Exhibit 10.65
PROMISSORY NOTE
$ 280,000.00 October 31, 2001
WHEREAS Vertical agreed to purchase from Paradigm Sales, Inc., 000 Xxxxx Xxxxx,
0xx Xxxxx, Xxx Xxxxxxx, XX 00000, ("Paradigm") certain property of Adhesive
Software (the "Property"), a Texas corporation, which Paradigm intends to
acquire through bank foreclosure sale by Silicon Valley Bank (the "Bank"),
pursuant to the terms and conditions set forth in the Asset Purchase Agreement,
dated October 31, 2001.
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned VERTICAL COMPUTER SYSTEMS, INC., a Delaware
corporation ("Promissor"), promises to pay to the order of Xxxxxx Xxxxxx, a
Texas resident, 000 Xxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxx 00000, ("Promissee"),
in lawful money of the United States of America the principal amount of TWO
HUNDRED Thousand eighty Dollars ($280,000 U.S.), together with interest on the
amount of such principal outstanding from time to time at the rate of four
percent (4%) per annum at the times and in the manner provided herein.
1. PAYMENT OF PRINCIPAL AND INTEREST. Principal and interest shall be paid as
follows:
a. The principal shall be payable in monthly
installments beginning on the date that is seven (7) days after the closing date
of the sale of the Property to Vertical, pursuant to the following schedule:
i. The first four monthly payments shall be
for Five Thousand Dollars ($5,000.00 US)
ii. All remaining monthly payments shall be for
Ten Thousand dollars ($10,000.00 U.S.) and shall
continue until the Principal has been paid in full.
b. All interest due shall be due and payable on the day
the Principal has been paid in full.
c. Promissor shall pay all amounts owing under this
Note in immediately available funds to Promissee at Promissee's address as set
forth herein, or at such other place as may be specified in writing by
Promissee. Each payment, when made, shall be credited to the principal.
Payments received after 1:00 p.m. on any banking day or
at any time on any Saturday, Sunday, or holiday shall be deemed received on the
next banking day.
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2. COLLATERAL AS SECURITY. This Note is secured by certain collateral, which
encumbers, among other things, the interest of Promissor in certain assets, as
more particularly described therein (the "Collateral"). This Note and the Asset
Pledge Agreement between Promissor and Promissee of even date herewith, and any
other documents or instruments given or to be given to Promissee to secure the
indebtedness evidenced by this Note are collectively referred to herein as the
"Loan Documents".
3. DEFAULT; REMEDIES. Each of the following occurrences and conditions shall
constitute an Event of Default:
a. failure of Promissor to pay as and when due any money,
whether principal, interest, or otherwise, under this Note, or the breach or
default of any obligation to pay money under or secured by the Security
Agreement; or
b. failure of Promissor to perform any obligation other than
an obligation to pay money, as and when performance of such obligation is due
under this Note or Loan Documents which failure continues for thirty (30) days
after notice thereof from Promissee to Promissor; or
c. failure by Promissor to comply with any of the terms,
provisions, covenants, conditions or restrictions now or hereafter affecting the
Collateral or any part thereof or contained in any agreement related or
pertaining to the Collateral, which failure continues for thirty (30) days after
notice thereof from Promissee to Promissor; or
d. Promissor's making or at any time having made any
representation, warranty or disclosure to Promissee that is or was materially
false or misleading on the date as of which made, whether or not that
representation or disclosure appears in the Loan Documents; or
e. the sale, transfer, conveyance, or lease of all or any
portion of the Collateral or of any of Promissor's rights therein, whether
voluntarily, involuntarily, or otherwise, or Promissor's entering into an
agreement to do any of the foregoing, in each case except as expressly permitted
in the Security Agreement; or
At any time following the occurrence of any Event of Default, or following the
occurrence of any event as a consequence of which the obligations evidenced
hereby may be accelerated, then at the election of Promissee and notwithstanding
anything to the contrary herein or elsewhere, the entire amount of principal
then outstanding under this Note and all interest, fees, charges, and other
amounts owing and then unpaid hereunder shall become immediately due and
payable, and Promissee may exercise any and all rights that it may have under
the Loan Documents, at law, in equity, and otherwise.
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4. ATTORNEYS' FEES. Promissor shall pay to Promissee upon demand all costs and
expenses incurred by Promissee in connection with determination, protection, or
enforcement of any and all of Promissee's rights hereunder or under any of the
Loan Documents, including enforcement of any and all obligations of Promissor
hereunder and thereunder and protection, enhancement, or maintenance of the
security interests securing such obligations or the priority of the same. Such
costs and expenses shall be payable whether or not any suit is instituted, and
the same shall include without limitation attorneys' fees, expert witness fees,
costs of investigation, and all of such costs incurred in connection with any
trial, appellate proceeding, or any case or proceeding under Chapters 7, 11, or
13 of the Bankruptcy Code or any successor thereto.
