Document:

<PAGE>

Exhibit 10.103b

THIS DEBENTURE,  AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE  (COLLECTIVELY,
THE  "SECURITIES"),  HAVE NOT BEEN REGISTERED WITH THE UNITED STATES  SECURITIES
AND  EXCHANGE  COMMISSION  OR  THE  SECURITIES  COMMISSION  OF  ANY  STATE.  THE
SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM  REGISTRATION  UNDER
REGULATION  D  PROMULGATED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE
"ACT").  THE SECURITIES ARE  "RESTRICTED"  AND MAY NOT BE OFFERED OR SOLD UNLESS
THE  SECURITIES  ARE  REGISTERED  UNDER THE ACT,  PURSUANT  TO  REGULATION  D OR
PURSUANT TO AVAILABLE  EXEMPTIONS FROM THE REGISTRATION  REQUIREMENTS OF THE ACT
AND THE  COMPANY  WILL BE  PROVIDED  WITH  OPINION  OF  COUNSEL  OR  OTHER  SUCH
INFORMATION  AS IT MAY  REASONABLY  REQUIRE TO CONFIRM THAT SUCH  EXEMPTIONS ARE
AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE
EXCEPT IN COMPLIANCE WITH THE ACT.

                                    DEBENTURE

                         VERTICAL COMPUTER SYSTEMS, INC.

                            5% CONVERTIBLE DEBENTURE

                               DUE APRIL 14, 2006

No.  ___                                                          $__________

         This Debenture is issued by VERTICAL COMPUTER SYSTEMS, INC., a Delaware
corporation (the "COMPANY"), to ____________________________  (together with its
permitted  successors  and assigns,  the "HOLDER")  pursuant to exemptions  from
registration under the Securities Act of 1933, as amended.

                                   ARTICLE I.

         SECTION 1.01 PRINCIPAL AND INTEREST.  For value received,  on April 14,
2003,  the Company  hereby  promises to pay to the order of the Holder in lawful
money of the United  States of America and in  immediately  available  funds the
principal sum of __________________(US $________), together with interest on the
unpaid  principal  of this  Debenture  at the rate of five percent (5%) per year
(computed on the basis of a 365-day year and the actual days  elapsed)  from the
date of this Debenture until paid. At the Company's option, the entire principal
amount and all  accrued  interest  shall be either (a) paid to the Holder on the
second  (2nd)  year  anniversary  from  the  date  hereof  or (b)  converted  in
accordance with Section 1.02 herein.

<PAGE>

         SECTION 1.02 OPTIONAL  CONVERSION.  Commencing one hundred twenty (120)
days after the date hereof,  the Holder is entitled,  at its option, to convert,
and sell on the same day,  at any time and from time to time,  until  payment in
full  of  this  Debenture,  all  or any  part  of the  principal  amount  of the
Debenture,  plus accrued interest,  into shares (the "CONVERSION SHARES") of the
Company's  common stock,  par value $0.001 per SHARE  ("COMMON  STOCK"),  at the
price per share (the "CONVERSION PRICE") equal to the lesser of (a) $0.03 or (b)
an amount equal to eighty  percent (80%) of the lowest  Closing Bid Price of the
Common Stock for the five (5) trading days immediately  preceding the Conversion
Date (as  defined  herein).  Subparagraphs  (a) and (b) above  are  individually
referred to as a "CONVERSION  PRICE". As used herein,  "PRINCIPAL  MARKET" shall
mean The National  Association  of Securities  Dealers  Inc.'s  Over-The-Counter
Bulletin Board,  Nasdaq  SmallCap  Market,  or American Stock  Exchange.  If the
Common  Stock is not traded on a Principal  Market,  the Closing Bid Price shall
mean, the reported  Closing Bid Price for the Common Stock,  as furnished by the
National Association of Securities Dealers, Inc., for the applicable periods. No
fraction of shares or scrip  representing  fractions of shares will be issued on
conversion,  but the number of shares  issuable  shall be rounded to the nearest
whole share. To convert this Debenture,  the Holder hereof shall deliver written
notice thereof, substantially in the form of EXHIBIT "A" to this Debenture, with
appropriate  insertions (the "CONVERSION NOTICE"), to the Company at its address
as set forth herein.  The date upon which the conversion shall be effective (the
"CONVERSION  DATE")  shall be deemed  to be the date the  Company  receives  the
Conversion Notice.

         SECTION 1.03 RESERVATION OF COMMON STOCK. The Company shall reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the  conversion of this  Debenture,  such number of
shares of Common Stock as shall from time to time be  sufficient  to effect such
conversion, based upon the Conversion Price. If at any time the Company does not
have a sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders  within thirty
(30)  days of that  time  for the sole  purpose  of  increasing  the  number  of
authorized shares of Common Stock.

         SECTION 1.04 RIGHT OF REDEMPTION.  The Company at its option shall have
the right to redeem,  with thirty (30) business days advance written notice (the
"REDEMPTION NOTICE"), a portion or all outstanding  convertible  debenture.  The
redemption  price  shall be one  hundred  twenty  percent  (120%) of the  amount
redeemed plus accrued interest.

         SECTION 1.05 REGISTRATION  RIGHTS. The Company is obligated to register
the  resale of the  Conversion  Shares  under  the  Securities  Act of 1933,  as
amended,  pursuant to the terms of a Registration Rights Agreement,  between the
Company and the Holder of even date herewith (the "INVESTOR  REGISTRATION RIGHTS
AGREEMENT").

         SECTION 1.06 INTEREST PAYMENTS. The interest so payable will be paid by
the  Company  in cash  (via wire  transfer  or  certified  funds) at the time of
maturity or conversion to the person in whose name this Debenture is registered.
In the event of default, as described in Article III Section 3.01 hereunder, the
Holder  may  elect  that the  interest  be paid in the form of  Common  Stock as
provided  for in the  Irrevocable  Transfer  Agent  Instructions  of  even  date
herewith.  If paid in the form of Common Stock, the amount of stock to be issued
will be calculated  as follows:  the value of the stock shall be the Closing Bid
Price on: (i) the date the interest payment is due; or (ii) if the interest

                                        2

<PAGE>

payment is not made when due, the date the interest payment is made. A number of
shares of Common Stock with a value equal to the amount of interest due shall be
issued.  No fractional shares will be issued;  therefore,  in the event that the
value of the Common Stock per share does not equal the total  interest  due, the
Company will pay the balance in cash.

