THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”), OR ANY STATE SECURITIES LAWS. THE SALE TO THE HOLDER OF THIS
      SECURITY OF THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS SECURITY
      ARE NOT COVERED BY A REGISTRATION STATEMENT UNDER THE ACT OR REGISTRATION UNDER
      STATE SECURITIES LAWS. THIS SECURITY HAS BEEN ACQUIRED, AND SUCH SHARES OF
      COMMON STOCK MUST BE ACQUIRED, FOR INVESTMENT ONLY AND MAY NOT BE SOLD,
      TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF
      OR
      AN OPINION OF COUNSEL REASONABLY ACCEPTABLE IN FORM, SCOPE AND SUBSTANCE TO
      THE
      COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

    


    No.
      49

    


    Right
      to
      Purchase 600,000 Shares
      of
      Common Stock of Vertical Computer Systems, Inc.

     

    


    VERTICAL
      COMPUTER SYSTEMS, INC.

    


    Common
      Stock Purchase Warrant (the “Warrant”)

    


    


    VERTICAL
      COMPUTER SYSTEMS, INC., a Delaware corporation (the “Company”), hereby certifies
      that, for value received, Richard
      Wade,
      or
      registered assigns (the “Holder”), is entitled, subject to the terms set forth
      below, to purchase from the Company at any time or from time to time up to
      and
      including Three
      (3)
      years
      after the date hereof, and before 5:00 p.m., Los Angeles time, on December
      19, 2004,
      Six
      Hundred Thousand
      (600,000) fully
      paid and nonassessable shares of Common Stock, $.00001 par value, of the Company
      (hereinafter the “Warrants”) at an Exercise Price per share initially equal to
      $0.10.
      The
      number of such shares of Common Stock and the Exercise Price are subject to
      adjustment as provided in this Warrant.

     

    1.
      Conditions and Rights of Holder to Exercise Warrants. 

    


    (a) If,
      from
      time to time, the Holder acquires any shares of stock pursuant to this Common
      Stock Purchase Warrant, the Holder accepts and agrees to the terms of the Lock
      Up Agreement, attached hereto as Exhibit A, and incorporated herein by this
      reference.

    


    (b) The
      Warrants shall vest in equal amounts on a monthly basis over a three (3) year
      period so long as the Holder is employed by company or as otherwise set forth
      in
      the employment agreement between the Company and the Holder, dated December
      1,
      2001. 

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (c)
       This
      Warrant may be exercised by the Holder hereof in full or in part at any time
      or
      from time to time during the exercise period specified in the first paragraph
      hereof, by surrender of this Warrant and the subscription form annexed hereto
      (duly executed) by such Holder to the Company and by making payment, in cash
      or
      by certified or official bank check payable to the order of the Company or
      wire
      transfer to the Company’s account or, with the prior written consent of the
      Company, through the surrender of previously acquired shares of Common Stock
      at
      their fair market value on the exercise date or through the execution of a
      promissory note collateralized by the shares underlying the Warrant, in the
      amount obtained by multiplying (a) the number of shares of Common Stock
      designated by the Holder in the subscription form by (b) the Exercise Price
      then
      in effect. On any partial exercise the Company will forthwith issue and deliver
      to or upon the order of the Holder hereof a new Warrant or Warrants of like
      tenor, in the name of the Holder hereof or as such Holder (upon payment by
      such
      Holder of any applicable transfer taxes) may request, providing in the aggregate
      on the face or faces thereof for the purchase of the number of shares of Common
      Stock for which such Warrant or Warrants may still be exercised.

    


    2.
      Delivery
      of Stock Certificates, etc., on Exercise.
      As soon
      as practicable after the exercise of this Warrant, and in any event within
      five
      business days thereafter, the Company at its expense (including the payment
      by
      it of any applicable issue or stamp taxes) will cause to be issued in the name
      of and delivered to the Holder hereof, or as such Holder (upon payment by such
      Holder of any applicable transfer taxes) may direct, a certificate or
      certificates for the number of fully paid and nonassessable shares of Common
      Stock to which such Holder shall be entitled on such exercise, in such
      denominations as may be requested by such Holder, plus, in lieu of any
      fractional share to which such Holder would otherwise be entitled, cash equal
      to
      such fraction multiplied by the then current fair market value of one full
      share, together with any other stock or other securities any property (including
      cash, where applicable) to which such Holder is entitled upon such exercise
      pursuant to Section 1 or otherwise. 

