Exhibit 10.7


 


GUARANTY


 


	
  New York, New York

  	
   

  	
  March 22, 2004

  



 


FOR VALUE RECEIVED, and in consideration of
loans made or to be made or credit otherwise extended or to be extended by
Laurus Master Fund, Ltd. (“Lender”) to or for the account of Time America, Inc.,
a Nevada corporation (the “Borrower”) from time to time and at any time, and in
consideration for the repayment by the Borrower of the loan of the Borrower in
the aggregate principal amount of $2,000,000 and for other good and valuable
consideration, and to induce Lender, in its discretion, to make such loans or
extensions of credit and to make or grant such renewals, extensions, releases
of collateral or relinquishments of legal rights as Lender may deem advisable,
Time America, Inc., an Arizona corporation and wholly owned subsidiary of the
Borrower (the “Guarantor”) unconditionally guaranties to Lender, and its
successors, endorsees and assigns, the prompt payment when due (whether by
acceleration or otherwise) of all present and future obligations and
liabilities of any and all kinds of Borrower to Lender and of all instruments
of any nature evidencing or relating to any such obligations and liabilities
upon which Borrower is or may become liable to Lender, whether incurred by
Borrower as maker, endorser, drawer, acceptor, guarantor, accommodation party
or otherwise, and whether due or to become due, secured or unsecured, absolute
or contingent, joint or several, and however or whenever acquired by Lender,
whether arising under, out of, or in connection with that certain Secured
Convertible Term Note in the original principal amount of $2,000,000 dated as
of the date hereof made by Borrower in favor of Lender (as amended, modified,
restated or supplemented from time to time, the “Term Note”), that certain
warrant dated as of the date hereof made by the Borrower in favor of Lender in
connection with the Term Note, and any documents, instruments or agreements
relating to or executed in connection with the Term Note or any documents,
instruments or agreements referred to therein (as each may be amended,
modified, restated or supplemented from time to time, the “Documents”), or
otherwise ((a)-(c) collectively referred to as the “Obligations”), and
irrespective of the genuineness, validity, regularity or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of
the Obligations in any case commenced by or against Borrower under Title 11,
United States Code, including, without limitation, obligations or indebtedness
of Borrower for post-petition interest, fees, costs and charges that would have
accrued or been added to the Obligations but for the commencement of such
case.  In furtherance of the foregoing,
the Guarantor hereby agrees as follows:


 


1.                                       No
Impairment.  Lender may at any time
and from time to time, either before or after the maturity thereof, without
notice to or further consent of the Guarantor, extend the time of payment of,
exchange or surrender any collateral for, renew or extend any of the
Obligations


 


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or decrease the interest rate thereon, and may also make any agreement
with Borrower or with any other party to or person liable on any of the
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Lender and
Borrower or any such other party or person, or make any election of rights
Lender may deem desirable under the United States Bankruptcy Code, as amended,
or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors’ rights
generally (any of the foregoing, an “Insolvency Law”) without in any way
impairing or affecting this Guaranty. 
So long as the Obligations are outstanding, this instrument shall be
effective regardless of the subsequent incorporation, merger or consolidation
of Borrower, or any change in the composition, nature, personnel or location of
Borrower and shall extend to any successor entity to Borrower, including a
debtor in possession or the like under any Insolvency Law.


 


