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Unassociated Document

    EXHIBIT
      10.2

    REGISTRATION
      RIGHTS AGREEMENT

     

    This
      REGISTRATION
      RIGHTS AGREEMENT
      (this
“Agreement”)
      is
      made and entered into by and between Debt Resolve, Inc., a Delaware corporation,
      with its principal executive offices located at 707 Westchester Avenue, Suite
      L7, White Plains, New York 10604 (the “Company”),
      and
      each of the purchasers set forth on the counterpart signature pages hereto
      (the
“Purchasers”),
      and
      is dated with respect to each of the Purchasers as of the date noted on each
      such Purchaser’s counterpart signature page.

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the “Securities
      Purchase Agreement”),
      the
      Company has agreed, upon the terms and subject to the conditions contained
      therein, to issue and sell to the Purchasers (i) 15% senior secured convertible
      promissory notes, or 15% senior secured promissory notes in the case of one
      Purchaser, of the Company in the aggregate principal amount of up to Four
      Million Dollars ($4,000,000), which includes a $1,000,000 over-allotment option
      (together with any note(s) issued in replacement thereof or as a dividend
      thereon or otherwise with respect thereto in accordance with the terms thereof,
      the “Notes”),
      a
      portion of which Notes is convertible into shares of common stock, par value
      $.001 per share, of the Company (the “Common
      Stock”),
      and
      (ii) warrants to purchase shares of Common Stock of the Company (the
“Warrants”);
      

     

    WHEREAS,
      the
      Company proposes to conduct an initial public offering of shares of its Common
      Stock (the “IPO”);
      and

     

    WHEREAS,
      in
      order to induce the Purchasers to purchase the Notes and Warrants, the Company
      has agreed to provide certain registration rights under the Securities Act
      of
      1933, as amended, and the rules and regulations thereunder, or any similar
      successor statute (collectively, the “1933
      Act”),
      and
      applicable state securities laws.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and each of the Purchasers hereby agree as
      follows:

     

    1. Definitions.

     

    As
      used
      in this Agreement, the following capitalized terms shall have the following
      meanings. Capitalized terms used but not otherwise defined herein shall have
      the
      respective meanings set forth in the Securities Purchase Agreement.

     

    “Purchasers”
means
      the Purchasers and any transferee or assignee who agrees to become bound by
      the
      provisions of this Agreement in accordance with Section 9 hereof.

     

    “register,”
      “registered,”
and
      “registration”
refer
      to a registration effected by preparing and filing a Registration Statement
      or
      Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
      1933 Act or any successor rule providing for offering securities on a continuous
      basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such Registration Statement
      by
      the United States Securities and Exchange Commission (the “SEC”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Registrable
      Securities”
means:
      (i) the shares of Common Stock issuable upon conversion of the Notes, (ii)
      the
      shares of Common Stock issuable upon exercise of the Warrants and (ii) any
      shares of capital stock issued or issuable as a dividend on or in exchange
      for
      or otherwise with respect to the foregoing, the Notes or the
      Warrants.

     

    “Registration
      Statement”
means
      a
      registration statement of the Company under the 1933 Act which the Company
      may
      or is obligated to file hereunder.

     

    2. Registration.

     

    (a) Mandatory
      Registration.
      The
      Company shall, in connection with the IPO and with the same Registration
      Statement utilized by the Company for the IPO, effect a registration of the
      Registrable Securities covering the resale of all Registrable Securities
      underlying the Notes issued or otherwise issuable pursuant to the Securities
      Purchase Agreement, which Registration Statement, to the extent allowable under
      the 1933 Act and the rules and regulations promulgated thereunder (including
      Rule 416), shall state that such Registration Statement also covers such
      indeterminate number of additional shares of Common Stock as may become issuable
      upon conversion of the Notes to prevent dilution resulting from stock splits,
      stock dividends or similar transactions. The Company acknowledges that the
      number of Registrable Securities initially to be included in the Registration
      Statement for the Registrable Securities shall represent a good faith estimate
      of the maximum number of shares issuable upon conversion of the Notes.

     

    Notwithstanding
      the foregoing agreement to register all Registrable Securities in connection
      with the IPO, if, in connection with IPO, the managing underwriter(s) thereof
      shall impose a limitation on the number of shares of Common Stock which may
      be
      included in the Registration Statement because, in such underwriter(s)’ sole and
      absolute judgment, marketing or other factors dictate such limitation is
      necessary to facilitate public distribution, then the Company shall be obligated
      to include in such Registration Statement only such limited portion of the
      Registrable Securities with respect to which such Purchaser has requested
      inclusion hereunder as the underwriter shall permit. Any exclusion of
      Registrable Securities shall be made pro rata among the Purchasers seeking
      to
      include Registrable Securities in proportion to the number of Registrable
      Securities sought to be included by such Purchasers; provided,
      however,
      that
      the Company shall not exclude any Registrable Securities unless the Company
      has
      first excluded all outstanding securities, the holders of which are not entitled
      to inclusion of such securities in such Registration Statement or are not
      entitled to pro rata inclusion with the Registrable Securities; and provided,
      further,
      however,
      that,
      after giving effect to the immediately preceding proviso, any exclusion of
      Registrable Securities shall be made pro rata with holders of other securities
      having the right to include such securities in the Registration Statement other
      than holders of securities entitled to inclusion of their securities in such
      Registration Statement by reason of demand registration rights.

     

    If
      a
      Registration Statement registering of all the Registrable Securities is not
      declared effective by October 31, 2006, the Company shall pay, in cash, and
      in
      addition to any other remedies available in law or equity, liquidated damages
      to
      each of the Purchasers in an amount equal to (i) one and one-half percent (1.5%)
      of each Purchaser’s subscription amount for the first 30 days (or part thereof)
      after July 31, 2006 and (ii) an additional one and one-half percent (1.5%)
      of
      each Purchaser’s subscription amount for any subsequent 30-day period (or part
      thereof), thereafter, subject to a maximum aggregate penalty of ten percent
      (10%) of each Purchaser’s subscription amount. Such payments shall be made on
      the first business day of each month, commencing November 1, 2006, until such
      Registration Statement is declared effective and all pro rate portions of such
      payments for the month in which such Registration Statement is declared
      effective shall be paid within five (5) business days of the declaration of
      effectiveness. 

     

    
      
        
        

      

      
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    (b) Piggy-Back
      Registrations.
      In the
      event that all Registrable Securities are not registered for resale in
      connection with the IPO, should the Company, after the IPO and at any time
      prior
      to the expiration of the Registration Period (as hereinafter defined), determine
      to file with the SEC a Registration Statement relating to an offering for its
      own account or the account of others under the 1933 Act of any of its equity
      securities (other than on Form S-4 or Form S-8 or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with stock option or other bona fide
      employee
      benefit plans), the Company shall send to each Purchaser who is entitled to
      registration rights under this Section 2(b) written notice of such determination
      and, if within twenty (20) days after the effective date of such notice (as
      provided for in Section 11(b) hereof), such Purchaser shall so request in
      writing, the Company shall include in such Registration Statement all or any
      part of the Registrable Securities such Purchaser requests to be registered,
      except that if, in connection with any underwritten public offering for the
      account of the Company the managing underwriter(s) thereof shall impose a
      limitation on the number of shares of Common Stock which may be included in
      the
      Registration Statement because, in such underwriter(s)’ sole and absolute
      judgment, marketing or other factors dictate such limitation is necessary to
      facilitate public distribution, then the Company shall be obligated to include
      in such Registration Statement only such limited portion of the Registrable
      Securities with respect to which such Purchaser has requested inclusion
      hereunder as the underwriter shall permit. Any exclusion of Registrable
      Securities shall be made pro rata among the Purchasers seeking to include
      Registrable Securities in proportion to the number of Registrable Securities
      sought to be included by such Purchasers; provided,
      however,
      that
      the Company shall not exclude any Registrable Securities unless the Company
      has
      first excluded all outstanding securities, the holders of which are not entitled
      to inclusion of such securities in such Registration Statement or are not
      entitled to pro rata inclusion with the Registrable Securities; and provided,
      further,
      however,
      that,
      after giving effect to the immediately preceding proviso, any exclusion of
      Registrable Securities shall be made pro rata with holders of other securities
      having the right to include such securities in the Registration Statement other
      than holders of securities entitled to inclusion of their securities in such
      Registration Statement by reason of demand registration rights. No right to
      registration of Registrable Securities under this Section 2(b) shall be
      construed to limit any registration required under Section 2(a) hereof. If
      an
      offering in connection with which a Purchaser is entitled to registration under
      this Section 2(b) is an underwritten offering, then each Purchaser whose
      Registrable Securities are included in such Registration Statement shall, unless
      otherwise agreed by the Company, offer and sell such Registrable Securities
      in
      an underwritten offering using the same underwriter or underwriters and, subject
      to the provisions of this Agreement, on the same terms and conditions as other
      shares of Common Stock included in such underwritten offering. 

     

    3. Obligations
      of the Company.
      In
      connection with the registration of the Registrable Securities, the Company
      shall have the following obligations:

     

    
      
        
        

      

      
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    (a) The
      Company shall, promptly following the date hereof, use its best efforts prepare
      and file with the SEC a Registration Statement for the IPO which shall include
      the Registrable Securities as provided for in Section 2(a) hereof. Upon
      effectiveness, the Company shall keep such Registration Statement effective
      pursuant to Rule 415 at all times until such date as is the earlier of: (i)
      the
      date on which all of the Registrable Securities have been sold and (ii) the
      date
      on which the Registrable Securities (in the opinion of counsel to the
      Purchasers) may be immediately sold to the public without registration or
      restriction (including, without limitation, as to volume by each holder thereof)
      under the 1933 Act (the “Registration
      Period”).
      Such
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein not misleading (it being agreed that
      the foregoing shall not apply to
      statements made or statements omitted in reliance upon and in conformity with
      information furnished in writing to the Company by one or more Purchasers
      specifically for use in the Registration Statement).

