Document:

Unassociated Document

    DEBT
      RESOLVE, INC.

    Warrant
      No. 2008-1

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    VOID
      AFTER 5:00 P.M., EASTERN TIME, 

    ON
      THE
      EXPIRATION DATE

     

    THIS
      WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
      AND
      MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
      COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
      FEDERAL AND STATE SECURITIES LAWS OR WITHOUT DELIVERING AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

     

    FOR
      VALUE
      RECEIVED, Debt
      Resolve, Inc., a
      Delaware corporation (the “Company”),
      hereby agrees to sell upon the terms and on the conditions hereinafter set
      forth, at any time commencing on the date hereof but no later than 5:00 p.m.,
      Eastern Time, on March 31, 2018 (the “Expiration
      Date”),
      to
Harmonie
      International, LLC, or
      its
      registered assigns (the “Holder”),
      under
      the terms as hereinafter set forth, three
      million seven hundred seven thousand six hundred twenty-seven (3,707,627)
fully
      paid and non-assessable shares of the Company’s Common Stock, par value $.001
      per share (the
      “Common
      Stock”),
      at a
      purchase price per share of $2.36 (the “Warrant
      Price”),
      pursuant to the terms and conditions set forth in this warrant (this
“Warrant”).
      The
      number of shares of Common Stock issued upon exercise of this Warrant
      (“Warrant
      Shares”)
      and
      the Warrant Price are subject to adjustment in certain events as hereinafter
      set
      forth. 

     

    This
      Warrant is one of a series of the Company’s Warrants to purchase Common Stock
      issued pursuant to the Securities Purchase Agreement between the Company and
      the
      Holder dated of even date herewith.

     

    1. Exercise
      of Warrant.

     

    (a)
      The
      Holder may exercise this Warrant according to the terms and conditions set
      forth
      herein by delivering to the Company, at the address set forth in Section 9
      prior
      to 5:00 p.m., Eastern Time, on the Expiration Date (i) this Warrant, (ii) the
      Subscription Form attached hereto as Exhibit
      A
      (the
“Subscription
      Form”)
      (having then been duly executed by the Holder) and (iii) cash, a certified
      check
      or a bank draft in payment of the purchase price, in lawful money of the United
      States of America, for the number of Warrant Shares specified in the
      Subscription Form.

     

    (b)
      This
      Warrant may be exercised in whole or in part so long as any exercise in part
      hereof would not involve the issuance of fractional Warrant Shares; provided,
      however,
      that
      the number of Warrant Shares issuable upon exercise of this Warrant at any
      given
      time shall be limited to such number of Warrant Shares as would not constitute
      a
      change of control in the Company (as referenced in the American Stock Exchange
      (“Amex”) Company Guide Section 713(b)), as such is determined by the Company in
      consultation with the Amex, assuming the issuance of such Common Stock by the
      Company has not been previously approved by the Company's stockholders;
provided,
      further,
      that in
      the event the issuance of such Warrant Shares is determined to constitute a
      change of control requiring approval by the Company’s stockholders, the Company
      will work with the Holder to take such reasonable steps and actions as are
      necessary and appropriate to obtain approval by the Company’s stockholders so
      that the Holder may proceed with exercise of the Warrant and the Company may
      issue the Warrant Shares. If exercised in part, the Company shall deliver to
      the
      Holder a new Warrant, identical in form to this Warrant, in the name of the
      Holder, evidencing the right to purchase the number of Warrant Shares as to
      which this Warrant has not been exercised, which new Warrant shall be signed
      by
      the Chief Executive Officer or President of the Company. The term Warrant as
      used herein shall include any subsequent Warrant issued as provided herein.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (c)
      No
      fractional Warrant Shares or scrip representing fractional Warrant Shares shall
      be issued upon the exercise of this Warrant, but the number of shares issuable
      shall be rounded to the nearest whole share

     

    (d)
      In
      the event of any exercise of the rights represented by this Warrant, a
      certificate or certificates for Warrant Shares so purchased, registered in
      the
      name of the Holder on the stock transfer books of the Company, shall be
      delivered to the Holder within a reasonable time after such rights shall have
      been so exercised. The person or entity in whose name any certificate for
      Warrant Shares is issued upon exercise of the rights represented by this Warrant
      shall for all purposes be deemed to have become the holder of record of such
      Warrant Shares immediately prior to the close of business on the date on which
      the Warrant was surrendered and payment of the Warrant Price and any applicable
      taxes was made, irrespective of the date of delivery of such certificate, except
      that, if the date of such surrender and payment is a date when the stock
      transfer books of the Company are closed, such person shall be deemed to have
      become the holder of such shares at the opening of business on the next
      succeeding date on which the Company’s stock transfer books are open. Except as
      provided in Section 4 hereof, the Company shall pay any and all documentary
      stamp or similar issue or transfer taxes payable in respect of the issue or
      delivery of Warrant Shares on exercise of this Warrant.

     

    2. Disposition
      of Warrant Shares and Warrant.

     

    (a)
      The
      Holder hereby acknowledges that: (i) this Warrant and any Warrant Shares
      purchased pursuant hereto are not being registered (A) under the Securities
      Act
      of 1933 (the “Act”)
      on the
      ground that the issuance of this Warrant is exempt from registration under
      Section 4(2) of the Act as not involving any public offering, or (B) under
      any
      applicable state securities law because the issuance of this Warrant does not
      involve any public offering; and (ii) that the Company’s reliance on the
      registration exemption under Section 4(2) of the Act and under applicable state
      securities laws is predicated in part on the representations hereby made to
      the
      Company by the Holder. The Holder represents and warrants that he, she or it
      is
      acquiring this Warrant and will acquire Warrant Shares for investment for his,
      her or its own account, with no present intention of dividing his, her or its
      participation with others or reselling or otherwise distributing this Warrant
      or
      Warrant Shares.

     

    (b)
      The
      Holder hereby agrees that he, she or it will not sell, transfer, pledge or
      otherwise dispose of (collectively, “Transfer”)
      all or
      any part of this Warrant and/or Warrant Shares unless and until he, she or
      it
      shall have first have given notice to the Company describing such Transfer
      and
      furnished to the Company (i) a statement from the transferee, whereby the
      transferee represents and warrants that he, she, or it is acquiring this Warrant
      and will acquire Warrant Shares, as applicable, for investment for his, her
      or
      its own account, with no present intention of dividing his, her or its
      participation with others or reselling or otherwise distributing this Warrant
      or
      Warrant Shares, as applicable, and either (ii) an opinion, reasonably
      satisfactory to counsel for the Company, of counsel (skilled in securities
      matters, selected by the Holder and reasonably satisfactory to the Company)
      to
      the effect that the proposed Transfer may be made without registration under
      the
      Act and without registration or qualification under any state law, or (iii)
      an
      interpretative letter from the U.S. Securities and Exchange Commission to the
      effect that no enforcement action will be recommended if the proposed sale
      or
      transfer is made without registration under the Act. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (c)
      If,
      at the time of issuance of Warrant Shares, no registration statement is in
      effect with respect to such shares under applicable provisions of the Act,
      the
      Company may, at its election, require that (i) the Holder provide written
      reconfirmation of the Holder’s investment intent to the Company, and (ii) any
      stock certificate evidencing Warrant Shares shall bear legends reading
      substantially as follows:

     

    “THE
      SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS
      CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT
      TO WHICH THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF SUCH
      RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. NO TRANSFER
      OF
      SUCH SHARES OR OF THIS CERTIFICATE (OR OF ANY SHARES OR OTHER SECURITIES (OR
      CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR OR IN RESPECT OF SUCH SHARES)
      SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS SET FORTH IN THE
      WARRANT HAVE BEEN COMPLIED WITH.”

     

    “THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT OF 1933 (THE “ACT”) OR AN OPINION OF COUNSEL SATISFACTORY TO THE
      ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER THE
      ACT.”

     

    In
      addition, so long as the foregoing legend may remain on any stock certificate
      evidencing Warrant Shares, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby
      on
      its books and records and with those to whom it may delegate registrar and
      transfer functions.

     

    3. Reservation
      of Shares.
      The
      Company hereby agrees that at all times there shall be reserved for issuance
      upon the exercise of this Warrant such number of shares of the Common Stock
      as
      shall be required for issuance upon exercise of this Warrant. The Company
      further agrees that all Warrant Shares will be duly authorized and will, upon
      issuance and payment of the exercise price therefor, be validly issued, fully
      paid and non-assessable, free from all taxes, liens, charges and encumbrances
      with respect to the issuance thereof, other than taxes, if any, in respect
      of
      any transfer occurring contemporaneously with such issuance and other than
      transfer restrictions imposed by federal and state securities laws.

