Document:

Unassociated Document

    THIS
      WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF HAVE
      NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”),
      OR
      ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
      TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
      REGISTRATION STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE
      SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH
      ALL
      APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

     

    
      	
              No.
                IW-001

            	
              For
                the Purchase

            
	 	
              of
                [_______] shares

            
	 	
              of
                Common Stock

            

    

    

    WARRANT
      TO PURCHASE 

    COMMON
      STOCK

    OF

    INDUSTRIAL
      SERVICES ACQUISITION CORP.

    (A
      Delaware Corporation)

     

    Industrial
      Services Acquisition Corp., a Delaware corporation (the “Company”),
      for
      value received, hereby certifies that [____________] (the “Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      any time or from time to time at or before the earlier of (i) 5:00 p.m. Eastern
      Standard Time on [______], 2012 (the “Expiration
      Date”),
      (ii)
      the termination of this Warrant as provided in Section 8 hereof, or (iii) the
      redemption of this Warrant as provided in Section 9 hereof, [_________] shares
      of Common Stock, par value $0.0001 per share, of the Company (the “Common
      Stock”),
      at a
      purchase price per share equal to 0.01 Dollars ($0.01) per share, as adjusted
      upon the occurrence of certain events as set forth in Section 3 of this Warrant.
      The shares of stock issuable upon exercise of this Warrant, and the purchase
      price per share, are hereinafter referred to as the “Warrant
      Stock”
and
      the
“Purchase
      Price,”
      respectively. 

     

    1. Exercise.

     

    1.1 Manner
      of Exercise; Payment in Cash.
      This
      Warrant may be exercised by the Holder, in whole or in part:

    

    (a) The
      Warrant will be exercisable for $0.01 per share, commencing three months
      following the closing of the Company’s first Business Combination
      (as
      defined in the Company’s Third Amended and Restated Certificate of
      Incorporation) (the “Initial
      Business Combination”)
      and
      will vest in three installments, with the first one-half of the Warrant vesting
      on the date that is six months from the consummation of a Business Combination,
      the
      second one-fourth of the Warrant vesting
      on the date that is nine months from the consummation of a Business
      Combination
      and the
      last one-fourth vesting
      on the date that is one year from the consummation of a Business
      Combination;
      provided, however, that, appropriate adjustments shall be made in the
      application of the provisions of this Section 1.1(a) in the event of any
      adjustments to the Purchase Price pursuant to Section 3 hereof;
      and

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) by
      surrendering this Warrant, with the purchase form appended hereto as
Exhibit
      A
      duly
      executed by the Holder, at the principal office of the Company, or at such
      other
      place as the Company may designate, accompanied by payment in full of the
      Purchase Price payable in respect of the number of shares of Warrant Stock
      purchased upon such exercise. Subject to Section 1.4 hereof, payment of the
      Purchase Price shall be in cash or by certified or official bank check payable
      to the order of the Company. 

     

    1.2 Effectiveness.
      Each
      exercise of this Warrant shall be deemed to have been effected immediately
      prior
      to the close of business on the day on which this Warrant shall have been
      surrendered to the Company as provided in Section 1.1 above. At such time,
      the
      person or persons in whose name or names any certificates for Warrant Stock
      shall be issuable upon such exercise as provided in Section 1.3 below shall
      be
      deemed to have become the holder or holders of record of the Warrant Stock
      represented by such certificates.

     

    1.3. Delivery
      of Certificates.
      As soon
      as practicable after the exercise of this Warrant in whole or in part, and
      in
      any event within ten (10) business days thereafter, the Company, at its sole
      expense, will cause to be issued in the name of, and delivered to, the Holder,
      or, subject to the terms and conditions hereof, as such Holder (upon payment
      by
      such Holder of any applicable transfer taxes) may direct:

     

    (a) A
      certificate or certificates for the number of full shares of Warrant Stock
      to
      which such Holder shall be entitled upon such exercise plus, in lieu of any
      fractional share to which such Holder would otherwise be entitled, cash in
      an
      amount determined pursuant to Section 1.4(c) hereof; and

     

    (b) In
      case
      such exercise is in part only, a new warrant or warrants (dated the date hereof)
      of like tenor, calling in the aggregate on the face or faces thereof for the
      number of shares of Warrant Stock (without giving effect to any adjustment
      therein) equal to the number of such shares called for on the face of this
      Warrant minus the number of such shares purchased by the Holder upon such
      exercise as provided in Section 1.1 above.

     

    1.4 Right
      to Convert Warrant into Stock: Net Issuance.

    

    (a) Right
      to Convert.
      Subject
      to Section 7, in addition to and without limiting the rights of the Holder
      under
      the terms of this Warrant, provided that this Warrant may then be exercised
      pursuant to Section 1.1(a) hereof, the Holder shall have the right to convert
      this Warrant or any portion thereof, to the extent it is then exercisable as
      provided in Section 1.1(a) hereof (the “Conversion
      Right”)
      into
      shares of Common Stock as provided in this Section 1.4 at any time or from
      time
      to time during the term of this Warrant. Upon exercise of the Conversion Right
      with respect to a particular number of shares subject to this Warrant (the
      “Converted Warrant Shares”), the Company shall deliver to the Holder (without
      payment by the holder of any Purchase Price or any cash or other consideration)
      that number of shares of fully paid and nonassessable Common Stock equal to
      the
      quotient obtained by dividing (X) the value of this Warrant (or the specified
      portion hereof) on the Conversion Date (as defined in subsection (b) hereof),
      which value shall be determined by subtracting (A) the aggregate Purchase Price
      of the Converted Warrant Shares immediately prior to the exercise of the
      Conversion Right from (B) the aggregate fair market value of the Converted
      Warrant Shares issuable upon exercise of this Warrant (or the specified portion
      hereof) on the Conversion Date (as herein defined) by (Y) the fair market value
      of one share of Common Stock on the Conversion Date (as herein
      defined).

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Expressed
      as a formula, such conversion shall be computed as follows:

    

    
      	 	
              X

            	
              =

            	
              B-A

            
	 	 	 	
                Y

            
	 	 	 	 
	 	
              where:
                

            	 	
              X
                =
                the number of shares of Common Stock that may be issued to the
                Holder

            
	 	 	 	 
	 	 	 	
              Y
                =
                the fair market value (FMV) of one share of Common
                Stock

            
	 	 	 	 
	 	 	 	
              A
                =
                the aggregate Warrant Price (Converted Warrant Shares x Purchase
                Price)

            
	 	 	 	 
	 	 	 	
              B
                =
                the aggregate FMV (i.e., FMV x Converted Warrant
                Shares)

            

    

    

    No
      fractional shares shall be issuable upon exercise of the Conversion Right,
      and,
      if the number of shares to be issued determined in accordance with the foregoing
      formula is other than a whole number, the Company shall pay to the Holder an
      amount in cash equal to the fair market value of the resulting fractional share
      on the Conversion Date.

    

    (b) Method
      of Exercise.
      The
      Conversion Right may be exercised by the Holder by the surrender of this Warrant
      at the principal office of the Company together with the Purchase Form in the
      form attached hereto duly completed and executed and indicating the number
      of
      shares subject to this Warrant which are being surrendered (referred to in
      Section 1.4(a) hereof as the Converted Warrant Shares) in exercise of the
      Conversion Right. Such conversion shall be effective upon receipt by the Company
      of this Warrant together with the aforesaid written statement, or on such later
      date as is specified therein (the “Conversion
      Date”),
      and,
      at the election of the Holder, may be made contingent upon the occurrence of
      any
      of the events specified in Section 8. Certificates for the shares issuable
      upon
      exercise of the Conversion Right and, if applicable, a new Warrant evidencing
      the balance of the shares remaining subject to this Warrant, shall be issued
      as
      of the Conversion Date and shall be delivered to the Holder within thirty (30)
      days following the Conversion Date.

    

    (c) Determination
      of Fair Market Value.
      For
      purposes of this Agreement, “fair market value” of a share of Common Stock as of
      a particular date (the “Determination
      Date”)
      shall
      mean:

    

    
      	
            	(i)	
              If
                traded on a securities exchange, the fair market value of the Common
                Stock
                shall be deemed to be the average of the closing prices of the Common
                Stock on such exchange over the five-day period ending one business
                day
                prior to the Determination Date or, if less, such number of days
                as the
                Common Stock has been traded on such
                exchange;

            

    

    

    
      	
            	(ii)	
              If
                traded over-the-counter, the fair market value of the Common Stock
                shall
                be deemed to be the average of the closing bid prices of the Common
                Stock
                over the five-day period ending one business day prior to the
                Determination Date or, if less, such number of days as the Common
                Stock
                has been traded over-the-counter;
                and

            

    

    

    
      	
            	(iii)	
              If
                there is no public market for the Common Stock, then fair market
                value
                shall be determined in good faith by the Board of Directors of the
                Company.

            

    

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    2. Fractional
      Shares.
      The
      Company shall not be required upon the exercise of this Warrant to issue any
      fractional shares, but instead shall, upon such exercise, round up or down
      to
      the nearest whole number of shares of Common Stock to be issued to the
      Holder.

     

    3. Certain
      Adjustments.

     

    3.1 Changes
      in Common Stock.
      In
      case
      the Company shall at any time after the date hereof (i) declare a dividend
      on
      the outstanding shares of Common Stock payable solely in shares of its capital
      stock, (ii) subdivide the outstanding shares of Common Stock, (iii) combine
      the
      outstanding shares of Common Stock into a lesser number of shares, or (iv)
      issue
      any shares of its capital stock by reclassification of the shares of Common
      Stock (including any such reclassification in connection with a consolidation
      or
      merger in which the Company is the continuing corporation), then, in each case,
      the Purchase Price, and the number and kind of securities issuable upon exercise
      or conversion of this Warrant, in effect at the time of the record date for
      such
      dividend or of the effective date of such subdivision, combination, or
      reclassification, shall be proportionately adjusted so that, subject to Section
      1.1(a) hereof, the Holder after such time shall be entitled to receive upon
      exercise of this Warrant the aggregate number and kind of shares which, if
      such
      Warrant had been exercised or converted immediately prior to such time (assuming
      all of the requirements of Section 1.1(a) had been satisfied), such Holder
      would
      have owned upon such exercise or conversion and been entitled to receive by
      virtue of such dividend, subdivision, combination, or reclassification. Such
      adjustment shall be made successively whenever any event listed above shall
      occur.

     

    3.2 Reorganizations
      and Reclassifications.
      If
      there shall occur any capital reorganization or reclassification of the Common
      Stock (other than a change in par value or a subdivision or combination as
      provided for in Section 3.1), then, as part of any such reorganization or
      reclassification, lawful provision shall be made so that the Holder shall have
      the right thereafter to receive upon the exercise of this Warrant the kind
      and
      amount of shares of stock or other securities or property which such Holder
      would have been entitled to receive if, immediately prior to any such
      reorganization or reclassification (assuming all of the requirements of Section
      1.1(a) had been satisfied), such Holder had held the number of shares of Common
      Stock which were then subject to this Warrant. In any such case, appropriate
      adjustment (as reasonably determined by the Board of Directors of the Company)
      shall be made in the application of the provisions set forth herein with respect
      to the rights and interests thereafter of the Holder, such that the provisions
      set forth in this Section 3 (including provisions with respect to adjustment
      of
      the Purchase Price) shall thereafter be applicable, as nearly as is reasonably
      practicable, in relation to any shares of stock or other securities or property
      thereafter deliverable upon the exercise of this Warrant.

     

    3.3 Merger,
      Consolidation or Sale of Assets.
      Subject
      to the provisions of Section 7, if there shall be a merger or consolidation
      of
      the Company with or into another corporation (other than a merger or
      reorganization involving only a change in the state of incorporation of the
      Company or the acquisition by the Company of other businesses where the Company
      survives as a going concern), or the sale of all or substantially all of the
      Company’s capital stock or assets to any other person, then as a part of such
      transaction, provision shall be made so that, subject to Section 1.1(a) hereof,
      the Holder shall thereafter be entitled to receive upon exercise of this Warrant
      the number of shares of stock or other securities or property of the Company,
      or
      of the successor corporation resulting from the merger, consolidation or sale,
      to which the Holder would have been entitled if the Holder had exercised its
      rights pursuant to the Warrant immediately prior thereto (assuming all of the
      requirements of Section 1.1(a) hereof had been satisfied). In any such case,
      appropriate adjustment shall be made in the application of the provisions of
      this Section 3 to the end that the provisions of this Section 3 shall be
      applicable after that event in as nearly equivalent a manner as may be
      practicable.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    3.4 Certificate
      of Adjustment.
      When
      any adjustment is required to be made in the number of shares of Common Stock
      or
      other securities or property issuable upon exercise of this Warrant or in the
      Purchase Price, the Company shall promptly mail to the Holder a certificate
      setting forth such number of shares or other securities or property or the
      Purchase Price after such adjustment and setting forth a brief statement of
      the
      facts requiring such adjustment. Delivery of such certificate shall be deemed
      to
      be a final and binding determination with respect to such adjustment absent
      manifest error unless challenged by the Holder within ten (10) days of receipt
      thereof. 