     

    (b) The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statements and
      the prospectus used in connection with the Registration Statements as may be
      necessary to keep the Registration Statements effective at all times during
      the
      Registration Period, and, during such period, comply with the provisions of
      the
      1933 Act with respect to the disposition of all Registrable Securities of the
      Company covered by the Registration Statements until such time as all of such
      Registrable Securities have been disposed of in accordance with the intended
      methods of disposition by the seller or sellers thereof as set forth in the
      Registration Statements. In the event the number of shares available under
      a
      Registration Statement filed pursuant to this Agreement is insufficient to
      cover
      all of the Registrable Securities issued or issuable upon conversion of the
      Notes, the Company shall amend the Registration Statement, or file a new
      Registration Statement (on the short form available therefor, if applicable),
      or
      both, so as to cover all of the Registrable Securities, in each case, as soon
      as
      practicable, but in any event within fifteen (15) days after the necessity
      therefor arises (based on the market price of the Common Stock and other
      relevant factors on which the Company reasonably elects to rely). The Company
      shall use its best efforts to cause such amendment and/or new Registration
      Statement to become effective as soon as practicable following the filing
      thereof. 

     

    (c) The
      Company shall furnish to each Purchaser whose Registrable Securities are
      included in a Registration Statement and one legal counsel designated by the
      Purchasers: (i) promptly (but in no event more than two (2) business days)
      after the same is prepared and publicly distributed, filed with the SEC, or
      received by the Company, one copy of each Registration Statement and any
      amendment thereto, each preliminary prospectus and prospectus and each amendment
      or supplement thereto, and, in the case of the Registration Statement referred
      to in Section 2(a), each letter written by or on behalf of the Company to the
      SEC or the staff of the SEC, and each item of correspondence from the SEC or
      the
      staff of the SEC, in each case relating to such Registration Statement (other
      than any portion of any thereof which contains information for which the Company
      has sought confidential treatment), and (ii) promptly (but in no event more
      than two (2) business days) after the Registration Statement is declared
      effective by the SEC, such number of copies of a prospectus, including a
      preliminary prospectus, and all amendments and supplements thereto and such
      other documents as such Purchaser may reasonably request in order to facilitate
      the disposition of the Registrable Securities owned by such Purchaser. The
      Company will promptly notify each Purchaser by facsimile of the effectiveness
      of
      each Registration Statement or any post-effective amendment. The Company will
      promptly (but in no event more than twenty (20) business days) respond to any
      and all comments received from the SEC (which comments shall promptly be made
      available to the Purchasers upon request), with a view towards causing each
      Registration Statement or any amendment thereto to be declared effective by
      the
      SEC as soon as practicable, shall promptly file an acceleration request as
      soon
      as practicable (but in no event more than two (2) business days) following
      the
      resolution or clearance of all SEC comments or, if applicable, following
      notification by the SEC that any such Registration Statement or any amendment
      thereto will not be subject to review and shall promptly file with the SEC
      a
      final prospectus as soon as practicable (but in no event more than two (2)
      business days) following receipt by the Company from the SEC of an order
      declaring the Registration Statement effective. 

     

    
      
        
        

      

      
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    (d) The
      Company shall use reasonable efforts to: (i) register and qualify the
      Registrable Securities covered by the Registration Statements under such other
      securities or “blue sky” laws of such jurisdictions in the United States as the
      Purchasers who hold a majority in interest of the Registrable Securities being
      offered reasonably request, (ii) prepare and file in those jurisdictions
      such amendments (including post-effective amendments) and supplements to such
      registrations and qualifications as may be necessary to maintain the
      effectiveness thereof during the Registration Period, (iii) take such other
      actions as may be necessary to maintain such registrations and qualifications
      in
      effect at all times during the Registration Period, and (iv) take all other
      actions reasonably necessary or advisable to qualify the Registrable Securities
      for sale in such jurisdictions; provided,
      however,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to: (a) qualify to do business in any jurisdiction where it would
      not otherwise be required to qualify but for this Section 3(d), (b) subject
      itself to general taxation in any such jurisdiction, (c) file a general
      consent to service of process in any such jurisdiction, (d) provide any
      undertakings that cause the Company undue expense or burden, or (e) make
      any change in its charter or bylaws, which in each case the Board of Directors
      of the Company determines to be contrary to the best interests of the Company
      and its stockholders.

     

    (e) As
      promptly as practicable after becoming aware of such event, the Company shall
      notify each Purchaser of the happening of any event, of which the Company has
      knowledge, as a result of which the prospectus included in any Registration
      Statement, as then in effect, includes an untrue statement of a material fact
      or
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and use its best efforts promptly
      to
      prepare a supplement or amendment to any Registration Statement to correct
      such
      untrue statement or omission, and deliver such number of copies of such
      supplement or amendment to each Purchaser as such Purchaser may reasonably
      request; provided,
      however,
      that,
      for not more than fifteen (15) consecutive trading days (or a total of not
      more
      than thirty (30) trading days in any twelve (12) month period), the Company
      may
      delay the disclosure of material non-public information concerning the Company
      (as well as prospectus or Registration Statement updating) the disclosure of
      which at the time is not, in the good faith opinion of the Company, in the
      best
      interests of the Company (an “Allowed
      Delay”);
      and
provided,
      further,
      that
      the Company shall promptly: (i) notify the Purchasers in writing of the
      existence of (but in no event, without the prior written consent of a Purchaser,
      shall the Company disclose to such investor any of the facts or circumstances
      regarding) material non-public information giving rise to an Allowed Delay
      and
      (ii) advise the Purchasers in writing to cease all sales under such
      Registration Statement until the end of the Allowed Delay. Upon expiration
      of
      the Allowed Delay, the Company shall again be bound by the first sentence of
      this Section 3(e) (but excluding the provisos therein) with respect to the
      information giving rise thereto.

     

    
      
        
        

      

      
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    (f) The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of any Registration Statement, and, if such
      an
      order is issued, to obtain the withdrawal of such order at the earliest possible
      moment and to notify each Purchaser who holds Registrable Securities being
      sold
      (or, in the event of an underwritten offering, the managing underwriters) of
      the
      issuance of such order and the resolution thereof.

     

    (g) The
      Company shall permit a single firm of counsel designated by the Purchasers
      to
      review such Registration Statement and all amendments and supplements thereto
      (as well as all requests for acceleration or effectiveness thereof) a reasonable
      period of time prior to their filing with the SEC, and not file any document
      in
      a form to which such counsel reasonably objects and will not request
      acceleration of such Registration Statement without prior notice to such
      counsel. The sections of such Registration Statement covering information with
      respect to the Purchasers, the Purchaser’s beneficial ownership of securities of
      the Company or the Purchasers intended method of disposition of Registrable
      Securities shall conform to the information provided to the Company by each
      of
      the Purchasers.

     

    (h) The
      Company shall make generally available to its security holders as soon as
      practicable, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with the provisions
      of
      Rule 158 under the 1933 Act) covering a twelve-month period beginning not later
      than the first day of the Company’s fiscal quarter next following the effective
      date of the Registration Statement.

     

    (i) At
      the
      request of the holders of a majority-in-interest of the Registrable Securities,
      the Company shall furnish, on the date that Registrable Securities are delivered
      to an underwriter, if any, for sale in connection with any Registration
      Statement or, if such securities are not being sold by an underwriter, on the
      date of effectiveness thereof: (i) an opinion, dated as of such date, from
      counsel representing the Company for purposes of such Registration Statement,
      in
      form, scope and substance as is customarily given in an underwritten public
      offering, addressed to the underwriters, if any, and the Purchasers and
      (ii) a letter, dated such date, from the Company’s independent registered
      public accounting firm in form and substance as is customarily given by
      independent certified public accountants to underwriters in an underwritten
      public offering, addressed to the underwriters, if any, and the
      Purchasers.

     

    (j) The
      Company shall make available for inspection by: (i) any Purchaser,
      (ii) any underwriter participating in any disposition pursuant to a
      Registration Statement, (iii) one firm of attorneys and one firm of
      accountants or other agents retained by the Purchasers and (iv) one firm of
      attorneys retained by all such underwriters (collectively, the “Inspectors”)
      all
      pertinent financial and other records, and pertinent corporate documents and
      properties of the Company, including without limitation, records of conversions
      by other holders of convertible securities issued by the Company and the
      issuance of stock to such holders pursuant to the conversions (collectively,
      the
“Records”),
      as
      shall be reasonably deemed necessary by each Inspector to enable each Inspector
      to exercise its due diligence responsibility, and cause the Company’s officers,
      directors and employees to supply all information which any Inspector may
      reasonably request for purposes of such due diligence; provided,
      however,
      that
      each Inspector shall hold in confidence and shall not make any disclosure
      (except to a Purchaser) of any Record or other information which the Company
      determines in good faith to be confidential, and of which determination the
      Inspectors are so notified, unless: (a) the disclosure of such Records is
      necessary to avoid or correct a misstatement or omission in any Registration
      Statement, (b) the release of such Records is ordered pursuant to a
      subpoena or other order from a court or government body of competent
      jurisdiction, or (c) the information in such Records has been made
      generally available to the public other than by disclosure in violation of
      this
      or any other agreement. The Company shall not be required to disclose any
      confidential information in such Records to any Inspector until and unless
      such
      Inspector shall have entered into confidentiality agreements (in form and
      substance satisfactory to the Company) with the Company with respect thereto,
      substantially in the form of this Section 3(j). Each Purchaser agrees that
      it
      shall, upon learning that disclosure of such Records is sought in or by a court
      or governmental body of competent jurisdiction or through other means, give
      prompt notice to the Company and allow the Company, at its expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, the Records deemed confidential. Nothing herein (or in any other
      confidentiality agreement between the Company and any Purchaser) shall be deemed
      to limit the Purchaser’s ability to sell Registrable Securities in a manner
      which is otherwise consistent with applicable laws and regulations.

     

    
      
        
        

      

      
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    (k) The
      Company shall hold in confidence and not make any disclosure of information
      concerning a Purchaser provided to the Company unless: (i) disclosure of
      such information is necessary to comply with federal or state securities laws,
      (ii) the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release
      of such information is ordered pursuant to a subpoena or other order from a
      court or governmental body of competent jurisdiction, or (iv) such
      information has been made generally available to the public other than by
      disclosure in violation of this or any other agreement. The Company agrees
      that
      it shall, upon learning that disclosure of such information concerning a
      Purchaser is sought in or by a court or governmental body of competent
      jurisdiction or through other means, give prompt notice to such Purchaser prior
      to making such disclosure, and allow the Purchaser, at its expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, such information.

