Document:

Exhibit 10.6

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this
“Agreement”) is made and entered into as of March 22, 2004, by and between
TIME AMERICA, INC., a Nevada corporation (the “Company”), and Laurus Master
Fund, Ltd. (the “Purchaser”).

 

This Agreement is made pursuant to the
Securities Purchase Agreement, dated as of the date hereof, by and between the
Purchaser and the Company (the “Securities Purchase Agreement”), and pursuant
to the Note and the Warrants referred to therein.

 

The Company and the Purchaser hereby agree as
follows:

 

1.                                       Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Securities Purchase Agreement shall have
the meanings given such terms in the Securities Purchase Agreement.  As used in this Agreement, the following
terms shall have the following meanings:

 

“Commission” means the Securities and
Exchange Commission.

 

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

 

“Effectiveness Date” means the 90th day
following the date hereof.

 

“Effectiveness Period” shall have the
meaning set forth in Section 2(a).

 

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

 

“Filing Date” means, with respect to the
Registration Statement required to be filed hereunder, a date no later than
forty-five (45) days following the date upon which the principal amount of the
Term Loan to the Company in original principal amount of $2,000,000 has been
funded to the Company.

 

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

 

“Indemnified Party” shall have the meaning
set forth in Section 5(c).

 

“Indemnifying Party” shall have the meaning
set forth in Section 5(c).

 

“Note” has the meaning set forth in the
Securities Purchase Agreement.

 

 

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

 

“Prospectus” means the prospectus included
in the Registration Statement (including, without limitation, a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

“Registrable Securities” means the shares
of Common Stock issuable upon the conversion of the Note and upon exercise of
the Warrants.

 

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

 

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

 

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

 

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

 

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

 

 

“Securities Purchase Agreement” means the
agreement between the parties hereto calling for the issuance by the Company of
up to $2,000,000 of convertible Notes plus Warrants.

 

“Trading Market” means any of the NASD OTC
Bulletin Board, NASDAQ SmallCap Market, the Nasdaq National Market, the
American Stock Exchange or the New York Stock Exchange.

 

“Warrants” means the Common Stock purchase
warrants issued pursuant to the Securities Purchase Agreement.

 

2.             Registration.

 

(a)                                  On
or prior to the Filing Date the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on Form
S-2, Form SB-2 or Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on such Forms , in which case
such registration shall be on another appropriate form in accordance
herewith).  The Company shall cause the
Registration Statement to become effective and remain effective as provided
herein.  The Company shall use its
reasonable commercial efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event no later than the Effectiveness Date.  The Company shall use its reasonable
commercial efforts to keep the Registration Statement continuously effective
under the Securities Act until the date which is the earlier date of when (i)
all Registrable Securities have been sold or (ii) all Registrable Securities
may be sold immediately without registration under the Securities Act and
without volume restrictions pursuant to Rule 144(k), as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
Holders (the  “Effectiveness Period”).

 

(b)                                 If:
(i) the Registration Statement is not declared effective by the Commission by
the Effectiveness Date; (ii) after the Registration Statement is filed with and
declared effective by the Commission, the Registration Statement ceases to be
effective (by suspension or otherwise) as to all Registrable Securities to
which it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time which
shall exceed 45 days in the aggregate per year or more than 20 consecutive
calendar days (defined as a period of 365 days commencing on the

 

 

date the Registration Statement is declared
effective); or (iii) the Common Stock is not listed or quoted, or is suspended
from trading on any Trading Market for a period of three (3) consecutive
Trading Days (provided the Company shall not have been able to cure such
trading suspension within 30 days of the notice thereof or list the Common
Stock on another Trading Market); (any such failure or breach being referred to
as an “Event,” and for purposes of clause (i) the date on which such Event
occurs, or for purposes of clause (ii) the date which such 30 day or 20
consecutive day period (as the case may be) is exceeded, or for purposes of
clause (iii) the date on which such three (3) Trading Day period is exceeded,
being referred to as “Event Date”), then until the applicable Event is cured,
the Company shall pay to each Holder an amount in cash, as liquidated damages
and not as a penalty, equal to1.0% for each thirty (30) day period (prorated
for partial periods) on a daily basis of the original principal amount of the
Note.  While such Event continues, such
liquidated damages shall be paid not less often than each thirty (30)
days.  Any unpaid liquidated damages as
of the date when an Event has been cured by the Company shall be paid within
three (3) days following the date on which such Event has been cured by the
Company.

