<![CDATA[Section 1 - Registrant's Business and Operations.
Item 1.01. Entry into a Material Definitive Agreement.
On Wednesday, February 22, 2006, Vertical Computer Systems, Inc. (the
"Company") closed two series of transactions having the effect of restructuring
and extending the maturities of existing indebtedness of the Company and its
wholly-owned subsidiaries. As a prelude to the transactions, the Company
established a new wholly-owned subsidiary, Taladin, Inc. ("Taladin").
In the first series of transactions, Taladin secured financing in the
aggregate amount of $600,000, which amount was utilized to acquire the existing
indebtedness of NOW Solutions, Inc. ("NOW Solutions"), from Wamco 32, Ltd. The
new financing, evidenced by two secured promissory notes, has a maturity date in
the year 2011.
In the second series of transactions, the Company and two of its
subsidiaries (including NOW Solutions) consolidated aggregate indebtedness in
the amount of $1.75 million into three new promissory notes having maturities in
the year 2018. The promissory notes payable by NOW Solutions contain provisions
requiring additional principal reductions in the event sales exceed certain
financial thresholds.
Section 9 - Financial Statements and Exhibits.
Item 9.01. Financial Statements and Exhibits.
Exhibit 10.1 Amended and Restated Term Secured Promissory Note in the
principal amount of $600,000.00, payable by NOW Solutions to
Taladin, Inc.
Exhibit 10.2 Secured Term Promissory Note in the principal amount of
$450,000.00, payable by Taladin, Inc. to Tara Financial
Services, Inc.
Exhibit 10.3 Secured Term Promissory Note in the principal amount of
$150,000.00, payable by Taladin, Inc. to Strategic Growth
Partners, Inc.
Exhibit 10.4 Agreement dated as of February 13, 2006 among Tara Financial
Services, Inc., as lender, NOW Solutions, the Company, Robert
Farias, and Robert Mokhtarian
Exhibit 10.5 Secured Term Promissory Note in the principal amount of
$359,559.90, payable by NOW Solutions to Tara Financial
Services, Inc.
Exhibit 10.6 Secured Term Promissory Note in the principal amount of
$438,795.31, payable by the Company to Tara Financial
Services, Inc.
Exhibit 10.7 Secured Term Promissory Note in the principal amount of
$955,103.30, payable by NOW Solutions to Tara Financial
Services, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Vertical Computer Systems, Inc.
(Registrant)
Date: February 24, 2006 By: /s/ Richard Wade
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Richard Wade, President &
Chief Executive Officer]]>
