses of whatsoever nature and howsoever
      (hereinafter, “Claims”) that the Investors may incur, suffer or sustain or have
      imposed on each Investor by reason of, arising in any way out of or in relation
      to the Original Notes, the Put Agreement dated November 13, 2007 (the “Put
      Agreement), the Refinancing Notes and this Agreement, but excluding any Claims
      resulting from an Investor’s gross negligence or willful misconduct, and shall
      pay to such Investor immediately upon first demand of the Investor such Claims
      as the Investor certifies to have occurred together with reasonable proof of
      the
      amount thereof (any such certificate being conclusive and binding on the parties
      hereto).

     

    4. Representations
      and Warranties of the Investors.
      Each
      Investor hereby represents and warrants to, and agrees with, the Company
      that:

     

    4.1 [Reserved].
      

     

    4.2 Authorization.
      All
      action on the part of the Investors necessary for the authorization, execution
      and delivery of this Agreement and for the performance of all obligations of
      the
      Investors hereunder has been taken. This Agreement constitutes a legal, valid
      and binding agreement of the Investors, enforceable against each Investor in
      accordance with its terms, except for the effect of bankruptcy, insolvency,
      reorganization, moratorium and other similar laws relating to or affecting
      the
      rights of creditors generally and by equitable principles of general
      applicability. 

     

    4.3 Non-Contravention.
      The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby and thereby will not (a) conflict with, or
      result in any breach or violation of the Certificate of Incorporation or the
      Bylaws of the Investors or (b) conflict with or constitute a breach of, or
      default (or an event which 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 of, or result in the creation of a Lien on any
      property or asset of the Investors pursuant to any contract, indenture,
      mortgage, loan agreement, note, lease or other instrument to which the Investors
      or any of its Subsidiaries is a party or by which it or any of its properties
      may be bound, or (c) to the Investor’s knowledge violate any law, administrative
      regulation or court decree, except in the case of clauses (b) and (c) for
      conflicts, breaches, defaults, violations or Liens which, either individually
      or
      in the aggregate, would not be reasonably expected to materially and adversely
      impair or restrict the Investor’s ability to perform its obligations hereunder
      or to consummate the transactions contemplated hereby. 

     

    4.4 Purchase
      Entirely for Own Account.
      This
      Agreement is made with the Investors in reliance upon each Investor’s
      representation to the Company, which by each Investor’s execution of this
      Agreement the Investor hereby confirms, that each Refinancing Note will be
      acquired for investment for the Investor’s own account, not as a nominee or
      agent, and not with a view to the resale or distribution of any part thereof,
      and that the Investor has no present intention of selling, granting any
      participation in, or otherwise distributing the same. By executing this
      Agreement, each Investor further represents that the Investor does not have
      any
      contract, undertaking, agreement or arrangement with any person to sell,
      transfer or grant participations to such person or to any third person, with
      respect to the Refinancing Notes.

     

    
      
         

      

      
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    4.5 Restricted
      Securities.
      

     

    (a) Each
      Investor understands that each Refinancing Note, it is or may be purchasing
      are
      characterized as “restricted securities” under the federal securities laws
      inasmuch as they are being acquired from the Company in a transaction not
      involving a public offering and that under such laws and applicable regulations
      may be resold without registration under the Securities Act only in certain
      limited circumstances. In addition to the restrictions on transfer or assignment
      set forth in the Refinancing Notes, the Investor agrees that it will not sell
      or
      otherwise dispose of the Refinancing Note(s) unless such sale or other
      disposition has been registered or is exempt from registration under the
      Securities Act and has been registered or qualified or is exempt from
      registration or qualification under applicable state securities laws.

     

    (b) Legends.
      Each
      Investor understands and agrees that the Refinancing Note(s) may bear one or
      all
      of the following legend:

     

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

     

    4.6 Investor
      Status.
      Each
      Investor certifies and represents to the Company that, as of the date hereof
      and
      at the time the Investor acquires any Refinancing Note, the Investor is and
      will
      be an “accredited investor” as defined in Rule 501 of Regulation D promulgated
      under the Securities Act. Each Investor’s financial condition is such that it is
      able to bear the risk of holding the Refinancing Notes for an indefinite period
      of time and the risk of loss of its entire investment. Each Investor has been
      afforded the opportunity to ask questions of and receive answers from the
      management of the Company concerning this investment and is able to evaluate
      the
      risks and merits of its investment in the Company.

     

    5. Conditions
      to Closing.

     

    5.1 Conditions
      of the Investor’s Obligations at the Closing.
      The
      obligations of each Investor to purchase from the Company the Refinancing Notes
      and to consummate the transactions to be consummated at the Closing are subject
      to the fulfillment on or before the Closing of each of the following conditions,
      any of which may be waived in writing in whole or in part by the
      Investors:

     

    
      
         

      

      
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    (a) The
      representations and warranties of the Company contained herein shall be true
      and
      correct on and as of the Closing Date with the same force and effect as though
      made on and as of the Closing Date (it being understood and agreed that, in
      the
      case of any representation and warranty of the Company contained herein that
      is
      made as of a specific date, such representation and warranty need be true and
      correct only as of such specific date and it being further understood and agreed
      that, in the case of any representation and warranty of the Company contained
      herein that is not hereinabove qualified by application thereto of a materiality
      standard, such representation and warranty need be true and correct only in
      all
      material respects in order to satisfy as to such representation and warranty
      the
      condition precedent set forth in the foregoing provision of this Section
5.1(a)).

     

    (b) The
      Company shall have performed in all material respects all obligations,
      agreements, covenants and conditions herein required to be performed or observed
      by the Company on or prior to the Closing Date.

     

    (c) The
      Investors shall have received a certificate, dated the Closing Date, signed
      by
      an executive officer of the Company, certifying on behalf of the Company that
      the conditions specified in the foregoing Sections 5.1(a)
      and
(b)
      have
      been fulfilled.

