EXHIBIT 10.60
REIMBURSEMENT AND INDEMNITY AGREEMENT
This Agreement, dated January 15, 2002, is by and between Luiz Xxxxxxx Xxxxxxxxx
Xxxxxx e Xxxxx ("Valdetaro") and Vertical Computer Systems, Inc. ("VCSY").
WHEREAS, VCSY has agreed to reimburse and indemnify Valdetaro for any costs
incurred by Valdetaro with respect to the loan transaction made on December 14,
2001 (the "Loan") made between VCSY and the Brighton Opportunity Fund
("Brighton").
WHEREAS, Valdetaro, in connection with the Loan, pledged 15,000,000 shares of
VCSY common stock owned by Valdetaro (the "Valdetaro Shares") as collateral
pursuant to the Valdetaro Pledge Agreement to induce Brighton to make the Loan.
WHEREAS, it is the intention of the parties that in the event of any default and
sale of any Valdetaro Shares that Valdetaro shall receive replacement shares and
reimbursement of any costs, including taxes, for selling or receiving the
replacement shares.
THEREFORE, the parties hereby confirm their agreements as follows:
1. In the event of that VCSY defaults on the Loan for which Valdetaro Shares
have been pledged as collateral and any Valdetaro Shares are sold pursuant to
the Valdetaro pledge agreement, VCSY shall:
a. issue a number of new shares of VCSY common stock (the "Replacement
Shares") equal to the number of the Valdetaro shares actually sold by
Brighton (or its designee) pursuant to Valdetaro's pledge agreement .
b. use its best efforts to (i) cause any Replacement Shares that are
issued to be freely tradable and without restriction to Valdetaro and (ii)
register the Replacement Shares with the Securities Exchange Commission.
c. reimburse Valdetaro for any costs or expenses in connection with the
sale of any Valdetaro shares or the issuance by VCSY of any Replacement
Shares. Such reimbursement of expenses shall include, without limitation,
any tax consequences (federal, state, and local, if any) and brokerage
fees. Valdetaro shall provide all documentation reasonably necessary in
order for VCSY to reimburse Valdetaro.
2. VCSY shall defend, protect, indemnify and hold harmless Valdetaro from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection with the
Loan for which Valdetaro pledged the Valdetaro Shares as collateral to Brighton,
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by Valdetaro as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or
warranty made by VCSY with regard to the Loan for which the Valdetaro Shares are
pledged, or any other certificate, instrument or document contemplated hereby or
thereby, (b) any breach of any covenant, agreement or obligation of VCSY in this
Agreement or any other certificate, instrument or document contemplated hereby
or thereby, or (c) any cause of action, suit or claim brought or made against
Valdetaro and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement or any other instrument, document
or agreement executed pursuant hereto by Valdetaro, any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Loan in which the Valdetaro shares were pledged as
collateral. To the extent that the foregoing undertaking by VCSY may be
unenforceable for any reason, VCSY shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.
The parties hereby agree to the foregoing on the date first set forth above.
Accepted and Agreed to by:
"Valdetaro"
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Luiz Xxxxxxx Xxxxxxxxx Xxxxxx e Xxxxx
Accepted and Agreed to by:
"VCSY"
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Xxxxxxx Xxxx
President, Vertical Computer Systems, Inc.
