EXHIBIT 10.89(b)
----------------
COLLATERAL PLEDGE AGREEMENT
Date: August 20, 2002
TO : XXXX XXXXXXXXX
To induce you to make a loan of U.S. $8,000.00 to Vertical Computer
Systems as evidenced by its Promissory Note by and between Vertical Computer
Systems, Inc., a Delaware corporation ("Company") and you in that amount dated
the date of this Collateral Pledge Agreement (the "Agreement"), bearing interest
at the rate of ten percent (10%) per annum, and payable to your order on
February 20, 2003 (the "Note", which term will include any amendments thereto
and substitutions therefor), and in consideration of your making said loan, and
to secure payment of all amounts owing under the Note and this Agreement and
performance of all of our other obligations under the Note and under this
Agreement, the Company hereby pledges to you and grants you a limited security
interest in $8,000 of that portion of the $1,500,000 pledged by the Company to
Coast Credit Bank on behalf of Now Solutions, LLC, a subsidiary of the Company,
which Company is entitled to receive. As of the date of this Collateral Pledge
Agreement, the Company is currently entitled to receive approximately $850,000
of its $1,500,000 pledge from Coast..
DEFINITION OF COLLATERAL; METHOD OF SELLING COLLATERAL AND REPAYMENT OF
PROMISSORY NOTE
The term "Collateral" means a limited security interest in $8,000 of that
portion of the $1,500,000 pledged by the Company to Coast Credit Bank on behalf
of Now Solutions, LLC, a subsidiary of the Company, which Company is entitled to
receive. As of the date of this Collateral Pledge Agreement, the Company is
currently entitled to receive approximately $850,000 of its $1,500,000 pledge
from Coast.
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 Agreement and the Note, which
constitute our legally binding obligations;
c. we are the sole owner of the Collateral(s);
d. the Collateral is validly issued, is fully paid and non-assessable,
and is not subject to any claim, restriction, lien or other encumbrance except
as provided in this Agreement; and
e. we may pledge and grant a security interest in the Collateral
without obtaining the approval of any other person, corporation, partnership, or
other entity, or any governmental authority.
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 Agreement.
1 of 3
DEFAULT
Upon a default under any of the provisions of the Note, or if any warranty
by us hereunder is incorrect, or if we fail to perform any of our obligations
under this Agreement (any such default or breach of warranty or failure being
herein called "a default under this Agreement"), you may, without notice, take
such action as you deem advisable with respect to the Collateral, including,
without limitation, selling any of the Collateral at public or private sale on
such terms as you deem appropriate; and you are also authorized as our
attorney-in-fact to endorse or otherwise effect the transfer of any of the
Collateral. At any such sale you may be the purchaser.
REMEDIES; ORDER OF PURSUIT
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 Agreement. You may
pursue your rights and remedies in such order as you determine, and the exercise
by you of any right or remedy 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 or any other collateral securing 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 Agreement and the perfection of your security interest
in any of the Collateral, and (b) all expenses of enforcing the provisions of
this 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 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.
GOVERNING LAW; AGENT FOR SERVICE OF PROCESS
This Agreement and your rights and our obligations hereunder shall be
governed by and construed in accordance with the law of the State of California.
We agree that any legal action or proceeding with respect to this Agreement or
any of the Collateral may be brought in the courts of the State of California
and of the United States having jurisdiction in the County of Los Angeles and
State of California and for the purpose of any such legal action or proceeding,
we hereby submit to the non-exclusive jurisdiction of such courts and agree not
to raise and waive any objection we may have based upon personal jurisdiction or
the venue of any such court or forum non conveniens. We agree not to bring any
action or other proceeding with respect to this Agreement or any of our
obligations under this Agreement in any other court unless such courts of the
State of California and of the United States determine that they do not have
jurisdiction in the matter. For purposes of any proceeding involving this
Agreement, we hereby irrevocably appoint Xxxx X. Xxxx, Esq., 0000 Xxxxxxxx
Xxxx., #000, Xxx Xxxxxxx, XX 00000, our agent to receive service of process for
us and on our behalf.
2 of 3
We will at all times maintain an agent to receive service of process in
California, on our behalf with respect to this Agreement, and in the event that,
for any reason, the agent named above or any successor agent shall no longer
serve as our agent to receive service of process in California, we shall
promptly appoint a successor and advise you thereof.
AMENDMENT
This Agreement may only be amended by an instrument in writing signed by
you and us.
Very truly yours,
PLEDGEE
XXXX XXXXXXXXX
___________________________________________
By: Xxxx Xxxxxxxxx
PLEDGOR
AGREED:
VERTICAL COMPUTER SYSTEMS, INC.
___________________________________________
By: Xxxxxxx Xxxx
3 of 3
