**Exhibit 10.5**

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**REGISTRATION RIGHTS AGREEMENT**

 

ThisRegistration Rights Agreement (this “Agreement”) is made and entered into as ofJanuary 3, 2006, by and between TIME AMERICA, INC., a Nevada corporation (the“Company”), and Laurus Master Fund, Ltd., a Cayman Islands company (the“Purchaser”).

 

This Agreementis made pursuant to the Security and Purchase Agreement, dated as of the datehereof, by and among the Purchaser, the Company and various subsidiaries of theCompany (as amended, modified or supplemented from time to time, the “SecurityAgreement”), and pursuant to the Grant Shares, the Secured Convertible TermNote and the Warrants referred to therein.

 

The Companyand the Purchaser hereby agree as follows:

 

# *1.             Definitions.  Capitalized terms used and not otherwisedefined herein that are defined in the Security Agreement shall have themeanings given such terms in the Security Agreement.  As used in this Agreement, the followingterms shall have the following meanings:*

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“*Commission*” means the Securities andExchange Commission.

 

“*Common Stock*” means shares of theCompany’s common stock, par value $0.005 per share.

 

*“Effectiveness Date”*means, (i) with respect to the Registration Statement required to be filed inconnection with the Secured Convertible Term Note issued on the date hereofunder the Security Agreement and the Warrants issued on the date hereof, a dateno later than one hundred eighty (180) days following the date hereof and (ii)with respect to each additional Registration Statement required to be filedhereunder (if any), a date no later than thirty (30) days following theapplicable Filing Date.

 

“*Effectiveness Period*” shall have themeaning set forth in Section 2(a).

 

“*Exchange Act*” means the SecuritiesExchange Act of 1934, as amended, and any successor statute.

 

*“Filing Date”* means,with respect to (1) the Registration Statement which is required to be filed inconnection with the shares of Common Stock issuable upon conversion of theSecured Convertible Term Note made on the date hereof, the date which is sixty(60) days after the date hereof, (2) the Registration Statement required to befiled in connection with the Grant Shares, the date which is sixty (60) daysafter the issuance of such Warrant, (3) the Registration Statement required tobe filed in connection with the shares of Common Stock issuable to the Holderupon exercise of a Warrant, the date which is sixty (60) days after theissuance of such Warrant, and (4) the Registration Statement required to befiled in connection with the shares of Common Stock issuable to the Holder as aresult of adjustments to the Fixed Conversion Price or the Exercise Price, asthe case may be, made pursuant to Section 3.5 of the Secured Convertible TermNote, Section 5 of the Warrant or otherwise, thirty (30) days after theoccurrence of such event or the date of the adjustment of the Fixed ConversionPrice or Exercise Price, as the case may be.

 

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“*Grant Shares*” has the meaning set forth inthe Security Agreement.

 

“*Holder*” or “*Holders*” means the Purchaser or any of its affiliates ortransferees to the extent any of them hold Registrable Securities.

 

“*Indemnified Party*” shall have the meaningset forth in Section 5(c).

 

“*Indemnifying Party*” shall have the meaningset forth in Section 5(c).

 

“*Proceeding*” means an action, claim, suit,investigation or proceeding (including, without limitation, an investigation orpartial proceeding, such as a deposition), whether commenced or threatened.

 

“*Prospectus*” means the prospectus includedin the Registration Statement (including, without limitation, a prospectus thatincludes any information previously omitted from a prospectus filed as part ofan effective registration statement in reliance upon Rule 430A promulgatedunder the Securities Act), as amended or supplemented by any prospectussupplement, with respect to the terms of the offering of any portion of theRegistrable Securities covered by the Registration Statement, and all otheramendments and supplements to the Prospectus, including post-effective amendments,and all material incorporated by reference or deemed to be incorporated byreference in such Prospectus.

 

“*Registrable Securities*” means the GrantShares and the shares of Common Stock issuable upon the conversion of theSecured Convertible Term Note in whole or in part and upon exercise of theWarrants.

 

“*Registration Statement*” means eachregistration statement required to be filed hereunder, including theProspectus, amendments and supplements to such registration statement orProspectus, including pre- and post-effective amendments, all exhibits thereto,and all material incorporated by reference or deemed to be incorporated byreference in such registration statement.

