Summary of VISUAL MANAGEMENT SYSTEMS INC

ITEM 1.01 ENTRY INTO A DEFINITIVE MATERIAL AGREEMENT

On August 28, 2008, Visual Management Systems, Inc. (the "Company") entered into an Amendment and Waiver Agreement with each of Enable Opportunity Partners, L.P., Enable Growth Partners, L.P. and Pierce Diversified Master Fund, LLC, Ena,(the "Debenture Holders") the holders of the Company's 5% Senior Secured Debentures (the "Debentures") pursuant to which the Debenture Holders have:

· waived the Company's compliance with the provisions of the Debentures which require the Company to have a registration statement covering the shares issuable upon the conversion of the Debentures declared effective under the Securities Act of 1933 and maintain the effectiveness of such registration statement;

· waived the anti-dilution provisions of the Debentures which, as a result of prior transactions, would otherwise result in an adjustment to the conversion price of the Debentures to $.40 per share;

· waived certain provisions of the agreement pursuant to which the Debentures were issued which restrict the Company's ability to issue common stock and securities convertible into or exercisable for common stock;

· waived all registration rights previously granted to the Debenture Holders with respect to the shares issuable upon the conversion of the Debentures and exercise of the warrants (the "Warrants") issued to the Debenture Holders, provided that the Company does not fail to satisfy the current public information requirements under Rule 144(c) of the Securities Act of 1933 for a period of three (3) consecutive trading days or more (a "Public Information Failure").

In the event of a Public Information Failure the Company will be required to file a registration statement covering the shares issuable upon the Debentures and Warrants and will be subject to monetary penalties if it fails to obtain and maintain the effectiveness of the registration statement.

In consideration of the waivers and in lieu of (i) $250,000 of liquidated damages that the Debenture Holders alleged were owed as a result of the Company's failure to register the shares underlying the Debentures and Warrants for public resale and (ii) $46,875 of accrued and unpaid interest owed to the Debenture Holders, the Company has agreed to issue shares of the Company's Common Stock valued at $296,875 (based upon a per share price equal to 80% of the average of the value weighted average price of the common stock for the 20 trading days prior to the date of the Amendment and Waiver) to the Debenture Holders pro-rata according to their percentage ownership of the Debentures. The Company has agreed to register the new shares for resale under the Securities Act of 1933, as amended. Failure to file and have the registration statement declared effective within a specified time frame will subject the Company to liquidated damages.

The exercise price of the Warrants has been adjusted to $.40 per share.