Document:

EXECUTIVE
      EMPLOYMENT AGREEMENT

    

    This
      EXECUTIVE
      EMPLOYMENT AGREEMENT
      ("Agreement") is made and entered into as of this 4th day of September, 2007,
      by
      and between T Bancshares, Inc., a Texas corporation with its principal office
      located at 16000 Dallas Parkway, Suite 125, Dallas, Texas (hereafter the
      "Company"), and Patrick Howard, a resident of Texas (hereafter the
      "Executive").

    

    WHEREAS,
      the
      Company has chartered a national banking association named T Bank (the “Bank”),
      and

    

    WHEREAS,
      the
      Executive has considerable experience, expertise and training in management
      related to banking and services offered by the Company; and

    

    WHEREAS,
      the
      Company desires and intends to cause the Executive to be employed as Executive
      Vice President and Chief Operating Officer of the Bank pursuant to the terms
      and
      conditions set forth in this Agreement; and

    

    WHEREAS,
      both
      the Company and the Executive have read and understood the terms and provisions
      set forth in this Agreement, and have been afforded a reasonable opportunity
      to
      review this Agreement with their respective legal counsel.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises and covenants set forth in this Agreement,
      the Executive and the Company agree as follows:

    

    A.
      DURATION

    

    1.  This
      Agreement shall continue in full force and effect for a period beginning on
      the
      date (the “Effective Date”) the Executive begins his employment with the Bank
      and, subject to paragraph two (2) below, will expire and terminate by its own
      terms one (1) year after the Effective Date (“Expiration Date”).

    

    2.  Both
      the
      Bank and the Executive acknowledge and agree that the parties may agree to
      continue the employment relationship upon such terms as they may mutually agree.
      This Agreement shall automatically renew at the end of each one-year term for
      an
      additional one (1) year term unless either party elects to terminate this
      Agreement by sending written notice of non-renewal at least thirty (30) days
      prior to the Expiration Date. Both parties acknowledge and agree that, in the
      event this Agreement does not renew, the employment of the Executive shall
      automatically terminate on the Expiration Date without any additional liability
      or obligation on the part of either party, except for the provisions of
      Paragraphs 12, 13, [16] and 18 which will survive the termination of this
      Agreement.

    

    
      
         

      

      
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    B.
      COMPENSATION

    

    3.  All
      payments of salary and other compensation to the Executive shall be payable
      in
      accordance with the Bank's ordinary payroll and other policies and procedures.
      

    

    a.  During
      the first year following the Effective Date, the Bank agrees to compensate
      the
      Executive on a salary basis of $170,000 annually, payable semi-monthly in equal
      amounts.

     

    b.  Subsequent
      to the first year following the original Effective Date, for the remaining
      term
      of this Agreement the Executive's annual salary shall be reviewed by the Bank's
      Board of Directors or a delegated committee thereof as of the anniversary of
      the
      original Effective Date of each year of the remaining term of this Agreement
      and
      increased as a result of such review and to provide reasonable cost of living
      adjustments, all in the discretion of the Board of Directors, and when
      consistent with safe and sound banking practices.

     

    c.  During
      the term of this Agreement, the Executive shall be paid a bonus of fifteen
      percent (15%) of the base annual salary if the Bank has an overall CAMEL rating
      by the Bank’s governmental regulators of two (2) or better during that fiscal
      year. Further, during the term of this Agreement, the Executive shall be paid
      a
      bonus of fifteen percent (15%) of the base annual salary during any fiscal
      year
      the Bank has a return on average assets of one percent (1%) or higher (net
      of
      any such bonuses referenced in this section). Executive shall also be entitled
      to participate in any benefit programs (other than bonus plans) applicable
      to
      all employees of the Bank or to executive officers of the Bank in accordance
      with Bank policy and the provisions of said benefit programs.

     

    d.  The
      Company shall grant to the Executive a number of options exercisable within
      ten
      (10) years from the date of the grant of such options. Such options, upon the
      grant of the options, will enable the Executive to purchase 25,000 shares of
      the
      Company’s common stock. The exercise price for the stock options to be received
      by the Executive shall be the opening per share price as quoted on the over
      the
      counter bulletin board on the effective date.

     

    4.  The
      Bank
      and the Executive acknowledge and agree that the Bank shall provide the
      Executive with a relocation/signing benefit of $40,000, (the “Relocation
      Benefit”) to be payable at Executive’s discretion within nine (9) months
      following the Effective Date. Executive, at his discretion, may submit actual
      relocation expenses to be reimbursed by the Bank including, but not necessarily
      limited to, commissions and closing costs associated with the sale or
      acquisition of Executive’s residence(s), moving expenses, travel expenses
      incurred by Executive or his family in connection with relocating, etc.
      Executive shall provide receipts or other evidence of actual expenses incurred
      for re-imbursement, which re-imbursements shall be made without tax withholdings
      and shall not be recorded by Bank as salary expense to the Executive. In the
      event such expenses exceed the Relocation Benefit, Bank shall have no obligation
      to pay such excess. Executive may elect to receive a cash payment of all or
      part
      of the benefit, less any amounts previously paid for expense re-imbursement,
      as
      a cash bonus subject to applicable taxes. The Bank and the Executive further
      agree that the Bank will pay for reasonable commuting expenses required based
      on
      timing between the Effective Date and actual relocation. The Bank and the
      Executive further acknowledge and agree that the Bank shall provide the
      Executive a cellular phone and laptop computer for use in the performance of
      his
      duties and obligations under this Agreement. The Bank shall also reimburse
      the
      Executive for all reasonable expenses, including, but not limited to, travel
      expenses, lodging expenses, and meals and entertainment expenses, that the
      Executive may incur in the performance of his duties and obligations under
      this
      Agreement; provided, however, that the Executive shall be required to submit
      receipts or other acceptable documentation to the Cashier or other appropriate
      bank officer to verify such expenses prior to any reimbursements.

    

    
      
         

      

      
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    5.  The
      Bank
      and the Executive acknowledge and agree that, subject to the provisions of
      Paragraph 7 of this Agreement, the Executive shall be entitled to receive as
      partial consideration for this Agreement, and the Bank shall be obligated to
      provide employee and dependent health insurance, dental insurance, sick leave
      and vacation, and any additional benefits provided to all Bank employees all
      in
      accordance with the Bank's employment policies and plans.

    

    6.  The
      Bank
      and the Executive acknowledge that, upon completion of the Executive’s first
      year of employment following the Effective Date, the Executive's compensation
      will be subject to an annual review and adjustment by the Board of Directors
      of
      the Bank in accordance with the terms of this Agreement, but in no event will
      the Executive's salary and bonuses be less than the amounts set forth in
      Paragraphs 3 and 4 at any time during the employment of the Executive
      pursuant to this Agreement.

    

    7.  The
      Executive acknowledges and agrees that any employee benefits provided to the
      Executive by the Bank incident to the Executive's employment are governed by
      the
      applicable plan documents, summary plan descriptions or employment policies,
      and
      may be modified, suspended or revoked at any time, in accordance with the terms
      and provisions of the applicable documents. 

    

    C.
      RESPONSIBILITIES

    

    8.  The
      Executive acknowledges and agrees that he shall be employed as Executive Vice
      President and Chief Operating Officer of the Bank. The Executive covenants
      and
      agrees that he will faithfully devote his best efforts and his primary focus
      to
      his positions with the Bank. 

    

    
      
         

      

      
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    9.  The
      Executive acknowledges and agrees that the duties and responsibilities of the
      Executive required by his position as Executive Vice President and Chief
      Operating Officer of the Bank are wholly within the discretion of its Board
      of
      Directors, and may be modified, or new duties and responsibilities imposed
      by
      the Bank's Board of Directors, at any time, without the approval or consent
      of
      the Executive. However, these new duties and responsibilities may not constitute
      immoral or unlawful acts. In addition, the new duties and responsibilities
      must
      be consistent with the Executive's role as Executive Vice President or Chief
      Operating Officer of a financial institution.

    

    10.  The
      Executive acknowledges and agrees that, during the term of this Agreement,
      he
      has a fiduciary duty of loyalty to the Bank, and that he will not engage in
      any
      activity during the term of this Agreement, which will or could, in any
      significant way, harm the business, business interests, or reputation of the
      Bank or the reputation of the Board of Directors.

    

    11.  The
      Executive acknowledges and agrees that he will not directly or indirectly engage
      in competition with the Bank at any time during the existence of the employment
      relationship between the Bank and the Executive, and the Executive will not
      on
      his own behalf, or as another's agent or employee, engage in any of the same
      or
      similar duties and/or Bank-related responsibilities required by the Executive's
      position with the Bank, other than as an employee of the Bank pursuant to this
      Agreement or as specifically approved by the Board of Directors of the
      Bank.

    

    D.
      NONINTERFERENCE

    

    12.  The
      Executive covenants and agrees that, for a period of one year subsequent to
      the
      termination of this Agreement, whether such termination occurs at the insistence
      of the Bank or the Executive, the Executive shall not recruit, hire, or attempt
      to recruit or hire, directly or by assisting others, any other employees of
      the
      Bank, nor shall the Executive contact or communicate with any other employees
      of
      the Bank for the purpose of inducing other employees to terminate their
      employment with the Bank. For purposes of this covenant, "other employees"
      shall
      refer to employees who are still actively employed by or were employed by the
      Bank within the prior year, or doing business with, the Bank at the time of
      the
      attempted recruiting or hiring.

    

    13.  In
      his
      position of employment, the Executive will be provided with confidential
      information and trade secrets (hereafter "Proprietary Information") pertaining
      to, or arising from, the business of the Bank, and its affiliates (if any),
      upon
      execution of this Agreement and for the duration of Executive’s employment with
      the Bank. The Executive hereby agrees and acknowledges that such Proprietary
      Information is unique and valuable to the Bank's business and that the Bank
      would suffer irreparable injury if this information were publicly disclosed,
      or
      used for purposes other than on behalf of the Bank. Therefore, the Executive
      agrees to keep in strict secrecy and confidence, both during and after the
      period of his employment, any and all Proprietary Information that the Executive
      acquires, or to which the Executive has access, during employment by the Bank,
      that has not been publicly disclosed by the Bank. The Proprietary Information
      covered by this Agreement shall include, but shall not be limited to,
      information relating to any financial information, processes, pricing, plans,
      devices, compilations of information, technical data, mailing lists, methods
      of
      distributing, names of suppliers, and customers, arrangements entered into
      with
      suppliers, vendors, and customers, marketing strategies, and other trade secrets
      of the Bank.

    

    
      
         

      

      
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    The
      provisions and agreements entered into herein shall survive the term of the
      Employee's employment to the extent reasonably necessary to accomplish their
      purpose in protecting the interests of the Bank in any Proprietary Information
      disclosed to, or learned by the Executive while employed.

    

    14.  The
      Executive expressly represents that he has no agreements with, or obligations
      to, any party which conflict, or may conflict, with the interests of the Bank
      or
      with the Executive's duties as an employee of the Bank.

    

    15.  The
      Executive acknowledges and agrees that in exchange for the execution of the
      noninterference agreement set forth above, the Executive will receive
      substantial, valuable consideration including: (i) confidential trade secret
      and
      proprietary information relating to the identity and special needs of the Bank's
      current and prospective customers, the Bank's current and prospective services,
      the Bank's business projections and market studies, the Bank's business plans
      and strategies, the Bank's studies and information concerning special services
      unique to the Bank; (ii) employment; (iii) compensation and benefits as
      described in this Agreement; and (iv) Severance. The Executive acknowledges
      and
      agrees that these four items collectively constitute fair and adequate
      consideration for the execution of the noninterference agreement set forth
      above.