 

“*Rule 144*” means Rule 144 promulgated bythe Commission pursuant to the Securities Act, as such Rule may be amended fromtime to time, or any similar rule or regulation hereafter adopted by theCommission having substantially the same effect as such Rule.

 

“*Rule 415*” means Rule 415 promulgated bythe Commission pursuant to the Securities Act, as such Rule may be amended fromtime to time, or any similar rule or regulation hereafter adopted by theCommission having substantially the same effect as such Rule.

 

“*Rule 424*” means Rule 424 promulgated bythe Commission pursuant to the Securities Act, as such Rule may be amended fromtime to time, or any similar rule or regulation hereafter adopted by theCommission having substantially the same effect as such Rule.

 

“*Secured Convertible Term Note*” has themeaning set forth in the Security Agreement.

 

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“*Securities Act*” means the Securities Actof 1933, as amended, and any successor statute.

 

*“Security Agreement”*has the meaning given to such term in the Preamble hereto.

 

“*Trading Market*” means any of the NASD OTCBulletin Board, NASDAQ SmallCap Market, the Nasdaq National Market, theAmerican Stock Exchange or the New York Stock Exchange.

 

“*Warrants*” means the Common Stock purchasewarrants issued in connection with the Security Agreement, whether on the datethereof or thereafter.

 

# *2.             Registration.*

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## (a)           Onor prior to the Filing Date the Company shall prepare and file with theCommission a Registration Statement covering the Registrable Securities for anoffering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on FormS-1, Form SB-2 or Form S-3 (except if the Company is not then eligible toregister for resale the Registrable Securities on such Forms, in which casesuch registration shall be on another appropriate form in accordanceherewith).  The Company shall cause theRegistration Statement to become effective and remain effective as providedherein.  The Company shall use its bestefforts to cause the Registration Statement to be declared effective under theSecurities Act as promptly as possible after the filing thereof, but in anyevent no later than the Effectiveness Date. The Company shall use its reasonable commercial efforts to keep theRegistration Statement continuously effective under the Securities Act untilthe date which is the earlier date of when (i) all Registrable Securities havebeen sold or (ii) all Registrable Securities may be sold immediately withoutregistration under the Securities Act and without volume restrictions pursuantto Rule 144(k), as determined by the counsel to the Company pursuant to awritten opinion letter to such effect, addressed and acceptable to theCompany’s transfer agent and the affected Holders (the  “Effectiveness Period”).

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 (b)          Within three business days of the Effectiveness Date, theCompany shall cause its counsel to issue a blanket opinion in the form attachedhereto as Exhibit A, to the transfer agent stating that the shares are subjectto an effective registration statement and can be reissued free of restrictivelegend upon notice of a sale by the Purchaser and confirmation by the Purchaserthat it has complied with the prospectus delivery requirements, provided thatthe Company has not advised the transfer agent orally or in writing that the opinionhas been withdrawn. Copies of the blanket opinion required by this Section 2(b)shall be delivered to the Purchaser within the time frame set forth above.

 

# *3.             Registration Procedures.  If and whenever the Company is required bythe provisions hereof to effect the registration of any Registrable Securitiesunder the Securities Act, the Company will, as expeditiously as possible:*

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## (a)           prepareand file with the Commission the Registration Statement with respect to suchRegistrable Securities, respond as promptly as possible to any comments

 

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## received from the Commission, and use its best efforts to cause theRegistration Statement to become and remain effective for the EffectivenessPeriod with respect thereto, and promptly provide to the Purchaser copies ofall filings and Commission letters of comment relating thereto;

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## (b)           prepareand file with the Commission such amendments and supplements to theRegistration Statement and the Prospectus used in connection therewith as maybe necessary to comply with the provisions of the Securities Act with respectto the disposition of all Registrable Securities covered by the RegistrationStatement and to keep such Registration Statement effective until the expirationof the Effectiveness Period;

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## (c)           furnishto the Purchaser such number of copies of the Registration Statement and theProspectus included therein (including each preliminary Prospectus) as thePurchaser reasonably may request to facilitate the public sale or dispositionof the Registrable Securities covered by the Registration Statement;

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## (d)           useits best efforts to register or qualify the Purchaser’s Registrable Securitiescovered by the Registration Statement under the securities or “blue sky” lawsof such jurisdictions within the United States as the Purchaser may reasonablyrequest, provided, however, that the Company shall not for any such purpose berequired to qualify generally to transact business as a foreign corporation inany jurisdiction where it is not so qualified or to consent to general serviceof process in any such jurisdiction;