     

    4. Compliance
      with Securities Act.

     

    4.1 Unregistered
      Securities.
      The
      Holder acknowledges that this Warrant and the Warrant Stock have not been
      registered under the Securities Act of 1933, as amended, and the rules and
      regulations thereunder, or any successor legislation (the “Securities
      Act”),
      and
      agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise
      dispose of this Warrant or any Warrant Stock in the absence of (a) an effective
      registration statement under the Securities Act covering this Warrant or such
      Warrant Stock and registration or qualification of this Warrant or such Warrant
      Stock under any applicable “blue sky” or state securities law then in effect, or
      (b) an opinion of counsel, satisfactory to the Company, that such registration
      and qualification are not required. The Company may delay issuance of the
      Warrant Stock until completion of any action or obtaining of any consent, which
      the Company deems necessary under any applicable law (including, without
      limitation, state securities or “blue sky” laws).

     

    4.2 Investment
      Letter.
      Without
      limiting the generality of Section 4.1, unless the offer and sale of any shares
      of Warrant Stock shall have been effectively registered under the Securities
      Act, the Company shall be under no obligation to issue the Warrant Stock unless
      and until the Holder shall have executed an investment letter in form and
      substance satisfactory to the Company, including a warranty at the time of
      such
      exercise that the Holder is acquiring such shares for his, her or its own
      account, for investment and not with a view to, or for sale in connection with,
      the distribution of any such shares.

     

    4.3 Legend.
      Certificates delivered to the Holder pursuant to Section 1.3 shall bear the
      following legend or a legend in substantially similar form:

    

      “THE
        SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
        ACT”),
        OR
        ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
        TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
        REGISTRATION STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE
        SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
        SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
        SECURITIES ACT IS AVAILABLE.”

    

     

    5. Reservation
      of Stock.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery upon the exercise of this Warrant, such shares of Warrant Stock and
      other stock, securities and property, as from time to time shall be issuable
      upon the exercise of this Warrant. The Company covenants that all shares of
      Warrant Stock so issuable will, when issued against payment therefor, be duly
      and validly issued and fully paid and nonassessable.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    6. Replacement
      of Warrants.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of loss, theft or
      destruction, upon delivery of an indemnity agreement (with surety if reasonably
      required) in an amount reasonably satisfactory to the Company, or in the case
      of
      mutilation upon surrender and cancellation of this Warrant, the Company will
      issue, in lieu thereof, a new Warrant of like tenor.

     

    7. Termination
      Upon Certain Events.
      If,
      subsequent to the Initial Business Combination, there shall be a merger or
      consolidation of the Company with or into another corporation (other than a
      merger or reorganization involving only a change in the state of incorporation
      of the Company or the acquisition by the Company of other businesses where
      the
      Company survives as a going concern), or the sale of all or substantially all
      of
      the Company’s capital stock or assets to any other person, or the liquidation or
      dissolution of the Company, then as a part of such transaction, at the Company’s
      option, either:

     

    (a) provision
      shall be made so that, subject to Section 1.1(a) hereof, the Holder shall
      thereafter be entitled to receive upon exercise of this Warrant the number
      of
      shares of stock or other securities or property of the Company, or of the
      successor corporation resulting from the merger, consolidation or sale, to
      which
      the Holder would have been entitled if the Holder had exercised its rights
      pursuant to the Warrant immediately prior thereto (assuming all of the
      requirements of Section 1.1(a) had been satisfied), and, in such case,
      appropriate adjustment shall be made in the application of the provisions of
      this Section 7(a) to the end that the provisions of this Section 7(a) shall
      be
      applicable after that event in as nearly equivalent a manner as may be
      practicable; or

     

    (b) this
      Warrant shall terminate on the effective date of such merger, consolidation
      or
      sale (the “Termination
      Date”)
      and
      become null and void, provided,
      that if
      this Warrant shall not have otherwise terminated or expired, (i) the Company
      shall have given the Holder written notice of such Termination Date at least
      twenty (20) business days prior to the occurrence thereof, and (ii) the Holder
      shall have the right, until 5:00 p.m., Eastern Standard Time, on the day
      immediately prior to the Termination Date to exercise its rights hereunder
      to
      the extent not previously exercised and without regard to whether the
      requirements set forth in Section 1.1(a) hereof have been
      satisfied.

     

    8. Transferability.
      This
      Warrant shall not be assigned, pledged or hypothecated in any way and shall
      not
      be subject to execution, attachment or similar process until such time as the
      Company completes the Initial Business Combination. The
      foregoing transfer restriction shall not apply to (a) transfers resulting from
      the death of any of the Holders, (b) transfers by operation of law, (c) any
      transfer for estate planning purposes to persons immediately related to the
      transferor by blood, marriage or adoption, or (d) any trust solely for the
      benefit of such transferor and/or the persons described in the preceding clause;
      provided,
      however,
      that with respect to each of the transfers described in clauses (a), (b), (c)
      and (d) of this sentence, prior to such transfer, each permitted transferee
      or
      the trustee or legal guardian for each permitted transferee agrees in writing
      to
      be bound by the terms of this Warrant. Any
      attempted transfer, assignment, pledge, hypothecation or other disposition
      of
      this Warrant or of any rights granted hereunder contrary to the provisions
      of
      this Section 8, or the levy of any attachment or similar process upon this
      Warrant or such rights, shall be null and void.

     

    9. Redemption.
      The
      Warrant shall be
      non-redeemable so long as the Holder holds such Warrant following its issuance
      by the Company to such Holder. In the event the Warrant is transferred by the
      Holder other than to a transferee permitted pursuant to Section 8 hereof, then
      the Warrant may be redeemed in whole, and not in part, at
      a
      price of $0.01 per Warrant, upon a minimum of 30 days’ prior written notice of
      redemption, if, and only if, the last sales price of the Company’s Common Stock
      equals or exceeds $11.50 per
      share
      for any twenty (20) trading days within any thirty (30) trading day period
      ending three (3) business days before the Company sends the notice of
      redemption.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    10. Registration
      Rights.
      This Warrant, together with the shares of Warrant Stock underlying this Warrant,
      are and will be entitled to registration rights under a registration rights
      agreement between the Holder
      and the Company. 

     

    11. No
      Rights as Shareholder.
      Until
      the exercise of this Warrant, the Holder shall not have or exercise any rights
      as a stockholder of the Company.

     

    12. Notices.
      All
      notices, requests and other communications hereunder shall be in writing, shall
      be (a) delivered by hand, (b) sent by overnight courier, or (c) sent by
      registered or certified mail, postage prepaid, return receipt requested. In
      the
      case of notices from the Company to the Holder, they shall be sent to the
      address furnished to the Company in writing by the last Holder who shall have
      furnished an address to the Company in writing. All notices from the Holder
      to
      the Company shall be delivered to the Company at its offices at c/o Mark
      McKinney, Chief Executive Officer, Industrial Services Acquisition Corp., 2807
      El Presidio St., Carson, California 90810, or such other address as the Company
      shall so notify the Holder. All notices, requests and other communications
      hereunder shall be deemed to have been given (i) if made by hand, at the time
      of
      the delivery thereof to the receiving party at the address of such party
      described above, (ii) if sent by overnight courier, on the next business day
      following the day such notices is delivered to the courier service, or (iii)
      if
      sent by registered or certified mail, on the third business day following the
      day of registration or certification thereof.

    

    13. Waivers
      and Modifications.
      Any
      term or provision of this Warrant may be waived only by written document
      executed by the party entitled to the benefits of such terms or provisions.
      The
      terms and provisions of this Warrant may be modified or amended only by written
      agreement executed by the parties hereto.

     

    14. Headings.
      The
      headings in this Warrant are for convenience of reference only and shall in
      no
      way modify or affect the meaning or construction of any of the terms or
      provisions of this Warrant.

     

    15. Governing
      Law.
      This
      Warrant will be governed by and construed in accordance with and governed by
      the
      laws of Delaware, without giving effect to the conflict of law principles
      thereof.

    

    
      	 	
              INDUSTRIAL
                SERVICES ACQUISITION CORP.

            
	 	 
	 	
              By:
                ____________________________

            
	 	
              Name:
                Mark McKinney

            
	 	
              Title:
                Chief Executive Officer 

            

    

    

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    PURCHASE
      FORM

    

    To: INDUSTRIAL
      SERVICES ACQUISITION CORP.

    

    The
      undersigned pursuant to the provisions set forth in the attached Warrant (No.
      IW-____), hereby irrevocably elects to (check one):

    

    
      	 	
              _____

            	
              (A)

            	
              purchase
                __________ shares of the Common Stock, par value $0.0001 per share,
                of
                Industrial Services Acquisition Corp. (the “Common
                Stock”),
                covered by such Warrant and herewith makes payment of $____________,
                representing the full purchase price for such shares at the price
                per
                share provided for in such Warrant; or

            
	 	 	 	 
	 	
              _____

            	
              (B)

            	
              convert
                _________ Converted Warrant Shares into that number of shares of
                fully
                paid and nonassessable shares of Common Stock, determined pursuant
                to the
                provisions of Section 1.4 of the
                Warrant.

            

    

    

    

    The
      Common Stock for which the Warrant may be exercised or converted shall be known
      herein as the “Warrant
      Stock.”

    

    The
      undersigned is aware that the Warrant Stock has not been and will not be
      registered under the Securities Act of 1933, as amended (the “Securities
      Act”),
      or
      any state securities laws. The undersigned understands that reliance by the
      Company on exemptions under the Securities Act is predicated in part upon the
      truth and accuracy of the statements of the undersigned in this Purchase
      Form.

    

    The
      undersigned represents and warrants that (a) he, she or it has been furnished
      with all information which he, she or it deems necessary to evaluate the merits
      and risks of the purchase of the Warrant Stock, (b) he, she or it has had the
      opportunity to ask questions concerning the Warrant Stock and the Company and
      all questions posed have been answered to his, her or its satisfaction, (c)
      he,
      she or it has been given the opportunity to obtain any additional information
      it
      deems necessary to verify the accuracy of any information obtained concerning
      the Warrant Stock and the Company, and (d) it has such knowledge and experience
      in financial and business matters that it is able to evaluate the merits and
      risks of purchasing the Warrant Stock and to make an informed investment
      decision relating thereto.

    

    The
      undersigned hereby represents and warrant that it is purchasing the Warrant
      Stock for his, her or its own account for investment and not with a view to
      the
      sale or distribution of all or any part of the Warrant Stock.

    

    The
      undersigned understands that because the Warrant Stock has not been registered
      under the Securities Act he, she or it must continue to bear the economic risk
      of the investment for an indefinite period of time and the Warrant Stock cannot
      be sold unless it is subsequently registered under applicable federal and state
      securities laws or an exemption from such registration is
      available.

    

    The
      undersigned agrees that he, she or it will in no event sell or distribute or
      otherwise dispose of all or any part of the Warrant Stock unless (1) there
      is an
      effective registration statement under the Securities Act and applicable state
      securities laws covering any such transaction involving the Warrant Stock,
      or
      (2) the Company receives an opinion satisfactory to the Company of the
      undersigned’s legal counsel stating that such transaction is exempt from
      registration. The undersigned consents to the placing of a legend on his, her
      or
      its certificate for the Warrant Stock stating that the Warrant Stock has not
      been registered and setting forth the restriction on transfer contemplated
      hereby and to the placing of a stop transfer order on the books of the Company
      and with any transfer agents against the Warrant Stock until the Warrant Stock
      may be legally resold or distributed without restriction.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    The
      undersigned has considered the federal and state income tax implications of
      the
      exercise of the Warrant and the purchase and subsequent sale of the Warrant
      Stock.

    

    
      	 	 	 
	 	 

	 	 	 
	 	
              Dated:

            	
               
                

            

    

     

     

    
      
        
        

      

      
        -2-Exhibit
      10.1

     

     

    
 

    
      
        

      

      
        

      

    

     

     

    
 

    

     

     

    DEBT
      RESOLVE, INC.