     

    (d) No
      order
      enjoining or restraining the transactions contemplated by this Agreement shall
      be in effect and no action or proceeding before any federal or state court
      or
      governmental agency or other regulatory or administrative agency or
      instrumentality shall have been instituted or pending that challenges the
      acquisition of, or payment for, the Refinancing Note by the Investor or
      otherwise seeks to restrain or prohibit consummation of the transactions
      contemplated by this Agreement or seeking to impose any material limitations
      on
      any provisions of this Agreement.

     

    (e) The
      Company and each Investor has executed the Security Agreement and the Collateral
      Agency Agreement, in substantially the forms attached as Exhibit B
      and
Exhibit C
      hereto.

     

    5.2 Conditions
      of the Company’s Obligations at the Closing.
      The
      obligations of the Company to issue and sell to the Investors the Refinancing
      Notes and to consummate the transactions to be consummated at the Closing are
      subject to the fulfillment on or before the Closing of each of the following
      conditions by the Investors, any of which may be waived in writing in whole
      or
      in part by the Company:

     

    (a) The
      representations and warranties of each Investor contained herein shall be true
      and correct on and as of the Closing Date with the same force and effect as
      though made on and as of the Closing Date (it being understood and agreed that,
      in the case of any representation and warranty of the Investor contained herein
      that is made as of a specific date, such representation and warranty need be
      true and correct only as of such specific date and it being further understood
      and agreed that, in the case of any representation and warranty of the Investors
      contained herein that is not hereinabove qualified by application thereto of
      a
      materiality standard, such representation and warranty need be true and correct
      only in all material respects in order to satisfy as to such representation
      and
      warranty the condition precedent set forth in the foregoing provision of this
      Section 5.2(a)).

     

    
      
         

      

      
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    (b) The
      Investors shall have performed in all material respects all obligations,
      agreements, covenants and conditions herein required to be performed or observed
      by the Investors on or prior to the Closing Date.

     

    (c) The
      Company shall have received a certificate, dated the Closing Date, signed by
      each Investor, certifying that the conditions specified in the foregoing
      Sections 5.2(a)
      and
(b)
      have
      been fulfilled.

     

    (d) No
      order
      enjoining or restraining the transactions contemplated by this Agreement shall
      be in effect and no action or proceeding before any federal or state court
      or
      governmental agency or other regulatory or administrative agency or
      instrumentality shall have been instituted or pending that challenges the
      acquisition of, or payment for, the Refinancing Notes by each Investor or
      otherwise seeks to restrain or prohibit consummation of the transactions
      contemplated by this Agreement or seeking to impose any material limitations
      on
      any provisions of this Agreement.

     

    (e) The
      Company and each Investor has executed the Security Agreement and the Collateral
      Agency Agreement, in substantially the forms attached as Exhibit B
      and
Exhibit C
      hereto.

     

    (f) Each
      Investor shall have delivered to the Company the Purchase Price for the
      Refinancing Note specified in Section 2.1(a)
      by wire
      transfer in immediately available funds in accordance with the provisions of
      Section 2.2.

     

    6. Miscellaneous.

     

    6.1 Termination;
      Term of Agreement.

     

    (a) This
      Agreement may also be terminated by either party by written notice to the other
      party in the event that the Closing Date does not occur on or before five (5)
      business days from the date of this Agreement or such other date as the Company
      and the Investor shall mutually agree in writing.

     

    (b) Nothing
      herein shall relieve any party from liability for any breach
      hereof.

     

    6.2 Public
      Announcements.
      Except
      as required by applicable law or regulations, the Company and the Investors
      shall jointly approve any public announcements relating to the transactions
      described herein or the relationship between the parties. Each party agrees
      to
      cooperate with the other in the preparation of any governmental filing relating
      to the transactions contemplated hereby.

     

    
      
         

      

      
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    6.3 Successors
      and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective successors and assigns of the parties. Nothing
      in
      this Agreement, express or implied, is intended to confer upon any party other
      than the parties hereto or their respective successors and assigns any rights,
      remedies, obligations, or liabilities under or by reason of this Agreement,
      except as expressly provided in this Agreement. Except as provided in Section
      6.5,
      neither
      the Company nor the Investors shall assign this Agreement or any rights
      hereunder or delegate any duties hereunder without the prior written consent
      of
      the other (which consent may be withheld for any reason in the sole discretion
      of the party from whom consent is sought). The merger, consolidation,
      acquisition or sale of securities representing more than 50% of the voting
      power
      of a party to this agreement shall not be deemed an assignment requiring the
      consent of the other party. 

     

    6.4 Notices.
      Unless
      otherwise provided, any notice, request, demand or other communication required
      or permitted under this Agreement shall be given in writing and shall be deemed
      effectively given upon personal delivery to the party to be notified, or when
      sent by fax (with receipt confirmed), or overnight courier service, or upon
      deposit with the United States Post Office, by registered or certified mail,
      postage prepaid and addressed as follows (or at such other address as a party
      may designate by notice to the other):

     

    If
      to the
      Company:

     

    US
      Dataworks, Inc.

    1
      Sugar
      Creek Center Blvd., 5th
      Floor

    Sugar
      Land, TX 77478

    Attention:
      CEO

    Fax:
      (800) 447-8029

    

    with
      a
      copy to:

     

    Pillsbury
      Winthrop Shaw Pittman LLP

    2475
      Hanover Street

    Palo
      Alto, CA 94304

    Attention:
      Richard S. Bebb Esq.

    Fax:
      (650) 233-4545

     

    If
      to the
      Investors:

     

    1
      Sugar
      Creek Center Blvd., 5th
      Floor

    Sugar
      Land, TX 77478

    Attention:
      Charles E. Ramey and John L. Nicholson, M.D.

