**Exhibit 10.6**

 

**AMENDEDAND RESTATED**

**SUBORDINATIONAGREEMENT**

 

This **AMENDED AND RESTATED****SUBORDINATION AGREEMENT** (this “**Amended and Restated Agreement**”) ismade as of the 30 day of January 3, 2006, by and among JOSEPH L. SIMEK (“**Mr. Simek**”), FRANCES L. SIMEK (“**Mrs. Simek**” and together with Mr. Simek,the “**Subordinated Lenders**”),TIME AMERICA, INC., a Nevada corporation (“**Time America-Nevada**”), TIME AMERICA, INC., an Arizonacorporation (“**Time America-Arizona**”)NETEDGE DEVICES, LLC, an Arizona limited liability company (“**NetEdge**” and, together with TimeAmerica-Nevada and Time America-Arizona and each of their respectivesubsidiaries acqiured or formed after the date hereof, “**Borrower**”) and LAURUS MASTER FUND,LTD., a Cayman Islands company (“**SeniorLender**”).

 

PRELIMINARYSTATEMENTS:

 

WHEREAS, Subordinated Lenders, Borrower, andSenior Lender entered into a Subordination Agreement, dated March 22, 2004(the “Agreement”), wherein each Subordinated Lender agreed tosubordinate payment and performance of all Subordinated Debt (as defined in theAgreement) to the Senior Debt (as defined in the Agreement);

 

WHEREAS, the Agreement was amended by thatcertain First Amendment to Subordination Agreement, dated as of April 15,2004, by and among each Subordinated Lender, Borrower, and Senior Lender;

 

WHEREAS, the Agreement was further amended bythat certain Second Amendment to Subordination Agreement, dated in November 2004,by and among each Subordinated Lender, Borrower, and Senior Lender;

 

WHEREAS, the Agreement was further amendedand restated on July 23, 2005, by and among each Subordinated Lender,Borrower, and Senior Lender;

 

WHEREAS, Borrower and Senior Lender intend to enter into a Security andPurchase Agreement, dated as of January 3, 2006 (as amended, modified orsupplemented from time to time, the “Security Agreement”), wherebySenior Lender has agreed to make available to Borrower revolving loans of up to$1,500,000, subject to Borrower’s eligible accounts receivable and certainother conditions set forth in the Security Agreement, as well as a term loan inthe initial principal amount of $2,000,000; and 

 

WHEREAS, as a condition to the closing of the transactions contemplatedunder the Security Agreement, Senior Lender requires that payment andperformance of all Subordinated Debt be subordinated to the Senior Debt (assuch term is modified by this Amended and Restated Agreement) to the extent andon the terms and conditions set forth herein and that Subordinated Lendersamend and restate the Subordination Agreement to evidence such subordination.

 

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AGREEMENTS:

 

NOW THEREFORE, in consideration of the foregoing premises and themutual agreements herein contained, and for other valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, Borrower, theSubordinated Lenders and Senior Lender hereby agree as follows:

 

1.                                       Definitions.The following terms shall have the meanings specified below. Any reference toany renewal, extension, replacement or other modification of any of the SeniorLoan Documents that may be contained in the definitions of the Senior LoanDocuments set forth below shall not be deemed to waive any consent of anyrespective Subordinated Lender to the extent such consent is required under Section 4(b) belowor otherwise limit in any way any respective Subordinated Lender’s rights underSection 4(b). Any reference to any renewal, extension, replacement orother modification of any of the Subordinated Loan Documents that may becontained in the definitions of the Subordinated Loan Documents set forth belowshall not be deemed to waive any consent of the Senior Lender to the extentsuch consent is required under Section 6 below or otherwise limit in anyway Senior Lender’s rights under Section 6.

 

**“Agreement”**shall have the meaning assigned to such term in the Preliminary Statements ofthis Agreement.

 

“**Borrower”** shallhave the meaning assigned to such term in the first paragraph of thisAgreement.