     

    and

     

    THE
      SOLE STOCKHOLDER OF

    FIRST
      PERFORMANCE CORPORATION

     

    ____________________

     

    STOCK
      PURCHASE AGREEMENT

    ____________________

     

    January
      19, 2007

     

     

     

     

     

     

    
 

    
    

    
      
        

      

      
        

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

    

    
      	Section	 	
              Page
                No.

            
	 	 	 
	
              1.

            	
              Sale
                and Purchase of the Shares

            	
              1

            
	 	 	 
	
              2.

            	
              The
                Closing; Purchase Price.

            	
              1

            
	 	 	 
	
              2.1.

            	
              The
                Closing

            	
              1

            
	 	 	 
	
              2.2.

            	
              Delivery
                of Shares

            	
              1

            
	 	 	 
	
              2.3.

            	
              Payment
                at Closing

            	
              1

            
	 	 	 
	
              3.

            	
              Representations
                and Warranties of the Seller

            	
              2

            
	 	 	 
	
              3.1.

            	
              Organization
                and Qualification

            	
              2

            
	 	 	 
	
              3.2.

            	
              No
                Subsidiaries

            	
              2

            
	 	 	 
	
              3.3.

            	
              Capitalization

            	
              2

            
	 	 	 
	
              3.4.

            	
              Agreement;
                Title to Shares

            	
              2

            
	 	 	 
	
              3.5.

            	
              Financial
                Statements

            	
              3

            
	 	 	 
	
              3.6.

            	
              Title
                to Property, Absence of Encumbrances, etc

            	
              3

            
	 	 	 
	
              3.7.

            	
              Inventories;
                Accounts Receivable; Company Payables

            	
              4

            
	 	 	 
	
              3.8.

            	
              Patents;
                Trademarks

            	
              4

            
	 	 	 
	
              3.9.

            	
              Employee
                Remuneration

            	
              5

            
	 	 	 
	
              3.10.

            	
              Union
                and Employment Agreements

            	
              5

            
	 	 	 
	
              3.11.

            	
              Officers,
                Directors and Bank Accounts

            	
              5

            
	 	 	 
	
              3.12.

            	
              No
                Adverse Change

            	
              6

            
	 	 	 
	
              3.13.

            	
              Absence
                of Certain Changes

            	
              6

            
	 	 	 
	
              3.14.

            	
              Environmental
                Matters

            	
              7

            
	 	 	 
	
              3.15.

            	
              Litigation

            	
              7

            
	 	 	 
	
              3.16.

            	
              Contracts

            	
              7

            
	 	 	 
	
              3.17.

            	
              Taxes.

            	
              8

            
	 	 	 
	
              3.18.

            	
              Licenses

            	
              9

            
	 	 	 
	
              3.19.

            	
              Internal
                Software Applications.

            	
              9

            
	 	 	 
	
              3.20.

            	
              Employee
                Benefit Plans and Arrangements.

            	
              10

            
	 	 	 
	
              3.21.

            	
              Compliance
                with Laws

            	
              12

            
	 	 	 
	
              3.22.

            	
              Other
                Liabilities

            	
              12

            
	 	 	 
	
              3.23.

            	
              Absence
                of Certain Payments

            	
              13

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              3.24.

            	
              Disclosure

            	
              13

            
	 	 	 
	
              3.25.

            	
              Subsidiaries

            	
              13

            
	 	 	 
	
              3.26.

            	
              Investment
                Representation

            	
              13

            
	 	 	 
	
              4.

            	
              Representations
                and Warranties of the Buyer

            	
              13

            
	 	 	 
	
              4.1.

            	
              Organization
                and Qualification

            	
              13

            
	 	 	 
	
              4.2.

            	
              Agreement

            	
              13

            
	 	 	 
	
              4.3.

            	
              Validity
                of Shares

            	
              14

            
	 	 	 
	
              4.4.

            	
              Investment
                Representation

            	
              14

            
	 	 	 
	
              4.5.

            	
              Information

            	
              14

            
	 	 	 
	
              5.

            	
              Covenants
                of the Seller

            	
              14

            
	 	 	 
	
              5.1.

            	
              Action
                to Closing

            	
              14

            
	 	 	 
	
              5.2.

            	
              Access
                and Information

            	
              15

            
	 	 	 
	
              5.3.

            	
              Confidentiality

            	
              15

            
	 	 	 
	
              5.4.

            	
              Best
                Efforts

            	
              15

            
	 	 	 
	
              6.

            	
              Covenants
                of the Buyer

            	
              15

            
	 	 	 
	
              6.1.

            	
              Publicity

            	
              15

            
	 	 	 
	
              6.2.

            	
              Best
                Efforts

            	
              15

            
	 	 	 
	
              7.

            	
              Conditions
                to the Obligations of the Seller

            	
              15

            
	 	 	 
	
              7.1.

            	
              Representations
                and Warranties

            	
              15

            
	 	 	 
	
              7.2.

            	
              Performance

            	
              16

            
	 	 	 
	
              7.3.

            	
              Closing
                Certificate

            	
              16

            
	 	 	 
	
              7.4.

            	
              Execution
                of Other Documents

            	
              16

            
	 	 	 
	
              8.

            	
              Conditions
                to the Obligations of the Buyer

            	
              16

            
	 	 	 
	
              8.1.

            	
              Representations
                and Warranties

            	
              16

            
	 	 	 
	
              8.2.

            	
              Performance

            	
              16

            
	 	 	 
	
              8.3.

            	
              Closing
                Certificate

            	
              16

            
	 	 	 
	
              8.4.

            	
              Schedules

            	
              16

            
	 	 	 
	
              8.5.

            	
              Opinion
                of Counsel

            	
              16

            
	 	 	 
	
              8.6.

            	
              Employment
                Agreement

            	
              16

            
	 	 	 
	
              8.7.

            	
              Payment
                of Outstanding Fees and Invoices

            	
              16

            
	 	 	 
	
              9.

            	
              Survival
                of Representations and Warranties

            	
              16

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	
              10.

            	
              Indemnification.

            	
              17

            
	 	 	 
	
              10.1.

            	
              In
                General

            	
              17

            
	 	 	 
	
              10.2.

            	
              Limit
                of Indemnification

            	
              17

            
	 	 	 
	
              10.3.

            	
              Third
                Party Claims

            	
              17

            
	 	 	 
	
              11.

            	
              Termination

            	
              18

            
	 	
               

            	 
	
              12.

            	
              Dispute
                Resolution.

            	
              18

            
	 	 	 
	
              13.

            	
              Miscellaneous.

            	
              18

            
	 	 	 
	
              13.1.

            	
              Expenses

            	
              18

            
	 	 	 
	
              13.2.

            	
              Notices

            	
              19

            
	 	 	 
	
              13.3.

            	
              Further
                Assurances

            	
              19

            
	 	 	 
	
              13.4.

            	
              Amendments

            	
              19

            
	 	 	 
	
              13.5.

            	
              Miscellaneous

            	
              20

            

    

     

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    LIST
      OF SCHEDULES AND EXHIBITS

     

    
      	
              Schedule
                3.6

            	
              Real
                Property; Equipment, etc.

            
	
              Schedule
                3.7

            	
              Inventories;
                Accounts Receivable; Company Payables

            
	
              Schedule
                3.8

            	
              Patents,
                Trademarks and Copyrights

            
	
              Schedule
                3.9

            	
              Employees

            
	
              Schedule
                3.10

            	
              Union
                and Employment Agreements

            
	
              Schedule
                3.11

            	
              Officers,
                Directors and Bank Accounts

            
	
              Schedule
                3.12

            	
              Adverse
                Changes

            
	
              Schedule
                3.13

            	
              Certain
                Changes

            
	
              Schedule
                3.14

            	
              Environmental
                Matters

            
	
              Schedule
                3.15

            	
              Litigation

            
	
              Schedule
                3.16

            	
              Contracts
                and Other Agreements

            
	
              Schedule
                3.19

            	
              Software
                Applications

            
	
              Schedule
                3.20

            	
              Employee
                Benefit Plans

            
	
              Schedule
                3.21

            	
              Compliance
                with Laws

            

    

    

    
      	
              Exhibit
                I

            	
              Escrow
                Account

            
	
              Exhibit
                II

            	
              Restricted
                Stock

            
	
              Exhibit
                III

            	
              Opinion
                of Seller’s Counsel

            
	
              Exhibit
                IV

            	
              Employment
                Agreement for John Tonetti

            

    

    

    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    STOCK
      PURCHASE AGREEMENT

     

    STOCK
      PURCHASE AGREEMENT, dated as of January 19, 2007, between DEBT RESOLVE, INC.,
      a
      Delaware corporation (the “Buyer”), and LISA DiPINTO (the
“Seller”).

     

    WHEREAS,
      First Performance Corporation, a Nevada corporation (the “Company”), is in the
      business of debt collection; 

     

    WHEREAS,
      the Seller owns all of the issued and outstanding shares of capital stock,
      consisting of 100 shares of Common Stock (the “Shares”), of the Company;
      and

     

    WHEREAS,
      the Buyer desires to purchase from the Seller and the Seller desires to sell
      to
      the Buyer all (and not less than all) of the Shares and the business of the
      Company as a going concern;

     

    NOW,
      THEREFORE, the parties hereto agree as follows:

     

    1.  Sale
      and Purchase of the Shares.
      Subject
      to the terms and conditions hereof and in reliance upon the representations,
      warranties and covenants contained herein, the Seller will sell all (and not
      less than all) of the Shares to the Buyer, and the Buyer will purchase all
      (and
      not less than all) of the Shares from the Seller on the Closing Date (as defined
      in Section 2.1.)

     

    2.  The
      Closing; Purchase Price.

     

    2.1.  The
      Closing.
      The
      closing (the “Closing”) of the transactions contemplated by this Agreement shall
      take place at the offices of Greenberg Traurig, LLP, at 10:00 a.m., New York
      time on January 19, 2007, or on such other date on or prior to February 2,
      2007,
      or such other time and place as may be agreed upon by the Buyer and the Seller.
      The date of the Closing is herein referred to as the Closing Date.

     

    2.2.  Delivery
      of Shares.
      At the
      Closing, the Seller will deliver to the Buyer certificates for the Shares
      endorsed for transfer by the Seller or accompanied by stock powers duly executed
      by the Seller.

     

    2.3.  Payment
      at Closing.
      At the
      Closing, the Buyer will deliver to the Seller: 

     

    (a)  the
      sum
      of $500,000.00 in cash (the “Cash Purchase Price”), by wire transfer of
      immediately available funds to the account designated by the Seller therefor,
      and shall deposit $209,748.13 of such Cash Purchase Price (the “Escrow Funds”)
      in an interest bearing escrow account (the “Escrow Account”) with Greenberg
      Traurig, LLP (the “Escrow Agent”), counsel to Buyer, to be held and distributed
      in accordance with the terms of Exhibit
      I;
      and

     

    (b)  a
      stock
      certificate representing shares of Common Stock of the Buyer (the “Restricted
      Stock”) valued at $350,000 based on the average closing price per share of the
      Buyer’s Common Stock for the five (5) trading days immediately preceding the
      Closing Date, payable by delivery to the Seller at Closing, and having the
      attributes set forth on Exhibit
      II.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.  Representations
      and Warranties of the Seller.
      The
      Seller represents and warrants to the Buyer as follows:

     

    3.1.  Organization
      and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada and has all requisite power and authority
      to own, lease and operate its properties and carry on its business as now being
      conducted. The Company is duly qualified and in good standing as a foreign
      corporation authorized to do business in the States of Florida and each other
      jurisdiction where the character of the properties owned or leased or the nature
      of activities conducted makes such qualification necessary. 

     

    3.2.  No
      Subsidiaries.
      Except
      for First Performance Recovery Corp., the Company does not own or control,
      directly or indirectly, any shares of, or interest in, any corporation,
      association or other business entity.

     

    3.3.  Capitalization.
      The
      authorized capital stock of the Company consists of 13,000,000 shares of Common
      Stock, par value $.01 per share (the “Common Stock”), of which 100 shares are
      issued and outstanding and no shares are held as treasury shares. All of the
      issued and outstanding shares of Common Stock are duly authorized, validly
      issued, fully paid, nonassessable and free of preemptive rights. There are
      no
      options, warrants, calls, subscriptions, convertible securities, or other rights
      or other agreements or commitments of any character whatsoever obligating the
      Company to issue or sell any shares of its capital stock, or any securities
      convertible into or exchangeable or exercisable for or otherwise evidencing
      a
      right to acquire any shares of its capital stock or other securities of any
      kind
      of the Company. There are no voting trusts or other agreements or understandings
      to which the Company or the Seller are a party with respect to the voting of
      the
      capital stock of the Company.

