Exhibit 10.7
 
SECURED TERM PROMISSORY NOTE
NOW SOLUTIONS, INC.

US$ 359,559.90
February 13, 2006

FOR VALUE RECEIVED, the undersigned, NOW Solutions, Inc., a Delaware
corporation, (“Debtor”), hereby covenants and promises to pay to Tara Financial
Services, Inc., a California corporation, (“Payee”), the principal sum of THREE
HUNDRED FIFTY-NINE THOUSAND FIVE HUNDRED FIFTY-NINE AND 90/100 DOLLARS,
($359,559.90), together with interest thereon at a rate equal to twelve percent
(12%) per annum, compounded annually, which shall be payable as follows:

 
(a)
principal and interest are due and payable in equal monthly installments of FOUR
THOUSAND SEVEN HUNDRED TWENTY-TWO AND 53/100 DOLLARS ($4,722.53), on the first
day of each month, beginning March 1, 2006, and continuing through September 1,
2006;

 
(b)
beginning on October 1, 2006, and continuing through December, 2006, interest
only is due and payable monthly as it accrues;

 
(c)
beginning on January 1, 2007, the unpaid principal balance and interest are due
and payable in equal monthly installments of FOUR THOUSAND SEVEN HUNDRED
TWENTY-TWO AND 53/100 DOLLARS ($4,722.53), and continuing until February 1, 2018
(the “Maturity Date”), upon which date all outstanding principal and interest
shall be due and payable in full.

All payments shall be made at _________________________________, or at such
other place as the holder of this Note may designate by notice to the Debtor.

Payments shall be applied first to accrued interest and the remainder to
reduction of the Principal Amount.

Debtor and Payee covenant and agree as follows:

1.           Prepayment.  This Note may, at the option of the Debtor, be
prepaid, in whole or in part, at any time through the due date of the final
payment hereunder, in order of maturity.  Subject to Paragraph 4, below, any
such prepayment shall be without penalty or premium but shall include the
payment of accrued interest, if any, on the amount prepaid to and including the
date of prepayment.  The Maturity Date shall remain the same and a new
amortization schedule shall be prepared upon Payee’s receipt of any prepayment
amount.

2.           Payee's Right of Acceleration.  Upon the occurrence of an Event of
Default, as said term is defined in Section 3 herein, the entire remaining
principal balance and other fees and charges with respect to this Note shall, at
Payee's option, become immediately due and payable.

 
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3.           Default and Payee's Rights Upon Default.  The following shall
constitute an event of default (“Event of Default”):
 
a.          If any payment required hereunder is not made when due or any
default occurs in any instrument securing the payment of this note;

b.          if any payment required under that certain Secured Term Promissory
Note of even date herewith by Taladin, Inc., as debtor, to Strategic Growth
Partners, LLC, as Payee, in the original principal amount of $150,000, is not
made when due or any default occurs in any instrument securing the payment of
such Secured Term Promissory Note;

c.          if any payment required under that certain Secured Term Promissory
Note of even date herewith by Taladin, Inc., as debtor, to Payee, in the
original principal amount of $450,000, is not made when due or any default
occurs in any instrument securing the payment of such Secured Term Promissory
Note;

d.          if any payment required under any other written obligations owing by
Debtor to Payee is not made when due;

e.          if any payment required under that certain Royalty Agreement of even
date herewith by and between NOW Solutions, Inc. and Payee is not made when due;
and

f.           if any payment required under that certain Secured Term Promissory
Note of even date herewith by Vertical Computer Systems, Inc., as debtor, to
Payee, is not made when due or any default occurs in any instrument securing the
payment of such Secured Term Promissory Note.
 
If any Event of Default occurs, then from the date such Event of Default occurs
until it is cured or waived in writing, in addition to any agreed upon charges,
the then outstanding principal balance of this Note shall thereafter bear
interest at a rate of eighteen (18%) percent per annum (the “Default Rate”)
computed on the basis of a year of three hundred sixty (360) days and actual
days elapsed unless collection from the Debtor of interest at such rate would be
contrary to applicable law, in which event such amount shall bear interest at
the highest rate which may be collected from the Debtor under applicable law.

4.           Principal Pay-Down.  Until such time as the amounts due pursuant to
this Note have been paid in full, the principal due hereunder shall be prepaid
at the rate of 2.5% of Excess New Sales.  “Excess New Sales” are software sales
by Debtor to new customers during a calendar year in an amount greater than
$800,000.00.  Additionally, if software sales by Debtor to new customers are
greater than $1.5 Million during a calendar year, then an additional 4% of such
Excess New Sales will be paid towards the principal balance.  Any payments
applied to principal pursuant to this Section 4, shall be applied to the
principal balance pursuant to the terms of Section 1,
Prepayment.  Notwithstanding the foregoing, any such prepayments pursuant to
this Section 4 shall be deemed a penalty.

