Exhibit 10.5
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement, effective on June 1, 2011, is between DEBT RESOLVE,
INC., a Delaware corporation (hereinafter referred to as the “Company”), and
Michael J. Cassella (hereinafter referred to as "Executive").
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to retain the services of the Executive and to that
end desires to enter into a contract of employment with him, upon the terms and
conditions herein set forth; and
 
WHEREAS, the Executive desires to be employed by the Company upon such terms and
conditions;
 
NOW, THEREFORE, in consideration of the premises and of the mutual benefits and
covenants contained herein, the parties hereto, intending to be bound, hereby
agree as follows:
 
1. 
APPOINTMENT AND TERM

 
Subject to the terms hereof, the Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, all in accordance with the
terms and conditions set forth herein, for a period of one (1) year commencing
on June 1, 2011 and conditioned upon funding at least $250,000 to the Company,
provided, however, that the Company may terminate the agreement upon thirty (30)
days notice at any time and for any reason or no reason within the first six
months, subject to the provisions in Section 6(b)v below.  At the end of such
initial one year Term, this Agreement shall be extended automatically for
successive one (1) year Terms of employment, unless either the Company or the
Executive notifies the other party in writing at least ninety (90) days prior to
the end of the incumbent Term of any intention not to renew this Agreement, in
which case (A) this Agreement will terminate at the end of such incumbent Term
and (B) Section 6(g) hereof shall apply.  All references herein to the “Term”
shall refer to both such initial Term and any successive Terms.  The date upon
which the Term of this Agreement expires shall be referred to herein as the
“Expiration Date”.  The Executive shall serve as the Chief Operating Officer of
the Company and shall report directly to the Company’s President.
 
 
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2.
SCOPE OF DUTIES

 
During the term of this Agreement, the Executive shall, unless prevented by
incapacity, devote his business time, attention and ability to the discharge of
his duties hereunder and to the faithful and diligent performance of such duties
and the exercise of such powers as may be assigned to or vested in him by the
President of the Company (the “President”), such duties to be consistent with
his position.  The Executive shall obey the lawful and reasonable directions of
the President, consistent with his position, and shall use his diligent business
efforts to promote the interests of the Company and to maintain and promote the
reputation thereof.  Specifically, the Executive will be responsible for sales
and investor relations.  The executive shall be based in Tarrytown, New York and
Long Island, New York.
 
With written approval from the Company’s Board of Directors, the Executive may
serve as a director or advisor to other corporations when those activities do
not conflict with his duties at Debt Resolve.  Executive agrees that he will,
upon request of the President and the Board of Directors of the Company, resign
from any such directorship or advisorship if such directorship or advisorship
becomes a direct conflict of interest with Executive’s obligations to the
Company.

3. 
COMPENSATION

 
a)           Annual Salary.  For the services and duties to be rendered and
performed by Executive during the Employment Period, the Company agrees to pay
Executive as follows:
 
(1)  at the rate of One Hundred Fifty Thousand Dollars ($150,000), payable in
equal monthly or semi-monthly installments, consistent with the policies of the
Company for employees, effective on the Employment Date.
 
The Executive shall be reimbursed upon receipt of an approved expense
report.  In addition, the Company shall reimburse Executive for all expenses
reasonably and necessarily incurred in connection with his employment by the
Company, including traveling expenses while absent, on the Company's business.
 
 
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b)           Commissions.  The Executive shall receive commissions of four
(4%) percent on any client secured by the Executive after the date of hire
(excluding current clients and current pipeline clients) for the duration of
employment and for a three (3) year term thereafter upon leaving employment.
 
c)           Stock and other Incentive Compensation.  Executive shall be issued
2,000,000 options at the prior day’s closing on the Effective Date which shall
vest one fourth on the Effective Date, one fourth at the year one anniversary of
the Effective Date, one fourth at the year two anniversary of the Effective Date
and one fourth at the year three anniversary of the Effective Date.
 
d)           Funding.  The Executive will receive a bonus upon the successful
introduction to the Company of investors of seven (7%) percent of the funds
closed for the referral.
 
e)           Stock price.  The Executive will receive a bonus in an amount to be
determined by the President and the Board upon the Company share price trading
in excess of $0.50 and again in excess of $1.00 for a period of twenty (20)
consecutive trading days in each case.
 