     

    3.4.  Agreement;
      Title to Shares.
      The
      Seller has the legal capacity to enter into this Agreement. This Agreement
      has
      been duly executed and delivered by the Seller and, assuming due execution
      by
      the Buyer, constitutes the legal and binding obligation of the Seller
      enforceable in accordance with its terms. The execution and delivery by the
      Seller of this Agreement, the consummation of the transactions contemplated
      hereby, and the performance by the Seller of her obligations hereunder will
      not
      conflict with or result in any violation of, or default under (either
      immediately or with notice or lapse of time), or in any right to accelerate
      or
      the creation of any lien, charge or encumbrance pursuant to, any provision
      of
      (a) the Articles of Incorporation or By-laws of the Company, (b) any agreement,
      contract, lease, license, note, bond, mortgage, indenture, deed of trust or
      other instrument to which the Seller or the Company is a party or by which
      any
      of the properties or assets of the Company is bound, (c) any governmental
      franchise, license, permit or authorization, or any judgment or order of any
      tribunal or governmental body applicable to the Seller or the Company, or any
      of
      the properties or assets of the Company, or (d) any law, statute, decree, rule
      or regulation of any jurisdiction. No authorization, consent or approval of,
      or
      declaration of, filing with or notice to any governmental body or authority
      by
      the Seller or the Company is necessary for the execution of this Agreement
      by
      the Seller, the consummation by the Seller of the transactions contemplated
      hereby or the performance by the Seller of her obligations hereunder. The Seller
      owns beneficially and of record, free and clear of any lien or other
      encumbrance, and has full power and authority to convey free and clear of any
      lien or other encumbrance, the Shares, and, upon delivery of and payment for
      the
      Shares as herein provided, the Buyer will acquire good and valid title thereto,
      free and clear of any lien or other encumbrance.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    3.5.  Financial
      Statements.
      

     

    (a) The
      Company has previously delivered to the Buyer true and complete copies of (i)
      the balance sheets of First Performance Recovery Corp. (the “Subsidiary,” a
      wholly-owned subsidiary of the Company) as of December 31, 2004 and 2005, and
      the related statements of income, changes in shareholder’s equity and cash flows
      for the years then ended, as audited by Acquavella, Chiarelli, Shuster &
Co., LLP, certified public accountants, and the supplemental schedules thereto
      (the “Subsidiary Financials”), and (ii) unaudited consolidated balance sheet of
      the Company and the Subsidiary as of November 30, 2006 and the related unaudited
      consolidated statement of operations, for the period from January 1, 2006 to
      November 30, 2006, certified by the President of the Company (the “Interim
      Financials”). The Subsidiary Financials and the Interim Financials, including
      the notes to all such statements, are referred to herein collectively as the
      “Financial Statements.” The Financial Statements have been prepared in
      accordance with generally accepted accounting principles applied on a consistent
      basis throughout the periods specified, and present fairly and in accordance
      with generally accepted accounting principles the financial position of the
      Company as of the respective dates specified and the results of operations
      and
      changes in financial position of the Company for the respective periods
      specified. The Interim Financials have been prepared consistently with the
      Company’s past practice and present fairly the financial position of the Company
      as of November 30, 2006, and the results of operations for the eleven months
      ended November 30, 2006. 

     

    (b) The
      books
      and records of the Company and each subsidiary contain, in all material
      respects: (i) all corporate action of the shareholders, directors and any board
      committees of the Company and each subsidiary, except as otherwise disclosed
      herein and (ii) are maintained in such a manner as to allow for the orderly
      preparation of financial statements in accordance with generally accepted
      accounting principles, as in effect in the United States (“GAAP”). 

     

    3.6.  Title
      to Property, Absence of Encumbrances, etc.
      Set
      forth in Schedule
      3.6
      is a
      complete and accurate list of (a) all real property and (b) all machinery,
      equipment, tools, furniture and fixtures having an original cost in excess
      of
      $25,000 owned or leased by the Company, and of all mortgages, liens and material
      encumbrances to which such real property, machinery, equipment, tools, furniture
      and fixtures are subject. Except for leased property and as specified in such
      Schedule
      3.6,
      the
      Company has good and marketable title to all assets, real or personal, tangible
      or intangible, owned or used by it, including, without limitation, all assets
      reflected in the balance sheet included in the Interim Financials (other than
      any assets sold or otherwise disposed of in the ordinary course of business
      since the date of the Interim Financials), free and clear of all mortgages,
      pledges, liens, security interests or encumbrances of any nature (other than
      liens for taxes, assessments or other governmental charges not yet due and
      payable, or presently payable without penalty or interest) including, without
      limitation, any governmental restrictions on the operation of such assets,
      except for such leases and such mortgages, liens and encumbrances, or as
      otherwise disclosed in Schedule
      3.6
      to this
      Agreement. Except as noted on Schedule
      3.6,
      all
      buildings, other improvements and leasehold improvements, and all machinery,
      equipment, tools, furniture and fixtures listed on Schedule
      3.6
      owned or
      leased by the Company are in good operating condition and repair, except for
      reasonable wear and tear. All real property owned or leased by the Company
      has
      been constructed and operated in compliance with all applicable Federal, state,
      county and municipal laws, regulations, ordinances, standards and orders,
      including, without limitation, all zoning and environmental laws, regulations,
      ordinances, standards and orders. Neither the Company nor any subsidiary is
      in
      default under any mortgage or lease agreement for any such property. There
      are
      no outstanding enforcement actions or notices of violation issued by any
      Federal, state, county or municipal authority having jurisdiction over any
      such
      property.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.7.  Inventories;
      Accounts Receivable;
      Company
      Payables.
      The
      inventories of the Company are, as of the dates of the Financial Statements,
      and
      will be, as of the Closing Date, (a) in the case of raw materials and work
      in
      progress, usable for the production of currently produced products which meet
      the Company’s current product specifications and, in the case of finished goods,
      saleable to customers in the normal course of its business, and (b) not
      obsolete, deteriorated, unusable or in excess of customary levels. All accounts
      receivable of the Company as of the dates of the Financial Statements and
      uncollected on the date hereof, to our knowledge, are collectible in the
      ordinary course of business (without requirement of legal proceedings) in the
      full aggregate face amount thereof. All accounts receivable created subsequent
      to the date of the Interim Financials through the Closing Date will have been
      collected in full prior to the Closing Date or, to our knowledge, are
      collectible thereafter in the full aggregate face amount thereof less an
      applicable reserve for doubtful accounts established in a manner consistent
      with
      the Company’s prior practices and not greater, as a percentage of such accounts
      receivable, than the reserve for doubtful accounts stated in such Financial
      Statements. Schedule
      3.7
      contains: (i) a complete list of any outstanding Company payables as of the
      date
      of this Agreement; (ii) a complete and accurate list of the Company’s accounts
      payable aging summary as of January 16, 2007; and (iii) a complete and accurate
      list of the Company’s accounts receivable aging summary as of January 16, 2007.

     

    3.8.  Patents;
      Trademarks.
      Schedule
      3.8
      contains
      a complete and correct list of all patents and trademarks registered or claimed
      by the Company, trade names, service marks and registered copyrights owned
      or
      used by, or registered in the name of, the Company, and all applications for
      patents or for registration of trademarks, trade names, service marks or
      copyrights made by the Company, or by any of its employees for the benefit
      of
      the Company. Except as otherwise indicated on Schedule
      3.8,
      the
      Company is the registered and beneficial owner of all such patents, trademarks,
      trade names, service marks and registered copyrights, free and clear of any
      license, royalty, lien, encumbrance or other interest of a third party. The
      Company owns or has the right to use all patents, patent applications,
      trademarks, trade names, service marks copyrights and other intellectual
      property rights, including, without limitation, inventions, processes, designs,
      formulae, trade secrets, technology and know-how necessary for the conduct
      of
      its business. There is no pending or threatened claim by the Company against
      any
      third party for infringement, misuse or misappropriation of any patent,
      trademark, trade name, service mark, copyright or other intellectual property
      (including, without limitation, any trade secrets or know-how), owned by the
      Company or in which the Company has an interest, whether as licensee or
      otherwise. Except as set forth in Schedule
      3.8,
      there
      is no pending or threatened action, suit or proceeding against the Company
      or
      the Seller for infringement, misuse or appropriation by either of them of any
      patent, trademark, trade name, service mark, copyright or other intellectual
      property (including, without limitation, any trade secret or know-how) owned
      or
      claimed by any third party or, to the knowledge of the Seller, any basis
      therefor.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.9.  Employee
      Remuneration.
      Schedule
      3.9
      lists
      the current salaries and bonuses (together with pending or anticipated increases
      therein) of each director, officer, employee, consultant or agent of the Company
      currently paid at a rate in excess of $60,000 per year. No officer or other
      key
      employee of the Company has indicated to the Seller, or to the Seller’s
      knowledge has, an intention to terminate his or her employment with the Company.
      The Company has paid all salaries, wages and benefits due to employees of the
      Company through January 15, 2007.

     

    3.10.  Union
      and Employment Agreements.
      Except
      as disclosed in Schedule
      3.10,
      the
      Company is not a party to any collective bargaining agreement, or to any written
      or oral employment agreement, with any of its officers, directors, employees,
      consultants or agents. Copies of any written agreements disclosed in
Schedule
      3.10
      (or
      written summaries of oral agreements so disclosed) have been delivered to the
      Buyer. Except as disclosed on Schedule
      3.10,
      no
      attempts to organize the employees of the Company have been made, nor are any
      such attempts now threatened or being planned. The Company is in compliance
      with
      all applicable Federal, state and local laws, rules and regulations regarding
      employment conditions and practices, has withheld all amounts required by law
      or
      agreement to be withheld from the wages or salaries of its employees and is
      not
      liable for any arrears of wages or any taxes or penalties for failure to comply
      with any of the foregoing. The Company has not engaged in any unfair labor
      practices or discriminated on the basis of age, sex, race or other
      discrimination prohibited by law in its employment conditions or practices.
      Except as set forth on Schedule
      3.10,
      there
      are no unfair labor practice or age, sex or race discrimination charges or
      complaints or other charges or complaints alleging illegal discriminatory
      practices pending or threatened against the Company before any Federal, state
      or
      local board, department, commission or agency nor does any basis therefor exist.
      There are no existing or threatened labor strikes, disputes, grievances,
      controversies or other labor troubles affecting the Company. There are no
      pending or threatened representation questions respecting the employees of
      the
      Company or any pending arbitration proceedings. The Company is not obligated
      to
      pay, and has not granted or promised in writing or orally, to pay to any
      employee, officer, director or provider of services to any of them, any special
      arrangements for the payment of monies or provision of benefits pursuant to
      which the Company could have any obligation to pay such persons in the event
      of,
      or as a consequence of, the severance of their employment or relationship with
      the Company, or a change in control of the Company.

     

    3.11.  Officers,
      Directors and Bank Accounts.
      Schedule
      3.11
      lists
      (a) the names of all directors and officers of the Company, (b) the name and
      location of each bank or other institution in which the Company has any account
      or safe deposit box, the number or other identification thereof and the names
      of
      all persons authorized to draw thereon or have access thereto and (c) the
      beneficiary and balance of any trust account held by the Company for any
      client.

     

    
      
        
        

      

      
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    3.12.  No
      Adverse Change.
      Except
      as specified in Schedule
      3.12,
      since
      January 1, 2006, there has not been any material adverse change in the assets,
      financial condition, operations or business of the Company. Neither the Company
      nor the Seller has received any notice or has reason to believe that any
      significant customer of the Company has ceased, or will cease, to use the
      products, equipment, goods or services of the Company, or has substantially
      reduced, or will substantially reduce, the use of such products, equipment,
      goods and services at any time.