    

    16.  In
      consideration for the above-recited valuable consideration, and as a material
      inducement for the Bank’s agreements herein, including the Bank’s promise to
      furnish Executive with access to its Proprietary Information, the Executive
      understands and agrees that during the continuation of this Agreement and for
      a
      period of one year following the termination of his employment with the Bank
      by
      either party, for whatever reason (both of which periods shall collectively
      be
      referred to as the ("Restricted Period")), the Executive will not directly
      or
      indirectly, alone or for his/her own account, or as owner, partner, investor,
      member, trustee, officer, director, shareholder, employee, consultant,
      distributor, advisor, representative or agent of any partnership, joint venture,
      corporation, trust, or other business organization or entity, contact, solicit,
      or seek to divert the business or patronage of any person, association,
      corporation or other business organization or entity with whom Executive is
      familiar and about whom Executive has learned Proprietary Information during
      his/her employment at the Bank. It is the parties' desire that these
      restrictions be enforced to the fullest extent allowed by law. 

    

    
      
         

      

      
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    17.  It
      is
      hereby further agreed by the parties that if the nonsolicitation covenants
      contained in this NONINTERFERENCE section should be held by any court or other
      constituted legal authority to be void or otherwise unenforceable in any
      particular area or jurisdiction despite those modifications outlined above,
      then
      the parties shall consider this Agreement to be amended and modified in that
      particular area or jurisdiction so as to eliminate therefrom any part of or
      the
      entire covenant that the particular area or jurisdiction finds void or otherwise
      unenforceable, but as to all other areas and jurisdictions covered by this
      Agreement, the nonsolicitation covenants contained herein shall remain in full
      force and effect as originally written.

    

    18.  If
      Executive is found to have violated any of the provisions of this Section D,
      Executive agrees that the restrictive period of each covenant so violated shall
      be extended by a period of time equal to the period of violation by him. Nothing
      in this Paragraph shall reduce or abrogate the Executive's obligations under
      any
      other section this Agreement.

    

    E.
      REMEDIES

    

    19.  In
      the
      event that the Executive violates any of the provisions set forth in this
      Agreement relating to NONINTERFERENCE, the Executive acknowledges and agrees
      that the Bank may suffer immediate and irreparable harm. Consequently, the
      Executive acknowledges and agrees that the Bank shall be entitled to immediate
      injunctive relief, either by temporary or permanent injunction, to prevent
      such
      a violation.

    

    F.
      TERMINATION

    

    20.  The
      Executive acknowledges and agrees that the Board of Directors of the Bank
      reserves the right to terminate this Executive Agreement, for any reason, by
      providing the Executive with thirty (30) days' written notice of the
      termination, delivered in person, or by certified U.S. mail to the Executive's
      last known address reflected in the Bank's personnel records. Such notice shall
      be effective upon personal delivery or three days after mailing by certified
      mail. However, if the Agreement is terminated at the Bank's insistence without
      Good Cause, as defined in this Agreement, the Bank covenants and agrees to
      provide the Executive with the severance set
      forth
      in paragraph thirty (30) of this Agreement. 

    

    
      
         

      

      
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    21.  The
      Executive acknowledges and agrees that the Bank may terminate this Agreement
      at
      any time, without notice, for any "Good Cause" defined as the
      following:

    

    	a.  	
            In
              the event the Executive violates any provision of this Agreement or
              is
              grossly negligent in the performance of his duties hereunder in the
              reasonable judgment of the Board, and fails to cure such violation
              or the
              effects of such gross negligence within a reasonable period after written
              notice to the Executive by the Bank specifying in reasonable detail
              the
              alleged violation;

          

    

    	b.  	
            The
              determination of the Board of Directors of the Bank in the exercise
              of its
              reasonable judgment, that (i) the Executive has failed to follow the
              policies adopted by the Board of Directors and fails to cure such breach
              or violation within a reasonable period after written notice to Executive
              by the Bank specifying in reasonable detail the alleged breach or
              violation or (ii) that Executive has engaged in such actions or omissions
              that would constitute unsafe or unsound banking
              practices;

          

    

    	c.  	
            In
              the event the Executive is convicted of a felony, or a misdemeanor
              involving moral turpitude;

          

    

    	d.  	
            In
              the event the Executive engages in gross misconduct in the course and
              scope of his employment with the Bank including indecency, immorality,
              gross insubordination, dishonesty, unlawful harassment, use of illegal
              drugs, or fighting;

          

    

    	e.  	
            In
              the event a majority of the Board of Directors of the Bank determines,
              in
              good faith, that the Executive’s job performance is unsatisfactory as
              measured against performance standards previously provided to the
              Executive and mutually agreed upon, and has given the Executive written
              notice of such determination which specifically enumerates the reason(s)
              for such determination and a reasonable opportunity, which shall not
              be
              less than 180 days, to correct such unsatisfactory performance;
              or

          

    

    
      
         

      

      
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    	f.  	
            In
              the event the Executive is prohibited from engaging in the business
              of
              banking by any governmental regulatory agency having jurisdiction over
              the
              Bank.

          

    

    If
      during
      his employment, Executive is terminated for Good Cause or resigns his employment
      for any reason other than for Good Reason (as defined below); Employee will
      be
      entitled only to receive base salary through the date of such termination,
      pay
      in lieu of any unused vacation in accordance with the Bank’s normal practice,
      and any benefits to which Executive is entitled under the terms of the Bank’s
      employee benefit plans and programs.

    

    22.  The
      Bank
      acknowledges and agrees that the Executive reserves the right to terminate
      this
      Agreement at any time, for any reason, with or without cause, by providing
      thirty (30) days written notice, by personal delivery or certified United States
      mail, to the Bank at its principal business address of the Executive's intention
      to terminate this Agreement. Such notice shall be effective upon personal
      delivery or three days after mailing by certified mail.

    

    23.  The
      Executive acknowledges and agrees that in the event of the Executive's death,
      this Agreement will terminate immediately, without notice, on the date of the
      Executive's death. The Executive acknowledges and agrees that, in the event
      of
      his death, the Bank will pay to the Executive's estate all compensation due
      and
      owing through the date of the Executive's death.

    

    24.  The
      Executive acknowledges and agrees that this Agreement will terminate
      immediately, without notice, in the event the Executive becomes physically
      or
      mentally disabled, as defined by 29 C.F.R. § 1630.2(g)(1), and cannot
      perform the essential functions of his position, with or without reasonable
      accommodation for the period designated by the Executive's disability insurance
      after which disability payments will begin.

    

    25.  The
      Executive acknowledges and agrees that in the event of termination of this
      Agreement, for whatever reason, whether at the insistence of the Executive
      or at
      the insistence of the Bank, the Executive will return to the Bank within
      seventy-two (72) hours of the time when notice of termination is communicated
      by
      either party, or sooner if requested by the Bank, any and all equipment,
      literature, documents, data, information, order forms, memoranda,
      correspondence, customer and prospective customer lists, customer's orders,
      records, cards or notes acquired, compiled or coming into the Executive's
      knowledge, possession or control in connection with his activities as an
      employee of the Bank, as well as all machines, parts, equipment or other
      materials received from the Bank or from any of its customers, agents or
      suppliers, in connection with such activities.

    

    
      
         

      

      
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    G.
      CHANGE
      IN CONTROL

    

    26.  The
      parties acknowledge that the Executive has agreed to assume the position of
      Executive Vice President and Chief Operating Officer and to enter into this
      Agreement based on his confidence in the current owners of the Bank and the
      direction of the Bank provided by the current Board of Directors. If the Bank
      should undergo a "Change of Control," as defined below, then the Executive,
      may
      be entitled to certain compensation and benefits under the following
      circumstances.  If,
      during the term: (i) Executive voluntarily terminates his employment with the
      Company (or its successor) after a minimum of six (6) months following a Change
      in Control (as defined below), or (ii) Executive’s employment is terminated by
      the Company (or its successor) without Good Cause, or Employee terminates his
      employment for Good Reason (as defined below), in either case within twenty-four
      (24) months following a Change in Control, Employee shall be entitled to receive
      the compensation and benefits described in this Section. Executive shall notify
      the Bank of such election by personal delivery or certified U.S. mail, that
      he
      intends to terminate this Agreement based upon the Change of Control. Notice
      of
      termination shall be effective upon delivery or three (3) days after mailing
      by
      certified mail.

    

    27.  In
      the
      event that the Executive elects to terminate this Agreement based upon a Change
      in Control, the Bank agrees and acknowledges that the Executive (or his
      Beneficiaries, if applicable) shall have the right to receive a cash lump sum
      payment equal to 99% of his Base Amount as defined in Section 280G(b)(3) of
      the
      Internal Revenue Code of 1986, as amended (“Code”) paid by the Bank upon a
“Triggering Termination,” which shall mean the Executive’s termination of
      employment with the Bank on or within two (2) years after a Change in Control.
      The Bank shall make payment within thirty (30) days of the Triggering
      Termination date. In the event that the Executive is entitled to any payment
      under Section H, no payment shall be due under this Section G.

    

    Notwithstanding
      any provision of this Agreement to the contrary, the Bank shall not be required
      to pay any benefit under this Agreement if, upon the advice of counsel, the
      Bank
      determines that the payment of such benefit, when aggregated with payments
      the
      Executive receives under other agreements, would be prohibited
      by
12
      C.F.R.
      Part 359 or any successor regulations regarding employee compensation
      promulgated by any regulatory agency having jurisdiction over the Bank or its
      affiliates, or to the extent any benefit would be a non-deductible excess
      parachute payment under Section 280G of the Code, or create an excise tax under
      the excess parachute rules of Sections 280G and 4999 of the Code. To the extent
      possible, the Bank shall reduce the benefit paid under this Agreement to the
      maximum benefit that would be deductible and would not result in any such excise
      tax.

    

    
      
         

      

      
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    28.  As
      used
      in this Agreement, a "Change of Control" shall be deemed to have occurred in
      any
      of the following instances:

    

    
      	 	
                
                a.

            	
              the
                Company or the Bank is merged or consolidated with another corporation
                and
                as a result of such merger or consolidation less than fifty percent
                (50%)
                of the outstanding voting securities (on a fully diluted basis) of
                the
                surviving or resulting corporation are owned in the aggregate by
                the
                former shareholders of the Company;

            

    

    

    	b.  	
            the
              Company or the Bank sells all or substantially all of its assets to
              another corporation;

          

     

    	c.  	
            (i)
              any person or group within the meaning of the Securities Exchange Act
              of
              1934, as amended (the “Securities Exchange Act”), including without
              limitation existing shareholders of the Company, acquires or otherwise
              becomes the owner of fifty percent (50%) or more of the outstanding
              voting
              securities of the Company and (ii) if such Person causes, encourages
              or
              otherwise provides for an employee, officer, representative or agent
              of
              such Person to be elected to the Board.;
              or

          

    

    Notwithstanding
      the foregoing, a Change in Control shall not be deemed to have occurred if
      a
      Person (as defined by the Securities Exchange Act) becomes a beneficial owner,
      directly or indirectly, of securities representing fifty percent (50%) or more
      of the combined voting power of the Company’s then outstanding securities solely
      as a result of an acquisition by the Company of its own voting securities which,
      by reducing the number of shares outstanding, increases the proportionate number
      of shares beneficially owned by such Person.

    

    
      
         

      

      
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    	d.  	
            During
              any period of two consecutive years, individuals who, at the beginning
              of
              such period constituted the members of the Board of Directors of the
              Bank,
              cease for any reason to constitute at least a majority of such Board
              of
              Directors., unless the election, or the nomination for election by
              the
              Company’s shareholders, of each new Director was approved by a vote of at
              least two-thirds of the Directors still in office who were Directors
              at
              the beginning of the period; provided, however, that no individual
              shall
              be considered a member of the Board of Directors of the Company at
              the
              beginning of such period if such individual initially assumed office
              as
              the result of either an actual or threatened election contest or proxy
              contest.

          

    

    Furthermore,
      notwithstanding anything contained herein to the contrary, if the Executive’s
      employment is terminated and he reasonably demonstrates that such termination
      was at the request of a third party who has indicated an intention of taking
      steps reasonably calculated to effect a Change in Control and who effects a
      Change in Control, or such termination otherwise occurred in connection with,
      or
      in anticipation of, a Change in Control which actually occurs, then for all
      purposes hereof, a Change in Control shall be deemed to have occurred on the
      day
      immediately prior to the date of such termination of his
      employment.