    Fax:
      (800) 447-8029

    

    6.5 Note
      Transfer Restrictions.
      The
      Investors agree that the Refinancing Note(s) may not be transferred or assigned
      by an Investor.

     

    6.6 Survival.
      The
      representations and warranties made by the Company and the Investors herein,
      except as otherwise expressly provided herein, shall terminate upon the delivery
      to each Investor of the Refinancing Notes, as applicable, being purchased and
      the payment therefor. 

     

    
      
         

      

      
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    6.7 Finders
      or Brokers.
      Each
      Investor represents that it has not engaged any investment banker, finder or
      broker, and neither is nor will be obligated for any finder’s fee or commission,
      in connection with the transactions contemplated hereby. The Company represents
      that it has not engaged any investment banker, finder or broker, and neither
      is
      nor will be obligated for any finder’s fee or commission, in connection with the
      transactions contemplated hereby. Each party agrees to indemnify and hold
      harmless the other from the liability for any fees, commissions and other
      payments (and the costs and expenses of defending against such liability or
      asserted liability) that may be owing as a result of such party’s breach of its
      representation made in this Section 6.7.

     

    6.8 Expenses.
      Each
      party hereto shall pay all of its own costs and expenses incurred in connection
      with the negotiation, preparation, execution, delivery and performance of this
      Agreement and the transactions contemplated herein, whether or not such
      transactions are consummated.

     

    6.9 Waivers.
      The
      observance of any term of this Agreement may be waived (either generally or
      in a
      particular instance and either retroactively or prospectively) only with the
      written consent of the party against whom such waiver is sought to be enforced.
      No waiver by either party of any default with respect to any provision,
      condition or requirement hereof shall be deemed to be a continuing waiver in
      the
      future thereof 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 accruing to it
      thereafter.

     

    6.10 Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable, invalid
      or
      void by a court of competent jurisdiction, such provision shall be excluded
      from
      this Agreement and the balance of this Agreement shall be interpreted as if
      such
      provision were so excluded and shall be enforceable in accordance with its
      terms.

     

    6.11 Specific
      Enforcement.
      The
      Company and each Investor acknowledges and agrees that if any of the provisions
      of this Agreement were not performed in accordance with their specific terms
      or
      were otherwise breached, irreparable damage would occur and it would be
      extremely impracticable and difficult to measure damages. Accordingly, in
      addition to any other rights and remedies to which the parties may be entitled
      by law or equity, the parties shall be entitled to an injunction or injunctions
      to prevent or cure breached of the provisions of this agreement and to enforce
      specifically the terms and provisions hereof, and the parties expressly waive
      (i) the defense that a remedy in damages will be adequate and (ii) any
      requirement, in an action for specific performance, for the posting of a
      bond.

     

    6.12 Entire
      Agreement; Amendments.

     

    (a) Except
      as
      otherwise provided herein, this Agreement contains the entire understanding
      of
      the parties with respect to the matters covered herein and supersedes all prior
      agreements and understandings, written or oral, between the parties relating
      to
      the subject matter hereof. 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (b) Any
      term
      of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with the written consent of the Company
      and the Investors. Any amendment or waiver effected in accordance with this
      paragraph shall be binding upon each holder of any securities purchased under
      this Agreement at the time outstanding, each future holder of all such
      securities, and the Company.

     

    6.13 Governing
      Law.
      This
      Agreement shall be governed by and construed under the laws of the State of
      New
      York (irrespective of its choice of law principles).

     

    6.14 Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

    6.15 Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this Agreement. Any
      reference in this Agreement to a statutory provision or rule or regulation
      promulgated thereunder shall be deemed to include any similar successor
      statutory provision or rule or regulation promulgated thereunder.

     

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

    

      
        	 	
                US
                  DATAWORKS, INC.

              
	 	 
	 	 
	 	
                By

              	
                /s/
                  Mario Villarreal

              
	 	
                Name

              	
                Mario
                  Villarreal

              
	 	
                Title

              	
                President
                  and COO

              

      

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
      	 	
              CHARLES
                E. RAMEY

            
	 	 
	 	 
	
              Principal
                Amount: $708,500.00

            	
              By

            	
              /s/
                Charles E. Ramey

            
	 	
              Name

            	
              Charles
                E. Ramey

            
	 	
              Title

            	
              CEO

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              JOHN
                L. NICHOLSON, M.D.

            
	 	 
	 	 
	
              Principal
                Amount: $2,995,000

            	
              By

            	
              /s/
                John L. Nicholson, M.D.

            
	 	
              Name

            	
              John
                L. Nicholson, M.D.

            
	 	
              Title

            	
                  

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      A

     

    Form
      of Refinancing Secured Note

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      B

     

    Security
      Agreement

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      C

    

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

     

     

    US
      DATAWORKS, INC.

     

    REFINANCING
      SECURED NOTE

    

      
        	
                Issuance
                  Date: August 13, 2008

              	
                Original
                  Principal Amount: U.S.
                  $_________

              

      

    

     

    FOR
      VALUE RECEIVED,
      US
      DATAWORKS, INC., a Nevada corporation (the “Company”)
      hereby
      promises to pay to __________ or registered assigns (“Holder”)
      the
      amount set out above as the Original Principal Amount (the “Principal”)
      when
      due, whether upon the Maturity Date (as defined below) and to pay interest
      (“Interest”)
      on any
      outstanding Principal at the applicable Interest Rate, from the date set out
      above as the Issuance Date (the “Issuance
      Date”)
      until
      the same becomes due and payable, whether upon an Interest Date (as defined
      below), the Maturity Date, pursuant to Section (3)(c) or otherwise. This
      Refinancing Secured Note (including all Refinancing Secured Notes issued in
      exchange, transfer or replacement hereof, this “Note”)
      is one
      of an issue of Refinancing Secured Notes issued pursuant to the Note Purchase
      Agreement dated August 13, 2008 (collectively, the “Notes”).
      Certain capitalized terms used herein are defined in
      Section 20.