 

“**Collateral**” meansall assets now or hereafter securing or intended to secure the payment andperformance of the Senior Debt and the Subordinated Debt including withoutlimitation all assets covered by any of the Senior Loan Security Documents andthe Subordinated Loan Security Documents.

 

“**Paid in Full” or “Paymentin Full**” means, with respect to the payment of the Senior Debt, thatthe Senior Debt has been fully, finally and indefeasibly paid in cash and allof the financing arrangements and commitments between Borrower and SeniorLender have been terminated.

 

“**Permitted Subordinated LenderActions**” means any lawful action taken by any SubordinatedLender pursuant to their respective Subordinated Loan Security Documents orapplicable law in order to enforce payment of the Subordinated Debt and theirrights against the Collateral, but only to the extent such action is permittedpursuant to Section 2.2(b) of this Agreement.

 

**“Secured Convertible Term Note”**meansthat certain Secured Convertible Term Note issued as of January 3, 2006pursuant to the Security Agreement by the Borrower to the Senior Lender, in theface amount of $2,000,000, together with all amendments, extensions,modifications, substitutions or renewals thereof.

 

**“Secured Non-Convertible Revolving Note”**means the Secured Non-Convertible Revolving Noteissued as of January 3, 2006 pursuant to the Security Agreement by the

 

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Borrower to the Senior Lender in the faceamount of $1,500,000), together with, in each case, all amendments, extensions,modifications, substitutions, or renewals thereof.

 

**“Security Agreement”**shallhave the meaning set forth in the Preliminary Statements hereto.

 

**“Senior Debt**”means the debt evidenced by the Secured Convertible Term Note, SecuredNon-Convertible Revolving Note, the Security Agreement and the AncillaryAgreements (as defined in the Security Agreement), including without limitationall principal, interest, fees, expenses, premiums and penalties incurred inconnection therewith.

 

“**Senior Lender**”shall have the meaning assigned to such term in the first paragraph of thisAgreement.

 

“**Senior Loan Documents**”means any and all documents, instruments or agreements now or hereafterevidencing, securing or executed in connection with the Senior Debt including,without limitation, the Security Agreement, the Secured Convertible Term Note,the Secured Non-Convertible Revolving Note, the Senior Loan Security Documentsand any other instruments or agreements now or hereafter executed in connectiontherewith, as any such documents may be restated, amended, supplemented orotherwise modified from time to time.

 

“**Senior Loan Security Documents**”means, singly and collectively any documents, instruments or agreements now orhereafter securing, or intended to secure, the Senior Debt, including withoutlimitation, the Security Agreement, the Security Documents (as defined in theSecurity Agreement), the Amended and Restated Stock Pledge Agreement, the Grantof Security Interest in Patents and Trademarks, and any security agreemententered into in connection with the execution of the Security Agreement. 

 

“**Subordinated Debt**”means the amounts owing on the Subordinated Notes and any other loans,obligations or indebtedness hereafter provided by any Subordinated Lender toBorrower, however evidenced.

 

“**Subordinated Notes**” mean (i) that certain PromissoryNote issued by Borrower to Mrs. Simek, on September 4, 2001, in theaggregate principal amount of $500,000, (ii) that certain promissory noteissued by Borrower to Mr. Simek on March 31, 2001, in the aggregateprincipal amount of $400,000, (iii) that certain Promissory Note issued byBorrower to Mr. Simek on November 2, 2001, in the aggregate principalamount of $200,000, (iv) that certain Promissory Note issued by Borrowerto Mrs. Simek, on April 15, 2004, in the aggregate principal amountof $500,000, (v) that certain Revolving Promissory Note in the aggregateprincipal amount of $500,000 issued by Borrower to Mrs. Simek pursuant tothe Credit Agreement, each together with all extensions, modifications,substitutions or renewals thereof and (vi) each other promissory note (ifany) issued by the Borrower to any Subordinated Lender.