 

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

 

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

 

(a)                                  prepare
and file with the Commission the Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments
received from the Commission, and use its best efforts to cause the
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto, and promptly provide to the Purchaser copies of
all filings and Commission letters of comment relating thereto;

 

 

(b)                                 prepare
and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may
be necessary to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by the Registration
Statement and to keep such Registration Statement effective until the
expiration of the Effectiveness Period;

 

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

 

(d)                                 use
its commercially reasonable efforts to register or qualify the Purchaser’s
Registrable Securities covered by the Registration Statement under the
securities or “blue sky” laws of such jurisdictions within the United States as
the Purchaser may reasonably request, provided, however, that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;

 

(e)                                  list
the Registrable Securities covered by the Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed;

 

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

 

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

 

4.                                       Registration
Expenses.  All expenses relating to
the Company’s compliance with Sections 2 and 3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent

 

 

public accountants for the Company, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (upon prior agreement by the parties and to the extent
such counsel is required due to Company’s failure to meet any of its
obligations hereunder), are called “Registration Expenses”. All selling
commissions applicable to the sale of Registrable Securities, including any
fees and disbursements of any special counsel to the Holders beyond those included
in Registration Expenses, are called “Selling Expenses.”   The Company shall only be responsible for
all Registration Expenses.

 

5.                                       Indemnification.

 

(a)                                  In
the event of a registration of any Registrable Securities under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
the Purchaser, and its officers, directors and each other person, if any, who
controls the Purchaser within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the
Purchaser, or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Purchaser, and each such person
for any reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of
Purchaser’s failure to comply with the prospectus delivery requirements under
the Securities Act or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished by or on behalf of the Purchaser or any such person in
writing specifically for use in any such document.

 

(b)                                 In
the event of a registration of the Registrable Securities under the Securities
Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless
the Company, and its officers, directors and each other person, if any, who
controls the Company within the meaning of the Securities

 

 

Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
which was furnished in writing by the Purchaser to the Company expressly for
use in (and such information is contained in) the Registration Statement under
which such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and each such person for any
reasonable legal or other expenses incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action, provided,
however, that the Purchaser will be liable in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished in writing to the
Company by or on behalf of the Purchaser specifically for use in any such
document.  Notwithstanding the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.

 

(c)                                  Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof is
to be made against a party hereto obligated to indemnify such Indemnified Party
(an “Indemnifying Party”), notify the Indemnifying Party in writing thereof,
but the omission so to notify the Indemnifying Party shall not relieve it from
any liability which it may have to such Indemnified Party other than under this
Section 5(c) and shall only relieve it from any liability which it may
have to such Indemnified Party under this Section 5(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and undertake
the defense thereof with counsel satisfactory to such Indemnified Party, and,
after notice from the Indemnifying Party to such Indemnified Party of its
election so to assume and undertake the defense thereof, the Indemnifying Party
shall not be liable to such Indemnified

 

 

Party under this Section 5(c) for any
legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel,
then the Indemnified Party shall pay all reasonable fees, costs and expenses of
such counsel, provided, however, that, if the defendants in any such action
include both the indemnified party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the Indemnifying Party or if the interests of the Indemnified
Party reasonably may be deemed to conflict with the interests of the
Indemnifying Party, the Indemnified Party shall have the right to select one
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.