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## (e)           listthe Registrable Securities covered by the Registration Statement with anysecurities exchange on which the Common Stock of the Company is then listed;

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## (f)            immediatelynotify the Purchaser at any time when a Prospectus relating thereto is requiredto be delivered under the Securities Act, of the happening of any event ofwhich the Company has knowledge as a result of which the Prospectus containedin such Registration Statement, as then in effect, includes an untrue statementof a material fact or omits to state a material fact required to be statedtherein or necessary to make the statements therein not misleading in light ofthe circumstances then existing; and

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## (g)           makeavailable for inspection by the Purchaser and any attorney, accountant or otheragent retained by the Purchaser, all publicly available, non-confidentialfinancial and other records, pertinent corporate documents and properties ofthe Company, and cause the Company’s officers, to supply all publiclyavailable, non-confidential information reasonably requested by the attorney,accountant or agent of the Purchaser.

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# *4.             Registration Expenses.  All expenses relating to the Company’scompliance with Sections 2 and 3 hereof, including, without limitation, allregistration and filing fees, printing expenses, fees and disbursements ofcounsel and independent public accountants for the Company, fees and expenses(including reasonable counsel fees) incurred in connection with complying withstate securities or “blue sky” laws, fees of the NASD, transfer taxes, fees oftransfer agents and registrars, fees of, and disbursements incurred by, onecounsel for the*

 

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# *Holders (upon prioragreement by the parties and to the extent such counsel is required due toCompany’s failure to meet any of its obligations hereunder), are called“Registration Expenses”. All selling commissions applicable to the sale ofRegistrable Securities, including any fees and disbursements of any specialcounsel to the Holders beyond those included in Registration Expenses, arecalled “Selling Expenses.”  The Companyshall only be responsible for all Registration Expenses.*

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# *5.             Indemnification.*

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## (a)           Inthe event of a registration of any Registrable Securities under the SecuritiesAct pursuant to this Agreement, the Company will indemnify and hold harmlessthe Purchaser, and its officers, directors and each other person, if any, whocontrols the Purchaser within the meaning of the Securities Act, against anylosses, claims, damages or liabilities, joint or several, to which thePurchaser, or such persons may become subject under the Securities Act orotherwise, insofar as such losses, claims, damages or liabilities (or actionsin respect thereof) arise out of or are based upon any untrue statement oralleged untrue statement of any material fact contained in any RegistrationStatement under which such Registrable Securities were registered under theSecurities Act pursuant to this Agreement, any preliminary Prospectus or finalProspectus contained therein, or any amendment or supplement thereof, or ariseout of or are based upon the omission or alleged omission to state therein amaterial fact required to be stated therein or necessary to make the statementstherein not misleading, and will reimburse the Purchaser, and each such personfor any reasonable legal or other expenses incurred by them in connection withinvestigating or defending any such loss, claim, damage, liability or action;provided, however, that the Company will not be liable in any such case if andto the extent that any such loss, claim, damage or liability arises out ofPurchaser’s failure to comply with the prospectus delivery requirements underthe Securities Act or is based upon an untrue statement or alleged untruestatement or omission or alleged omission so made in conformity withinformation furnished by or on behalf of the Purchaser or any such person inwriting specifically for use in any such document.

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## (b)           Inthe event of a registration of the Registrable Securities under the SecuritiesAct pursuant to this Agreement, the Purchaser will indemnify and hold harmlessthe Company, and its officers, directors and each other person, if any, whocontrols the Company within the meaning of the Securities Act, against alllosses, claims, damages or liabilities, joint or several, to which the Companyor such persons may become subject under the Securities Act or otherwise, insofaras such losses, claims, damages or liabilities (or actions in respect thereof)arise out of or are based upon any untrue statement or alleged untrue statementof any material fact which was furnished in writing by the Purchaser to theCompany expressly for use in (and such information is contained in) theRegistration Statement under which such Registrable Securities were registeredunder the Securities Act pursuant to this Agreement, any preliminary Prospectusor final Prospectus contained therein, or any amendment or supplement thereof,or arise out of or are based upon the omission or alleged omission to statetherein a material fact required to be stated therein or necessary to make thestatements therein not misleading, and will reimburse the Company and each suchperson for any reasonable

 

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## legal or other expenses incurred by them in connection withinvestigating or defending any such loss, claim, damage, liability or action,provided, however, that the Purchaser will be liable in any such case if andonly to the extent that any such loss, claim, damage or liability arises out ofor is based upon an untrue statement or alleged untrue statement or omission oralleged omission so made in conformity with information furnished in writing tothe Company by or on behalf of the Purchaser specifically for use in any suchdocument.  Notwithstanding the provisionsof this paragraph, the Purchaser shall not be required to indemnify any personor entity in excess of the amount of the aggregate net proceeds received by thePurchaser in respect of Registrable Securities in connection with any suchregistration under the Securities Act.

