Exhibit 10.1


 





SECURED TERM PROMISSORY NOTE


NOW SOLUTIONS, INC.


 


 


US $1,759,150.00 January 9, 2013


 


FOR VALUE RECEIVED,
the undersigned, NOW Solutions, Inc., a Delaware corporation, (“Debtor”), hereby covenants and promises to pay to Lakeshore
Investment, LLC, a California limited liability company, (“Payee”), the principal sum of ONE MILLION SEVEN HUNDRED
FIFTY-NINE THOUSAND ONE HUNDRED FIFTY AND NO/100 DOLLARS ($1,759,150.00), together with interest thereon at a rate equal to eleven
percent (11%) per annum, which shall be payable as follows:


 


Beginning on February 1, 2013,
the unpaid principal balance and interest are due and payable in equal monthly installments of TWENTY-FOUR THOUSAND TWO HUNDRED
THIRTY-TWO AND 29/100 DOLLARS ($24,232.297), and continuing until January 91, 2022 (the “Maturity Date”), upon which
date all outstanding principal and interest shall be due and payable in full.


 





All payments shall
be made at directly into the account of Lakeshore Investments LLC, account number _______________, 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.


 


3.            Default and Payee's Rights Upon Default. The following shall constitute an event of default (“Event of Default”):


 


3.1             
If any payment required hereunder is not made when due or any default occurs in any instrument securing the payment of this
note;


 



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3.2             
if any payment required under any other written obligations owing by Debtor to Payee is not made when due; and


 


3.3             
if any payment required under that certain Royalty Agreement of even date herewith by and between Debtor and Payee is not
made when due.


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 sixteen (16%) 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. As a condition of any cure of an Event of Default, any accrued
default interest plus the monthly payment from the date of such Event of Default must be timely paid within the cure period specified
in Section 6.10.


 


4.            Principal Pay-Down. “Excess New Sales” shall mean Debtor’s new software sales to Debtor’s
customers during a calendar year in accordance with generally accepted accounting principles as consistently applied by the Company
(“GAAP”). 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 7% of Excess New Sales in an amount greater than $400,000.00. Additionally, if Debtor’s
new software sales by Debtor to Debtor’s customers are greater than $1.5 Million, then an additional 17% 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 not be deemed a penalty.


 


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.


 


6.1If 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.


 


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


 



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6.3No 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.


 


6.4No 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.


 


6.5All 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.


 


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


 


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


 


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


 


6.9This 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.


 


6.10The Debtor shall
have thirty (30) days to cure a payment default after notice of default thereof sent to Debtor by or on behalf of Payee. In the
event that the last day of the thirty (30) day period to cure a payment default falls on a Saturday, Sunday or legal bank holiday,
such payment to cure a payment default shall be due on the next following business day


 


6.11Principal 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.


 


6.12ANY 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.


 


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


 



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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 January 9, 2013 (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 emailed, facsimile, mailed or delivered via certified mail, return receipt requested, or by a nationally recognized
overnight delivery service: (a) to Debtor at 101 W. Renner Road, Suite 300, Richardson, TX 75082; and (b) to Payee at _________________________,
or such other address as the parties may specify from time to time in the manner required for notice set forth herein. Email notices
shall be addressed to Debtor at _________________________, and to Payee at _________________________. Notices shall be effective:
(a) if given by email or facsimile immediately; (b) if given by certified mail, on the fifth (5th) day after deposit
in the mail with postage prepaid, addressed as aforesaid; and (c) 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.


 


DEBTOR:


 


NOW Solutions, Inc.


a Delaware corporation


 


 





	By:	/s/ Richard Wade
	 	Richard Wade
	 	Chairman







 


 



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