 

(d)                                 In
order to provide for just and equitable contribution in the event of joint
liability under the Securities Act in any case in which either (i) the
Purchaser, or any officer, director or controlling person of the Purchaser,
makes a claim for indemnification pursuant to this Section 5 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of the Purchaser or such officer, director or
controlling person of the Purchaser in circumstances for which indemnification
is provided under this Section 5; then, and in each such case, the Company
and the Purchaser will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that the Purchaser is responsible only for the portion
represented by the percentage that the public offering price of its securities
offered by the Registration Statement bears to the public offering price of all
securities offered by such Registration Statement, provided, however, that, in
any such case, (A) the Purchaser will not be required to contribute any amount
in excess of the public offering price of all such securities offered by it
pursuant to such Registration Statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Act) will be entitled to contribution from any person or entity who was not
guilty of such fraudulent misrepresentation.

 

 

6.                                       Representations
and Warranties.

 

(a)                                  The
Common Stock of the Company is registered pursuant to Section 12(b) or
12(g) of the Exchange Act and, except with respect to certain matters which the
Company has disclosed to the Purchaser on Schedule 4.21 to the Securities
Purchase Agreement, the Company has timely filed all proxy statements, reports,
schedules, forms, statements and other documents required to be filed by it under
the Exchange Act.  The Company has filed
(i) its Annual Report on Form 10-KSB for the fiscal year ended June 30,
2003 and (ii) its Quarterly Report on Form 10-QSB for the fiscal quarters ended
September 30, 2003 and December 31, 2003 and all Current Reports on
Form 8-K that the Company was required to file (collectively, the “SEC
Reports”).  Each SEC Report was, at the
time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and
the notes thereto) included in the SEC Reports, as of their respective filing
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of
the Company included in the SEC Reports comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations with
respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed) and fairly present
in all material respects the financial condition, the results of operations and
the cash flows of the Company and its subsidiaries, on a consolidated basis, as
of, and for, the periods presented in each such SEC Report.

 

(b)                                 The
Common Stock is listed for trading on the National Association of Securities
Dealers, Inc. Over the Counter Bulletin Board (“NASD OTCBB”) and satisfies all
requirements for the continuation of such listing.  The Company has not received any notice that its Common Stock
will be delisted from the NASD OTCBB (except for prior notices which have been
fully remedied) or that the Common Stock does not meet all requirements for the
continuation of such listing.

 

(c)                                  Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales

 

 

of any security or solicited any offers to
buy any security under circumstances that would cause the offering of the
Securities pursuant to the Securities Purchase Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act which would
prevent the Company from selling the Common Stock pursuant to Rule 506 under
the Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or subsidiaries take
any action or steps that would cause the offering of the Securities to be
integrated with other offerings.

 

(d)                                 The
Warrants, the Note and the shares of Common Stock which the Purchaser may acquire
pursuant to the Warrants and the Note are all restricted securities under the
Securities Act as of the date of this Agreement.  The Company will not issue any stop transfer order or other order
impeding the sale and delivery of any of the Registrable Securities at such
time as such Registrable Securities are registered for public sale or an
exemption from registration is available, except as required by federal or
state securities laws.

 

(e)                                  The
Company understands the nature of the Registrable Securities issuable upon the
conversion of the Note and the exercise of the Warrant and recognizes that the
issuance of such Registrable Securities may have a potential dilutive
effect.  The Company specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company.

 

(f)                                    Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material respect.

 

(g)                                 The
Company will at all times have authorized and reserved a sufficient number of
shares of Common Stock for the full conversion of the Note and exercise of the
Warrants.

 

7.                                       Miscellaneous.

 

(a)                                  Remedies.  In the event of a breach by the Company or
by a Holder, of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to

 

 

exercise all rights granted by law and under
this Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement.

 

(b)                                 No
Piggyback on Registrations.  Except
as and to the extent specified in Schedule 7(b) hereto or provided that
the Holders give their consent, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously
entered into any agreement granting any registration rights with respect to any
of its securities to any Person that have not been fully satisfied.

 

(c)                                  Compliance.  Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.