     

    (l) The
      Company shall cause all the Registrable Securities covered by the Registration
      Statement to be listed on each national securities exchange or quotation system
      on which securities of the same class or series issued by the Company are then
      listed, if any, if the listing of such Registrable Securities is then permitted
      under the rules of such exchange or system.

     

    (m) The
      Company shall provide a transfer agent and registrar, which may be a single
      entity, for the Registrable Securities not later than the effective date of
      the
      Registration Statement.

     

    (n) The
      Company shall cooperate with the Purchasers who hold Registrable Securities
      being offered and the managing underwriter or underwriters, if any, to
      facilitate the timely preparation and delivery of certificates (not bearing
      any
      restrictive legends) representing Registrable Securities to be offered pursuant
      to a Registration Statement and enable such certificates to be in such
      denominations or amounts, as the case may be, as the managing underwriter or
      underwriters, if any, or the Purchasers may reasonably request and registered
      in
      such names as the managing underwriter or underwriters, if any, or the
      Purchasers may request. Within three (3) business days after a Registration
      Statement which includes Registrable Securities is ordered effective by the
      SEC,
      the Company shall deliver, and shall cause legal counsel selected by the Company
      to deliver, to the transfer agent for the Registrable Securities (with copies
      to
      the Purchasers whose Registrable Securities are included in such Registration
      Statement) a customary instruction letter and opinion of such counsel to
      facilitate the timely preparation and delivery of certificates (not bearing
      any
      restrictive legends) representing Registrable Securities. 

     

    
      
        
        

      

      
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    (o) At
      the
      request of the holders of a majority-in-interest of the Registrable Securities,
      the Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      any
      prospectus used in connection with the Registration Statement as may be
      necessary in order to change the plan of distribution set forth in such
      Registration Statement.

     

    (p) From
      and
      after the date of this Agreement, the Company shall not, and shall not agree
      to,
      allow the holders of any securities of the Company to include any of their
      securities in any Registration Statement under Section 2(a) hereof or any
      amendment or supplement thereto under Section 3(b) hereof without the consent
      of
      the holders of a majority-in-interest of the Registrable
      Securities.

     

    (q) The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Purchasers of Registrable Securities pursuant
      to a
      Registration Statement.

     

    4. Obligations
      of the Purchasers.
      In
      connection with the registration of the Registrable Securities, the Purchasers
      shall have the following obligations:

     

    (a) It
      shall
      be a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of a particular Purchaser that such Purchaser shall furnish to the
      Company such information regarding itself, the Registrable Securities held
      by it
      and the intended method of disposition of the Registrable Securities held by
      it
      as shall be reasonably required to effect the registration of such Registrable
      Securities and shall execute such documents in connection with such registration
      as the Company may reasonably request. At least three (3) business days prior
      to
      the first anticipated filing date of the Registration Statement, the Company
      shall notify each Purchaser of the information the Company requires from each
      such Purchaser. 

     

    (b) Each
      Purchaser, by such Purchaser’s acceptance of the Registrable Securities, agrees
      to cooperate with the Company as reasonably requested by the Company in
      connection with the preparation and filing of the Registration Statements
      hereunder, unless such Purchaser has notified the Company in writing of such
      Purchaser’s election to exclude all of such Purchaser’s Registrable Securities
      from the Registration Statements.

     

    
      
        
        

      

      
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    (c) In
      the
      event Purchasers holding a majority-in-interest of the Registrable Securities
      being registered (with the approval of the Purchasers) determine to engage
      the
      services of an underwriter, each Purchaser agrees to enter into and perform
      such
      Purchaser’s obligations under an underwriting agreement, in usual and customary
      form, including, without limitation, customary indemnification and contribution
      obligations, with the managing underwriter of such offering and take such other
      actions as are reasonably required in order to expedite or facilitate the
      disposition of the Registrable Securities, unless such Purchaser has notified
      the Company in writing of such Purchaser’s election to exclude all of such
      Purchaser’s Registrable Securities from such Registration
      Statement.

     

    (d) Each
      Purchaser agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(e) or 3(f), such
      Purchaser will immediately discontinue disposition of Registrable Securities
      pursuant to the Registration Statement covering such Registrable Securities
      until such Purchaser’s receipt of the copies of the supplemented or amended
      prospectus contemplated by Section 3(e) or 3(f) and, if so directed by the
      Company, such Purchaser shall deliver to the Company (at the expense of the
      Company) or destroy (and deliver to the Company a certificate of destruction)
      all copies in such Purchaser’s possession, of the prospectus covering such
      Registrable Securities current at the time of receipt of such
      notice.

     

    (e) No
      Purchaser may participate in any underwritten registration hereunder unless
      such
      Purchaser: (i) agrees to sell such Purchaser’s Registrable Securities on
      the basis provided in any underwriting arrangements in usual and customary
      form
      entered into by the Company, (ii) completes and executes all
      questionnaires, powers of attorney, indemnities, underwriting agreements and
      other documents reasonably required under the terms of such underwriting
      arrangements, and (iii) agrees to pay its pro rata share of all
      underwriting discounts and commissions and any expenses in excess of those
      payable by the Company pursuant to Section 5 below.

     

    5. Expenses
      of Registration.
      All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3, including, without limitation, all registration, listing and
      qualification fees (including, without limitation, all “blue sky” fees and
      expenses and the fees associated with the review of any Registration Statement
      and related offering by the National Association of Securities Dealers, Inc.),
      printers and accounting fees, the fees and disbursements of counsel for the
      Company, and the reasonable fees and disbursements of one counsel selected
      by
      the Purchasers pursuant to Sections 2(b) and 3(j) hereof shall be borne by
      the
      Company.

     

    6. Indemnification.
      In the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

     

    (a) To
      the
      extent permitted by law, the Company will indemnify, hold harmless and defend:
      (i) each Purchaser who holds such Registrable Securities, (ii) the
      directors, officers, partners, employees, agents and each person who controls
      any Purchaser within the meaning of the 1933 Act or the Securities Exchange
      Act
      of 1934, as amended (the “1934
      Act”),
      if
      any, (iii) any underwriter (as defined in the 1933 Act) for the Purchasers,
      and (iv) the directors, officers, partners, employees and each person who
      controls any such underwriter within the meaning of the 1933 Act or the 1934
      Act, if any (each, an “Indemnified
      Person”),
      against any joint or several losses, claims, damages, liabilities or expenses
      (collectively, together with actions, proceedings or inquiries by any regulatory
      or self-regulatory organization, whether commenced or threatened, in respect
      thereof, “Claims”)
      to
      which any of them may become subject insofar as such Claims arise out of or
      are
      based upon: (i) any untrue statement or alleged untrue statement of a material
      fact in a Registration Statement or the omission or alleged omission to state
      therein a material fact required to be stated or necessary to make the
      statements therein not misleading; (ii) any untrue statement or alleged untrue
      statement of a material fact contained in any preliminary prospectus if used
      prior to the effective date of such Registration Statement, or contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading; or (iii) any violation or alleged violation by the Company
      of the 1933 Act, the 1934 Act, any other law, rule or regulation, including,
      without limitation, any state securities law, or any rule or regulation
      thereunder relating to the offer or sale of the Registrable Securities (the
      matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”).
      Subject to the restrictions set forth in Section 6(c) with respect to the number
      of legal counsel, the Company shall reimburse the Indemnified Person, promptly
      as such expenses are incurred and are due and payable, for any reasonable legal
      fees or other reasonable expenses incurred by them in connection with
      investigating or defending any such Claim. Notwithstanding anything to the
      contrary contained herein, the indemnification agreement contained in this
      Section 6(a): (i) shall not apply to a Claim arising out of or based upon a
      Violation which occurs in reliance upon and in conformity with information
      furnished in writing to the Company by any Indemnified Person or underwriter
      for
      such Indemnified Person expressly for use in connection with the preparation
      of
      such Registration Statement or any such amendment thereof or supplement thereto;
      (ii) shall not apply to amounts paid in settlement of any Claim if such
      settlement is effected without the prior written consent of the Company, which
      consent shall not be unreasonably withheld; and (iii) with respect to any
      preliminary prospectus, shall not inure to the benefit of any Indemnified Person
      if the untrue statement or omission of material fact contained in the
      preliminary prospectus was corrected on a timely basis in the prospectus, as
      then amended or supplemented. Such indemnity shall remain in full force and
      effect regardless of any investigation made by or on behalf of the Indemnified
      Person and shall survive the transfer of the Registrable Securities by the
      Purchasers pursuant to Section 9.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (b) In
      connection with any Registration Statement in which a Purchaser is
      participating, each such Purchaser agrees severally and not jointly to
      indemnify, hold harmless and defend, to the same extent and in the same manner
      set forth in Section 6(a), the Company, each of its directors, each of its
      officers who signs the Registration Statement, each person, if any, who controls
      the Company within the meaning of the 1933 Act or the 1934 Act, any underwriter
      and any other stockholder selling securities pursuant to the Registration
      Statement or any of its directors or officers or any person who controls such
      stockholder or underwriter within the meaning of the 1933 Act or the 1934 Act
      (collectively and together with an Indemnified Person, an “Indemnified
      Party”),
      against any Claim to which any of them may become subject, under the 1933 Act,
      the 1934 Act or otherwise, insofar as such Claim arises out of or is based
      upon
      any Violation by such Purchaser, in each case to the extent (and only to the
      extent) that such Violation occurs in reliance upon and in conformity with
      written information furnished to the Company by such Purchaser expressly for
      use
      in connection with such Registration Statement; and subject to Section 6(c)
      such
      Purchaser will reimburse any legal or other expenses (promptly as such expenses
      are incurred and are due and payable) reasonably incurred by them in connection
      with investigating or defending any such Claim; provided,
      however,
      that
      the indemnity agreement contained in this Section 6(b) shall not apply to
      amounts paid in settlement of any Claim if such settlement is effected without
      the prior written consent of such Purchaser, which consent shall not be
      unreasonably withheld; provided,
      further,
      however,
      that
      the Purchaser shall be liable under this Agreement (including this Section
      6(b)
      and Section 7) for only that amount as does not exceed the net proceeds to
      such
      Purchaser as a result of the sale of Registrable Securities pursuant to such
      Registration Statement. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such Indemnified Party
      and shall survive the transfer of the Registrable Securities by the Purchasers
      pursuant to Section 9. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(b) with
      respect to any preliminary prospectus shall not inure to the benefit of any
      Indemnified Party if the untrue statement or omission of material fact contained
      in the preliminary prospectus was corrected on a timely basis in the prospectus,
      as then amended or supplemented.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c) Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action (including any governmental action),
      such Indemnified Person or Indemnified Party shall, if a Claim in respect
      thereof is to be made against any indemnifying party under this Section 6,
      deliver to the indemnifying party a written notice of the commencement thereof,
      and the indemnifying party shall have the right to participate in, and, to
      the
      extent the indemnifying party so desires, jointly with any other indemnifying
      party similarly noticed, to assume control of the defense thereof with counsel
      mutually satisfactory to the indemnifying party and the Indemnified Person
      or
      the Indemnified Party, as the case may be; provided,
      however,
      that an
      Indemnified Person or Indemnified Party shall have the right to retain its
      own
      counsel with the fees and expenses to be paid by the indemnifying party, if,
      in
      the reasonable opinion of counsel retained by the indemnifying party, the
      representation by such counsel of the Indemnified Person or Indemnified Party
      and the indemnifying party would be inappropriate due to actual or potential
      differing interests between such Indemnified Person or Indemnified Party and
      any
      other party represented by such counsel in such proceeding. The indemnifying
      party shall pay for only one separate legal counsel for the Indemnified Persons
      or the Indemnified Parties, as applicable, and such legal counsel shall be
      selected by Purchasers holding a majority-in-interest of the Registrable
      Securities included in the Registration Statement to which the Claim relates
      (with the approval of a majority-in-interest of the Purchasers), if the
      Purchasers are entitled to indemnification hereunder, or the Company, if the
      Company is entitled to indemnification hereunder, as applicable. The failure
      to
      deliver written notice to the indemnifying party within a reasonable time of
      the
      commencement of any such action shall not relieve such indemnifying party of
      any
      liability to the Indemnified Person or Indemnified Party under this Section
      6,
      except to the extent that the indemnifying party is actually prejudiced in
      its
      ability to defend such action. The indemnification required by this Section
      6
      shall be made by periodic payments of the amount thereof during the course
      of
      the investigation or defense, as such expense, loss, damage or liability is
      incurred and is due and payable.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7. Contribution.
      To the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided,
      however,
      that:
      (i) no contribution shall be made under circumstances where the maker would
      not have been liable for indemnification under the fault standards set forth
      in
      Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
      be
      entitled to contribution from any seller of Registrable Securities who was
      not
      guilty of such fraudulent misrepresentation, and (iii) contribution (together
      with any indemnification or other obligations under this Agreement) by any
      seller of Registrable Securities shall be limited in amount to the net amount
      of
      proceeds received by such seller from the sale of such Registrable
      Securities.