     

    1. MATURITY.
      On the
      Maturity Date, the Company shall pay to the Holder an amount in cash
      representing all outstanding Principal, accrued and unpaid Interest. The
“Maturity
      Date”
shall
      be August 13, 2009, as may be extended at the option of the Holder in the
      event that, and for so long as, an Event of Default (as defined in
      Section 3(a)) shall have occurred and be continuing on the Maturity Date
      (as may be extended pursuant to this Section 1) or any event shall have
      occurred and be continuing on the Maturity Date (as may be extended pursuant
      to
      this Section 1) that with the passage of time and the failure to cure would
      result in an Event of Default. The Company may prepay any portion of the
      outstanding Principal, accrued and unpaid Interest, without
      penalty.

     

    2. INTEREST;
      INTEREST RATE.
      Interest on this Note shall commence accruing on the Issuance Date and shall
      be
      computed on the basis of a 360-day year comprised of twelve (12) thirty (30)
      day
      months and shall be payable in arrears monthly on October 15, November 15,
      December 15, January 15, February 15, March 15, April 15, May 15, June 15,
      July 15, August 15 and September 15 of each year (each, an “Interest
      Date”)
      with
      the first Interest Date being September 15, 2008. Interest shall be payable
      on each Interest Date, to the record holder of this Note on the applicable
      Interest Date, in cash.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    3. RIGHTS
      UPON EVENT OF DEFAULT.

     

    (a) Event
      of Default.
      Each of
      the following events shall constitute an “Event
      of Default”:

     

    (i) the
      Company’s failure to pay to the Holder any amount of Principal, , Interest, or
      other amounts when and as due under this Note or any other Transaction Document
      (as defined in the Note Purchase Agreement) or any other agreement, document,
      certificate or other instrument delivered in connection with the transactions
      contemplated hereby and thereby to which the Holder is a party;

     

    (ii) the
      Company or any of its Subsidiaries, pursuant to or within the meaning of
      Title 11, U.S. Code, or any similar Federal, foreign or state law for
      the relief of debtors (collectively, “Bankruptcy
      Law”),
      (A)
      commences a voluntary case, (B) consents to the entry of an order for relief
      against it in an involuntary case, (C) consents to the appointment of a
      receiver, trustee, assignee, liquidator or similar official (a “Custodian”),
      (D)
      makes a general assignment for the benefit of its creditors or (E) admits in
      writing that it is generally unable to pay its debts as they become due;
      or

     

    (iii) a
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that (A) is for relief against the Company or any of its Subsidiaries in an
      involuntary case, (B) appoints a Custodian of the Company or any of its
      Subsidiaries or (C) orders the liquidation of the Company or any of its
      Subsidiaries.

     

    (b) In
      the
      event an Event of Default occurs under Section 3(a)(i), the Interest shall
      be
      increased to eighteen percent (18.0%) per annum. In the event that such Event
      of
      Default is subsequently cured, the adjustment referred to in the preceding
      sentence shall cease to be effective as of the date of such cure; provided
      that
      the Interest as calculated and unpaid at such increased rate during the
      continuance of such Event of Default shall continue to apply to the extent
      relating to the days after the occurrence of such Event of Default through
      and
      including the date of cure of such Event of Default.

     

    (c) In
      the
      event an Event of Default occurs under Sections 3(a)(ii) and 3(a)(iii), the
      Company shall within four (4) Business Days deliver written notice thereof
      via
      facsimile and overnight courier ( an “Event
      of Default Notice”)
      to the
      Holder. At any time after the earlier of the Holder’s receipt of an Event of
      Default Notice and the Holder becoming aware of an Event of Default, the
      Required Holders may require the Company to redeem all or any portion of this
      Note by delivering written notice thereof (the “Event
      of Default Redemption Notice”)
      to the
      Company, which Event of Default Redemption Notice shall indicate the outstanding
      principal and accrued Interest (including any increased interest pursuant to
      Section 3(b)above) (the “Redemption
      Amount”)
      of
      this Note the Required Holders are electing to require the Company to redeem.
      Each portion of this Note subject to redemption by the Company pursuant to
      this
      Section 3(c) shall be redeemed by the Company at the Redemption Amount. To
      the
      extent redemptions required by this Section 3(c) are deemed or determined by
      a
      court of competent jurisdiction to be prepayments of the Note by the Company,
      such redemptions shall be deemed to be voluntary prepayments. The parties hereto
      agree that in the event of the Company’s redemption of any portion of the Note
      under this Section 3(c), the Holder’s damages would be uncertain and difficult
      to estimate because of the parties’ inability to predict future interest rates
      and the uncertainty of the availability of a suitable substitute investment
      opportunity for the Holder. 

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    4. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Articles of Incorporation, Bylaws or through any reorganization, transfer
      of
      assets, consolidation, merger, scheme of arrangement, dissolution, issue or
      sale
      of securities, or any other voluntary action, avoid or seek to avoid the
      observance or performance of any of the terms of this Note, and will at all
      times in good faith carry out all of the provisions of this Note and take all
      action as may be required to protect the rights of the Holder of this
      Note.

     

    5. SECURITY.
      This
      Note is secured to the extent and in the manner set forth in the Security
      Agreement and Collateral Agency Agreement (as defined in the Note Purchase
      Agreement). 

     

    6. VOTING
      RIGHTS.
      The
      Holder shall have no voting rights as the holder of this Note, except as
      required by law, including but not limited to the General Corporation Law of
      the
      State of Nevada, and as expressly provided in this Note. 