     

    4. Exchange,
      Transfer or Assignment of Warrant.
      Subject
      to Section 2, this Warrant is exchangeable, without expense, at the option
      of
      the Holder, upon presentation and surrender hereof to the Company or at the
      office of its stock transfer agent, if any, for other Warrants of the Company
      (“Warrants”)
      of
      different denominations, entitling the Holder or Holders thereof to purchase
      in
      the aggregate the same number of Warrant Shares purchasable hereunder. Subject
      to Section 2, upon surrender of this Warrant to the Company or at the office
      of
      its stock transfer agent, if any, with the Assignment Form attached hereto
      as
Exhibit
      B
      (the
“Assignment
      Form”)
      duly
      executed and funds sufficient to pay any transfer tax, the Company shall,
      without charge, execute and deliver a new Warrant in the name of the assignee
      named in the Assignment Form and this Warrant shall promptly be canceled.
      Subject to Section 2, this Warrant may be divided or combined with other
      Warrants that carry the same rights upon presentation hereof at the office
      of
      the Company or at the office of its stock transfer agent, if any, together
      with
      a written notice specifying the names and denominations in which new Warrants
      are to be issued and signed by the Holder hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    5. Capital
      Adjustments.
      This
      Warrant is subject to the following further provisions:

     

    (a) Recapitalization,
      Reclassification and Succession.
      If any
      recapitalization of the Company or reclassification of its Common Stock or
      any
      merger or consolidation of the Company into or with a corporation or other
      business entity, or the sale or transfer of all or substantially all of the
      Company’s assets or of any successor corporation’s assets to any other
      corporation or business entity (any such corporation or other business entity
      being included within the meaning of the term “successor corporation”) shall be
      effected, at any time while this Warrant remains outstanding and unexpired,
      then, as a condition of such recapitalization, reclassification, merger,
      consolidation, sale or transfer, lawful and adequate provision shall be made
      whereby the Holder of this Warrant thereafter shall have the right to receive
      upon the exercise hereof as provided in Section 1 and in lieu of the Warrant
      Shares immediately theretofore issuable upon the exercise of this Warrant,
      such
      shares of capital stock, securities or other property as may be issued or
      payable with respect to or in exchange for the number of outstanding shares
      of
      Common Stock equal to the number of Warrant Shares immediately theretofore
      issuable upon the exercise of this Warrant had such recapitalization,
      reclassification, merger, consolidation, sale or transfer not taken place,
      and
      in each such case, the terms of this Warrant shall be applicable to the shares
      of stock or other securities or property receivable upon the exercise of this
      Warrant after such consummation.

     

    (b) Subdivision
      or Combination of Shares.
      If the
      Company at any time while this Warrant remains outstanding and unexpired shall
      subdivide or combine its Common Stock, the number of Warrant Shares purchasable
      upon exercise of this Warrant shall be proportionately adjusted.

     

    (c) Stock
      Dividends and Distributions.
      If the
      Company at any time while this Warrant is outstanding and unexpired shall issue
      or pay the holders of its Common Stock, or take a record of the holders of
      its
      Common Stock for the purpose of entitling them to receive, a dividend payable
      in, or other distribution of, Common Stock, then the number of Warrant Shares
      purchasable upon exercise of this Warrant shall be adjusted to the number of
      shares of Common Stock that Holder would have owned immediately following such
      action had this Warrant been exercised immediately prior thereto.

     

    (d) Price
      Adjustments.
      Whenever the number of Warrant Shares purchasable upon exercise of this Warrant
      is adjusted pursuant to Sections 5(a), 5(b) or 5(c), the then applicable Warrant
      Price shall be proportionately adjusted.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (e) Certain
      Shares Excluded.
      The
      number of shares of Common Stock outstanding at any given time for purposes
      of
      the adjustments set forth in this Section 5 shall exclude any shares then
      directly or indirectly held in the treasury of the Company.

     

    (f) Deferral
      and Cumulation of De Minimis Adjustments.
      The
      Company shall not be required to make any adjustment pursuant to this Section
      5
      if the amount of such adjustment would be less than one percent (1%) of the
      Warrant Price in effect immediately before the event that would otherwise have
      given rise to such adjustment. In such case, however, any adjustment that would
      otherwise have been required to be made shall be made at the time of and
      together with the next subsequent adjustment which, together with any adjustment
      or adjustments so carried forward, shall amount to not less than one percent
      (1%) of the Warrant Price in effect immediately before the event giving rise
      to
      such next subsequent adjustment. All calculations under this Section 5 shall
      be
      made to the nearest cent or to the nearest one-hundredth of a share, as the
      case
      may be, but in no event shall the Company be obligated to issue fractional
      Warrant Shares or fractional portions of any securities upon the exercise of
      the
      Warrant.

     

    (g) Duration
      of Adjustment.
      Following each computation or readjustment as provided in this Section 5, the
      new adjusted Warrant Price and number of Warrant Shares purchasable upon
      exercise of this Warrant shall remain in effect until a further computation
      or
      readjustment thereof is required.

     

    6. Notice
      to Holders.

     

    (a) Notice
      of
      Record Date. In case:

     

    (i)
      the
      Company shall take a record of the holders of its Common Stock (or other stock
      or securities at the time receivable upon the exercise of this Warrant) for
      the
      purpose of entitling them to receive any dividend (other than a cash dividend
      payable out of earned surplus of the Company) or other distribution, or any
      right to subscribe for or purchase any shares of stock of any class or any
      other
      securities, or to receive any other right;

     

    (ii)
      of
      any capital reorganization of the Company, any reclassification of the capital
      stock of the Company, any consolidation with or merger of the Company into
      another corporation, or any conveyance of all or substantially all of the assets
      of the Company to another corporation; or

     

    (iii)
      of
      any voluntary dissolution, liquidation or winding-up of the
      Company;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      hereof at the time outstanding a notice specifying, as the case may be, (i)
      the
      date on which a record is to be taken for the purpose of such dividend,
      distribution or right, and stating the amount and character of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up is to take place, and the time, if any, is to be fixed, as of which
      the holders of record of Common Stock (or such stock or securities at the
      time receivable upon the exercise of this Warrant) shall be entitled to exchange
      their shares of Common Stock (or such other stock or securities) for securities
      or other property deliverable upon such reorganization, reclassification,
      consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
      be mailed at least ten (10) calendar days prior to the record date therein
      specified, or if no record date shall have been specified therein, at least
      ten
      (10) days prior to such specified date.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (b) Certificate
      of Adjustment.
      Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company
      shall promptly make available and have on file for inspection a certificate
      signed by its Chairman, Chief Executive Officer, President or a Vice President,
      setting forth in reasonable detail the event requiring the adjustment, the
      amount of the adjustment, the method by which such adjustment was calculated
      and
      the Warrant Price and number of Warrant Shares purchasable upon exercise of
      this
      Warrant after giving effect to such adjustment.

     

    7. Loss,
      Theft, Destruction or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it, in the exercise of its
      reasonable discretion, of the ownership and the loss, theft, destruction or
      mutilation of this Warrant and, in the case of loss, theft or destruction,
      of
      indemnity reasonably satisfactory to the Company and, in the case of mutilation,
      upon surrender and cancellation thereof, the Company will execute and deliver
      in
      lieu thereof, without expense to the Holder, a new Warrant of like tenor dated
      the date hereof.

     

    8. Warrant
      Holder Not a Stockholder.
      The
      Holder of this Warrant, as such, shall not be entitled by reason of this Warrant
      to any rights whatsoever as a stockholder of the Company, including but not
      limited to voting rights.

     

    9. Notices.
      Any
      notice provided for in this Warrant must be in writing and must be either
      personally delivered, mailed by first class mail (postage prepaid and return
      receipt requested), or sent by reputable overnight courier service (charges
      prepaid) to the recipient at the address below indicated:

    

    If
      to the
      Company:

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Suite L7

    White
      Plains, New York 10604

    Attention:
      Chief Executive Officer

    

    If
      to the
      Holder:

    

    
      	 	 	
              To
                the address of such Holder set forth on the books and records of
                the
                Company.

            

    

     

    or
      such
      other address or to the attention of such other person as the recipient party
      shall have specified by prior written notice to the sending party. Any notice
      under this Warrant will be deemed to have been given (a) if personally
      delivered, upon such delivery, (b) if mailed, five days after deposit in the
      U.S. mail, or (c) if sent by reputable overnight courier service, one business
      day after such services acknowledges receipt of the notice.

     

    10. Choice
      of Law.
      THIS
      WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED
      IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT
      TO
      ITS CONFLICTS OF LAW RULES.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    11. Submission
      to Jurisdiction.
      EACH OF
      THE HOLDER AND THE COMPANY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL
      COURT SITTING IN THE STATE AND CITY OF NEW
      YORK
IN
      ANY
      ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AND AGREES
      THAT
      ALL CLAIMS IN RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
      IN
      ANY SUCH COURT. EACH OF THE HOLDER AND THE COMPANY ALSO AGREE NOT TO BRING
      ANY
      ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT IN ANY OTHER
      COURT. EACH OF THE PARTIES WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE
      MAINTENANCE OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY,
      OR OTHER SECURITY THAT MIGHT BE REQUIRED OF ANY OTHER PARTY WITH RESPECT
      THERETO.

     

    IN
      WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
      behalf, in its corporate name and by a duly authorized officer, as of this
      31st
      day of
      March 2008.

     

    
      	 	 	 
	 	 
	 	DEBT
              RESOLVE,
              INC.
	 
 	 
 	 
 
	 	By:  	
              /s/ James
                D. Burchetta

            
	 	
              

              Name:
                James
                D. Burchetta

              Title:
                Chairman

            
	 	 

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    Subscription
      form

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Suite L7

    White
      Plains, New York 10604

    Attention:
      Chief Executive Officer

     

    The
      undersigned hereby (1) irrevocably elects to exercise his, her or its rights
      to
      purchase ____________ shares of the common stock, par value $.001 per share
      (“Common
      Stock”),
      of
      Debt Resolve, Inc., a Delaware corporation, covered by the attached Warrant,
      (2)
      makes payment in full of the purchase price therefore by enclosure of cash,
      a
      certified check or bank draft, (3) requests that certificates for such shares
      of
      Common Stock be issued in the name of:

     

    (Please
      print the Warrant holder’s name, address and Social Security/Tax Identification
      Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    and
      (4)
      if such number of shares of Common Stock shall not be all the shares receivable
      upon exercise of the attached Warrant, requests that a new Warrant for the
      balance of the shares covered by the attached Warrant be registered in the
      name
      of, and delivered to:

     

    (Please
      print name, address and Social Security/Tax Identification Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    In
      lieu
      of receipt of a fractional share of Common Stock, the undersigned will receive
      a
      check representing payment therefor.