     

    8. Reports
      Under the 1934 Act.
      With a
      view to making available to the Purchasers the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the investors to sell securities of the Company to the public
      without registration (“Rule
      144”),
      the
      Company agrees to:

     

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    (b) use
      its
      best efforts to file with the SEC in a timely manner all reports and other
      documents required of the Company under the 1933 Act and the 1934 Act so long
      as
      the Company remains subject to such requirements (it being understood that
      nothing herein shall limit the Company’s obligations under Section 4(c) of the
      Securities Purchase Agreement) and the filing of such reports and other
      documents is required for the applicable provisions of Rule 144;
      and

     

    (c) furnish
      to each Purchaser so long as such Purchaser owns Registrable Securities,
      promptly upon request: (i) a written statement by the Company that it has
      complied with the reporting requirements of Rule 144, the 1933 Act and the
      1934
      Act and (ii)  such other information as may be reasonably requested to
      permit the Purchasers to sell such securities pursuant to Rule 144 without
      registration.

     

    9. Assignment
      of Registration Rights.
      The
      rights under this Agreement shall be automatically assignable by the Purchasers
      to any transferee of all or any portion of Registrable Securities if:
      (i) the Purchaser agrees in writing with the transferee or assignee to
      assign such rights, and a copy of such agreement is furnished to the Company
      promptly after such assignment, (ii) the Company is, promptly after such
      transfer or assignment, furnished with written notice of (a) the name and
      address of such transferee or assignee, and (b) the securities with respect
      to which such registration rights are being transferred or assigned, (iii)
      following such transfer or assignment, the further disposition of such
      securities by the transferee or assignee is restricted under the 1933 Act and
      applicable state securities laws, (iv) at or before the time the Company
      receives the written notice contemplated by clause (ii) of this sentence, the
      transferee or assignee agrees in writing with the Company to be bound by all
      of
      the provisions contained herein, (v) such transfer shall have been made in
      accordance with the applicable requirements of the Securities Purchase
      Agreement, and (vi) such transferee shall be an “accredited investor” as that
      term defined in Rule 501 of Regulation D promulgated under the 1933
      Act.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    10. Amendment
      of Registration Rights.
      The
      terms and provisions of this Agreement may be amended and the observance thereof
      may be waived (either generally or in a particular instance and either
      retroactively or prospectively), only with written consent of the Company and
      Purchasers who hold a majority interest of the Registrable Securities. Any
      amendment or waiver effected in accordance with this Section 10 shall be binding
      upon each Purchaser and the Company.

     

    11. Miscellaneous.

     

    (a) A
      person
      or entity is deemed to be a holder of Registrable Securities whenever such
      person or entity owns of record such Registrable Securities. If the Company
      receives conflicting instructions, notices or elections from two or more persons
      or entities with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the
      registered owner of such Registrable Securities.

     

    (b) Any
      notices required or permitted to be given under the terms hereof shall be sent
      by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile and shall be effective five days after being placed in the mail,
      if
      mailed by regular United States mail, or upon receipt, if delivered personally
      or by courier (including a recognized overnight delivery service) or by
      facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

     

    (i)    If
      to the
      Company:

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Lobby Level

    White
      Plains, New York 10604

    Attention:
      James D. Burchetta

    Telephone:
      (914) 949-5500

    Facsimile:
      (914) 428-3044

     

    With
      a
      copy to:

     

    Greenberg
      Traurig LLP

    MetLife
      Building

    200
      Park
      Avenue, 15th Floor

    New
      York,
      NY 10166

    Attention:
      Spencer G. Feldman, Esq.

    Telephone:
      (212) 801-9200

    Facsimile:
      (212) 801-6400

     

    (ii)   If
      to a
      Purchaser:  To
      the
      address and fax number set forth immediately below such Purchaser’s name on the
      signature pages to the Securities Purchase Agreement.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    With
      copy
      to:

     

    Capital
      Growth Financial, Inc.

    225
      NE
      Mizner Boulevard, Suite #750 

    Boca
      Raton, FL 33432 

    Attention:
      Alan Jacobs

    Telephone:
      (561) 417-5680

    Facsimile:
      (561) 417-5680

    

    and

    

    Maxim
      Group LLC

    405
      Lexington Avenue

    New
      York,
      NY 10174 

    Attention:
      Clifford A. Teller

    Telephone:
      (212) 895-3500

    Facsimile:
      (212) 895-3783

     

    Each
      party shall provide notice to the other party of any change in
      address.

     

    (c) Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    (d) THIS
      AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
      LAW. 

     

    (e) THE
      PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE NEW YORK
      STATE
      OR UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
      TO
      ANY DISPUTE ARISING UNDER THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
      HEREBY. THE PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM
      TO
      THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. THE PARTIES FURTHER AGREE THAT
      SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
      IN
      EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT
      OR
      PROCEEDING. NOTHING HEREIN SHALL AFFECT A PARTY’S RIGHT TO SERVE PROCESS IN ANY
      OTHER MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE
      JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
      IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.
      

     

    (f) THE
      PARTY
      OR PARTIES WHICH DO NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT
      SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES,
      INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (g) EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
      HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
      TRANSACTION CONTEMPLATED HEREBY.

     

    (h) In
      the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

     

    (i) This
      Agreement and the other Transaction Documents (including all schedules and
      exhibits thereto) constitute the entire agreement among the parties hereto
      with
      respect to the subject matter hereof and thereof. There are no restrictions,
      promises, warranties or undertakings, other than those set forth or referred
      to
      herein and therein. This Agreement and the Securities Purchase Agreement
      supersede all prior agreements and understandings among the parties hereto
      with
      respect to the subject matter hereof and thereof.

     

    (j) Subject
      to the requirements of Section 9 hereof, this Agreement shall be binding upon
      and inure to the benefit of the parties and their successors and
      assigns.

     

    (k) The
      headings in this Agreement are for convenience of reference only and shall
      not
      form part of, or affect the interpretation of, this Agreement.

     

    (l) This
      Agreement may be executed in one or more counterparts (with the Purchasers
      each
      executing the counterpart in the form of Annex
      A
      hereto),
      each of which shall be deemed an original but all of which shall constitute
      one
      and the same agreement and shall become effective when counterparts have been
      signed by each party and delivered to the other party. This Agreement, once
      executed by a party, may be delivered to the other party hereto by facsimile
      transmission of a copy of this Agreement bearing the signature of the party
      so
      delivering this Agreement.

     

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

     

    (n) Except
      as
      otherwise provided herein, all consents and other determinations to be made
      by
      the Purchasers pursuant to this Agreement shall be made by Purchasers holding
      a
      majority of the Registrable Securities, determined as if the all of the Notes
      then outstanding have been converted into Registrable Securities.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (o) The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to each Purchaser by vitiating the intent and purpose of the
      transactions contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for breach of its obligations under this Agreement will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of any of the provisions under this Agreement, that each Purchaser
      shall
      be entitled, in addition to all other available remedies in law or in equity,
      and in addition to the penalties assessable herein, to an injunction or
      injunctions restraining, preventing or curing any breach of this Agreement
      and
      to enforce specifically the terms and provisions hereof, without the necessity
      of showing economic loss and without any bond or other security being
      required.

     

    (p) The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    [Remainder
      of page intentionally left blank; signature pages
      follow.]

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

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

              Name:
                James D. Burchetta

              Title:
                Co-chairman, President and CEO

            
	 	 	 
	 	
              PURCHASERS: 

               

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

            

    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Annex
      A

    

    Registration
      Rights Agreement

    Purchaser
      Counterpart Signature Page

    

    The
      undersigned, desiring to: enter into this Registration Rights Agreement dated
      as
      of _________________ ___, 2006 (the “Agreement”),
      between the undersigned, Debt Resolve, Inc., a Delaware corporation (the
“Company”),
      and
      the other parties thereto, in or substantially in the form furnished to the
      undersigned, hereby agrees to join the Agreement as a party thereto, with all
      the rights and privileges appertaining thereto, and to be bound in all respects
      by the terms and conditions thereof.

