Exhibit
10.26


 


TIME AMERICA, INC.


 


NOTE PURCHASE AGREEMENT


 


This NOTE PURCHASE
AGREEMENT (“Agreement”) is dated as of April 16, 2004, by and among Time
America, Inc., a Nevada corporation (the “Company”), and Frances L.
Simek (the “Investor”).


 


W  I  T
N  E  S  S  E  T  H:


 


WHEREAS, the Company desires to sell and
issue to the Investor, and the Investor desires to purchase from the Company,
$500,000 in original principal amount of a Promissory Note, in the identical
form and substance of Exhibit A attached hereto, on the terms
and conditions set forth herein (the “Note”), to bear interest (computed
on the basis of a 360-day year and actual days elapsed) from the date of
issuance at the rate of fifteen percent (15.0%) per annum;


 


WHEREAS, the Note will be secured by all of the Company’s assets, which security
interest shall be evidenced by a Security Agreement (the “Security Agreement”),
in substantially the form and substance of Exhibit B attached hereto;


 


NOW, THEREFORE, in consideration of the
foregoing premises and the covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


Certain Definitions.  As used in this Agreement, the following
terms shall have the following respective meanings:


 


“Closing” and “Closing
Date” shall have the meanings ascribed to such terms in Section 1.3 herein.


 


“Holder” and “Holders”
shall include an Investor or Investors, respectively, and any transferee of the
Notes which have been transferred in compliance thereof.


 


“Maturity Date” shall
mean May 1, 2009, the date upon which the Notes mature and the principal
thereof and all interest thereon becomes due and payable.


 


 “Regulation D” shall mean Regulation D as
promulgated pursuant to the Securities Act, and as subsequently amended.


 


ARTICLE I


 


Purchase and Sale of the Notes


 


Section 1.1  Purchase and Sale.  Upon the following terms and conditions, the
Company shall issue and sell to the Investor, and the Investor shall purchase from
the Company, the aggregate principal amount $500,000.


 

















 


Section 1.2  Purchase Price.  The purchase price for the Note shall be
100% of the principal amount thereof (the “Note Purchase Price”).


 


Section 1.3  The Closing.  (a) 
The closing of the purchase and sale of the Note, shall take place by
facsimile transmission of signature pages to each of the documents contemplated
by this Agreement, and the satisfaction or waiver of the other conditions set
forth in Article V hereof. The date on which the Closing occurs is referred to
herein as the “Closing Date.”


 


(b)                                 On
the Closing Date, the Company shall deliver to the Investor the Note, and an
executed counterpart of this Agreement and the Security Agreement, and such
Investor shall deliver to the Company the purchase price for the Note purchased
by such Investor hereunder by wire transfer in immediately available funds to
an account designated in writing prior to the Closing Date by the Company and
executed counterparts of this Agreement and the Security Agreement.  In addition, each party shall deliver all
documents, instruments and writings required to be delivered by such party
pursuant to this Agreement at or prior to the Closing Date.


 


ARTICLE II


 


Representations and Warranties


 


Section 2.1  Representations and Warranties of the
Company.  The Company hereby makes
the following representations and warranties to the Investor from and as of the
date hereof through the Closing Date:


 


(a)                                  Organization
and Qualification; Material Adverse Effect.  The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada.  Except for the Company’s wholly owned
subsidiary, Time America, Inc., there are no other corporations or other
entities (including partnerships, limited liability companies and joint
ventures) in which the Company directly or indirectly owns at least a majority
of the voting power represented by the outstanding capital stock or other
voting securities or interests having voting power under ordinary circumstances
to elect a majority of the directors or similar members of the governing body,
or otherwise to direct the management and policies, of such corporation or
entity.  The Company has the requisite
corporate power to own its properties and to carry on its business as now being
conducted.  The Company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary other than those in which the
failure so to qualify would not, individually or in the aggregate, have a
Material Adverse Effect.  “Material
Adverse Effect” means any adverse effect on the business, operations,
properties, or financial condition of the entity with respect to which such
term is used and which is material to such entity and other entities
controlling or controlled by such entity, taken as a whole, and any material
adverse effect on the transactions contemplated under the Agreement or any
other agreement or document contemplated hereby.