 

(d)                                 Discontinued
Disposition.  Each Holder agrees by
its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of a Discontinuation Event (as defined
below), such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. 
For purposes of this Section 7(d), a “Discontinuation Event” shall
mean (i) when the Commission notifies the Company whether there will be a
“review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by
the Commission of any stop order suspending the effectiveness of such
Registration Statement covering any or all of the Registrable Securities or

 

 

the initiation of any Proceedings for that
purpose; (iv) the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of
any event or passage of time that makes the financial statements included in
such Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to such Registration Statement, Prospectus or
other documents so that, in the case of such Registration Statement or
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

 

(e)                                  Piggy-Back
Registrations.  If at any time
during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen days after receipt of such notice, any such Holder shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such holder requests to be registered to
the extent the Company may do so without violating registration rights of
others which exist as of the date of this Agreement, subject to customary
underwriter cutbacks applicable to all holders of registration rights and
subject to obtaining any required the consent of any selling stockholder(s) to
such inclusion under such registration statement.

 

(f)                                    Amendments
and Waivers.  The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of certain Holders and that does not directly or indirectly affect the
rights of

 

 

other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.

 

(g)                                 Notices.  Any notice or request hereunder may be given
to the Company or the Purchaser at the respective addresses set forth below or
as may hereafter be specified in a notice designated as a change of address
under this Section 7(g).  Any
notice or request hereunder shall be given by registered or certified mail,
return receipt requested, hand delivery, overnight mail, Federal Express or
other national overnight next day carrier (collectively, “Courier”) or telecopy
(confirmed by mail).  Notices and
requests shall be, in the case of those by hand delivery, deemed to have been
given when delivered to any party to whom it is addressed, in the case of those
by mail or overnight mail, deemed to have been given three (3) business days
after the date when deposited in the mail or with the overnight mail carrier,
in the case of a Courier, the next business day following timely delivery of
the package with the Courier, and, in the case of a telecopy, when
confirmed.  The address for such notices
and communications shall be as follows:

 

	
  If to the Company:

  	
   

  	
  Time
  America, Inc.

  51 West Third Street, Suite 310

  Tempe, Arizona 85281

  Attention: Craig J. Smith

  Facsimile: (480) 967-5444

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gregory R.
  Hall, Esq.

  Squire, Sanders & Dempsey L.L.P.

  Two Renaissance Square

  40 North Central Avenue, Suite 2700

  Phoenix, Arizona 85004

  Facsimile: (602) 253-8129

  

 

 

	
  If to a Purchaser:

  	
   

  	
  Laurus
  Master Fund, Ltd.

  c/o Ironshore Corporate Services Ltd.

  P.O. Box 1234 G.T.

  Queensgate House, South Church Street

  Grand Cayman, Cayman Islands

  Facsimile: (345) 949-9877

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  John E.
  Tucker, Esq.

  825 Third Avenue – 14th Floor

  New York, New York 10022

  Facsimile: (212) 541-4434

  
	
   

  	
   

  	
   

  
	
  If to any other
  Person who

  	
   

  	
   

  
	
  is then the
  registered

  Holder:

  	
   

  	
  To the
  address of such Holder as it

  appears in the stock transfer books of the

  Company

  

 

or such other address as may be
designated in writing hereafter in accordance with this Section 7(g) by
such Person.

 

(h)                                 Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder.
The Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. 
Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Notes and the Security Agreement with
the prior written consent of the Company, which consent shall not be
unreasonably withheld.

 

(i)                                     Execution
and Counterparts.  This Agreement
may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and, all of which taken together shall
constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.

 

(j)                                     Governing
Law.  All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof.  Each

 

 

party agrees that all Proceedings concerning
the interpretations, enforcement and defense of the transactions contemplated
by this Agreement shall be commenced exclusively in the state and federal
courts sitting in the City of New York, Borough of Manhattan. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding
is improper.  Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) 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 contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. If either party
shall commence a Proceeding to enforce any provisions of a Transaction
Document, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
Proceeding.

 

(k)                                  Cumulative
Remedies.  The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.

 

(l)                                     Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

 

(m)                               Headings.
 The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

[BALANCE OF PAGE INTENTIONALLY
LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.

 

	
  TIME
  AMERICA, INC.