2.                                       Guaranty
Absolute.  The Guarantor hereby
guaranties that the Obligations will be paid strictly in accordance with the
terms of the Term Note and/or any other document, instrument or agreement creating
or evidencing the Obligations, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Borrower with respect thereto. 
Guarantor hereby knowingly accepts the full range of risk encompassed
within a contract of “continuing guaranty” which risk includes the possibility
that Borrower will contract additional indebtedness for which Guarantor may be
liable hereunder after Borrower’s financial condition or ability to pay its lawful
debts when they become due has deteriorated, whether or not Borrower has
properly authorized incurring such additional indebtedness.  The Guarantor acknowledges that no oral
representations, including any representations to extend credit or provide other
financial accommodations to Borrower, have been made by Lender to induce the
Guarantor to enter into this Guaranty. 
The liability of the Guarantor under this Guaranty shall be absolute and
unconditional, in accordance with its terms, and, so long as the Obligations
are outstanding, shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation:
(a) any waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Documents or any other instruments or
agreements relating to the Obligations or any assignment or transfer of any
thereof, (b) any lack of validity or enforceability of the Term Note or other
documents, instruments or agreements relating to the Obligations or any
assignment or transfer of any thereof, (c) any furnishing of any additional
security to Lender or its assignees or any acceptance thereof or any release of
any security by Lender or its assignees, (d) any limitation on any party’s
liability or obligation under the Documents or any other documents, instruments
or agreements relating to the Obligations or any assignment or transfer of any
thereof or any invalidity or unenforceability, in whole or in part, of any such
document, instrument or agreement or any term thereof, (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to Borrower, or any action taken with respect
to this Guaranty by any trustee or receiver, or by any court, in any such
proceeding, whether or not the Guarantor shall have notice or knowledge of any
of the foregoing, (f) any exchange, release or nonperfection of any collateral,
or any release, or amendment or


 


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waiver of or consent to departure from any guaranty or security, for
all or any of the Obligations or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the
Guarantor.  Any amounts due from the
Guarantor to Lender shall bear interest until such amounts are paid in full at
the highest rate then applicable to the Obligations.  Obligations include post-petition interest whether or not allowed
or allowable.


 


3.                                       Waivers.  (a)  This Guaranty is a guaranty of payment and not of
collection.   Lender shall be under no obligation to institute suit, exercise
rights or remedies or take any other action against Borrower or any other
person liable with respect to any of the Obligations or resort to any
collateral security held by it to secure any of the Obligations as a condition
precedent to the Guarantor being obligated to perform as agreed herein and
Guarantor hereby waives any and all rights which it may have by statute or
otherwise which would require Lender to do any of the foregoing.  The Guarantor further consents and agrees
that Lender shall be under no obligation to marshal any assets in favor of the
Guarantor, or against or in payment of any or all of the Obligations.  The Guarantor hereby waives all suretyship
defenses and any rights to interpose any defense, counterclaim or offset of any
nature and description which the Guarantor may have or which may exist between
and among Lender, Borrower and/or the Guarantor with respect to the Guarantor’s
obligations under this Guaranty, or which Borrower may assert on the underlying
debt, including but not limited to failure of consideration, breach of
warranty, fraud, payment (other than cash payment in full of the Obligations),
statute of frauds, bankruptcy, infancy, statute of limitations, accord and
satisfaction, and usury, except for payment in full of the Obligations pursuant
to this Guaranty.


 


(b)                                 The
Guarantor waives (i) notice of the acceptance of this Guaranty, and of all
notices and demands of any kind to which the Guarantor may be entitled,
including, without limitation, notice of adverse change in Borrower’s financial
condition or of any other fact which might materially increase the risk of the
Guarantor and (ii) presentment to or demand of payment from anyone whomsoever
liable upon any of the Obligations, protest, notices of presentment,
non-payment or protest and notice of any sale of collateral security or any
default of any sort.


 


(c)                                  Notwithstanding
any payment or payments made by the Guarantor hereunder, or any setoff or
application of funds of the Guarantor by Lender, the Guarantor shall not be
entitled to be subrogated to any of the rights of Lender against Borrower or
against any collateral or guarantee or right of offset held by Lender for the
payment of the Obligations, nor shall the Guarantor seek  or be entitled to seek any contribution or
reimbursement from Borrower in respect of payments made by the Guarantor
hereunder, until all amounts owing to Lender by Borrower on account of the
Obligations are paid in full.  If an
Event of Default (as such term is defined in the Term Note) has occurred and is
continuing, and any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by the Guarantor in trust for Lender,
segregated from other funds of the Guarantor, and shall forthwith upon, and in
any event within two (2) business days of, receipt by the Guarantor, be turned
over to Lender in the exact form received by the Guarantor (duly endorsed by
the Guarantor to Lender, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as Lender may determine, subject to
the provisions of the Term Note.  Any
and all present and future debts and obligations of Borrower to any of the
Guarantor are hereby waived and postponed in favor of, and subordinated


 


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to the full payment and performance of, all present and future debts
and obligations of Borrower to Lender.