     

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed the Agreement as of _________________ ___,
      2006.

     

    
      	 	
              PURCHASER: 

            
	 	 
	 	
              Name
                and Address, Fax No. and Social 
Security No./EIN of
                Purchaser: 

            
	 	
            
	 	
              
  
	 	
              
 
	 	
              
 
	 	
              
  
	 	Fax No.:
              _______________________________________
	 	 
	 	
              Soc.
                Sec. No./EIN:
                ________________________________

            
	 	 
	 	
              If
                a partnership, corporation, trust or other business 
                entity: 

            
	 	 	 
	 	 	 
	 	By:  	 
	 	 	
              

              Name:

              
                Title: 

              

            
	 	 	 
	 	
              If 
                an individual: 

            
	 	 
	 	 
	 	
              

              Signature  

            

    

     

    
      
        
        

      

      
        18Unassociated Document

    EXHIBIT
      10.3

     

    SECURITY
      AGREEMENT

    

    THIS
      SECURITY AGREEMENT
      (this
“Agreement”)
      is
      made and entered into by and among Debt Resolve, Inc., a Delaware corporation,
      with its principal executive offices located at 707 Westchester Avenue, Suite
      L7, White Plains, New York 10604 (the “Company”),
      CAMOFI Master LDC, a Cayman Islands limited duration company (the “Agent”),
      and
      each of the purchasers set forth on the counterpart signature pages hereto
      (the
“Purchasers,”
and
      each a “Secured
      Party”
or
      together the “Secured
      Parties”),
      and
      is dated with respect to each of the Purchasers as of the date noted on each
      such Purchaser’s counterpart signature page.

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the “Securities
      Purchase Agreement”),
      the
      Company has agreed, upon the terms and subject to the conditions contained
      therein, to issue and sell to the Purchasers (i) 15% senior secured convertible
      promissory notes, or 15% senior secured promissory notes in the case of one
      Purchaser, of the Company in the aggregate principal amount of up to Four
      Million Dollars ($4,000,000), which includes a $1,000,000 over-allotment option
      (together with any note(s) issued in replacement thereof or as a dividend
      thereon or otherwise with respect thereto in accordance with the terms thereof,
      the “Notes”),
      a
      portion of which Notes is convertible into shares of common stock, par value
      $.001 per share, of the Company (the “Common
      Stock”),
      and
      (ii) warrants to purchase shares of Common Stock of the Company (the
“Warrants”);
      and

     

    WHEREAS,
      in
      order to induce the Purchasers to purchase the Notes and Warrants, the Company
      has agreed to grant the Purchasers a first priority security interest in all
      of
      the Company’s Collateral listed in Exhibit
      A
      hereto,
      and to that end has required the execution and delivery of this Agreement by
      the
      Company.

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and each of the Purchasers hereby agree as
      follows:

     

    1. Incorporation
      of Recitals.
      The
      foregoing Recitals are hereby incorporated herein in their entirety by this
      reference.

    

    2. Definitions.
      The
      following terms shall have the meanings set forth below:

    

    “Collateral”
shall
      mean all of the items set forth on Exhibit
      A
      hereto.

    

    “Patents”
shall
      mean, collectively, all of the Company’s letters patent under the laws of the
      United States, all recordings and registrations thereof and applications
      therefor, including, without limitation, the inventions described therein,
      all
      reissues, continuations, divisions, renewals, extensions, continuations-in-part
      thereof, in each case whether now owned or existing or hereafter acquired or
      arising.

    

    “Permitted
      Liens”
shall
      mean, collectively, the following: (i) liens for current taxes or other
      governmental or regulatory assessments which are not delinquent, or which are
      being contested in good faith by the appropriate procedures and for which
      appropriate reserves are maintained; (ii) liens in favor of the Agent and/or
      the
      Secured Parties; and (iii) licenses or sublicenses of Patents, in each instance
      granted to others not interfering in any material respect with the business
      of
      the Company. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Proceeds”
shall
      mean any consideration received from the sale, exchange, lease or other
      disposition of any asset or property which constitutes Collateral, any other
      value received as a consequence of the possession of any Collateral and any
      payment received from any insurer or other person or entity as a result of
      the
      destruction, loss, theft or other involuntary conversion of whatever nature
      of
      any asset or property that constitutes Collateral.

    

    “Secured
      Obligations”
has
      the
      meaning given in Section 3(a) below.

    

    “Security
      Interest”
has
      the
      meaning given in Section 3(b) below.

    

    3. Security
      for Obligations.

    

    (a) This
      Agreement secures, and the Collateral is collateral security for, the prompt
      payment or performance in full when due, whether at stated maturity, by required
      prepayment, declaration, acceleration, conversion, demand or otherwise
      (including the payment of amounts that would become due but for the operation
      of
      the automatic stay under Section 363(a) of the Bankruptcy Code, 11 U.S.C.
§362(a)) of all obligations and liabilities of every nature of the Company now
      or hereafter existing under or arising out of the Notes, and this Agreement
      and
      all extensions or renewals thereof, whether for principal, interest, (including,
      without limitation, interest that, but for the filing of a petition in
      bankruptcy with respect to the Company, would accrue on such obligations),
      fees,
      expenses, indemnities or otherwise, whether voluntary or involuntary, direct
      or
      indirect, absolute or contingent, liquidated or unliquidated, whether or not
      jointly owed with others, and whether or not from time to time decreased or
      extinguished and later increased, created or incurred, and all or any portion
      of
      such obligations or liabilities that are paid, to the extent all or any part
      of
      such payment is avoided or recovered directly or indirectly from the Agent
      or
      any Secured Party as a preference, fraudulent transfer or otherwise (all such
      obligations of the Company being the “Secured
      Obligations”).

    

    (b) Security
      Interest.
      As
      security for the payment or performance, as the case may be, of the Secured
      Obligations, the Company hereby creates and grants to the Agent, its successors
      and its assigns, for its own benefit and for the pro rata benefit of the
      Purchasers, their successors and their assigns, a security interest in the
      Collateral (the “Security
      Interest”).
      Without limiting the foregoing, the Agent is hereby authorized to file one
      or
      more financing statements, continuation statements or other documents for the
      purpose of perfecting, confirming, continuing, enforcing or protecting the
      Security Interest, naming the Company as debtors and the Agent as secured
      party.

    

    The
      Company agrees at all times to keep in all material respects accurate and
      complete accounting records with respect to the Collateral, including, but
      not
      limited to, a record of all payments and Proceeds received.

    

    4. Representations
      and Warranties.
      The
      Company represents and warrants as follows:

    

    (a) Financing
      Statements.
      Except
      for the financing statements in favor of Secured Parties, at the time of
      granting the security interest described herein, no financing statement covering
      the Collateral or any portion thereof will be on file in any public office,
      and
      except for Permitted Liens, the Company agrees not to execute or authorize
      the
      filing of any such additional financing statement in favor of any person, entity
      or governmental agency (whether federal, state or local) other than Secured
      Parties as long as any portion of the Secured Obligations evidenced by the
      Notes
      remain unpaid.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) Legal
      Name.
      The
      Company’s exact legal name is as set forth in the first paragraph of this
      Security Agreement. The Company shall not change its legal name or its form
      of
      organization without 30 days’ prior written notice to the Agent.

    

    (c) Title
      and Authority.
      The
      Company has (i) rights in and good title to the Collateral in which it is
      granting a security interest hereunder and (ii) the requisite corporate power
      and authority to grant to the Agent the Security Interest in such Collateral
      pursuant hereto and to execute, deliver and perform its obligations in
      accordance with the terms of this Agreement, without the consent or approval
      of
      any other person other than any consent or approval which has been obtained.
      The
      Company has the sole, full and clear title to each of the Patents shown on
      Schedule
      A
      hereto
      and the registrations thereof are valid and subsisting and in full force and
      effect. None of the Patents has been abandoned or dedicated, and, except to
      the
      extent that the Agent, upon prior written notice by the Company, shall consent,
      the Company will not do any act, or omit to do any act, whereby the Patents
      may
      become abandoned or dedicated and shall notify the Agent immediately if it
      knows
      of any reason or has reason to know that any application or registration may
      become abandoned or dedicated. The Company hereby represents and warrants that
      the Patents shown on Schedule
      A
      are the
      only issued U.S. patents owned by the Company as of the date of this
      Agreement.

    

    (d) Filing.
      Fully
      executed Uniform Commercial Code financing statements containing a description
      of the Collateral shall have been, or shall be delivered to the Agent in a
      form
      such that they can be, filed of record in every governmental, municipal or
      other
      office in every jurisdiction in which any portion of the Collateral is located
      necessary to publish notice of and protect the validity of and to establish
      a
      valid, legal and perfected security interest in favor of the Agent in respect
      of
      the Collateral in which a security interest may be perfected by filing in the
      United States and its territories and possessions, and no further or subsequent
      filing, refiling, recording, rerecording, registration or reregistration is
      necessary in any such jurisdiction, except as provided under applicable law
      with
      respect to the filing of Uniform Commercial Code continuation
      statements.

     

    (e) Validity
      of Security Interest.
      The
      Security Interest constitutes a valid, legal and perfected first priority
      security interest in all of the Collateral for payment and performance of the
      Secured Obligations subject only to Permitted Liens.

    

    (f) Locations
      of Collateral; Place of Business.
      The
      Company hereby represents and warrants that all the Collateral is located at
      the
      locations listed on Schedule
      A
      hereto
      and that its federal employer identification number is as set forth on said
      Schedule. The Company agrees not to establish, or permit to be established,
      any
      other location for Collateral unless all filings under the Uniform Commercial
      Code as in effect in any state or otherwise which are required by this Agreement
      or the Notes to be made with respect to the Collateral have been made and the
      Agent has a valid, legal and perfected first priority security interest in
      the
      Collateral. The Company confirms that its chief executive office is located
      at
      the office indicated on Schedule
      A
      hereto.
      The Company agrees not to change, or permit to be changed, the location of
      its
      chief executive office unless all filings under the Uniform Commercial Code
      or
      otherwise which are required by this Agreement or the Notes to be made have
      been
      made and the Agent has a valid, legal and perfected first priority security
      interest.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (g) Incorporation
      by Reference.
      The
      Company hereby makes to each Secured Party all of the representations and
      warranties of the Company contained in the Securities Purchase Agreement, which
      representations and warranties are incorporated by reference herein as if fully
      set forth herein.