4. 
HEALTH INSURANCE AND OTHER FRINGE BENEFITS

 
In addition to the compensation specified in Section 3, the Executive shall be
entitled to participate in regular employee fringe benefit programs to the
extent such programs are offered by the Company to its executive employees,
including, but not limited to health, dental and vision, in effect prior to the
Commencement Date, and any benefit but not compensation programs developed after
the Commencement Date.
 
 
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5.  
VACATION

 
The Executive shall be entitled to four (4) weeks vacation (in addition to the
usual national holidays) during each calendar year during which he serves
hereunder.  Such vacation shall be taken at such time or times as reasonably
requested by the Executive.  Vacation not taken during a calendar year may not
be carried forward.
 
6.  
TERMINATION

 
a.           This Agreement shall terminate in accordance with the terms of
Section 6(b) hereof; provided, however, that such termination shall not affect
the obligations of the Executive pursuant to the terms of Sections 7, 8 and 9
hereof.
 
b.           This Agreement shall terminate on the Expiration Date; or as
follows:
 
i.           Upon the written notice to the Executive by the Company at any
time, because of (v) the willful and material malfeasance, dishonesty or
habitual drug or alcohol abuse by the Executive materially and demonstrably
related to or materially and demonstrably affecting the performance of his
duties; (w) the Executive’s continuing and intentional breach, non-performance
or non-observance of any of the material terms or provisions of this Agreement,
but only after notice by the Company of such breach, nonperformance or
nonobservance and the failure of the Executive to cure such default within
thirty (30) days after the Company’s delivery of such notice; (x) the conduct by
the Executive which the Board in good faith determines could reasonably be
expected to have a material adverse effect on the business, assets, properties,
results of operations, financial condition, personnel or prospects of the
Company (within each category, taken as a whole), but only after notice by the
Company of such conduct and the failure of the Executive to cure same within
thirty (30) days after the Company’s delivery of such notice; (y) upon the
Executive’s conviction of a felony, any crime involving moral turpitude
(including, without limitation, sexual harassment) related to or affecting the
performance of his duties or any act of fraud, embezzlement, theft or willful
breach of fiduciary duty against the Company (clauses (v)-(y), collectively
referred to as “Cause”) .
 
 
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ii.          In the event the Executive, by reason of physical or mental
disability, shall be unable to perform the services required of him hereunder
with or without reasonable accommodation for a period of more than 90
consecutive days, or for more than a total of 120 non-consecutive days in the
aggregate during any period of twelve (12) consecutive calendar months, on the
91st consecutive day, or the 121st day, as the case may be.  The Executive
agrees, in the event of any dispute under this Section 6(b)(ii), and after
written notice by the Board, to submit to a physical examination by a licensed
physician practicing in the metropolitan New York, NY area selected by the
Board.
 
iii.         In the event the Executive dies while employed pursuant hereto, on
the last day of the month in which his death occurs.
 
iv.         After the initial six (6) month period, upon sixty (60) days’
written notice by the Executive to the Company, in the event that the Company
(A) shall not comply with any material provision of this Agreement and shall not
have cured any such failure within thirty (30) days after written notice of such
noncompliance has been given by the Executive to the Company, or (B) shall
assign to the Executive any duties that are materially inconsistent with his
status or that materially diminish his duties hereunder.
 
v.          Within the initial six (6) month period, upon thirty (30) days
written notice to the Executive.

c.           Termination by Company for Cause/Termination by Executive without
Cause.  If this Agreement is terminated by the Company pursuant to Section
6(b)(i) or upon resignation by the Executive with or without notice, then, other
than as set forth in this Agreement, the Company will have no further liability
to the Executive after the date of termination including, without limitation,
the compensation and benefits described herein.  In the case of termination by
the Company pursuant to Section 6(b)(i) or resignation by the Executive with or
without notice, all Stock Options that have not then vested shall be immediately
forfeited.  From and after the date of such termination, Executive shall
continue to be subject to the terms of Section 7, 8 and 9 hereof.
 
