Unassociated Document


    EXHIBIT
      10.1

    


    ARISEAN
      CAPITAL LTD.

    4
      Five
      Ponds Drive

    Waccabuc,
      New York 10597

     

    May
      31,
      2007

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Suite L7

    White
      Plains, New York 10604

     

    Gentlemen:

     

    This
      letter agreement sets forth the terms and conditions under which Arisean Capital
      Ltd., a New York corporation ("Arisean"), agrees to provide a $500,000 line
      of
      credit to Debt Resolve, Inc., a Delaware corporation ("Debt
      Resolve").

     

    1. Line
      of Credit.

     

    (a) Subject
      to the terms and conditions hereof, the Security Agreement of even date herewith
      between Arisean and Debt Resolve (the “Security Agreement”) and the
      Non-Negotiable Promissory Note of even date herewith made by Debt Resolve in
      favor of Arisean (the "Note"), Arisean agrees from time to time to make loans
      (each, a "Loan") to Debt Resolve up to a maximum aggregate amount of $500,000.
      Debt Resolve shall use the proceeds of each Loan for its working capital needs,
      including to support the operations of Debt Resolve’s debt-collection
      subsidiary, First Performance Corporation. Interest on the outstanding principal
      amount of the Note shall be at a rate of twelve percent (12%) per annum, as
      more
      fully set forth in the Note. Debt Resolve’s obligations under the Note shall be
      secured by a lien and security interest in the Collateral, as more fully set
      forth in the Security Agreement.

     

    (b) By
      written request to Arisean, accompanied by a description of the use(s) of such
      loan proceeds, Debt Resolve may from time to time request that Arisean make
      a
      Loan in the amount specified therein and Arisean will make such Loan. Subject
      to
      Arisean's review and approval of the written request, Arisean shall disburse
      the
      amount of the Loan requested by wire transfer in immediately available funds
      to
      an account or accounts designated in writing by Debt Resolve, or by check if
      mutually agreed, within two (2) business days following Debt Resolve's written
      request. Each such request for a Loan shall constitute Debt Resolve's
      representation and warranty to Arisean that no Event of Default (as such term
      is
      defined in the Note) exists at such time, or would occur after giving effect
      to
      any such Loan.

     

    (c) Except
      as
      otherwise provided in Section 2 below, by not less than thirty (30) days’
written notice to Debt Resolve, Arisean may demand that payment of the entire
      principal balance then outstanding of the Note, together with accrued interest,
      be made on any date after the date hereof, and Debt Resolve will pay the entire
      amount thereof in cash on such date. The Note may, at the option of Debt
      Resolve, be prepaid at any time in whole or in part, without premium or penalty.
      

     

    (d) Debt
      Resolve shall pay to Arisean a 1% origination fee in connection with arranging
      the Loans, upon funding.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    2. Mandatory
      Payments.
      During
      the term of the Note, Debt Resolve will pay, in whole or in part, the principal
      balance then outstanding of the Note, together with accrued interest, with
      the
      cash proceeds from the issuance of any note, bond, debenture, evidence of
      indebtedness, share of capital stock or any other security ("securities"),
      other
      than working capital financing or secured financing of assets in the ordinary
      course of business, issued by Debt Resolve after the date hereof (a
      "Financing"). The obligation of Debt Resolve to pay the outstanding balance
      under the Note pursuant to the preceding sentence shall be superior and first
      in
      priority to any other use of the proceeds of a Financing, and, without Arisean’s
      prior written consent, Debt Resolve agrees not to enter into any agreement
      or
      instrument during the term of the Note which would modify or alter the foregoing
      priority. 

     

    3. Change
      in Control.
      A
      Change in Control (as defined below) during the term of the Note shall be
      considered an Event of Default, in which case Debt Resolve shall be required,
      unless waived by Arisean in whole or in part, to pay the entire principal
      balance then outstanding of the Note, together with accrued interest, on or
      within ten (10) days following the Change in Control. A "Change in Control"
      shall be deemed to have occurred when (a) a third person, including a "group,"
      as such term is defined in Section 13(d)(3) of the Securities Exchange Act
      of
      1934, other than Arisean or its affiliates, becomes (other than as a result
      of a
      purchase from Debt Resolve) the beneficial owner of shares of Debt Resolve
      having 50% or more of the total number of votes that may be cast for the
      election of directors of Debt Resolve and such beneficial owner continues for
      five consecutive days, or (b) as a result of, or in connection with, any cash
      tender or exchange offer, merger or other business combination, sale of assets
      or contested election or any combination of the foregoing transactions, the
      persons who were directors of Debt Resolve before such transaction shall cease
      for any reason to constitute at least a majority of the Board of Directors
      of
      Debt Resolve or any successor.