     

    3.13.  Absence
      of Certain Changes.
      Except
      as specified in Schedule
      3.13,
      since
      January 1, 2006, the Company has not (a) issued, sold or delivered or agreed
      to
      issue, sell or deliver any shares of its capital stock or any options or rights
      to acquire any such capital stock or securities convertible into or exchangeable
      for such capital stock, (b) incurred any obligations or liabilities, whether
      absolute, accrued, contingent or other, other than obligations and liabilities
      incurred in the ordinary course of business, (c) mortgaged, pledged or subjected
      to any lien, lease, security interest or other encumbrance (other than liens
      for
      taxes, assessments or other governmental charges not yet due and payable, or
      presently payable without penalty or interest) any of its assets, real or
      personal, tangible or intangible, (d) acquired or disposed of any assets or
      properties, or entered into any agreement for any such acquisition or
      disposition, except in the ordinary course of business, (e) declared, made,
      paid
      or set apart any sum for any dividend or other distribution to its shareholders,
      or purchased or redeemed any shares of its capital stock or options, warrants
      or
      other such rights, or granted any option, warrant or right to purchase any
      such
      capital stock, (f) forgiven or cancelled any debts or claims or waived any
      rights of material value not previously accrued for, (g) granted any increase
      in
      compensation in any form to any officer, salaried employee or any class of
      other
      employees, or granted any severance or termination pay, or entered into any
      employment agreement, or any modification of a previously existing employment
      agreement, with any officer or any other salaried employee, other than increases
      in compensation of less than 10% granted in the ordinary course of business
      consistent with prior practice to employees whose base pay at the time of such
      increase was less than $60,000, (h) adopted, amended or entered into any
      collective bargaining, bonus, profit sharing, compensation, stock option,
      pension, retirement, deferred compensation or other plan, agreement or
      arrangement for the benefit of employees, (i) granted any rights or licenses
      under any of its patents, trademarks, trade names, copyrights or other
      industrial property rights, (j) suffered any material loss of, or adverse change
      in its relationship with, any material supplier or customer or has knowledge
      that any such supplier or customer intends or is contemplating any action which
      would constitute or lead to such a loss or adverse change, (k) suffered any
      damage, destruction or loss (whether or not covered by insurance) which has
      a
      material adverse effect on its business, (1) suffered any strike or other labor
      trouble which has materially affected its operations, (m) terminated or made
      any
      substantial revision of, or engaged in any renegotiation of, any material
      contract, (n) materially decreased the level of maintenance on, or its
      expenditures for maintenance of, the real property, machinery, equipment, tools,
      furniture and fixtures owned or leased by it, (o) made any change in accounting
      principles or methods or in classification, depreciation or amortization
      policies or rates, (p) settled any dispute involving payment by the Company
      in
      excess of $25,000 or cancelled, forgiven or reduced any obligation of any person
      or entity in an amount in excess of $25,000, (q) made any loan or advance in
      excess of $10,000 to any person or entity other than travel or expense advances
      in accordance with its normal policies which have been accounted for or repaid
      and extensions of trade credit in accordance with its normal business practices,
      or (r) entered into any material transaction other than in the ordinary course
      of business.

     

    
      
        
        

      

      
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    3.14.  Environmental
      Matters.
      Except
      as set forth in Schedule
      3.14,
      there
      are not, nor to the knowledge of the Seller is there any basis for, (a) any
      proceedings or governmental investigations concerning or against the Company
      pending or threatened in writing before any court or tribunal or governmental
      instrumentality, (b) any citation, summons, directive, order or notice of
      violation of any law, decree, rule, regulation, permit or order by or against,
      the Company, or (c) any liens arising from Environmental Matters (as defined
      below), or any governmental actions resulting or which are likely to result in
      the imposition of any such lien on any of the properties owned or leased by
      the
      Company, any of which is based upon or related in any way to Environmental
      Matters. No toxic or hazardous substances have been improperly generated,
      treated, released, stored, discharged, deposited or disposed of on or from
      any
      of the premises of the Company or by the Company (whether directly or indirectly
      through a third party) at any other location. As used herein, the term
“Environmental Matters” refers to all matters relating to ground, air and water
      pollution or discharge, solid or hazardous wastes, toxic, hazardous or polluting
      substances, occupational health, the transport, storage, recycling or disposal
      of waste (including, without limitation, garbage, refuse, sludge and other
      discarded materials, whether solid, liquid, semisolid or gaseous and whether
      on-site or off-site), ground water and soil monitoring, and discharge or
      emission of pollutants, contaminants or by-products (including, without
      limitation, dredged soil, solid wastes, incinerator residue, sewage, garbage,
      sewage sludge, chemical wastes, biological materials, radioactive materials,
      heat, wrecked or discarded equipment, industrial waste, chemicals, metals or
      other substances), whether such pollution or discharge was caused by (i) the
      Company, (ii) any third party arising from off-site transport, storage, disposal
      or treatment on behalf of the Company, (iii) any lessee or sublessee of any
      real
      property owned or leased by the Company, or (iv) any partnership, joint venture
      or other similar business arrangement to which the Company is a
      party.

     

    3.15.  Litigation.
      Other
      than as disclosed on Schedules
      3.8,
      3.10,
      3.14
      and
3.15,
      there
      are no judicial or administrative actions, suits, proceedings or governmental
      investigations pending or to the knowledge of the Seller threatened before
      any
      court or tribunal or governmental instrumentality, or any citation, order or
      notice of violation of any law, decree, rule or regulation, by or against the
      Seller or the Company or any of their respective properties, or which relate
      in
      any way to the Company’s business, properties, assets or operations, or which
      have or are likely to result in an imposition of a lien on any of the properties
      or assets owned or leased by the Company, or which question the validity of
      this
      Agreement or any action to be taken in connection herewith, nor is there any
      such action, suit, proceeding or investigation, to the knowledge of the Seller,
      pending or threatened, which involves any director, officer, employee,
      consultant or independent contractor of the Company in its or his or her
      capacity as such. Except as set forth in Schedule
      3.15,
      neither
      the Seller, the Company nor any property or assets of the Company is subject
      to
      any judicial or administrative order, judgment, injunction or
      decree.

     

    3.16.  Contracts.
      Schedule
      3.16
      contains
      a complete and correct list of each (a) mortgage, debenture, note or installment
      obligation, or other instrument or contract for the borrowing or lending of
      money by the Company, including, without limitation, any agreement or
      arrangement relating to the maintenance of compensating balances or the
      availability of a line of 

     

    
      
        
        

      

      
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    credit,
      (b) license agreement, sales agency agreement or distribution agreement to
      which
      the Company is a party, (c) guaranty of any obligation by the Company,
      including, without limitation, any keep-well, make-whole or maintenance of
      working capital or earnings or similar agreement, (d) agreement for the sale
      of
      any properties or assets by the Company other than sales of products and
      services in the ordinary course of business, (e) contract, other than a
      contract, purchase order or other agreement for the purchase of raw materials
      or
      other supplies in the ordinary course of business or for the purchase of
      machinery, equipment, tools, furniture or fixtures with a cost of less than
      $25,000, pursuant to which the Company is or may be obligated to make payments,
      contingent or otherwise, on account of or arising out of the acquisition, prior,
      pending or future, of the shares, business or other assets of another
      enterprise, (f) secrecy or invention agreement under which the Seller or the
      Company or, to the Seller’s knowledge, any of the present officers or employees
      of the Company has any obligation and relating to the business of the Company,
      (g) requirements contract with the Company as purchaser or Seller or other
      agreement for the purchase or sale of goods or services not terminable without
      liability by the Company on 30 days’ (or less) notice or involving payments by
      or to the Company in excess of $25,000, (h) agreement or arrangement with a
      customer or supplier of the Company for rebates, sharing of expenses or any
      similar device for the effective reduction or increase of prices or other
      charges and involving products with a value in excess of $25,000, (i) agreement
      of the Company with, or loan or advance by the Company to or from, or other
      obligation of the Company to or from any officer or director of the Company,
      (j)
      lease of real or personal property with the Company as lessor or lessee,
      involving rents of more than $2,500 per year, (k) agreement or arrangement
      limiting the freedom of the Seller or the Company or any of the present officers
      or employees of the Company to compete in any line of business similar to the
      Company’s business, with any person or other entity or in any geographical area,
      (1) governmental license, franchise, permit or authorization held by and
      material to the business of the Company and not listed on any other Schedule
      hereto, (m) insurance policy relating to the properties, businesses or products
      of the Company having a currently unexpired term or, as to any casualty,
      workers’ compensation, general or product liability or excess liability
      insurance policy currently in effect, (n) joint venture agreement or
      partnership, profit sharing or other agreements to which the Company is a party,
      (o) agreement pursuant to which the Company has indemnified or shared tax
      liability with any party, and (p) contract, commitment or agreement not referred
      to above in this Section 3.16 or in any other Schedule to this Agreement and
      which involves aggregate payments by or to the Company of $25,000 or more.
      All
      such contracts and agreements are in full force and effect, the Company is
      not
      in default thereunder and no event has occurred which, whether with notice,
      lapse or time or otherwise, would constitute a default thereunder. The Company
      has paid all amounts payable under any contract due on or before January 15,
      2007. 

     

    3.17.  Taxes.

     

    (a)  The
      Company has duly and timely filed (giving due regard to permitted extensions)
      all Federal, state and local income, sales, franchise and other tax reports
      and
      returns required to be filed by them, which reports and returns are true,
      complete and correct in all material respects. All taxes due and payable in
      respect of the operations of the Company, including, but not limited to,
      Federal, state and local income, sales and franchise taxes, have been paid
      in
      full or provided for in the Company Financials. The reserves for taxes reflected
      on the balance sheets included in the Company Financials are adequate for the
      periods to which such balance sheets relate. There are no tax liens upon any
      property or assets of the Company except liens for current taxes not yet due.
      The Company has paid any and all taxes due or payable on or before January
      15,
      2007.

     

    
      
        
        

      

      
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    (b)  (i)
      The
      Federal income tax returns of the Company are closed for all years ended on
      or
      prior to the end of the taxable year ended December 31, 2005, (ii) there are
      no
      outstanding proposed adjustments, (iii) all income tax returns of the Company
      for taxable years ended through December 31, 2005, have been filed and (iv)
      there are no pending audits.

     

    (c)  No
      deficiency for any other tax has been asserted or assessed against the Company,
      and there are neither unresolved claims concerning, nor proceedings or actions
      pending which relate to, either the tax liability of the Company or the
      collection or assessment of tax for any period for which returns covering the
      Company have been filed or were due.

     

    (d)  There
      are
      no outstanding agreements, extensions or waivers extending the statutory period
      of limitation applicable to any Federal, state or local franchise, income or
      other tax returns covering the Company.

     

    (e)  The
      Company has not agreed to, nor is the Company required to, make any adjustment
      pursuant to Section 481(a) of the Internal Revenue Code of 1986, as amended
      (the
“Code”), or any predecessor provision by reason of any change in any accounting
      method of the Company (other than any changes mandated by regulations under
      the
      Code), and the Company has not made any application pending with any taxing
      authority requesting permission for any changes in any of their respective
      accounting methods.

     

    (f)  The
      Company has not consented to the application of Section 341(f)(2) of the Code
      (or any predecessor provision).

     

    (g)  The
      Company has duly and timely withheld from all salaries, wages and other
      compensation of their respective employees and has duly and timely paid over
      to
      the appropriate governmental authorities all amounts required to be so withheld
      and paid over for all periods under all applicable laws.

     

    3.18.  Licenses.
      The
      Company has obtained and holds all licenses, permits, authorizations, consents
      and orders or approvals of all foreign, Federal, state or local governmental
      or
      regulatory bodies that are necessary for the lawful conduct of its business
      (the
“Permits”) including, without limitation, any licenses or filings, permits to
      operate as a debt collection agency. All of the Permits are validly issued
      and
      in full force and effect and the Company is in compliance therewith. No
      proceeding is pending or threatened which seeks or may result in canceling,
      suspending, restricting or modifying any Permit. The business of the Company
      is
      being operated in all respects in accordance with the terms and conditions
      of
      the Permits.

     

    3.19.  Internal
      Software Applications.

     

    (a)  Owned
      Software.
      To the
      extent that any of the Software has been designed or developed by the Seller
      or
      the Company’s management information or development staff or by consultants on
      the Seller’s or the Company’s behalf, such Software is original and capable of
      copyright protection in the United States, and the Company has complete rights
      to and ownership of such Software, including possession of, or ready access
      to,
      the source code for such Software in its most recent version. No part of any
      such Software is an imitation or copy of, or infringes upon, the software of
      any
      other person or entity, or violates or infringes upon any common law or
      statutory rights of any other person or entity, including, without limitation,
      rights relating to defamation, contractual rights, copyrights, trade secrets,
      and rights of privacy or publicity. Neither the Seller nor the Company has
      sold,
      assigned, licensed, distributed or in any other way disposed of or encumbered
      any of the Software.

     

    
      
        
        

      

      
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    (b)  Licensed
      Software.
      The
      Software, to the extent it is licensed from any third party licensor or
      constitutes “off-the-shelf” software, is held by the Company legitimately and is
      fully transferable hereunder without any third party consent. All of the
      Company’s computer hardware has legitimately licensed software installed
      therein.

     

    (c)  No
      Errors; Nonconformity.
      The
      Software is free from any significant defect or programming or documentation
      error, operates and runs in a reasonable and efficient business manner, conforms
      to the stated specifications thereof, and, with respect to owned Software,
      the
      applications can be recreated from their associated source codes.