     

    Covenants
      and Agreements.
      The
      Company covenants and agrees as follows:

    

    (a) Restrictions.
      The
      Company agrees that until the Secured Obligations shall have been satisfied
      in
      full, the Company shall not, without the Agent’s prior written consent, assign,
      transfer, encumber or otherwise dispose of the Collateral, or any interest
      therein, except that the Company may (i) license (other than on an exclusive
      basis for all known fields of use for the duration of the term of the Patent)
      or
      grant similar rights and interests on an arm’s length basis consistent with good
      industry practice in all or any part of the Patents to unrelated third parties
      pursuant to its business, (ii) sell, license on an exclusive basis for all
      known
      fields of use for the duration of the term of the Patent or otherwise transfer
      for value all or any part of the Patents with the prior written consent of
      the
      Agent, which consent will not be unreasonably withheld, provided that the
      restriction on exclusive licenses shall terminate beginning on the date that
      more than one-half of the principal amount of the Notes secured by the
      Collateral has been repaid by the Company or has been converted to Common Stock
      and (iii) sell inventory in the ordinary course of business or sell obsolete
      equipment or inventory for the reasonable fair value thereof. The Company
      further agrees that it will not take any action, or permit any action to be
      taken by others subject to its control, including licensees, or fail to take
      any
      action, which would affect the validity or enforcement of the rights transferred
      to the Secured Parties under this Agreement.

    

    (b) Defense.
      The
      Company shall, at its own cost and expense, take any and all actions reasonably
      necessary to defend title to the Collateral owned by it against all persons
      and
      to defend the Security Interest in such Collateral, and the priority thereof,
      against any adverse lien of any nature whatsoever (other than Permitted
      Liens).

    

    (c) Maintenance.
      The
      Company shall at all times and at its own expense maintain and keep, or cause
      to
      be maintained and kept, the Collateral. The
      Company will keep the Collateral in good order and repair, and will not waste
      or
      destroy the Collateral or any part hereof, and will make any needful and proper
      repairs, renewals, replacements or improvements so that its business may at
      all
      times be properly and advantageously conducted, and will not use the Collateral
      in violation of any applicable statute, ordinance or policy of insurance
      thereon. Upon prior written notice to the Company, the Agent may enter on the
      Company’s property and may examine and inspect the Collateral or the Company’s
      books, records, papers and journals at any reasonable time or times, wherever
      located. The
      Company shall perform all acts and execute all documents, including, without
      limitation, security agreements with respect to Patents in form suitable for
      filing with the United States Patent and Trademark Office hereof requested
      by
      the Agent at any time to evidence, perfect, maintain, record and enforce the
      Agent’s interest in the Collateral that consists of Patents or otherwise in
      furtherance of the provisions of this Agreement, and the Company hereby
      authorizes the Agent to execute and file one or more financing statements (and
      similar documents) or copies thereof or of this Agreement with respect to the
      Collateral signed only by the Agent. The Company will take all necessary steps
      in any proceeding before the United States Patent and Trademark Office or any
      similar office or agency of the United States or any State thereof to maintain
      each application and registration of the Patents, including, without limitation,
      filing of renewals, affidavits of use, affidavits of incontestability and
      opposition, interference and cancellation proceedings.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (d) Agent’s
      Right to Take Action.
      If,
      after ten days written notice from the Agent, the Company fails to perform
      or
      observe any of its covenants or agreements set forth in this Section 5 or
      if the Company notifies the Agent that it intends to abandon all or any part
      of
      the Collateral, the Agent may (but need not) perform or observe such covenant
      or
      agreement or take steps to prevent such intended abandonment on behalf and
      in
      the name, place, and stead of the Company (or, in the case of intended
      abandonment, in the Agent’s own name) and may (but need not) take any and all
      other actions that the Agent may reasonably deem necessary to cure or correct
      such failure or prevent such intended abandonment. 

    

    (e) Costs
      and Expenses.
      Except
      to the extent that the effect of such payment would be to render any loan or
      forbearance of money usurious or otherwise illegal under any applicable law,
      the
      Company shall pay the Agent on demand the amount of all moneys expended and
      all
      costs and expenses (including reasonable attorneys’ fees and disbursements)
      incurred by the Agent or the Secured Parties in connection with or as a result
      of the Agent’s taking action under subsection 5(d), except for intended
      abandonment of the Collateral by the Company, or exercising its rights under
      Section 7, together with interest thereon from the date expended or incurred
      by
      the Agent or Secured Parties.

    

    (f) Use
      and Disposition of Collateral.
      The
      Company shall not make or permit to be made any assignment, pledge or
      hypothecation of the Collateral other than Permitted Liens or as permitted
      by
      Section 5(a) above, or grant any security interest in the Collateral except
      for
      the Security Interest and Permitted Liens. The Company shall not make or permit
      to be made any transfer of any Collateral, except in the ordinary course of
      business or as permitted by Section 5(a) above, and the Company shall remain
      at
      all times in possession of the Collateral owned by it other than transfers
      to
      the Agent pursuant to the provisions hereof and as otherwise provided in this
      Agreement. The Agent shall have the right, as the true and lawful agent of
      the
      Company, with power of substitution for the Company and in the Company’s name,
      the Agent’s name or otherwise, for the use and benefit of the Agent and the
      Purchasers and solely to effect the purposes of this Agreement, (i) to endorse
      the Company’s name upon any notes, acceptances, checks, drafts, money orders or
      other evidences of payment with respect to the Collateral that may come into
      its
      possession; (ii) to sign the name of the Company on any invoice relating to
      any
      of the Collateral and (iii) upon the occurrence and during the continuance
      of an
      event of default under this Agreement or under the Notes, (A) to receive,
      endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
      money orders or other evidences or instruments of payment relating to the
      Collateral or any part thereof, and the Company hereby waives notice of
      presentment, protest and non-payment of any instrument so endorsed, (B) to
      demand, collect, receive payment of, give receipt for, extend the time of
      payment of and give discharges and releases of all or any of the Collateral
      and/or release the obligor thereon, (C) to commence and prosecute any and all
      suits, actions or proceedings at law or in equity in any court of competent
      jurisdiction to collect or otherwise realize on all or any of the Collateral
      or
      to enforce any rights in respect of any Collateral, (D) to settle, compromise,
      compound, adjust or defend any actions, suits or proceedings relating to or
      pertaining to all or any of the Collateral, and (H) to use, sell, assign,
      transfer, pledge, make any agreement with respect to or otherwise deal with
      all
      or any of the Collateral, and to do all other acts and things necessary to
      carry
      out the purposes of this Agreement, as fully and completely as though the Agent
      were the absolute owner of the Collateral for all purposes; provided,
      however,
      that
      nothing herein contained shall be construed as requiring or obligating the
      Agent
      or any Secured Party to make any commitment or to make any inquiry as to the
      nature or sufficiency of any payment received by the Agent or such Secured
      Party
      or to present or file any claim or notice, or to take any action with respect
      to
      the Collateral or any part thereof or the moneys due or to become due in respect
      thereof or any property covered thereby, and no action taken by the Agent or
      any
      Secured Party or omitted to be taken with respect to the Collateral or any
      part
      thereof shall give rise to any defense, counterclaim or offset in favor of
      the
      Company or to any claim or action against the Agent or any Secured Party in
      the
      absence of the gross negligence or willful misconduct of the Agent or such
      Secured Party; and provided further,
      that
      the Agent shall at all times act reasonably and in good faith. It is understood
      and agreed that the appointment of the Agent as the agent of the Company for
      the
      purposes set forth above in this Section 5(f) is coupled with an interest and
      is
      irrevocable. The provisions of this Section 5(f) shall in no event relieve
      the
      Company of any of its obligations hereunder with respect to the Collateral
      or
      any part thereof (other than obligations which are impaired as a result of
      actions taken by the Agent pursuant to this Section 5(f)) or impose any
      obligation on the Agent or any Secured Party to proceed in any particular manner
      with respect to the Collateral or any part thereof, or in any way limit the
      exercise by the Agent or any Secured Party of any other or further right which
      it may have on the date of this Agreement or hereafter, whether hereunder or
      by
      law or otherwise. Anytime action is taken under this Section 5(f), prompt
      written notice of such action shall be provided to the Company by the
      Agent.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (g) Further
      Assurances.
      The
      Company agrees, at its expense, to execute, acknowledge, deliver and cause
      to be
      duly filed all such further instruments and documents and take all such actions
      as the Agent may from time to time reasonably request for the assuring and
      preserving of the Security Interest and the rights and remedies created hereby,
      including, without limitation, the payment of any fees and taxes required in
      connection with the execution and delivery of this Agreement, the granting
      of
      the Security Interest and the filing of any financing statements or other
      documents in connection herewith. If any amount payable under or in connection
      with any of the Collateral shall be or become evidenced by any promissory note
      or other instrument, such note or instrument shall be promptly pledged and
      delivered to the Agent, duly endorsed in a manner satisfactory to the Agent.
      The
      Company agrees to notify promptly the Agent of any change in its corporate
      name
      or in the location of its chief executive office, its chief place of business
      or
      the office where it keeps its records. 

    

    (h) Subsidiaries.
      The
      Company has no subsidiaries at this time; however, should the Company form
      any
      subsidiaries during the term of this Agreement, the Company shall cause such
      subsidiaries to become a party to this Agreement and such subsidiaries’ assets
      shall be made a part of the Collateral hereunder.

     

    (i) Insurance.
      The
      Company shall, at its expense, keep the Collateral at all times insured in
      a
      commercially reasonable manner for full value with nationally recognized,
      reputable and sufficiently capitalized insurers. Such insurance shall not be
      cancelable or not renewed by the Company and the Company shall take all
      commercially reasonable actions to ensure that such insurance is not cancelled.
      All risk of loss of, damage to or destruction of the Collateral shall at all
      times be on the Company.