5. WAIVER OF NOTICE. Promissor and each endorser, guarantor and surety of this
Note hereby waive diligence, demand, presentment for payment, notice of
discharge, notice of nonpayment, protest and notice of protest, and specifically
consent to and waive notice of any renewals or extensions of this Note, whether
made to or in favor of Promissor or any other person or persons. Promissor and
each endorser, guarantor and surety of this Note further waive and renounce all
rights to the benefits of all statutes of limitation and any moratorium,
appraisement, by any federal exception and homestead now or hereafter provided
or state law or statute, including but not limited to exemptions provided by or
allowed under the Bankruptcy Code, both as to each of themselves personally and
as to all of their property, whether real or personal, against the enforcement
and collection of the obligations evidenced by this Note and any and all
extensions, renewals and modifications thereof.
6. NOTICES. All notices required hereunder or pertaining hereto shall be in
writing and shall be deemed delivered and effective upon the earlier of (i)
actual receipt, or (ii) the date of delivery or refusal of the addressee to
accept delivery if such notice is sent by express courier service or United
States mail, postage prepaid, certified or registered, return receipt requested,
in either case to the applicable address as follows:
To Promissee: Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
To Promissor: VERTICAL COMPUTER SYSTEMS, INC.
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: President
Notwithstanding the foregoing, any notice under or pertaining to the Loan
Documents or the obligations secured thereby given and effective in accordance
with applicable law shall be effective for purposes hereof. Either party may
change the address at which it is to receive notices hereunder to another
business address within the United States (but not a post office box or similar
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mail receptacle) by giving notice of such change of address in accordance
herewith.
7. EXERCISE OF RIGHTS. No single or partial exercise of any of Promissees
rights or powers under this Note or any of the other Loan Documents shall
preclude any other or further exercise thereof or the exercise of any other
right or power. Promissee at all times shall have the right to proceed against
any portion of the security which secures payment of the indebtedness evidenced
hereby in such order and manner as Promissee may elect without waiving any
rights with respect to any other portion of such security. Each and all rights
and remedies of Promissee hereunder and under the Loan Documents are cumulative
and in addition to each and all other such rights and remedies. No exercise of
any right or remedy shall preclude exercise of any other right or remedy.
8. NO WAIVER. No failure of Promissee to insist upon strict performance of any
obligation of Promissor or to exercise any right or remedy hereunder or under
the Loan Documents, whether before or after any default, shall constitute or
give rise to a waiver thereof, and no waiver of any default shall constitute a
waiver of any future default or of any other default. No failure to accelerate
the debt evidenced hereby by reason of default hereunder or otherwise, and no
acceptance of any past due payment hereunder or acceptance of any amount less
than the amount then due, and no other indulgence that may be granted by
Promissee from time to time shall (a) preclude the exercise of any right that
Promissee may have at law, in equity, by contract or agreement or otherwise, or
(b) constitute or give rise to (i) a waiver of such right of acceleration or any
other right, or (ii) a novation of this Note or a reinstatement of the debt
evidenced hereby, or (iii) any waiver of Promissee's rights to demand and
receive from Promissor full and prompt payment and performance thereafter, to
impose late charges retroactively, or to declare a default. Promissor and each
endorser, guarantor, and surety of this Note hereby expressly waive the benefit
of any statute or rule of law or equity which would produce any result contrary
to or otherwise in conflict with any of the foregoing.
9. ASSIGNMENT; SUCCESSORS AND ASSIGNS. Promissee may assign or otherwise
transfer all or any part of its interest herein. Promptly following written
notice of such assignment or other transfer, duly executed by Xxxxxxxxx,
Promissor shall render full and complete performance hereunder as and when due
to the transferee so designated by Promissee. Promissor shall not assign or
transfer all or any of its interests or obligations hereunder, and any attempted
or purported assignment or transfer by Promissor shall be void and of no force
or effect, except to the extent that the same may be expressly permitted under
the Security Agreement. Subject to the foregoing, the terms of this Note shall
apply to, be binding upon, and inure to the benefit of ail parties hereto and
their successors and assigns.
10. MODIFICATION. This Note shall not be modified, amended, or terminated,
except by written agreement duly executed and delivered by both Promissee and
Promissor.
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11. CONFLICTS. In the event of any conflict between any provision of this Note
and any provision of the Security Agreement, which conflict cannot reasonably be
resolved in such a way as to give effect to all provisions herein and therein
contained, this Note shall govern.
12. SEVERABILITY. If any provision of this Note or any payments pursuant to the
terms hereof shall be invalid or unenforceable to any extent, the remainder of
this Note and any other payments hereunder shall not be affected thereby and
shall be enforceable to the greatest extent permitted by law.
13. GOVERNING Law. This Note shall be governed by and construed in accordance
with the laws of the State of California.
IN WITNESS WHEREOF, Xxxxxxxxx has executed and delivered this Note as of
the date first written above.
VERTICAL COMPUTER SYSTEMS, INC.
By /s/ Xxxxxxx Xxxx, President
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Xxxxxxx Xxxx, President