    

    
      
         

      

      
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    29.  For
      purposes of this Agreement, “Good Reason” shall mean any one or more of the
      following occurrences: (i) Executive’s base salary or bonus structure as defined
      in 3.c. of this Agreement or as it may be increased subsequent to the Effective
      Date, is reduced; (ii) Executive’s status or responsibilities with the Bank are
      materially reduced, or Executive is assigned duties which are inconsistent
      with
      such status or responsibilities, or Executive’s business location is materially
      changed; (iii) the Bank (or its successor) fails to continue in effect any
      pension, health care or executive compensation plan or arrangement in which
      Executive was participating, or the Bank (or their successors) takes some action
      which materially reduces Executive’s benefits under any such plan or program,
      without (in either such case) providing Executive with substantially similar
      benefits; or (iv) any successor to the Bank in connection with a Change in
      Control does not, prior to the Change in Control, expressly assume this
      Agreement.

    

    
      
         

      

      
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    H.
      SEVERANCE

    

    30.  The
      Executive and the Bank acknowledge and agree that, if the Bank terminates
      Executive’s employment at any time for any reason other than Good Cause, as
      defined in this Agreement, or Executive terminates his employment for Good
      Reason, as defined above, the Executive shall be entitled to severance pay
      to be
      paid in accordance with the normal payroll procedure of the Bank. Such severance
      pay shall be equal to the base salary that would have been due the Executive
      had
      he remained employed for the remaining term of this Agreement, but in no event
      less than one year’s base salary. In the event that the Executive is entitled to
      any payment under Section G, no payment shall be due under this Section H.
      

    

    I.
      SEVERABILITY

    

    31.  The
      Executive acknowledges and agrees that each covenant and/or provision of this
      Agreement shall be enforceable independently of every other covenant and/or
      provision. Furthermore, the Executive acknowledges and agrees that, in the
      event
      any covenant and/or provision of this Agreement is determined to be
      unenforceable for any reason, the remaining covenants and/or provisions will
      remain effective, binding and enforceable.

    

    J.
      WAIVER

    

    32.  The
      parties acknowledge and agree that the failure of either to enforce any
      provision of this Agreement shall not constitute a waiver of that particular
      provision, or of any other provisions of this Agreement.

    

    K.
      SUCCESSORS
      AND ASSIGNS

    

    33.  The
      Executive acknowledges and agrees that this Agreement may be assigned by the
      Bank to any successor-in-interest and shall inure to the benefit of, and be
      fully enforceable by, any successor and/or assignee; and this Agreement will
      be
      fully binding upon, and may be enforced by the Executive against, any successor
      and/or assignee of the Bank.

    

    34.  The
      Executive acknowledges and agrees that his obligations, duties and
      responsibilities under this Agreement are personal and shall not be assignable,
      and that this Agreement shall be enforceable by the Executive only. In the
      event
      of the Executive's death, this Agreement shall be enforceable by the Executive's
      estate, executors and/or legal representatives, only to the extent provided
      herein.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    L.
      CHOICE
      OF LAW

    

    35.  Both
      parties acknowledge and agree that the law of the state of Texas will govern
      the
      validity, interpretation and effect of this Agreement, and any other dispute
      relating to, or arising out of, the employment relationship between the Bank
      and
      the Executive.

    

    M.
      MODIFICATION

    

    36.  Both
      parties acknowledge and agree that this Agreement and the stock option plan
      and
      stock grants set forth in Paragraph 3.f. of this Agreement constitute the
      complete and entire agreement between the parties regarding the employment
      of
      Executive; that the parties have executed this Agreement based upon the express
      terms and provisions set forth herein; that the parties have not relied on
      any
      representations, oral or written, which are not set forth in this Agreement;
      that no previous agreement, either oral or written, shall have any effect on
      the
      terms or provisions of this Agreement; and that all previous agreements, either
      oral or written, are expressly superseded and revoked by this
      Agreement.

    

    37.  Both
      parties acknowledge and agree that the covenants and/or provisions of this
      Agreement may not be modified by any subsequent agreement unless the modifying
      agreement; (i) is in writing; (ii) contains an express provision
      referencing this Agreement; (iii) is signed by the Executive; and
      (iv) is approved by a disinterested majority of the Board of Directors of
      the Bank.

    

    N.
      INDEMNIFICATION

    

    38.  During
      the term of this Agreement, the Company and the Bank shall indemnify the
      Executive against all judgments, penalties, fines, amounts paid in settlement
      and reasonable expenses (including, but not limited to, attorneys' fees)
      relating to his employment by the Bank to the fullest extent permissible under
      the law, including, without limitation, the National Banking Act, Article 2.02-1
      of the Texas Business Corporation Act, the Company’s Articles of Incorporation,
      and the Bank's Articles of Association, and may purchase such indemnification
      insurance as the Board of Directors may from time to time
      determine.

    

    O.
      ARBITRATION

    

    39.  Any
      dispute, controversy, or claim arising out of or relating to this Agreement
      or
      breach thereof, or arising out of or relating in any way to the employment
      of
      the Executive or the termination thereof, shall be submitted to arbitration
      in
      accordance with the Employment Dispute Arbitration Rules of the American
      Arbitration Association. Judgment upon the award rendered by the arbitrator
      may
      be entered in any court of competent jurisdiction. In reaching his or her
      decision, the arbitrator shall have no authority to ignore, change, modify,
      add
      to or delete from any provision of this Agreement, but instead is limited to
      interpreting this Agreement. Notwithstanding the arbitration provisions set
      forth in this Agreement, the Executive and the Bank acknowledge and agree that
      nothing in this Agreement shall be construed to require the arbitration of
      any
      claim or controversy arising under the NONINTERFERENCE section of this
      Agreement. These provisions shall be enforceable by any court of competent
      jurisdiction and shall not be subject to this section of the Agreement. The
      Executive and the Bank further acknowledge and agree that nothing in this
      Agreement shall be construed to require arbitration of any claim for workers'
      compensation or unemployment compensation.

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    P.
      LEGAL
      CONSULTATION

    

    40.  The
      Executive and the Company acknowledge and agree that both parties have been
      accorded a reasonable opportunity to review this Agreement with legal counsel
      prior to executing the agreement.

    

    Q.
      MISCELLANEOUS

    

    41.  The
      Executive shall make himself available, upon the request of the Bank, to testify
      or otherwise assist in litigation, arbitration, or other disputes involving
      the
      Bank, or any of the directors, officers, employees, subsidiaries, or parent
      corporations of either, at no additional cost during the term of this Agreement
      and at any time following the termination of this Agreement.

    

    42.  The
      Executive shall not be required to mitigate the amount of any payment provided
      for in this Agreement by seeking other employment or otherwise, nor shall the
      amount of any payment provided for in this Agreement be reduced by any
      compensation earned by the Executive as the result of employment by another
      employer after the date of termination, or otherwise.

    

    43.  In
      the
      event either party institutes arbitration or litigation to enforce or protect
      its rights under this Agreement, the prevailing party in such arbitration or
      litigation shall be entitled, in addition to all other relief, to reasonable
      attorneys fees, out-of-pocket costs, disbursements, and arbitrator's fees
      relating to such arbitration or litigation.

    

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

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    R.
      NOTICES

    

    45.  Any
      and
      all notices of documents or other notices required to be delivered under the
      terms of this Agreement shall be addressed to each party as
      follows:

    

    EXECUTIVE:

     

    Patrick
      Howard

    

    

    COMPANY:

     

    T
      Bancshares, Inc.

    President

    16000
      Dallas Parkway, Suite 125

    Dallas,
      TX 75248

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    

      EXECUTED
        ON THIS DATE FIRST WRITTEN ABOVE IN DALLAS, TEXAS.

      

       

        
          	 	 	
                  “EXECUTIVE”

                
	 	 	 
	 	 	 
	 	 	 
	
                  WITNESS

                	 	
                  Patrick
                    Howard

                
	 	 	 
	 	 	 
	 	 	 
	 	 	
                  “COMPANY”

                
	 	 	 
	 	 	 
	 	 	
                  T
                    BANCSHARES, INC.

                
	 	 	 
	 	 	 
	 	 	 
	
                  WITNESS

                	 	
                  PresidentUnassociated Document

    EXHIBIT
      10.1

    

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      SECURITIES PURCHASE AGREEMENT (this “Agreement”)
      is
      made and entered into as of August ___1,
      2007,
      by and between Debt Resolve, Inc., a Delaware corporation (the “Company”)
      and
      the Investors set forth on the signature pages affixed hereto (each an
“Investor”
and
      collectively the “Investors”).
      

     

    WHEREAS,
      the Investors wish to purchase from the Company, and the Company wishes to
      sell
      and issue to the Investors, upon the terms and conditions stated in this
      Agreement, (i) an aggregate of up to 900,000 shares (the “Shares”)
      of the
      Company’s Common Stock, par value $0.001 per share (together with any securities
      into which such shares may be reclassified the “Common
      Stock”),
      at
      purchase price of $2.00 per share, and (ii) warrants (the “Warrants”)
      to
      purchase an aggregate of up to 450,000 shares of Common Stock (subject to
      adjustment) (“Warrant
      Shares”)
      at an
      exercise price of $2.00 per share (subject to adjustment) in the form attached
      hereto as Exhibit A upon the terms and conditions set forth in this Agreement;
      

     

    WHEREAS,
      the Shares, the Warrants and the Warrant Shares issued pursuant to this
      Agreement are
      collectively referred to herein as the “Securities,”
and
      the Shares and the Warrants are collectively referred to in the Private
      Placement Memorandum as “Units;”
and
      

     

    WHEREAS,
      in connection with the Investors’ purchase of the Shares and Warrants, the
      Investors will receive certain rights to participate in public offerings of
      Company stock, and will be subject to certain restrictions on the transfer
      of
      the Shares, all as more fully set forth in this Agreement. 

     

    NOW,
      THEREFORE, in consideration of the mutual terms, conditions and other agreements
      set forth herein and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, and intending to be legally bound
      hereby, the parties hereto hereby agree to the sale and purchase of the Shares
      and Warrants as set forth herein.

     

    
      
        1.
          Definitions.
          

      

    

     

    For
      purposes of this Agreement, the terms set forth below shall have the
      corresponding meanings provided below.

     

    “1933
      Act”
means
      the 1933 Act of 1933, as amended.

     

    “1934
      Act”
means
      the Securities Exchange Act of 1934, as amended.

    

    “Affiliate”
shall
      mean, with respect to any specified Person, (i)
      if such
      Person is an individual, the spouse, heirs, executors, or legal representatives
      of such individual, or any trusts for the benefit of such individual or such
      individual’s spouse and/or lineal descendants, or (ii)
      otherwise, another Person that directly, or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      the
      Person specified. As used in this definition, “control” shall mean the
      possession, directly or indirectly, of the sole and unilateral power to cause
      the direction of the management and policies of a Person, whether through the
      ownership of voting securities or by contract or other written
      instrument.

    

    “AMEX”
shall
      mean the American Stock Exchange.

    

    “Blue
      Sky Application”
as
      defined in Section 5.4 hereto. 

    

      
        
          

        
1Will
        reflect First Closing Date. 

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    “Business
      Day”
shall
      mean any day on which banks located in New York City are not required or
      authorized by law to remain closed.

    

    “Closing”
and
      “Closing
      Date”
as
      defined in Section 2.2 (c).

     

    “Common
      Stock”
as
      defined in the recitals above. 

     

    “Company
      Financial Statements”
      as
      defined in Section 4.5 hereto. 

    

    “Company’s
      knowledge”
means
      the actual knowledge of the executive officers (as defined in Rule 405 under
      the
      1933 Act) of the Company, after due inquiry.

     

    “ERISA”
      as
      defined in Section 4.17 hereto. 

    

    “First
      Closing”
and
      “First
      Closing Date”
as
      defined in Section 2.2(a).