d.           Termination due to Disability. In the case of termination pursuant
to Section 6(b)(ii), the Executive will receive his then current salary until
such time (but not more than 180 days after such termination for disability) as
payments begin under any long term disability insurance plan of the Executive,
if any.  From and after the date of such termination, Executive shall continue
to be subject to the terms of Section 7, 8 and 9 hereof.
 
e.           Termination due to Death of Executive. In the case of termination
pursuant to Section 6(b)(iii), the Executive will receive his salary to the date
of termination.
 
 
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f.           Constructive Termination or Termination without Cause.  In the case
of termination pursuant to Section 6(b)(iv) after the initial six (6) month
period,  the Executive will receive from the Company (i) the remaining balance
of the contract year’s Base Salary, subject to a minimum of at least 6 months
pay and (ii) the right to exercise all Stock Options that have vested.  The
Executive shall be bound by the terms of Section 9 for a period of one year from
the date of termination.  The Executive shall continue to be bound by the terms
of Sections 7 and 8 as long as its terms apply.
 
g.           Non-Renewal.  In the event that, at least ninety (90) days prior to
the end of the Term of this Agreement, the Company notifies the Executive in
writing of the Company’s intention not to renew this Agreement, then (A) the
Executive will receive from the Company three months’ Base Salary following the
Term of this Agreement and (B) the terms of Section 9 hereof shall only apply to
the Executive during the three months following the Term during which the
Executive is being paid his Base Salary.
 
h.           Initial Six (6) Month Period.  In the event that the Company
terminates this agreement within the first six (6) months upon thirty (30) days
written notice to the Executive, then (1) the Executive shall be eligible for
thirty (30) days severance, (2) any deferred compensation to date and severance
shall be paid in cash or, at the option of the Executive, in Company stock at a
conversion price of $0.10 per share, such deferred compensation and severance to
be paid in cash provided that the Company has sufficient cash for at least six
(6) months of operations and that such payment would not violate the terms of
any financing secured by the Company and (3) in the event that Company
terminates this agreement after sixty (60) days but prior to the end of the six
(6) month initial period, then Executive’s unvested options shall immediately
vest and the former Executive shall have thirty (30) days in which to exercise
such options, after which time all newly vested but unexercised options shall
expire but previously vested options continue to follow the terms of the option
agreement.
 
7.
CONFIDENTIAL INFORMATION

 
(a)          The Executive covenants and agrees that he will not at any time
during the continuance of this Agreement or at any time thereafter (i) print,
publish, divulge or communicate to any person, firm, corporation or other
business organization (except in connection with the Executive’s employment
hereunder) or use for his own account any proprietary secret or confidential
information relating to the business of the Company (including, without
limitation, information relating to any customers, suppliers, employees,
products, services, formulae, technology, know-how, trade secrets or the like,
financial information or plans) or any proprietary secret or confidential
information relating to the affairs, dealings, projects and concerns of the
Company, both past and planned (the “Confidential Information”), which the
Executive has received or obtained or may receive or obtain during the course of
his employment with the Company (whether or not developed, devised or otherwise
created in whole or in part by the efforts of the Executive), or (ii) take with
him, upon termination of his employment hereunder, any information in paper or
document form or on any computer-readable media relating to the foregoing.  The
term “Confidential Information” does not include information which is or becomes
generally available to the public other than as a result of disclosure by the
Executive or which is generally known in the consumer debt collection
business.  The Executive further covenants and agrees that he shall retain the
Confidential Information received or obtained during such service in trust for
the sole benefit of the Company or its successors and assigns.
 
 
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(b)           The term Confidential Information as defined in Section 7(a)
hereof shall include information obtained by the Company from any third party
under an agreement including restrictions on disclosure known to the Executive.
 