 


4.                                       Security.  All sums at any time to the credit of the
Guarantor and any property of the Guarantor in Lender’s possession or in the
possession of any bank, financial institution or other entity that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, Lender (each such entity, an “Affiliate”)
shall be deemed held by Lender or such Affiliate, as the case may be, as
security for any and all of the Guarantor’s obligations to Lender and to any
Affiliate of Lender, no matter how or when arising and whether under this or
any other instrument, agreement or otherwise.


 


5.                                       Representations
and Warranties.  The Guarantor
hereby represents and warrants (all of which representations and warranties
shall survive until all Obligations are indefeasibly satisfied in full), that:


 


(a)                                  Corporate
Status.  The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Arizona.  The
Guarantor has full power, authority and legal right to own its property and
assets and to transact the business in which it is engaged.


 


(b)                                 Authority
and Execution.  The Guarantor has
full power, authority and legal right to execute and deliver, and to perform
its obligations under, this Guaranty and has taken all necessary corporate and
legal action to authorize the execution, delivery and performance of this
Guaranty.


 


(c)                                  Legal,
Valid and Binding Character.  This
Guaranty constitutes the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, except as enforceability may be
limited by applicable Insolvency Law.


 


(d)                                 Violations.  The execution, delivery and performance of
this Guaranty will not violate any requirement of law applicable to the
Guarantor or any material contract, agreement or instrument to which the
Guarantor is a party or by which the Guarantor or any property of the Guarantor
is bound or result in the creation or imposition of any mortgage, lien or other
encumbrance other than to Lender on any of the property or assets of the
Guarantor pursuant to the provisions of any of the foregoing.


 


(e)                                  Consents
or Approvals.  No consent of any
other person or entity (including, without limitation, any creditor of the
Guarantor) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty, where
failure to obtain such consent would have a material adverse effect on the
business, operating assets or condition, financial or otherwise, of the
Guarantor.


 


(f)                                    Litigation.  No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or governmental
authority, bureau or agency is


 


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currently pending or, to the best knowledge of the Guarantor,
threatened (i) with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting the Guarantor, or
any of property or assets of the Guarantor, which, if adversely determined,
would have a material adverse effect on the business, operating assets or
condition, financial or otherwise, of the Guarantor.


 


(g)                                 Financial
Benefit.  The Guarantor has derived
or expects to derive a financial or other advantage from each and every loan,
advance or extension of credit made under the Term Note or other Obligation
incurred by Borrower to Lender.


 


6.                                       Acceleration.  If (i) any Event of Default (as such term is
defined in the Term Note) shall occur and be continuing under any agreement
made by Borrower or the Guarantor to Lender, or make a general assignment or
(ii) the Guarantor shall make an assignment for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for it or for
a substantial part of its property or business; or such a receiver or trustee
shall otherwise be appointed; (iii) Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Guarantor which is not vacated within ninety (90) days or (iv) any money
judgment, writ or similar final process shall be entered or filed against the
Guarantor or any of its properties or other assets for more than $250,000, and
shall remain unvacated, unbonded or unstayed for a period of ninety (90) days,  then any and all Obligations shall for
purposes hereof, at Lender’s option, be deemed due and payable without notice
notwithstanding that any such Obligation is not then due and payable by
Borrower.


 


(b)                                 The
Guarantor will promptly notify Lender of any default by the Guarantor in the
performance or observance of any term or condition of any agreement to which
the Guarantor is a party if the effect of such default is to cause, or permit
the holder of any obligation under such agreement to cause, such obligation to
become due prior to its stated maturity and, if such an event occurs, Lender
shall have the right to accelerate the Guarantor’s obligations hereunder.


 


7.                                       Payments
from Guarantors.  Lender, in its
sole and absolute discretion, with or without notice to the Guarantor, may
apply on account of the Obligations any payment from the Guarantor or any other
guarantor, or amounts realized from any security for the Obligations, or may
deposit any and all such amounts realized in a non-interest bearing cash
collateral deposit account to be maintained as security for the Obligations.


 


8.                                       Costs.  The Guarantor shall pay on demand, all
costs, fees and expenses (including expenses for legal services of every kind)
relating or incidental to the enforcement or protection of the rights of Lender
hereunder or under any of the Obligations.