         SECTION 1.07 PAYING AGENT AND  REGISTRAR.  Initially,  the Company will
act as paying  agent and  registrar.  The Company  may change any paying  agent,
registrar,  or  Company-registrar  by giving  the  Holder not less than ten (10)
business  days' written  notice of its election to do so,  specifying  the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.

         SECTION 1.08 SUBORDINATED  NATURE OF DEBENTURE.  This Debenture and all
payments  hereon,  including  principal or interest,  shall be  subordinate  and
junior in right of payment to all  accounts  payable of the Company  incurred in
the  ordinary  course of business  and/or bank debt of the Company not to exceed
$200,000.

                                   ARTICLE II.

         SECTION 2.01 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may not be
amended without the consent of the Holder.  Notwithstanding  the above,  without
the consent of the Holder,  the Debenture may be amended to cure any  ambiguity,
defect or  inconsistency,  or to make any change that does not adversely  affect
the rights of the Holder.

                                  ARTICLE III.

         SECTION  3.01  EVENTS OF  DEFAULT.  An Event of  Default  is defined as
follows:  (a) failure by the Company to pay amounts due hereunder within fifteen
(15) days of the date of maturity of this Debenture;  (b) failure by the Company
to comply with the terms of the Irrevocable Transfer Agent Instructions attached
to the  Securities  Purchase  Agreement;  (c) failure by the Company's  transfer
agent to issue Common Stock to the Holder  within ten (10) days of the Company's
receipt of the attached  Notice of  Conversion  from Holder;  (d) failure by the
Company  for ten (10) days  after  notice to it to comply  with any of its other
agreements  in the  Debenture;  (e) events of bankruptcy  or  insolvency;  (f) a
breach by the Company of its obligations under the Securities Purchase Agreement
or the Investor  Registration Rights Agreement which is not cured by the Company
within ten (10) days after receipt of written notice thereof.

         SECTION 3.02 FAILURE TO ISSUE  UNRESTRICTED  COMMON STOCK. As indicated
in Article III Section  3.01, a breach by the Company of its  obligations  under
the Investor  Registration Rights Agreement shall be deemed an Event of Default,
which if not cured within ten (10) days,  shall  entitle the Holder  accelerated
full  repayment of all debentures  outstanding.  The Company  acknowledges  that
failure to honor a Notice of  Conversion  shall  cause  irreparable  harm to the
Holder.

                                        3

<PAGE>

                                   ARTICLE IV.

         SECTION 4.01 RIGHTS AND TERMS OF  CONVERSION.  Subject to Section 1.04,
this Debenture,  in whole or in part, may be converted at any time following the
date of closing,  into shares of Common Stock at a price equal to the Conversion
Price as described in Section 1.02 above.

         SECTION  4.02  RE-ISSUANCE  OF  DEBENTURE.  When the  Holder  elects to
convert a part of the Debenture,  then the Company shall reissue a new Debenture
in the same form as this Debenture to reflect the new principal amount.

         SECTION 4.03  TERMINATION OF CONVERSION  RIGHTS.  The Holder's right to
convert the Debenture  into the Common Stock in accordance  with  paragraph 4.01
shall terminate on the date that is the second (2nd) year  anniversary  from the
date hereof and this Debenture shall be automatically  converted on that date in
accordance  with  the  formula  set  forth  in  Section  4.01  hereof,  and  the
appropriate shares of Common Stock and amount of interest shall be issued to the
Holder.

         SECTION  4.04  RESTRICTION  ON SHORT SALE OF STOCK.  The Holder  hereby
acknowledges  and agrees that it shall not short sell the Common Stock except in
connection  with a  Conversion  Notice,  and  thereafter  only  such  number  of
Conversion Shares it receives with respect to such Conversion Notice.

                                   ARTICLE V.

         SECTION 5.01 ANTI-DILUTION.  In the event that the Company shall at any
time subdivide the  outstanding  shares of Common Stock,  or shall issue a stock
dividend  on the  outstanding  Common  Stock,  the  Conversion  Price in  effect
immediately  prior to such subdivision or the issuance of such dividend shall be
proportionately  decreased,  and in the event that the Company shall at any time
combine the outstanding  shares of Common Stock,  the Conversion Price in effect
immediately  prior  to such  combination  shall  be  proportionately  increased,
effective at the close of business on the date of such subdivision,  dividend or
combination as the case may be.

         SECTION 5.02 CONSENT OF HOLDER TO SELL  CAPITAL  STOCK.  Except for the
Equity Line of Credit  Agreement  dated the date hereof  between the Company and
Cornell Capital Partners,  LP. so long as any of the principal of or interest on
this Debenture  remains unpaid and  unconverted,  the Company shall not, without
the prior consent of the Holder, issue or sell (i) any Common Stock or Preferred
Stock without  consideration or for a consideration per share less than its fair
market value determined  immediately  prior to its issuance,  (ii) issue or sell
any Preferred Stock, warrant,  option, right, contract,  call, or other security
or  instrument  granting  the holder  thereof the right to acquire  Common Stock
without  consideration  or for a  consideration  per share less than such Common
Stock's fair market value determined  immediately  prior to its issuance,  (iii)
enter into any security  instrument  granting the holder a security  interest in
any and all assets of the  Company or (iv) file any  registration  statement  on
Form S-8.

                                   ARTICLE VI.