     

    4. Representations.
      Each of
      the parties hereto represents severally and as to itself only that this letter
      agreement has been duly authorized, executed and delivered by it and, assuming
      the due authorization, execution and delivery of this letter agreement by the
      other party hereto, constitutes its legal, valid and binding obligation,
      enforceable against it in accordance with its terms, except to the extent that
      enforceability (x) may be limited by bankruptcy, insolvency or other similar
      laws affecting or relating to the enforcement of creditors' rights generally
      and
      (y) is subject to general principles of equity (whether such enforceability
      is
      considered in a proceeding in equity or at law).

     

    5. Notices.
      All
      notices, requests and demands to or upon Debt Resolve or Arisean to be effective
      shall be in writing and shall be deemed to have been duly given or made when
      delivered by hand, or when sent by certified mail, postage prepaid, addressed
      as
      follows or to such other address as may hereafter be notified by the respective
      parties hereto:

     

    
      	
              Debt
                Resolve:

            	
              Debt
                Resolve Inc.

            
	 	
              707
                Westchester Avenue, Suite L7

            
	 	
              White
                Plains, New York 10604

            
	 	
              Attn:
                Mr. James D. Burchetta,

            
	 	
                
                Co-Chairman and Chief Executive Officer

            
	 	 
	
              Arisean:

            	
              Arisean
                Capital Ltd.

            
	 	
              4
                Five Ponds Drive

            
	 	
              Waccabuc,
                New York 10597

            
	 	
              Attn:
                Mr. Charles S. Brofman,

            
	 	
              President
                

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    6. Miscellaneous.
      This
      letter agreement, the Security Agreement and the Note represent the entire
      agreement and understanding between Arisean and Debt Resolve with respect to
      the
      subject matter hereof. This letter agreement, the Security Agreement and the
      Note may not be amended except by an instrument in writing executed by Arisean
      and Debt Resolve. This letter agreement shall be governed by and construed
      in
      accordance with the laws of the State of New York, without giving effect to
      its
      choice of law rules. This letter agreement may be executed in
      counterparts.

     

    If
      the
      foregoing correctly sets forth our agreement, please acknowledge your acceptance
      of the terms of this letter agreement by signing and returning a copy of this
      letter agreement, the Security Agreement and the Note to the undersigned.


     

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              ARISEAN
                CAPITAL LTD.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Charles S. Brofman

            
	 	 	
              Charles
                S. Brofman

            
	 	 	
              President

            


    

     

    Agreed
      and Accepted

    this
      May
      31, 2007

     

    DEBT
      RESOLVE INC.

     

    By: 
      /s/
      James D. Burchetta                   

    James
      D.
      Burchetta

    Co-Chairman
      and Chief Executive Officer

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    NON-NEGOTIABLE
      PROMISSORY NOTE

    


    Dated:
      May 31, 2007

     

    FOR
      VALUE
      RECEIVED, the undersigned, DEBT RESOLVE, INC., a Delaware corporation ("Debt
      Resolve"), promises to pay to ARISEAN CAPITAL LTD, a New York corporation
      ("Arisean"), at the offices of Arisean, 4 Five Ponds Drive, Waccabuc, New York
      10597, or at such commercial bank within the United States of America as Arisean
      may designate to Debt Resolve from time to time, in lawful money of the United
      States of America and in immediately available funds, the outstanding amount
      of
      all loans made by Arisean to Debt Resolve from time to time in accordance with
      the provisions hereof. Debt Resolve further agrees to pay interest in like
      money
      at such office or commercial bank on the unpaid aggregate principal amount
      hereof at a rate equal to twelve percent (12%) per annum. 

     

    1. Principal
      and interest shall be due and payable in the manner set forth
      below:

     

    (a) Accrued
      interest on the unpaid principal amount hereof shall be paid monthly in cash;
      

     

    (b) Debt
      Resolve will pay, in whole or in part, the principal balance then outstanding
      of
      this Note, together with accrued interest, on or within two (2) days after
      each
      date Debt Resolve receives cash proceeds of a Financing, as such term is defined
      in the letter agreement of even date herewith between Debt Resolve and Arisean
      (the "Letter Agreement").