     

    7. COVENANTS.

     

    (a) Rank.
      All
      payments due under this Note shall rank senior to all Permitted Indebtedness
      of
      the Company and its Subsidiaries under clause (ii) of the definition of
“Permitted Indebtedness” in Section 20(h).

     

    (b) Indebtedness.
      So long
      as this Note is outstanding, the Company shall not, and the Company shall not
      permit any of its Subsidiaries to, directly or indirectly, incur or guarantee,
      assume or suffer to exist any Indebtedness, other than (i) the Indebtedness
      evidenced by this Note and (ii) Permitted Indebtedness.

     

    (c) Existence
      of Liens.
      So long
      as this Note is outstanding, the Company shall not, and the Company shall not
      permit any of its Subsidiaries to, directly or indirectly, allow or suffer
      to
      exist any mortgage, lien, pledge, charge, security interest or other encumbrance
      upon or in any property or assets (including accounts and contract rights)
      owned
      by the Company or any of its Subsidiaries (collectively, “Liens”)
      other
      than Permitted Liens.

     

    (d) Transactions
      with Affiliates.
      The
      Company shall not, nor shall it permit any of its Subsidiaries to, enter into,
      renew, extend or be a party to, any transaction or series of related
      transactions (including, without limitation, the purchase, sale, lease, transfer
      or exchange of property or assets of any kind or the rendering of services
      of
      any kind) with any Affiliate, except in the ordinary course of business in
      a
      manner and to an extent consistent with past practice and necessary or desirable
      for the prudent operation of its business, for fair consideration and on terms
      no less favorable to it or its Subsidiaries than would be obtainable in a
      comparable arm’s length transaction with a Person that is not an Affiliate
      thereof.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (e) Change
      in Nature of Business.
      The
      Company shall not make, or permit any of its Subsidiaries to make, any change
      in
      the nature of its business as described in the Company’s most recent annual
      report filed on Form 10-KSB with the SEC. The Company shall not modify its
      corporate structure or purpose.

     

    (f) Preservation
      of Existence, Etc.
      The
      Company shall maintain and preserve, and cause each of its Subsidiaries to
      maintain and preserve, its existence, rights and privileges, and become or
      remain, and cause each of its Subsidiaries to become or remain, duly qualified
      and in good standing in each jurisdiction in which the character of the
      properties owned or leased by it or in which the transaction of its business
      makes such qualification necessary.

     

    (g) Maintenance
      of Properties, Etc.
      The
      Company shall maintain and preserve, and cause each of its Subsidiaries to
      maintain and preserve, all of its properties which are necessary or useful
      in
      the proper conduct of its business in good working order and condition, ordinary
      wear and tear excepted, and comply, and cause each of its Subsidiaries to
      comply, at all times with the provisions of all leases to which it is a party
      as
      lessee or under which it occupies property, so as to prevent any loss or
      forfeiture thereof or thereunder.

     

    (h) Maintenance
      of Insurance.
      The
      Company shall maintain, and cause each of its Subsidiaries to maintain,
      insurance with responsible and reputable insurance companies or associations
      (including, without limitation, comprehensive general liability, hazard, rent
      and business interruption insurance) with respect to its properties (including
      all real properties leased or owned by it) and business, in such amounts and
      covering such risks as is required by any governmental authority having
      jurisdiction with respect thereto or as is carried generally in accordance
      with
      sound business practice by companies in similar businesses similarly situated
      and in any event in amount, adequacy and scope reasonably satisfactory to the
      Collateral Agent. All policies covering the Collateral are to be made payable
      to
      the Collateral Agent for the benefit of the Holders, as its interests may
      appear, in case of loss, under a standard non-contributory “lender” or “secured
      party” clause and are to contain such other provisions as the Collateral Agent
      may require to fully protect the Holders’ interest in the Collateral and to any
      payments to be made under such policies. All certificates of insurance are
      to be
      delivered to the Collateral Agent and the policies are to be premium prepaid,
      with the loss payable and additional insured endorsement in favor of the
      Collateral Agent and such other Persons as the Collateral Agent may designate
      from time to time, and shall provide for not less than 30 days’ prior written
      notice to the Collateral Agent of the exercise of any right of cancellation.
      If
      the Company or any of its Subsidiaries fails to maintain such insurance, the
      Collateral Agent may arrange for such insurance, but at the Company’s expense
      and without any responsibility on the Collateral Agent’s part for obtaining the
      insurance, the solvency of the insurance companies, the adequacy of the
      coverage, or the collection of claims. Upon the occurrence and during the
      continuance of an Event of Default, the Collateral Agent shall have the sole
      right, in the name of the Holders, the Company and its Subsidiaries, to file
      claims under any insurance policies, to receive, receipt and give acquittance
      for any payments that may be payable thereunder, and to execute any and all
      endorsements, receipts, releases, assignments, reassignments or other documents
      that may be necessary to effect the collection, compromise or settlement of
      any
      claims under any such insurance policies.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (i) Change
      in Collateral; Collateral Records.
      The
      Company shall (i) give the Collateral Agent not less than 30 days’ prior written
      notice of any change in the location of any Collateral (as defined in the
      Security Documents), (ii) advise the Collateral Agent promptly, in sufficient
      detail, of any material adverse change relating to the type, quantity or quality
      of the Collateral or the Lien granted thereon and (iii) execute and deliver,
      and
      cause each of its Subsidiaries to execute and deliver, to the Collateral Agent
      for the benefit of the Holders of the Senior Bonds from time to time, solely
      for
      the Collateral Agent’s convenience in maintaining a record of Collateral, such
      written statements and schedules as the Collateral Agent may reasonably require,
      designating, identifying or describing the Collateral.