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## (c)           Promptlyafter receipt by a party entitled to claim indemnification hereunder (an“Indemnified Party”) of notice of the commencement of any action, suchIndemnified Party shall, if a claim for indemnification in respect thereof isto be made against a party hereto obligated to indemnify such Indemnified Party(an “Indemnifying Party”), notify the Indemnifying Party in writing thereof,but the omission so to notify the Indemnifying Party shall not relieve it fromany liability which it may have to such Indemnified Party other than under thisSection 5(c) and shall only relieve it from any liability which it may have tosuch Indemnified Party under this Section 5(c) if and to the extent theIndemnifying Party is prejudiced by such omission. In case any such actionshall be brought against any Indemnified Party and it shall notify the IndemnifyingParty of the commencement thereof, the Indemnifying Party shall be entitled toparticipate in and, to the extent it shall wish, to assume and undertake thedefense thereof with counsel satisfactory to such Indemnified Party, and, afternotice from the Indemnifying Party to such Indemnified Party of its election soto assume and undertake the defense thereof, the Indemnifying Party shall notbe liable to such Indemnified Party under this Section 5(c) for any legalexpenses subsequently incurred by such Indemnified Party in connection with thedefense thereof; if the Indemnified Party retains its own counsel, then theIndemnified Party shall pay all reasonable fees, costs and expenses of suchcounsel, provided, however, that, if the defendants in any such action includeboth the indemnified party and the Indemnifying Party and the Indemnified Partyshall have reasonably concluded that there may be reasonable defenses availableto it which are different from or additional to those available to the IndemnifyingParty or if the interests of the Indemnified Party reasonably may be deemed toconflict with the interests of the Indemnifying Party, the Indemnified Partyshall have the right to select one separate counsel and to assume such legaldefenses and otherwise to participate in the defense of such action, with thereasonable expenses and fees of such separate counsel and other expensesrelated to such participation to be reimbursed by the Indemnifying Party asincurred.

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## (d)           Inorder to provide for just and equitable contribution in the event of jointliability under the Securities Act in any case in which either (i) thePurchaser, or any officer, director or controlling person of the Purchaser,makes a claim for indemnification pursuant to this Section 5 but it isjudicially determined (by the entry of a final judgment or decree by a court ofcompetent jurisdiction and the expiration of time to appeal or the denial ofthe last right of appeal) that such indemnification may not be enforced in suchcase notwithstanding the fact that this Section 5 provides for indemnificationin such

 

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## case, or (ii) contribution under the Securities Act may be required onthe part of the Purchaser or such officer, director or controlling person ofthe Purchaser in circumstances for which indemnification is provided under thisSection 5; then, and in each such case, the Company and the Purchaser willcontribute to the aggregate losses, claims, damages or liabilities to whichthey may be subject (after contribution from others) in such proportion so thatthe Purchaser is responsible only for the portion represented by the percentagethat the public offering price of its securities offered by the RegistrationStatement bears to the public offering price of all securities offered by suchRegistration Statement, provided, however, that, in any such case, (A) thePurchaser will not be required to contribute any amount in excess of the publicoffering price of all such securities offered by it pursuant to suchRegistration Statement; and (B) no person or entity guilty of fraudulentmisrepresentation (within the meaning of Section 10(f) of the Act) will beentitled to contribution from any person or entity who was not guilty of such fraudulentmisrepresentation.

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# *6.             Representations and Warranties*.

