10.114(d)
30% OWNERSHIP PLEDGE AGREEMENT
Date: February 13, 2004
TO: Xxxxxx Xxxxxx
PLEDGE OF OWNERSHIP
To induce you Xxxxxx Xxxxxx (hereinafter "You"), to provide the loan Now
Solutions $500,000, to us as evidenced by the $500,000 promissory note (the
"Note") by and between Now Solutions, LLC, ("Now Solutions") and you in that
amount dated the date of this Agreement (hereinafter the "Ownership Pledge
Agreement"), and payable to your order pursuant to the schedule set forth
therein (the "Note", which term will include any amendments thereto and
substitutions therefor), , and to secure payment of all amounts owing under the
Note and this Ownership Pledge Agreement and performance of all of our other
obligations under the Note and under this Ownership Pledge Agreement, the
undersigned, Vertical Computer Systems, Inc. (the "Company") hereby pledges to
you and pledges to you a thirty percent (30%) of that the Company's subsidiary,
Now Solutions, LLC ("Now Solutions") .
DEFINITION OF COLLATERAL;
The term "Collateral" means (i) a thirty percent (30%) interest in Now
Solutions. Upon default under this Ownership Pledge Agreement, you may at any
time transfer the Collateral into your name or the name of your nominee.
WARRANTIES
We hereby warrant to you that:
a. The Company is duly incorporated and validly existing under the laws
of the State of Delaware;
b. We have taken all necessary corporate action to authorize the
execution, delivery and performance of this Ownership Pledge
Agreement and the Note, which constitute our legally binding
obligations;
PROHIBITION ON TRANSFER OF COLLATERAL
We agree that we will not sell, transfer, assign or encumber any of our
rights in any of the Collateral or grant any rights in or to any of the
Collateral except pursuant to this Ownership Pledge Agreement. Notwithstanding
the foregoing, you acknowledge and agree that, provided we are not in Default of
this Agreement, we shall have the express right (a) in our sole and absolute
discretion, to commercially exploit the Now Solutions, in any manner, or refrain
therefrom and to enter into any contracts with respect thereto; (b) to collect,
receive, and retain any revenues derived from our commercial exploitation of the
Now Solutions for our own benefit.
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DEFAULT
After pursuing your rights under the Security Agreement (the "Security
Agreement"), dated February 13, 2004, between Now Solutions and yourself and
upon a default under any of the provisions of the Note or if any warranty by us
hereunder is incorrect, you may, with ten (10) business days written notice,
take such action as you deem advisable with respect to the Collateral.
REMEDIES; ORDER OF PURSUIT
You expressly acknowledge and agree that your rights to proceed under the
terms of this agreement will not be effective until you have exhausted all
remedies under the Security Agreement. Except as set forth herein and in the
Security Agreement, you shall not be required to resort to or pursue any of your
rights or remedies under or with respect to any other agreement or any other
collateral before pursuing any of your rights or remedies under this Ownership
Pledge Agreement. You may pursue your rights and remedies under this agreement
in such order as you determine, and the exercise by you of any right or remedy
under this agreement will not preclude your exercising any other right or
remedy.
DELAY; WAIVER
The failure or delay by you in exercising any of your rights hereunder or
with respect to the Note in any instance shall not constitute a waiver thereof
in that or any other instance. You may waive your rights only by an instrument
in writing signed by you.
EXPENSES
We agree to pay on demand (a) all expenses (including, without limitation,
legal fees and disbursements) incurred by you in connection with the negotiation
and preparation of this Ownership Pledge Agreement and the perfection of your
security interest in any of the Collateral, and (b) all expenses of enforcing
the provisions of this Ownership Pledge Agreement and your rights against any of
the Collateral, including, without limitation, expenses and fees of legal
counsel, court costs and the cost of appellate proceedings.
WHERE TO MAKE PAYMENTS
All payments under this Ownership Pledge Agreement shall be made in lawful
currency of the United States of America in immediately available funds at the
address as provided in the Note, or in such other manner or at such other place
as you shall designate in writing.
NOTICES
Unless otherwise specified, all notices or other communications required
herein must be in writing and will be deemed to have been duly served if hand
delivered, sent by first class mail postage prepaid and properly addressed,
return receipt requested, or sent by overnight delivery. Notices shall be
delivered to the address of each party as set forth above or as otherwise
designated by the respective party, as the case may be. All notices to Xxxxxx
shall be addressed to Xxxxxx Xxxxxx at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
XX 00000.
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AMENDMENT
This Ownership Pledge Agreement may only be amended by an instrument in
writing signed by you and us.
The parties hereby agree to the terms of this ownership pledge agreement on the
date first set forth above.
ACCEPTED AND AGREED:
PLEDGEE PLEDGOR
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Xxxxxx Xxxxxx Xxxxxxx Xxxx
President/CEO
Vertical Computer Systems, Inc.
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