  	
   

  	
  LAURUS
  MASTER FUND, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

EXHIBIT A

 

[               ,
2004]

 

[               
Stock Transfer
   & Trust Company

[Address]

 

 Attn:[                              ]

 

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

 

Ladies and Gentlemen:

 

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

 

A Registration
Statement on Form [SB-2] under the Securities Act of 1933, as amended (the
“Act”), with respect to the resale of the Shares was declared effective by the
Securities and Exchange Commission on [date]. 
Enclosed is the Prospectus dated [date].  We understand that the Shares are to be offered and sold in the
manner described in the Prospectus.

 

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

 

Very truly yours,

 

 

[Company counsel]

 

 

Schedule A

 

	
  Selling
  Stockholder

  	
   

  	
  R/N/O

  	
   

  	
  Shares

  Being OfferedExhibit 10.7

 

GUARANTY

 

	
  New York, New York

  	
   

  	
  March 22, 2004

  

 

FOR VALUE RECEIVED, and in consideration of
loans made or to be made or credit otherwise extended or to be extended by
Laurus Master Fund, Ltd. (“Lender”) to or for the account of Time America, Inc.,
a Nevada corporation (the “Borrower”) from time to time and at any time, and in
consideration for the repayment by the Borrower of the loan of the Borrower in
the aggregate principal amount of $2,000,000 and for other good and valuable
consideration, and to induce Lender, in its discretion, to make such loans or
extensions of credit and to make or grant such renewals, extensions, releases
of collateral or relinquishments of legal rights as Lender may deem advisable,
Time America, Inc., an Arizona corporation and wholly owned subsidiary of the
Borrower (the “Guarantor”) unconditionally guaranties to Lender, and its
successors, endorsees and assigns, the prompt payment when due (whether by
acceleration or otherwise) of all present and future obligations and
liabilities of any and all kinds of Borrower to Lender and of all instruments
of any nature evidencing or relating to any such obligations and liabilities
upon which Borrower is or may become liable to Lender, whether incurred by
Borrower as maker, endorser, drawer, acceptor, guarantor, accommodation party
or otherwise, and whether due or to become due, secured or unsecured, absolute
or contingent, joint or several, and however or whenever acquired by Lender,
whether arising under, out of, or in connection with that certain Secured
Convertible Term Note in the original principal amount of $2,000,000 dated as
of the date hereof made by Borrower in favor of Lender (as amended, modified,
restated or supplemented from time to time, the “Term Note”), that certain
warrant dated as of the date hereof made by the Borrower in favor of Lender in
connection with the Term Note, and any documents, instruments or agreements
relating to or executed in connection with the Term Note or any documents,
instruments or agreements referred to therein (as each may be amended,
modified, restated or supplemented from time to time, the “Documents”), or
otherwise ((a)-(c) collectively referred to as the “Obligations”), and
irrespective of the genuineness, validity, regularity or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all of
the Obligations in any case commenced by or against Borrower under Title 11,
United States Code, including, without limitation, obligations or indebtedness
of Borrower for post-petition interest, fees, costs and charges that would have
accrued or been added to the Obligations but for the commencement of such
case.  In furtherance of the foregoing,
the Guarantor hereby agrees as follows:

 

1.                                       No
Impairment.  Lender may at any time
and from time to time, either before or after the maturity thereof, without
notice to or further consent of the Guarantor, extend the time of payment of,
exchange or surrender any collateral for, renew or extend any of the
Obligations

 

1

 

or decrease the interest rate thereon, and may also make any agreement
with Borrower or with any other party to or person liable on any of the
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Lender and
Borrower or any such other party or person, or make any election of rights
Lender may deem desirable under the United States Bankruptcy Code, as amended,
or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors’ rights
generally (any of the foregoing, an “Insolvency Law”) without in any way
impairing or affecting this Guaranty. 
So long as the Obligations are outstanding, this instrument shall be
effective regardless of the subsequent incorporation, merger or consolidation
of Borrower, or any change in the composition, nature, personnel or location of
Borrower and shall extend to any successor entity to Borrower, including a
debtor in possession or the like under any Insolvency Law.

