Exhibit 10.109a
May 9, 2003
Xxxxx and Xxxxx Xxxxxx
c/o Xxxx Xxxxx
0000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
RE: KUSAKA LOAN- TERM SHEET
Dear Mr. & Xxx. Xxxxxx,
The following letter will confirm the terms of the loan (the "Agreement") to be
made by you, Xxxxx and Xxxxx Xxxxxx (hereinafter the "Lender"), to Vertical
Computer Systems, Inc. ("Vertical"), and the warrants issued by Vertical in
connection therewith. The Lender and Vertical hereby confirm the following
terms:
1. The Lender shall loan Vertical $15,000 in cash and Vertical shall pay the
Lender a commitment fee of $2,500 to the Lender.
2. Vertical shall issue the Lender a promissory note, dated May 9, 2003 (the
"Note"), in a principal amount of $17,500, on June 9, 2003, which shall
include the commitment fee of $2,500. If not paid to the Lender at
maturity, Vertical shall pay an additional $250 penalty to the Lender for
each day that the funds have not been paid.
3. In connection with this agreement, Vertical pledges to the Lender $17,500
from the proceeds of the first $35,000 of any distribution to Vertical from
its subsidiary, NOW Solutions, LCC, in connection with the upcoming court
hearing and motion by Vertical to get funds due to Vertical.
4. Vertical shall issue to the Lender 5 year warrants to purchase an aggregate
of 250,000 shares of the VCSY common stock at a strike price of $0.075 with
"piggy back" registration rights.
This Agreement shall be governed by the law of the State of California and
subject to the jurisdiction and venue of the courts of Los Angeles, California.
If the foregoing meets with the Xxxxxx's approval, please sign in the space
provided below.
Sincerely,
---------------------------
Xxxxxxx Xxxx, President/CEO
Vertical Computer Systems, Inc.
ACCEPTED AND AGREED BY XXXXXX:
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Xxxxx Xxxxxx