         SECTION 6.01 NOTICE.  Notices regarding this Debenture shall be sent to
the  parties  at the  following  addresses,  unless a party  notifies  the other
parties, in writing, of a change of address:

                                        4

<PAGE>

If to the Company, to:              Vertical Computer Systems, Inc.
                                    6336 Wilshire Boulevard
                                    Los Angeles, CA 90048
                                    Attention:        Richard Wade
                                                      President
                                    Telephone:        (323) 658-4211
                                    Facsimile:        (322) 658-4214

With a copy to:                     Kirkpatrick & Lockhart LLP
                                    201 South Biscayne Boulevard - Suite 2000
                                    Miami, FL  33131-2399
                                    Attention:        Clayton E. Parker, Esq.
                                    Telephone:        (305) 539-3300
                                    Facsimile:        (305) 358-7095

If to the Holder:                   _______________________________

                                    -------------------------------

                                    -------------------------------

With a copy to:                     Butler Gonzalez LLP
                                    1000 Stuyvesant Avenue - Suite 6
                                    Union, NJ 07083
                                    Attention:        David Gonzalez, Esq.
                                    Telephone:        (908) 810-8588
                                    Facsimile:        (908) 810-0973

         SECTION 6.02 GOVERNING  LAW. This Debenture  shall be deemed to be made
under  and  shall be  construed  in  accordance  with  the laws of the  State of
Delaware  without  giving effect to the  principals of conflict of laws thereof.
Each of the parties  consents to the  jurisdiction  of the U.S.  District  Court
sitting in the  District  of the State of New Jersey or the state  courts of the
State of New Jersey sitting in Hudson County,  New Jersey in connection with any
dispute  arising under this Debenture and hereby  waives,  to the maximum extent
permitted by law, any  objection,  including  any  objection  based on FORUM NON
CONVENIENS to the bringing of any such proceeding in such jurisdictions.

         SECTION 6.03  SEVERABILITY.  The invalidity of any of the provisions of
this  Debenture  shall  not  invalidate  or  otherwise  affect  any of the other
provisions of this Debenture, which shall remain in full force and effect.

         SECTION 6.04 ENTIRE AGREEMENT AND AMENDMENTS. This Debenture represents
the entire  agreement  between  the parties  hereto with  respect to the subject
matter  hereof  and there are no  representations,  warranties  or  commitments,
except as set forth herein.  This Debenture may be amended only by an instrument
in writing executed by the parties hereto.

                                        5

<PAGE>

         SECTION 6.05  COUNTERPARTS.  This Debenture may be executed in multiple
counterparts,  each of which  shall be an  original,  but all of which  shall be
deemed to constitute on instrument.

         IN WITNESS  WHEREOF,  with the intent to be legally bound  hereby,  the
Company as executed this Debenture as of the date first written above.

                                     VERTICAL COMPUTER SYSTEMS, INC.

                                       By:
                                     -------------------------------
                                     Name:    Richard S. Wade
                                     Title:   President

                                        6

<PAGE>

                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

           (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE NOTE)

TO:

         The undersigned hereby irrevocably elects to convert $ of the principal
amount of the above  Note into  Shares  of  Common  Stock of  Vertical  Computer
Systems,  Inc., according to the conditions stated therein, as of the Conversion
Date written below.

CONVERSION DATE:
                              -----------------------------------------------
APPLICABLE CONVERSION PRICE:
                              -----------------------------------------------
SIGNATURE:
                              -----------------------------------------------
NAME:
                              -----------------------------------------------
ADDRESS:
                              -----------------------------------------------
AMOUNT TO BE CONVERTED:  $
                              -----------------------------------------------
AMOUNT OF DEBENTURE UNCONVERTED: $
                              -----------------------------------------------
CONVERSION PRICE PER SHARE: $
                              -----------------------------------------------
NUMBER OF SHARES OF COMMON STOCK TO BE
                              -----------------------------------------------
ISSUED:
                              -----------------------------------------------
PLEASE ISSUE THE SHARES OF COMMON STOCK
IN THE FOLLOWING NAME AND TO THE
FOLLOWING ADDRESS:
                              -----------------------------------------------
ISSUE TO:
                              -----------------------------------------------
AUTHORIZED SIGNATURE:
                              -----------------------------------------------
NAME:
                              -----------------------------------------------
TITLE:
                              -----------------------------------------------
PHONE NUMBER:
                              -----------------------------------------------
BROKER DTC PARTICIPANT CODE:
                              -----------------------------------------------
ACCOUNT NUMBER:
                              -----------------------------------------------

                                       A-1<PAGE>

Exhibit 10.103c

                     INVESTOR REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT (this  "AGREEMENT"),  dated as of
April 14,  2003,  by and among  VERTICAL  COMPUTER  SYSTEMS,  INC.,  a  Delaware
corporation,  with headquarters located at 6336 Wilshire Boulevard, Los Angeles,
California  90048 (the  "COMPANY"),  CORNELL CAPITAL PARTNERS LP ("CORNELL") and
the undersigned investors (Cornell and the undersigned investors each, at times,
an "INVESTOR" and collectively, the "INVESTORS").

         WHEREAS:

         A. In connection  with the Securities  Purchase  Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE  AGREEMENT"),
the Company has agreed (i) upon the terms and subject to the  conditions  of the
Securities  Purchase Agreement,  to issue and sell to the Investors  convertible
debentures (the "CONVERTIBLE  DEBENTURES")  which shall be convertible into that
number of shares of the  Company's  common stock,  par value  $0.00001 per share
(the "COMMON STOCK"), pursuant to the terms of the Securities Purchase Agreement
for  an  aggregate  purchase  price  of  up  to  Two  Hundred  Thousand  Dollars
($200,000);  and (ii) upon the terms and subject to the conditions of the Equity
Line of Credit  Agreement,  by and between the  Company and  Cornell,  to pay to
Cornell the sum of One Hundred Ninety Thousand Dollars ($190,000) in the form of
a compensation  debenture (the convertible debentures pursuant to the Securities
Purchase  Agreement  and the  compensation  debenture  under the Equity  Line of
Credit Agreement collectively, the "CONVERTIBLE DEBENTURES").  Capitalized terms
not defined  herein  shall have the meaning  ascribed to them in the  Securities
Purchase Agreement.

