**Exhibit 10.2**

 

**THIS NOTE AND THE COMMON SHARESISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPONCONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED ORHYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THISNOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OFCOUNSEL REASONABLY SATISFACTORY TO TIME AMERICA, INC. THAT SUCH REGISTRATION ISNOT REQUIRED.**

 

**SECURED CONVERTIBLE TERM NOTE**

 

FOR VALUE RECEIVED, TIME AMERICA, INC., a Nevadacorporation (the “**Company**”),promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate ServicesLimited, P.O. Box 309 GT, Ugland House, South Church Street, George Town,Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “**Holder**”) or its registered assigns orsuccessors in interest, sum of Two Million Dollars ($2,000,000), together withany accrued and unpaid interest hereon, on January 3, 2009 (the “**Maturity Date**”) if not sooner paid.

 

Capitalized terms used herein without definition shallhave the meanings ascribed to such terms in that certain Security and PurchaseAgreement dated as of the date hereof by and between the Companies and theHolder (as amended, modified and/or supplemented from time to time, the “**Security Agreement**”).

 

The following terms shall apply to this SecuredConvertible Term Note (this “**Note**”):

 

# **ARTICLE I**CONTRACT RATE AND AMORTIZATION

 

1.1           ContractRate.  Subject to Sections 4.2 and5.10, interest payable on the outstanding principal amount of this Note (the “**Principal Amount**”) shall accrue at a rateper annum equal to the “prime rate” published in The Wall Street Journalfrom time to time (the “**Prime Rate**”),plus two percent (2.0%) (the “**Contract Rate**”).  The Contract Rate shall be increased ordecreased as the case may be for each increase or decrease in the Prime Rate inan amount equal to such increase or decrease in the Prime Rate; each change tobe effective as of the day of the change in the Prime Rate.  The Contract Rate shall not at any time beless than seven and one quarter percent (7.25%).  Interest shall be (i) calculated on thebasis of a 360 day year, and (ii) payable monthly, in arrears, commencingon February 1, 2006, on the first business day of each consecutivecalendar month thereafter through and including the Maturity Date, and on theMaturity Date, whether by acceleration or otherwise.

 

1.2           PrincipalPayments.  Amortizing payments of theaggregate principal amount outstanding under this Note at any time (the “**Principal Amount**”) shall be made by theCompany on July 1, 2006 and on the first business day of each succeedingmonth thereafter through and including the Maturity Date (each, an “**Amortization Date**”).  Subject to Article III below, commencingon the first Amortization Date, the Company shall make monthly payments

 

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to the Holder on eachRepayment Date, each such payment in the amount of $66,666.67 together with anyaccrued and unpaid interest on such portion of the Principal Amount plus anyand all other unpaid amounts which are then owing under this Note, the SecurityAgreement and/or any other Ancillary Agreement (collectively, the “**Monthly Amount**”).  Any outstanding Principal Amount togetherwith any accrued and unpaid interest and any and all other unpaid amounts whichare then owing by the Company to the Holder under this Note, the SecurityAgreement and/or any other Ancillary Agreement shall be due and payable on theMaturity Date.

 

**ARTICLE IICONVERSION AND REDEMPTION**

# ** **

2.1           Paymentof Monthly Amount.

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### (a)           Payment in Cashor Common Stock.  If the MonthlyAmount (or a portion of such Monthly Amount if not all of the Monthly Amountmay be converted into shares of Common Stock pursuant to Section 3.2) isrequired to be paid in cash pursuant to Section 2.1(b), then the Companyshall pay the Holder an amount in cash equal to 100% of the Monthly Amount (orsuch portion of such Monthly Amount to be paid in cash) due and owing to theHolder on the Amortization Date.  If theMonthly Amount (or a portion of such Monthly Amount if not all of the MonthlyAmount may be converted into shares of Common Stock pursuant to Section 3.2)is required to be paid in shares of Common Stock pursuant to Section 2.1(b),the number of such shares to be issued by the Company to the Holder on suchAmortization Date (in respect of such portion of the Monthly Amount convertedinto shares of Common Stock pursuant to Section 2.1(b)), shall be thenumber determined by dividing (i) the portion of the Monthly Amountconverted into shares of Common Stock, by (ii) the then applicable FixedConversion Price.  For purposes hereof,subject to Section 3.6 hereof, the initial “**Fixed Conversion Price**” means $ 0.65.