    

    “Intellectual
      Property”
means
      the Company’s and each of its Subsidiaries’ patents, patent applications,
      provisional patents, trademarks, service marks, trade names, trademark
      registrations, service mark registrations, copyrights, licenses, formulae,
      mask
      works, customer lists, internet domain names, know-how and other intellectual
      property, including trade secrets and other unpatented and/or unpatentable
      proprietary or confidential information, systems, procedures or registrations
      or
      applications relating to the same.

    

    “Liens”
      means
      any mortgage, lien, title claim, assignment, encumbrance, security interest,
      adverse claim, contract of sale, restriction on use or transfer or other defect
      of title of any kind.

    

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the assets, liabilities, results of operations,
      condition (financial or otherwise), business, or prospects of the Company and
      its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
      its obligations under the Transaction Documents.

    

    “Person”
shall
      mean an individual, entity, corporation, partnership, association, limited
      liability company, limited liability partnership, joint-stock company, trust
      or
      unincorporated organization.

     

    “Piggyback
      Registration”
as
      defined in Section 5.1 hereto. 

     

    “Private
      Placement Memorandum”
means
      the Company’s Confidential Private Placement Memorandum, dated August 17,
2007,
      and
      any amendments or supplements thereto.

     

    “Purchase
      Price”
shall
      mean up to $1,800,000. 

     

    "Registrable
      Securities"
      shall
      mean the Shares, the Warrant Shares and any shares issuable upon exercise of
      any
      warrants issued to registered broker-dealers and their affiliates as
      compensation in connection with the transactions contemplated hereby; provided,
      that, a security shall cease to be a Registrable Security upon (A) sale pursuant
      to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security
      becoming eligible for sale by the Investors pursuant to Rule 144(k).

    

    “Registration
      Statement”
shall
      mean any registration statement of the Company filed under the 1933 Act that
      covers the resale of any of the Registrable Securities pursuant to the
      provisions of this Agreement, amendments and supplements to such Registration
      Statement, including post-effective amendments, all exhibits and all material
      incorporated by reference in such Registration Statement.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    “Regulation
      D”
as
      defined in Section 3.7 hereto.

    

    “Regulation
      S”
as
      defined in Section 6.1(i)(E) hereto.

    

    “Rule
      144”
as
      defined in Section 6.1(i)(C) hereto.

    

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

    

    “SEC
      Documents”
as
      defined in Section 4.5 hereto. 

    

    “Securities”
as
      defined in the recitals above. 

    

    “Shares”
as
      defined in the recitals above. 

    

    “Subsequent
      Closing”
and
      “Subsequent
      Closing Date”
as
      defined in Section 2.2(b).

    

    “Subsidiaries”
shall
      mean any corporation or other entity or organization, whether incorporated
      or
      unincorporated, in which the Company owns, directly or indirectly, any equity
      or
      other ownership interest or otherwise controls through contract or
      otherwise.

    

    “Transaction
      Documents”
shall
      mean this Agreement and the Warrants. 

    

    “Transfer”
shall
      mean any sale, transfer, assignment, conveyance, charge, pledge, mortgage,
      encumbrance, hypothecation, security interest or other disposition, or to make
      or effect any of the above.

    

    “Underwriter”
as
      defined in Section 5.2 hereto. 

    

    “Underwriting
      Documents”
shall
      mean an underwriting agreement in customary form and all other agreements and
      other documents reasonably requested by an underwriter in connection with an
      underwritten public offering of equity securities (including, without
      limitation, questionnaires, powers of attorney, indemnities, custody agreements
      and lock-up agreements).

    

    “Warrant
      Shares”
      as
      defined in the recitals above. 

    

    “Warrants”
      as
      defined in the recitals above. 

    

    
      
        2.
          Sale
          and Purchase of Shares and Warrants.

      

    

     

    2.1. Subscription
      for Shares and Warrants by Investors.
      Subject
      to the terms and conditions of this Agreement, on the Closing Date (as
      hereinafter defined) each of the Investors shall severally, and not jointly,
      purchase, and the Company shall sell and issue to the Investors, the Shares
      and
      Warrants, in the respective amounts set forth on the signature pages attached
      hereto in exchange for the Purchase Price.

     

    2.2 Closings.
      

     

    (a)
      First
      Closing.
      Subject
      to the terms and conditions set forth in this Agreement, the Company shall
      issue
      and sell to each Investor, and each Investor shall, severally and not jointly,
      purchase from the Company on the First Closing Date, such number of Shares
      and
      Warrants set forth on the signature pages attached hereto, which will be
      reflected opposite such Investor’s name on Exhibit
      A-1
      (the
“First
      Closing”).
      The
      date of the First Closing is hereinafter referred to as the “First
      Closing Date.”
      Notwithstanding anything to the contrary in this Agreement, a minimum of 200,000
      Shares and a maximum of 900,000 Shares may be issued and sold at the First
      Closing.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    (b)
      Subsequent
      Closing(s).
      The
      Company agrees to issue and sell to each Investor listed on the Subsequent
      Closing Schedule of Investors, and each Investor agrees, severally and not
      jointly, to purchase from the Company on such Subsequent Closing Date such
      number of Shares and Warrants set forth on the signature pages attached hereto,
      which will be reflected opposite such Investor’s name on Exhibit
      A-2
      (a
“Subsequent
      Closing”).
      There
      may be more than one Subsequent Closing; provided, however that the final
      Subsequent Closing shall take place within the time periods set forth in the
      Private Placement Memorandum. The date of any Subsequent Closing is hereinafter
      referred to as a “Subsequent
      Closing Date”).
      Notwithstanding the foregoing, the maximum number of Shares to be sold at the
      First Closing and all Subsequent Closings shall be 900,000 Shares. 

    

    (c)
      Closing.
      The
      First Closing and any applicable Subsequent Closings are each referred to in
      this Agreement as a “Closing.”
The
      First Closing Date and any Subsequent Closing Dates are sometimes referred
      to
      herein as a “Closing
      Date.”
All
      Closings shall occur within the time periods set forth in the Private Placement
      Memorandum at the offices of Greenberg Traurig, LLP, counsel to the Company,
      at
      200 Park Avenue, 14th
      Floor,
      New York, New York 10166 or remotely via the exchange of documents and
      signatures. 

    

    2.3. Closing
      Deliveries.
      At each
      Closing, the Company shall deliver to the Investors, against delivery by the
      Investor of the Purchase Price (as provided below), duly issued certificates
      representing the Shares and the Warrants. At each Closing, each Investor shall
      deliver or cause to be delivered to the Company the Purchase Price set forth
      in
      its counterpart signature page annexed hereto by paying United States dollars
      via
      bank,
      certified or personal check which has cleared prior to the applicable
      or
      in
      immediately available funds, by wire transfer to the following escrow account:
         

     

    Acct.
      Name: 
      Signature Bank as Escrow Agent for Debt Resolve, Inc.  

    ABA
      Number: 
      026013576 

    Acct
      Number: 
      1500
974377

    

    
      
        3.
          Representations,
          Warranties and Acknowledgments of the Investors.
          

      

    

    

    Each
      Investor severally and not jointly represents and warrants to the Company solely
      as to such Investor that:

    

    3.1 Authorization.
      The
      execution, delivery and performance by such Investor of the Transaction
      Documents to which such Investor is a party have been duly authorized and will
      each constitute the valid and legally binding obligation of such Investor,
      enforceable against such Investor in accordance with their respective terms,
      subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
      moratorium and similar laws of general applicability, relating to or affecting
      creditors’ rights generally.

    

    3.2 Purchase
      Entirely for Own Account.
      The
      Securities to be received by such Investor hereunder will be acquired for such
      Investor’s own account, not as nominee or agent, and not with a view to the
      resale or distribution of any part thereof in violation of the 1933 Act, and
      such Investor has no present intention of selling, granting any participation
      in, or otherwise distributing the same in violation of the 1933 Act,
      without
      prejudice, however, to such Investor’s right at all times to sell or otherwise
      dispose of all or any part of such Securities in compliance with applicable
      federal and state securities laws.
      Nothing
      contained herein shall be deemed a representation or warranty by such Investor
      to hold the Securities for any period of time. Such
      Investor
      is not a broker-dealer registered with the SEC under the 1934 Act or an entity
      engaged in a business that would require it to be so registered.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    3.3. Investment
      Experience.
      Such
      Investor acknowledges that the purchase of the Shares and Warrants is a
      speculative investment and that it can bear the economic risk and complete
      loss
      of its investment in the Securities and has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of the investment contemplated hereby.

    

    3.4 Disclosure
      of Information.
      Such
      Investor has had an opportunity to receive all information related to the
      Company and the Securities requested by it and to ask questions of and receive
      answers from the Company regarding the Company, its business and the terms
      and
      conditions of the offering of the Securities. Neither such inquiries nor any
      other due diligence investigation conducted by such Investor shall modify,
      amend
      or affect such Investor’s right to rely on the Company’s representations and
      warranties contained in this Agreement. Such Investor acknowledges that it
      has
      received and reviewed the Private Placement Memorandum describing the offering
      of the Securities. Such Investor acknowledges receipt of copies of the SEC
      Filings, either in hard copy or electronically through the SEC’s EDGAR system.

    

    3.5 Restricted
      Securities.
      Such
      Investor understands that the Securities are characterized as “restricted
      securities” under the U.S. 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 such securities may be resold
      without registration under the 1933 Act only in certain limited
      circumstances.

    

    3.6 Legends.
      It is
      understood that, except as provided below, certificates evidencing the
      Securities may bear the following or any similar legend:

    

    (a) “The
      securities represented hereby may not be transferred unless (i) such securities
      have been registered for sale pursuant to the 1933 Act of 1933, as amended,
      (ii)
      such securities may be sold pursuant to Rule 144(k), or (iii) the Company has
      received an opinion of counsel reasonably satisfactory to it that such transfer
      may lawfully be made without registration under the 1933 Act of 1933 or
      qualification under applicable state securities laws.”

    

    (b) If
      required by the authorities of any state in connection with the issuance of
      sale
      of the Securities, the legend required by such state authority.

    

    3.7 Accredited
      Investor.
      Such
      Investor is an accredited investor as defined in Rule 501(a) of Regulation
      D, as
      amended, under the 1933 Act. (“Regulation
      D”)

    

    3.8 No
      General Solicitation.
      Such
      Investor did not learn of the investment in the Securities as a result of any
      public advertising or general solicitation.

    

    3.9 Brokers
      and Finders.
      No
      Investor will have, as a result of the transactions contemplated by the
      Transaction Documents, any valid right, interest or claim against or upon the
      Company, any Subsidiary or any other Investor for any commission, fee or other
      compensation pursuant to any agreement, arrangement or understanding entered
      into by or on behalf of such Investor.

    

    
      
        4.
          Representations
          and Warranties of the Company.

      

    

     

    The
      Company represents, warrants and covenants to the Investors that:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    4.1. Organization;
      Execution, Delivery and Performance.

     

    (a) The
      Company and each of its Subsidiaries, if any, is a corporation or other entity
      duly organized, validly existing and in good standing under the laws of the
      jurisdiction in which it is incorporated or organized, with full power and
      authority (corporate and other) to own, lease, use and operate its properties
      and to carry on its business as and where now owned, leased, used, operated
      and
      conducted. The following lists all direct and indirect Subsidiaries of the
      Company and the jurisdiction in which each is incorporated or organized: First
      Performance Corporation, a Nevada corporation, First Performance Recovery
      Corporation, a Nevada corporation, DRV Capital, LLC, a Delaware limited
      liability company and EAR Capital I, LLC, a Delaware limited liability company.
      The Company and each of its Subsidiaries is duly qualified as a foreign
      corporation to do business and is in good standing in every jurisdiction in
      which its ownership or use of property or the nature of the business conducted
      by it makes such qualification necessary except where the failure to be so
      qualified or in good standing would not have a Material Adverse Effect.