    


    3.
      Dilution.

    


    a. Dividends,
      Etc.
      If the
      Company shall pay to the holders of its Common Stock a dividend in shares of
      Common Stock or in securities convertible into Common Stock, the Exercise Price
      in effect immediately prior to the record date fixed for the determination
      of
      the holders of Common Stock entitled to such dividend shall be proportionately
      decreased, effective at the opening of business on the next following full
      business day.

    


    b. Splits,
      Combinations, Etc.
      If the
      Company shall split the outstanding shares of its Common Stock into a greater
      number of shares or combine the outstanding shares into a smaller number, the
      Exercise Price in effect immediately prior to such action shall be
      proportionately decreased in the case of a split or increased in the case of
      a
      combination, effective at the opening of business on the full business day
      next
      following the day such action becomes effective. Notwithstanding the foregoing,
      in the event that the Company shall approve a so-called reverse stock split,
      the
      number of Warrants shall not be decreased but the initial exercise price per
      share shall be multiplied by the inverse of the stock split. By way of example
      only, if the Company approves a 4 to 1 reverse stock split, the Holder would
      retain the right to purchase 600,000
      common
      shares underlying the Warrants at a purchase price per share four times the
      original purchase price per share.

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4.  Protection
      in Case or Reclassification, Etc.
      In case
      of any reclassification or change of the terms of the outstanding shares of
      the
      class of Common Stock issuable upon the exercise of this Warrant, then upon
      exercise of this Warrant (other than a change relating to par value, or as
      a
      result of a subdivision or combination), or in case of any consolidation or
      merger of the Company with or into another company (other than a merger in
      which
      the Company is the continuing company or which does not result in any
      reclassification or change of outstanding shares of Common Stock of the class
      issuable upon exercise of this Warrant, other than a split or combination of
      shares), or in case of any sale or conveyance to any other person or entity
      of
      all or substantially all of the assets of the Company, the Company shall use
      its
      best efforts to execute an agreement providing that the holder of this Warrant
      shall have the right thereafter to exercise this Warrant for the kind and amount
      of shares of stock and other securities and property receivable upon such
      reclassification, change, dividend, distribution, consolidation, merger, sale
      or
      conveyance by a holder of the number of shares of Common Stock of the Company
      for which this Warrant might have been exercised immediately prior to such
      reclassification, change, dividend, distribution, consolidation, merger, sale
      or
      conveyance. This Section 4 shall apply to successive reclassifications and
      changes of and dividends and distributions on shares of Common Stock and to
      successive consolidations, mergers, sales or conveyances. Notice of the
      execution of any agreement pertaining to such reclassification, change,
      dividend, distribution, consolidation, merger, sale or conveyance shall be
      given
      to the holder of this Warrant as soon as practicable and in any event not less
      than ten (10) business days before any such transaction is
      consummated.

     

    5.
      Reservation
      of Stock, etc., Issuable on Exercise of Warrants.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of this Warrant, all shares of Common Stock from time
      to time issuable on the exercise of this Warrant. 

    


    6.
      Register
      of Warrants.
      The
      Company shall maintain, at the principal office of the Company (or such other
      office as it may designate by notice to the Holder hereof), a register in which
      the Company shall record the name and address of the person in whose name this
      Warrant has been issued, as well as the name and address of each successor
      and
      prior owner of such Warrant. The Company shall be entitled to treat the person
      in whose name this Warrant is so registered as the sole and absolute owner
      of
      this Warrant for all purposes.

    


    7.
      Exchange
      of Warrant.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder hereof at
      the
      office or agency of the Company referred to in Section 6, for one or more new
      Warrants of like tenor representing in the aggregate the right to subscribe
      for
      and purchase the number of shares of Common Stock which may be subscribed for
      purchase hereunder, each of such new Warrants to represent the right to
      subscribe for and purchase such number of shares as shall be designated by
      said
      Holder hereof at the time of such surrender.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    8.
      Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense will execute and deliver, in lieu thereof, a new Warrant
      of like tenor.

    


    9.
      Warrant
      Agent.
      The
      Company will act as the exercise agent for the purpose of issuing Common Stock
      on the exercise of this Warrant pursuant to Section 1. The Company may, by
      written notice to the Holder, appoint an agent having an office in the United
      States of America, for the purpose of issuing Common Stock on the exercise
      of
      this Warrant pursuant to Section 1, redeeming this Warrant pursuant to Section
      2, exchanging this Warrant pursuant to Section 7, and replacing this Warrant
      pursuant to Section 8, or any of the foregoing, and thereafter any such
      issuance, exchange or replacement, as the case may be, shall be made at such
      office by such agent.