    

      
        	
                Dated:
                  

              	          	 	
                        
                  

              	 
	 	 	 	
                PRINT
                  WARRANT HOLDER NAME

              
	 	 	 	 
	 	 	 	 
	 	 	 	             
                	 
	
                 

              	 	 	
                Name:
                  

              	 
	
                 

              	 	 	
                Title:
                  

              	 
	 	 	 	 	 
	
                Witness:

              	            
                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	             
                	 	 	 

      

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

    

    ASSIGNMENT
      FORM

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Suite L7

    White
      Plains, New York 10604

    Attention:
      Chief Executive Officer

    

    FOR
      VALUE
      RECEIVED, ___________________
      hereby
      sells, assigns and transfers unto

    

    (Please
      print assignee’s name, address and Social Security/Tax Identification
      Number)

    ________________________________________________

    ________________________________________________

    ________________________________________________

    the
      right
      to purchase shares of common stock, par value $.001 per share, of Debt Resolve,
      Inc., a Delaware corporation (the “Company”),
      represented by this Warrant to the extent of shares as to which such right
      is
      exercisable and does hereby irrevocably constitute and appoint
      ____________________________, Attorney, to transfer the same on the books of
      the
      Company with full power of substitution in the premises.

    
      

        
          	
                  Dated:
                    

                	          	 	
                          
                    

                	 
	 	 	 	
                  PRINT
                    WARRANT HOLDER NAME

                
	 	 	 	 
	 	 	 	 
	 	 	 	             
                  	 
	
                   

                	 	 	
                  Name:
                    

                	 
	
                   

                	 	 	
                  Title:
                    

                	 
	 	 	 	 	 
	
                  Witness:

                	            
                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	             
                  	 	 	 

        

      

    

     

    
      
        
        

      

      
        9Unassociated Document

    SECURITIES
      PURCHASE AGREEMENT

     

    This
      SECURITIES PURCHASE AGREEMENT (this "Agreement")
      is
      made as of March 31, 2008, by and between Debt
      Resolve, Inc.,
      a
      Delaware corporation with its principal office at 707 Westchester Avenue, Suite
      L7, White Plains, New York 10604 (the "Company"),
      and
Harmonie
      International, LLC,
      a
      Delaware limited liability company with its principal office at 30201 Orchard
      Lake Road, Suite 220, Farmington Hills, Michigan 48334 (the "Purchaser").

     

    WHEREAS,
      the Company desires to issue and sell to the Purchaser (i) 2,966,102 shares
      (the
      "Shares")
      of the
      authorized but unissued shares of the Company's common stock, par value $.001
      per share (the "Common
      Stock"),
      and
      (ii) warrants to purchase up to 3,707,627 shares of the Common Stock (the
“Warrants”);
      and

     

    WHEREAS,
      the Purchaser wishes to purchase the Shares upon the terms and subject to the
      conditions set forth in this Agreement.

     

    NOW
      THEREFORE, in consideration of the mutual agreements, representations,
      warranties and covenants herein contained, the parties hereto agree as
      follows:

     

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings:

     

    "Affiliate"
      of a
      party means any other Person controlling, controlled by or under common control
      with the specified Person. For the purposes of this definition, "control"
      means
      the power to direct the management and policies of such Person, whether through
      the ownership of voting securities, by contract or otherwise.

     

    "Exchange
      Act"
      means
      the Securities Exchange Act of 1934, as amended, and all of the rules and
      regulations promulgated thereunder.

     

    "GAAP"
      means
      United States generally accepted accounting principles.

     

    "Material
      Adverse Effect"
      shall
      mean a material adverse effect on the prospects, condition (financial or other),
      business, operations, assets, liabilities, or results of operations of the
      Company and its subsidiaries, taken as a whole.

     

    "Person"
      shall
      mean an individual, corporation, company, partnership, firm, association, joint
      venture, trust, unincorporated organization, government, governmental body,
      agency, political subdivision or other entity.

     

    "SEC"
      shall
      mean the U.S. Securities and Exchange Commission.

     

    "Securities
      Act"
      shall
      mean the Securities Act of 1933, as amended, and all of the rules and
      regulations promulgated thereunder.

     

    "Warrant
      Share"
      shall
      mean the shares of Common Stock issuable or issued upon the exercise of the
      Warrants.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    2. Purchase
      and Sale of Shares and Warrants.

     

    2.1 Purchase
      and Sale.
      Subject
      to and upon the terms and conditions set forth in this Agreement, the Company
      agrees to issue, sell and deliver to the Purchaser, and the Purchaser hereby
      agrees to purchase from the Company, at the Closing, (i) 2,966,102 shares of
      Common Stock, at a purchase price per share of $2.36 (the “Purchase
      Price”),
      and
      (ii) one or more Warrants to purchase up to 3,707,627 shares of Common Stock,
      at
      an exercise price per Warrant Share of $2.36. The total purchase price payable
      by the Purchaser for the shares of Common Stock and the Warrants that the
      Purchaser is hereby agreeing to purchase is $7,000,000.

     

    2.2 Closing.
      The
      closing of the transactions contemplated under this Agreement (the "Closing")
      shall take place at 10:00 a.m. at the offices of Greenberg Traurig, LLP in
      New
      York, New York, on March 31, 2008, or at such other location, date and time
      as
      may be agreed upon between the Purchaser and the Company (the "Closing
      Date").
      At
      the Closing, the Company shall authorize its transfer agent to issue to the
      Purchaser, against delivery of payment for the Shares and the Warrants by wire
      transfer of immediate available funds in accordance with the Company's
      instructions, (i) one or more stock certificates registered in the name of
      the
      Purchaser, representing the Shares, and (ii) one or more warrant certificates
      registered in the name of the Purchaser to purchase the shares of Common Stock,
      and, in the case of both (i) and (ii) above, bearing the legend set forth in
      Section 6.2 hereof. Closing documents may be delivered by facsimile with
      original signature pages sent by overnight courier.

     

    3. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Purchaser as follows:

     

    3.1 Organization
      and Good Standing.
      The
      Company 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, and all necessary licenses and permits, to own and lease its
      properties and assets and to conduct its business as now conducted. Each
      subsidiary as referred to in the SEC Documents (as hereinafter defined) is
      a
      corporation duly organized, validly existing and in good standing under the
      laws
      of the jurisdiction of its incorporation and has all requisite power and
      authority, and all necessary licenses and permits, to own and lease its
      properties and assets and to conduct its business as now conducted. The Company
      and its subsidiaries are each qualified to do business as a foreign corporation
      and are in good standing in all states where the conduct of their respective
      businesses or their ownership or leasing of property requires such
      qualification, except where the failure to so qualify would not have a Material
      Adverse Effect. The Company does not own or control, directly or indirectly,
      any
      interest in any other corporation, partnership, limited liability company,
      unincorporated business organization, association, trust or other business
      entity.

     

    3.2 Capitalization.

     

    (a)
      The
      authorized capital stock of the Company consists of: (i) 10,000,000 shares
      of
      preferred stock of the Company, par value $.001 per share, of which no shares
      are issued or outstanding; and (ii) 100,000,000 shares of Common Stock, par
      value $.0001 per share, of which, immediately prior to the consummation of
      the
      transactions contemplated hereby, (A) 8,474,363 shares are issued and
      outstanding and all such outstanding shares are validly issued, fully paid
      and
      non-assessable; (B) 3,853,434 shares of Common Stock are reserved for issuance
      upon the exercise of outstanding stock options granted under the Company's
      2005
      Incentive Compensation Plan; and (C) 2,042,770 shares of Common Stock are
      reserved for issuance upon exercise of outstanding warrants. 

     

    (b)
      There
      are no preemptive or similar rights to purchase or otherwise acquire shares
      of
      capital stock of the Company pursuant to any provision of law or the Certificate
      of Incorporation or By-laws of the Company or by agreement or otherwise. Except
      for the Warrants, as set forth in this Section 3.2 and except as set forth
      in
      the SEC Documents, there are no outstanding subscriptions, warrants, options
      or
      other rights or commitments of any character to subscribe for or purchase from
      the Company, or obligating the Company to issue, any shares of capital stock
      of
      the Company or any securities convertible into or exchangeable for such
      shares.

     

    
      
        
        

      

      
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    (c)
      There
      are no stockholder agreements, voting agreements, or similar agreements with
      respect to the Common Stock to which the Company is a party, or to the knowledge
      of the Company, by or between any stockholders of the Company or any of its
      Affiliates.

     

    3.3 Authorization.
      The
      Company has all requisite corporate power to enter into this Agreement, to
      issue
      the Shares, the Warrants and the Warrant Shares and to carry out and perform
      its
      obligations under the terms of this Agreement (including, without limitation,
      the issuance of the Shares, the Warrants and the Warrant Shares). All corporate
      action on the part of the Company, its officers, directors and stockholders
      necessary for the authorization, execution, delivery and performance of this
      Agreement and the consummation of the transactions contemplated herein has
      been
      taken or will be taken prior to the Closing Date. When executed and delivered
      by
      the Company, this Agreement shall constitute the legal, valid and binding
      obligation of the Company, enforceable against the Company in accordance with
      their respective terms, except as such may be limited by bankruptcy, insolvency,
      reorganization or other laws affecting creditors' rights generally and by
      general equitable principles.