 

 “**Subordinated Lenders**” shall have the meaning assigned tosuch term in the first paragraph of this Agreement.

 

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“**Subordinated Loan Documents**”means the Subordinated Notes, the Subordinated Loan Security Documents, and allother documents and instruments now or hereafter evidencing, securing orexecuted in connection with the Subordinated Debt.

 

“**Subordinated Loan SecurityDocuments**” means, singly and collectively any documents,instruments or agreements now or hereafter securing, or intended to secure, theSubordinated Debt.

 

2.                                       Subordination.

 

2.1                                 Paymentson Subordinated Debt. Except as otherwise provided in this Agreement, eachof the Subordinated Lenders agrees that it will not ask for, demand, sue for,or take or receive from Borrower or any successor or assign of Borrower,including a receiver, trustee or debtor in possession, whether by setoff or inany other manner, the whole or any part of the Subordinated Debt, unlessand until all of the Senior Debt shall have been Paid in Full. Notwithstandingthe foregoing sentence to the contrary, so long as (i) Senior Lender hasreceived all payments then due and owing under the Senior Loan Documents; and (ii) SeniorLender has not delivered to the Subordinated Lenders written notice of theoccurrence of an event of default under the Senior Loan Documents, then,Borrower may pay to the Subordinated Lenders, and the Subordinated Lendersmay accept and retain from Borrower payments of principal and interest onthe Subordinated Debt (the “**PermittedPayments**”). If Permitted Payments are suspended, in the case ofan event of default under the Senior Loan Documents, such Permitted Payments may beresumed only after such an event of default is cured or waived or after theSenior Debt is Paid in Full.

 

2.2                                 SubordinatedLenders’ Liens.

 

(a)                                  Notwithstandingthe date, manner or order of perfection or attachment of the security interestsand liens granted by Borrower to Senior Lender or any Subordinated Lender, andnotwithstanding the usual application of the priority provisions of the UCC orany other applicable law or judicial decision, or whether Senior Lender or anySubordinated Lender holds possession of all or any part of the Collateral,Senior Lender shall have a first and prior continuing security interest in andlien on the Collateral, and Subordinated Lender shall have a security interesttherein subordinate in priority to the lien and security interest held bySenior Lender. Senior Lender and the Subordinated Lenders nevertheless, eachagree to make such filings and recordings in the public records to evidence thepriorities made herein as the other may reasonably request.

 

(b)                                 EachSubordinated Lender agrees that such Subordinated Lender will not withoutSenior Lender’s written permission and in concert with and at the direction ofSenior Lender:  (a) commence anyaction or proceeding or otherwise take action against Borrower to recover allor any portion of the Subordinated Debt, including any action to foreclose orrealize upon any Collateral securing the Subordinated Debt; or (b) commence,or join with any creditor, other than Senior Lender, in commencing, directly orindirectly, or cause Borrower to commence, or assist Borrower in commencing,any proceeding under any bankruptcy, insolvency, reorganization, receivershipor similar laws for arrangement of debts of Borrower.

 

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(c)                                  Exceptas provided in Section 2.2(b) above and subject at all times toSenior Lender’s prior and superior lien in the Collateral, in the event anypayment or distribution to any Subordinated Lender is made from any of theCollateral upon or with respect to any of the Subordinated Debt, other than anypayments of principal and interest which such Subordinated Lender is permittedto accept and retain hereunder, prior to the time all of the Senior Debt shallhave been fully, finally and indefeasibly paid, such Subordinated Lender shallreceive and hold the same in trust, as trustee, for the benefit of SeniorLender and shall immediately deliver the same to Senior Lender in precisely theform received for application against the Senior Debt, whether due or notdue, and, until so delivered, the same shall be held in trust by suchSubordinated Lender as the property of Senior Lender.