     

    (c) By
      not
      less than thirty (30) days’ written notice to Debt Resolve, Arisean may demand
      that payment of the entire principal balance then outstanding of this Note,
      together with accrued interest, be made on any date after the date hereof,
      and
      Debt Resolve will pay the entire amount thereof in cash on such date.


     

    (d) All
      payments (including prepayments) made hereunder shall be applied first to the
      payment of accrued and unpaid interest, with the balance remaining applied
      to
      the payment of the unpaid principal balance of this Note.

     

    (e) This
      Note
      may, at the option of Debt Resolve, be prepaid at any time in whole or in part,
      without premium or penalty.

     

    2. Debt
      Resolve is borrowing the principal sum of this Note pursuant to the Letter
      Agreement, the terms of which are incorporated herein by reference and supersede
      the terms of this Note in the event of any conflict. This Note shall be
      non-negotiable.

     

    3. Payment
      of this Note is secured by certain collateral (the “Collateral”) under the terms
      of the Security Agreement of even date herewith between Debt Resolve and Arisean
      (the “Security Agreement”). 

     

    4. Arisean
      is authorized to record the date and amount of each loan made by it and the
      date
      and amount of each payment, prepayment or reduction of the principal amount
      hereof on the schedule annexed hereto and made a part hereof, and any such
      recordation shall constitute prima
      facie
      evidence
      of the accuracy of the information so recorded.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    5. Notwithstanding
      any provision to the contrary contained in this Note, it is expressly agreed
      that the entire principal amount outstanding at any time under this Note, and
      all accrued and unpaid interest, shall immediately become due and payable
      (without demand for payment, notice of non-payment, presentment, notice of
      dishonor, protest, notice of protest or any other notice, all of which are
      hereby expressly waived by Debt Resolve):

     

    (a) upon
      the
      default in the payment of any interest or principal due under this Note, which
      default continues uncured for a period of ten (10) days; 

     

    (b) if
      Debt
      Resolve shall make an assignment for the benefit of creditors; or shall admit
      in
      writing its inability to pay its debts; or if a receiver or trustee shall be
      appointed for Debt Resolve or for substantially all of its assets and, if
      appointed without its consent, such appointment is not discharged or stayed
      within thirty (30) days; or if proceedings under any law relating to bankruptcy,
      insolvency or the reorganization or relief of debtors are instituted by or
      against the Debt Resolve and, if contested by it, are not dismissed or stayed
      within thirty (30) days; or if any writ of attachment or execution or any
      similar process is issued or levied against Debt Resolve or any significant
      part
      of its property and is not released, stayed, bonded or vacated within thirty
      (30) days after its issue or levy; or if Debt Resolve takes corporate action
      in
      furtherance of any of the foregoing; 

     

    (c) in
      the
      event of any default or event of default under the Security Agreement, which
      default is not cured following the giving of notice and within five (5)
      days;

     

    (d) after
      a
      Change in Control, as provided, and as such term is defined, in the Letter
      Agreement (each, an "Event of Default"); or

     

    (e) any
      event
      of default which results in the acceleration of indebtedness of Debt Resolve
      to
      any other person under any note, indenture, agreement or undertaking and that
      is
      not cured within thirty (30) days. 

     

    5. All
      notices, requests and demands to or upon Debt Resolve or Arisean to be effective
      shall be in writing and shall be deemed to have been duly given or made when
      delivered by hand, or when sent by certified mail, postage prepaid, addressed
      as
      follows or to such other address as may hereafter be notified by the respective
      parties hereto:

     

    
      	
              Debt
                Resolve:

            	
              Debt
                Resolve, Inc.

            
	 	
              707
                Westchester Avenue, Suite L7

            
	 	
              White
                Plains, New York 10604

            
	 	
              Attn:
                Mr. James D. Burchetta,

            
	 	
               
                Co-Chairman and Chief Executive Officer

            
	 	 
	
              Arisean:

            	
              Arisean
                Capital Ltd.

