EXHIBIT 10.7

                              CONSULTING AGREEMENT

      This Consulting Agreement is made as of this 9th day of July, 2001, by and
between Vertical Computer Systems, Inc. (the "Company"), a corporation duly
organized and existing under the laws of California, with offices at 6336
Wilshire Boulevard, Los Angeles, California 90048 and M.S. Farrell & Co., Inc.,
(the "Consultant") a corporation duly organized and existing under the laws of
the State of New York, with offices at 67 Wall Street, New York, New York 10005.

      WHEREAS, the Company is a publicly held corporation (NASDAQ Bulletin Board
"VCSY") and is engaged in the business of software and technology, and

      WHEREAS, the Consultant is experienced in providing corporate advisory
services to publicly traded companies and privately held companies; and

      WHEREAS, the Company wishes to retain the services of the Consultant on
the following terms and conditions:

            The Company hereby retains the services of the Consultant for a
period of six (6) months commencing upon the execution of this agreement (the
"Execution Date"). The Company may terminate this agreement prior to the 90th
day following the Execution Date upon presentation of 15 days prior written
notice of termination to the Consultant in the event the Consultant has not made
an introduction leading to a transaction involving the introduced party and the
Company. In the event this agreement is terminated early, the Consultant shall
retain all compensation received or to be received prior to the notice of
termination. In exchange for the Consulting Services (as that term is defined
herein), the Consultant shall not receive a fee payable in cash but shall be
reimbursed in cash for reasonable travel and other expenses, payable on the
first business day of the month, which expenses shall be pre-approved by the
Company. The Consultant shall receive the following as fees for Consulting
Services: 5,375,000 shares of common stock of the Company (the "Common Stock
Compensation") and 500,000 Warrants to purchase common stock of the Company (the
"Warrants"). The Company agrees to register the Common Stock Compensation using
a Form S-8 within thirty days from the Execution Date. In the event the Common
Stock Compensation is not registered and certificates representing the
registered common shares are not issued on or before the thirtieth day following
the Execution Date, Consultant shall receive an additional 150,000 shares of
common stock of the Company (which the Company agrees to register on a Form S-8
or similar form) for each ten day period (or portion of each ten day period)
following the 30th day after the Execution Date. The shares shall be issued 75%
to Brendan Rempel and 25% to Stuart Garawitz. The Warrants Compensation shall be
paid or issued as appropriate to the Consultant in two equal installments; half
on the signing of this agreement and half on the 91st day after the Execution
Date. The Common Stock Compensation shall be paid 1,000,000 shares upon signing
this agreement, 1,125,000 shares within 30 days of the Execution Date, 1,125,000
within 60 days of the Execution Date, and 2,125,000 shares within 90 days of the
Execution Date. The Company and the Consultant agree that in the event the share
price varies from $.037 at the time of any payment of the Common Stock
Compensation, the number of shares issued to Consultant shall be changed in
inverse proportion with the change in the share price such that the total value
of the shares issued shall remain constant (for example, in the event the share
price at time of issuance of 1,125,000 shares increases 50% above $.037, the
amount of shares issued shall be decreased by 50% to 562,500 shares). The share
price shall be the average of the closing high bid price per common share as
quoted on the NASDAQ Bulletin Board for the three business days prior to the
filing of the Form S-8. The exercise price of the Warrants shall be the average
of the closing high bid price for the five (5) business days prior to the date
of this agreement. In addition, the Company will pay the Consultant a finder's
fee of 2.5% of the consideration paid (or to be paid) or received (or to be
received) at the time of the closing of a transaction in the event that the
Consultant, or the designee of the Consultant, originates a merger, acquisition,
joint venture, spin-off or other similar transaction to which the Company is a
party.

            The Warrants and the securities underlying the Warrants shall not be
callable by the Company and shall contain customary anti-dilution provisions.
However, should the Company approve a reverse stock split, the number of
Warrants shall not be decreased but the original purchase price per share shall
be multiplied by the inverse of the stock split. For example, if the Company
approves a 4 for 1 reverse stock split, the Consultant shall retain the right to
purchase 500,000 common shares underlying the Warrants at a purchase price per
share four times the original purchase price per share. The Warrants shall
expire five years from the date of their issuance, and shall be exercisable at
any time in whole or in part. The Company agrees to use its best efforts to keep
current in its regulatory filings in order to maintain effective the
registration covering the shares underlying the Warrants. The Consultant may
transfer the Warrants to its officers, directors, employees, or agents.

            At any time prior to the expiration of the Warrants, should the
Company prepare and file a registration statement in connection with any
securities of the Company, the Company agrees to include for registration in
such filing the common shares underlying the Warrants issued pursuant to this
Agreement. The Company shall bear all fees and expenses in connection with the
preparation and filing of such registration statements. In the event of such
proposed filings, the Company agrees to notify the Consultant via registered
mail, return receipt requested, at least thirty (30) days prior to the proposed
date of filing of such registration statement. The Consultant shall have the
right to exercise the "piggy-back" rights provided for herein by giving written
notice, within ten (10) days of receipt of the Company's notice of its intention
to file a registration statement, to the Company. The Company need not keep any
registration statement current for more than nine months.