(c)           In the event that the Executive is requested pursuant to subpoena
or other legal process to disclose any of the Confidential Information, the
Executive will provide the Company with prompt written notice so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with Section 7 of this Agreement.  In the event that such protective
order or other remedy is not obtained or that the Company waives compliance with
the provisions of Section 7 of this Agreement, the Executive will furnish only
that portion of the Confidential Information which is legally required.
 
8. 
PATENTS

 
Executive agrees to and does hereby sell, assign, transfer and set over to the
Company, its successors, assigns, or affiliates, as the case may be, all his
right, title, and interest in and to any inventions, improvements, processes,
patents or applications for patents which he has developed or develops or
conceives individually or in conjunction with others during his employment by
the Company, or, having possibly conceived same prior to his employment, may
complete while in the employ of the Company or any of its affiliates, in both
cases whether during or outside business hours, whether or not on the Company's
premises, in connection with any matters with which his employment by the
Company or any of its affiliates is or may be concerned, to be held and enjoyed
by the Company, its successors, assigns or affiliates, as the case may be, to
the full extent of the term for which any Letters Patent may be granted and as
fully as the same would have been held by Executive, had this Agreement, sale or
assignment not been made.  Executive will make, execute and deliver any and all
instruments and documents necessary to obtain patents for such inventions,
improvements and processes in any and all countries.  Executive hereby
irrevocably appoints the Company to be his attorney in fact in the name of and
on behalf of Executive to execute all such instruments and do all such things
and generally to use the Executive's name for the purposes of assuring to the
Company (or its nominee) the full benefit of its rights under the provisions of
this Article 8.
 
 
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9.
CERTAIN COVENANTS

 
(a)           Covenant Not to Compete.  Executive agrees that during the
Employment Period, he will not, without the express written permission of the
Company, which may be given or withheld in the Company’s sole discretion,
directly or indirectly own, manage, operate, control, lend money to, endorse the
obligations of, or participate or be connected as an officer, director, 5% or
more stockholder of a publicly-held company, stockholder of a closely-held
company, employee, partner or otherwise, with any enterprise or individual
engaged in a business which is directly competitive with the business conducted
by the Company.  For the purposes of this Agreement, directly competitive shall
mean any company engaged in sales of (i) debt resolution software, or (ii)
collection software, or (iii) applications or extensions of the Company’s debt
resolution technology.
 
(b)           Covenant Regarding Solicitation of Customers and Employees. 
During the one year period following termination of his employment, Executive
agrees that, if such agreement is requested by the Company, he will not (i)
solicit any past, present or future customers of the Company in any way relating
to the business of the Company, or (ii) induce or actively attempt to influence
any other employee or consultant of the Company to terminate his or her
employment or consultancy with the Company.
 
(c)           Scope of Covenants.  It is understood and acknowledged by both
parties that, inasmuch as the Company intends to transact business worldwide,
the covenants set forth in this Article 9 shall be enforced throughout the
United States and in any other country in which the Company does business.
 
 
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10.  
REMEDIES

 
(a)          Without intending to limit the remedies available to the Company,
it is mutually understood and agreed that the Executive’s services are of a
special, unique, unusual, extraordinary and intellectual character giving them a
peculiar value, the loss of which may not be reasonably or adequately
compensated in damages in an action at law, and, therefore, in the event of any
material breach by the Executive that continues after any applicable cure
period, the Company shall be entitled to equitable relief by way of injunction
or otherwise.
 
(b)          The covenants of each of Sections 7, 8 and 9 hereof shall be
construed as independent of any other provisions contained in this Agreement and
shall be enforceable as aforesaid notwithstanding the existence of any claim or
cause of action of the Executive against the Company, whether based on this
Agreement or otherwise.  In the event that any of the provisions of Sections 7,
8 or 9 hereof should ever be adjudicated to exceed the time, geographic,
product/service or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in any such
jurisdiction to the maximum time, geographic, product/service or other
limitations permitted by applicable law.
 
