STOCK
      PLEDGE AGREEMENT

    


    Date:
      August
      7,
      2002

    


    TO
      : ________________

    


    Pledge
      of Stock

    


    To
      induce
      you to make a loan of U.S. $25,000.00
      to
      Vertical Computer Systems as evidenced by its Promissory
      Note by and between Vertical
      Computer Systems, Inc.,
      a
      Delaware corporation (“Company”) and you 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 August
      16, 2001
      (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
      our other obligations under the Note and under this Agreement, we, the
      undersigned, Mountain
      Reservoir Corporation
      (“Pledgor”), hereby pledge to you and grant you a security interest in
Ten
      Million
      (10,000,000)
      shares
      of Vertical
      Computer Systems common
      stock.

    


    Definition
      of Collateral; Method of Selling Collateral and Repayment of Promissory
      Note

    


    The
      term
      "Collateral" means (i) the shares of stock pledged under the foregoing paragraph
      (collectively called the "Stock"),
      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 this
      Agreement, you may at any time transfer the stock or any other Collateral into
      your name or the name of your nominee. The method of repayment of the Promissory
      Note upon default shall be as follows: Pledgor shall transfer the collateral
      to
      the Company or as otherwise directed by the Company. The Company shall open
      an
      account and deposit the 10,000,000 Vertical
      Computer Systems common
      stock
shares
      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 10,000,000
      shares
      in such manner to timely repay all sums due the Lender 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.
      Both
      parties agree that the Broker shall have the right to sell up to 10% of the
      daily volume unless otherwise agreed to in writing. In no event shall the Stock
      be “shorted” as such term is commonly understood. The Company or Pledgor shall
      have the express right, at any time, to pay any outstanding amounts owed to
      you
      and, upon such payment, the Broker shall return any remaining Stock immediately
      to the Company or Pledgor, as the case may be; 

    


    Warranties

    


    


    We
      hereby
      warrant to you that:

    


    a. we
      are
      the sole owner of the Stock(s);

    


    b. 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, except that the stock is subject to SEC Rule 144;

     

    
      
        
        

      

      
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    c.
       we
      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, 

     

    Prohibition
      on Transfer of Collateral

    


    We
      agree
      that we will not sell, transfer, assign or encumber any of our rights in any
      of
      the Collateral or grant any rights in or to any of the Collateral except
      pursuant to this Agreement.

     

    Default

    


    Upon
      a
      default under any of the provisions of the Note, or if any warranty by us
      hereunder is incorrect, or if we fail to perform any of our 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 our
      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.

    


    Expenses

    


    We
      agree
      to pay on demand (a) all expenses (including, without limitation, legal fees
      and
      disbursements) incurred by you in connection with the negotiation and
      preparation of this Agreement and the perfection of your security interest
      in
      any of the Collateral, and (b) all expenses of enforcing the provisions of
      this
      Agreement and your rights against any of the Collateral, including, without
      limitation, expenses and fees of legal counsel, court costs and the cost of
      appellate proceedings.

    


    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.

    


    
      
        
        

      

      
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    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. We agree 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, we hereby
      submit to the non-exclusive jurisdiction of such courts and agree not to raise
      and waive any objection we may have based upon personal jurisdiction or the
      venue of any such court or forum
      non conveniens.
      We
      agree 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, we hereby irrevocably appoint ________________________________,
      our
      agent to receive service of process for us and on our behalf.

    


    We
      will
      at all times maintain an agent to receive service of process in California,
      on
      our behalf with respect to this Agreement, and in the event that, for any
      reason, the agent named above or any successor agent shall no longer serve
      as
      our agent to receive service of process in California, we 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
	 	 ________________
	 	 
	
            	By:  	 
	 	 	
              

            
	 	 
	 	 PLEDGOR
	 	 	 
	
               AGREED:

            	 	 
	 	 	 
	 	 	MOUNTAIN RESERVOIR
              CORPORATION
	 	 	 
	 	 	 
	 	 	
              
By:
Frank
              Mento,
              President
	 	 



     

    
      
         

      

      
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