###  

### (b)           Monthly AmountConversion Conditions. Subject to Sections 2.1(a), 2.2, and 3.2hereof, the Holder shall convert into shares of Common Stock all or a portionof the Monthly Amount due on each Amortization Date if the following conditions(the “**Conversion Criteria**”) aresatisfied: (i) the average closing price of the Common Stock as reportedby Bloomberg, L.P. on the Principal Market for the five (5) trading daysimmediately preceding such Amortization Date shall be greater than or equal to110% of the Fixed Conversion Price and (ii) the amount of such conversiondoes not exceed twenty percent (20%) of the aggregate dollar trading volume ofthe Common Stock for the period of twenty-two (22) trading days immediatelypreceding such Amortization Date.  If subsection (i) ofthe Conversion Criteria is met but subsection (ii) of the ConversionCriteria is not met as to the entire Monthly Amount, the Holder shall convertonly such part of the Monthly Amount that meets subsection (ii) ofthe Conversion Criteria.  Any portion ofthe Monthly Amount due on an Amortization Date that the Holder has not beenable to convert into shares of Common Stock due to the failure to meet theConversion Criteria, shall be paid in cash by the Company at the rate of 100%of the Monthly Amount otherwise due on such Amortization Date, within three (3) businessdays of such Amortization Date.

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## 2.2           No Effective Registration.  Notwithstanding anything to the contraryherein, none of the Company’s obligations to the Holder may be converted intoCommon Stock

 

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## unless (a) either (i) an effective currentRegistration Statement (as defined in the Registration Rights Agreement)covering the shares of Common Stock to be issued in connection withsatisfaction of such obligations exists or (ii) an exemption fromregistration for resale of all of the Common Stock issued and issuable isavailable pursuant to Rule 144 of the Securities Act and (b) no Eventof Default (as hereinafter defined) exists and is continuing, unless such Eventof Default is cured within any applicable cure period or otherwise waived inwriting by the Holder.

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## 2.3           Optional Redemption in Cash.  The Company may prepay this Note (“**Optional Redemption**”) by paying to theHolder a sum of money equal to one hundred fifteen percent (115%) of thePrincipal Amount outstanding at such time together with accrued but unpaidinterest thereon and any and all other sums due, accrued or payable to theHolder arising under this Note, the Security Agreement or any other AncillaryAgreement (the “**Redemption Amount**”)outstanding on the Redemption Payment Date (as defined below).  The Company shall deliver to the Holder awritten notice of redemption (the “**Notice ofRedemption**”) specifying the date for such Optional Redemption (the “**Redemption Payment Date**”), which date shallbe ten (10) business days after the date of the Notice of Redemption (the “**Redemption Period**”).  A Notice of Redemption shall not be effectivewith respect to any portion of this Note for which the Holder has previouslydelivered a Notice of Conversion (as hereinafter defined) or for conversionselected to be made by the Holder pursuant to Section 3.3 during theRedemption Period.  The Redemption Amountshall be determined as if the Holder’s conversion elections had been completedimmediately prior to the date of the Notice of Redemption.  On the Redemption Payment Date, theRedemption Amount must be paid in good funds to the Holder.  In the event the Company fails to pay theRedemption Amount on the Redemption Payment Date as set forth herein, then suchRedemption Notice will be null and void.

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# **ARTICLE IIIHOLDER’S CONVERSION RIGHTS**

# ** **

## 3.1           Optional Conversion.  Subject to the terms set forth in this Article III,the Holder shall have the right, but not the obligation, to convert all or anyportion of the issued and outstanding Principal Amount and/or accrued interestand fees due and payable into fully paid and nonassessable shares of CommonStock at the Fixed Conversion Price.  Theshares of Common Stock to be issued upon such conversion are herein referred toas, the “**Conversion Shares.**”

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## 3.2           Conversion Limitation.  Notwithstanding anything contained herein tothe contrary, the Holder shall not be entitled to convert pursuant to the termsof this Note an amount that would be convertible into that number of ConversionShares which would exceed the difference between (i) 4.99% of theoutstanding shares of Common Stock and (ii) the number of shares of CommonStock beneficially owned by the Holder. For purposes of the immediately preceding sentence, beneficial ownershipshall be determined in accordance with Section 13(d) of the ExchangeAct and Regulation 13d-3 thereunder.  TheConversion Shares limitation described in this Section 3.2 shallautomatically become null and void following notice to any Company upon theoccurrence and during the continuance of an Event of Default, upon 75 daysprior notice to the Parent, or upon receipt by the Holder of a Notice ofRedemption.

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## Notwithstanding anything contained herein to thecontrary, the provisions of this Section 3.2 are irrevocable and may notbe waived by the Holder or any Company.