 

2.                                       Guaranty
Absolute.  The Guarantor hereby
guaranties that the Obligations will be paid strictly in accordance with the
terms of the Term Note and/or any other document, instrument or agreement creating
or evidencing the Obligations, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Borrower with respect thereto. 
Guarantor hereby knowingly accepts the full range of risk encompassed
within a contract of “continuing guaranty” which risk includes the possibility
that Borrower will contract additional indebtedness for which Guarantor may be
liable hereunder after Borrower’s financial condition or ability to pay its lawful
debts when they become due has deteriorated, whether or not Borrower has
properly authorized incurring such additional indebtedness.  The Guarantor acknowledges that no oral
representations, including any representations to extend credit or provide other
financial accommodations to Borrower, have been made by Lender to induce the
Guarantor to enter into this Guaranty. 
The liability of the Guarantor under this Guaranty shall be absolute and
unconditional, in accordance with its terms, and, so long as the Obligations
are outstanding, shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation:
(a) any waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Documents or any other instruments or
agreements relating to the Obligations or any assignment or transfer of any
thereof, (b) any lack of validity or enforceability of the Term Note or other
documents, instruments or agreements relating to the Obligations or any
assignment or transfer of any thereof, (c) any furnishing of any additional
security to Lender or its assignees or any acceptance thereof or any release of
any security by Lender or its assignees, (d) any limitation on any party’s
liability or obligation under the Documents or any other documents, instruments
or agreements relating to the Obligations or any assignment or transfer of any
thereof or any invalidity or unenforceability, in whole or in part, of any such
document, instrument or agreement or any term thereof, (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to Borrower, or any action taken with respect
to this Guaranty by any trustee or receiver, or by any court, in any such
proceeding, whether or not the Guarantor shall have notice or knowledge of any
of the foregoing, (f) any exchange, release or nonperfection of any collateral,
or any release, or amendment or

 

2

 

waiver of or consent to departure from any guaranty or security, for
all or any of the Obligations or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the
Guarantor.  Any amounts due from the
Guarantor to Lender shall bear interest until such amounts are paid in full at
the highest rate then applicable to the Obligations.  Obligations include post-petition interest whether or not allowed
or allowable.

 

3.                                       Waivers.  (a)  This Guaranty is a guaranty of payment and not of
collection.   Lender shall be under no obligation to institute suit, exercise
rights or remedies or take any other action against Borrower or any other
person liable with respect to any of the Obligations or resort to any
collateral security held by it to secure any of the Obligations as a condition
precedent to the Guarantor being obligated to perform as agreed herein and
Guarantor hereby waives any and all rights which it may have by statute or
otherwise which would require Lender to do any of the foregoing.  The Guarantor further consents and agrees
that Lender shall be under no obligation to marshal any assets in favor of the
Guarantor, or against or in payment of any or all of the Obligations.  The Guarantor hereby waives all suretyship
defenses and any rights to interpose any defense, counterclaim or offset of any
nature and description which the Guarantor may have or which may exist between
and among Lender, Borrower and/or the Guarantor with respect to the Guarantor’s
obligations under this Guaranty, or which Borrower may assert on the underlying
debt, including but not limited to failure of consideration, breach of
warranty, fraud, payment (other than cash payment in full of the Obligations),
statute of frauds, bankruptcy, infancy, statute of limitations, accord and
satisfaction, and usury, except for payment in full of the Obligations pursuant
to this Guaranty.

 

(b)                                 The
Guarantor waives (i) notice of the acceptance of this Guaranty, and of all
notices and demands of any kind to which the Guarantor may be entitled,
including, without limitation, notice of adverse change in Borrower’s financial
condition or of any other fact which might materially increase the risk of the
Guarantor and (ii) presentment to or demand of payment from anyone whomsoever
liable upon any of the Obligations, protest, notices of presentment,
non-payment or protest and notice of any sale of collateral security or any
default of any sort.