     

    3.4 Valid
      Issuance of the Shares and the Warrant Shares.
      The
      Shares and the Warrant Shares will, upon issuance pursuant to the terms hereof,
      be validly issued, fully paid and non-assessable, free from all liens, claims,
      encumbrances with respect to the issuance of such Shares and Warrant Shares
      and
      will not be subject to any preemptive or similar rights. Except for blue sky
      filing fees, if any, there are no state or city taxes, fees or other charges
      payable in connection with the execution or delivery of this Agreement, the
      Shares, the Warrants and the Warrant Shares.

     

    3.5 SEC
      Documents.
      The
      Company has made available to the Purchaser, a true and complete copy of the
      Company's Annual Report on Form 10-KSB for the year ended December 31, 2006,
      and
      any other statement, report, registration statement (other than registration
      statements on Form S-8) or definitive proxy statement filed by the Company
      with
      the SEC during the period commencing on December 31, 2006 and ending on the
      date
      hereof. The Company will, promptly upon the filing thereof, also make available
      to the Purchaser on its website, www.debtresolve.com, all statements, reports
      (including, without limitation, Quarterly Reports on Form 10-Q and Current
      Reports on Form 8-K), registration statements and definitive proxy statements
      filed by the Company with the SEC during the period commencing on the date
      hereof and ending on the Closing Date (all such materials required to be
      furnished to the Purchaser pursuant to this sentence or pursuant to the next
      preceding sentence of this Section 3.5 being called, collectively, including
      any
      amendments thereto, the "SEC
      Documents").
      Since
      January 1, 2007, the Company has timely made all filings required to be made
      by
      it under the Exchange Act and the securities laws of any state, and any rules
      and regulations promulgated thereunder. The SEC Documents comply in all material
      respects with the requirements of the Exchange Act or the Securities Act, as
      applicable, and none of the SEC Documents contained any untrue statement of
      a
      material fact or omitted to state a material fact required to be stated therein
      or necessary in order to make the statements made therein, in light of the
      circumstances under which they were made, not misleading, as of their respective
      filing dates, except to the extent corrected by a subsequently filed SEC
      Document filed prior to the date hereof. 

     

    3.6 Financial
      Statements.
      All
      financial statements included in the SEC Documents (hereinafter referred to
      collectively as the "Financial
      Statements")
      have
      been prepared in accordance with U.S. generally accepted accounting principles
      applied on a consistent basis during the periods involved, and fairly present,
      in all material respects, the financial position of the Company and the results
      of its operations as of the date and for the periods indicated thereon. Since
      December 31, 2006, to the Company's knowledge, (i) there has been no development
      or change (actual or threatened), individually or in the aggregate, having
      a
      Material Adverse Effect, (ii) except as set forth in an SEC Document (as defined
      below), there does not exist any condition reasonably likely to result in a
      Material Adverse Effect and (iii) the Company has conducted its business only
      in
      the ordinary course consistent with past practice. The Company has no
      indebtedness, obligations or liabilities of any kind (whether accrued, absolute,
      contingent or otherwise, and whether due or to become due) which were not fully
      reflected in, reserved against or otherwise described in the Financial
      Statements or the notes thereto, or incurred in the ordinary course of business
      consistent with the Company's past practices, all of which individually and
      in
      the aggregate do not or would not have a Material Adverse Effect.

     

    
      
        
        

      

      
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    3.7 Consents.
      Except
      for filings under federal and applicable state securities laws and except for
      Permits (as defined below), the absence of which either individually or in
      the
      aggregate would not have a Material Adverse Effect, all permits, consents,
      approvals, orders, authorizations of, or declarations to (collectively,
      "Permits")
      or
      filings with any federal, state, local or foreign court, governmental or
      regulatory authority, or other person (including third party consents) required
      on the part of the Company in connection with the execution, delivery or
      performance of this Agreement and the consummation of the transactions
      contemplated herein have been obtained or will be obtained prior to the Closing
      Date, and will be effective as of the Closing Date.

     

    3.8 No
      Conflict.
      The
      execution and delivery of this Agreement by the Company and the consummation
      of
      the transactions contemplated hereby (including, without limitation, the
      issuance of the Shares, the Warrants and the Warrant Shares) will not (x)
      conflict with or result in any violation of or default (with or without notice
      or lapse of time, or both) under, or give rise to a right of termination,
      cancellation or acceleration of any obligation or to a loss of a material
      benefit under (i) any provision of the Certificate of Incorporation or By-laws
      of the Company or (ii) any agreement or instrument, Permit, franchise, license,
      judgment, order, statute, law, ordinance, rule or regulations, applicable to
      the
      creation of any lien, security interest, charge or encumbrance upon the
      Company's or any of its subsidiaries' assets, properties or outstanding capital
      stock.

     

    3.9 Brokers
      or Finders.
      Except
      for The Resolution Group, Inc. (“TRG”), the Company has not dealt with any
      broker or finder in connection with the transactions contemplated by this
      Agreement, and, except for certain fees and expenses payable by the Company
      to
      TRG, the Company has not incurred, and shall not incur, directly or indirectly,
      any liability for any brokerage or finders' fees or agents commissions or any
      similar charges in connection with this Agreement or any transaction
      contemplated hereby.

     

    3.10 American
      Stock Exchange.
      The
      Common Stock is listed on the American Stock Exchange and, except as disclosed
      in the SEC Documents, there are no proceedings to revoke or suspend such
      listing. The Common Stock is registered pursuant to Section 12(b) of the
      Exchange Act. The Company has taken no action designed to, or which to its
      knowledge is likely to have the effect of, terminating the registration of
      the
      Common Stock under the Exchange Act or delisting the Common Stock from the
      American Stock Exchange. The Company has not received any notification that,
      and
      has no knowledge that, the SEC is contemplating terminating such registration.
      The issuance of the Shares, the Warrants and the Warrant Shares does not require
      stockholder approval.

     

    3.11 Absence
      of Litigation.
      There
      is no action, suit or proceeding or, to the Company's knowledge, any
      investigation, pending, or to the Company's knowledge, threatened by or before
      any governmental body against the Company, its subsidiaries, its activities,
      properties or assets or any officer, director, or employee of the Company in
      connection with such officer's, director's or employee's relationship with,
      or
      actions taken on behalf of the Company and in which an unfavorable outcome,
      ruling or finding in any said matter, or for all matters taken as a whole,
      might
      have a Material Adverse Effect. The foregoing includes, without limitation,
      any
      such action, suit, proceeding or investigation that questions this Agreement
      or
      the right of the Company to execute, deliver and perform under same. The Company
      is not a party to or subject to the provisions of any order, writ, injunction
      or
      decree of any court or government agency.

     

    
      
        
        

      

      
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    3.12 Title
      to Property and Assets.
      Except
      as disclosed in the SEC Documents, each of the Company and its subsidiaries
      owns
      its property and assets free and clear of all mortgages, liens, loans, claims,
      charges and encumbrances, and except such encumbrances and liens that arise
      in
      the ordinary course of business and do not materially impair their respective
      ownership or use of such property or assets. With respect to property and assets
      it leases, the Company is in material compliance with such leases and, to the
      best of its knowledge, holds a valid leasehold interest free of any liens,
      charges, claims or encumbrances, except to the extent any such lien, charge,
      claim or encumbrance would not have a Material Adverse Effect.

     

    3.13 Patents,
      Trademarks, Proprietary Rights.

     

    (a)
      To
      the Company's knowledge, each of the Company and its subsidiaries owns or has
      the right to use all of the Intellectual Property Rights (as defined below),
      except where such failure would not have a Material Adverse Effect on the
      business, properties or assets of the Company and its subsidiaries, taken as
      a
      whole. For purposes of this Agreement, "Intellectual
      Property Rights"
      means
      all patents, copyrights, trademarks, service marks, trade names, permits, trade
      secrets, computer programs, software designs and related materials and other
      intellectual property that are used by the Company or a subsidiary and are
      material to the conduct of the Company's or a subsidiary's
      business.

     

    (b)
      To
      the Company's knowledge, the Company's and each subsidiary's use and enjoyment
      of the Intellectual Property Rights do not violate any license or conflict
      with
      or infringe the intellectual property rights of others in a manner which would
      materially and adversely affect the business, assets, properties, operations
      or
      condition (financial or otherwise) of the Company and its subsidiaries, taken
      as
      a whole.

     

    3.14 Environmental
      Matters.
      Except
      as set forth in the SEC Documents, to the Company's knowledge, neither the
      Company nor any of its subsidiaries is in violation of any applicable statute,
      law or regulation relating to the environment or occupational health and safety,
      which violation could reasonably be expected to result in a Material Adverse
      Effect, and to the best of its knowledge, no expenditures are required in order
      to comply with any such existing statute, law or regulation, which expenditures
      could reasonably be expected to result in a Material Adverse
      Effect.

     

    3.15 Permits.
      Each of
      the Company and its subsidiaries possesses all Permits or similar authority
      necessary to conduct its business as described in the SEC Documents, except
      where the failure to possess such Permits would not, individually or in the
      aggregate, have a Material Adverse Effect on the Company or its subsidiaries
      ("Material
      Permits"),
      and
      neither the Company nor any such subsidiary has received any notice of
      proceedings relating to the revocation or modification of any Material
      Permit.