     

    (j) Written
      Statements.
      The
      Company will furnish to Agent from time to time, upon written request to the
      Company, written statements and schedules identifying and describing the
      Collateral and any additions thereto and substitutions thereof, in such detail
      as Agent may reasonably require, and will maintain books and records pertaining
      to the Collateral in such detail, form and scope as is customary in transactions
      such as this, and will advise Agent promptly and in sufficient detail of any
      substantial change in the Collateral and of the occurrence of any event which
      would have any material effect on the value of any of the Collateral or on
      the
      lien and security interest granted to the Secured Parties therein.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (k) Notice
      of Default.
      The
      Company shall promptly give notice to the Agent of the occurrence of any Event
      of Default (as defined in below) or of any event which could, with the giving
      of
      notice or the passage of time, or both, constitute an Event of
      Default.

     

    Events
      of Default.
      Each of
      the following occurrences shall constitute an event of default under this
      Agreement (herein called an “Event
      of Default”):
      

    

    (a) an
      Event
      of Default, as defined in the Notes, shall occur;

     

    (b) The
      Company shall fail promptly to observe or perform any covenant or agreement
      herein binding on it and such failure is not cured within 15 days after written
      notice from the Agent;

     

    (c) there
      is
      any levy, seizure, or attachment of all or any material portion of the
      Collateral, other than as set forth in this Agreement; or

     

    (d) any
      of
      the representations or warranties contained in Section 4 shall prove to have
      been incorrect in any material respect when made.

     

    Remedies.
      Upon
      the occurrence of an Event of Default and at any time thereafter, the Agent
      may,
      at its option, take any or all of the following actions:

    

    (a) exercise
      any or all remedies available under this Agreement or the Notes including,
      without limitation, any and all rights afforded to a secured party under, and
      subject to its obligations contained in, the Uniform Commercial Code as in
      effect in any state or other applicable law;

    

    (b) sell,
      assign, transfer, pledge, encumber, or otherwise dispose of the
      Collateral;

    

    (c) enforce
      the Patents comprising the Collateral and if the Agent shall commence any suit
      for such enforcement, the Company shall, at the request of the Agent, do any
      and
      all lawful acts and execute any and all proper documents reasonably required
      by
      the Agent in aid of such enforcement; or

    

    (d) incur
      expenses, including attorneys’ fees at the regular hourly rates of the Agent’s
      counsel from time to time in effect, legal expenses and costs for the exercise
      of any right or power under this Security Agreement, which expenses are secured
      by this Security Agreement.

    

    Any
      disposition of Collateral by the Agent shall be subject to the mandatory
      requirements of applicable law and subject to the requirement that the Agent
      act
      reasonably and in good faith. Subject to such conditions, the Agent may sell
      or
      otherwise dispose of all or any part of the Collateral, at public or private
      sale, for cash, upon credit or for future delivery as the Agent shall deem
      appropriate. Each purchaser at any such sale shall hold the property sold
      absolutely free from any claim or right on the part of the Company, and the
      Company hereby waives (to the extent permitted by law) all rights of redemption,
      stay and appraisal which the Company now has or may at any time in the future
      have under any rule of law or statute now existing or hereafter enacted. The
      Agent shall give the Company ten (10) days’ written notice (which the Company
      agrees is reasonable notice within the meaning of Section 9-504(3) of the
      Uniform Commercial Code) of the Agent’s intention to make any sale of
      Collateral. Such notice, in the case of a public sale, shall state the time
      and
      place for such sale. Any such public sale shall be held at such time or times
      within ordinary business hours and at such place or places as the Agent may
      fix
      and state in the notice (if any) of such sale. At any such sale, the Collateral,
      or portion thereof, to be sold may be sold in one lot, as an entirety or in
      separate parcels, as the Agent may (in its sole and absolute discretion)
      determine. The Agent shall not be obligated to make any sale of any Collateral
      if it shall determine not to do so, regardless of the fact that notice of sale
      of such Collateral shall have been given. The Agent may, without notice or
      publication, adjourn any public or private sale or cause the same to be
      adjourned from time to time by announcement at the time and place fixed for
      sale, and such sale may, without further notice, be made at the time and place
      to which the same was so adjourned. In case any sale of all or any part of
      the
      Collateral is made on credit or for future delivery, the Collateral so sold
      may
      be retained by the Agent until the sale price is paid by the purchaser or
      purchasers thereof, but the Agent shall not incur any liability in case any
      such
      purchaser or purchasers shall fail to take up and pay for the Collateral so
      sold
      and, in case of any such failure, such Collateral may be sold again upon like
      notice. At any public sale made pursuant to this Section 7, any Secured Company
      may bid for or purchase, free (to the extent permitted by law) from any right
      of
      redemption, stay or appraisal on the part of the Company (all said rights being
      also hereby waived and released to the extent permitted by law), with respect
      to
      the Collateral or any part thereof offered for sale and any such Secured Party
      may make payment on account thereof by using any claim then due and payable
      to
      any such Secured Party from the Company as a credit against the purchase price,
      and any such Secured Party may, upon compliance with the terms of sale, hold,
      retain and dispose of such property without further accountability to the
      Company therefor. For purposes hereof, a written agreement to purchase the
      Collateral or any portion thereof shall be treated as a sale thereof; the Agent
      shall be free to carry out such sale and purchase pursuant to such agreement,
      and the Company shall not be entitled to the return of the Collateral or any
      portion thereof subject thereto, notwithstanding the fact that after the Agent
      shall have entered into such an agreement all events of default shall have
      been
      remedied and the Secured Obligations paid in full. The Company shall remain
      liable for any deficiency. As an alternative to exercising the power of sale
      herein conferred upon it, the Agent may proceed by a suit or suits at law or
      in
      equity to foreclose this Agreement and to sell the Collateral or any portion
      thereof pursuant to a judgment or decree of a court or courts having competent
      jurisdiction or pursuant to a proceeding by a court appointed
      receiver.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Designation
      of the Agent.
      The
      Purchasers hereby irrevocably designate CAMOFI Master LDC (and its successors
      and assigns) as their agent and CAMOFI Master LDC hereby accepts such
      designation, in order to execute any and all instruments or other documents
      on
      behalf of the Purchasers and to do any and all other acts or things on behalf
      of
      the Purchasers that CAMOFI Master LDC (or its successors or assigns) in its
      sole
      discretion deems necessary or advisable or that may be required pursuant to
      this
      Agreement or otherwise, to exercise the Secured Parties’ rights and remedies
      under this Agreement. None of the Purchasers may take any action or exercise
      any
      rights under this Agreement except through CAMOFI Master LDC as their agent.
      Each Secured Party hereby appoints the Agent the attorney-in-fact of such
      Secured Party solely for the purpose of carrying out the provisions of this
      Agreement and taking any action and executing any instrument which the Agent
      may
      reasonably deem necessary or advisable to accomplish the purposes hereof, which
      appointment is irrevocable so long as this Agreement and the Security Interest
      have not been terminated and coupled with an interest.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    9. Application
      of Proceeds.
      The
      proceeds of any collection or sale of Collateral, as well as any Collateral
      consisting of cash, shall be applied by the Agent as follows:

    

    FIRST,
      to
      the payment of all reasonable costs and expenses incurred by the Agent in
      connection with such collection or sale or otherwise in connection with this
      Agreement or any of the Secured Obligations, including, but not limited to,
      all
      court costs and the reasonable fees and expenses of its agents and legal
      counsel, the repayment of all advances made by the Agent hereunder on behalf
      of
      the Company and any other reasonable costs or expenses incurred in connection
      with the exercise of any right or remedy hereunder;

    

    SECOND,
      pro rata to the payment in full of principal and interest in respect of any
      amount of the Notes outstanding, subject to the last sentence of Section 2
      of
      the Notes; 

    

    THIRD,
      to
      the Company, its successors and assigns, or as a court of competent jurisdiction
      may otherwise direct.

    

    Security
      Interest Absolute.
      All
      rights of the Secured Parties and the Agent hereunder, the Security Interest,
      and all obligations of the Company hereunder, shall be absolute and
      unconditional irrespective of (i) any partial invalidity or unenforceability
      of
      the Note, any other agreement with respect to any of the Secured Obligations
      or
      any other agreement or instrument relating to any of the foregoing, (ii) any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Secured Obligations, or any other amendment or waiver of or
      consent to any departure from the Notes, or any other agreement or instrument,
      (iii) any exchange, release or nonperfection of any other Collateral, or any
      release or amendment or waiver of or consent to or departure from any guarantee,
      for all or any of the Secured Obligations, or (iv) any other circumstance which
      might otherwise constitute a defense available to, or discharge of the Company
      in respect of the Secured Obligations or in respect of this
      Agreement.

     

    Value
      of the Collateral.
      Each
      Secured Party acknowledges that it is familiar with the Company or has
      independent access to information regarding the Company, and is not relying
      upon
      any representations of the Company as to the value of the Collateral being
      pledged hereunder or the present or future prospects or value of the
      Company.

     

    Miscellaneous.
      This
      Agreement can be waived, modified, amended, terminated or discharged, and the
      Security Interest can be released, only explicitly in a writing signed by the
      Agent. A waiver signed by the Agent shall be effective only in the specific
      instance and for the specific purpose given. Mere delay or failure to act shall
      not preclude the exercise or enforcement of any of any Secured Parties’ or the
      Agent’s rights or remedies. All rights and remedies of a Secured Party shall be
      cumulative and may be exercised singularly or concurrently, at the Agent’s
      option, and the exercise or enforcement of any one such right or remedy shall
      neither be a condition to nor bar the exercise or enforcement of any other.
      The
      Secured Parties shall not be obligated to preserve any rights the Company may
      have against prior parties, to realize on the Collateral at all or in any
      particular manner or order, or to apply any cash proceeds of the Collateral
      in
      any particular order of application. This Agreement shall be binding upon and
      inure to the benefit of the Company and Secured Parties and their respective
      participants, successors, and permitted assigns and shall take effect when
      signed by the Company and Secured Parties, and the Company waives notice of
      Secured Parties’ acceptance hereof; provided, however, that the Secured Parties’
rights hereunder may not be transferred or assigned to any third party without
      the prior written consent of the Company. This Agreement shall be governed
      by
      the internal law of the State of New York without regard to conflicts of law
      provisions. If any provision or application of this Agreement is held unlawful
      or unenforceable in any respect, such illegality or unenforceability shall
      not
      affect other provisions or applications which can be given effect and this
      Agreement shall be construed as if the unlawful or unenforceable provision
      or
      application had never been contained herein or prescribed hereby. All
      representations and warranties contained in this Agreement shall survive the
      execution, delivery and performance of this Agreement and the creation and
      payment of the Secured Obligations. Any notices required or permitted to be
      given under the terms hereof shall be sent by certified or registered mail
      (return receipt requested) or delivered personally or by courier (including
      a
      recognized overnight delivery service) or by facsimile and shall be effective
      five days after being placed in the mail, if mailed by regular United States
      mail, or upon receipt, if delivered personally or by courier (including a
      recognized overnight delivery service) or by facsimile, in each case addressed
      to a party. The addresses for such communications shall be:

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (i) If
      to the
      Company:

     

    Debt
      Resolve, Inc.