 

(d)                                 Theprovisions of this Agreement are applicable regardless of whether the securityinterest and/or lien of Senior Lender in the Collateral is not perfected or isvoidable for any reason.

 

2.3                                 PaymentsHeld in Trust. In the event that any Subordinated Lender shall receive anypayment, or security for payment, on the Subordinated Debt which suchSubordinated Lender is not entitled to receive or accept under the provisionsof this Section 2, such Subordinated Lender will hold any such amount orsecurity so received as trustee of an express trust for the sole and exclusivebenefit of Senior Lender, and such Subordinated Lender will forthwith assignand turn over the same to Senior Lender, in the form received, properlyendorsed and assigned, to be applied to payment of or held by Senior Lender, assecurity for the Senior Debt, as the case may be. In the event of anyfailure by such Subordinated Lender to make any such endorsement or assignment,Senior Lender is hereby irrevocably authorized, as attorney-in-fact for therespective Subordinated Lender, to make the same. 

 

3.                                       FurtherLimitations on Actions of Subordinated Lenders.

 

3.1                                 Otherthan Permitted Subordinated Lender Actions (which Subordinated Lenders may takeat any time, but only to the extent permitted by this Agreement and theSubordinated Loan Documents and applicable law), until Senior Lender has receivedPayment in Full of all Senior Debt, no Subordinated Lender shall enforce orexercise, or seek to enforce or exercise, any right of acceleration or demand,or commence any other action or proceeding (including without limitation theinitiation of any legal proceedings) to collect all or any part of theSubordinated Debt.

 

3.2                                 SeniorLender hereby approves the execution and delivery of the Subordinated LoanDocuments as the same exist as of the date hereof and acknowledges that suchexecution and delivery shall not constitute an event of default under theSenior Loan Documents.

 

3.3                                 SubordinatedLender hereby approves the execution and delivery of the Senior Loan Documentsas the same exist as of the date hereof and acknowledges that such executionand delivery shall not constitute an event of default under the SubordinatedLoan Documents.

 

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4.                                       ContinuingSubordination. 

 

The subordination effected bythis Agreement is a continuing subordination and may not be modified orterminated by any Subordinated Lender or any other holder of any SubordinatedDebt until all of the Senior Debt shall have been Paid in Full. At any time andfrom time to time, without the consent of or notice to the Subordinated Lendersor any other holder of any Subordinated Debt, and without impairing oraffecting the obligations of any of them hereunder:

 

4.1                                 SeniorLender may exercise or refrain from exercising any rights or remediesagainst Borrower subject to each respective Subordinated Lender’s rightspursuant to Section 2.2(b) of this Agreement;

 

4.2                                 TheSenior Loan Documents may be revised, amended or otherwise modified forthe purpose of adding or changing any provisions thereof or changing in anymanner the rights of Senior Lender and/or Borrower;

 

4.3                                 Theterms of this Agreement shall continue in full force and effect in the eventthat all or any portion of the Senior Debt is refunded, refinanced, or extendedand the term “Senior Debt” shall include any Senior Debt which is refunded,refinanced or extended on one or more occasions, and in any such case, theterms “Security Agreement” and “Senior Loan Documents” and the like as usedherein shall refer to the agreements and instruments executed in connectionwith any such refunding, refinancing or extension;

 

4.4                                 Thematurity of the Senior Debt may be accelerated after the occurrence of anevent of default and any Collateral or any other rights of Senior Lender may beexchanged, sold, surrendered, released or otherwise dealt with in any lawfulmanner; and

 

4.5                                 Anyperson liable in any manner for payment of all or any part of the SeniorDebt may be released.

 

Notwithstanding the occurrence of any of the foregoing, the provisionsof this Agreement shall remain in full force and effect.