     

    3.16 Employees.
      To the
      Company's knowledge, no strike, labor dispute or union organizing activities
      are
      pending or threatened against the Company or any of its subsidiaries by its
      employees. No employees belong to a union or collective bargaining unit. To
      the
      Company's knowledge, neither the Company nor any of its subsidiaries has any
      workers' compensation liabilities.

     

    
      
        
        

      

      
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    3.17 Compliance
      with Certificate of Incorporation and By-laws; Compliance with
      Laws.
      The
      Company is not in violation or default of any provisions of its Certificate
      of
      Incorporation or By-laws. The business and operations of the Company and each
      of
      its subsidiaries have been conducted in accordance with all applicable laws,
      rules and regulations of all governmental agencies, authorities and
      instrumentalities (including, without limitation, under the Employee Retirement
      Income Security Act of 1974, as amended, and all laws relating to the collection
      of debt), except for such violations which would not, individually or in the
      aggregate, have a Material Adverse Effect.

     

    3.18 Insurance.
      The
      Company and each of its subsidiaries maintains insurance of the type and in
      the
      amount reasonably adequate for its business, including, but not limited to,
      insurance covering all real and personal property owned or leased by the Company
      against theft, damage, destruction, acts of vandalism, and all other risks
      customarily insured against by similarly situated companies, all of which
      insurance is in full force and effect.

     

    3.19 Investment
      Company Act.
      The
      Company is not an "Investment Company" within the meaning of the Investment
      Company Act of 1940, as amended (the "Investment
      Company Act"),
      and
      the Company is not directly or indirectly controlled by or acting on behalf
      of
      any person that is an "Investment Company" within the meaning of the Investment
      Company Act.

     

    3.20 Compliance
      with Securities Laws.
      Assuming the accuracy of the representations and warranties of the Purchaser
      set
      forth in Section 4 hereof, the offer and sale by the Company of the Shares
      and
      the Warrants are exempt from the registration and prospectus delivery
      requirements of the Securities Act. Other than pursuant to an effective
      registration statement under the Securities Act, the Company has not issued,
      offered or sold any shares of Common Stock (including for this purpose any
      securities of the same or a similar class as the Common Stock) within the
      six-month period preceding the date hereof or taken any other action, or failed
      to take any action, that, in any such case, would (i) eliminate the availability
      of the exemption from registration under Regulation D under the Securities
      Act
      in connection with the offer and sale of the Shares and the Warrants as
      contemplated hereby or (ii) cause the offering of the Shares or the Warrants
      pursuant to this Agreement to be integrated with prior offerings by the Company
      for purposes of the Securities Act or any applicable stockholder approval
      provisions. The Company shall not directly or indirectly take, and shall not
      permit any of its directors, officers or Affiliates directly or indirectly
      to
      take, any action (including, without limitation, any offering or sale to any
      Person of the Shares, the Warrants or any Common Stock) that will make
      unavailable the exemption from registration under the Securities Act being
      relied upon by the Company for the offer and sale to the Purchaser of the Shares
      and the Warrants as contemplated by this Agreement, including, without
      limitation, the filing of a registration statement under the Securities Act.
      No
      form of general solicitation or advertising within the meaning of Rule 502(c)
      under the Securities Act has been used or authorized by the Company or any
      of
      its officers, directors or Affiliates in connection with the offer or sale
      of
      the Shares and the Warrants as contemplated by this Agreement or any other
      agreement to which the Company is a party.

     

    3.21 Registration
      Rights.
      Except
      as set forth in the SEC Documents, there are no Persons with registration or
      other similar rights to have any securities registered by the Company under
      the
      Securities Act which have not been satisfied.

     

    3.22 Related-Party
      Transactions.
      Except
      as set forth in the SEC Documents, neither the Company nor any of its officers,
      directors or Affiliates nor any family member of any officer, director or
      Affiliate of the Company has borrowed any moneys from or has outstanding any
      indebtedness or other similar obligations to the Company. Except as set forth
      in
      the SEC Documents, no director or Affiliate nor any family member of any
      officer, director or Affiliate of the Company (i) owns any direct or indirect
      interest constituting more than a 1% equity (or similar profit participation)
      interest in, or controls or is a director, officer, partner, member or employee
      of, or consultant or lender to or borrower from, or has the right to participate
      in the profits of, any person or entity which is a participant in any
      transaction to which the Company or any subsidiary is a party or (ii) is a
      party
      to any contract, agreement, commitment or other arrangement with the Company
      or
      any subsidiary or (iii) has entered into any transaction with the Company or
      any
      subsidiary that would be required to be disclosed under Item 404 of Regulation
      S-K. 

     

    
      
        
        

      

      
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    3.23 Sarbanes-Oxley
      Act.
      The
      Chief Executive Officer and the Chief Financial Officer of the Company have
      signed, and the Company has furnished to the SEC, all certifications required
      by
      Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Such certifications
      contain no qualifications or exceptions to the matters certified therein and
      have not been modified or withdrawn; and neither the Company nor any of its
      officers has received notice from any governmental entity questioning or
      challenging the accuracy, completeness, form or manner of filing or submission
      of such certifications.

     

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

     

    3.25 Disclosure.
      Neither
      this Agreement nor the SEC Documents taken together contain any untrue statement
      of a material fact nor omit to state a material fact necessary in order to
      make
      the statements contained herein or therein, in light of the circumstances under
      which they were made, not misleading. 

     

    4. Representations,
      Warranties and Agreements of the Purchaser.
      The
      Purchaser represents and warrants to, and agrees with, the Company as
      follows:

     

    4.1 Authorization.
      The
      Purchaser has all requisite power under its constituent documents to enter
      into
      this Agreement and to carry out and perform its obligations under the terms
      of
      this Agreement. All action on the part of the Purchaser and, if applicable,
      its
      officers, directors, stockholders, managers, members and equity holders
      necessary for the authorization, execution, delivery and performance of this
      Agreement and the consummation of the transactions contemplated herein has
      been
      taken. When executed and delivered, this Agreement will constitute the legal,
      valid, binding and irrevocable obligation of the Purchaser, enforceable against
      the Purchaser in accordance with its terms, except as such may be limited by
      bankruptcy, insolvency, reorganization or other laws affecting creditors' rights
      generally and by general equitable principles.

     

    4.2 Purchase
      Entirely for Own Account.
      The
      Purchaser is acquiring the Shares and the Warrants being purchased by it
      hereunder for investment, for its own account, and not for resale or with a
      view
      to distribution thereof in violation of the Securities Act.

     

    4.3 Investor
      Status; Etc.
      The
      Purchaser certifies and represents to the Company that at the time the Purchaser
      acquires any of the Shares or Warrants, the Purchaser will be an "Accredited
      Investor"
      as
      defined in Rule 501 of Regulation D promulgated under the Securities Act and
      was
      not organized for the purpose of acquiring the Shares or the Warrants. The
      Purchaser's financial condition is such that it is able to bear the risk of
      holding the Shares, the Warrants or the Warrant Shares for an indefinite period
      of time and the risk of loss of its entire investment. The Purchaser has
      sufficient knowledge and experience in investing in companies similar to the
      Company in terms of the Company's stage of development so as to be able to
      evaluate the risks and merits of its investment in the Company. The Purchaser
      has received and carefully reviewed this Agreement, the SEC Documents and other
      materials relating thereto that the Purchaser has requested. The Purchaser
      has
      had an opportunity to ask questions of and receive answers from the authorized
      representatives of the Company, and to review any relevant documents and records
      concerning the business of the Company and the terms and conditions of this
      investment, and that any such questions have been answered to the Purchaser's
      full satisfaction. No Person other than the Company or its authorized
      representatives, has offered the securities to the Purchaser. The Purchaser
      is
      acquiring the Shares and the Warrants in the ordinary course of business for
      the
      Purchaser's own account as principal (and not as a nominee or agent), for
      investment purposes only, and not with a view to, or for, resale, distribution
      or fractionalization thereof, in whole or in part, in any manner in violation
      of
      applicable United States federal or state securities laws or the rules or
      regulations promulgated thereunder. The Purchaser has made no agreement, direct
      or indirect, with any other Person regarding any sale, transfer, assignment
      or
      other disposition of any interest in the Shares, the Warrants or the Warrant
      Shares. The Purchaser is aware that, in the view of the SEC and certain state
      securities commissions, a purchase of the Shares or the Warrants now with an
      intent to resell by reason of any foreseeable specific contingency or
      anticipated change in market values or any change in the condition of the
      Company, or in connection with a contemplated liquidation or settlement of
      any
      loan obtained for the acquisition of the Shares, the Warrants or the Warrant
      Shares and for which the Shares, the Warrants or the Warrant Shares were pledged
      as security, would represent an intent inconsistent with this representation.
      The Purchaser further represents and agrees that if, contrary to the foregoing
      intentions, the Purchaser should later desire to dispose of or transfer any
      of
      the Shares, the Warrant Shares or the Warrants in any manner, the Purchaser
      shall not do so without first complying with the provisions of Section 6.1.
      The
      Purchaser understands that no federal or state agency has passed upon or made
      any recommendation or endorsement of an investment in the Shares, the Warrant
      Shares or the Warrants. The foregoing shall in no way limit or modify the
      representations of the Company set forth in Section 3 hereof.

