Exhibit 10.1 (a)
Berche Promissory Note
PROMISSORY NOTE
$180,000.00 August 13, 2001
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned VERTICAL COMPUTER SYSTEMS, INC., a Nevada
corporation ("Borrower"), promises to pay to the order of THE ANNE BERCHE FAMILY
TRUST ("Lender"), in lawful money of the United States of America the principal
amount of ONE HUNDRED EIGHTY Thousand Dollars ($180,000 U.S.), together with
interest on the amount of such principal outstanding from time to time at the
rate of twelve percent (12%) per annum, calculated on the basis of a three
hundred sixty (360) day year containing twelve (12) months of thirty (30) days
each (the "Basic Interest Rate"), at the times and in the manner provided
herein.
1. Payment of Principal and Interest. Principal and interest shall
be paid as follows:
a. All principal then outstanding, and all interest, fees,
charges, and other amounts owing hereunder and then unpaid
shall be due and payable on February 13, 2002 (the "Maturity
Date").
b. Borrower shall pay all amounts owing under this Note in
immediately available funds to Lender at Lender's address as
set forth herein, or at such other place as may be specified
in writing by Lender. Each payment, when made, shall be
credited first to interest then due, and then at the option of
Lender to principal, late charges, and other fees and expenses
outstanding hereunder in such order as Lender may determine.
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.
2. Collateral as Security. This Note is secured by certain
collateral, which encumbers, among other things, the interest
of Borrower in certain assets, as more particularly described
therein (the "Collateral"). This Note and the Stock Pledge
Agreement between Borrower and Lender of even date herewith,
and any other documents or instruments given or to be given to
Lender to secure the indebtedness evidenced by this Note are
collectively referred to herein as the "Loan Documents".
3. Interest Rate Upon Default. Should Borrower fail to pay any
amount owing hereunder as and when due, whether the same is
due regularly as
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scheduled or by reason of acceleration following default or
otherwise, then interest shall accrue on the past due amount
at the Basic Interest Rate. Such interest shall be due and
payable upon the earlier of demand or the first day of the
calendar month following the month in which the same shall
have accrued.
5. Default; Remedies. Each of the following occurrences and
conditions shall constitute an Event of Default:
a. failure of Borrower 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 Borrower 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 fifteen (15) days after
notice thereof from Lender to Borrower; or
c. failure by Borrower 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 fifteen (15)
days after notice thereof from Lender to Borrower; or
d. Borrower's making or at any time having made any representation, warranty
or disclosure to Lender 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 Borrower's rights therein, whether voluntarily,
involuntarily, or otherwise, or Borrower'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 Lender 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 Lender may exercise any and all rights that it may have under the
Loan Documents, at law, in equity, and otherwise.
6. Attorneys' Fees. Borrower shall pay to Lender upon demand all costs
and expenses incurred by Lender in connection with determination,
protection, or enforcement of any and all of Lender's rights
hereunder or under any of the Loan Documents, including enforcement
of any and all obligations of Borrower hereunder and thereunder and
protection, enhancement, or maintenance of the security interests
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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.
7. Waiver of Notice. Borrower 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 Borrower or any other person or persons. Borrower 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.
8. 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 Lender:
THE ANNE HECHE TRUST
9, Rue Alsace-Lorraine, 2400 Perigueux
France
C/o 124 Via Yella
Newport Beach, CA 92663
Attn: Phillipe de Lespinay
To Borrower:
VERTICAL COMPUTER SYSTEMS, INC.
6336 Wilshire Boulevard
Los Angeles, CA 90048
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
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notices hereunder to another business address within the United States (but not
a post office box or similar mail receptacle) by giving notice of such change of
address in accordance herewith.
9. Exercise of Rights. No single or partial exercise of any of Lenders
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. Lender 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 Lender may elect without waiving any rights with respect
to any other portion of such security. Each and all rights and
remedies of Lender 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.
10. No Waiver. No failure of Lender to insist upon strict performance of
any obligation of Borrower 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 Lender from time to time shall (a) preclude the
exercise of any right that Lender 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 Lender's rights to demand
and receive from Borrower full and prompt payment and performance
thereafter, to impose late charges retroactively, or to declare a
default. Borrower 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.
11. Assignment; Successors and Assigns. Lender 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 Lender, Borrower shall render full and complete performance
hereunder as and when due to the transferee so designated by Lender.
Borrower shall not assign or transfer all or any of its interests or
obligations hereunder, and any attempted or purported assignment or
transfer by Borrower 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.
12. Modification. This Note shall not be modified, amended, or
terminated, except by written agreement duly executed and delivered
by both Lender and Borrower.
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13. 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.
14. 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.
15. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of
the date first written above.
VERTICAL COMPUTER SYSTEMS, INC.
By
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Richard Wade, President
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