     

    (d)  No
      Bugs or Viruses.
      The
      Company has not knowingly altered its data, or any Software or supporting
      software which may, in turn, damage the integrity of the data, stored in
      electronic, optical, or magnetic or other form. Except as set forth on
Schedule
      3.19,
      the
      Seller has no knowledge of the existence of any bugs or viruses with respect
      to
      the Software.

     

    (e)  Documentation.
      The
      Seller and the Company have furnished the Buyer with true and accurate copies
      of
      all documentation (end user or otherwise) relating to the use, maintenance
      and
      operation of the Software.

     

    3.20.  Employee
      Benefit Plans and Arrangements.

     

    (a)  No
      Retirement or Deferred Compensation Plans.
      The
      Company does not sponsor, maintain, support, and is not otherwise a party to,
      and has no liability under, any plan, fund, program, understanding, policy,
      arrangement, contract or commitment, whether or not qualified for federal income
      tax purposes, whether or not terminated, partially terminated, “frozen,” or
      otherwise suspended as to benefit accruals, whether or not funded, whether
      formal or informal, and whether for the benefit of a single individual or more
      than one individual, which is in the nature of (i) an employee pension benefit
      plan (as defined in Section 3(2) of the Employee Retirement Income Security
      Act
      of 1974, as amended (“ERISA”)), (ii) an incentive, bonus, profit-sharing,
      deferred compensation, or other retirement benefit or additional compensation
      arrangement for employees, former employees, their dependents and/or their
      beneficiaries, or (iii) any other arrangement that could be characterized as
      providing for incentive, deferred, retirement or additional
      compensation.

     

    (b)  Welfare
      Benefit Plans.
      The
      Company does not sponsor, maintain, support, and is not otherwise a party to,
      and has no liability under, any plan, fund, program, understanding, policy,
      arrangement, contract or commitment, whether or not terminated or partially
      terminated, whether or not funded, whether formal or informal, and whether
      for
      the benefit of a single individual or more than one individual, which is in
      the
      nature of (i) an employee welfare benefit plan (as defined in Section 3(l)
      of
      ERISA), (ii) any hospitalization, medical, disability, health or life insurance
      or arrangement, or vacation pay or severance pay arrangement, or (iii) any
      other
      arrangement that could be characterized as providing other welfare benefits,
      perquisites or fringe benefits, except as disclosed on Schedule
      3.20
      (collectively referred to herein as the "Employee Plans").

     

    
      
        
        

      

      
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    (c)  Compliance
      with Law.
      Each
      Employee Plan, the administrators and fiduciaries of each Employee Plan, the
      Company and the Seller has at all times complied with all applicable
      requirements of ERISA and of any other applicable law (including regulations
      and
      rulings thereunder) governing each Employee Plan, and each Employee Plan has
      at
      all times been properly administered in accordance with all such requirements
      of
      law and in accordance with its terms to the extent consistent with all such
      requirements of law.

     

    (d)  Excise
      Taxes and Liabilities.
      Neither
      any Employee Plan, any administrator or fiduciary of any Employee Plan, the
      Company nor the Seller has taken any action, or failed to take any action,
      that
      could subject it or any other person to any liability, either directly or by
      way
      of indemnification, for any excise tax or for breach of fiduciary duty with
      respect to or in connection with any Employee Plan.

     

    (e)  Communications
      and Reports.
      Neither
      any Employee Plan, any administrator or fiduciary of any Employee Plan, the
      Company nor the Seller has any liability under any provision of ERISA or any
      other applicable law by reason of any communication or failure to communicate
      with respect to or in connection with any Employee Plan, or any filing or
      failure to file with any government entity.

     

    (f)  Payment
      of Benefits and Contributions.
      Neither
      any Employee Plan, any administrator or fiduciary of any Employee Plan, the
      Company nor the Seller has any liability to any plan participant, beneficiary
      or
      other person under any provision of ERISA or any other applicable law by reason
      of any payment of benefits or other amounts or failure to pay benefits with
      respect to or in connection with any Employee Plan. The Company is not
      delinquent or in arrears on other amounts owed to or with respect to any
      payments or contributions under any Employee Plan and has paid any such amount
      due or payable on or before January 15, 2007.

     

    (g)  Other
      Liabilities.
      The
      Company has not incurred any liability to any employee, beneficiary or other
      person or entity prior to and including the Closing Date in connection with
      any
      Employee Plan, by reason of any action or inaction by the Company, the Seller
      or
      any person affiliated with the Seller, or any plan administrator or fiduciary,
      or any other person other than liabilities for benefits that have been paid.
      The
      Seller hereby agrees that no liability to any employee, beneficiary or other
      person or entity shall be incurred following the Closing Date in connection
      with
      any Employee Plan, by reason of any action or inaction by the Seller or any
      person affiliated with the Seller, or any plan administrator or fiduciary,
      or
      any other person other than liabilities undertaken by them under the terms
      of
      the Employee Plan.

     

    
      
        
        

      

      
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    (h)  Information.
      All
      employees of the Company and their beneficiaries and dependents, and other
      participants and beneficiaries of any Employee Plan, all available data and
      benefits applicable to each of them under the terms of each Employee Plan
      (including, without limitation, complete pertinent pay history and all
      administrative records), shall be correctly identified and set forth in records
      to be delivered on or prior to the Closing Date by the Seller to the Buyer.
      The
      Seller has provided to the Buyer all plan documents, administrative forms,
      employee booklets, summary plan descriptions and other employee communication
      materials used in connection with each Employee Plan.

     

    (i)  No
      Multiemployer Plan Liabilities.
      The
      Company is not now, nor has at any time been, a “substantial employer” within
      the meaning of that term as defined in Section 4001(a)(2) of ERISA with respect
      to any “multiemployer plan” as that term is defined in Section 4001(a)(3) of
      ERISA. The Company is not now, nor has the Company at any time been, a party
      to,
      or become subject to, any collective bargaining agreement pursuant to which
      the
      Company has been, is, or will become obligated to contribute to a "multiemployer
      plan" as that term is defined in section 4001(a)(3) of ERISA.

     

    (j)  Plans
      of Affiliates of the Company.
      Other
      than the Employee Plans (and then only as set forth in this Section 3.20),
      the
      Company is not presently or potentially liable with respect to any employee
      benefit plan sponsored by any element(s) of any controlled group of
      corporations, groups of trades or businesses under common control or affiliated
      service groups, whether such plan is a single employer plan, a multiple employer
      plan or a multiemployer plan.

     

    3.21.  Compliance
      with Laws.
      Except
      as set forth in Schedule
      3.21,
      the
      operation of the business of each of the Company has been conducted in
      accordance with all applicable laws (including the Fair Debt Collection
      Practices Act, the Fair Credit Reporting Act, the Real Estate Settlement
      Procedures Act, mortgage laws and other state laws covering comparable subject
      matter), regulations, orders and other requirements of all courts and
      Governmental Entities having jurisdiction over the Company and its business,
      assets, properties and operations. Except as set forth in Schedule 3.21,
      the
      Company has not received any notice of any violation of any such law,
      regulation, order or other legal requirement that is pending as of the date
      hereof. The Company is not in default with respect to any order, writ, judgment,
      award, injunction or decree of any Governmental Entity applicable to its
      business or any of its assets, properties or operations. For purposes of this
      section, “Governmental Entity” shall mean any government or governmental or
      regulatory body thereof, or political subdivision thereof, whether federal,
      state, local or foreign, or any agency, instrumentality, or authority thereof,
      or any court or arbitrator (public or private).

     

    3.22.  Other
      Liabilities.
      The
      Company does not have any liabilities or obligations (direct or indirect,
      contingent or absolute, matured or unmatured) of whatever nature, whether
      arising out of contract, tort, statute or otherwise, except (a) as reflected
      in
      the balance sheets included in the Company Financials, (b) disclosed in the
      Schedules to this Agreement, (c) as contemplated by this Agreement and (d)
      liabilities and obligations incurred in the ordinary course of business since
      December 31, 2006.

     

    
      
        
        

      

      
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    3.23.  Absence
      of Certain Payments.
      Neither
      the Seller nor the Company nor any officers, directors, employees, agents,
      representatives, or independent contractors of the Company has made, or arranged
      for the making of, any unlawful payment to any official, officer or employee
      of
      any Federal, state, county, municipal or other governmental or regulatory body
      or authority or any self-regulatory body or authority, or made any payment
      to
      any customer or supplier of the Company or any officer, director, partner,
      employee or agent of any customer or supplier, for the unlawful sharing of
      fees
      or to any such customer or supplier or any such officer, director, partner,
      employee or agent for the unlawful rebating of charges, or engaged in any other
      unlawful reciprocal practice, or made any other unlawful payment or given any
      other unlawful consideration to any such customer or supplier or any such
      officer, director, partner, employee or agent, in respect of the
      Company.

     

    3.24.  Disclosure.
      This
      Agreement (except for Sections 4 and 6), the Schedules hereto and the Financial
      Statements do not contain any untrue statement of a material fact or omit to
      state any material fact necessary to make the statements contained therein
      not
      false or misleading. There is no fact known to the Seller which has not been
      disclosed to the Buyer which materially adversely affects the assets,
      properties, liabilities, business, results of operations or financial condition
      of the Company.

     

    3.25.  Subsidiaries.
      Each
      representation and warranty made by the Seller in this Section 3, as well as
      each covenant in Section 5, shall also apply to each subsidiary of the Company
      and each Schedule to this Agreement shall contain relevant information with
      respect to each such subsidiary.

     

    3.26.  Investment
      Representation.
      The
      Seller represents and warrants that it is acquiring the Restricted Stock for
      its
      own account only, for investment purposes and not with a view to distribution
      and acknowledges that the Restricted Stock is and will be “restricted
      securities” within the meaning of the Rules and Regulations under the Securities
      Act of 1933, as amended (the “Securities Act”), that the disposition of such
      securities is subject to compliance with the provisions of the Securities Act,
      and that certificates for the securities issued hereunder will bear a legend
      to
      that effect. The Seller has sufficient experience in business, financial and
      investment matters to be able to evaluate the risks involved in the acquisition
      of the Restricted Stock and to make an informed decision with respect to such
      acquisition.

     

    4.  Representations
      and Warranties of the Buyer.
      The
      Buyer represents and warrants to the Seller as follows:

     

    4.1.  Organization
      and Qualification.
      The
      Buyer is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has all requisite power and
      authority to own, lease and operate its properties and carry on its business
      as
      it is now being conducted.

     

    4.2.  Agreement.
      This
      Agreement has been duly executed and delivered by the Buyer and constitutes
      the
      legal and binding obligation of the Buyer enforceable against the Buyer in
      accordance with its terms. The execution and delivery by the Buyer of this
      Agreement, the consummation of the transactions contemplated hereby, and the
      performance by the Buyer of its obligations hereunder will not conflict with
      or
      result in any violation of, or default under (either immediately or with notice
      or lapse of time), or in any right to accelerate or the creation of any lien,
      charge or encumbrance pursuant to, any provision of (a) the certificate of
      incorporation or by-laws of the Buyer, (b) any agreement, contract, lease,
      license, note, bond, mortgage, indenture, deed of trust or other instrument
      to
      which the Buyer is a party or by which any of the Buyer's properties or other
      assets is bound, (c) any governmental franchise, license, permit or
      authorization, or any judgment or order of any tribunal or governmental body
      applicable to the Buyer, or any of the Buyer's properties or other assets,
      or
      (d) any law, statute, decree, rule or regulation of any jurisdiction. No
      authorization, consent or approval of, or declaration of, filing with or notice
      to any governmental body or authority by the Buyer is necessary for the
      execution of this Agreement by the Buyer, the consummation by the Buyer of
      the
      transactions contemplated hereby and thereby or the performance by the Buyer
      of
      its obligations hereunder.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    4.3.  Validity
      of Shares.
      The
      shares of Restricted Stock to be issued at the Closing pursuant to Section
      2.3
      hereof, when issued and delivered in accordance with the terms hereof, shall
      be
      duly and validly issued, fully paid and, except as provided in Section 10
      hereof, nonassessable. Based in part on the representations and warranties
      of
      the Seller in this Agreement and assuming the accuracy thereof, the issuance
      of
      the Restricted Stock at the Closing pursuant to Section 2.3 will be exempt
      from
      the registration requirements of the Securities Act and from the qualification
      or registration requirements of any applicable state blue sky or securities
      laws.

     

    4.4.  Investment
      Representation.
      The
      Buyer represents and warrants that it is acquiring the Shares for its own
      account only, for investment purposes and not with a view to distribution and
      acknowledges that the Shares are and will be “restricted securities” within the
      meaning of the Rules and Regulations under the Securities Act, that the
      disposition of such securities is subject to compliance with the provisions
      of
      the Securities Act, and that certificates for the securities issued hereunder
      will bear a legend to that effect.