     

    (b) (i)
      The
      Company has all requisite corporate power and authority to enter into and
      perform the Transaction Documents and to consummate the transactions
      contemplated hereby and thereby and to issue the Securities, in accordance
      with
      the terms hereof and thereof, (ii) the execution and delivery of the Transaction
      Documents by the Company and the consummation by the Company of the transactions
      contemplated hereby and thereby (including without limitation, the issuance
      of
      the Shares and the Warrants, and the issuance and reservation for issuance
      of
      the Warrant Shares) have been duly authorized by the Company’s Board of
      Directors and no further consent or authorization of the Company, its Board
      of
      Directors, or its stockholders, is required, (iii) each of the Transaction
      Documents has been duly executed and delivered by the Company by its authorized
      representative, and such authorized representative is a true and official
      representative with authority to sign each such document and the other documents
      or certificates executed in connection herewith and bind the Company
      accordingly, and (iv) each of the Transaction Documents constitutes, and upon
      execution and delivery thereof by the Company will constitute, a legal, valid
      and binding obligation of the Company enforceable against the Company in
      accordance with its terms, except to the extent limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or other laws of general
      application affecting enforcement of creditors’ rights and general principles of
      equity that restrict the availability of equitable or legal remedies.

    

    4.2. Shares
      and Warrants Duly Authorized.
      

     

    The
      Shares to be issued to each such Investor pursuant to this Agreement, when
      issued and delivered in accordance with the terms of this Agreement, will be
      duly and validly issued and will be fully paid and nonassessable and free from
      all taxes or Liens with respect to the issue thereof and shall not be subject
      to
      preemptive rights or other similar rights of stockholders of the Company. The
      Warrant Shares will be duly authorized and reserved for future issuance and,
      upon exercise of the Warrants in accordance with its terms, will be duly and
      validly issued, fully paid and non-assessable, and free from all taxes or Liens
      with respect to the issue thereof and shall not be subject to preemptive rights
      or other similar rights of stockholders of the Company.

    

    
      	4.3  	
               No
                Conflicts.

            

    

    

    The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the issuance and reservation for
      issuance of the Warrant Shares) will not: (i) conflict with or result in a
      violation of any provision of the Certificate of Incorporation or By-laws or
      (ii) violate or conflict with, or result in a breach of any provision of, or
      constitute a default (or an event which with notice or lapse of time or both
      could become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, indenture, patent,
      patent license or instrument to which the Company or any of its Subsidiaries
      is
      a party, except for possible violations, conflicts or defaults as would not,
      individually or in the aggregate, have a Material Adverse Effect, or (iii)
      result in a violation of any law, rule, regulation, order, judgment or decree
      (including federal and state securities laws and regulations and regulations
      of
      any self-regulatory organizations to which the Company or its securities are
      subject) applicable to the Company or any of its Subsidiaries or by which any
      property or asset of the Company or any of its Subsidiaries is bound or
      affected. Neither the Company nor any of its Subsidiaries is in violation of
      its
      Certificate of Incorporation, By-laws or other organizational documents. Neither
      the Company nor any of its Subsidiaries is in default (and no event has occurred
      which with notice or lapse of time or both could put the Company or any of
      its
      Subsidiaries in default) under, and neither the Company nor any of its
      Subsidiaries has taken any action or failed to take any action that would give
      to others any rights of termination, amendment, acceleration or cancellation
      of,
      any agreement, indenture or instrument to which the Company or any of its
      Subsidiaries is a party or by which any property or assets of the Company or
      any
      of its Subsidiaries is bound or affected, except for possible defaults as would
      not, individually or in the aggregate, have a Material Adverse Effect. The
      businesses of the Company and its Subsidiaries are not being conducted in
      violation of any law, rule ordinance or regulation of any governmental entity,
      except for possible violations which would not, individually or in the
      aggregate, have a Material Adverse Effect. Except as required under the 1933
      Act, the 1934 Act,
      the
      rules and regulations of the American Stock Exchange
      and any
      applicable state securities laws, the Company is not required to obtain any
      consent, authorization or order of, or make any filing or registration with,
      any
      court, governmental agency, regulatory agency, self regulatory organization
      or
      stock market or any third party in order for it to execute, deliver or perform
      any of its obligations under this Agreement or the Warrants in accordance with
      the terms hereof or thereof or to issue and sell the Shares and Warrants in
      accordance with the terms hereof and to issue the Warrant Shares upon exercise
      of the Warrants. All consents, authorizations, orders, filings and registrations
      which the Company is required to obtain pursuant to the preceding sentence
      have
      been obtained or effected on or prior to the date hereof or will be obtained
      or
      effected in a timely manner following the Closing Date.

    

    
      
        
        

      

      
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    4.4. Capitalization.

    

    (a) As
      of
      August
      16,
      2007, the authorized capital stock of the Company consists of (i) 100,000,000
      shares of Common Stock, of which 7,499,414 shares are issued and outstanding,
      4,075,934 shares are reserved for issuance pursuant to options granted under
      the
      Company’s 2005 Incentive Compensation Plan, and 1,310,959 shares are reserved
      for issuance pursuant to securities (other than the Warrants) exercisable for,
      or convertible into or exchangeable for shares of Common Stock and (ii)
      10,000,000 shares of preferred stock, par value $.001 per share, of which no
      shares are issued and outstanding. Except as described above, in the SEC
      Documents (as such term is defined below), the Company will not, upon the
      consummation of the transactions contemplated hereby (i) there are no
      outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
      rights of first refusal, agreements, understandings, claims or other commitments
      or rights of any character whatsoever relating to, or securities or rights
      convertible into or exchangeable for any shares of capital stock of the Company
      or any of its Subsidiaries, or arrangements by which the Company or any of
      its
      Subsidiaries is or may become bound to issue additional shares of capital stock
      of the Company or any of its Subsidiaries, (ii) there are no agreements or
      arrangements under which the Company or any of its Subsidiaries is obligated
      to
      register the sale of any of its or their securities under the 1933 Act (except
      for the registration rights provisions contained herein) and (iii) there are
      no
      anti-dilution or price adjustment provisions contained in any security issued
      by
      the Company (or in any agreement providing rights to security holders) that
      will
      be triggered by the issuance of the Shares the Warrants or the Warrant Shares,
      All of such outstanding shares of capital stock are, or upon issuance will
      be,
      duly authorized, validly issued, fully paid and nonassessable. No shares of
      capital stock of the Company are subject to preemptive rights or any other
      similar rights of the stockholders of the Company or any Lien imposed through
      the actions or failure to act of the Company. 

    

    
      
        
        

      

      
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    4.5. SEC
      Information.

    

    (a) The
      Company has timely filed (subject to 12b-25 filings with respect to certain
      periodic filings) all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC pursuant to the reporting requirements
      of the 1934 Act (all of the foregoing and all other documents filed with the
      SEC
      prior to the date hereof and all exhibits included therein and financial
      statements and schedules thereto and documents incorporated by reference
      therein, being hereinafter referred to herein as the “SEC
      Documents”).
      The
      SEC Documents have been made available to the Investors via the SEC’s EDGAR
      system. As of their respective dates, the SEC Documents complied in all material
      respects with the requirements of the 1934 Act and the rules and regulations
      of
      the SEC promulgated thereunder applicable to the SEC Documents, and none of
      the
      SEC Documents, at the time they were filed with the SEC, 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. As of their
      respective dates, the financial statements of the Company included in the SEC
      Documents (“Company
      Financial Statements”)
      complied as to form in all material respects with applicable accounting
      requirements and the published rules and regulations of the SEC with respect
      thereto. The Company Financial Statements have been prepared in accordance
      with
      United States generally accepted accounting principles, consistently applied,
      during the periods involved (except (i) as may be otherwise indicated in such
      financial statements or the notes thereto, or (ii) in the case of unaudited
      interim statements, to the extent they may not include footnotes or may be
      condensed or summary statements) and fairly present in all material respects
      the
      consolidated financial position of the Company and its consolidated Subsidiaries
      as of the dates thereof and the consolidated results of their operations and
      cash flows for the periods then ended (subject, in the case of unaudited
      statements, to normal year-end audit adjustments). Except as set forth in the
      Company Financial Statements, the Company has no liabilities, contingent or
      otherwise, other than: (i) liabilities incurred in the ordinary course of
      business subsequent to December 31, 2006 and (ii) obligations under contracts
      and commitments incurred in the ordinary course of business and not required
      under generally accepted accounting principles to be reflected in such financial
      statements, which, individually or in the aggregate, are not material to the
      financial condition or operating results of the Company. 

    

    (b) The
      shares of Common Stock are currently listed on the AMEX. The Company has not
      received notice (written or oral) from the AMEX to the effect that the Company
      is not in compliance with the continued listing and 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.

    

    4.6 Intellectual
      Property.
      The
      Company owns valid title, free and clear of any Liens, or possesses the
      requisite valid and current licenses or rights, free and clear of any Liens,
      to
      use all Intellectual Property in connection with the conduct its business as
      now
      operated (and, to the best of the Company’s knowledge, as presently contemplated
      to be operated in the future). There is no claim or action by any person
      pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
      which challenges the right of the Company or of a Subsidiary with respect to
      any
      Intellectual Property necessary to enable it to conduct its business as now
      operated (and, to the best of the Company’s knowledge, as presently contemplated
      to be operated in the future). To the best of the Company’s knowledge, the
      Company’s or its Subsidiaries’ current and intended products, services and
      processes do not infringe on any Intellectual Property or other rights held
      by
      any person, and the Company is unaware of any facts or circumstances which
      might
      give rise to any of the foregoing. The Company has not received any notice
      of
      infringement of, or conflict with, the asserted rights of others with respect
      to
      the Intellectual Property. The Company and each of its Subsidiaries have taken
      reasonable security measures to protect the secrecy, confidentiality and value
      of their Intellectual Property.

    

    4.7 Permits;
      Compliance.
      The
      Company and each of its Subsidiaries is in possession of all franchises, grants,
      authorizations, licenses, permits, easements, variances, exemptions, consents,
      certificates, approvals and orders necessary to own, lease and operate its
      properties and to carry on its business as it is now being conducted
      (collectively, the “Company
      Permits”),
      and
      there is no action pending or, to the knowledge of the Company, threatened
      regarding suspension or cancellation of any of the Company Permits. Neither
      the
      Company nor any of its Subsidiaries is in conflict with, or in default or
      violation of, any of the Company Permits, except for any such conflicts,
      defaults or violations which, individually or in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect. Since December 31,
      2006, neither the Company nor any of its Subsidiaries has received any
      notification with respect to possible conflicts, defaults or violations of
      applicable laws, except for notices relating to possible conflicts, defaults
      or
      violations, which conflicts, defaults or violations would not have a Material
      Adverse Effect.

    

    
      
        
        

      

      
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    4.8 Absence
      of Litigation.
      Except
      as set forth in the SEC Documents, there is no action, suit, claim, proceeding,
      inquiry or investigation before or by any court, public board, government
      agency, self-regulatory organization or body pending or, to the knowledge of
      the
      Company or any of its Subsidiaries, threatened against or affecting the Company
      or any of its Subsidiaries, or their respective businesses, properties or assets
      or their officers or directors in their capacity as such, that would have a
      Material Adverse Effect. The Company is unaware of any facts or circumstances
      which might give rise to any of the foregoing.

    

    4.9 No
      Materially Adverse Contracts, etc.
      Neither
      the Company nor any of its Subsidiaries is subject to any charter, corporate
      or
      other legal restriction, or any judgment, decree, order, rule or regulation
      which in the judgment of the Company’s officers has or is expected in the future
      to have a Material Adverse Effect. Neither the Company nor any of its
      Subsidiaries is a party to any contract or agreement which has or is reasonably
      expected to have a Material Adverse Effect.

    

    4.10 No
      Material Changes.
      

     

    (a) Since
      December 31, 2006, except as set forth in the SEC Documents, there has not
      been:

    

    (i) Any
      material adverse change in the financial condition, operations or business
      of
      the Company from that shown on the Company Financial Statements, or any material
      transaction or commitment effected or entered into by the Company outside of
      the
      ordinary course of business;

     

    (ii) Any
      effect, change or circumstance which has had, or could reasonably be expected
      to
      have, a Material Adverse Effect; or

     

    (iii) Any
      incurrence of any material liability outside of the ordinary course of
      business.