            
	 	
              4
                Five Ponds Drive

            
	 	
              Waccabuc,
                New York 10597

            
	 	
              Attn:
                Mr. Charles S. Brofman

            
	 	
               
                President

            


    

     

    6. No
      failure or delay on the part of Arisean in exercising any of its rights, powers
      or privileges hereunder shall operate as a waiver thereof, nor shall a single
      or
      partial exercise thereof preclude any other or further exercise of any right,
      power or privilege. Debt Resolve hereby waives demand for payment, notice of
      non-payment, presentment, notice of dishonor, protest, notice of protest or
      any
      other notice in connection with the delivery, acceptance, performance or
      enforcement of this Note.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    7. In
      case
      any one or more Events of Default shall occur and be continuing, Arisean may
      proceed to protect and enforce its rights by an action at law, suit in equity
      or
      other appropriate proceeding. Debt Resolve shall pay all reasonable costs of
      collection when incurred, including reasonable attorneys' fees.

     

    8. This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York, without giving effect to its choice of law rules.

     

    IN
      WITNESS WHEREOF, Debt Resolve has executed this Non-Negotiable Promissory Note
      as of the date first above written. 

     

    
      	 	
              DEBT
                RESOLVE, INC.

            
	 	 
	 	 
	 	
              By:

            	  

	
               

            	 	
              James
                D. Burchetta

            
	
               

            	 	
              Co-Chairman
                and Chief Executive Officer

            


    

    


    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    GRID
      PROMISSORY NOTE SCHEDULE

    


    

      
        	
                 

                 

                  
                  Date   

              	
                 

                Amount
                  of

                  
                  Loan   

              	
                Amount
                  of

                Principal
                  Paid

                or
                  Prepaid   

              	
                Unpaid
                  Principal

                Amount
                  of

                 
                  Note     

              	
                Available

                Line
                  of 

                   Credit 
                     

              	
                 

                Notation

                  Made
                  By  

              
	 	 	 	 	 	 
	 
	 
	  	 
	  	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	  	 
	  	 
	 
 
	  
	   	  
	   	  	   


      

    

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    SECURITY
      AGREEMENT

    


    SECURITY
      AGREEMENT, dated as of May 31, 2007, by and between ARISEAN CAPITAL LTD., a
      New
      York corporation ("Arisean"), having its offices located at 4 Five Ponds Drive,
      Waccabuc, New York 10597, and DEBT RESOLVE, INC., a Delaware corporation ("Debt
      Resolve"), having its principal executive offices at 707 Westchester Avenue,
      Suite L7, White Plains, New York 10604.

     

    1. Definitions
      of Terms.
      As used
      herein, (a) "Obligations" shall mean (i) all indebtedness of Debt Resolve to
      Arisean arising on or after the date hereof under the Non-Negotiable Promissory
      Note of even date herewith made by Debt Resolve in favor of Arisean (the
      "Note"), pursuant to the Letter Agreement of even date herewith (the "Letter
      Agreement"), between Debt Resolve and Arisean, and any extensions or
      substitutions thereof, (ii) all costs incurred by Arisean to obtain, preserve
      and enforce the security interest granted hereby, collect all amounts due under
      the Note and this Security Agreement, and maintain and preserve the Collateral
      (as such term is defined below), including, but not limited to, taxes,
      assessments, insurance premiums, repairs, reasonable attorneys' fees and
      expenses, rent, storage costs and expenses of sale, and (iii) interest on the
      above amounts as provided in the Note; and (b) "Collateral" shall mean all
      of
      Debt Resolve's present and future right, title and interest in the Debt
      Resolve's assets of every kind and description, including, but not limited
      to,
      all right, title and interest of the Debt Resolve in, to and under the following
      property, whether now owned or hereafter created or acquired: (i) all of the
      Debt Resolve's accounts receivable and all proceeds, renewals, substitutions
      for, and replacements thereof (collectively, the "Accounts Receivable"), (ii)
      all promissory notes, chattel paper, documents and other instruments, whether
      now or hereafter existing or acquired, evidencing any obligation to Debt Resolve
      under the Accounts Receivable, (iii) all interest of Debt Resolve in any goods,
      including but not limited to returned goods, the sale or lease of which shall
      have given rise to any of the foregoing, (iv) any and all contract rights of
      the
      Debt Resolve, and (v) all cash or non-cash products and proceeds of any of
      the
      foregoing, including insurance proceeds.

     

    2. Security
      Interest.
      As
      security for the full and timely payment of the Obligations in accordance with
      the terms thereof and of the respective instruments or agreements now or
      hereafter evidencing the Obligations or pursuant to which the Obligations arise,
      Debt Resolve agrees that Arisean shall have, and Debt Resolve hereby grants
      to
      and creates in favor of Arisean, a security interest in and to all now-owned
      and
      hereafter acquired Collateral.