     

    4.5.  Information.
      The
      Buyer has made available to the Seller true and complete copies of the Buyer’s
      (i) Annual Report on Form 10-KSB for the year ended December 31, 2005, (ii)
      Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2006, June
      30,
      2006, and September 30, 2006, and (iii) Registration Statement on Form SB-2
      (No.
      333-135911), effective November 1, 2006 (the “SEC Documents”). None of the SEC
      Documents, as of their respective dates, contained any untrue statement of
      a
      material fact or omitted to state a material fact necessary in order to make
      the
      statements contained therein not misleading.

     

    5.  Covenants
      of the Seller.
      The
      Seller covenants as follows:

     

    5.1.  Action
      to Closing.
      From
      the date of this Agreement until the Closing Date, the Seller will use its
      best
      efforts to cause the Company to (a) conduct its operations only in the ordinary
      course, in substantially the manner as heretofore conducted and in accordance
      with all applicable laws, rules, regulations, orders, approvals, authorizations,
      exemptions, classifications and registrations applicable to the Company or
      relating to their respective operations, (b) maintain its respective real and
      personal property in as good condition and repair as of the date hereof, (c)
      perform in all material respects all of the respective obligations under all
      contracts listed on Schedule 3.16, and not amend, alter or modify any provision
      of any such contract or enter into any new contract or transaction involving
      consideration in excess of $25,000 or dispose of any asset having a value in
      excess of $25,000 without the prior written consent of the Buyer, (d) use its
      best efforts to maintain the existing relationships of the Company with its
      suppliers and customers, (e) use its best efforts to keep available the services
      of its present officers and employees, (f) promptly deliver to the Buyer interim
      financial statements as regularly prepared for its internal use, which financial
      statements shall be in accordance with the last sentence of Section 3.5, (g)
      not
      issue any shares of capital stock or any options, warrants or other rights
      to
      acquire capital stock, (h) confer on a regular and frequent basis with
      representatives of the Buyer to report material operational matters and the
      general status of ongoing operations, and (i) not, without the prior written
      consent of the Buyer, take any action or engage in any transaction not expressly
      permitted by this Section 5.1 or otherwise contemplated by this Agreement which
      would cause any of representations made by the Seller herein to be untrue as
      of
      the Closing Date or a breach of the terms and conditions of this
      Agreement.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    5.2.  Access
      and Information.
      The
      Seller agrees to cause the Company to afford the Buyer and the Buyer’s
      employees, accountants, counsel and other authorized representatives reasonable
      access to the Company’s plants, properties, books and records and the Seller
      will, and will cause the Company to, furnish to the Buyer and its
      representatives all additional financial and operating data and other
      information as the Buyer may from time to time reasonably request.

     

    5.3.  Confidentiality.
      Notwithstanding anything to the contrary contained in this Agreement, none
      of
      the Seller, the Company or any subsidiary or of their respective affiliates
      shall at any time divulge, disclose, disseminate, announce or release any
      information to any person concerning this Agreement or the transactions
      contemplated hereby without first obtaining the prior written consent of the
      Buyer.

     

    5.4.  Best
      Efforts.
      The
      Seller agrees to use her reasonable best efforts to satisfy the conditions
      to
      the obligations of the Buyer hereunder set forth in Section 8.

     

    6.  Covenants
      of the Buyer.
      The
      Buyer covenants as follows:

     

    6.1.  Publicity.
      The
      Buyer will not, without the consent of the Seller, issue or cause the
      publication of any press release or other announcement with respect to this
      Agreement except where such release or announcement is required by
      law.

     

    6.2.  Best
      Efforts.
      The
      Buyer will use its reasonable best efforts to satisfy the conditions to the
      obligations of the Seller hereunder set forth in Section 7.

     

    7.  Conditions
      to the Obligations of the Seller.
      The
      obligations of the Seller to effect the transactions contemplated hereby are
      subject to the fulfillment to its satisfaction, prior to or at the Closing,
      of
      the following conditions:

     

    7.1.  Representations
      and Warranties.
      The
      representations and warranties of the Buyer contained herein shall have been
      true and correct when made and shall be true and correct at and as of the
      Closing as though such representations and warranties were made at and as of
      the
      Closing.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    7.2.  Performance.
      The
      Buyer shall have performed and complied with each covenant or condition required
      by this Agreement to be performed or complied with by it prior to or at the
      Closing.

     

    7.3.  Closing
      Certificate.
      The
      Buyer shall have delivered to the Seller a certificate, dated the Closing Date
      and executed by a principal executive or financial officer, certifying that
      the
      conditions specified in Sections 7.1 and 7.2 have been fulfilled.

     

    7.4.  Execution
      of Other Documents.
      The
      Buyer shall have executed and delivered to the Seller the shares of Restricted
      Stock at the Closing pursuant to Section 2.3 hereof.

     

    8.  Conditions
      to the Obligations of the Buyer.
      The
      obligations of the Buyer to effect the transactions contemplated hereby are
      subject to the fulfillment to its satisfaction, prior to or at the Closing,
      of
      the following conditions:

     

    8.1.  Representations
      and Warranties.
      The
      representations and warranties of the Seller contained herein and in the
      Schedules hereto shall have been true and correct when made and, except for
      such
      changes expressly consented to in writing by the Buyer or expressly permitted
      by
      this Agreement, shall be true and correct in all material respects at and as
      of
      the Closing as though such representations and warranties were made at and
      as of
      the Closing.

     

    8.2.  Performance.
      The
      Seller shall have performed and complied with each covenant and condition
      required by this Agreement to be performed or complied with by the Seller prior
      to or at the Closing.

     

    8.3.  Closing
      Certificate.
      The
      Seller shall have delivered to the Buyer a certificate, dated the Closing Date
      and executed by the Seller, certifying that the conditions specified in Sections
      8.1 and 8.2 have been fulfilled.

     

    8.4.  Schedules.
      The
      Schedules to this Agreement to be delivered by the Seller to the Buyer shall
      be
      reasonably satisfactory to the Buyer. 

     

    8.5.  Opinion
      of Counsel.
      The
      Buyer shall have received from Gersten Savage LLP, counsel for the Seller,
      an
      opinion, dated the Closing Date, in substantially the form attached hereto
      as
Exhibit
      III.

     

    8.6.  Employment
      Agreement.
      The
      Company and John Tonetti shall have executed and delivered an Employment
      Agreement in the form attached hereto as Exhibit
      IV,
      which
      shall include provisions to the effect that a material breach of the Seller’s
      representations and warranties shall be grounds for a for cause termination
      of
      the Employment Agreement. 

     

    8.7.  Payment
      of Outstanding Fees and Invoices.
      The
      Seller shall cause the Company to pay all outstanding tax, audit, payroll,
      insurance or related fees and/or invoices that that become due and/or payable
      on
      or before January 15, 2007.

     

    9.  Survival
      of Representations and Warranties.
      Except
      as otherwise provided, all representations and warranties contained in this
      Agreement shall survive the Closing and any 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    investigations
      made by any party but shall expire and be extinguished on the first anniversary
      of the Closing Date. The representations and warranties contained in Section
      3.17 shall survive the Closing until the expiration of the applicable statute
      of
      limitations. All statements contained in the Schedules hereto, the Financial
      Statements and the certificates delivered pursuant to Sections 7.3 and 8.3
      shall
      be deemed representations and warranties of such party under this
      Agreement.

     

    10.  Indemnification.

     

    10.1.  In
      General.
      The
      Seller shall indemnify and hold harmless the Buyer against and in respect of
      any
      and all costs, claims, liabilities, damages, losses or deficiencies, whether
      suffered by the Buyer or the Company:

     

    (a)  resulting
      from any misrepresentation or breach of any warranty or covenant by the Seller
      made herein, in any Schedule hereto, the Financial Statements and/or the
      certificate delivered pursuant to Section 8.3;

     

    (b)  arising
      out of any claim for fees or expenses of any finder, broker, agent or other
      intermediary who has acted on behalf of the Seller or the Company in connection
      with this Agreement or the transaction contemplated hereby; and

     

    (c)  any
      and
      all actions, suits, procedures, demands, assessments, judgments, damages, fines,
      awards, costs and expenses (including but not limited to reasonable fees and
      disbursements of counsel, interest and penalties) incident to the foregoing.
      All
      such damages, losses, deficiencies, assessments, judgments, fines, awards,
      costs
      and expenses are referred to in this Section 10 as “Losses.”

     

    10.2.  Limit
      of Indemnification.
      The
      indemnification of the Buyer hereunder shall be subject to the following
      limitations:

     

    (a)  Notwithstanding
      any other provision of this Agreement, except with respect to any Losses
      involving proven fraud by the Seller or with respect to Losses relating to
      any
      breach of any warranties under Section 3.17, the Seller shall first satisfy
      its
      indemnification obligations by tendering to the Buyer for cancellation a number
      of shares of Restricted Stock having a value (for purposes hereof, the shares
      of
      the Restricted Stock shall be valued at the same value per share utilized for
      purposes of Section 2.3(b)) equal to the amount of the subject indemnification
      claim being satisfied in such manner. To the extent that all of the shares
      of
      Restricted Stock have been so tendered to the Buyer, the Seller shall satisfy
      any additional indemnification obligations through cash payments to the
      Buyer.

     

    (b)  The
      Buyer
      shall be entitled to indemnification by the Seller for Losses only in respect
      of
      claims arising on or before the one year anniversary of the Closing Date, or,
      with respect to Losses relating to any breach of any warranty under Section
      3.17
      or any Losses involving proven fraud, the expiration of the applicable statute
      of limitations.

     

    10.3.  Third
      Party Claims.
      If the
      facts giving rise to any claim for indemnification shall involve any actual
      or
      threatened action or demand by any third party against the Buyer or the Company,
      the Buyer will promptly give notice of a such claim to the Seller stating the
      nature thereof and enclosing copies of any complaint, summons, written

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    assertion
      of such claim or similar document. The Seller shall be entitled (without
      prejudice to the Buyer’s right to participate at its own expense through counsel
      of its choosing), at her expense and through a single counsel of her own
      choosing, to defend or prosecute such claim in the name of the Buyer or the
      Company; provided,
      that if
      the Seller fails to timely defend such claims, the Buyer may defend through
      its
      own counsel but at Seller’s expense. In any event, the Seller shall give the
      Buyer advance written notice of any proposed compromise or settlement of any
      such claim; provided,
      that no
      settlement shall be made without the Buyer’s prior written consent. If such
      settlement provides solely for the payment of monies and the Buyer provides
      notice to the Seller within 20 days of such notice that it objects to such
      settlement or compromise, then the Buyer shall be required to undertake, conduct
      and control, through counsel of its own choosing and at its sole expense, the
      settlement or defense thereof, and the Seller shall cooperate with the Buyer
      in
      connection therewith. 

     

    11.  Termination.
      This
      Agreement may be terminated at any time prior to the Closing Date:

     

    (a)  by
      mutual
      written consent of the Buyer and the Seller;

     

    (b)  by
      either
      the Buyer or the Seller if the Closing has not occurred prior to February 2,
      2007, provided
      that the
      non-occurrence of the Closing is not attributable to a breach of the terms
      hereof by the party seeking termination; or

     

    (c)  by
      either
      the Seller or the Buyer if any court of competent jurisdiction or any
      governmental body shall have issued an order, decree or ruling or taken any
      other action restraining, enjoining or otherwise prohibiting the transactions
      contemplated by this Agreement and such order, decree, ruling or other action
      shall have become final and non-appealable.

     

    12.  Dispute
      Resolution.

     

    (a)  Any
      controversy or dispute between the Buyer and the Seller involving the
      construction, interpretation, application or performance of the terms, covenants
      or conditions of this Agreement or in any way arising under this Agreement
      shall, on demand by either the Buyer or the Seller by written notice to the
      other, be finally settled by arbitration in New York, New York in accordance
      with the American Arbitration Association Rules of Arbitration before one
      arbitrator appointed pursuant thereto. Any counterclaim shall take place in
      the
      same venue. The arbitration award shall be final, shall be binding upon the
      parties hereto, and may be entered in any court having jurisdiction
      thereof.