     

    8. VOTE
      TO ISSUE, OR CHANGE THE TERMS OF, NOTES.
      The
      affirmative vote at a meeting duly called for such purpose or the written
      consent without a meeting of the Required Holders shall be required for any
      change or amendment to this Note. No consideration shall be offered or paid
      to
      any holder of Notes to amend or consent to a waiver or modification of the
      Notes
      unless the same consideration also is offered to all of the holders of
      Notes.

     

    9. TRANSFER.
      This
      Note may not be offered, sold, assigned or transferred by the Holder without
      the
      prior written consent of the Company.

     

    10. REISSUANCE
      OF THIS NOTE.

     

    (a) Transfer.
      If this
      Note is to be transferred, the Holder shall surrender this Note to the Company,
      whereupon the Company will forthwith issue and deliver upon the order of the
      Holder a new Note (in accordance with Section 10(d)), registered as the
      Holder may request, representing the outstanding Principal being transferred
      by
      the Holder and, if less then the entire outstanding Principal is being
      transferred, a new Note (in accordance with Section 10(d)) to the Holder
      representing the outstanding Principal not being transferred. The Holder and
      any
      assignee, by acceptance of this Note, acknowledge and agree that, by reason
      of
      the provisions of this Section 10(a), the outstanding Principal represented
      by this Note may be less than the Principal stated on the face of this
      Note.

     

    (b) Lost,
      Stolen or Mutilated Note.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Note, and, in the case of loss,
      theft or destruction, of any indemnification undertaking by the Holder to the
      Company in customary form and, in the case of mutilation, upon surrender and
      cancellation of this Note, the Company shall execute and deliver to the Holder
      a
      new Note (in accordance with Section 10(d)) representing the outstanding
      Principal.

     

    (c) Note
      Exchangeable for Different Denominations.
      This
      Note is exchangeable, upon the surrender hereof by the Holder at the principal
      office of the Company, for a new Note or Notes (in accordance with
      Section 10(d) and in principal amounts of at least $100,000) representing
      in the aggregate the outstanding Principal of this Note, and each such new
      Note
      will represent such portion of such outstanding Principal as is designated
      by
      the Holder at the time of such surrender.

     

    (d) Issuance
      of New Notes.
      Whenever the Company is required to issue a new Note pursuant to the terms
      of
      this Note, such new Note (i) shall be of like tenor with this Note,
      (ii) shall represent, as indicated on the face of such new Note, the
      Principal remaining outstanding (or in the case of a new Note being issued
      pursuant to Section 10(a) or Section 10(c), the Principal designated
      by the Holder which, when added to the principal represented by the other new
      Notes issued in connection with such issuance, does not exceed the Principal
      remaining outstanding under this Note immediately prior to such issuance of
      new
      Notes), (iii) shall have an issuance date, as indicated on the face of such
      new Note, which is the same as the Issuance Date of this Note, (iv) shall have
      the same rights and conditions as this Note, and (v) shall represent
      accrued and unpaid Interest on the Principal and Interest of this Note, if
      any,
      from the Issuance Date.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    11. REMEDIES,
      CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
      RELIEF.
      The
      remedies provided in this Note shall be cumulative and in addition to all other
      remedies available under this Note and any of the other Transaction Documents
      at
      law or in equity (including a decree of specific performance and/or other
      injunctive relief), and nothing herein shall limit the Required Holders’ right
      to pursue actual and consequential damages for any failure by the Company to
      comply with the terms of this Note. Amounts set forth or provided for herein
      with respect to payments shall be the amounts to be received by the Holder
      and
      shall not, except as expressly provided herein, be subject to any other
      obligation of the Company (or the performance thereof). The Company acknowledges
      that a breach by it of its obligations hereunder will cause irreparable harm
      to
      the Holder and that the remedy at law for any such breach may be inadequate.
      The
      Company therefore agrees that, in the event of any such breach or threatened
      breach, the Required Holders shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach, without the
      necessity of showing economic loss and without any bond or other security being
      required.

     

    12. PAYMENT
      OF COLLECTION. ENFORCEMENT AND OTHER COSTS.
      If (a)
      this Note is placed in the hands of an attorney for collection or enforcement
      or
      is collected or enforced through any legal proceeding or the Required Holders
      otherwise takes action to collect amounts due under this Note or to enforce
      the
      provisions of this Note or (b) there occurs any bankruptcy, reorganization,
      receivership of the Company or other proceedings affecting Company creditors’
rights and involving a claim under this Note, then the Company shall pay the
      costs incurred by the Required Holders for such collection, enforcement or
      action or in connection with such bankruptcy, reorganization, receivership
      or
      other proceeding, including, but not limited to, attorneys’ fees and
      disbursements.

     

    13. CONSTRUCTION;
      HEADINGS.
      This
      Note shall be deemed to be jointly drafted by the Company and all the Purchasers
      and shall not be construed against any person as the drafter hereof. The
      headings of this Note are for convenience of reference and shall not form part
      of, or affect the interpretation of, this Note.

     

    14. FAILURE
      OR INDULGENCE NOT WAIVER.
      No
      failure or delay on the part of the Required Holders in the exercise of any
      power, right or privilege hereunder shall operate as a waiver thereof, nor
      shall
      any single or partial exercise of any such power, right or privilege preclude
      other or further exercise thereof or of any other right, power or
      privilege.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    15. NOTICES;
      PAYMENTS.

     

    (a) Notices.
      Whenever notice is required to be given under this Note, unless otherwise
      provided herein, such notice shall be given in accordance with Section 6.4
      of the Note Purchase Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Note, including in
      reasonable detail a description of such action and the reason therefore.