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## 3.3           Mechanics of Holder’s Conversion.  In the event that the Holder elects toconvert this Note into Common Stock, the Holder shall give notice of suchelection by delivering an executed and completed notice of conversion insubstantially the form of Exhibit A hereto (appropriately completed)  (“**Notice ofConversion**”) to the Company and such Notice of Conversion shallprovide a breakdown in reasonable detail of the Principal Amount, accruedinterest and fees that are being converted. On each Conversion Date (as hereinafter defined) and in accordance withits Notice of Conversion, the Holder shall make the appropriate reduction tothe Principal Amount, accrued interest and fees as entered in its records andshall provide written notice thereof to the Company within two (2) businessdays after the Conversion Date.  Eachdate on which a Notice of Conversion is delivered or telecopied to the Companyin accordance with the provisions hereof shall be deemed a Conversion Date (the“**Conversion Date**”).  Pursuant to the terms of the Notice ofConversion, the Company will issue instructions to the transfer agentaccompanied by an opinion of counsel within one (1) business day of thedate of the delivery to the Company of the Notice of Conversion and shall causethe transfer agent to transmit the certificates representing the ConversionShares to the Holder by crediting the account of the Holder’s designated brokerwith the Depository Trust Corporation (“**DTC**”)through its Deposit Withdrawal Agent Commission (“**DWAC**”) system within three (3) business days afterreceipt by the Company of the Notice of Conversion (the “**Delivery Date**”).  In the case of the exercise of the conversionrights set forth herein the conversion privilege shall be deemed to have beenexercised and the Conversion Shares issuable upon such conversion shall bedeemed to have been issued upon the date of receipt by the Company of theNotice of Conversion.  The Holder shallbe treated for all purposes as the record holder of the Conversion Shares,unless the Holder provides the Company written instructions to the contrary.

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## 3.4           Conversion Mechanics.  The number of shares of Common Stock to beissued upon each conversion of this Note shall be determined by dividing thatportion of the principal and interest and fees to be converted, if any, by thethen applicable Fixed Conversion Price. In the event of any conversions of a portion of the outstandingPrincipal Amount pursuant to this Article III, such conversions shall bedeemed to constitute conversions of the outstanding Principal Amount applyingto Monthly Amounts for the remaining Amortization Dates in chronological order.

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## 3.5           Adjustment Provisions.  The Fixed Conversion Price and number andkind of shares or other securities to be issued upon conversion determinedpursuant to this Note shall be subject to adjustment from time to time upon theoccurrence of certain events during the period that this conversion rightremains outstanding, as follows:

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### (a)           Reclassification.  If the Company at any time shall, byreclassification or otherwise, change the Common Stock into the same or adifferent number of securities of any class or classes, this Note, as to theunpaid Principal Amount and accrued interest thereon, shall thereafter bedeemed to evidence the right to purchase an adjusted number of such securitiesand kind of securities as would have been issuable as the result of such changewith respect to the Common Stock (i) immediately prior to or (ii) immediatelyafter, such reclassification or other change at the sole election of theHolder.

 

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### (b)           Stock Splits,Combinations and Dividends.  If theshares of Common Stock are subdivided or combined into a greater or smallernumber of shares of Common Stock, or if a dividend is paid on the Common Stockor any preferred stock issued by the Company in shares of Common Stock, theFixed Conversion Price shall be proportionately reduced in case of subdivisionof shares or stock dividend or proportionately increased in the case ofcombination of shares, in each such case by the ratio which the total number ofshares of Common Stock outstanding immediately after such event bears to thetotal number of shares of Common Stock outstanding immediately prior to suchevent.

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## 3.6           Reservation of Shares.  During the period the conversion rightexists, the Company will reserve from its authorized and unissued Common Stocka sufficient number of shares to provide for the issuance of the Grant Shares,the Conversion Shares assuming the full conversion of this Note, and suchnumber of shares of Common Stock required upon the full exercise of theWarrants.  The Company represents thatupon issuance, the Conversion Shares will be duly and validly issued, fullypaid and non-assessable.  The Companyagrees that its issuance of this Note shall constitute full authority to itsofficers, agents, and transfer agents who are charged with the duty ofexecuting and issuing stock certificates to execute and issue the necessarycertificates for the Conversion Shares upon the conversion of this Note.

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## 3.7           Registration Rights.  The Holder has been granted registrationrights with respect to the Conversion Shares as set forth in the RegistrationRights Agreement.

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## 3.8           Issuance of New Note.  Upon any partial conversion of this Note, anew Note containing the same date and provisions of this Note shall, at therequest of the Holder, be issued by the Company to the Holder for the principalbalance of this Note and interest which shall not have been converted orpaid.  Subject to the provisions of Article IVof this Note, the Company shall not pay any costs, fees or any otherconsideration to the Holder for the production and issuance of a new Note.