     

    
      
        
        

      

      
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    4.4 Shares
      and Warrants Not Registered.
      The
      Purchaser understands that the Shares and the Warrants have not been registered
      under the Securities Act, by reason of their issuance by the Company in a
      transaction exempt from the registration requirements of the Securities Act,
      and
      that the Shares and the Warrants must continue to be held by the Purchaser
      unless a subsequent disposition thereof is registered under the Securities
      Act
      or is exempt from such registration. The Purchaser understands that the
      exemptions from registration afforded by Rule 144 (the provisions of which
      are
      known to it) promulgated under the Securities Act depend on the satisfaction
      of
      various conditions, and that, if applicable, Rule 144 may afford the basis
      for
      sales only in limited amounts.

     

    4.5 No
      Conflict.
      The
      execution and delivery of this Agreement by the Purchaser and the consummation
      by it of the transactions contemplated hereby will not conflict with or result
      in any violation of or default by the Purchaser (with or without notice or
      lapse
      of time, or both) under (i) any provision of the organizational documents of
      the
      Purchaser or (ii) any judgment, order, statute, law, ordinance, rule or
      regulations, applicable to the Purchaser or its respective properties or
      assets.

     

    4.6 Brokers.
      The
      Purchaser has not retained, utilized or been represented by any broker or finder
      in connection with the transactions contemplated by this Agreement.

     

    4.7 Consents.
      All
      consents, approvals, orders and authorizations required on the part of the
      Purchaser in connection with the execution, delivery or performance of this
      Agreement and the consummation of the transactions contemplated herein have
      been
      obtained and are effective as of the Closing Date.

     

    4.8 Agreement
      with Respect to Short Sales.
      Neither
      the Purchaser nor any of its Affiliates nor any person acting on its behalf
      will
      have entered into for a period of five (5) days prior to the Closing Date,
      any
      "short sale" (as such term is defined in Rule 3b-3 under the Securities Exchange
      Act of 1934, as amended).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    5. Conditions
      Precedent.

     

    5.1 Conditions
      to the Obligation of the Purchaser to Consummate the Closing.
      The
      obligation of the Purchaser to consummate the Closing and to purchase and pay
      for the Shares and the Warrants being purchased by it pursuant to this Agreement
      is subject to the satisfaction of the following conditions precedent (or waiver
      by the Purchaser):

     

    (a)
      The
      representations and warranties contained herein of the Company that are
      qualified as to "materiality" shall be true and correct, and the representations
      and warranties contained herein of the Company that are not so qualified shall
      be true and correct in all material respects, in each case, as of the date
      of
      this Agreement and as of the Closing Date (except for such representations
      and
      warranties which are made expressly as of a specified date or period, which
      shall be true and correct or true and correct in all material respects, as
      herein above required, as of such specified date or period).

     

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

     

    (c)
      Prior
      to the Closing Date, no event shall have occurred which has had a Material
      Adverse Effect shall have occurred.

     

    (d)
      No
      suit, action, or other proceeding challenging this Agreement or the transactions
      contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
      the Closing, shall have been instituted before any court, arbitrator or
      governmental body, agency or official and shall be pending.

     

    (e)
      The
      purchase of and payment for the Shares and the Warrants by the Purchaser shall
      not be prohibited by any law or governmental order or regulation. All necessary
      consents, approvals, licenses, permits, orders and authorizations of, or
      registrations, declarations and filings with, any governmental or administrative
      agency or of any other person with respect to any of the transactions
      contemplated hereby (including, without limitation, the issuance of the Shares,
      the Warrants and the Warrant Shares) shall have been duly obtained or made
      and
      shall be in full force and effect.

     

    (f)
      The
      Company shall have complied with all applicable requirements of federal and
      state securities or "blue sky" laws with respect to the issuance of the Shares
      and the Warrants, and the Purchaser, at the Purchaser's request, shall have
      been
      provided reasonable evidence thereof.

     

    (g)
      The
      Common Stock of the Company (i) shall be listed on the American Stock Exchange
      and (ii) shall not have been suspended from trading on such
      exchange.

     

    (h)
      A
      certificate shall have been delivered by the Company, signed by its Chief
      Executive Officer or Chief Financial Officer, dated as of the Closing Date,
      certifying as to the fulfillment of the conditions specified in Sections 5.1(a)
      and (b).

     

    (i)
      A
      stock certificate shall have been delivered by the Company representing the
      number of shares of Common Stock purchased by the Purchaser and (ii) one or
      more
      warrants to purchase the shares of Common Stock shall have been delivered by
      the
      Company, and in each case shall be, registered in the name of the Purchaser
      or
      nominee as designated by the Purchaser in writing, free of all restrictive
      and
      other legends (except as provided in Section 6.2 hereof) and against payment
      of
      the purchase price therefor by wire transfer of immediately available funds
      to
      such account or accounts as the Company shall designate in writing.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    (j)
      All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated at the Closing shall be
      satisfactory in form and substance to the Purchaser, and the Purchaser shall
      have received copies (executed or certified, as may be appropriate) of all
      documents which the Purchaser may have reasonably requested in connection with
      such transactions.

     

    (k)
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    (l)
      The
      Company shall have delivered to the Purchaser a certificate of the Company
      executed by the Company's Secretary attaching and certifying to the truth and
      correctness of (i) the Company's Certificate of Incorporation, (ii) the
      Company's By-laws and (iii) the resolutions adopted by the Company's Board
      of
      Directors in connection with the transactions contemplated by this
      Agreement.

    (m)
      The
      Company shall have delivered to the Purchaser a certificate of the Secretary
      of
      State of the State of Delaware, dated as of a date within five days of the
      date
      of the Closing, with respect to the good standing of the Company.

     

    (n)
      The
      Purchaser will have received an opinion on behalf of the Company, dated as
      of
      the date of the Closing, from Greenberg Traurig, LLP, counsel to the Company,
      in
      the form attached as Exhibit A.

     

    5.2 Conditions
      to the Obligation of the Company to Consummate the Closing.
      The
      obligation of the Company to consummate the Closing, to issue and sell to the
      Purchaser the Shares and the Warrants to be purchased by it at the Closing
      is
      subject to the satisfaction of the following conditions precedent (or waiver
      by
      the Company):

     

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

     

    (b)
      The
      Purchaser shall have performed all obligations and conditions herein required
      to
      be performed or observed by it on or prior to the Closing Date.

     

    (c)
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted before any court, arbitrator or governmental body, agency
      or official and shall be pending.

     

    (d)
      The
      sale of the Shares and the Warrants by the Company shall not be prohibited
      by
      any law or governmental order or regulation. All necessary consents, approvals,
      licenses, permits, orders and authorizations of, or registrations, declarations
      and filings with, any governmental or administrative agency or of any other
      person with respect to any of the transactions contemplated hereby shall have
      been duly obtained or made and shall be in full force and effect.

     

    (e)
      All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated at the Closing shall be
      satisfactory in form and substance to the Company, and the Company shall have
      received counterpart originals, or certified or other copies of all documents,
      including, without limitation, records of corporate or other proceedings, which
      it may have reasonably requested in connection therewith.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    (f)
      Neither the Purchaser nor any of its Affiliates nor any person acting on behalf
      of such Persons will have entered into for a period of five days prior to the
      Closing Date, any "short sale" (as such term is defined in Section 6.5
      hereof).

     

    6. Transfer;
      Legends; Future Financings; Short Sales; Board Seat.

     

    6.1 Securities
      Law Transfer Restrictions.
      The
      Purchaser shall not sell, assign, pledge, transfer or otherwise dispose or
      encumber any of the Shares, the Warrants, and if applicable, the Warrant Shares,
      being purchased by it hereunder, except: (i) pursuant to an effective
      registration statement under the Securities Act or (ii) pursuant to an available
      exemption from registration under the Securities Act and applicable state
      securities laws and, if reasonably requested by the Company, upon delivery
      by
      the Purchaser of an opinion of counsel reasonably satisfactory to the Company
      to
      the effect that the proposed transfer is exempt from registration under the
      Securities Act and applicable state securities laws. Any transfer or purported
      transfer of the Shares, the Warrants, and if applicable, the Warrant Shares,
      in
      violation of this Section 6.1 shall be voidable by the Company; provided,
      however,
      that no
      opinion will be required in connection with (1) a public sale or transfer of
      Shares, the Warrants, and if applicable, the Warrant Shares, pursuant to an
      effective registration statement in connection with which the Purchaser
      represents in writing to the Company that such Shares, and if applicable,
      Warrant Shares, have been or are being sold pursuant to such registration
      statement; (2) a public sale of Shares, and if applicable, Warrant Shares
      pursuant to Rule 144 under the Securities Act if such Purchaser has delivered
      to
      the Company a customary and accurate Rule 144 broker's and seller's
      representation letter; or (3) a sale of shares pursuant to Rule 144 under the
      Securities Act if the Purchaser has delivered to the Company a customary and
      accurate Rule 144 seller's representation letter. The Company shall not register
      any transfer of the Shares, the Warrants, and if applicable, the Warrant Shares
      in violation of this Section 6.1. The Company may, and may instruct any transfer
      agent for the Company, to place such stop transfer orders as may be required
      on
      the transfer books of the Company in order to ensure compliance with the
      provisions of this Section 6.1.

