Exhibit 10.93(c)
STOCK PLEDGE AGREEMENT
October 17, 2002
Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
RE: VERTICAL STOCK PLEDGE
Dear Xxxxxx,
In consideration for the loan you, Xxxxxx Xxxxxx, made to Vertical Computer
Systems, Inc. ("VERTICAL") (the "Loan") and in consideration of the sale by you
on the terms set forth in the Asset Purchase Agreement and the related
underlying documents thereto, you and we, Mountain Reservoir Corporation ("MRC")
hereby agree to the following:
1. MRC hereby pledges 10,450,000 shares of VERTICAL common stock (the "Stock")
owned by MRC to pay any amounts due in the event of a default on the Promissory
Note in the amount of $181,583.70 issued by VERTICAL (the "Note"). In the event
that VERTICAL fails to pay monies in accordance with the Note, the number of
"Shares" necessary to cover the amount of any default on this Note shall be
sold.
2. The method of repayment of the Note upon default shall be as follows:
VERTICAL shall promptly provide an opinion 144 opinion letter to the transfer
agent setting forth the necessary information to remove any restriction on the
stock certificate regarding the Stock. VERTICAL shall open an account and MRC
shall deposit the Stock with a brokerage firm agreed upon by the parties (the
"Broker"). The brokerage firm shall be given instructions which are mutually
agreeable to the parties to sell the Stock in such manner to timely repay all
sums due you pursuant to the Note. Notwithstanding the foregoing, the parties
agree that, in the event of default, the Stock shall be resold as follows: The
Broker shall resell the Stock into the market until the principal and interest
has been paid pursuant to the terms set forth herein. The Stock shall be sold in
increments of 10,000 shares and the Stock shall be sold into the public in an
orderly and nondisruptive manner over a period not to exceed 120 days. Both
parties agree that the Broker shall have the right to sell up to 10% of the
preceding day's volume unless otherwise agreed by VERTICAL or MRC. In no event
shall the Stock be "shorted" as such term is commonly understood. Once all
outstanding amounts owed under the Note have been paid to you, all remaining
stock and any excess funds shall be returned to MRC or VERTICAL and you shall
have no rights with respect to any collateral under the Note. VERTICAL shall
have the express right, at any time, to pay any outstanding amounts owed to you
under the Note and, upon such payment, the Broker shall immediately return any
unsold Stock and any excess monies to MRC.
This Agreement shall be governed by the law of California and subject to the
jurisdiction and venue of the state and federal courts of Los Angeles,
California.
If the foregoing meets with your approval, please sign in the space provided
below. Thank you.
Sincerely,
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Xxxxx Xxxxx, President
Mountain Reservoir Corp.
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Xxxxxx Xxxxxx
