Exhibit 10.107
April 11, 2003
Xx. Xxxx Xxxxxxxx President/CEO TranStar, Inc. 0000 Xxxxxxxx Xxxx. Los Angeles,
CA 90048
RE: AMENDMENT TO TRANSTAR LICENSE, NOTE, AND AMENDED STOCKHOLDER AGREEMENT
Dear Xxxx,
This letter will confirm the material terms of the mutual agreement between
TranStar Systems, Inc. formally known as Apollo Industries, Inc., (the
"Corporation"), and Vertical Computer Systems, Inc. ("Vertical") to amend the
following agreements:
o Royalty Agreement, dated October 14, 2000
o Stock Purchase Agreement, October 14, 2000
o Amended Stockholder's Agreement, dated October 14, 2000
o $24,000 Promissory Note, dated April 19, 2001 (including
security documents)
o $24,000 Promissory Note, dated May 8, 2001 (including security
documents)
Whereas, Vertical, Xxxx Xxxxxxxx ("Radlovic"), Xxxxxx X. Mix III, Xxxx Xxxx, The
Secura Group, L.L.C., and X. Xxxxxxx are the stockholders ("Stockholders") of
the common stock of the Corporation who executed the Amended Stockholder's
Agreement.
In connection with the above agreements, the parties hereby agree as follows:
1. All agreements between the Corporation and Vertical shall be amended such
that all references to Apollo Industries, Inc. shall be changed to TranStar
Systems, Inc. whenever reasonably required.
2. Vertical shall waive all current defaults on the $24,000 Promissory Note,
dated April 19, 2001 (including underlying security documents), and the $24,000
Promissory Note, dated May 8, 2001 (including security documents), hereinafter
collectively referred to as the "2001 Notes". The due date for the 2001 Notes is
extended to April 5, 2006. The Corporation and Vertical acknowledge confirm and
agree that all underlying agreements to the 2001 Notes, including the Stock
Pledge Agreement and the Loan and Security Agreement shall remain in full force
and effect and that Vertical shall retain the 1,000,000 shares of common stock
of the Corporation issued by the Corporation as collateral (the "Collateral
Stock"). The Corporation expressly acknowledges and warrants that the waiver of
default is expressly conditioned upon the Corporation's continuing obligations
under the 2001 Notes and underlying security interests. At Vertical's request,
the Corporation will execute any other documents reasonably required to perfect
Vertical's security interest in any collateral shares issued for a breach of
either of the 2001 Notes.
1
3. In consideration of Vertical's waiver of default on each of the 2001 Notes,
the Corporation shall increase the royalty rate on the Royalty Agreement to
three percent (3%) of any Transaction Fees and any other revenues generated in
perpetuity;
4. Concurrently with the execution of this Agreement, Vertical is transferring
its remaining ownership interest in the Corporation, consisting of 3,000,000
shares of common stock originally purchased pursuant to the Stock Purchase
Agreement dated October 14, 2000, to Radlovic in the capacity of an individual.
The Corporation and Vertical hereby acknowledge, warrant and agree that, upon
such a transfer:
a. Vertical shall have no further rights under the Stockholders
Agreement, including without limitation, any voting rights and any rights with
respect to appointment of directors of the Corporation;
b. Vertical and any of Vertical's employees or agents acting as
Officers or Directors of the Corporation hereby resign, affective upon the
execution of this agreement. Vertical and the directors appointed by Vertical
shall have no further obligations to the Corporation, including any obligations
specifically set forth in the Amended Stockholders Agreement, and the
Corporation agrees to indemnify Vertical and its directors for any past acts
that involved Vertical's rights and obligations to the Corporation;
c. Vertical shall have no obligation to provide any consultant services
as specified in Article 3, Section 13 of the Stockholders Agreement nor shall
either Vertical or the Corporation have any further obligations under Article 5
of the Stockholder's Agreement.
5. FURTHER DOCUMENTS. The Corporation shall secure all written approvals
(including any Stockholders who are not a party to the Radlovic purchase of
Vertical's shares) and corporate resolutions necessary to effectuate the terms
of this Agreement and shall provide Vertical with executed copies with respect
thereto. The parties agree to promptly execute any further documents as
reasonably necessary to effectuate the terms of this Agreement.
6. AUTHORITY. Each party hereto represents and warrants that it has full power
and authority to enter into this Agreement and to perform this Agreement in
accordance with its terms.
7. GOVERNING LAW. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of California and shall be subject to the
exclusive jurisdiction and venue of the state and federal courts of Los Angeles,
California, to which the Parties irrevocably agree to submit to.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
2
9. SEVERABILITY. In the event that any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
10. AMENDMENT. This Agreement may be amended only in writing executed by the
parties hereto.
11. ATTORNEY'S FEES. In the event of a dispute the prevailing party shall be
entitled to be reimbursed for its legal fees, including attorney fees and court
costs, by the other party.
The parties agree to the terms of agreement effective on the date first set
forth above:
ACCEPTED AND AGREED:
VERTICAL COMPUTER SYSTEMS, INC.
--------------------------
Xxxxxxx Xxxx, President/CEO
TRANSTAR SYSTEMS, INC (the "Corporation")
--------------------------
Xxxx Xxxx, Secretary
3