    


    10.
      No
      Rights or Liabilities as a Stockholder.
      This
      Warrant shall not entitle the Holder hereof to any voting rights or other rights
      as a stockholder of the Company, until properly exercised.  

    


    11.
      Notices, etc. All notices and other communications from the Company to the
      registered Holder of this Warrant shall be mailed by first class certified
      mail,
      postage prepaid, at such address as may have been furnished to the Company
      in
      writing by such Holder or at the address shown for such Holder on the register
      of Warrants referred to in Section 7.

    


    12.
      Miscellaneous. This Warrant and any terms hereof may be changed, waived,
      discharged or terminated only by an instrument in writing signed by the party
      against which enforcement or such change, waiver, discharge or termination
      is
      sought. This Warrant shall be construed and enforced in accordance with and
      governed by the internal laws of the State of Delaware. The headings in this
      Warrant are for purposes of reference only, and shall not limit or otherwise
      affect any of the terms hereof. The invalidity or unenforceability of any
      provision hereof shall in no way affect the validity or enforceability of any
      other provision.

    


    13.
      “Piggy-Back” Registration.

    


       a. Grant
      of
      Right. The Holder of this Warrant shall have the right for a period of five
      years from the date of grant of this Warrant to include all or any part of
      this
      Warrant and the shares of Common Stock underlying this Warrant (collectively,
      the “Registrable Securities”) as part of any registration of securities filed by
      the Company (other than in connection with a transaction contemplated by Rule
      145(a) promulgated under the Act); provided, however, that if, in the written
      opinion of the Company’s managing underwriter or underwriters, if any, for such
      offering determines that marketing factors require a limitation of the number
      of
      shares to be underwritten, the managing underwriter in its sole discretion
      may
      limit the number of Registrable Securities to be included in the registration,
      or may exclude Registrable Securities entirely from such registration. In such
      case, the Company shall so advise Holder whose Registrable Securities otherwise
      would be included in such registration and underwritten offering shall be
      allocated among other selling shareholders requesting registration in
      proportion, as nearly as practicable, to the respective amounts of Registrable
      Securities held by Holder and registrable shares each of such other selling
      shareholders at the date of filing of the Registration Statement. If Holder
      disapproves of the terms and conditions of the underwritten offering, Holder
      may
      withdraw therefrom by written notice to the Company and the managing
      underwriter(s). Any Registrable Securities excluded or withdrawn from such
      underwritten offering shall be withdrawn from such registration.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

       b.
       Lock
      Up.
      Holder hereby agrees that, if requested by the Company and the managing
      underwriter(s), it will enter into a customary form of “lock-up” agreement with
      the Company and the managing underwriter(s) with respect to any Registrable
      Securities then held by Holder, which agreement shall contain such Registrable
      Securities than those contained in any other such agreements then entered into
      by the Company and the managing underwriter(s) with other comparable holders
      of
      the Company’s Common Stock.

    


       c.
       Terms.
      The Company shall bear all fees and expenses attendant to registering the
      Reigstrable Securities, including any filing fees payable to the National
      Association of Securities Dealers, Inc. (NASD), but the Holder shall pay any
      and
      all underwriting commissions and the expenses of any legal counsel selected
      by
      the Holder to represent it in connection with the sale of the Registrable
      Securities. In the event of such a proposed registration, the Company shall
      furnish the then Holder of outstanding Registrable Securities with prompt
      written notice prior to the proposed date of filing of such registration
      statement. Such notice to the Holder shall continue to be given for each
      registration statement filed by the Company until such time as all of the
      Registrable Securities have been sold by the Holder. The Holder of the
      Registrable Securities shall exercise the “piggy-back” rights provided for
      herein by giving written notice, within twenty days of the receipt of the
      Company’s notice of its intention to file a registration statement. Nothing
      contained in this Warrant shall be construed as requiring any Holder to exercise
      this Warrant or any part thereof prior to the initial filing of any registration
      statement or the effectiveness thereof. The Company shall have the right to
      terminate or withdraw any registration initiated by the Company under this
      Section 5 prior to the effectiveness of such registration whether or not Holder
      has elected to include Registrable Securities in such registration.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Vertical Computer Systems, Inc. has caused this Warrant to
      be
      executed on its behalf by one of its officers thereunto duly
      authorized.

     

    
      	 	 	 
	 Dated:
December
              19, 2001 	VERTICAL
              COMPUTER
              SYSTEMS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
William
              Mills, Secretary