            The Consultant shall use their best efforts to provide the following
services to the Company: (i) introduction to the Company of other business
ventures (publicly and/or privately held) for the purpose of potential merger
and/or acquisition, (ii) general corporate advice. The services provided by the
Consultants are not in connection with the offer or sale of securities in any
capital raising transactions, and do not directly or indirectly promote or
maintain a market for the Company's securities. The services referred to in this
paragraph shall be known as the "Consulting Services".

            The Consultant shall be an independent contractor and shall have no
right or authority to assume or create any obligations or responsibility,
express or implied, on behalf of or in the name of the Company, unless
specifically authorized in writing by the Company. No provision of this
Agreement shall be construed to preclude the Consultant, or any officer,
director, agent, assistant, affiliate or employee of the Consultant from
engaging in any activity whatsoever, including, without limitation, receiving
compensation for managing investments, or acting as an advisor, broker, or
dealer, to or participant in any corporation, partnership, trust or other
business entity or from receiving compensation or profit therefore. The
Consultant shall not be obligated to present any particular business combination
to the Company even if such opportunity is of such character which, if presented
to the Company, could be taken by the Company, and the Consultant and any
affiliate thereof shall have the right to take for its own account (individually
or as trustee) to recommend to others any such particular business combination.

            The Consultant (including any person or entity acting for or on
behalf of the Consultant) shall not be liable for any mistakes of fact, errors
of judgment, for losses sustained by the Company or any subsidiary or for any
acts or omissions of any kind, unless caused by the gross negligence or
intentional misconduct of the Consultant or any person or entity acting for or
on behalf of the Consultant.

            The Company and its present and future subsidiaries jointly and
severally, agree to indemnify and hold harmless the Consultant and its present
and future shareholders as well as its and their officers, directors,
affiliates, associates, employees, attorneys and agents ("Indemnified Parties"
or "Indemnified Party") against any loss, claim, damage or liability whatsoever
(including reasonable attorneys' fees and expenses), to which such

<PAGE>

Indemnified Party may become subject as a result of performing any act (or
omitting to perform any act) contemplated to be performed by the Consultant
pursuant to this Agreement. So long as the Company has not provided counsel to
the Indemnified Party in accordance with the terms of this Agreement, the
Company and its subsidiaries agree to reimburse the defense of any action or
investigation (including reasonable attorneys' fees and expenses) subject to an
understanding from such Indemnified Party to repay the Company or its
subsidiaries if it is ultimately determined that such Indemnified Party is not
entitled to such indemnity. In case any action, suit or proceeding shall be
brought or threatened, in writing, against any Indemnified Party, it shall
notify the Company within twenty (20) days after the Indemnified Party receives
notice of such action, suit or such threat. The Company shall have the right to
appoint the Company's counsel to defend such action, suit or proceeding,
provided that such Indemnified Party consents to such representation by such
counsel. In the event any counsel appointed by the Company shall not acceptable
to such Indemnified Party, then the Company shall have the right to appoint
alternative counsel for such Indemnified Party reasonably acceptable to such
Indemnified Party, until such time as acceptable counsel can be appointed. In
any event, the Company shall, at its sole cost and expense, be entitled to
appoint counsel to appear and participate as co-counsel in the defense thereof.
The Indemnified Party, or its co-counsel, shall promptly supply the Company's
counsel with copies of all documents, pleadings and notices, which are filed,
served or submitted in any of the aforementioned. No Indemnified Party shall
enter into any settlement without the prior written consent of the Company,
which consent shall not be unreasonably withheld.

      This Agreement shall be binding upon the Company and the Consultant and
their successors and assigns.

      If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever; (i) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (ii) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested by the provision held, invalid illegal
or unenforceable.

      No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto. No waiver of any
other provisions hereof (whether or not similar) shall be binding unless
executed in writing by both parties hereto nor shall such waiver constitute a
continuing waiver.

      This Agreement may be executed in one or more counterparts, each
counterpart shall for all purposes be deemed to be an original but all of which
shall constitute one and the same Agreement.

      The Parties agree that should any dispute arise in the administration of
this Agreement, that the dispute shall be resolved through arbitration under the
rules of the American Arbitration Association, with its location in New York,
New York.

      This Agreement contains the entire agreement between the parties with
respect to the services to be provided to the Company by the Consultant and
supersedes any and all prior understandings, agreement or correspondence between
the parties.

IN WITNESS WHEREOF, the Company and the Consultant have caused this Agreement to
be signed by their duly authorized representatives as of the day and year first
above written.

Vertical Computer Systems, Inc.              M.S. Farrell & Co., Inc.


By:__________________________________        By:________________________________
Richard Wade                                 Thomas A. Gallo
President                                    Chief Executive Officer