 
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5.           Savings Clause.  Interest on the debt evidenced by this Note will
not exceed the maximum rate or amount of nonusurious interest that may be
contracted for, taken, reserved, charged, or received under law.  Any interest
in excess of that maximum amount will be credited on the Principal Amount or; if
the Principal Amount has been paid, refunded.  On any acceleration or required
or permitted prepayment, any excess interest will be canceled automatically as
of the acceleration or prepayment or, if the excess interest has already been
paid, credited on the Principal Amount or, if the Principal Amount has been
paid, refunded.  This provision overrides any conflicting provisions in this
Note and all other instruments concerning the debt.
 
6.           General Provisions.

6.1        If this Note is not paid when due, or upon the occurrence of an Event
of Default, the Debtor further promises to pay all costs of collection,
foreclosure fees, reasonable attorneys' fees and expert witness fees incurred by
the Payee, whether or not suit is filed hereon.

6.2        The undersigned hereby consents to any and all renewals, replacements
and/or extensions of time for payment of this Note before, at or after maturity.

6.3        No delay or omission on the part of the Payee of this Note in
exercising any right shall operate as a waiver thereof or of any other right.

6.4        No waiver by the Payee of this Note upon any one occasion shall be
effective unless in writing nor shall it be construed as a bar or waiver of any
right or remedy on any future occasion.

6.5        All the terms of this Note shall be binding upon and incur to the
benefit of and be enforceable by the parties hereto and their respective heirs,
representatives, successors and assigns, whether or not so expressed.

6.6        Time is of the essence for the performance by the undersigned of the
obligations set forth in this Note.

6.7        Should any one or more of the provisions of this Note be determined
illegal or unenforceable, all other provisions shall nevertheless remain
effective.

6.8        This Note cannot be changed, modified, amended or terminated orally.

6.9        This Note shall be governed by, construed and enforced in accordance
with the laws of the State of California without reference to the principles of
conflicts of laws thereof.

6.10      The Debtor shall have forty-five (45) days to cure a payment default
after notice of default thereof sent to Debtor by or on behalf of Payee.

6.11      Principal of, and interest on, this Note shall be payable in lawful
money of the United States of America.  If a payment hereunder becomes due and
payable on a Saturday, Sunday or legal holiday, the due date thereof shall be
extended to the next succeeding business day, and interest shall not accrue
until such next succeeding business day.

 
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6.12      ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO ANY DISPUTE WILL BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY.  DEBTOR
WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION OR PROCEEDING AND
ACKNOWLEDGES THAT YOUR ACCEPTANCE OF THIS NOTE CONSTITUTES YOUR WAIVER OF ANY
RIGHT TO A JURY TRIAL IN ANY SUCH ACTION OR PROCEEDING.

6.13      The jurisdiction, venue and choice of law provision set forth herein
will survive the termination of this Note.

7.          Security Agreement.  This Note is secured by a security interest in
certain of Debtor’s collateral as identified in that certain Security Agreement,
between Debtor and Payee, dated as of February 13, 2006 (as the same has been
amended, revised, or amended and restated from time to time, the “Security
Agreement”).  All of the terms and conditions of the Security Agreement are
incorporated herein and made a part hereof. Nothing herein shall be deemed to
limit any of the terms, provisions, conditions, representations, stipulations,
or agreements contained in the Security Agreement or any other present or future
document, instrument or agreement, between the Debtor and Payee, and all of
Payee’s rights and remedies hereunder and thereunder are cumulative.
 
8.          Debtor and all guarantors, endorsers and sureties consent that Payee
at any time may extend the time of payment of all or any part of the
indebtedness secured hereby, or may grant any other indulgences.
 
9.          Except as otherwise stated herein, all notices, responses, requests,
documents and service of legal process will be sufficiently given or served if
mailed or delivered via certified mail, return receipt requested, or by a
nationally recognized overnight delivery service: (a) to Debtor at 201 Main
Street, Ste. 1175, Fort Worth, Texas 76102; and (b) to Payee at 3436 Verdugo
Road, Suite 250, Glendale, CA 91208, or such other address as the parties may
specify from time to time in the manner required for notice set forth
herein.  Notices shall be effective: (a) if given by certified mail, on the
fifth (5th) day after deposit in the mail with postage prepaid, addressed as
aforesaid; and (b) if given by a nationally recognized overnight delivery
service, on the business day following deposit with such service, addressed as
aforesaid with receipt of delivery.

THIS NOTE CONTAINS A JURY WAIVER.

 
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DEBTOR:

NOW Solutions, Inc.
a Delaware corporation

By:
     
Richard Wade,
 
Chairman

 
STATE OF CALIFORNIA
§
 
§
COUNTY OF __________ 
§

On the 13 day of February in the year 2006, before me, the undersigned, a Notary
Public in and for said State, personally appeared Richard Wade, Chairman of NOW
Solutions, Inc., a Delaware corporation, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 
Notary Public in and for
the State of California

 
 
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