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# **ARTICLE IVEVENTS OF DEFAULT**

# ** **

## 4.1           Events of Default.  The occurrence of an Event of Default underthe Security Agreement shall constitute an event of default (“**Event of Default**”) hereunder.

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## 4.2           Default Interest.  Following the occurrence and during thecontinuance of an Event of Default, the Companies shall, jointly and severally,pay additional interest on the outstanding principal balance of this Note in anamount equal to two percent (2%) per month, and all outstanding Obligations,including unpaid interest, shall continue to accrue interest at such additionalinterest rate from the date of such Event of Default until the date such Eventof Default is cured or waived.

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## 4.3           Default Payment.  Following the occurrence and during thecontinuance of an Event of Default, the Holder, at its option, may elect, inaddition to all rights and remedies of the Holder under the Security Agreementand the Ancillary Agreements and all obligations of each Company under theSecurity Agreement and the Ancillary Agreements, to require the Companies,jointly and severally, to make a Default Payment (“**Default Payment**”).  The

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## Default Payment shall be one hundred twenty-fivepercent (125%) of the outstanding principal amount of the Note, plus accruedbut unpaid interest, all other fees then remaining unpaid, and all otheramounts payable hereunder.  The Default Paymentshall be applied first to any fees due and payable to the Holder pursuant tothe Notes and/or the Ancillary Agreements, then to accrued and unpaid interestdue on the Notes, the Security Agreement and then to the outstanding principalbalance of the Notes.  The DefaultPayment shall be due and payable immediately on the date that the Holder hasexercised its rights pursuant to this Section 4.3.

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# **ARTICLE V**MISCELLANEOUS

# ** **

## 5.1           Conversion Privileges.  The conversion privileges set forth in Article IIIshall remain in full force and effect immediately from the date hereof untilthe date this Note is indefeasibly paid in full and irrevocably terminated.

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## 5.2           Cumulative Remedies.  The remedies under this Note shall becumulative.

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## 5.3           Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holderhereof in the exercise of any power, right or privilege hereunder shall operateas a waiver thereof, nor shall any single or partial exercise of any suchpower, right or privilege preclude other or further exercise thereof or of anyother right, power or privilege.  Allrights and remedies existing hereunder are cumulative to, and not exclusive of,any rights or remedies otherwise available.

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## 5.4           Notices.  Any notice herein required or permitted to begiven shall be in writing and shall be deemed effectively given: (a) uponpersonal delivery to the party notified, (b) when sent by confirmed telexor facsimile if sent during normal business hours of the recipient, if not,then on the next business day, (c) five days after having been sent byregistered or certified mail, return receipt requested, postage prepaid, or (d) oneday after deposit with a nationally recognized overnight courier, specifyingnext day delivery, with written verification of receipt.  All communications shall be sent to theCompany at the address provided in the Security Agreement executed inconnection herewith, and to the Holder at the address provided in the SecurityAgreement for such Holder, with a copy to John E. Tucker, Esq., 825 ThirdAvenue, 14th Floor, New York, New York 10022, facsimile number (212)541-4434, or at such other address as the Company or the Holder may designateby ten days advance written notice to the other parties hereto.  A Notice of Conversion shall be deemed givenwhen made to the Company pursuant to the Security Agreement.

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## 5.5           Amendment Provision.  The term “Note” and all references thereto,as used throughout this instrument, shall mean this instrument as originallyexecuted, or if later amended or supplemented, then as so amended orsupplemented, and any successor instrument as such successor instrument may beamended or supplemented.

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## 5.6           Assignability.  This Note shall be binding upon the Companyand its successors and assigns, and shall inure to the benefit of the Holderand its successors and assigns, and may be assigned by the Holder in accordancewith the requirements of the Security Agreement.  The Company may not assign any of itsobligations under this Note without the

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## prior written consent of the Holder, any suchpurported assignment without such consent being null and void.

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## 5.7           Cost of Collection.  In case of any Event of Default under thisNote, the Company shall pay the Holder reasonable costs of collection,including reasonable attorneys’ fees.

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## 5.8           Governing Law, Jurisdiction andWaiver of Jury Trial.