     

    4.11 Litigation.
      Except
      as set forth in the SEC Documents, there is no action, suit, claim, proceeding,
      inquiry or investigation before or by any court, public board, government
      agency, self-regulatory organization or body pending or, to the knowledge of
      the
      Company, threatened against or affecting the Company or any of its Subsidiaries,
      or their respective businesses, properties or assets or their officers or
      directors in their capacity as such, that would have a Material Adverse Effect.
      The Company is unaware of any facts or circumstances which might give rise
      to
      any of the foregoing. 

    

    4.12 Tax
      Matters.
      The
      Company and each of its Subsidiaries has made or filed all federal, state and
      foreign income and all other tax returns, reports and declarations required
      by
      any jurisdiction to which it is subject and has paid all taxes and other
      governmental assessments and charges that are material in amount, shown or
      determined to be due on such returns, reports and declarations, except those
      being contested in good faith and has set aside on its books provisions
      reasonably adequate for the payment of all taxes for periods subsequent to
      the
      periods to which such returns, reports or declarations apply. There are no
      unpaid taxes in any material amount claimed to be due by the taxing authority
      of
      any jurisdiction, and the officers of the Company know of no basis for any
      such
      claim. The Company has not executed a waiver with respect to the statute of
      limitations relating to the assessment or collection of any foreign, federal,
      state or local tax. The Company has not received notice that any of its tax
      returns is presently being audited by any taxing authority.

    

    
      
        
        

      

      
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    4.13 Certain
      Transactions.
      Except
      as set forth in the SEC Documents, there are no loans, leases, royalty
      agreements or other transactions between: (i) the Company or any of its
      Subsidiaries or any of their respective customers or suppliers, and (ii) any
      officer, employee, consultant or director of the Company or any person owning
      five percent (5%) or more of the capital stock of the Company or five percent
      (5%) or more of the ownership interests of the Company or any of its
      Subsidiaries or any member of the immediate family of such officer, employee,
      consultant, director, stockholder or owner or any corporation or other entity
      controlled by such officer, employee, consultant, director, stockholder or
      owner, or a member of the immediate family of such officer, employee,
      consultant, director, stockholder or owner.

    

    4.14 No
      General Solicitation.
      Neither
      the Company nor any person participating on the Company’s behalf in the
      transactions contemplated hereby has conducted any “general solicitation,” as
      such term is defined in Regulation D promulgated under the 1933 Act, with
      respect to any of the Securities being offered hereby. 

    

    4.15 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 in any security
      or
      solicited any offers to buy any security under circumstances that would require
      registration under the 1933 Act of the issuance of the Securities to the
      Investors. The issuance of the Securities to the Investors will not be
      integrated with any other issuance of the Company’s securities (past, current or
      future) for purposes of any stockholder approval provisions applicable to the
      Company or its securities. 

    

    4.16 No
      Brokers.
      Except
      as set forth in Section 9.1, the Company has taken no action which would give
      rise to any claim by any person for brokerage commissions, transaction fees
      or
      similar payments relating to this Agreement or the transactions contemplated
      hereby. 

    

    4.17 ERISA.
      Neither
      the Company nor any of its Subsidiaries has made or currently makes any
      contributions to any employee pension benefit plan for its employees which
      plan
      is subject to the Employee Retirement Income Security Act of l974, as amended
      from time to time (“ERISA”).

    

    4.18 Title
      to Property.
      The
      Company and its Subsidiaries hold no title in fee simple to any real property.
      The Company and its Subsidiaries hold good and marketable title to all personal
      property owned by them which is material to the business of the Company and
      its
      Subsidiaries, in each case free and clear of all Liens, except such as are
      described in the SEC Documents. Any real property and facilities held under
      lease by the Company and its Subsidiaries are held by them under valid,
      subsisting and enforceable leases.

    

    4.19 Insurance.
      The
      Company and each of its Subsidiaries, officers and directors, assets and
      properties are insured by insurers of recognized financial responsibility
      against such losses and risks and in such amounts as management of the Company
      believes to be prudent and customary in the businesses in which the Company
      and
      its Subsidiaries are engaged. Neither the Company nor any such 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 at a cost that
      would not have a Material Adverse Effect. 

     

    
      
        
        

      

      
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    4.20 Internal
      Controls.
      The
      Company is
      in
      material compliance with the provisions of the Sarbanes-Oxley Act of 2002
      currently applicable to the Company. The Company and
      the
      Subsidiaries maintain 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 1934 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, including the Subsidiaries, is made known
      to the certifying officers by others within those entities, particularly during
      the period in which the Company’s most recently filed period report under the
      1934 Act, 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 the end of the period covered by the most recently filed
      periodic report under the 1934 Act (such date, the "Evaluation Date"). The
      Company presented in its most recently filed periodic report under the 1934
      Act
      the conclusions of the certifying officers about 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
      308
      of Regulation S-K) or, to the Company's Knowledge, in other factors that could
      significantly affect the Company's internal controls. The Company maintains
      and
      will continue to maintain a standard system of accounting established and
      administered in accordance with GAAP and the applicable requirements of the
      1934
      Act.

    

    4.21 Books
      and Records.
      The
      books of account, ledgers, order books, records and documents of the Company
      and
      its subsidiaries accurately and completely reflect all material information
      relating to the business of the Company and its Subsidiaries, the location
      and
      collection of their respective assets, and the nature of all transactions giving
      rise to the obligations or accounts receivable of the Company or any of its
      Subsidiaries.

    

    4.22 FCPA
      Matters.
      Neither
      the Company, nor any of its Subsidiaries, nor any director, officer, agent,
      employee or other person acting on behalf of the Company or any Subsidiary
      has,
      in the course of his or her actions for, or on behalf of, the Company: (i)
      used
      any corporate funds for any unlawful contribution, gift, entertainment or other
      unlawful expenses relating to political activity, (ii) made any direct or
      indirect unlawful payment to any foreign or domestic government official or
      employee from corporate funds, (iii) violated or is in violation of any
      provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or
      (iv)
      made any bribe, rebate, payoff, influence payment, kickback or other unlawful
      payment to any foreign or domestic governmental or private official or
      person.

    

    4.23 Disclosure.
      All
      information relating to or concerning the Company or any of its Subsidiaries,
      officers, directors, employees, customers or clients (including, without
      limitation, all information regarding the Company’s internal financial
      accounting controls and procedures): (i) set forth in this Agreement and/or
      (ii)
      as disclosed in any SEC Document or exhibit or certification thereto and/or
      is
      true and correct in all material respects and the Company has not omitted to
      state any material fact necessary in order to make the statements made herein
      or
      therein, in light of the circumstances under which they were made, not
      misleading. 

    

    4.24 Form
      D; Blue Sky Laws.
      The
      Company agrees to file a Form D with respect to the Securities as required
      under
      Regulation D and to provide a copy thereof to National Securities Corporation
      promptly after such filing. The Company shall, on or before the Closing Date,
      take such action as the Company shall reasonably determine is necessary to
      qualify the Securities for sale to the Investors t the applicable closing
      pursuant to this Agreement under applicable securities or “blue sky” laws of the
      states of the United States (or to obtain an exemption from such qualification),
      and shall provide evidence of any such action so taken to National Securities
      Corporation on or prior to the Closing Date.

    

    
      
        
        

      

      
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    4.25 Most
      Favored Nations.
      If, at
      any time and from time to time during the period commencing August
      17, 2007
      and ending on the first anniversary of such date, the Company issues, in a
      financing or series of related financings, additional shares of Common Stock
      or
      other equity or equity-linked securities that exceed an aggregate of 100,000
      shares (the “Additional Shares”) at a purchase, exercise or conversion price
      less than $2.00 (subject to adjustment for splits, recapitalizations,
      reorganizations), then the Company shall: (a) issue additional shares of Common
      Stock to the Investors so that the effective purchase price per Share shall
      be
      the same per share purchase, exercise or conversion price of the Additional
      Shares and (b) the exercise price of the Warrants shall be reduced to the per
      share purchase, exercise or conversion price of such Additional Shares.
      Notwithstanding the foregoing, (i) no adjustment will be made in respect of
      shares of Common Stock or options to employees, directors or consultants issued
      at the then fair market value, not to exceed 5% of the shares then outstanding,
      and (ii) nothing herein shall require the Company to take any action which
      would
      violate the rules or regulations of the AMEX. In that regard, the Company
      covenants to promptly take all necessary action to obtain shareholder approval
      with respect to the provisions of this Section 4.25 as more particularly
      described in the Private Placement Memorandum. 

    

    5. Registration
      Rights.
      

    

    5.1. Participation
      in Registrations.
      Whenever the Company proposes to register any of its securities under the 1933
      Act, whether for its own account or for the account of another stockholder
      (except for the registration of securities (A) to be offered pursuant to an
      employee benefit plan on Form S-8 or (B) pursuant to a registration made on
      Form
      S-4, or any successor forms then in effect) at any time and the registration
      form to be used may be used for the registration of the Registrable Securities
      (a “Piggyback
      Registration”),
      it
      will so notify in writing all holders of Registrable Securities no later than
      the earlier to occur of (i) the tenth (10th)
      day
      following the Company’s receipt of notice of exercise of other demand
      registration rights, or (ii) thirty (30) days prior to the anticipated filing
      date. Subject to the provisions of this Agreement, the Company will include
      in
      the Piggyback Registration all Registrable Securities, on a pro rata basis
      based
      upon the total number of Registrable Securities with respect to which the
      Company has received written requests for inclusion within fifteen (15) business
      days after the applicable holder’s receipt of the Company’s notice.

     

    5.2. Underwritten
      Offerings.
      In the
      event a registration giving rise to the Investors’ rights pursuant to Section
      5.1 relates to an underwritten offering of securities, the Investors’ right to
      registration pursuant to Section 5.1 shall be conditioned upon its (i)
      participation in such underwriting, (ii) inclusion of the Registrable Securities
      therein and (iii) execution of all underwriting documents requested by the
      underwriter with respect thereto (the “Underwriter”).
      If
      the managing underwriter gives the Company its written opinion that the total
      number or dollar amount of securities requested to be included in the
      registration exceeds the number or dollar amount of securities that can be
      sold,
      the Company will include the securities in the registration in the following
      order of priority: (A) first, all securities the Company proposes to sell;
      and
      (B) second, pro rata among all other holders of securities (including the
      holders of Registrable Securities) that have registration rights, if any, in
      each case, on the basis of the dollar amount or number of securities requested
      to be included, as the case may be.

    

    
      
        
        

      

      
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    5.3. Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to the Registration Statement. The
      fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with the
      trading market on which the Common Stock is then listed for trading, and (B)
      in
      compliance with applicable state securities or Blue Sky laws, (ii) printing
      expenses, (iii) messenger, telephone and delivery expenses, (iv) fees and
      disbursements of counsel and independent public accountants for the Company,
      (v)
      fees and disbursements of one counsel to the Investors not to exceed $7,500
      and
      (vi) filing fees and counsel fees of National Securities Corporation if a
      determination is made that a NASD Rule 2710 filing is required to be made with
      respect to the Registration Statement.   

