**Exhibit10.7**

** **

**REAFFIRMATIONAND RATIFICATION AGREEMENT**

 

January 3,2006

 

Laurus Master Fund, Ltd.

c/o Laurus Capital ManagementLLC

825 Third Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

Reference ismade to (I) (a) the Security Agreement, dated as of March 22, 2004(as amended and restated, further amended, modified or supplemented from timeto time, the “**Security Agreement**”),by and between the Company and Laurus Master Fund, Ltd. (“**Laurus**”) (b) the Security Agreement,dated as of March 22, 2004 (as amended and restated, further amended,modified or supplemented from time to time, the “**Subsidiary Security Agreement**” and, together with the ParentSecurity Agreement, the “**March 2004Security Documents**”), by and between Time America, Inc., anArizona corporation (“**Time America-Arizona**”)and Laurus, and (II) (a) the Security Agreement, dated as of June 23,2005 (as amended, modified or supplemented from time to time, the “**June 2005 Security Agreement**”) by andbetween the Company, Time America-Arizona and Laurus, (b) the Amended andRestated Stock Pledge Agreement, dated as of March 22, 2004 (as amendedand restated as of June 23, 2005, further amended, modified orsupplemented from time to time, the “**June 2005Stock Pledge Agreement**”), by and between the Parent and Laurus, (c) theGrant of Security Interest in Patents and Trademarks, dated as of June 23,2005 (as amended, modified or supplemented from time to time, the “**June 2005 IP Grant**”) by and betweenthe Company in favor of Laurus, (d) the Four Party Wholesale LockboxAgreement dated as of June 23, 2005 (as amended, modified or supplementedfrom time to time, the “**Parent LockboxAgreement**”) by and between Wells Fargo Bank AZ, N.A., Wells FargoBank, N.A., the Company and Laurus, (e) the Four Party Wholesale LockboxAgreement dated as of June 23, 2005 (as amended, modified or supplementedfrom time to time, the “**Subsidiary LockboxAgreement**” and, together with the June 2005 Security Agreement,the June 2005 Stock Pledge Agreement, the June 2005 IP Grant and theParent Lockbox Agreement, the “**June 2005Security Documents**” and, together with the March 2004 SecurityDocuments, the “**Existing Security Documents**”)by and between Wells Fargo Bank AZ, N.A., Wells Fargo Bank AZ, N.A., the TimeAmerica-Arizona and Laurus.

 

To induceLaurus to enter into the Security and Purchase Agreement dated as of the datehereof by and between the Company, Time America-Arizona, NetEdge Devices, LLC,an Arizona limited liability company (“**NetEdge**”)and Laurus (as amended, restated or otherwise modified, the “**January 2006 Security Agreement**”)pursuant to which Laurus has agreed to purchase from the Company a SecuredConvertible Term Note in the aggregate principal amount of Two Million Dollars($2,000,000) (the “**January 2006 TermNote**”) and a Secured Non-Convertible Revolving Note in the aggregateprincipal amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the“**January 2006 Revolving Note**”),the undersigned hereby:

 

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(a)           represents and warrants to Laurusthat it has reviewed and approved the terms and provisions of the January 2006Security Agreement, the January 2006 Term Note, the January 2006Revolving Note and the Ancillary Agreements (as defined in the January 2006Security Agreement, the “**January 2006Ancillary Agreements**”) (the January 2006 Security Agreement,the January 2006 Term Note, the January 2006 Revolving Note and the January 2006Ancillary Agreements, each a “**January 2006Agreement**” and collectively, the “**January 2006Agreements**”);

 

(b)           acknowledges, ratifies and confirmsthat all of the terms, conditions, representations and covenants contained inthe Existing Security Documents to which it is a party are in full force andeffect and shall remain in full force and effect after giving effect to theexecution and effectiveness of the January 2006 Agreements;

 

(c)           acknowledges, ratifies and confirmsthat the defined term “Obligations” under the March 2004 SecurityDocuments, the June 2005 Security Agreement and the June 2005 StockPledge Agreement include, without limitation, all obligations and liabilitiesof the Company under the Existing Security Documents and the January 2006Agreements and all other obligations and liabilities of each of the undersignedto Laurus (including interest accruing after the filing of any petition inbankruptcy, or the commencement of any insolvency, reorganization or likeproceeding, whether or not a claim for post-filing or post-petition interest isallowed or allowable in such proceeding), whether now existing or hereafterarising, direct or indirect, liquidated or unliquidated, absolute or contingent(collectively, the “**Obligations**”);

 

(d)           acknowledges and confirms that (i) theoccurrence of an Event of Default under any of the January 2006 Agreementsshall constitute an Event of Default under the Existing Security Documents and (ii) theoccurrence of an Event of Default under any of the Existing Security Documentsshall constitute an Event of Default under the January 2006 Agreements;

 

(e)           represents and warrants that nooffsets, counterclaims or defenses exist as of the date hereof with respect toany of the undersigned’s obligations under any of the Existing SecurityDocuments;

 

(f)            acknowledges, ratifies and confirms (1) thegrant by each undersigned to Laurus of a security interest and lien in theassets of each undersigned as more specifically set forth in the ExistingSecurity Documents and the January 2006 Agreements, as applicable (the “**Security Interest Grants**”) and (2) thatthe Security Interest Grants secure all Obligations; and

 

(g)                                 releases,remises, acquits and forever discharges Laurus and Laurus’ employees, agents,representatives, consultants, attorneys, fiduciaries, officers, directors,partners, predecessors, successors and assigns, subsidiary corporations, parentcorporations, and related corporate divisions (all of the foregoing hereinaftercalled the “**Released Parties**”),from any and all actions and causes of action, judgments, executions, suits,debts, claims, demands, liabilities, obligations, damages and expenses of anyand every character, known or unknown, direct and/or indirect, at law or inequity, of whatsoever kind or nature, for or because of any matter or thingsdone, omitted or suffered to be done by any of the Released Parties prior to andincluding the date of execution hereof, and in any way directly or indirectlyarising out of or in any way connected to this Reaffirmation and RatificationAgreement, the Existing Security Documents,

 

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the January 2006 Agreements and anyother document, instrument or agreement made by the undersigned in favor ofLaurus.

 

**[Theremainder of this page intentionally left blank.]**

 

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ThisReaffirmation and Ratification Agreement shall be governed by and construed inaccordance with the laws of the State of New York.

 
|                      | Very truly  yours,                                           |
|---------------------------|--------------------------------------------------------------|
|                      |                                                         |
|                      | TIME  AMERICA, INC., a Nevada   corporation                  |
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|                      | By:                                                          |   |   |
|                      | Name:                                                        |   |   |
|                      | Title:                                                       |   |   |
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|                      | TIME  AMERICA, INC., an Arizona corporation                  |
|                      |                                                         |
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|                      | By:                                                          |   |   |
|                      | Name:                                                        |   |   |
|                      | Title:                                                       |   |   |
|                      |                                                         |
|                      | NETEDGE  DEVICES, LLC, an Arizona  limited liability company |
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|                      | By:                                                          |   |   |
|                      | Name:                                                        |   |   |
|                      | Title:                                                       |   |   |
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| ACCEPTED AND  AGREED TO:  |                                                         |
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| LAURUS  MASTER FUND, LTD. |                                                         |
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| By:                       |                                                         |   |   |
| Name:                     |                                                         |   |   |
| Title:                    |                                                         |   |   |
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