         B. In  connection  with the  Convertible  Debentures  and to induce the
Investors to execute and deliver the Securities Purchase Agreement,  the Company
has agreed to provide  certain  registration  rights under the Securities Act of
1933,  as amended,  and the rules and  regulations  there under,  or any similar
successor  statute   (collectively,   the  "1933  ACT"),  and  applicable  state
securities laws.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Investors hereby agree as follows:

         1.       DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
meanings:

         (a) "INVESTOR" means an Investor and any transferee or assignee thereof
to whom an Investor  assigns its rights under this  Agreement  and who agrees to
become bound by the  provisions of this  Agreement in accordance  with Section 9
hereof.

         (b) "PERSON"  means a  corporation,  a limited  liability  company,  an
association,  a partnership,  an  organization,  a business,  an  individual,  a
governmental or political subdivision thereof or a governmental agency.

<PAGE>

         (c)   "REGISTER,"   "REGISTERED,"   and   "REGISTRATION"   refer  to  a
registration   effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as defined  below) in compliance  with the 1933 Act and pursuant to
Rule 415  under  the 1933  Act or any  successor  rule  providing  for  offering
securities on a continuous or delayed basis ("RULE 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange SEC (the "SEC").

         (d) "REGISTRABLE  SECURITIES" means the shares of Common Stock issuable
to Investors  upon  conversion  of the  Convertible  Debentures  pursuant to the
Securities Purchase Agreement and the Equity Line of Credit Agreement.

         (e) "REGISTRATION  STATEMENT" means a registration  statement under the
1933 Act which covers the Registrable Securities.

         2. REGISTRATION.

         (a) Subject to the terms and conditions of this Agreement,  the Company
shall  prepare and file, no later than sixty (60) days from the date hereof (the
"SCHEDULED FILING DEADLINE"),  with the SEC a registration statement on Form S-1
or SB-2 (or,  if the Company is then  eligible,  on Form S-3) under the 1933 Act
(the "INITIAL  REGISTRATION  STATEMENT") for the  registration for the resale by
all Investors who were issued Convertible  Debentures pursuant to the Securities
Purchase  Agreement  and the Equity  Line of Credit  Agreement  ________________
shares  of  Common  Stock  to be  issued  upon  conversion  of  the  Convertible
Debentures.  The  Company  shall  cause  the  Registration  Statement  to remain
effective until all of the Registrable  Securities have been sold.  Prior to the
filing of the  Registration  Statement with the SEC, the Company shall furnish a
copy  of the  Initial  Registration  Statement  to  the  Investors,  and  Butler
Gonzalez,  LLP for their review and comment.  The Investors and Butler  Gonzalez
LLP shall furnish comments on the Initial Registration  Statement to the Company
within twenty-four (24) hours of the receipt thereof from the Company.

         (b) EFFECTIVENESS OF THE INITIAL  REGISTRATION  STATEMENT.  The Company
shall  use its best  efforts  (i) to have  the  Initial  Registration  Statement
declared  effective  by the SEC no later than ninety (90) days after the date of
filing  of  the  Initial   Registration   Statement  (the  "SCHEDULED  EFFECTIVE
DEADLINE")  and (ii) to insure that the Initial  Registration  Statement and any
subsequent Registration Statement remains in effect until all of the Registrable
Securities  have  been  sold,  subject  to the  terms  and  conditions  of  this
Agreement.

         (c)  FAILURE  TO  FILE  OR  OBTAIN  EFFECTIVENESS  OF THE  REGISTRATION
STATEMENT. In the event the Registration Statement is not filed by the Scheduled
Filing  Deadline  or is not  declared  effective  by the  SEC on or  before  the
Scheduled  Effective  Date,  or if after  the  Registration  Statement  has been
declared effective by the SEC, sales cannot be made pursuant to the Registration
Statement  (whether  because  of a failure  to keep the  Registration  Statement
effective,  failure to disclose such information as is necessary for sales to be
made  pursuant to the  Registration  Statement,  failure to register  sufficient
shares of Common Stock or otherwise)  then as partial  relief for the damages to
any holder of Registrable Securities by reason of any such delay in or reduction
of its ability to sell the underlying shares of Common Stock (which remedy shall
not be exclusive of any other remedies at law or in equity), the Company will

                                        2

<PAGE>

pay as  liquidated  damages (the  "LIQUIDATED  DAMAGES")  to the holder,  at the
holder's  option,  either a cash amount or shares of the Company's  Common Stock
(as provided for in the  Irrevocable  Transfer Agent  Instructions  of even date
herewith)  within three (3) business days after demand  therefore,  equal to two
percent (2%) of the liquidated value of the Convertible  Debentures  outstanding
as Liquidated Damages for each thirty (30) day period after the Scheduled Filing
Deadline or the Scheduled Effective Date as the case may be; provided,  however,
that the  Liquidated  Damages  shall cease  accruing  as to such  portion of the
Convertible  Debenture  outstanding,  which if  converted  into shares of Common
Stock,  such shares  would be eligible  for trading  pursuant to Rule 144 of the
Securities  Act. If paid in the form of Common Stock,  the amount of stock to be
issued  will be  calculated  as  follows:  the value of the  stock  shall be the
Closing Bid Price on the date the Liquidated Damages payment is demanded.

         (d) LIQUIDATED DAMAGES. The Company and the Investor hereto acknowledge
and agree that the sums payable  under  subsection  2(c) above shall  constitute
liquidated damages and not penalties.  The parties further  acknowledge that (i)
the amount of loss or damages likely to be incurred is incapable or is difficult
to precisely  estimate,  (ii) the amounts  specified in such  subsections bear a
reasonable  relationship to, and are not plainly or grossly  disproportionate to
the probable  loss likely to be incurred in  connection  with any failure by the
Company to obtain or maintain the  effectiveness  of a  Registration  Statement,
(iii) one of the reasons for the Company and the Investor  reaching an agreement
as to such amounts was the  uncertainty  and cost of  litigation  regarding  the
question  of  actual  damages,  and  (iv)  the  Company  and  the  Investor  are
sophisticated  business parties and have been  represented by sophisticated  and
able legal counsel and negotiated this Agreement at arm's length.