 

5.                                       NoModification of Subordinated Debt. 

 

Until the Senior Debt shallhave been Paid in Full, neither Borrower nor any Subordinated Lender shallamend, modify or terminate the Subordinated Notes, or any other SubordinatedLoan Document (as the same exist on the date hereof) without the prior writtenconsent of Senior Lender, which consent shall not be unreasonably withheld; andany such purported amendment, modification or termination without such consentshall be ineffective; this prohibition includes, but not by way of limitation,any acceleration of the amortization schedule of the Subordinated Debt andany increase in the rate of interest that accrues thereon. Notwithstanding theforegoing, any Subordinated Lender may agree to amend their respective SubordinatedLoan Documents without Senior Lender’s consent to (i) reduce the interestrate, (ii) extend the maturity of any principal amount or interest duethereunder, or (iii) waive or otherwise delete any provision thereof withrespect to such Subordinated Lender’s rights thereunder, providedthata copy of any such amendment shall be provided to Senior Lendercontemporaneously with the execution thereof. Any reference to any renewal,extension,

 

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replacement or other modification of any ofthe Subordinated Loan Documents that may be contained in the definition ofany of the Subordinated Loan Documents set forth in this Agreement shall not bedeemed to waive the consent required by this Section 5 or otherwise limitin any way Senior Lender’s rights under this Section 5.

 

6.                                       SeniorDebt and Subordinated Debt Default and Default Notices.

 

6.1                                 Ifan event of default shall occur under or within the meaning of any of theSenior Loan Documents, a default and event of default shall occur under theSubordinated Lender Documents. The Senior Lender shall use its reasonable besteffort to provide to the Subordinated Lender any notice of an “event of default”under the Senior Loan Documents which Senior Lender sends to Borrower at theaddress set forth in Section 13 below.

 

6.2                                 Ifa default or event of default shall occur under or within the meaning of any ofthe Subordinated Lender Documents, an event of default shall occur under theSenior Loan Documents. Any notice of “default” or “event of default” under theSubordinated Loan Documents which any respective Subordinated Lender sends toBorrower shall also be simultaneously sent to Senior Lender (and its counsel)at the addresses set forth in Section 13 below.

 

7.                                       BankruptcyFinancing Issues. 

 

This Agreement shall continuein full force and effect after the filing of any petition for relief by oragainst Borrower under the United States Bankruptcy Code (the “**Code**”) and all converted or succeedingcases in respect thereof (all references herein to Borrower being deemed toapply to Borrower as debtor-in-possession and to a trustee for Borrower), andshall apply with full force and effect with respect to all Collateral acquiredby Borrower, and to all Senior Debt and Subordinated Debt incurred by Borrower,subsequent to such filing. If Borrower shall become subject to a proceedingunder the Code, and if the Senior Lender shall desire to permit the use of cashcollateral by Borrower or to provide post-petition financing from the SeniorLender to Borrower, each Subordinated Lender agrees as follows:  (a) no notice need be provided to anyrespective Subordinated Lender for such use of cash collateral or suchpost-petition financing; and (b) no objection will be raised by the SubordinatedLenders to any such use of cash collateral or such post-petition financing fromthe Senior Lender. No objection will be raised by the Subordinated Lenders tothe Senior Lender’s motion for relief from automatic stay in any suchproceeding to foreclose on, sell or otherwise realize upon the Collateral. Incase of any assignment by Borrower for the benefit of creditors, and in case ofthe appointment of any receiver for Borrower or Borrower’s business or assets,and in case of any dissolution or other winding up of the affairs of Borrower,or of Borrower’s business, and in all such cases respectively, the officer ofBorrower and any assignee, trustee in bankruptcy, receiver, and other person orpersons in charge, are hereby directed to pay to Senior Lender the full amountof Senior Lender’s claims against Borrower before making any payment to anySubordinated Lender, and so far as may be necessary for that purpose, theSubordinated Lenders hereby transfer and assign to Senior Lender all theirrights to any payment or distribution which might otherwise be coming to it. SeniorLender is hereby irrevocably constituted and appointed the attorney-in-fact ofthe Subordinated Lenders to file any and all proofs of claim and any otherdocuments and to take all other action, either in the name of Senior Lender orany Subordinated

 

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Lender, which in the opinion of Senior Lenderis necessary or desirable to enable Senior Lender to obtain all such payments.