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## (a)           TheCommon Stock of the Company is registered pursuant to Section 12(b) or 12(g) ofthe Exchange Act and, except with respect to certain matters which the Companyhas disclosed to the Purchaser on Schedule 12(u) to the SecurityAgreement, the Company has timely filed all proxy statements, reports,schedules, forms, statements and other documents required to be filed by itunder the Exchange Act.  The Company hasfiled (i) its Annual Report on Form 10-KSB for its fiscal year ended June 30,2005 and (ii) its Quarterly Report on Form 10-QSB for the fiscal quarter endedSeptember 30, 2005 and all Current Reports on Form 8-K that the Company wasrequired to file in its fiscal year 2005 (collectively, the “SECReports”).  Each SEC Report was, at thetime of its filing, in substantial compliance with the requirements of itsrespective form and none of the SEC Reports, nor the financial statements (andthe notes thereto) included in the SEC Reports, as of their respective filingdates, contained any untrue statement of a material fact or omitted to state amaterial fact required to be stated therein or necessary to make the statementstherein, in light of the circumstances under which they were made, notmisleading.  The financial statements ofthe Company included in the SEC Reports comply as to form in all materialrespects with applicable accounting requirements and the published rules andregulations of the Commission or other applicable rules and regulations withrespect thereto.  Such financialstatements have been prepared in accordance with generally accepted accountingprinciples (“GAAP”) applied on a consistent basis during the periods involved(except (i) as may be otherwise indicated in such financial statements or thenotes thereto or (ii) in the case of unaudited interim statements, to theextent they may not include footnotes or may be condensed) and fairly presentin all material respects the financial condition, the results of operations andthe cash flows of the Company and its subsidiaries, on a consolidated basis, asof, and for, the periods presented in each such SEC Report.

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## (b)           TheCommon Stock is listed for trading on the National Association of SecuritiesDealers, Inc. Over the Counter Bulletin Board (“NASD OTCBB”) and satisfies allrequirements for the continuation of such listing.  The Company has not received any notice thatits Common Stock will be delisted from the NASD OTCBB (except for prior

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## notices which have been fully remedied) or that the Common Stock doesnot meet all requirements for the continuation of such listing.

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## (c)           Neitherthe Company, nor any of its affiliates, nor any person acting on its or theirbehalf, has directly or indirectly made any offers or sales of any security orsolicited any offers to buy any security under circumstances that would causethe offering of the Securities pursuant to the Security Agreement to beintegrated with prior offerings by the Company for purposes of the SecuritiesAct which would prevent the Company from selling the Common Stock pursuant toRule 506 under the Securities Act, or any applicable exchange-relatedstockholder approval provisions, nor will the Company or any of its affiliatesor subsidiaries take any action or steps that would cause the offering of theSecurities to be integrated with other offerings.

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## (d)           TheWarrants, each Note and the shares of Common Stock which the Purchaser mayacquire pursuant to the Warrants and the Secured Convertible Term Note are allrestricted securities under the Securities Act as of the date of thisAgreement.  The Company will not issueany stop transfer order or other order impeding the sale and delivery of any ofthe Registrable Securities at such time as such Registrable Securities areregistered for public sale or an exemption from registration is available,except as required by federal or state securities laws.

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## (e)           TheCompany understands the nature of the Registrable Securities issuable upon theconversion of the Secured Convertible Term Note and the exercise of the Warrantand recognizes that the issuance of such Registrable Securities may have apotential dilutive effect.  The Companyspecifically acknowledges that its obligation to issue the RegistrableSecurities is binding upon the Company and enforceable regardless of thedilution such issuance may have on the ownership interests of othershareholders of the Company.

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## (f)            Exceptfor agreements made in the ordinary course of business, there is no agreementthat has not been filed with the Commission as an exhibit to a registrationstatement or to a form required to be filed by the Company under the ExchangeAct, the breach of which could reasonably be expected to have a material andadverse effect on the Company and its subsidiaries, or would prohibit orotherwise interfere with the ability of the Company to enter into and performany of its obligations under this Agreement in any material respect.

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## (g)           TheCompany will at all times have authorized and reserved a sufficient number ofshares of Common Stock for the issuance of the Grant Share, for the fullconversion of the Secured Convertible Term Note and the exercise of theWarrants.

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# *7.             Miscellaneous.*

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## (a)           Remedies.  In the event of a breach by the Company or bya Holder, of any of their respective obligations under this Agreement, eachHolder or the Company, as the case may be, in addition to being entitled toexercise all rights granted by law and

 

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## under this Agreement, including recovery of damages, will be entitledto specific performance of its rights under this Agreement.