     

    3. Fixtures.
      If the
      Collateral is or is about to become affixed to realty, Debt Resolve will, at
      Arisean's request, furnish Arisean a writing executed by the owner and/or
      mortgagee of the realty whereby the owner and/or mortgagee subordinates its
      rights and priorities to Arisean's security interest in the Collateral. If
      the
      Collateral is or may become subject to a landlord's lien, the Debt Resolve
      will,
      at Arisean's request, furnish Arisean with a landlord's waiver satisfactory
      in
      form to Arisean.

     

    4. Insurance.
      Until
      this Agreement is terminated, Debt Resolve will have and maintain insurance
      on
      the Collateral against all customarily insured risks to which it is exposed,
      such insurance to be payable to Arisean and Debt Resolve as their interests
      may
      appear; all policies shall provide for ten (10) days' written minimum
      cancellation notice to Arisean. Arisean may act as attorney for Debt Resolve
      in
      obtaining, adjusting, settling and canceling such insurance. 

     

    5. Default.
      Upon
      the occurrence of any Default (as such term is defined in the Note), Debt
      Resolve agrees upon demand to deliver the Collateral to Arisean, or Arisean
      may,
      with or without legal process, and with or without previous notice or demand
      for
      performance, enter any premises wherein the Collateral may be located, and
      take
      possession of the same, together with anything therein; and Arisean may collect
      upon and/or make disposition of the Collateral subject to any and all applicable
      provisions of the law. If the Collateral is sold at public sale, Arisean may
      purchase the Collateral at such sale. Arisean, provided it has sent the
      statutory notice of default, may retain from the proceeds of such sale all
      reasonable costs incurred in the said taking and sale and also, all other sums
      then owing by Debt Resolve to Arisean, and any surplus of any such sale shall
      be
      paid to Debt Resolve or as otherwise directed by court order. In the case of
      any
      deficiency, Arisean may collect such deficiency from Debt Resolve.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


     

    6. General
      Agreements.
      Debt
      Resolve agrees (a) to pay the costs of filing financing statements and of
      conducting searches in connection with this Agreement; (b) to allow Arisean
      through any of its officers or agents, at all reasonable times, to examine
      or
      inspect any of the Collateral and to examine, inspect and make extracts from
      Debt Resolve's books and records relating to the Collateral; (c) to promptly
      pay
      when due all taxes and assessments upon the Collateral or for its use or
      operation or upon the proceeds thereof or upon this Agreement or upon any
      instrument or instruments evidencing the Obligations; and (d) that Arisean
      is
      authorized to file appropriate financing statements and any amendments thereto
      without the signature of Debt Resolve, such authorization being limited to
      the
      security interest granted by this Agreement. At its option, Arisean may
      discharge taxes, liens or security interests or other encumbrances at any time
      levied or placed on the Collateral, and may pay for the maintenance,
      preservation and/or insurance of the Collateral, and Debt Resolve agrees to
      reimburse Arisean on demand for any payment made or any expense incurred by
      Arisean pursuant to the foregoing authorization, including attorneys’ fees and
      disbursements incurred or expended by Arisean in connection with this Agreement.
      Arisean shall not be deemed to have waived any of its rights hereunder or under
      any other agreement, instrument or paper signed by Debt Resolve by reason of
      Arisean's performance of any of Debt Resolve's obligations as aforesaid, or
      in
      any other manner unless such waiver is in writing and signed by Arisean. No
      delay or omission on the part of Arisean in exercising any right shall operate
      as a waiver thereof or of any other right. A waiver upon any one occasion shall
      not be construed as a bar or a waiver of any right or remedy on any future
      occasion. All of the rights and remedies of Arisean, whether evidenced hereby
      or
      by any other agreement, instrument or paper, shall be cumulative and may be
      exercised singly or concurrently. This Agreement shall be construed in
      accordance with the laws of the State of New York, without giving effect to
      its
      choice of law rules.

     

    
      	 	
              DEBT
                RESOLVE, INC.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	
               
                

            
	 	 	
              James
                D. Burchetta

            
	 	 	
              Co-Chairman
                and Chief Executive Officer

            
	 	 	 
	 	
              ARISEAN
                CAPITAL LTD.

            
	 	 	 
	 	 	 
	 	
              By:
                

            	
               
                

            
	 	 	
              Charles
                S. Brofman

            
	 	 	
              President