Exhibit 10.76

                      REIMBURSEMENT AND INDEMNITY AGREEMENT

This Agreement,  dated January 15, 2002, is by and between Mountain  Reservoir
Corporation ("MRC") and Vertical Computer Systems, Inc. ("VCSY").

WHEREAS,  VCSY has agreed to reimburse and indemnify MRC for any costs  incurred
by MRC with  respect to the loan  transaction  made on  December  14,  2001 (the
"Loan") made between VCSY and the Brighton Opportunity Fund ("Brighton").

WHEREAS,  MRC, in connection with the Loan,  pledged  36,303,932  shares of VCSY
common stock owned by MRC (the "MRC") as  collateral  pursuant to the MRC 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  MRC  Shares  that  MRC  shall  receive   replacement  shares  and
reimbursement  of any  costs,  including  taxes for  selling  or  receiving  the
replacement shares.

THEREFORE, the parties hereby confirm their agreement as follows:

1. In the event of that VCSY defaults on the Loan for which MRC Shares have been
pledged as collateral and any MRC Shares are sold pursuant to the MRC any pledge
agreement, VCSY shall:

      a.    issue a number of new shares of VCSY common stock (the  "Replacement
            Shares")  equal to the  number of the MRC  shares  actually  sold by
            Brighton (or its designee) pursuant to MRC'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 MRC and (ii)
            register  the  Replacement  Shares  with  the  Securities   Exchange
            Commission.

      c.    reimburse MRC for any costs or expenses in connection  with the sale
            of any MRC 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.  MRC shall  provide  all  documentation  reasonably
            necessary in order for VCSY to reimburse MRC.



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2. VCSY shall defend, protect,  indemnify and hold harmless MRC 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 MRC pledged the MRC Shares as collateral to Brighton, including reasonable
attorneys' fees and disbursements (the "Indemnified  Liabilities"),  incurred by
MRC 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 MRC 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  MRC  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 MRC, 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 MRC 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:

"MRC"


-----------------------------------
Frank Mento, President



Accepted and Agreed to by:
"VCSY"


-----------------------------------
William Mills
Secretary, Vertical Computer Systems, Inc.