         3. RELATED OBLIGATIONS.

         (a)  The  Company  shall  keep  the  Registration  Statement  effective
pursuant  to Rule 415 at all times  until the date on which the  Investor  shall
have sold all the Registrable  Securities covered by such Registration Statement
(the  "REGISTRATION  PERIOD"),   which  Registration  Statement  (including  any
amendments or supplements thereto and prospectuses  contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein,  or necessary to make the statements  therein, in
light of the circumstances in which they were made, not misleading.

         (b) The Company  shall  prepare  and file with the SEC such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers  thereof  as set forth in such  Registration  Statement.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this Agreement  (including  pursuant to this Section 3(b)) by
reason of the Company's filing a report on Form 10-KSB,  Form 10-QSB or Form 8-K
or any analogous  report under the  Securities  Exchange Act of 1934, as amended
(the "1934 ACT"),  the Company shall  incorporate  such report by reference into
the  Registration  Statement,  if applicable,  or shall file such  amendments or
supplements  with the SEC within two (2) business days after the 1934 Act report
is filed which  created the  requirement  for the Company to amend or supplement
the Registration Statement.

                                        3

<PAGE>

         (c) The  Company  shall  furnish  to each  Investor  whose  Registrable
Securities are included in any Registration  Statement,  without charge,  (i) at
least one (1) copy of such Registration  Statement as declared  effective by the
SEC and any amendment(s) thereto,  including financial statements and schedules,
all  documents  incorporated  therein  by  reference,   all  exhibits  and  each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included in
such Registration  Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may  reasonably  request) and (iii) such
other  documents as such  Investor may  reasonably  request from time to time in
order to facilitate the disposition of the Registrable  Securities owned by such
Investor.

         (d) The Company  shall use its best efforts to (i) register and qualify
the Registrable  Securities covered by a Registration Statement under such other
securities or "blue sky" laws of such  jurisdictions in the United States as any
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments  (including  post-effective   amendments)  and  supplements  to  such
registrations   and   qualifications   as  may  be  necessary  to  maintain  the
effectiveness  thereof  during the  Registration  Period,  (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times  during  the  Registration  Period,  and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable  Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required  in  connection  therewith  or as a  condition  thereto to (w) make any
change to its  certificate  of  incorporation  or  by-laws,  (x)  qualify  to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d),  (y) subject  itself to general  taxation in any such
jurisdiction,  or (z) file a general  consent  to service of process in any such
jurisdiction.  The  Company  shall  promptly  notify  each  Investor  who  holds
Registrable  Securities of the receipt by the Company of any  notification  with
respect to the suspension of the  registration  or  qualification  of any of the
Registrable  Securities  for sale under the securities or "blue sky" laws of any
jurisdiction  in the  United  States  or its  receipt  of  actual  notice of the
initiation or threat of any proceeding for such purpose.

         (e) As promptly as  practicable  after  becoming aware of such event or
development,  the Company shall notify each Investor in writing of the happening
of any event as a result  of which the  prospectus  included  in a  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading  (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such  supplement or amendment to each  Investor.  The
Company  shall  also  promptly  notify  each  Investor  in  writing  (i)  when a
prospectus or any  prospectus  supplement or  post-effective  amendment has been
filed,  and when a Registration  Statement or any  post-effective  amendment has
become effective  (notification of such effectiveness shall be delivered to each
Investor  by  facsimile  on the  same  day of such  effectiveness),  (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or

                                        4

<PAGE>

related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective  amendment to a Registration Statement would
be appropriate.

         (f) The Company  shall use its best  efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable  Securities for
sale in any  jurisdiction  within the United  States of America  and, if such an
order or  suspension  is  issued,  to obtain  the  withdrawal  of such  order or
suspension at the earliest possible moment and to notify each Investor who holds
Registrable  Securities  being  sold  of the  issuance  of  such  order  and the
resolution  thereof or its receipt of actual notice of the  initiation or threat
of any proceeding for such purpose.

         (g) At the  reasonable  request  of any  Investor,  the  Company  shall
furnish to such Investor,  on the date of the  effectiveness of the Registration
Statement  and  thereafter  from time to time on such dates as an  Investor  may
reasonably request (i) a letter, dated such date, from the Company's independent
certified  public  accountants in form and substance as is customarily  given by
independent  certified  public  accountants to  underwriters  in an underwritten
public  offering,  and  (ii) an  opinion,  dated  as of such  date,  of  counsel
representing the Company for purposes of such Registration  Statement,  in form,
scope and substance as is customarily given in an underwritten  public offering,
addressed to the Investors.

         (h) The Company shall make available for inspection by (i) any Investor
and (ii) one (1) firm of accountants  or other agents  retained by the Investors
(collectively,  the "INSPECTORS") all pertinent financial and other records, and
pertinent corporate documents and properties of the Company  (collectively,  the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector, and cause
the Company's officers,  directors and employees to supply all information which
any Inspector may reasonably  request;  provided,  however,  that each Inspector
shall agree, and each Investor hereby agrees,  to hold in strict  confidence and
shall not make any disclosure (except to an Investor) or use any Record or other
information which the Company  determines in good faith to be confidential,  and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a  misstatement  or omission in
any Registration  Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final,  non-appealable subpoena
or order from a court or government body of competent  jurisdiction,  or (c) the
information  in such  Records has been made  generally  available  to the public
other than by  disclosure  in violation of this or any other  agreement of which
the  Inspector  and the Investor has  knowledge.  Each  Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, the Records deemed confidential.