 


(b)                                 Authorization;
Enforcement.  (i)  The Company has the requisite corporate
power and authority to enter into and perform this Agreement,  the Note and the Security


 


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Agreement in accordance with the terms hereof, (ii) the execution and
delivery of this Agreement and the Security Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including the issuance of the Notes in accordance with the terms of this
Agreement, have been duly authorized by all necessary action, and no further
consent or authorization of the Company is required, (iii) this Agreement has
been duly executed and delivered by the Company, and (iv) each of this
Agreement, the Security Agreement, and the Notes constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to the enforcement of
creditors’ rights generally and by general principles of equity.


 


(c)                                  No Conflicts.  The
execution, delivery and performance of this Agreement, the Security Agreement,
and the Notes by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) result in
a violation of the organizational documents, as amended, of the Company or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company is a
party, or result in a violation of any Federal, state, local or foreign law,
rule, regulation, order, judgment or decree (including Federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect);
provided that, for purposes of such representation as to Federal, state, local
or foreign law, rule or regulation, no representation is made herein with
respect to any of the same applicable solely to the Investors and not to the
Company.  The business of the Company
has not been, is not now being conducted in violation of any law, ordinance or
regulation of any governmental entity, except for violations which either
singly or in the aggregate do not and will not have a Material Adverse
Effect.  The Company is not required
under Federal, state, local or foreign law, rule or regulation to obtain any
consent, authorization or order of, or to make any filing or registration with,
any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under this Agreement, the Security Agreement, or the
Notes, provided that, for purposes of the representation made in this sentence,
the Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Investors herein.


 


(d)                                 No
Undisclosed Liabilities.  The
Company does not have any liabilities or obligations not disclosed in the
Company’s most recent financial statements, as filed with the Commission, other
than those liabilities incurred in the ordinary course of its business since December
31, 2003, or liabilities or obligations, individually or in the aggregate,
which do not or would not have a Material Adverse Effect on the Company.


 


(e)                                  No General Solicitation.  Neither
the Company nor, to the Company’s knowledge, any of its affiliates or any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities.


 


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(f)                                    No
Litigation.  No litigation or claim
(including those for unpaid taxes) against the Company is pending or, to the
Company’s knowledge, threatened, and no other event has occurred, which if
determined adversely would have a Material Adverse Effect on the Company, or
would materially adversely effect the transactions contemplated hereby.


 


(g)                                 Brokers.  The Company has taken no action that would
give rise to any claim by any person for brokerage commissions, finder’s fees
or similar payments by the Company relating to this Agreement or the
transactions contemplated hereby or thereby.


 


ARTICLE III


 


Covenants


 


Section 3.1  Replacement Certificates.  The certificate(s) representing the Notes
held by any Investor (or then holder) may be exchanged by such Investor (or
such holder) at any time and from time to time for certificates with different
denominations representing an equal amount of Notes as reasonably requested by
such Investor upon surrendering the same. 
No service charge will be made for such registration, transfer or
exchange.


 


Section 3.2  Subordination.  Investor subordinates to the obligations of
the Company under any Senior Indebtedness: (a) indebtedness of the Company to
Investor under this Note, including, without limitation, all rights of
subrogation, indemnification, reimbursement or contribution (collectively, the
“Subordinated Indebtedness”); and (b) all liens, security interests,
claims and right of any kind that Investor may now have or hereafter acquire
against the Company and/or the property of the Company which secure, result
from or otherwise pertain to the Subordinated Indebtedness.  For purposes of this Note, the term “Senior
Indebtedness” shall mean indebtedness of the Company and indebtedness
guaranteed by the Company for (i) money borrowed from banks or other lending
institutions whether outstanding on the date of this Note or thereafter
incurred, and (ii) any other indebtedness or obligation of the Company, whether
outstanding on the date of this Note or thereafter created, incurred, assumed
or guaranteed, which is evidenced by a note or other similar instrument, unless
by the terms of such note or other instrument it is provided that such
indebtedness is not superior in right of payment to this Note.


