INVESTOR RELATIONS SERVICES AGREEMENT
This Agreement ("the Agreement"), made as of the 10th day of June, 2003 by and
between Equitilink, LLC, maintaining its principal offices at 4275 Executive
Square, Suite 210, La Jolla, CA 92037 (hereinafter referred to as "Equitilink")
and Vertical Computer Systems, Inc., located at 6336 Wilshire Boulevard, Los
Angeles, CA 90048, (hereinafter referred to as "Client").
W I T N E S E T H:
WHEREAS, Equitilink is engaged in the business of providing and rendering public
relations and communications services and has knowledge, expertise and personnel
to render the requisite services to Client; and
WHEREAS, Client is desirous of retaining Equitilink for the purpose of obtaining
public and investor relations and corporate communications services so as to
better, more fully and more effectively deal and communicate with its
shareholders.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, it is agreed as follows:
I. ENGAGEMENT OF EQUITILINK. Client herewith engages Equitilink and
Equitilink agrees to render to Client public relations (including its
shareholders), communications, advisory and consulting services (the
"Services").
A. The Services to be provided by Equitilink shall include, but are not
limited to, drafting, coordinating and issuing press releases, investor
kits (in print and electronic forms), corporate profiles (all of the
foregoing shall be subject to Client's final approval), preparing
materials for use on Client's website, initiating and maintaining direct
contact and communication with the existing shareholder base, responding
to investor and shareholder inquiries, conducting a CEO interview to be
aired on EquityBroadcast.com, and directing an interview of the CEO for
nationwide broadcast (which utilizes 256 radio stations in 47 states,
reaching a cumulative audience of 2.5 million). Subject to the forthcoming
SB-2 Registration and upon Client's request, Equitilink shall initiate
contact with the existing shareholder database, send out mailers to
existing shareholders, and develop, implement and maintain an ongoing
program to increase the investment community's awareness of Client's
activities . Client acknowledges that Equitilink's ability to relate
information regarding Client's activities is directly related to the
information provided by Client to Equitilink. Equitilink acknowledges and
agrees that it shall at all times comply with SEC rules and regulations
with respect to the Services it provides to Client.
B. Client acknowledges that Equitilink will devote such time as is reasonably
necessary to perform the Services for Client, having due regard for
Equitilink's commitments and obligations to other business for which it
performs the Services. Equitilink shall use best efforts to perform the
Services and shall keep Client informed in reasonable detail of the
Services proposed and the Services rendered on a weekly basis.
TERM AND TERMINATION. The term (the "Term") of this Agreement shall be for a
period that commences on the expiration date of the agreement entered into
between the parties on July 10, 2002 and expires on December 31, 2003.
TREATMENT OF CONFIDENTIAL INFORMATION. Equitilink acknowledges and confirms the
terms of the Confidentiality Agreement, executed on June 25, 2002. The parties
hereby agree that the term of the confidentiality agreement shall be extended
for a period of time that is equal to the term of this Agreement, plus an
additional one (1) year. .
REPRESENTATION BY EQUITILINK OF OTHER CLIENTS. Client acknowledges and consents
to Equitilink rendering public relations, consulting and/or communications
services to other clients of Equitilink engaged in the same or similar business
as that of Client.
II. ADDITIONAL TERMS
INDEMNIFICATION. Client acknowledges that Equitilink, in the performance of its
duties, will be required to rely upon the accuracy and completeness of
information supplied to it by Client's officers, directors, agents and/or
employees. Client agrees to indemnify, hold harmless and defend Equitilink, its
officers, agents and/or employees from any proceeding or suit which arises out
of or is due to the inaccuracy or incompleteness of any material or information
supplied by Client to Equitilink. Except as set forth above, Equitilink agrees
to indemnify, hold harmless and defend Client, its officers, agents and/or
employees from any proceeding or suit which arises out of or is due to
Equitilink's performance of this Agreement.
INDEPENDENT CONTRACTOR. It is expressly agreed that Equitilink is acting as an
independent contractor in performing its services hereunder. Client shall carry
no workers compensation insurance or any health or accident insurance on
Equitilink or consultant's employees. Client shall not pay any contributions to
social security, unemployment insurance, Federal or state withholding taxes nor
provide any other contributions or benefits that might be customary in an
employer-employee relationship.
NON-ASSIGNMENT. This Agreement shall not be assigned by either party without the
written consent of the other party.
COMPENSATION. Equitilink's compensation for the services provided hereunder
shall the fees specified in SCHEDULE A1, which is attached hereto and
incorporated herein by the reference. The parties acknowledge and agree that no
additional compensation shall be due for the services provided during the Term
of this Agreement.
NOTICES. Any notice to be given by either party to the other hereunder shall be
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to such party at the address specified on the first
page of this Agreement or such other address as either party may have given to
the other in writing.
INDEPENDENT COUNSEL. Each party represents and warrants that they have
independent legal counsel representation with respect to the execution and
performance of this Agreement.
MODIFICATION AND WAIVER. This Agreement may not be altered or modified except by
writing signed by each of the respective parties hereof. No breach or violation
of this Agreement shall be waived except in writing executed by the party
granting such waiver.
2
ENTIRE AGREEMENT. This writing constitutes the entire Agreement between the
parties. This Agreement can only be modified by a written contract signed by
both parties. In the event that any party brings suit to enforce any part of
this Agreement, the prevailing party shall recover attorney fees and legal
costs. This Agreement shall be interpreted according to the laws of the state of
California. By signing below all parties agree they have the authority to bind
their respective companies.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
EQUITILINK, LLC
By: _______________________________ Date: ___________________
James J. Mahoney,
Managing Director
By: _______________________________ Date: ___________________
Thomas N. Mahoney,
Managing Director
VERTICAL COMPUTER SYSTEMS, INC.
By: ___________________________ Date: ___________________
Richard Wade
3
SCHEDULE A-1
PAYMENT FOR SERVICES AND REIMBURSEMENT OF EXPENSES
A. For the services to be rendered and performed by Equitilink during the
term of the Agreement, Client shall, upon acceptance of this Agreement:
Pay to Equitilink fifteen million (15,000,000) shares of VCSY stock that
will be subject to so-called "piggy back" registration rights for Client's
forthcoming SB-2 registration statement for the initial term of this
Agreement.
EQUITILINK, LLC
By: _______________________________ Date: ___________________
James J. Mahoney,
Managing Director
By: _______________________________ Date: ___________________
Thomas N. Mahoney,
Managing Director
VERTICAL COMPUTER SYSTEMS, INC.
By: _______________________________ Date: ____________________
Richard Wade
4