         (i) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such  information  is necessary  to comply with  federal or state  securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such   information   is  ordered   pursuant  to  a  subpoena  or  other   final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other

                                        5

<PAGE>

agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

         (j) The  Company  shall  use its best  efforts  either to cause all the
Registrable  Securities covered by a Registration  Statement (i) to be listed on
each securities  exchange on which securities of the same class or series issued
by the Company  are then  listed,  if any,  if the  listing of such  Registrable
Securities  is then  permitted  under  the  rules of such  exchange  or (ii) the
inclusion for quotation on the National Association of Securities Dealers,  Inc.
OTC Bulletin Board for such  Registrable  Securities.  The Company shall pay all
fees and  expenses in  connection  with  satisfying  its  obligation  under this
Section 3(j).

         (k) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, to facilitate the timely
preparation  and delivery of certificates  (not bearing any restrictive  legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such  certificates to be in such  denominations or amounts,
as the case may be, as the Investors may  reasonably  request and  registered in
such names as the Investors may request.

         (l) The  Company  shall use its best  efforts to cause the  Registrable
Securities  covered by the  applicable  Registration  Statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

         (m) The Company shall make generally  available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period  covered  thereby,  an earnings  statement  (in form  complying  with the
provisions  of Rule 158 under the 1933 Act)  covering a twelve (12) month period
beginning  not later than the first day of the  Company's  fiscal  quarter  next
following the effective date of the Registration Statement.

         (n) The Company shall otherwise use its best efforts to comply with all
applicable  rules and regulations of the SEC in connection with any registration
hereunder.

         (o) Within two (2) business days after a Registration  Statement  which
covers  Registrable  Securities  is declared  effective  by the SEC, the Company
shall deliver,  and shall cause legal counsel for the Company to deliver, to the
transfer  agent for such  Registrable  Securities  (with copies to the Investors
whose  Registrable  Securities  are  included  in such  Registration  Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as EXHIBIT A.

         (p) The Company shall take all other  reasonable  actions  necessary to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

                                        6

<PAGE>

         4.       OBLIGATIONS OF THE INVESTORS.

         Each Investor  agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e),  such Investor will  immediately  discontinue  disposition  of
Registrable  Securities pursuant to any Registration  Statement(s) covering such
Registrable  Securities  until  such  Investor's  receipt  of the  copies of the
supplemented  or amended  prospectus  contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the contrary,  the Company shall cause its transfer agent to deliver  unlegended
certificates  for  shares of Common  Stock to a  transferee  of an  Investor  in
accordance  with the terms of the  Securities  Purchase  Agreement in connection
with any sale of  Registrable  Securities  with respect to which an Investor has
entered  into a contract  for sale prior to the  Investor's  receipt of a notice
from the Company of the happening of any event of the kind  described in Section
3(f) or the  first  sentence  of 3(e) and for  which  the  Investor  has not yet
settled.

         5.       EXPENSES OF REGISTRATION.

         All expenses  incurred in  connection  with  registrations,  filings or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualifications fees,  printers,  legal and accounting
fees shall be paid by the Company.

         6.       INDEMNIFICATION.

         With  respect  to  Registrable  Securities  which  are  included  in  a
Registration Statement under this Agreement:

         (a) To the fullest  extent  permitted  by law,  the Company  will,  and
hereby does, indemnify,  hold harmless and defend each Investor,  the directors,
officers, partners,  employees, agents,  representatives of, and each Person, if
any, who  controls  any Investor  within the meaning of the 1933 Act or the 1934
Act (each,  an  "INDEMNIFIED  Person"),  against  any losses,  claims,  damages,
liabilities,  judgments, fines, penalties, charges, costs, reasonable attorneys'
fees,  amounts paid in settlement or expenses,  joint or several  (collectively,
"CLAIMS") incurred in investigating,  preparing or defending any action,  claim,
suit, inquiry,  proceeding,  investigation or appeal taken from the foregoing by
or before any court or governmental,  administrative or other regulatory agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or alleged  untrue  statement  of a  material  fact in a
Registration Statement or any post-effective  amendment thereto or in any filing
made in connection with the  qualification  of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("BLUE SKY  FILING"),  or the  omission or alleged  omission to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final  prospectus (as amended or  supplemented,
if the Company files any amendment  thereof or supplement  thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which

                                        7

<PAGE>

the  statements  therein were made,  not  misleading;  or (iii) any violation or
alleged  violation  by the Company of the 1933 Act, the 1934 Act, any other law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  there  under  relating  to the  offer  or  sale  of the  Registrable
Securities  pursuant to a  Registration  Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively,  "VIOLATIONS"). The Company shall
reimburse  the  Investors  and each such  controlling  person  promptly  as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements or other reasonable  expenses  incurred by them in connection with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 6(a):  (x) shall not apply to a Claim by an  Indemnified  Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by such Indemnified Person
expressly  for  use in  connection  with  the  preparation  of the  Registration
Statement or any such amendment thereof or supplement thereto;  (y) shall not be
available  to the extent  such Claim is based on a failure  of the  Investor  to
deliver  or to  cause to be  delivered  the  prospectus  made  available  by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the  Indemnified  Person  and shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9 hereof.

         (b) In connection with a Registration  Statement,  each Investor agrees
to severally and not jointly  indemnify,  hold harmless and defend,  to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each
of its directors, each of its officers,  employees,  representatives,  or agents
and each Person, if any, who controls the Company within the meaning of the 1933
Act or the  1934  Act  (each  an  "INDEMNIFIED  Party"),  against  any  Claim or
Indemnified Damages to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise,  insofar as such Claim or  Indemnified  Damages arise
out of or is based upon any Violation,  in each case to the extent,  and only to
the extent,  that such Violation  occurs in reliance upon and in conformity with
written information  furnished to the Company by such Investor expressly for use
in connection with such  Registration  Statement;  and, subject to Section 6(d),
such Investor will reimburse any legal or other expenses  reasonably incurred by
them in connection  with  investigating  or defending any such Claim;  provided,
however,  that the  indemnity  agreement  contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable under this  Section  6(b) for only that amount of a Claim or  Indemnified
Damages as does not exceed the net proceeds to such  Investor as a result of the
sale of Registrable  Securities  pursuant to such Registration  Statement.  Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the   Registrable   Securities   by  the   Investors   pursuant  to  Section  9.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(b) with respect to any  prospectus  shall
not inure to the benefit of any  Indemnified  Party if the untrue  statement  or
omission of material fact contained in the prospectus was corrected and such new
prospectus  was delivered to each Investor  prior to such  Investor's use of the
prospectus to which the Claim relates.