 


9.                                       No
Termination.  This is a continuing
irrevocable guaranty and shall remain in full force and effect and be binding
upon the Guarantor, and the Guarantor’s successors and assigns, until all of the
Obligations have been paid in full.  If
any of the present or future Obligations are guarantied by persons,
partnerships or corporations in addition to the Guarantor, the death, release
or discharge in whole or in part or the bankruptcy, merger, consolidation,


 


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incorporation, liquidation or dissolution of one or more of them shall
not discharge or affect the liabilities of the Guarantor under this Guaranty.


 


10.                                 Recapture.  Anything in this Guaranty to the contrary
notwithstanding, if Lender receives any payment or payments on account of the
liabilities guaranteed hereby, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver, or any other party
under any Insolvency Law, common law or equitable doctrine, then to the extent
of any sum not finally retained by Lender, the Guarantor’s obligations to
Lender shall be reinstated and this Guaranty shall remain in full force and
effect (or be reinstated) until payment shall have been made to Lender, which
payment shall be due on demand.


 


11.                                 Books
and Records.  The books and records
of Lender showing the account between Lender and Borrower shall be admissible
in evidence in any action or proceeding, shall be binding upon the Guarantor
for the purpose of establishing the items therein set forth and shall
constitute prima facie proof thereof.


 


12.                                 No
Waiver.  No failure on the part of
Lender to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by Lender of any right, remedy or power hereunder preclude any other
or future exercise of any other legal right, remedy or power.  Each and every right, remedy and power
hereby granted to Lender or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by Lender at
any time and from time to time.


 


13.                                 Waiver
of Jury Trial.  THE GUARANTOR DOES
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL
HERETO.  THE GUARANTOR DOES HEREBY
CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.


 


14.                                 Governing
Law; Jurisdiction; Amendments.  THIS
INSTRUMENT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED,
CONSTRUED AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  THE GUARANTOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF
THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL
PURPOSES IN CONNECTION HEREWITH.  ANY
JUDICIAL PROCEEDING BY THE GUARANTOR AGAINST LENDER INVOLVING, DIRECTLY OR
INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF
NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK.  THE


 


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GUARANTOR FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS
OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY
NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER
AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.  THE GUARANTOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF
ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM  NON  CONVENIENS.


 


15.                                 Severability.  To the extent permitted by applicable law,
any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.


 


16.                                 Amendments,
Waivers.  No amendment or waiver of
any provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
executed by the Guarantor and Lender.


 


17.                                 Notice.  All notices, requests and demands to or upon
the Guarantor, shall be in writing and shall be sent in accordance to
Section 11.8 of the Securities Purchase Agreement.


 


18.                                 Successors.  Lender may, from time to time, without
notice to the Guarantor, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty.  Without limiting the generality of the
foregoing, Lender may assign, or grant participations to, one or more banks,
financial institutions or other entities all or any part of any of the
Obligations.  In each such event,
Lender, its Affiliates and each and every immediate and successive purchaser,
assignee, transferee or holder of all or any part of the Obligations shall have
the right to enforce this Guaranty, by legal action or otherwise, for its own
benefit as fully as if such purchaser, assignee, transferee or holder were
herein by name specifically given such right. 
Lender shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which Lender has not
disposed of, sold, assigned, or otherwise transferred.


 


19.                                 Release.  Nothing except cash payment in full of the
Obligations, either by Borrower, the Guarantor, or any third party on either of
their behalf, shall release the Guarantor from liability under this Guaranty.


 


[Signature page follows.]


 


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IN WITNESS WHEREOF, this
Guaranty has been executed by the Guarantor this 22nd  day of  March, 2004.


 


	
   

  	
  TIME AMERICA, INC.,  an
  Arizona corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Facsimile: (   )

  
										



 


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STATE OF
                            )

                                                ):
ss.:

COUNTY OF
                        )


 


On the         day of
                ,
2004, before me personally came                                                 
to me known, who being by me duly sworn, did depose and say s/he is the
                         
of Time America, Inc., an Arizona corporation, the corporation described in and
which executed the foregoing instrument; and that s/he signed her/his name
thereto by order of the board of directors of said corporation.


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  



 


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