     

    6.2 Legends.
      Each
      certificate representing any of the Shares, the Warrants and, if applicable,
      the
      Warrant Shares shall be endorsed with a legend in substantially the form set
      forth below, and the Purchaser covenants that, except to the extent such
      restrictions are waived by the Company, it shall not transfer the securities
      represented by any such certificate without complying with the restrictions
      on
      transfer described in this Agreement and the legends endorsed on such
      certificate:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
      STATE AND MAY ONLY BE OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE
      DISPOSED OF PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
      AND SUCH LAWS OR (II) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT, AND TO
      THE
      EXTENT PERMITTED BY SECTION 6.1 OF THE SECURITIES PURCHASE AGREEMENT PURSUANT
      TO
      WHICH THE SECURITIES REPRESENTED HEREBY WERE ACQUIRED, UPON DELIVERY OF AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
      TRANSFER IS EXEMPT FROM THE ACT AND SUCH LAWS.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    6.3 Removal
      of Legends.
      Any
      legend endorsed on a certificate evidencing the Shares and, if applicable,
      the
      Warrant Shares shall be removed, and the Company shall issue a certificate
      without such legend to the holder of such Shares and, if applicable, the Warrant
      Shares if such Shares and, if applicable, the Warrant Shares will be sold (i)
      pursuant to an effective registration statement under the Securities Act or
      pursuant to Rule 144 promulgated thereunder, (ii) at any time the Shares and,
      if
      applicable, the Warrant Shares become eligible for sale under Rule 144 under
      the
      Securities Act or (iii) if, in the opinion of counsel, such legends are no
      longer required under applicable requirements of the Securities Act, and the
      purchaser thereof may immediately resell such Shares and, if applicable, Warrant
      Shares without restriction and without registration; provided,
      however,
      that in
      the case of a sale pursuant to Rule 144, such holder of Shares and, if
      applicable, Warrant Shares shall provide such information as is reasonably
      requested by the Company to ensure that such Shares and, if applicable, the
      Warrant Shares may be sold in reliance on Rule 144. 

     

    6.4 Participation
      in Future Financings.

     

    (a) From
      the
      date hereof until the date that is 36 months after the Closing, upon any
      issuance by the Company of its equity or equity-linked securities for cash
      consideration in a financing transaction (a "Subsequent
      Financing"),
      the
      Purchaser shall have the right to participate in up to an amount of the
      Subsequent Financing equal to 100% of the Subsequent Financing (the
      "Participation
      Maximum")
      on the
      same terms, conditions and price provided for in the Subsequent Financing.
      

     

    (b) At
      least
      ten business days prior to the closing of the Subsequent Financing, the Company
      shall deliver to the Purchaser a written notice of its intention to effect
      a
      Subsequent Financing ("Pre-Notice"),
      which
      Pre-Notice shall ask the Purchaser if it wants to review the details of such
      financing (such additional notice, a "Subsequent
      Financing Notice").
      Upon
      the request of the Purchaser, and only upon a request by the Purchaser, for
      a
      Subsequent Financing Notice, the Company shall promptly, but no later than
      one
      business day after such request, deliver a Subsequent Financing Notice to the
      Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
      the proposed terms of such Subsequent Financing, the amount of proceeds intended
      to be raised thereunder, the Person or Persons through or with whom such
      Subsequent Financing is proposed to be effected, and attached to which shall
      be
      a term sheet or similar document relating thereto. 

     

    (c) The
      Purchaser, desiring to participate in such Subsequent Financing, must provide
      written notice to the Company by not later than 5:00 p.m. (New York time) on
      the
      tenth business day after the Purchaser has received the Pre-Notice that the
      Purchaser is willing to participate in the Subsequent Financing, the amount
      of
      the Purchaser’s participation, and that the Purchaser has such funds ready,
      willing and available for investment on the terms set forth in the Subsequent
      Financing Notice. If the Company receives no notice from the Purchaser as of
      such fifth business day, the Purchaser shall be deemed to have notified the
      Company that it does not elect to participate. 

     

    (d) If
      by
      5:00 p.m. (New York time) on the tenth business day after the Purchaser has
      received the Pre-Notice, notification by the Purchaser of its willingness to
      participate in the Subsequent Financing (or to cause its designees to
      participate) is, in the aggregate, less than the total amount of the Subsequent
      Financing, then the Company may effect the remaining portion of such Subsequent
      Financing on the terms and with the Persons set forth in the Subsequent
      Financing Notice. 

     

    (e) The
      Company must provide the Purchaser with a second Subsequent Financing Notice,
      and the Purchaser will again have the right of participation set forth above
      in
      this Section 6.4, if the Subsequent Financing subject to the initial Subsequent
      Financing Notice is not consummated for any reason on the terms set forth in
      such Subsequent Financing Notice within 90 calendar days after the date of
      the
      initial Subsequent Financing Notice. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

       

    

    (f) Notwithstanding
      the foregoing, this Section 6.4 shall not apply in respect of issuances
      of Common Stock in connection with strategic partnerships, mergers and
      acquisitions, and public
      offerings.
      

     

    6.5 Short
      Sales.
      The
      Purchaser covenants that neither it nor any Affiliate acting on its behalf
      or
      pursuant to any understanding with it will execute any Short Sales (as defined
      below) during the period commencing on the date hereof and ending 12 months
      after the Closing. For purposes of this Section 6.5, “Short
      Sales”
means
      “short sales,” as defined in Rule 200 of Regulation SHO under the Exchange Act
      (but shall not be deemed to include the location and/or reservation of
      borrowable shares of Common Stock).  

     

    6.6 Board
      Seat.
      The
      Purchaser shall have the right, for a period of three years after the Closing,
      to designate two persons to be a nominees for directors of the Company. One
      of
      the Purchaser’s nominees will be William E. Donahue, Jr. The other Purchaser’s
      nominee will be an independent industry expert that is reasonably acceptable
      to
      the Company. The Company shall, and shall cause its existing directors to,
      use
      best efforts (which shall include, without limitation, the solicitation of
      proxies on behalf of such nominee at any meeting of stockholders for the
      election of directors) to elect such nominees to the Board of Directors
      immediately following the Closing. The Board of Directors shall consist of
      not
      more than nine directors. Such nominees shall receive reimbursement of
      reasonable expenses and such compensation for attending meetings equal to the
      compensation received by any outside director. The Company agrees to indemnify
      and hold the Purchaser harmless against any and all claims, actions, awards
      and
      judgments arising solely out of the attendance and participation of the
      Purchaser’s designated nominees at any such meeting. In the event the Company
      maintains a liability insurance policy affording coverage for the acts of its
      officers and directors, it agrees, if possible, to include the Purchaser’s
      designated nominees as insured under such policy.

     

    7. Termination;
      Liabilities Consequent Thereon.
      This
      Agreement may be terminated and the transactions contemplated hereunder
      abandoned at any time prior to the Closing only as follows:

     

    (a)
      with
      respect to the Purchaser, by the Purchaser, upon notice to the Company if the
      conditions set forth in Section 5.1 shall not have been satisfied on or prior
      to
      March 31, 2008; or

     

    (b)
      with
      respect to the Purchaser, by the Company, upon notice to the Purchaser if the
      conditions set forth in Section 5.2 to be satisfied by the Purchaser shall
      not
      have been satisfied on or prior to March 14, 2008; or

     

    (c)
      at
      any time by mutual agreement of the Company and the Purchaser; or

     

    (d)
      with
      respect to the Purchaser, by the Purchaser, if there has been any breach of
      any
      representation or warranty or any material breach of any covenant of the Company
      contained herein and the same has not been cured within 15 days after notice
      thereof (it being understood and agreed by the Purchaser that, in the case
      of
      any representation or warranty of the Company contained herein which is not
      hereinabove qualified by application thereto of a materiality standard, such
      representation or warranty will be deemed to have been breached for purposes
      of
      this Section 7.1(d) only if such representation or warranty was not true and
      correct in all material respects at the time such representation or warranty
      was
      made by the Company); or

     

    (e)
      by
      the Company with respect to the Purchaser, if there has been any breach of
      any
      representation, warranty or any material breach of any covenant of the Purchaser
      contained herein and the same has not been cured within 15 days after notice
      thereof (it being understood and agreed by the Company that, in the case of
      any
      representation and warranty of the Purchaser contained herein which is not
      hereinabove qualified by application thereto of a materiality standard, such
      representation or warranty will be deemed to have been breached for purposes
      of
      this Section 7.1(e) only if such representation or warranty was not true and
      correct in all material respects at the time such representation or warranty
      was
      made by the Purchaser).

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    Any
      termination pursuant to this Section 7 shall be without liability on the part
      of
      any party, unless such termination is the result of a material breach of this
      Agreement by a party to this Agreement in which case such breaching party shall
      remain liable for such breach notwithstanding any termination of this
      Agreement.

     

    8. Miscellaneous
      Provisions.

     

    8.1 Use
      of
      Proceeds.
      The
      Company shall use the net proceeds from the sale of the Shares and Warrants
      for
      working capital and other growth initiatives.

     

    8.2 Filings.
      The
      Company shall make all necessary filings with the SEC and "blue sky" filings
      required to be made by the Company in connection with the sale of the Shares
      and, if applicable, the Warrant Shares to the Purchaser as required by all
      applicable laws, and shall provide a copy thereof to the Purchaser promptly
      after such filing.