                                        8

<PAGE>

         (c) Promptly  after  receipt by an  Indemnified  Person or  Indemnified
Party  under  this  Section  6 of notice of the  commencement  of any  action or
proceeding  (including any governmental action or proceeding) involving a Claim,
such  Indemnified  Person or  Indemnified  Party  shall,  if a Claim in  respect
thereof is to be made  against  any  indemnifying  party  under this  Section 6,
deliver to the indemnifying party a written notice of the commencement  thereof,
and the  indemnifying  party shall have the right to participate in, and, to the
extent the indemnifying  party so desires,  jointly with any other  indemnifying
party similarly  noticed,  to assume control of the defense thereof with counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees and  expenses  of not more than one (1)  counsel for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented  by such counsel in such  proceeding.  The  Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection  with any  negotiation  or defense of any such action or claim by the
indemnifying  party and shall furnish to the indemnifying  party all information
reasonably  available  to the  Indemnified  Party or  Indemnified  Person  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
Indemnified  Party or  Indemnified  Person fully apprised at all times as to the
status of the defense or any settlement  negotiations  with respect thereto.  No
indemnifying  party shall be liable for any  settlement of any action,  claim or
proceeding effected without its prior written consent;  provided,  however, that
the indemnifying party shall not unreasonably  withhold,  delay or condition its
consent.  No indemnifying party shall,  without the prior written consent of the
Indemnified  Party or  Indemnified  Person,  consent to entry of any judgment or
enter into any  settlement  or other  compromise  which  does not  include as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
Indemnified  Party or  Indemnified  Person of a release  from all  liability  in
respect to such claim or litigation.  Following  indemnification as provided for
hereunder,  the  indemnifying  party  shall be  subrogated  to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations  relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice to the  indemnifying  party  within a
reasonable  time of the  commencement  of any such action shall not relieve such
indemnifying  party of any liability to the  Indemnified  Person or  Indemnified
Party under this Section 6, except to the extent that the indemnifying  party is
prejudiced in its ability to defend such action.

         (d) The  indemnification  required  by this  Section 6 shall be made by
periodic  payments of the amount thereof during the course of the  investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

         (e) The indemnity  agreements  contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the  indemnifying  party or others,  and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

                                        9

<PAGE>

         7.       CONTRIBUTION.

         To  the  extent  any   indemnification  by  an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds  received by
such seller from the sale of such Registrable Securities.

         8.       REPORTS UNDER THE 1934 ACT.

         With a view to making  available to the  Investors the benefits of Rule
144 promulgated  under the 1933 Act or any similar rule or regulation of the SEC
that may at any time permit the  Investors to sell  securities of the Company to
the public without registration ("RULE 144") the Company agrees to:

         (a) make and keep  public  information  available,  as those  terms are
understood and defined in Rule 144;

         (b)  file  with  the SEC in a  timely  manner  all  reports  and  other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing herein shall limit the Company's  obligations  under Section 4(c) of the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents as are required by the applicable provisions of Rule 144; and

         (c) furnish to each Investor so long as such Investor owns  Registrable
Securities,  promptly  upon  written  request,  (i) a written  statement  by the
Company that it has complied  with the reporting  requirements  of Rule 144, the
1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit  the  Investors  to sell such  securities  pursuant  to Rule 144  without
registration.

         9. ASSIGNMENT OF REGISTRATION RIGHTS.

         The rights under this Agreement  shall be  automatically  assignable by
the Investors to any transferee of all or any portion of Registrable  Securities
if: (i) the Investor agrees in writing with the transferee or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such assignment;  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned;
(iii) at or before the time the Company receives the written notice contemplated
by clause (ii) of this  sentence the  transferee  or assignee  agrees in writing
with the Company to be bound by all of the provisions contained herein; and (iv)
such  transfer   shall  have  been  made  in  accordance   with  the  applicable
requirements of the Securities Purchase Agreement.

                                       10

<PAGE>

         10.      AMENDMENT OF REGISTRATION RIGHTS.

         Provisions of this Agreement may be amended and the observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively  or  prospectively),  only with the written consent of the Company
and  Investors  who then  hold at  least  two-thirds  (2/3)  of the  Registrable
Securities.  Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company.  No such amendment shall be
effective  to the extent that it applies to fewer than all of the holders of the
Registrable Securities.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or  modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

         11. MISCELLANEOUS.

         (a) A  Person  is  deemed  to be a  holder  of  Registrable  Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from two (2) or more  Persons  with  respect to the same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the registered owner of such Registrable Securities.

         (b) Any notices,  consents, waivers or other communications required or
permitted to be given under the terms of this  Agreement  must be in writing and
will be  deemed  to have  been  delivered:  (i)  upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one (1) business day after  deposit with a nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

If to the Company, to:            Vertical Computer Systems, Inc.
                                  6336 Wilshire Boulevard
                                  Los Angeles, CA 90048
                                  Attention:        Richard Wade
                                                    President
                                  Telephone:        (323) 658-4211
                                  Facsimile:        (323) 658-4214

With a copy to:                   Kirkpatrick & Lockhart LLP
                                  201 South Biscayne Boulevard - Suite 2000
                                  Miami, FL  33131-2399
                                  Attention:        Clayton E. Parker, Esq.
                                  Telephone:        (305) 539-3300
                                  Facsimile:        (305) 358-7095

If to an  Investor,  to its  address  and  facsimile  number on the  Schedule of
Investors attached hereto, with copies to such Investor's representatives as set
forth on the  Schedule of Investors or to such other  address  and/or  facsimile
number and/or to the  attention of such other person as the recipient  party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  or  electronically  generated  by the sender's  facsimile  machine
containing the time, date, recipient facsimile number and an image of the first