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## (b)           NoPiggyback on Registrations.  Exceptas and to the extent specified in Schedule 7(b) hereto or provided that theHolders give their consent, neither the Company nor any of its security holders(other than the Holders in such capacity pursuant hereto) may includesecurities of the Company in any Registration Statement other than theRegistrable Securities, and the Company shall not after the date hereof enterinto any agreement providing any such right for inclusion of shares in theRegistration Statement to any of its security holders. Except as and to theextent specified in Schedule 7(b) hereto, the Company has not previouslyentered into any agreement granting any registration rights with respect to anyof its securities to any Person that have not been fully satisfied.

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## (c)           Compliance.  Each Holder covenants and agrees that it willcomply with the prospectus delivery requirements of the Securities Act asapplicable to it in connection with sales of Registrable Securities pursuant tothe Registration Statement.

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## (d)           DiscontinuedDisposition.  Each Holder agrees byits acquisition of such Registrable Securities that, upon receipt of a noticefrom the Company of the occurrence of a Discontinuation Event (as definedbelow), such Holder will forthwith discontinue disposition of such RegistrableSecurities under the applicable Registration Statement until such Holder’sreceipt of the copies of the supplemented Prospectus and/or amendedRegistration Statement or until it is advised in writing (the “Advice”) by theCompany that the use of the applicable Prospectus may be resumed, and, ineither case, has received copies of any additional or supplemental filings thatare incorporated or deemed to be incorporated by reference in such Prospectusor Registration Statement. The Company may provide appropriate stop orders toenforce the provisions of this paragraph. For purposes of this Section 7(d), a “Discontinuation Event” shall mean(i) when the Commission notifies the Company whether there will be a “review”of such Registration Statement and whenever the Commission comments in writingon such Registration Statement (the Company shall provide true and completecopies thereof and all written responses thereto to each of the Holders); (ii)any request by the Commission or any other Federal or state governmentalauthority for amendments or supplements to such Registration Statement orProspectus or for additional information; (iii) the issuance by the Commissionof any stop order suspending the effectiveness of such Registration Statementcovering any or all of the Registrable Securities or the initiation of any Proceedingsfor that purpose; (iv) the receipt by the Company of any notification withrespect to the suspension of the qualification or exemption from qualificationof any of the Registrable Securities for sale in any jurisdiction, or theinitiation or threatening of any Proceeding for such purpose; and/or (v) theoccurrence of any event or passage of time that makes the financial statementsincluded in such Registration Statement ineligible for inclusion therein or anystatement made in such Registration Statement or Prospectus or any documentincorporated or deemed to be incorporated therein by reference untrue in anymaterial respect or that requires any revisions to such Registration Statement,Prospectus or other documents so that, in the case of such RegistrationStatement or Prospectus, as the case may be, it will not contain any untruestatement of a

 

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## material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein, in light of thecircumstances under which they were made, not misleading.

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## (e)           Piggy-BackRegistrations.  If at any time thereis not an effective Registration Statement covering all of the RegistrableSecurities and the Company shall determine to prepare and file with theCommission a registration statement relating to an offering for its own accountor the account of others under the Securities Act of any of its equitysecurities, other than on Form S-4 or Form S-8 (each as promulgated under theSecurities Act) or their then equivalents relating to equity securities to beissued solely in connection with any acquisition of any entity or business orequity securities issuable in connection with stock option or other employeebenefit plans, then the Company shall send to each Holder written notice ofsuch determination and, if within fifteen days after receipt of such notice,any such Holder shall so request in writing, the Company shall include in suchregistration statement all or any part of such Registrable Securities suchholder requests to be registered to the extent the Company may do so withoutviolating registration rights of others which exist as of the date of thisAgreement, subject to customary underwriter cutbacks applicable to all holdersof registration rights and subject to obtaining any required the consent of anyselling stockholder(s) to such inclusion under such registration statement.

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## (f)            Amendmentsand Waivers.  The provisions of thisAgreement, including the provisions of this sentence, may not be amended,modified or supplemented, and waivers or consents to departures from theprovisions hereof may not be given, unless the same shall be in writing andsigned by the Company and the Holders of the then outstanding RegistrableSecurities. Notwithstanding the foregoing, a waiver or consent to depart fromthe provisions hereof with respect to a matter that relates exclusively to therights of certain Holders and that does not directly or indirectly affect therights of other Holders may be given by Holders of at least a majority of theRegistrable Securities to which such waiver or consent relates; provided,however, that the provisions of this sentence may not be amended, modified, orsupplemented except in accordance with the provisions of the immediatelypreceding sentence.