 


ARTICLE IV


 


Conditions


 


Section 4.1  Conditions Precedent to the Obligation of
the Company to Issue and Sell the Notes. 
The obligation hereunder of the Company to issue and sell the Notes to
the Investor is subject to the satisfaction, at or before the Closing Date, of
each of the conditions set forth below. 
These conditions are for the Company’s sole benefit and may be waived by
the Company at any time in its sole discretion.


 


(a)                                  Accuracy
of the Investor’s Representations and Warranties.  The representations and warranties of the Investor shall be true
and correct in all material respects as


 


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of the date when made and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a particular
date, which shall be true and correct in all material respects as of such other
date), and except that all representations and warranties that by their terms
are qualified by reference to “materiality” or to a “Material Adverse Effect”
shall be, or have been, true and correct in all respects.


 


(b)                                 Performance
by the Investors.  Each Investor
shall have performed all agreements and satisfied all conditions required
hereby to be performed or satisfied by such Investor at or prior to the Closing
Date.


 


(c)                                  No
Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.


 


(d)                                 Approvals.
The Company’s Board of Directors shall have approved the transactions
contemplated by this Agreement.


 


Section 4.2  Conditions Precedent to the Obligation of
the Investor to Purchase the Notes. 
The obligation hereunder of the Investor to acquire and pay for the
Notes is subject to the satisfaction, at or before the Closing Date, of each of
the conditions set forth below.  These
conditions are for the Investor’s sole benefit and may be waived by the
Investor at any time in its sole discretion.


 


(a)                                  Accuracy
of the Company’s Representations and Warranties.  The representation and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a particular date which shall be true and correct
in all material respects as of such other date), and except that all
representations and warranties that by their terms are qualified by reference
to “materiality” or to a “Material Adverse Effect” shall be, or have been, true
and correct in all respects.


 


(b)                                 Performance
by the Company.  The Company shall
have performed all agreements and satisfied all conditions required to be
performed or satisfied by the Company at or prior to the Closing Date.


 


(c)                                  No
Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority or competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.


 


ARTICLE V


 


Termination


 


Section 5.1  Termination by Mutual Consent.  This Agreement may be terminated at any time
prior to the Closing Date by the mutual written consent of the Company and the
Investor.


 


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Section 5.2  Other Termination.  This Agreement may be terminated by an
authorized representative of the Company or by the Investor at any time if the
Closing Date shall not have occurred by the fifth business day following the
date of this Agreement; provided, however, that the right to terminate this
Agreement under Section 5.2 shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing Date to have occurred on or prior to
such date.


 


ARTICLE VI


 


Miscellaneous


 


Section 6.1  Stamp Taxes; Agent Fees.  The Company shall pay all stamp and other
taxes and duties levied in connection with the issuance of the Notes pursuant
hereto.


 


Section 6.2  Specific Enforcement; Consent to
Jurisdiction.


 


(a)                                  The
Company and the Investor acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.


 


(b)                                 The
Company and the Investor (i) hereby irrevocably submit to the exclusive
jurisdiction of the United States District Court, the Arizona State courts and
other courts of the United States sitting in Maricopa County, Arizona for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement and (ii) hereby waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is
improper.  The Company and the Investor
consent to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.


 


Section 6.3  Entire Agreement; Amendment.  This Agreement together with the agreements
and documents executed in connection herewith, contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein, neither the Company nor the Investor
makes any representation, warranty, covenant or undertaking with respect to
such matters.  No provision of this
Agreement may be waived or amended other than by a written instrument signed by
the party against whom enforcement of any such amendment or waiver is sought.