 

8.                                       Transfers:Binding Effect.

 

8.1                                 Subjectto Section 8.2 below, Senior Lender shall have the right to sell, assign,transfer or otherwise dispose of any of the Senior Debt, or any interesttherein, from time to time, without the prior consent of any other party hereto.

 

8.2                                 ThisAgreement shall extend to and bind the respective successors, assigns, andtransferees of the parties hereto and shall inure to the benefit of any suchsuccessor, assignee or transferee but shall not otherwise create any rights orbenefits for any third party.

 

9.                                       Headings.The headings in this Agreement are for convenience of reference only and shallnot after or otherwise affect the meaning hereof.

 

10.                                 Conflictswith Senior or Subordinated Loan Documents. Notwithstanding any term orprovision of the Senior Loan Documents or the Subordinated Loan Documents orany other agreement to which Borrower, Senior Lender or the SubordinatedLenders are a party or by which any of them is bound, in the event that anyterm or provision of any such instrument or agreement conflicts or isinconsistent with the terms and provisions of this Agreement, until such timeas the Senior Debt shall have been Paid in Full, the terms and provisions ofthis Agreement shall control.

 

11.                                 GoverningLaw. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED INACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TOSUCH STATE’S PRINCIPLES OF CONFLICT OF LAWS.

 

12.                                 Waivers:Amendments, Etc. Neither this Agreement nor any of the terms hereof may beamended, waived, discharged or terminated unless such amendment, waiver,discharge or termination is in writing signed by each of Senior Lender and eachSubordinated Lender.

 

13.                                 Notice.Any notices or other communications required or permitted to be given hereundermust be given in writing and (i) personally delivered or (ii) mailedby prepaid certified or registered mail or by Federal Express or similarcourier service, to the party to whom such notice of communication is directed,to the address of such party as follows:

 

(a)                                  Mrs. Simek:

 

Mrs. Frances L. Simek

860 Vega Lane

Medford, WI  54451

 

with a copy to:

 

Robert W. Zimmerman, Esq.

Mallery & Zimmerman, S.C.

 

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101 Grand Avenue

PO Box 479

Wausau, WI

 

(b)                                 Mr. Simek:

 

Mr. Joseph Simek

860 Vega Lane

Medford, WI  54451

 

with a copy to:

 

Robert W. Zimmerman, Esq.

Mallery & Zimmerman, S.C.

101 Grand Avenue

PO Box 479

Wausau, WI

 

(c)                                  SeniorLender:

 

Laurus Master Fund, Ltd.

c/o Laurus Capital Management, LLC

825 Third Avenue, 14th Floor

New York, NY 10022

Facsimile: (212) 541-5800

 

with a copy to:

 

John E. Tucker, Esq.

c/o Laurus Capital Management, LLC

825 Third Avenue, 14th Floor

New York, NY 10022

Facsimile: (212) 541-4434

 

(d)                                 Borrower:

 

Time America, Inc.51 West Third Street

Suite 310Tempe, Arizona  85281Telephone:  480-967-5800Attn:   Thomas S. BednarikPresident and Chief Executive Officer

 

with copies to:

 

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Squire, Sanders & Dempsey L.L.P.Two Renaissance Square40 North Central Avenue, Suite 2700Phoenix, Arizona  85004-4498Telephone:  602-528-4134

Facsimile: 602-253-8129

Attn:   Gregory R. Hall, Esq.

 

Any such notice or other communication shall be deemed to have beengiven (whether actually received or not) on the day it is mailed or personallydelivered as aforesaid. Any party may change its address for purposes ofthis Agreement by giving notice of such change to the other parties pursuant tothis Section 13.