11.  
COMPLIANCE WITH OTHER AGREEMENTS

 
The Executive represents and warrants to the Company that the execution of this
Agreement by him and his performance of his obligations hereunder will not, with
or without the giving of notice or the passage of time or both, conflict with,
result in the breach of any provision of or the termination of, or constitute a
default under, any agreement to which the Executive is a party or by which the
Executive is or may be bound.
 
 
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12.  
WAIVERS

 
The waiver by the Company or the Executive of a breach of any of the provisions
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
 
13.  
BINDING EFFECT; BENEFITS

 
This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs and legal
representatives, including any corporation or other business organization with
which the Company may merge or consolidate or sell all or substantially all of
its assets.  Insofar as the Executive is concerned, this contract, being
personal, cannot be assigned.
 
14.  
NOTICES

 
All notices and other communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to the person to whom such notice is to be given at his or its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:
 
(a)   If to the Executive, to him at:
 
Michael J. Cassella
2 Connecticut Avenue
Massapequa, NY 11758
 
and
 
 
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(b)   If to the Company, to it at:
 
Debt Resolve, Inc.
150 White Plains Rd., Suite 108
Tarrytown, NY 10591
 
Attention: General Counsel

with a copy to:
 
Greenberg Traurig, LLP
200 Park Avenue, 15th Floor
New York, NY 10166
Attention:  Spencer G. Feldman, Esq.
 
15.  
MISCELLANEOUS

 
(a)          This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter hereof.  This
Agreement may not be changed, modified, or terminated except upon written
amendment approved by the President and Board of Directors and executed by a
duly authorized officer of the Company and the Executive.
 
 
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(b)          The Executive acknowledges that from time to time, the Company may
establish, maintain and distribute employee manuals of handbooks or personnel
policy manuals, and officers or other representatives of the Company may make
written or oral statements relating to personnel policies and procedures.  Such
manuals, handbooks and statements are intended only for general guidance.  No
policies, procedures or statements of any nature by or on behalf of the Company
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement or to create express or implied
obligations of any nature to the Executive.
 
(c)          This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.
 
(d)          All questions pertaining to the validity, construction, execution
and performance of this Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
 
(e)          Any controversy or claim arising from, out of or relating to this
Agreement, or the breach hereof (other than controversies or claims arising
from, out of or relating to the provisions in Sections 7, 8, 9 and 10), shall be
determined by final and binding arbitration in Westchester County, New York, in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association, by a panel of not less than three (3) arbitrators
appointed by the American Arbitration Association.  The decision of the
arbitrators may be entered and enforced in any court of competent jurisdiction
by either the Company or the Executive.
 
The parties indicate their acceptance of the foregoing arbitration requirement
by initialing below:
 
 

 
For the Company
 
Executive
 

 
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(f)          If any provision of this Agreement is held to be illegal, invalid,
or unenforceable under present or future laws, such provision shall be
severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by such illegal, invalid, or
unenforceable provision or by its severance from this Agreement.  Furthermore,
in lieu of such illegal, invalid, or unenforceable provision, there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
 
(g)          Indemnification.  The Company hereby agrees to indemnify the
Executive pursuant to this Agreement to the fullest extent permitted by
applicable law from and against any and all liability, costs and expenses
(including reasonable attorneys' fees) that may be incurred by the Executive (i)
as a result of Executive's rendering of services to the Company, other than any
such liability which arises as a direct result of the material and demonstrable
willful misconduct or gross negligence of the Executive, and (ii) as a  result
of Executive’s rendering of his duties hereunder, in accordance with the
certificate of incorporation of the Company.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
 

 
DEBT RESOLVE, INC.
         
 
By:
      Name:
David M. Rainey
    Title:
President and Chief Financial Officer
                    EXECUTIVE              
Michael J. Cassella
 

 
 
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EXHIBIT A TO THE EMPLOYMENT AGREEMENT,
DATED MAY 20, 2011, BETWEEN
DEBT RESOLVE, INC. AND MICHAEL J. CASELLA
 
 
Performance Goals: 2011

List/Identify key performance goals below:

To be determined in conjunction with the President, Board of Directors and the
approved business plan of the Company.
 
 
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