     

    13.  Miscellaneous.

     

    13.1.  Expenses.
      The
      Buyer and the Seller shall pay their own respective expenses and costs,
      including, without limitation, expenses of their respective counsel and
      auditors, incidental to the preparation of this Agreement, the performance
      and
      compliance with all agreements and conditions contained in this Agreement to
      be
      performed or complied with by them and the consummation of the transactions
      contemplated hereby and thereby. The Seller expressly agrees that the Company
      shall not pay or be liable for any expenses and costs of the Seller in
      connection with this Agreement or the transactions contemplated
      hereby.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    13.2.  Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given when delivered or mailed by first-class registered
      or
      certified mail, postage prepaid, addressed as follows:

     

    (a)  If
      to the
      Buyer, at:

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue

    Suite
      L7

    White
      Plains, New York 10604

    Attention: Mr.
      James
      D. Burchetta

                       
      Chief
      Executive Officer

    

    with
      a
      copy to:

     

    Greenberg
      Traurig, LLP

    MetLife
      Building

    200
      Park
      Avenue, 15th Floor

    New
      York,
      New York 10166

    Attention:
      Spencer G. Feldman, Esq.

     

    (b)  If
      to the
      Seller, at:

     

    Lisa
      DiPinto

    12
      Woodfield Lane

    Old
      Brookville, New York 11545

     

    with
      a
      copy to:

     

    Gersten
      Savage LLP

    600
      Lexington Avenue

    9th
      Floor

    New
      York,
      New York 10022

    Attention:
      Arthur S. Marcus, Esq.

    

    or,
      in
      each case, at such other address as may be specified in writing to the other
      parties.

     

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

     

    13.4.  Amendments.
      This
      Agreement may be amended, waived, discharged or terminated only by an instrument
      in writing executed by the party against which enforcement of such amendment,
      waiver, discharge or termination is sought.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    13.5.  Miscellaneous.
      This
      Agreement and the agreements and instruments referred to herein embody the
      entire agreement and understanding between the parties hereto with respect
      to
      the subject matter hereof. The headings in this Agreement are for convenience
      of
      reference only and shall not constitute a part of this Agreement. This Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      New York, without reference to the choice of law principles thereof. This
      Agreement may be executed in several counterparts and by fax or electronic
      signature, each of which is an original but all of which shall constitute one
      instrument. Neither this Agreement nor any rights or obligations hereunder
      may
      be assigned by one party without the consent of the other, except that the
      Buyer
      may assign this Agreement to any of its subsidiaries or affiliates, such
      assignment not to discharge the Buyer from its obligations hereunder. Subject
      to
      the previous sentence, this Agreement shall be binding upon and inure to the
      benefit of the successors and assigns of the Buyer and the successors, assigns,
      heirs, administrators, executors and legal representatives of the
      Seller.

     

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

     

    The
      Buyer:

    DEBT
      RESOLVE, INC.

     

    By: 
      /s/
      James D.
      Burchetta                      
  

    James
      D.
      Burchetta

    Chief
      Executive Officer

     

    The
      Seller:

     

    /s/
      Lisa
      DiPinto                                         
   

    Lisa
      DiPinto

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    EXHIBIT
      I

     

    ESCROW
      ACCOUNT

     

    
      	
              1.

            	
              The
                following tax and other liabilities (collectively, the “Liabilities”)
                shall be paid by the Company from funds in the Escrow Account immediately
                following the Closing:

            

    

     

    First
      Performance Corporation:

     

    
      	
              Florida
                Department of Revenue

            	 	
              1,677.15

            	 	
              Florida
                Third Quarter 2006 Suta payable

            
	
              Nevada
                Employment Security Division

            	 	
              304.76

            	 	
              Nevada
                Third Quarter 2006 Suta Payable

            
	
              NYS
                Employment Taxes

            	 	
              13.62

            	 	
              NYS
                Unemployment interest Assessment Charge

            
	
              United
                States Treasury

            	 	
              28,591.66

            	 	
              Paydates
                11/17, 12/01 Federal & Fica Taxes

            
	
              United
                HealthCare Insurance Company

            	 	
              40,000.00

            	
            	
              December
                2006 and January 07 Health Insurance
                Premium

            

    

    

    First
      Performance Recovery Corporation:

     

    
      	
              Florida
                Department of Revenue

            	 	
              3,095.57

            	 	
              Florida
                Third Quarter 2006 Suta payable

            
	
              Nevada
                Employment Security Division

            	 	
              10,280.90

            	 	
              Nevada
                Third Quarter 2006 Suta Payable

            
	
              NYS
                Employment Taxes

            	 	
              2.14

            	 	
              NYS
                Unemployment interest Assessment Charge

            
	
              Tennessee
                Department of Revenue

            	 	
              508.42

            	 	
              Fiscal
                YE09/30/05 Late Tax filing Charge

            
	
              Texas
                Workforce Commission

            	 	
              257.25

            	 	
              Texas
                Third Quarter 2006 Suta payable

            
	
              United
                States Treasury

            	 	
              28,591.66

            	 	
              Paydates
                11/17 Federal & Fica Taxes

            
	
              Vermont
                Department of Taxes

            	 	
              -450.00

            	 	
              Corporate
                Tax overpayment due from Vermont

            

    

    

     

    
      	
              2.

            	
              The
                following accounts payable (the “Accounts Payable”) shall be paid by the
                Company, in accordance with paragraph 3, out of monies held in the
                Escrow
                Account:

            

    

     

    First
      Performance Corporation:

     

    
      	
              ACSB
                & Co., LLP

            	 	
              16,875.00

            	 	
              9
                months retainer for outside accountants (April - Dec)

            
	
              ADP-Automatic
                Data Process

            	 	
              40,000.00

            	 	
              Payroll
                processing charges & Directs Deposit by
                ADP

            

    

    

    First
      Performance Recovery Corporation:

     

    
      	
              ADP
                Automatic Data Processing

            	 	
              40,000.00

            	 	 
	 	 	
              209,748.13

            	 	 

    

    

    
      	
              3.

            	
              For
                a period of six months from the date hereof (the “Settlement Period”), the
                Seller shall (i) have sole authority and control over the settlement
                and
                defense of the Accounts Payable, (ii) shall actively pursue, at her
                own
                expense, the resolution of such Accounts Payable and (iii) shall
                give
                notice to the Company of any and all developments concerning the
                settling
                or contesting of such Accounts Payable. During the Settlement Period,
                the
                disbursement of funds from the Escrow Account by the Company in
                satisfaction of each Accounts Payable shall be preceded by a written
                notice from the Seller to the Company and the Escrow Agent setting
                forth
                in reasonable detail, among other things, written proof that the
                Accounts
                Payable party has received payment in full for such Accounts Payable
                or
                agreed to settle such Accounts Payable for the full or a lesser amount,
                the amount (if any) to be disbursed in final settlement of such Accounts
                Payable and the material facts supporting the disbursement (including
                copies of relevant documentation). During the Settlement Period,
                to the
                extent that an Accounts Payable have been paid or settled in full
                satisfaction, the Company shall instruct the Escrow Agent to release
                the
                balance of the funds in the Escrow Account allocated for that Accounts
                Payable to the Seller. Immediately after the Settlement Period, if
                any
                Accounts Payable have not been satisfied in full, they shall be paid
                by
                the Company from funds in the Escrow Account, and, if there is any
                remaining balance in the Escrow Account after all remaining Accounts
                Payable have been satisfied in full, the Company shall instruct the
                Escrow
                Agent to release the balance of the funds in the Escrow Account allocated
                for that Accounts Payable to the
                Seller.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              4.

            	
              It
                is hereby understood and agreed as
                follows:

            

    

     

    
      	 	
              (a)

            	
              The
                Escrow Agent agrees that it shall at all times maintain the Escrow
                Funds
                in a segregated interested-bearing account demand deposit account
                at the
                Escrow Agent’s regular commercial bank. In no event and under no
                circumstances will the Escrow Agent commingle any of the Escrow Funds
                with
                any funds or property of the Escrow Agent or any other
                person.

            

    

     

    
      	 	
              (b)

            	
              In
                the event of any bona fide
                dispute with respect to the circumstances or reasons for termination
                of
                this Agreement, the Escrow Agent shall retain the Escrow Funds until
                such
                dispute is finally resolved, and shall thereafter disburse the Escrow
                Funds in accordance with the resolution of such
                dispute.

            

    

     

    
      	 	
              (c)

            	
              Upon
                the Closing of the transactions contemplated by this Agreement, (i)
                the
                principal of the Escrow Funds shall immediately be paid to the Seller
                by
                wire transfer of immediately available funds, and the principal of
                the
                Escrow Funds shall be a payment by the Buyer on account of the Cash
                Purchase Price, and (ii) the interest portion of the Escrow Funds
                shall be
                paid to the Buyer.

            

    

     

    
      	
              5.

            	
              The
                Escrow Agent shall have no authority to disburse Escrow Funds for
                any
                purpose or reason or in any manner other than as expressly provided
                in
                this Agreement. The Escrow Agent shall not be required, at any time
                or
                under any circumstances, to disburse any funds other than Escrow
                Funds,
                and upon the disbursement of all of the Escrow Funds in accordance
                with
                this agreement, or otherwise upon the written agreement of the Buyer
                and
                the Seller, the Escrow Agent shall be deemed to have completed and
                discharged all of its duties
                hereunder.

            

    

     

    
      	
              6.

            	
              The
                Escrow Agent shall have no duties or obligations hereunder other
                than as
                expressly set forth in this agreement, and no other duties or obligations
                shall be inferred upon the Escrow Agent at any time. The Escrow Agent
                shall not incur any liability for any action taken by it, except
                to the
                extent that same constitutes gross negligence or willful misconduct
                by the
                Escrow Agent or its agents. The Escrow Agent shall be entitled to
                rely
                upon and assume to be accurate all notices and advice given to the
                Escrow
                Agent hereunder (absent specific actual knowledge to the contrary),
                to
                rely upon any document and/or signature believed by it in good faith
                to be
                genuine and rendered by an authorized representative of the subject
                person, and to seek and rely upon (and be protected in relying upon)
                advice of counsel in taking or refraining from taking any action
                hereunder. The Escrow Agent shall look solely to the Seller for
                reimbursement of any reasonable out-of-pocket fees, costs and expenses
                which it may incur in acting hereunder. If the Escrow Agent shall
                at any
                time or from time to time, in good faith, be in doubt as to the
                entitlement of the Buyer or the Seller to any of the Escrow Funds,
                or if
                there shall be bona fide
                conflicting claims with respect to any Escrow Funds, then the Escrow
                Agent
                may refrain from making the subject disbursement until such uncertainty
                is
                resolved by written agreement of the Buyer and the Seller, or by
                a
                judgment or order of a court of competent jurisdiction, evidenced
                by a
                certified judgment or order. The Escrow Agent may resign at any time,
                provided that such resignation shall not become effective until a
                substitute escrow agent is appointed by mutual agreement of the Buyer
                and
                the Seller, and the Escrow Agent has delivered to its successor all
                Escrow
                Funds then held hereunder. The Buyer and the Sellers acknowledge
                that the
                Escrow Agent has rendered and will continue to render legal advice
                to the
                Buyer in connection with the transactions contemplated by this Agreement,
                and the Buyer and the Seller hereby waive any claims of conflict
                of
                interest by reason of such legal
                representation.

            

    

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      II

     

    TERMS
      OF RESTRICTED STOCK

     

    
      	
              1.

            	
              The
                Restricted Stock delivered to the Seller pursuant to Section 2.3
                shall be
                subject to forfeiture for a period of one year following the Closing
                Date
                (the “Forfeiture Deadline Date”) in the event and to the extent of any
                judicial or arbitral determination or settlement agreement that
                indemnification is due in an action brought by the Buyer against
                the
                Seller on or before the Forfeiture Deadline
                Date.

            

    

     

    
      	
              2.

            	
              The
                Restricted Stock certificates delivered to the Seller shall bear
                the
                following legend:

            

    

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
      EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
      OF
      1933 OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE
      STATE SECURITIES LAWS.

     

    UNTIL
      JULY 19, 2008, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
      RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCK PURCHASE AGREEMENT DATED AS
      OF
      JANUARY 19, 2007, AS IT MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS
      ON
      FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION OR
      TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND
      UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH.

     

    
      	
              3.

            	
              The
                Restricted Stock shall be subject to a lock-up agreement for a period
                of
                18 months following the Closing Date or until all pending claims
                for
                indemnification are resolved, whichever is
                later.

            

    

    

    
      	
              4.

            	
              The
                Buyer shall deliver a stop transfer instruction to the transfer agent
                with
                respect to the Restricted Stock which shall only be withdrawn upon
                the
                later to occur of: (a) the Forfeiture Deadline Date or (b) the
                satisfaction of any judicial or arbitral determination or settlement
                agreement that indemnification is due in an action brought by the
                Buyer
                against the Seller on or before the Forfeiture Deadline
                Date.

            

    

    

    
      
        
        

      

      
        1

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