     

    8.3 Public
      Statements or Releases.
      Each of
      the parties to this Agreement agrees that it shall not make, issue, or release
      any announcement, whether to the public generally, or to any of its suppliers
      or
      customers, with respect to this Agreement or the transactions provided for
      herein, or make any statement or acknowledgment of the existence of, or reveal
      the status of, this Agreement or the transactions provided for herein, without
      the prior consent of the other parties, which shall not be unreasonably withheld
      or delayed. Notwithstanding the foregoing, nothing in this Section 8.3 shall
      prevent any party hereto from making such public announcements or filings as
      it
      may consider necessary in order to satisfy its legal obligations, or from
      releasing a public statement acceptable to each of the parties hereto upon
      the
      completion of the offering contemplated hereby. Notwithstanding the foregoing,
      as soon as possible but not later than 9:30 a.m. (New York time) on the first
      business day following the Closing Date, the Company will issue a press release
      in accordance with applicable law describing the transactions contemplated
      by
      this Agreement, and promptly thereafter file a Current Report on Form 8-K with
      the SEC, attaching such press release.

     

    8.4 Further
      Assurances.
      The
      parties agree to cooperate fully to execute such further instruments, documents
      and agreements and to give such further written assurances, as may be reasonably
      requested by any party to better evidence and reflect the transactions described
      herein and contemplated hereby, and to carry into effect the intents and
      purposes of this Agreement.

     

    8.5 Rights
      Cumulative.
      Each
      and all of the various rights, powers and remedies of the parties hereto shall
      be considered to be cumulative with and in addition to any other rights, powers
      and remedies which such parties may have at law or in equity in the event of
      the
      breach of any of the terms of this Agreement. The exercise or partial exercise
      of any right, power or remedy shall neither constitute the exclusive election
      thereof nor the waiver of any other right, power or remedy available to such
      party.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    8.6 Notices.

     

    (a)
      Any
      notices, reports or other correspondence (hereinafter collectively referred
      to
      as "Correspondence")
      required or permitted to be given hereunder shall be sent by postage prepaid
      first class mail, courier or facsimile or delivered by hand to the party to
      whom
      such Correspondence is required or permitted to be given hereunder. The date
      of
      giving any notice shall be the date of its actual receipt.

     

    (b)
      All
      Correspondence to the Company shall be addressed as follows:

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Suite L7

    White
      Plains, New York 10604

    Attention:
      Mr. Kenneth H. Montgomery

    Chief
      Executive Officer

    Facsimile:
      (914) 428-3044

     

    with
      a
      copy to:

     

    Greenberg
      Traurig, LLP

    MetLife
      Building

    200
      Park
      Avenue, 15th
      Floor

    New
      York,
      New York 10166

    Attention:
      Spencer G. Feldman, Esq.

    Facsimile:
      (212) 801-6400

     

    (c)
      All
      Correspondence to the Purchaser shall be addressed as follows:

     

    Harmonie
      International, LLC

    30201
      Orchard Lake Road, Suite 220

    Farmington
      Hill, Michigan 48334

    Attention: Mr.
      William E. Donahue, Jr.

    Chairman
      and Chief Executive Officer

    Facsimile: (248)
      737-9937

    

    with
      a
      copy to:

    

    McKenna
      Long & Aldridge, LLP

    1900
      K
      Street N.W.

    Washington,
      D.C. 20006-1108

    Attention:
      Ian K. Portnoy, Esq.

    Facsimile:
      (202) 496-7756

    

    (d)
      Any
      Person may change the address to which correspondence to it is to be addressed
      by notification as provided for herein.

     

    8.7 Captions.
      The
      captions and paragraph headings of this Agreement are solely for the convenience
      of reference and shall not affect its interpretation.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    8.8 Severability.
      Should
      any part or provision of this Agreement be held unenforceable or in conflict
      with the applicable laws or regulations of any jurisdiction, the invalid or
      unenforceable part or provisions shall be replaced with a provision which
      accomplishes, to the extent possible, the original business purpose of such
      part
      or provision in a valid and enforceable manner, and the remainder of this
      Agreement shall remain binding upon the parties hereto.

    

    8.9 Governing
      Law; Injunctive Relief.

     

    (a)
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      internal and substantive laws of the State of New York and without regard to
      any
      conflicts of laws concepts that would apply the substantive law of any other
      jurisdiction.

     

    (b)
      Each
      of the parties hereto acknowledges and agrees that damages will not be an
      adequate remedy for any material breach or violation of this Agreement if such
      material breach or violation would cause immediate and irreparable harm (an
      “Irreparable
      Breach”).
      Accordingly, in the event of a threatened or ongoing Irreparable Breach, each
      party hereto shall be entitled to seek, in any state or federal court in the
      State of New York, equitable relief of a kind appropriate in light of the nature
      of the ongoing or threatened Irreparable Breach, which relief may include,
      without limitation, specific performance or injunctive relief; provided,
      however,
      that if
      the party bringing such action is unsuccessful in obtaining the relief sought,
      the moving party shall pay the non-moving party's costs, including actual
      attorney's fees, incurred in connection with defending such action. Such
      remedies shall not be the parties' exclusive remedies, but shall be in addition
      to all other remedies provided in this Agreement.

     

    8.10 Waiver.
      No
      waiver of any term, provision or condition of this Agreement, whether by conduct
      or otherwise, in any one or more instances, shall be deemed to be, or be
      construed as, a further or continuing waiver of any such term, provision or
      condition or as a waiver of any other term, provision or condition of this
      Agreement.

     

    8.11 Fees,
      Costs and Expenses.
      All
      fees, costs and expenses (including attorneys' fees and expenses) incurred
      by
      any party hereto in connection with the preparation, negotiation and execution
      of this Agreement and the exhibits hereto and the consummation of the
      transactions contemplated hereby and thereby (including the costs associated
      with any filings with, or compliance with any of the requirements of, any
      governmental authorities), shall be the sole and exclusive responsibility of
      such party.

     

    8.12 Assignment.
      The
      rights and obligations of the parties hereto shall inure to the benefit of
      and
      shall be binding upon the authorized successors and permitted assigns of each
      party. The Company shall not assign this Agreement or any rights or obligations
      hereunder without the prior written consent of the Purchaser. The Purchaser
      may
      assign its rights under this Agreement to any person to whom the Purchaser
      assigns or transfers any Shares, Warrants, and, if applicable, Warrant Shares
      provided that such transferee agrees in writing to be bound by the terms and
      provisions of this Agreement, and such transfer is in compliance with the terms
      and provisions of this Agreement and permitted, with the approval of counsel
      to
      the Company, by federal and state securities laws.

     

    8.13 Survival.
      The
      respective representations and warranties given by the parties hereto, and
      the
      other covenants and agreements contained herein, shall survive the Closing
      Date
      and the consummation of the transactions contemplated herein for a period of
      one
      year, without regard to any investigation made by any party.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    8.14 Entire
      Agreement.
      This
      Agreement and exhibits attached hereto and incorporated herewith constitute
      the
      entire agreement between the parties hereto respecting the subject matter hereof
      and supersedes all prior agreements, negotiations, understandings,
      representations and statements respecting the subject matter hereof, whether
      written or oral.

     

    8.15 Amendments.
      No
      modification, alteration, waiver or change in any of the terms of this Agreement
      shall be valid or binding upon the parties hereto unless made in writing and
      duly executed by the Company and the Purchaser.

     

    8.16 Confidential
      Information.
      Each of
      the Company and the Purchaser agrees to keep confidential, and not to disclose
      to or use for the benefit of any third party, the terms of this Agreement or
      any
      other information which at any time is communicated by the other party as being
      confidential, without the prior written approval of the other party;
provided,
      however,
      that
      this provision shall not apply to information which, at the time of disclosure,
      is already part of the public domain (except by breach of this Agreement) and
      information which is required to be disclosed by law (including, without
      limitation, pursuant to Item 601(b)(10) of Regulation S-K under the Securities
      Act and the Exchange Act) and provided further the Company will not furnish
      confidential information to a Purchaser without (i) informing the Purchaser
      regarding the nature of such information and (ii) receiving the prior express
      written agreement of the Purchaser. Notwithstanding anything herein to the
      contrary, any party to this Agreement (and any employee, representative, or
      other agent of any party to this Agreement) may disclose to any and all persons,
      without limitation of any kind, the tax treatment and tax structure of the
      transactions contemplated by this Agreement and all materials of any kind
      (including opinions or other tax analyses) that are provided to it relating
      to
      such tax treatment and tax structure. However, any such information relating
      to
      the tax treatment or tax structure is required to be kept confidential to the
      extent necessary to comply with any applicable federal or state securities
      laws.

     

    8.17 Stock
      Splits, Dividends and other Similar Events.
      The
      provisions of this Agreement shall be appropriately adjusted to reflect any
      stock split, stock dividend, reorganization or other similar event that may
      occur with respect to the Company after the date hereof.

     

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

     

    [THE
      REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK;

    SIGNATURE
      PAGE FOLLOWS.]

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
      Agreement as of the day and year first above written.

    
      	 	 	 
	 	 
	 	DEBT
              RESOLVE,
              INC.
	 
 	 
 	 
 
	 	By:  	
              /s/ James
                D. Burchetta

            
	 	
              

              Name: James
                D. Burchetta

              Title:
                Chairman

            
	 	 

    

    
      
        	 	 	 
	 	 
	 	HARMONIE
                INTERNATIONAL, LLC
	 
 	 
 	 
 
	 	By:  	
                /s/
                  William
                  E. Donahue, Jr.

              
	 	
                

                Name:
                  William
                  E. Donahue, Jr.

                Title:
                  Chairman
                  / CEO

              
	 	 

      
    

    
      
        
        

      

      
        18

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