                                       11

<PAGE>

page of such  transmission  or (C)  provided by a courier or  overnight  courier
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

         (c)  Failure of any party to  exercise  any right or remedy  under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

         (d)  The  laws  of the  State  of  Delaware  shall  govern  all  issues
concerning  the  relative  rights  of  the  Company  and  the  Investors  as its
stockholders.  All  other  questions  concerning  the  construction,   validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by the
internal laws of the State of New Jersey, without giving effect to any choice of
law or conflict of law  provision or rule (whether of the State of New Jersey or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction  other than the State of New Jersey.  Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the Superior Courts of the State of
New Jersey,  sitting in Hudson  County,  New Jersey and  federal  courts for the
District of New Jersey sitting Newark,  New Jersey,  for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein,  and hereby  irrevocably  waives,  and agrees not to
assert in any suit,  action or  proceeding,  any claim that it is not personally
subject  to the  jurisdiction  of any such  court,  that  such  suit,  action or
proceeding is brought in an  inconvenient  forum or that the venue of such suit,
action or proceeding is improper.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or  proceeding  by mailing a copy  thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient  service of process and notice  thereof.  Nothing  contained
herein  shall be deemed to limit in any way any  right to serve  process  in any
manner  permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction  or the  validity  or  enforceability  of  any  provision  of  this
Agreement in any other  jurisdiction.  EACH PARTY HEREBY  IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION
OF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

         (e) This Agreement,  the Irrevocable  Transfer Agent Instructions,  the
Securities  Purchase  Agreement and related documents  including the Convertible
Debentures  and the  Escrow  Agreement  dated  the date  hereof by and among the
Company,  the Investors set forth on the Schedule of Investors  attached  hereto
and Butler Gonzalez LLP (the "ESCROW AGREEMENT") constitute the entire agreement
among the parties  hereto with respect to the subject matter hereof and thereof.
There are no  restrictions,  promises,  warranties or  undertakings,  other than
those  set  forth or  referred  to  herein  and  therein.  This  Agreement,  the
Irrevocable Transfer Agent Instructions, the Securities Purchase Agreement and

                                       12

<PAGE>

related documents including the Convertible  Debentures and the Escrow Agreement
supersede all prior agreements and understandings  among the parties hereto with
respect to the subject matter hereof and thereof.

         (f) This  Agreement  shall inure to the benefit of and be binding  upon
the permitted successors and assigns of each of the parties hereto.

         (g) The headings in this  Agreement  are for  convenience  of reference
only and shall not limit or otherwise affect the meaning hereof.

         (h) This Agreement may be executed in identical  counterparts,  each of
which shall be deemed an original but all of which shall  constitute one and the
same agreement.  This Agreement,  once executed by a party,  may be delivered to
the other party hereto by  facsimile  transmission  of a copy of this  Agreement
bearing the signature of the party so delivering this Agreement.

         (i) Each party shall do and perform, or cause to be done and performed,
all such further acts and things,  and shall  execute and deliver all such other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

The language used in this Agreement will be deemed to be the language  chosen by
the parties to express their mutual  intent and no rules of strict  construction
will be applied against any party.

(j) This  Agreement is intended for the benefit of the parties  hereto and their
respective  permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Investor  Registration
Rights Agreement to be duly executed as of day and year first above written.

                                           COMPANY:
                                           VERTICAL COMPUTER SYSTEMS, INC.

                                           By: _______________________________
                                           Name:    Richard Wade
                                           Title:   President

                                       14

<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

                                                                                               ADDRESS/FACSIMILE
              NAME                                    SIGNATURE                                 NUMBER OF BUYER
-----------------------------      ------------------------------------------
----------------------------------------
<S>                                <C>                                         <C>
Cornell Capital Partners, LP       By:      Yorkville Advisors, LLC                 101 Hudson Street - Suite 3606
                                   Its:     General Partner                         Jersey City, NJ  07303
                                                                                    Facsimile:        (201)
985-8266

                                   By:
                                   -----------------------------------------
                                   Name:    Mark A. Angelo
                                   Its:     Portfolio Manager

</TABLE>

                                       15

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

         Re:      VERTICAL COMPUTER SYSTEMS, INC.

Ladies and Gentlemen:

         We  are  counsel  to  VERTICAL  COMPUTER  SYSTEMS,   INC.,  a  Delaware
corporation (the "COMPANY"), and have represented the Company in connection with
that certain Securities  Purchase Agreement (the "PURCHASE  AGREEMENT")  entered
into by and among the Company and the investors named therein (collectively, the
"INVESTORS") pursuant to which the Company issued to the Investors shares of its
Common Stock, par value $0.00001 per share (the "COMMON STOCK"). Pursuant to the
Purchase  Agreement,  the Company  also has entered into a  Registration  Rights
Agreement with the Investors (the "REGISTRATION  RIGHTS AGREEMENT")  pursuant to
which the Company  agreed,  among other  things,  to  register  the  Registrable
Securities  (as  defined  in  the  Registration   Rights  Agreement)  under  the
Securities  Act of 1933,  as amended (the "1933 ACT").  In  connection  with the
Company's  obligations under the Registration Rights Agreement,  on ____________
____,  the Company filed a  Registration  Statement on Form  ________  (File No.
333-_____________)  (the  "REGISTRATION  STATEMENT")  with  the  Securities  and
Exchange SEC (the "SEC") relating to the Registrable Securities which names each
of the Investors as a selling stockholder there under.

         In connection  with the  foregoing,  we advise you that a member of the
SEC's  staff has  advised  us by  telephone  that the SEC has  entered  an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF  EFFECTIVENESS]  on [ENTER DATE OF  EFFECTIVENESS]  and we have no knowledge,
after  telephonic  inquiry of a member of the SEC's  staff,  that any stop order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration Statement.

                                             Very truly yours,

                                             KIRKPATRICK & LOCKHART LLP

                                             By:
                                                -------------------------------

cc:      [LIST NAMES OF INVESTORS]

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]