    707
      Westchester Avenue, Lobby Level

    White
      Plains, New York 10604

    Attention:
      James D. Burchetta

    Telephone:
      (914) 949-5500

    Facsimile:
      (914) 428-3044

     

    With
      a
      copy to:

     

    Greenberg
      Traurig LLP

    MetLife
      Building

    200
      Park
      Avenue, 15th Floor

    New
      York,
      NY 10166

    Attention:
      Spencer G. Feldman, Esq.

    Telephone:
      (212) 801-9200

    Facsimile:
      (212) 801-6400

     

    (ii) If
      to the
      Agent:

     

    CAMOFI
      Master LDC

    c/o
      Centrecourt Asset Management

    350
      Madison Avenue, 8th
      Floor

    New
      York,
      New York 10017

    Attention:
      Keith D. Wellner, General Counsel

    Telephone:
      (646) 758-6755

    Facsimile:
      (646) 304-0500

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              If
                to a Purchaser: To the address and fax number set forth immediately
                below
                such Purchaser’s name on the signature pages to this
                Agreement.

            

    

     

    With
      copy
      to:

     

    Capital
      Growth Financial, Inc.

    225
      NE
      Mizner Boulevard, Suite #750 

    Boca
      Raton, FL 33432 

    Attention:
      Alan Jacobs

    Telephone:
      (561) 417-5680

    Facsimile:
      (561) 417-5680

    

    and

    

    Maxim
      Group LLC

    405
      Lexington Avenue

    New
      York,
      NY 10174 

    Attention:
      Clifford A. Teller

    Telephone:
      (212) 895-3500

    Facsimile:
      (212) 895-3783

     

    Each
      party shall provide notice to the other party of any change in
      address.

     

    Waiver
      of Jury Trial:
      THE
      COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT THE
      COMPANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON
      OR
      ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
      CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
      COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER
      PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING
      INTO THIS AGREEMENT.

    

    Termination.
      This
      Agreement and the Security Interest shall terminate when all the Secured
      Obligations have been fully and indefeasibly paid in full, at which time the
      Agent shall execute and deliver to the Company all Uniform Commercial Code
      termination statements and similar documents which the Company shall reasonably
      request to evidence such termination; provided,
      however,
      that
      all indemnities of the Company contained in this Agreement shall survive, and
      remain operative and in full force and effect regardless of, the termination
      of
      this Agreement for a period of six (6) months following the termination of
      this
      Agreement.

    

    [Remainder
      of page intentionally left blank; signature pages
      follow.]

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	COMPANY:
	 
 	
              
DEBT
                RESOLVE, INC.

               

            
	 	By:  	/s/
              James D. Burchetta
	 	
              
                

              

              Name:
                James D. Burchetta

              Title:
                Co-chairman, President and CEO

            

    

     

    
      	 	 	 
	 	AGENT:
	 
 	
              
 CAMOFI
                MASTER LDC

               

            
	 	By:  	/s/ Jeffrey
              M. Haas
	 	
              
                

              

              Name:
                Jeffrey M. Haas

              Title:
                Authorized
                Signatory

            

    

     

    
      	 	
              PURCHASERS:

               

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

               

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Annex
      A

    

    Security
      Agreement

    Purchaser
      Counterpart Signature Page

    

    The
      undersigned, desiring to enter into this Security Agreement dated as of
      _________________ ___, 2006 (the “Agreement”),
      between the undersigned, Debt Resolve, Inc., a Delaware corporation (the
“Company”),
      CAMOFI Master LDC, a Cayman Islands limited duration company (the “Agent”),
      and
      the other parties thereto, in or substantially in the form furnished to the
      undersigned, hereby agrees to join the Agreement as a party thereto, with all
      the rights and privileges appertaining thereto, and to be bound in all respects
      by the terms and conditions thereof.

     

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed the Agreement as of _________________ ___,
      2006.

    
       

      
        	 	
                PURCHASER: 

              
	 	 
	 	
                Name
                  and Address, Fax No. and Social Security No./EIN of
                  Purchaser: 

              
	 	
              
	 	
                
  
	 	
                
 
	 	
                
 
	 	
                
  
	 	Fax No.: 
                _____________________________________
	 	 
	 	
                Soc.
                  Sec. No./EIN:
                  ________________________________

              
	 	 
	 	
                If
                  a partnership, corporation, trust or other
                  business entity: 

              
	 	 	 
	 	 	 
	 	By:  	 
	 	 	
                

                Name:

                
                  Title: 

                

              
	 	 	 
	 	
                If  an individual: 

              
	 	 
	 	 
	 	
                

                Signature  

              

      

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Collateral
      Locations

    

    707
      Westchester Avenue, Lobby Level

    White
      Plains, New York 10604

    (also
      principal executive office)

    

    Federal
      Employer Identification Number:

    

    33-0889197

    

    Patents
      Described in Section 4(c):

    

    None.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    DESCRIPTION
      OF COLLATERAL

    

    The
      term
“Collateral”
shall
      mean all
      of
      the Company’s now owned or hereafter acquired right, title, and interest in and
      to each of the following, together
      with all present and future additions, attachments and accessions thereto and
      all substitutions therefor and replacements thereof, and all copies or originals
      of all records and documents relating thereto:

     

    (a) All
      “accounts,” as that term is defined in Article 9 of the Uniform Commercial Code,
      as in effect in the State of New York (“UCC”),
      including, without limitation, every right to payment for goods or other
      property of any kind sold or leased or for services rendered or for any other
      transaction, whether or not the right to payment has been earned by performance,
      and including without limitation every account receivable, all purchase orders,
      all interest in goods the sale or lease of which gives rise to the right to
      payment (including returned or repossessed goods and unpaid seller’s rights),
      and the rights pertaining to such goods, including the right to stoppage in
      transit, every right to payment under any contract, and every lien, guaranty,
      or
      security interest that secures a right to payment for any of the foregoing
      (“Accounts”);

     

    (b) All
      chattel paper, consisting of a writing or writings evidencing both a monetary
      obligation and a security interest in or lease of goods, together with any
      guarantees, letters of credit, and other security therefore (“Chattel
      Paper”);

     

    (c) All
      “deposit accounts,” as defined in the UCC (“Deposit
      Accounts”);

     

    (d) All
      “inventory” of whatever kind, as that term is used in the UCC, including without
      limitation all goods held by the Company for sale or lease, goods furnished
      or
      to be furnished under a contract for service, and supplies, packaging, raw
      materials, goods in transit, work-in-process, and materials used or consumed
      or
      to be used or consumed in the Company’s business, or in the processing,
      packaging, or shipping of same, all finished goods, and all property, the sale
      or lease of which has given rise to Accounts, Chattel Paper, or Instruments,
      and
      that has been returned to the Company or repossessed by the Company or stopped
      in transit, and all warranties and related claims, credits, setoffs, and other
      rights of recovery with respect to any of the foregoing (“Inventory”);

     

    (e) All
      “equipment,” as that term is used in the UCC, including without limitation all
      equipment, machinery, and other property held for use in or purchased for the
      Company’s business, together with all increases, parts, fittings, accessories,
      repair equipment, and special tools now or later affixed to, or used in
      connection with, that property, all transferable rights of the Company to the
      licenses and warranties (express and implied) received from the sellers and
      manufacturers of the foregoing property, all related claims, credits, setoffs,
      and other rights of recovery (“Equipment”);

     

    (f) All
      “instruments,” including without limitation every instrument of any kind, as
      that term is used in the UCC, and includes every promissory note, negotiable
      instrument, certificated security, or other writing that evidences a right
      to
      payment of money, that is not a lease or security agreement, and that is
      transferred in the ordinary course of business by delivery with any necessary
      assignment or indorsement (“Instruments”);

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (g) “Investment
      property,” as that term is defined in the UCC (“Investment
      Property”);

     

    (h) All
      documents, including without limitation any paper that is treated in the regular
      course of business as adequate evidence that the person in possession of the
      paper is entitled to receive, hold, and dispose of the goods the paper covers,
      including warehouse receipts, bills of lading, certificates of title, and
      applications for certificates of title;

     

    (i) All
      “general intangibles” of any kind, as that term is used in the UCC, and includes
      without limitation all intangible personal property other than Accounts,
      Documents, Instruments, and Chattel Paper, and includes without limitation
      money, contract rights, corporate or other business records, deposit accounts,
      inventions, designs, formulas, Patents (as defined in Section 2 of this
      Agreement), service marks, trademarks, trade names, trade secrets, engineering
      drawings, goodwill, rights to prepaid expenses, registrations, franchises,
      copyrights, licenses, customer lists, computer programs and other software,
      source code, tax refund claims, royalty, licensing and product rights, all
      claims under guarantees, security interests or other security held by or granted
      to the Company to secure payment of any of the Accounts by an Account Debtor,
      all indemnification rights, and rights to retrieval from third parties of
      electronically processed and recorded data pertaining to any Collateral, things
      in action, items, checks, drafts, and orders in transit to or from the Company,
      credits or deposits of the Company (whether general or special) that are held
      by
      Secured Parties (“General
      Intangibles”);

     

    (j) All
      Instruments, including stock certificates and membership interest certificates,
      evidencing ownership in any and all subsidiaries of the Company;

     

    (k) “Supporting
      obligations,” as that term is defined in the UCC (“Supporting
      Obligations”);
      and

     

    (l) To
      the
      extent not listed above in this Exhibit
      A
      as
      original collateral, proceeds and products of the foregoing.

    
      
        
        

      

      
        16

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