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### (a)           THIS NOTE SHALL BEGOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATEOF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

(b)           EACH COMPANY HEREBY CONSENTS ANDAGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK,STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANYCLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THEOTHER HAND, PERTAINING TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHERANCILLARY AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE,THE SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS PROVIDED,THAT EACH COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVETO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEWYORK; AND FURTHERPROVIDED, THAT NOTHING IN THIS NOTE SHALL BEDEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHERLEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZEON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE AJUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER.  EACH COMPANY EXPRESSLY SUBMITS AND CONSENTSIN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCHCOURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVEBASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NONCONVENIENS.  EACH COMPANY HEREBYWAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED INANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT ANDOTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THECOMPANY AT THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SOMADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPTTHEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGEPREPAID

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### (c)           EACH COMPANY DESIRESTHAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OFTHE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVESALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TORESOLVE ANY

 

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### DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OROTHERWISE BETWEEN THE HOLDER, AND/OR ANY COMPANY ARISING OUT OF, CONNECTEDWITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM INCONNECTION WITH THIS NOTE, THE SECURITY AGREEMENT, ANY OTHER ANCILLARYAGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

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## 5.9           Severability.  In the event that any provision of this Noteis invalid or unenforceable under any applicable statute or rule of law,then such provision shall be deemed inoperative to the extent that it mayconflict therewith and shall be deemed modified to conform with such statute orrule of law.  Any such provisionwhich may prove invalid or unenforceable under any law shall not affect thevalidity or enforceability of any other provision of this Note.

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## 5.10         Maximum Payments.  Nothing contained herein shall be deemed toestablish or require the payment of a rate of interest or other charges inexcess of the maximum permitted by applicable law.  In the event that the rate of interestrequired to be paid or other charges hereunder exceed the maximum ratepermitted by such law, any payments in excess of such maximum rate shall becredited against amounts owed by the Company to the Holder and thus refunded tothe Company.

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## 5.11         Security Interest.  The Holder has been granted a securityinterest (i) in certain assets of the Company and its Subsidiaries as morefully described in the March 2004 Security Agreement, the March 2004Subsidiary Security Agreement and the June 2005 Security Agreement and (ii) pursuantto that certain Amended and Restated Stock Pledge Agreement dated as of March 22,2004 and amended and restated as of June 23, 2005, among the Holder, theCompany and certain Subsidiaries of the Company, as amended and restated,amended, restated, modified or supplemented from time to time.

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## 5.12         Construction.  Each party acknowledges that its legalcounsel participated in the preparation of this Note and, therefore, stipulatesthat the rule of construction that ambiguities are to be resolved againstthe drafting party shall not be applied in the interpretation of this Note tofavor any party against the other.

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## 5.13         Registered Obligation. This Noteis intended to be a registered obligation within the meaning of TreasuryRegulation Section 1.871-14(c)(1)(i) and the Company (or its agent)shall register this Note (and thereafter shall maintain such registration) asto both principal and any stated interest. Notwithstanding any document, instrument or agreement relating to thisNote to the contrary, transfer of this Note (or the right to any payments ofprincipal or stated interest thereunder) may only be effected by (i) surrenderof this Note and either the reissuance by the Company of this Note to the newholder or the issuance by the Company of a new instrument to the new holder, or(ii) transfer through a book entry system maintained by the Company (orits agent), within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

 

[Balance of page intentionally left blank; signature page follows]

 

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** **

**IN WITNESS WHEREOF**,the Company has caused this Secured Convertible Term Note to be signed in itsname effective as of this 3rd day of January 2006.

 
| ** ** | **TIME AMERICA, INC.** |
|------------|------------------------|
|       |                   |
|       | By:                    |   |   |
|       |                   | Name: |
|       |                   | Title: |
|       |                   |
| WITNESS:   |
|       |
|       |                   |
|            |                        |  |  |  |

 

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**EXHIBIT A**

 

**NOTICE OF CONVERSION**

 

(To be executed by the Holder in order to convert all or part ofthe Secured Convertible Term Note into Common Stock)

 

[Name and Address of Parent]

 

The undersigned hereby converts $           of the principal due on [specify applicable Repayment Date] under the SecuredConvertible Term Note dated as of January 3, 2006 (the “**Note**”) issued by Time America, Inc.(the “**Parent**”) by delivery ofshares of Common Stock of the Parent (**“Shares”**)on and subject to the conditions set forth in the Note.

 
| 1.     | Date of Conversion      |   |   |
|--------|-------------------------|--------|--------|
|   |                    |   |   |
| 2.     | Shares To Be Delivered: |   |   |
|   |                    |   |
|   | [HOLDER]                |   |
|   |                    |   |
|   |                    |   |
|   | By:                     |   |   |
|   | Name:                   |   |   |
|   | Title:                  |   |   |
|        |                         |        |        |  |  |  |  |  |

 

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