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## (g)           Notices.  Any notice or request hereunder may be givento the Company or the Purchaser at the respective addresses set forth below oras may hereafter be specified in a notice designated as a change of addressunder this Section 7(g).  Any notice orrequest hereunder shall be given by registered or certified mail, returnreceipt requested, hand delivery, overnight mail, Federal Express or othernational overnight next day carrier (collectively, “Courier”) or telecopy(confirmed by mail).  Notices andrequests shall be, in the case of those by hand delivery, deemed to have beengiven when delivered to any party to whom it is addressed, in the case of thoseby mail or overnight mail, deemed to have been given three (3) business daysafter the date when deposited in the mail or with the overnight mail carrier,in the case of a Courier, the next business day following timely delivery ofthe package with the Courier, and, in the case of a telecopy, whenconfirmed.  The address for such noticesand communications shall be as follows:

 

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| *If to the Company:*            |     | Time  America, Inc.  8840 East Chaparral Road, Suite 100  Scottsdale, Arizona 85250  Attention: Craig J. Smith  Facsimile: (480) 967-5444                                     |
|---------------------------------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                            |     |                                                                                                                                                                          |
| * *                        | * * | *with a copy to:*                                                                                                                                                             |
|                            |     |                                                                                                                                                                          |
|                            |     | Gregory R.  Hall, Esq.  Squire, Sanders & Dempsey L.L.P.  Two Renaissance Square  40 North Central Avenue, Suite 2700  Phoenix, Arizona 85004  Facsimile: (602) 253-8129  |
| * *                        | * * | * *                                                                                                                                                                      |
| *If to a Purchaser:*            |     | Laurus  Master Fund, Ltd.  c/o  M&C Corporate Services Limited  P.O. Box 309 GT, Ugland House, South Church Street  Grand Cayman, Cayman Islands  Facsimile: 345-949-8080 |
| * *                        |     |                                                                                                                                                                          |
| *With a copy to:*               | * * | John E.  Tucker, Esq.  825 Third Avenue — 14th Floor  New York, New York 10022  Facsimile: (212) 541-4434                                                                |
| *If to any other Person who is* | * * |                                                                                                                                                                          |
| *then the registered Holder:*   |     | To the  address of such Holder as it appears in the stock transfer books of the  Company                                                                                      |

 

or such otheraddress as may be designated in writing hereafter in accordance with thisSection 7(g) by such Person.

 

## (h)           Successorsand Assigns.  This Agreement shallinure to the benefit of and be binding upon the successors and permittedassigns of each of the parties and shall inure to the benefit of each Holder.The Company may not assign its rights or obligations hereunder without theprior written consent of each Holder. Each Holder may assign their respective rights hereunder in the mannerand to the Persons as permitted under the Secured Convertible Term Note and theSecurity Agreement with the prior written consent of the Company, which consentshall not be unreasonably withheld.

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## (i)            Executionand Counterparts.  This Agreement maybe executed in any number of counterparts, each of which when so executed shallbe deemed to be an original and, all of which taken together shall constituteone and the same Agreement. In the event that any signature is delivered byfacsimile transmission, such signature shall create a valid binding obligationof the party executing (or on whose behalf such

 

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## signature is executed) the same with the same force and effect as ifsuch facsimile signature were the original thereof.

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## (j)            GoverningLaw.  All questions concerning theconstruction, validity, enforcement and interpretation of this Agreement shallbe governed by and construed and enforced in accordance with the internal lawsof the State of New York, without regard to the principles of conflicts of lawthereof. Each party agrees that all Proceedings concerning the interpretations,enforcement and defense of the transactions contemplated by this Agreementshall be commenced exclusively in the state and federal courts sitting in theCity of New York, Borough of Manhattan. Each party hereto hereby irrevocablysubmits to the exclusive jurisdiction of the state and federal courts sittingin the City of New York, Borough of Manhattan for the adjudication of anydispute hereunder or in connection herewith or with any transactioncontemplated hereby or discussed herein, and hereby irrevocably waives, andagrees not to assert in any Proceeding, any claim that it is not personallysubject to the jurisdiction of any such court, that such Proceeding isimproper.  Each party hereto herebyirrevocably waives personal service of process and consents to process beingserved in any such Proceeding by mailing a copy thereof via registered orcertified mail or overnight delivery (with evidence of delivery) to such partyat the address in effect for notices to it under this Agreement and agrees thatsuch service shall constitute good and sufficient service of process and noticethereof. Nothing contained herein shall be deemed to limit in any way any rightto serve process in any manner permitted by law. Each party hereto herebyirrevocably waives, to the fullest extent permitted by applicable law, any andall right to trial by jury in any legal proceeding arising out of or relatingto this Agreement or the transactions contemplated hereby. If either partyshall commence a Proceeding to enforce any provisions of a TransactionDocument, then the prevailing party in such Proceeding shall be reimbursed bythe other party for its reasonable attorneys fees and other costs and expensesincurred with the investigation, preparation and prosecution of suchProceeding.