     

    (b) Payments.
      Whenever any payment of cash is to be made by the Company to any Person pursuant
      to this Note, such payment shall be made in lawful money of the United States
      of
      America by a check drawn on the account of the Company and sent via overnight
      courier service to such Person at such address as previously provided to the
      Company in writing (which address, in the case of each of the Purchasers, shall
      initially be as set forth on the Schedule of Buyers attached to the Note
      Purchase Agreement); provided that the Holder may elect to receive a payment
      of
      cash via wire transfer of immediately available funds by providing the Company
      with prior written notice setting out such request and the Holder’s wire
      transfer instructions. Whenever any amount expressed to be due by the terms
      of
      this Note is due on any day which is not a Business Day, the same shall instead
      be due on the next succeeding day which is a Business Day and, in the case
      of
      any Interest Date which is not the date on which this Note is paid in full,
      the
      extension of the due date thereof shall not be taken into account for purposes
      of determining the amount of Interest due on such date. 

     

    16. CANCELLATION.
      After
      all Principal, accrued Interest and other amounts at any time owed on this
      Note
      has been paid in full, this Note shall automatically be deemed canceled, shall
      be surrendered to the Company for cancellation and shall not be
      reissued.

     

    17. WAIVER
      OF NOTICE.
      To the
      extent permitted by law, the Company hereby waives demand, notice, protest
      and
      all other demands and notices in connection with the delivery, acceptance,
      performance, default or enforcement of this Note and the Note Purchase
      Agreement.

     

    18. GOVERNING
      LAW, JURISDICTION; JURY TRIAL.
      This
      Note shall be construed and enforced in accordance with, and all questions
      concerning the construction, validity, interpretation and performance of this
      Note shall be governed by, the internal laws of the State of New York, without
      giving effect to any choice of law or conflict of law provision or rule (whether
      of the State of New York or any other jurisdictions) that would cause the
      application of the laws of any jurisdictions other than the State of New York.
      The Company hereby irrevocably submits to the exclusive jurisdiction of the
      state and federal courts sitting in The City of New York, Borough of Manhattan,
      for the adjudication of any dispute hereunder or in connection herewith or
      with
      any transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any manner
      permitted by law. The Company hereby irrevocably waives personal service of
      process and consents to process being served in any such suit, action or
      proceeding by mailing a copy thereof to such party at the address as provided
      in
      Section 15 hereof and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall
      be deemed or operate to preclude the Holder from bringing suit or taking other
      legal action against the Company in any other jurisdiction to collect on the
      Company’s obligations to the Holder, to realize on any collateral or any other
      security for such obligations, or to enforce a judgment or other court ruling
      in
      favor of the Holder. THE
      COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
      HEREBY.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    19. SEVERABILITY.
      If any
      provision of this Note is prohibited by law or otherwise determined to be
      invalid or unenforceable by a court of competent jurisdiction, the provision
      that would otherwise be prohibited, invalid or unenforceable shall be deemed
      amended to apply to the broadest extent that it would be valid and enforceable,
      and the invalidity or unenforceability of such provision shall not affect the
      validity of the remaining provisions of this Note so long as this Note as so
      modified continues to express, without material change, the original intentions
      of the parties as to the subject matter hereof and the prohibited nature,
      invalidity or unenforceability of the provision(s) in question does not
      substantially impair the respective expectations or reciprocal obligations
      of
      the parties or the practical realization of the benefits that would otherwise
      be
      conferred upon the parties. The parties will endeavor in good faith negotiations
      to replace the prohibited, invalid or unenforceable provision(s) with a valid
      provision(s), the effect of which comes as close as possible to that of the
      prohibited, invalid or unenforceable provision(s).

     

    20. CERTAIN
      DEFINITIONS.
      For
      purposes of this Note, the following terms shall have the following
      meanings:

     

    (a) “Business
      Day”
means
      any day other than Saturday, Sunday or other day on which commercial banks
      in
      The City of New York are authorized or required by law to remain
      closed.

     

    (b) “Closing
      Date”
shall
      have the meaning set forth in the Note Purchase Agreement, which corresponds
      to
      the date this Note and the Other Notes were initially issued by the Company
      pursuant to the terms of the Note Purchase Agreement.

     

    (c) “Collateral
      Agent”
has
      the
      meaning ascribed to such term in the Note Purchase Agreement, and shall include
      all successors thereto.

     

    (d) “Contingent
      Obligation”
means,
      as to any Person, any direct or indirect liability, contingent or otherwise,
      of
      that Person with respect to any Indebtedness, lease, dividend or other
      obligation of another Person if the primary purpose or intent of the Person
      incurring such liability, or the primary effect thereof, is to provide assurance
      to the obligee of such liability that such liability will be paid or discharged,
      or that any agreements relating thereto will be complied with, or that the
      holders of such liability will be protected (in whole or in part) against loss
      with respect thereto.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (e) “GAAP”
means
      United States generally accepted accounting principles, consistently
      applied.

     

    (f) “Indebtedness”
of
      any
      Person means, without duplication (i) all indebtedness for borrowed money,
      (ii)
      all obligations issued, undertaken or assumed as the deferred purchase price
      of
      property or services, including (without limitation) “capital leases” in
      accordance with GAAP (other than trade payables entered into in the ordinary
      course of business), (iii) all reimbursement or payment obligations with respect
      to letters of credit, surety bonds and other similar instruments, (iv) all
      obligations evidenced by notes, bonds, debentures or similar instruments,
      including obligations so evidenced incurred in connection with the acquisition
      of property, assets or businesses, (v) all indebtedness created or arising
      under
      any conditional sale or other title retention agreement, or incurred as
      financing, in either case with respect to any property or assets acquired with
      the proceeds of such indebtedness (even though the rights and remedies of the
      seller or bank under such agreement in the event of default are limited to
      repossession or sale of such property), (vi) all monetary obligations under
      any
      leasing or similar arrangement which, in connection with GAAP, consistently
      applied for the periods covered thereby, is classified as a capital lease,
      (vii)
      all indebtedness referred to in clauses (i) through (vi) above secured by (or
      for which the holder of such Indebtedness has an existing right, contingent
      or
      otherwise, to be secured by) any mortgage, lien, pledge, charge, security
      interest or other encumbrance upon or in any property or assets (including
      accounts and contract rights) owned by any Person, even though the Person which
      owns such assets or property has not assumed or become liable for the payment
      of
      such indebtedness, and (viii) all Contingent Obligations in respect of
      indebtedness or obligations of others of the kinds referred to in clauses (i)
      through (vii) above.