 

14.                                 MultipleCounterparts. This Agreement may be executed in any number ofcounterparts, all of which taken together shall constitute one and the sameagreement, and any of the parties hereto may execute this Agreement bysigning any such counterpart.

 

15.                                 FurtherAssurances. Each of the parties hereto hereby agree to promptly execute anddeliver to the other parties hereto any and all such further instruments anddocuments and to take such further action as such other parties may at anytime reasonably request in order to fully effect the purposes of thisAgreement.

 

16.                                 Relianceby Senior Lender; Waiver of Notices; No Representations by Senior Lender;Management of Credit Facilities by Senior Lender. All of the Senior Debtshall be deemed to have been made or incurred in reliance upon this Agreement. EachSubordinated Lender expressly waives all notice of the acceptance by SeniorLender of the provisions of this Agreement and all other notices notspecifically required pursuant to the terms of this Agreement. EachSubordinated Lender agrees that Senior Lender has not made any representationor warranty with respect to the due execution, legality, validity, completenessor enforceability of any of the Senior Loan Documents, the perfection orpriority or any security interest or lien securing any or all of the SeniorDebt or the collectibility of any of the Senior Debt. Senior Lender shall beentitled to manage and supervise its credit facilities with Borrower inaccordance with applicable law and its usual business practices (subject to theprovisions of this Agreement), modified from time to time as it deemsappropriate under the circumstances, and Senior Lender shall have no liabilityto any Subordinated Lender for any loss, claim or damage allegedly suffered byany Subordinated Lender in any proceeding by Senior Lender to foreclose orotherwise enforce any of its security interests in and/or liens on any of theCollateral.

 

17.                                 FinancialCondition of Borrower. Each Subordinated Lender hereby assumesresponsibility for keeping itself informed of the financial condition ofBorrower and any and all guarantors of the Subordinated Debt and of all othercircumstances bearing upon the risk of nonpayment of the Subordinated Debt thatdiligent inquiry would reveal and each Subordinated Lender hereby agrees thatSenior Lender shall have no duty to advise any Subordinated Lender of anyinformation regarding such condition or any such circumstances.

 

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18.                                 Miscellaneous.

 

18.1                           Everyword herein importing the singular number shall also be construed to extend toand include the plural number also and vice versa.

 

18.2                           In theevent that any term or provision of this Agreement or the application thereofto any person or circumstance shall, to any extent, be held invalid orunenforceable, the remainder of this Agreement or the application of such termor provision to persons or circumstances than those to which it is held invalidor unenforceable, shall be valid and enforceable to the fullest extent permittedby law.

 

18.3                           ThisAgreement and all covenants, agreements, representations and warranties madeherein shall survive and continue in full force and effect until such time asall of the Senior Debt has been indefeasibly Paid in Full.

 

18.4                           Theparties acknowledge that each party and its respective counsel have reviewedand revised this Agreement and agree that any rule of construction to theeffect that ambiguities are to be resolved against the drafting party shall notapply in the interpretation of this Agreement.

 

18.5                           NeitherSenior Lender nor any Subordinated Lender shall be deemed to have waived any oftheir respective rights or remedies under this Agreement unless such waiver isin writing and signed by the party to be charged. No delay or omission on the part ofany party in exercising any such right or remedy shall operate as a waiver ofany such right or remedy or any other right or remedy. A waiver on any oneoccasion shall not be construed as bar to or a waiver of the same right orremedy on any future occasion. Without limiting the generality of theforegoing, Senior Lender’s acquiescence in the payment of any sum to anySubordinated Lender in contravention of the terms of this Agreement shall notconstitute a waiver of the right of Senior Lender to require prompt performanceof any and all of the covenants contained in this Agreement.

 

18.6                           Time isof the essence with respect to the payment, performance and observance of eachof the covenants of each of the parties to this Agreement.