     

    5.4. Indemnification.

     

    (a) Indemnification
      by the Company.
      The
      Company will indemnify and hold harmless each Investor and its officers,
      directors, members, employees and agents, successors and assigns, and each
      other
      person, if any, who controls such Investor within the meaning of the 1933 Act,
      against any losses, claims, damages or liabilities, joint or several, to which
      they may become subject under the 1933 Act or otherwise, insofar as such losses,
      claims, damages or liabilities (or actions in respect thereof) arise out of
      or
      are based upon: (i) any untrue statement or alleged untrue statement of any
      material fact contained in any Registration Statement, any preliminary
      prospectus or final prospectus contained therein, or any amendment or supplement
      thereof; (ii) any blue sky application or other document executed by the Company
      specifically for that purpose or based upon written information furnished by
      the
      Company filed in any state or other jurisdiction in order to qualify any or
      all
      of the Registrable Securities under the securities laws thereof (any such
      application, document or information herein called a “Blue
      Sky Application”);
      (iii)
      the omission or alleged omission to state therein a material fact required
      to be
      stated therein or necessary to make the statements therein not misleading;
      (iv)
      any violation by the Company or its agents of any rule or regulation promulgated
      under the 1933 Act applicable to the Company or its agents and relating to
      action or inaction required of the Company in connection with such registration;
      or (v) any failure to register or qualify the Registrable Securities included
      in
      any such Registration in any state where the Company or its agents has
      affirmatively undertaken or agreed in writing that the Company will undertake
      such registration or qualification on an Investor’s behalf and will reimburse
      such Investor, and each such officer, director or member and each such
      controlling person for any legal or other expenses reasonably incurred by them
      in connection with investigating or defending any such loss, claim, damage,
      liability or action; provided,
      however,
      that
      the Company will not be liable in any such case if and to the extent that any
      such loss, claim, damage or liability arises out of or is based upon an untrue
      statement or alleged untrue statement or omission or alleged omission so made
      in
      conformity with information furnished by such Investor or any such controlling
      person in writing specifically for use in such Registration Statement or
      Prospectus.

     

    (b) Indemnification
      by the Investors.
      Each
      Investor agrees, severally but not jointly, to indemnify and hold harmless,
      to
      the fullest extent permitted by law, the Company, its directors, officers,
      employees, stockholders and each person who controls the Company (within the
      meaning of the 1933 Act) against any losses, claims, damages, liabilities and
      expense (including reasonable attorney fees) resulting from any untrue statement
      of a material fact or any omission of a material fact required to be stated
      in
      the Registration Statement or Prospectus or preliminary prospectus or amendment
      or supplement thereto or necessary to make the statements therein not
      misleading, to the extent, but only to the extent that such untrue statement
      or
      omission is contained in any information furnished in writing by such Investor
      to the Company specifically for inclusion in such Registration Statement or
      Prospectus or amendment or supplement thereto. In no event shall the liability
      of an Investor be greater in amount than the dollar amount of the proceeds
      (net
      of all expense paid by such Investor in connection with any claim relating
      to
      this Section 5.4 and the amount of any damages such Investor has otherwise
      been
      required to pay by reason of such untrue statement or omission) received by
      such
      Investor upon the sale of the Registrable Securities included in the
      Registration Statement giving rise to such indemnification
      obligation.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    (c) Conduct
      of Indemnification Proceedings.
      Any
      person entitled to indemnification hereunder shall (i) give prompt notice to
      the
      indemnifying party of any claim with respect to which it seeks indemnification
      and (ii) permit such indemnifying party to assume the defense of such claim
      with
      counsel reasonably satisfactory to the indemnified party; provided
      that any
      person entitled to indemnification hereunder shall have the right to employ
      separate counsel and to participate in the defense of such claim, but the fees
      and expenses of such counsel shall be at the expense of such person unless
      (a)
      the indemnifying party has agreed to pay such fees or expenses, or (b) the
      indemnifying party shall have failed to assume the defense of such claim and
      employ counsel reasonably satisfactory to such person or (c) in the reasonable
      judgment of any such person, based upon written advice of its counsel, a
      conflict of interest exists between such person and the indemnifying party
      with
      respect to such claims (in which case, if the person notifies the indemnifying
      party in writing that such person elects to employ separate counsel at the
      expense of the indemnifying party, the indemnifying party shall not have the
      right to assume the defense of such claim on behalf of such person); and
provided,
      further,
      that
      the failure of any indemnified party to give notice as provided herein shall
      not
      relieve the indemnifying party of its obligations hereunder, except to the
      extent that such failure to give notice shall materially adversely affect the
      indemnifying party in the defense of any such claim or litigation. It is
      understood that the indemnifying party shall not, in connection with any
      proceeding in the same jurisdiction, be liable for fees or expenses of more
      than
      one separate firm of attorneys at any time for all such indemnified parties.
      No
      indemnifying party will, except with the consent of the indemnified party,
      consent to entry of any judgment or enter into any settlement that does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such indemnified party of a release from all liability in respect of such
      claim or litigation.

     

    (d) Contribution.
      If for
      any reason the indemnification provided for in the preceding paragraphs (a)
      and
      (b) is unavailable to an indemnified party or insufficient to hold it harmless,
      other than as expressly specified therein, then the indemnifying party shall
      contribute to the amount paid or payable by the indemnified party as a result
      of
      such loss, claim, damage or liability in such proportion as is appropriate
      to
      reflect the relative fault of the indemnified party and the indemnifying party,
      as well as any other relevant equitable considerations. No person guilty of
      fraudulent misrepresentation within the meaning of Section 11(f) of the 1933
      Act
      shall be entitled to contribution from any person not guilty of such fraudulent
      misrepresentation. In no event shall the contribution obligation of a holder
      of
      Registrable Securities be greater in amount than the dollar amount of the
      proceeds (net of all expenses paid by such holder in connection with any claim
      relating to this Section 5.4 and the amount of any damages such holder has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission) received by it upon the sale of
      the
      Registrable Securities giving rise to such contribution obligation.

     

    5.5. Cooperation
      by Investor.

     

    Each
      Investor shall furnish to the Company or the Underwriter, as applicable, such
      information regarding the Investor and the distribution proposed by it as the
      Company may reasonably request in connection with any registration or offering
      referred to in this Section 5. Each Investor shall cooperate as reasonably
      requested by the Company in connection with the preparation of the registration
      statement with respect to such registration, and for so long as the Company
      is
      obligated to file and keep effective such registration statement, shall provide
      to the Company, in writing, for use in the registration statement, all such
      information regarding the Investor and its plan of distribution of the Shares
      included in such registration as may be reasonably necessary to enable the
      Company to prepare such registration statement, to maintain the currency and
      effectiveness thereof and otherwise to comply with all applicable requirements
      of law in connection therewith.

     

    6. Transfer
      Restrictions.
      

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    6.1. Transfer
      or Resale.
      Each
      Investor understands that: 

    

    (i) Except
      as
      provided in the registration rights provisions set forth above, the sale or
      resale of all or any portion or component of the Securities has not been and
      is
      not being registered under the 1933 Act or any applicable state securities
      laws,
      and the all or any portion or component of Securities may not be transferred
      unless: 

    

    (A) the
      Securities are sold pursuant to an effective registration statement under the
      1933 Act,

    

    (B) the
      Investor shall have delivered to the Company, at the cost of the Company, a
      customary opinion of counsel that shall be in form, substance and scope
      reasonably acceptable to the Company, to the effect that the Securities to
      be
      sold or transferred may be sold or transferred pursuant to an exemption from
      such registration,

    

    (C) the
      Securities are sold or transferred to an “affiliate” (as defined in Rule 144
      promulgated under the 1933 Act (or a successor rule) (“Rule
      144”))
      of
      the Investor who agrees to sell or otherwise transfer the Securities only in
      accordance with this Section 6.1 and who is an Accredited Investor,

    

    (D) the
      Securities are sold pursuant to Rule 144, or 

    

    (E) the
      Securities are sold pursuant to Regulation S under the 1933 Act (or a successor
      rule) (“Regulation
      S”),
      

    

    and,
      in
      each case, the Investor shall have delivered to the Company, at the cost of
      the
      Company, a customary opinion of counsel, in form, substance and scope reasonably
      acceptable to the Company. Notwithstanding the foregoing or anything else
      contained herein to the contrary, the Securities may be pledged as collateral
      in
      connection with a bona fide
      margin
      account or other lending arrangement. 

    

    6.2 Transfer
      Agent Instructions.
      The
      Company shall issue irrevocable instructions to its transfer agent to issue
      certificates, registered in the name of each Investor or its nominee, for any
      Warrant Shares in such amounts as specified from time to time by each Investor
      to the Company upon exercise of the Warrants in accordance with the terms
      thereof (the “Irrevocable
      Transfer Agent Instructions”).
      Prior
      to registration of the Warrant Shares under the 1933 Act or the date on which
      the Warrant Shares may be sold pursuant to Rule 144 without any restriction
      as
      to the number of Securities as of a particular date that can then be immediately
      sold, all such certificates shall bear the restrictive legend specified in
      Section 3.6(a) of this Agreement. Nothing in this Section shall affect in any
      way the Investor’s obligations and agreement set forth in Section 6.1 hereof to
      comply with all applicable prospectus delivery requirements, if any, upon
      re-sale of the Securities. If an Investor provides the Company with a customary
      opinion of counsel, that shall be in form, substance and scope reasonably
      acceptable to such counsel, to the effect that a public sale or transfer of
      such
      Securities may be made without registration under the 1933 Act and such sale
      or
      transfer is effected, the Company shall permit the transfer, and, in the case
      of
      the Warrant Shares, promptly instruct its transfer agent to issue one or more
      certificates, free from restrictive legend, in such name and in such
      denominations as specified by such Investor. The Company acknowledges that
      a
      breach by it of its obligations hereunder will cause irreparable harm to the
      Investors, by vitiating the intent and purpose of the transactions contemplated
      hereby. Accordingly, the Company acknowledges that the remedy at law for a
      breach of its obligations under this Section 6.2 may be inadequate and agrees,
      in the event of a breach or threatened breach by the Company of the provisions
      of this Section, that the Investors shall be entitled, in addition to all other
      available remedies, to an injunction restraining any breach and requiring
      immediate transfer, without the necessity of showing economic loss and without
      any bond or other security being required.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    7. Conditions
      to Closing of the Investors.

    

    The
      obligation of each Investor to purchase the Shares and the Warrants at the
      Closing is subject to the fulfillment to such Investor’s satisfaction, on or
      prior to the Closing Date, of the following conditions, any of which may be
      waived by such Investor (as to itself only): 

    

    7.1. Representations
      and Warranties.
      The
      representations and warranties made by the Company in Section 4 hereof qualified
      as to materiality shall be true and correct at all times prior to and on the
      Closing Date, except to the extent any such representation or warranty expressly
      speaks as of an earlier date, in which case such representation or warranty
      shall be true and correct as of such earlier date, and, the representations
      and
      warranties made by the Company in Section 4 hereof not qualified as to
      materiality shall be true and correct in all material respects at all times
      prior to and on the Closing Date, except to the extent any such representation
      or warranty expressly speaks as of an earlier date, in which case such
      representation or warranty shall be true and correct in all material respects
      as
      of such earlier date. The Company shall have performed in all material respects
      all obligations and covenants herein required to be performed by it on or prior
      to the Closing Date.

     

    
      
        7.2.
          Approvals.

      

    

     

    The
      Company shall have obtained any and all consents, permits, approvals,
      registrations and waivers necessary or appropriate for consummation of the
      purchase and sale of the Securities and the consummation of the other
      transactions contemplated by the Transaction Documents, all of which shall
      be in
      full force and effect. 

     

    
      
        7.3.
          Judgments,
          Etc.

      

    

     

    No
      judgment, writ, order, injunction, award or decree of or by any court, or judge,
      justice or magistrate, including any bankruptcy court or judge, or any order
      of
      or by any governmental authority, shall have been issued, and no action or
      proceeding shall have been instituted by any governmental authority, enjoining
      or preventing the consummation of the transactions contemplated hereby or in
      the
      other Transaction Documents.

     

    7.4 Stop
      Orders.

     

    No
      stop
      order or suspension of trading shall have been imposed by the SEC or any other
      governmental or regulatory body with respect to public trading in the Common
      Stock.

     

    7.5 Company
      CEO/CFO Certificate.

     

    The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Chief Executive Officer or its Chief Financial Officer, dated as of the
      Closing Date, certifying to the fulfillment of the conditions specified in
      subsections 7.1, 7.2, 7.3 and 7.4.

     

    7.6 Company
      Secretary Certificate.

     

    The
      Company shall have delivered a Certificate, executed on behalf of the Company
      by
      its Secretary, dated as of the Closing Date, certifying the resolutions adopted
      by the Board of Directors of the Company approving the transactions contemplated
      by this Agreement and the other Transaction Documents and the issuance of the
      Securities, certifying the current versions of the Articles of Incorporation
      and
      Bylaws of the Company and certifying as to the signatures and authority of
      persons signing the Transaction Documents and related documents on behalf of
      the
      Company. The foregoing certificate shall only be required to be delivered on
      the
      First Closing Date, unless any information contained in the certificate has
      changed. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    7.7 Opinion
      of Counsel.