##  

## (k)           CumulativeRemedies.  The remedies providedherein are cumulative and not exclusive of any remedies provided by law.

##  

## (l)            Severability.  If any term, provision, covenant orrestriction of this Agreement is held by a court of competent jurisdiction tobe invalid, illegal, void or unenforceable, the remainder of the terms,provisions, covenants and restrictions set forth herein shall remain in fullforce and effect and shall in no way be affected, impaired or invalidated, andthe parties hereto shall use their reasonable efforts to find and employ analternative means to achieve the same or substantially the same result as thatcontemplated by such term, provision, covenant or restriction. It is herebystipulated and declared to be the intention of the parties that they would haveexecuted the remaining terms, provisions, covenants and restrictions withoutincluding any of such that may be hereafter declared invalid, illegal, void orunenforceable.

##  

## (m)          Headings.  The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning hereof.

 

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IN WITNESSWHEREOF, the parties have executed this Registration Rights Agreement as of thedate first written above. 

 
| **TIME AMERICA, INC., A NEVADA  CORPORATION** | ** ** | **LAURUS MASTER FUND, LTD.** | ** ** |
|-----------------------------------------------|------------|------------------------------|------------|
| ** **                                    | ** ** | ** **                   | ** ** |
| ** **                                    | ** ** | ** **                   | ** ** |
| By:                                           |       |                         | By:        |   |
| Name:                                         |       |                         | Name:      |   |
| Title:                                        |       |                         | Title:     |   |
|                                               |            |                              |            |  |  |

 

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**EXHIBIT A**

 

[           ,2005]

 

 

[              StockTransfer  & Trust Company[Address]

 Attn:[                         ]

 
| Re: |   | Time America, Inc. Registration Statement on Form [SB-2] |
|-----|--------|----------------------------------------------------------|

 

 

Ladies and Gentlemen:

 

As counsel to Time America, Inc., a Nevada corporation (the “Company”),we have been requested to render our opinion to you in connection with theresale by the individuals or entitles listed on Schedule A attached hereto (the“Selling Stockholders”), of an aggregate of [amount] shares (the “Shares”) ofthe Company’s Common Stock.

 

A Registration Statement on Form [SB-2] under the Securities Act of1933, as amended (the “Act”), with respect to the resale of the Shares wasdeclared effective by the Securities and Exchange Commission on [date].  Enclosed is the Prospectus dated [date].  We understand that the Shares are to beoffered and sold in the manner described in the Prospectus.

 

Based upon the foregoing, upon request by the Selling Stockholders atany time while the registration statement remains effective, it is our opinionthat the Shares have been registered for resale under the Act and newcertificates evidencing the Shares upon their transfer or re-registration bythe Selling Stockholders may be issued without restrictive legend.  We will advise you if the registrationstatement is not available or effective at any point in the future.

 

Very trulyyours,

 

[Companycounsel]

 

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**Schedule A**

** **
| **Selling Stockholder** | ** ** | **R/N/O**  | ** ** | **Shares  Being Offered** |
|-------------------------|------------|------------|------------|---------------------------|
| ** **              | ** ** | ** ** | ** ** | ** **                |
| ** **              | ** ** | ** ** | ** ** | ** **                |
| ** **              | ** ** | ** ** | ** ** | ** **                |

 

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** **

**TIMEAMERICA, INC.**

 

**DISCLOSURESCHEDULES**

 

**TO**

 

**REGISTRATIONRIGHTS AGREEMENT**

 

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** **

**SCHEDULE 7(b)**

** **

**PIGGY-BACK REGISTRATION RIGHTS**

** **

**NONE.**

 

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