     

    (g) “Interest
      Rate”
means
      twelve percent (12.0%). The Interest Rate shall be re-calculated as of the
      first
      day of each month or, initially, as of the Issuance Date.

     

    (h) “Permitted
      Indebtedness”
means
      (i) Indebtedness evidenced by this Note and the Other Notes, (ii) other
      unsecured Indebtedness incurred by the Company and/or any of its Subsidiaries
      that is made expressly subordinate in right of payment to the Indebtedness
      evidenced by this Note, as reflected in a written agreement acceptable to the
      Holder and approved by the Holder in writing, and which Indebtedness does not
      provide at any time for (A) the payment, prepayment, repayment, repurchase
      or
      defeasance, directly or indirectly, of any principal or premium, if any, thereon
      until ninety-one (91) days after the Maturity Date or later and (B) total
      interest and fees at a rate in excess of the maximum applicable Interest Rate
      hereunder, (iii) Indebtedness secured by Permitted Liens, (iv) Indebtedness
      to
      trade creditors incurred in the ordinary course of business and not outstanding
      for more than 120 days after the date such payable was created, and (v)
      extensions, refinancings and renewals of any items of Permitted Indebtedness,
      provided that the principal amount is not increased or the terms modified to
      impose more burdensome terms upon the Company or its Subsidiary, as the case
      may
      be.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (i) “Permitted
      Liens”
means
      (i) any Lien for taxes not yet due or delinquent or being contested in good
      faith by appropriate proceedings for which adequate reserves have been
      established in accordance with GAAP, (ii) any statutory Lien arising in the
      ordinary course of business by operation of law with respect to a liability
      that
      is not yet due or delinquent, (iii) any Lien created by operation of law, such
      as materialmen’s liens, mechanics’ liens and other similar liens, arising in the
      ordinary course of business with respect to a liability that is not yet due
      or
      delinquent or that are being contested in good faith by appropriate proceedings,
      (iv) Liens (A) upon or in any equipment (as defined in the Security Agreement)
      acquired or held by the Company or any of its Subsidiaries to secure the
      purchase price of such equipment or Indebtedness incurred solely for the purpose
      of financing the acquisition or lease of such equipment, or (B) existing on
      such
      equipment at the time of its acquisition, provided that the Lien is confined
      solely to the property so acquired and improvements thereon, and the proceeds
      of
      such equipment, (v) Liens incurred in connection with the extension, renewal
      or
      refinancing of the Indebtedness secured by Liens of the type described in
      clauses (i) and (iv) above, provided that any extension, renewal or replacement
      Lien shall be limited to the property encumbered by the existing Lien and the
      principal amount of the Indebtedness being extended, renewed or refinanced
      does
      not increase, (vi) Liens securing the obligations under the Notes; (vii) leases
      or subleases and licenses and sublicenses granted to others in the ordinary
      course of the Company’s business, not interfering in any material respect with
      the business of the Company and its Subsidiaries taken as a whole, (ix) Liens
      in
      favor of customs and revenue authorities arising as a matter of law to secure
      payments of custom duties in connection with the importation of goods and (viii)
      Liens arising from judgments, decrees or attachments.

     

    (j) “Person”
means
      an individual, a limited liability company, a partnership, a joint venture,
      a
      corporation, a trust, an unincorporated organization, any other entity and
      a
      government or any department or agency thereof.

     

    (k) “Required
      Holders”
means
      the holders of Notes representing 100% of the aggregate principal amount of
      the
      Notes then outstanding.

     

    (l) “SEC”
means
      the United States Securities and Exchange Commission.

     

    (m) “Note
      Purchase Agreement”
means
      that certain Note Purchase Agreement dated as of the Subscription Date by and
      among the Company and the initial holders of the Notes pursuant to which the
      Company issued the Notes.

     

    (n) “Security
      Documents”
has
      the
      meaning ascribed to such term in the Note Purchase Agreement, and shall include
      all successors thereto.

     

    (o) “Subscription
      Date”
means
      August 13, 2008.

     

    (p) “Subsidiary”
means
      any entity in which the Company, directly or indirectly, owns any of the capital
      stock or holds an equity or similar interest.

     

    21. DISCLOSURE.
      Upon
      receipt or delivery by the Company of any notice in accordance with the terms
      of
      this Note, unless the Company has in good faith determined that the matters
      relating to such notice do not constitute material, nonpublic information
      relating to the Company or its Subsidiaries, the Company shall within four
      (4)
      Business Daya after any such receipt or delivery publicly disclose such
      material, nonpublic information on a Current Report on Form 8-K or otherwise.
      In
      the event that the Company believes that a notice contains material, nonpublic
      information, relating to the Company or its Subsidiaries, the Company shall
      indicate to the Holder contemporaneously with delivery of such notice, and
      in
      the absence of any such indication, the Holder shall be allowed to presume
      that
      all matters relating to such notice do not constitute material, nonpublic
      information relating to the Company or its Subsidiaries.

     

    [Signature
      Page Follows]

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Note to be duly executed as of
      the
      Issuance Date set out above.

     

    
      	
              US
                DATAWORKS, INC.

            
	 	 
	 	 
	
              By

            	
               

            
	 	 
	
              Name

            	
               

            
	 	 
	
              Title

            	
               

            

    

    
      
         

      

      
        11

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