     

    The
      Investors shall have received an opinion from Greenberg Traurig, LLP, the
      Company's counsel, dated as of the Closing Date, in form and substance
      reasonably acceptable to National Securities Corporation. 

     

    
      
        8.
          Conditions
          to Closing of the Company.

      

    

     

    The
      obligations of the Company to effect the transactions contemplated by this
      Agreement are subject to the fulfillment at or prior to each Closing Date of
      the
      conditions listed below.

     

    
      
        8.1.
          Representations
          and Warranties.

      

    

     

    The
      representations and warranties made by the Investor in Section 3 shall be true
      and correct in all material respects at the time of Closing as if made on and
      as
      of such date.

     

    
      
        8.2.
          Corporate
          Proceedings.

      

    

     

    All
      corporate and other proceedings required to be undertaken by the Investor in
      connection with the transactions contemplated hereby shall have occurred and
      all
      documents and instruments incident to such proceedings shall be reasonably
      satisfactory in substance and form to the Company.

     

    9. Miscellaneous.

     

    9.1. Compensation
      of Brokers.

     

    The
      Investor acknowledges that it is aware that National Securities Corporation
      will
      receive from the Company, in consideration of its services as placement agent
      in
      respect of the transactions contemplated hereby, (i) a success fee of 10% of
      the
      Purchase Price of the Shares and Warrants sold at each closing, payable in
      cash
      (the “Success Fee”) and (ii) a warrant to purchase a number of shares of Common
      Stock equal to 10% of the Shares sold at each closing at an exercise price
      of
      $2.00 per share. 

     

    9.2. Notices.

     

    All
      notices, requests, demands and other communications provided in connection
      with
      this Agreement shall be in writing and shall be deemed to have been duly given
      at the time when hand delivered, delivered by express courier, or sent by
      facsimile (with receipt confirmed by the sender’s transmitting device) in
      accordance with the contact information provided below or such other contact
      information as the parties may have duly provided by notice.

     

    The
      Company: 

    
      	
              Debt
                Resolve, Inc.

              707
                Westchester Avenue, Suite L-7

              White
                Plains, New York 10604

              Telephone:
                914-949-5500

              Facsimile:
                914-428-3044

              Attention:
                Mr. James D. Burchetta,

              Chief
                Executive Officer

            	
              With
                a copy to:

            	
              Greenberg
                Traurig, LLP

              200
                Park Avenue, 14th
                Floor

              New
                York, NY 10166

              Telephone:
                212-801-9221

              Facsimile:
                212-801-6400

              Attention:
                Spencer G. Feldman, Esq.

            

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    The
      Investors:

     

    As
      per
      the contact information provided on the signature page hereof.

     

    National
      Securities Corporation:
      

     

    
      	
              National
                Securities Corporation 

              875
                N. Michigan Avenue, Suite 1560 Chicago, IL 60611 

              Facsimile.
                312-751-0769 

              Attention:
                Brian Friedman, 

              Managing
                Director

            	
              With
                a copy to:

            	
              Littman
                Krooks, LLP

              655
                Third Avenue, 20th
                Floor

              New
                York, NY 10017

              Facsimile:
                212-490-2990

              Attention:
                Steven D. Uslaner, Esq.

            

    

     

    9.3 Survival
      of Representations and Warranties.

     

    Each
      party hereto covenants and agrees that the representations and warranties of
      such party contained in this Agreement shall survive the Closing.

     

    9.4 Indemnification.
      

     

    (a) The
      Company agrees to indemnify and hold harmless each Investor and its Affiliates
      and their respective directors, officers, employees and agents from and against
      any and all losses, claims, damages, liabilities and expenses (including without
      limitation reasonable attorney fees and disbursements and other expenses
      incurred in connection with investigating, preparing or defending any action,
      claim or proceeding, pending or threatened and the costs of enforcement thereof)
      (collectively, “Losses”)
      to
      which such Person may become subject as a result of any breach of
      representation, warranty, covenant or agreement made by or to be performed
      on
      the part of the Company under the Transaction Documents, and will reimburse
      any
      such Person for all such amounts as they are incurred by such
      Person.

     

    (b) Promptly
      after receipt by any Investor (the “Indemnified Person”) of notice of any
      demand, claim or circumstances which would or might give rise to a claim or
      the
      commencement of any action, proceeding or investigation in respect of which
      indemnity may be sought pursuant to Section 9.4, such Indemnified Person shall
      promptly notify the Company in writing and the Company shall assume the defense
      thereof, including the employment of counsel reasonably satisfactory to such
      Indemnified Person, and shall assume the payment of all fees and expenses;
      provided,
      however,
      that
      the failure of any Indemnified Person so to notify the Company shall not relieve
      the Company of its obligations hereunder except to the extent that the Company
      is materially prejudiced by such failure to notify. In any such proceeding,
      any
      Indemnified Person shall have the right to retain its own counsel, but the
      fees
      and expenses of such counsel shall be at the expense of such Indemnified Person
      unless: (i) the Company and the Indemnified Person shall have mutually agreed
      to
      the retention of such counsel; or (ii) in the reasonable judgment of counsel
      to
      such Indemnified Person representation of both parties by the same counsel
      would
      be inappropriate due to actual or potential differing interests between them.
      The Company shall not be liable for any settlement of any proceeding effected
      without its written consent, which consent shall not be unreasonably withheld,
      but if settled with such consent, or if there be a final judgment for the
      plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
      from and against any loss or liability (to the extent stated above) by reason
      of
      such settlement or judgment. Without the prior written consent of the
      Indemnified Person, which consent shall not be unreasonably withheld, the
      Company shall not effect any settlement of any pending or threatened proceeding
      in respect of which any Indemnified Person is or could have been a party and
      indemnity could have been sought hereunder by such Indemnified Party, unless
      such settlement includes an unconditional release of such Indemnified Person
      from all liability arising out of such proceeding.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    9.5. Entire
      Agreement.
      This
      Agreement contains the entire agreement between the parties hereto in respect
      of
      the subject matter contained herein and supersedes all prior agreements and
      understandings of the parties, oral and written, with respect to the subject
      matter contained herein.

    

    9.6 Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and, except for NSC and the Other BDs, if
      any,
      who are specifically agreed to be and acknowledged by each party as third party
      beneficiaries hereof, is not for the benefit of, nor may any provision hereof
      be
      enforced by, any other person.

    

    9.7. Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and assigns. Neither the Company nor any Investor shall assign
      this Agreement or any rights or obligations hereunder without the prior written
      consent of the other. Notwithstanding the foregoing, but subject to the
      provisions of Section 6.1 hereof, any Investor may, without the consent of
      the
      Company, assign its rights hereunder to any person that purchases Securities
      in
      a private transaction from an Investor or to any of its “affiliates,” as that
      term is defined under the 1934 Act.

     

    9.8. Publicity.
      The
      Company and NSC shall have the right to review a reasonable period of time
      before issuance of any press releases or SEC or other regulatory filings, or
      any
      other public statements with respect to the transactions contemplated hereby;
      provided,
      however,
      that
      the Company shall be entitled, without the prior approval of the Placement
      Agents or the Purchasers, to make any press release or SEC or other regulatory
      filings with respect to such transactions as is required by applicable law
      and
      regulations (although the Placement Agents shall be consulted by the Company
      in
      connection with any such press release prior to its release and shall be
      provided with a copy thereof and be given an opportunity to comment thereon).
      

     

    9.9. Binding
      Effect; Benefits.

     

    This
      Agreement and all the provisions hereof shall be binding upon and inure to
      the
      benefit of the parties hereto and their respective successors and permitted
      assigns; nothing in this Agreement, expressed or implied, is intended to confer
      on any persons other than the parties hereto or their respective successors
      and
      permitted assigns, any rights, remedies, obligations or liabilities under or
      by
      reason of this Agreement.

     

    9.10. Amendment;
      Waivers.

     

    All
      modifications, amendments or waivers to this Agreement shall require the written
      consent of both the Company and a majority in interest of the Investors (based
      on the number of Shares purchased hereunder). 

     

    9.11. Applicable
      Law; Disputes.

     

    This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without giving effect to the conflict of law provisions
      thereof, and the parties hereto irrevocably submit to the exclusive jurisdiction
      of the United States District Court for the Southern District of New York,
      or,
      if jurisdiction in such court is lacking, the Supreme Court of the State of
      New
      York, New York County, in respect of any dispute or matter arising out of or
      connected with this Agreement

     

    9.12. Further
      Assurances.

     

    Each
      party hereto shall do and perform or cause to be done and performed all such
      further acts and shall execute and deliver all such other agreements,
      certificates, instruments and documents as any other party hereto reasonably
      may
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    9.13. Counterparts.

     

    This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original and all of which taken together shall constitute one
      and the same instrument. This Agreement may also be executed via facsimile,
      which shall be deemed an original.

     

    [SIGNATURE
      PAGES IMMEDIATELY FOLLOW]

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned Investors and the Company have caused this Securities Purchase
      Agreement to be duly executed as of the date first above written.

     

    
      	 	 	 
	 	
              DEBT
                RESOLVE, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
              James D. Burchetta
	 	Title:
              Co-chairman, President and CEO

    

    
      	
               

            	
              INVESTORS:

               

              The
                Investors executing the Signature Page in the form attached hereto
                as
                Annex
                A
                and delivering the same to the Company or its agents shall be deemed
                to
                have executed this Agreement and agreed to the terms
                hereof.

            

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    Annex
      A

    

    Securities
      Purchase Agreement

    Investor
      Counterpart Signature Page

    

    The
      undersigned, desiring to: (i) enter into this Securities Purchase Agreement
      dated as of August ___2,
      2007
      (the “Agreement”),
      between the undersigned, Debt Resolve, Inc., a Delaware corporation (the
“Company”),
      and
      the other parties thereto, in or substantially in the form furnished to the
      undersigned and (ii) purchase the securities of the Company as set forth below,
      hereby agrees to purchase such securities from the Company as of the Closing
      and
      further agrees to join the Agreement as a party thereto, with all the rights
      and
      privileges appertaining thereto, and to be bound in all respects by the terms
      and conditions thereof. The undersigned specifically acknowledges having read
      the representations in the Purchase Agreement section entitled “Representations,
      Warranties and Acknowledgments of the Investors,” and hereby represent that the
      statements contained therein are complete and accurate with respect to the
      undersigned as an Investor.

    

      
        	 	
                Name
                  of Investor:

              
	 	 
	 	
                If
                  an entity: 

              
	 	 
	 	
                Print
                  Name of Entity: 

              
	 	 
	 	
                                                                                                                                             

              
	 	 
	 	
                By: 
                                                                                                                                       
                  

              
	 	
                Name:                                                                                

              
	 	
                Title:                                                                
                                   
                  

              
	 	 
	 	
                If
                  an individual:

              
	 	 
	 	
                Print
                  Name:                                                                               

              
	 	 
	 	
                Signature:                                                                                 

              
	 	 
	 	
                All
                  Investors: 

              
	 	 
	 	
                Address:                                                                                  

              
	 	                                                                                              
	 	 
	 	
                Telephone
                  No.:                                                                          

              
	 	 
	 	
                Facsimile
                  No.:                                                                            

              
	 	 
	 	
                Email
                  Address:                                                                          

              
	 	 
	 	
                The
                  Investor hereby elects to purchase ______ Shares (to be completed
                  by
                  Investor) under the Securities Purchase Agreement at a price of
                  $2.00 per
                  Share for a total Purchase Price of $_________ (to be completed
                  by
                  Investor). Investor will also receive 50% warrant coverage with
                  respect to
                  said investment.

              

      

    

    
    

    
      
        
          
            
              

            
2 Will
            reflect First Closing Date. Not to be completed by
            Investor.

        

      

      
         

        
          
            
            

          

          
            22

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