 

18.7                           Each partyhereto acknowledges that to the extent that no adequate remedy at law existsfor breach of its obligations under this Agreement in the event any party failsto comply with its obligations hereunder, the other party shall have the rightto obtain specific performance of the obligations of such defaulting party,injunctive relief or such other equitable relief as may be available.

 

18.8                           Thefailure of any party to perform any of the terms, covenants or conditionsset forth in this Agreement shall not alter, or be deemed to alter, in any waythe subordination provisions hereof or the relative priorities establishedhereby.

 

19.                                 NOREFINANCING COMMITMENT. Borrower and Subordinated Lenders each herebyacknowledge and agree that notwithstanding any references herein to therefunding, refinancing or extension of the Senior Debt, the Senior Lender hasnot impliedly or expressly committed to provide any such refunding, refinancingor extension nor have any terms of any

 

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such refunding, refinancing or extension beenin any way agreed to. Borrower and Senior Lender hereby acknowledge and agreethat notwithstanding any references herein to the refinancing or extension ofthe Subordinated Debt, no Subordinated Lender has impliedly or expresslycommitted to provide such refinancing or extension, nor has any terms of anysuch refinancing or extension been in any way agreed to.

 

20.                                 FINALAGREEMENT. THIS WRITTEN SUBORDINATION AGREEMENT, THE SENIOR LOAN DOCUMENTSAND THE SUBORDINATED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THEPARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTSAMONG THE PARTIES. 

 

21.                                 WAIVEROF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILYAND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANYLITIGATION BASED UPON THIS AGREEMENT OR THE SENIOR LOAN DOCUMENTS OR ARISINGOUT OF, UNDER, OR IN CONNECTION WITH THE TRANSACTIONS OF WHICH THIS AGREEMENTIS A PART, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHERORAL OR WRITTEN). OR ACTIONS BY ANY PARTY. THIS MUTUAL WAIVER IS GIVEN AS AMATERIAL INDUCEMENT FOR THE PARTIES TO EXECUTE THIS AGREEMENT.

 

[**Signatures on following page**]

 

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IN WITNESS WHEREOF, the parties hereto by their duly authorizedrepresentatives have executed this Agreement as an instrument under seal as ofthe date first above written.

 
| ** ** | **SUBORDINATED LENDERS:**                                   |
|------------|-------------------------------------------------------------|
| ** ** | ** **                                                  |
| ** ** | ** **                                                  | ** ** |
|       | FRANCES L. SIMEK                                            |
|       |                                                        |
|       |                                                        |   |
|       | JOSEPH L. SIMEK                                             |
|       |                                                        |
|       |                                                        |
| ** ** | **SENIOR LENDER:**                                          |
| ** ** | ** **                                                  |
|       | LAURUS MASTER FUND, LTD., a Cayman Islands   company,       |
|       |                                                        |
|       |                                                        |
|       | By:                                                         |   |
|       | Name:                                                       |   |
|       | Title:                                                      |   |
|       |                                                        |   |
|       |                                                        |
| ** ** | **BORROWER:**                                               |
| ** ** | ** **                                                  |
|       | TIME AMERICA, INC., a Nevada corporation               |
|       |                                                        |
|       |                                                        |
|       | By:                                                         |   |
|       | Name:                                                       |   |
|       | Title:                                                      |   |
|       |                                                        |
|       |                                                        |
|       | TIME AMERICA, INC., an Arizona corporation             |
|       |                                                        |
|       |                                                        |
|       | By:                                                         |   |
|       | Name:                                                       |   |
|       | Title:                                                      |   |
|       |                                                        |
|       |                                                        |
|       | NETEDGE DEVICES, LLC, an Arizona limited  liability company |
|       |                                                        |
|       |                                                        |
|       | By:                                                         |   |
|       | Name:                                                       |   |
|       | Title:                                                      |   |
|            |                                                             |  |  |  |  |

 

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