 


Section 6.4  Notices.  Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: 
(i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically


 


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generated and kept on file by the sending party); or (iii) one business
day after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such
communications shall be:


 


	
  to the Company:

  	
   

  	
  Time america,
  Inc.

  
	
   

  	
   

  	
  51 West Third
  Street

  
	
   

  	
   

  	
  Suite 310

  
	
   

  	
   

  	
  Tempe,
  Arizona  85281

  
	
   

  	
   

  	
  Telephone:  480-296-0400

  
	
   

  	
   

  	
  Facsimile:
  480-296-0444

  
	
   

  	
   

  	
  Attn:

  	
  Craig J. Smith

  
	
   

  	
   

  	
   

  	
  Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  Squire, Sanders
  & Dempsey L.L.P.

  
	
   

  	
   

  	
  Two Renaissance
  Square

  
	
   

  	
   

  	
  40 North Central
  Avenue, Suite 2700

  
	
   

  	
   

  	
  Phoenix,
  Arizona  85004-4498

  
	
   

  	
   

  	
  Telephone:  602-528-4134

  
	
   

  	
   

  	
  Facsimile:  602-253-8129

  
	
   

  	
   

  	
  Attn:

  	
  Gregory R. Hall,
  Esq.

  
	
   

  	
   

  	
   

  
	
  to the Investor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


Any party hereto may from
time to time change its address for notices by giving at least five (5) days
written notice of such changed address to the other parties hereto.  Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above.


 


Section 6.5  Indemnity.  Each party shall indemnify, defend and hold harmless each other
party against any loss, cost or damages (including reasonable attorney’s fees)
incurred as a result of such parties’ breach of any representation, warranty,
covenant or agreement in this Agreement.


 


Section 6.6  Waivers.  No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any


 


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delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right accruing to it thereafter.


 


Section 6.7  Headings.  The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.


 


Section 6.8  Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. 
The parties hereto may amend this Agreement without notice to or the
consent of any third party.  The Company
may not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Investor, except that the Company may assign
this Agreement in connection with a merger, consolidation, business combination
or the sale of all or substantially all of its assets provided that the Company
is not released from any of its obligations hereunder, such successor in
interest or assignee assumes all obligations of the Company hereunder, and
appropriate adjustment of the provisions contained in this Agreement, and the
Notes is made, in form and substance satisfactory to the Investor, to place the
Investor in substantially the same position as they would have been but for
such assignment.  The Investor may not
assign this Agreement (in whole or in part) or any rights or obligations
hereunder without the Company’s prior written consent (which consent may be
withheld for any reason in their sole discretion).


 


Section 6.9  No Third Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.


 


Section 6.10  Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Arizona without regard to such State’s principles of conflict of laws.


 


Section 6.11  Survival.  The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
Closing.


 


Section 6.12  Execution.  This Agreement may be executed in two or more counterparts, all
of which shall be considered one and the same agreement, it being understood
that all parties need not sign the same counterpart.


 


Section 6.13  Publicity.   The Company agrees that it will not include in any public
announcement the name of any Investor without its consent, unless and until
such disclosure is required by law or applicable regulation, and then only to
the extent of such requirement.


 


Section 6.14  Severability. The parties acknowledge
and agree that all representations, warranties, covenants and agreements of the
Investors hereunder are several and not joint, that no Investor shall have any
responsibility or liability for the representations,  agreements, acts or omissions of any other Investor, and that any
rights granted to “Investors” hereunder shall be enforceable by each Investor
hereunder.


 


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Section 7.15  Expenses.  Each party shall pay its own expenses incident to the preparation
and performance of this Agreement and the documents provided for herein.


 


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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.


 


	
   

  	
  TIME AMERICA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas S.
  Bednarik

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas S.
  Bednarik

  
	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frances
  Simek

  	
   

  
	
   

  	
   

  	
  Frances Simek

  
						



 


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EXHIBITS
AND SCHEDULES


 


	
  Exhibit A

  	
   

  	
  Form of Notes

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Security Agreement

  



 

















 


 


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