EXHIBIT 10.61
VALDETARO STOCK PLEDGE AGREEMENT
Date: December 14, 2001
TO : BRIGHTON OPPORTUNITY FUND, L.P.
Pledge of Stock
To induce you, the Brighton Opportunity Fund, L.P. (hereinafter
"Brighton" or "You") to make a loan of U.S. $425,000.00 (the "Loan") to Vertical
Computer Systems, Inc., a Delaware corporation (the "Company"), as evidenced by
the Promissory Note by and between Company and you (the "Note") in that amount
dated the date of this Stock Pledge Agreement (the "Agreement"), bearing
interest at the rate of twelve percent (12%) per annum, and payable to your
order on January 31, 2002 (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 Company's other obligations under the Note
and under this Agreement, the undersigned ("Pledgor") hereby pledges to you and
grant you a security interest in 15,000,000 shares of Vertical Computer Inc.
common stock owned and controlled by the undersigned, represented by
certificate(s) no. 03953, 03954, 03955, 03956, 03957, 03958, 03959, and 03972.
Definition of Collateral; Method of Selling Collateral and Repayment of Loan
The term "Collateral" means (i) the shares of stock pledged under the
foregoing paragraph (collectively called the "Stock") by Luiz Xxxxxxx Xxxxxxxxx
Xxxxxx E Xxxxx ("Valdetaro") and Mountain Reservoir Corporation ("MRC") (each a
"Pledgor"), and (ii) any cash, securities or other property paid or otherwise
distributed on, with respect to, or in exchange for any Collateral. Upon default
under the Note, you may, at any time thereafter, sell the stock pursuant to the
terms contained herein. The method of repayment of the Loan in the event of a
default is to be as follows:
(a) Each Pledgor shall deposit their respective Stock pledged
hereunder into a trust account controlled and maintained by
Brighton ("Brighton").
(b) In the event of default, Brighton reserves the right to resell the
Stock into the market until the principal and interest has been
paid pursuant to the terms set forth herein. Both parties agree
that there shall be no transfer of ownership in the Stock until
Brighton shall sell the stock pursuant to the following terms:
(1) Brighton shall sell the Stock of Valdetaro and MRC
proportionately, at a ratio of 1 share of Valdetaro's
Stock to 2.5 shares of MRC's Stock (the "Agreed
Proportion") in increments of 10,000 shares and the stock
shall be sold into the public in an orderly and
nondisruptive manner. Both parties agree that Brighton
shall have the right to sell up to 10% of the daily volume
unless otherwise agreed to. In no event shall the Stock be
"shorted" as such term is commonly understood. Vertical
shall have the express right, at any time, to pay any
outstanding amounts owed to you and, upon such payment,
Brighton shall return any remaining Stock immediately to
the Pledgor;
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(2) Under no circumstances shall Brighton sell more Stock than
is reasonably necessary to pay the then outstanding
amount;
(3) Within two (2) days, Brighton shall deliver notice to
Pledgor and the Company, upon the completion of any sales
of Stock sufficient to pay the then outstanding amount;
(4) Upon full payment of all monies owed under the Note,
Brighton shall deliver any Stock unsold within five (5)
business days, to each Pledgor in the Agreed Proportion.
Any funds held by Brighton and not otherwise distributed
to you shall be delivered within five (5) business days,
at Company's instruction, to Company.
Warranties
Pledgor hereby warrants 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. Pledgor is the sole owner of the Stock;
d. The Stock 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. Pledgor may pledge and grant a security interest in the Stock
without obtaining the approval of any other person, corporation, partnership, or
other entity, or any governmental authority,
You hereby represent to Pledgor that:
a. The stock shall be sold into the public in an orderly and
nondisruptive manner and.
b. In no event shall the Stock be "shorted" as such term is commonly
understood.
Prohibition on Transfer of Collateral
Pledgor agrees that Pledgor will not sell, transfer, assign or encumber
any of its rights in any of the Collateral or grant any rights in or to any of
the Collateral except pursuant to this Agreement.
Further Assurances
Pledgor will, at its expense, take or cause to be taken such action and
execute and deliver or cause to be executed and delivered such additional
agreements and documents as you may request in connection with this Agreement or
any of the Collateral or to perfect your security interest in any of the
Collateral, including, without limitation, delivering any Collateral to you and
executing and filing financing and other statements under the Uniform Commercial
Code in effect in any state; and Pledgor hereby authorize you to sign any such
agreement or document or statement on Pledgor's behalf and to file any such
statement with or without Pledgor's signature. In the event that you utilize the
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Collateral to secure the Note and Company subsequently pays you all monies then
due under the Note, you will take or cause to be taken such action and execute
and deliver or cause to be executed and delivered such additional agreements and
documents as Pledgor may request in connection with this Agreement or any of the
Collateral, including, without limitation, delivering or causing the delivery of
any remaining Collateral to Pledgor; and you hereby authorize Pledgor to sign
any such agreement or document or statement on your behalf and to file any such
statement with or without your signature.
Default
Upon a default under any of the provisions of the Note, or if any
warranty by us hereunder is incorrect, or if Pledgor fails to perform any of
Pledgor's 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 Pledgor's 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.
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.
Pledgor agrees 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, Pledgor hereby submits to the non-exclusive jurisdiction of such
courts and agree not to raise and waive any objection Pledgor may have based
upon personal jurisdiction or the venue of any such court or forum non
conveniens. Pledgor agrees 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, Pledgor hereby irrevocably appoints
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.
Pledgor will at all times maintain an agent to receive service of
process in California, on its behalf with respect to this Agreement, and in the
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event that, for any reason, the agent named above or any successor agent shall
no longer serve as its agent to receive service of process in California,
Pledgor 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
Brighton Opportunity Fund, LP
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By: Xxxxx Xxxxxxxxx, General Partner
PLEDGOR
AGREED: Luiz Xxxxxxx Xxxxxxxxx Xxxxxx E Xxxxx
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By: Luiz Xxxxxxx Xxxxxxxxx Xxxxxx E Xxxxx
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