 

(c)                                  Notwithstanding
any payment or payments made by the Guarantor hereunder, or any setoff or
application of funds of the Guarantor by Lender, the Guarantor shall not be
entitled to be subrogated to any of the rights of Lender against Borrower or
against any collateral or guarantee or right of offset held by Lender for the
payment of the Obligations, nor shall the Guarantor seek  or be entitled to seek any contribution or
reimbursement from Borrower in respect of payments made by the Guarantor
hereunder, until all amounts owing to Lender by Borrower on account of the
Obligations are paid in full.  If an
Event of Default (as such term is defined in the Term Note) has occurred and is
continuing, and any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by the Guarantor in trust for Lender,
segregated from other funds of the Guarantor, and shall forthwith upon, and in
any event within two (2) business days of, receipt by the Guarantor, be turned
over to Lender in the exact form received by the Guarantor (duly endorsed by
the Guarantor to Lender, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as Lender may determine, subject to
the provisions of the Term Note.  Any
and all present and future debts and obligations of Borrower to any of the
Guarantor are hereby waived and postponed in favor of, and subordinated

 

3

 

to the full payment and performance of, all present and future debts
and obligations of Borrower to Lender.

 

4.                                       Security.  All sums at any time to the credit of the
Guarantor and any property of the Guarantor in Lender’s possession or in the
possession of any bank, financial institution or other entity that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, Lender (each such entity, an “Affiliate”)
shall be deemed held by Lender or such Affiliate, as the case may be, as
security for any and all of the Guarantor’s obligations to Lender and to any
Affiliate of Lender, no matter how or when arising and whether under this or
any other instrument, agreement or otherwise.

 

5.                                       Representations
and Warranties.  The Guarantor
hereby represents and warrants (all of which representations and warranties
shall survive until all Obligations are indefeasibly satisfied in full), that:

 

(a)                                  Corporate
Status.  The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Arizona.  The
Guarantor has full power, authority and legal right to own its property and
assets and to transact the business in which it is engaged.

 

(b)                                 Authority
and Execution.  The Guarantor has
full power, authority and legal right to execute and deliver, and to perform
its obligations under, this Guaranty and has taken all necessary corporate and
legal action to authorize the execution, delivery and performance of this
Guaranty.

 

(c)                                  Legal,
Valid and Binding Character.  This
Guaranty constitutes the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms, except as enforceability may be
limited by applicable Insolvency Law.

 

(d)                                 Violations.  The execution, delivery and performance of
this Guaranty will not violate any requirement of law applicable to the
Guarantor or any material contract, agreement or instrument to which the
Guarantor is a party or by which the Guarantor or any property of the Guarantor
is bound or result in the creation or imposition of any mortgage, lien or other
encumbrance other than to Lender on any of the property or assets of the
Guarantor pursuant to the provisions of any of the foregoing.

 

(e)                                  Consents
or Approvals.  No consent of any
other person or entity (including, without limitation, any creditor of the
Guarantor) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty, where
failure to obtain such consent would have a material adverse effect on the
business, operating assets or condition, financial or otherwise, of the
Guarantor.

 

(f)                                    Litigation.  No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or governmental
authority, bureau or agency is

 

4

 

currently pending or, to the best knowledge of the Guarantor,
threatened (i) with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting the Guarantor, or
any of property or assets of the Guarantor, which, if adversely determined,
would have a material adverse effect on the business, operating assets or
condition, financial or otherwise, of the Guarantor.

 

(g)                                 Financial
Benefit.  The Guarantor has derived
or expects to derive a financial or other advantage from each and every loan,
advance or extension of credit made under the Term Note or other Obligation
incurred by Borrower to Lender.

 

6.                                       Acceleration.  If (i) any Event of Default (as such term is
defined in the Term Note) shall occur and be continuing under any agreement
made by Borrower or the Guarantor to Lender, or make a general assignment or
(ii) the Guarantor shall make an assignment for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for it or for
a substantial part of its property or business; or such a receiver or trustee
shall otherwise be appointed; (iii) Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Guarantor which is not vacated within ninety (90) days or (iv) any money
judgment, writ or similar final process shall be entered or filed against the
Guarantor or any of its properties or other assets for more than $250,000, and
shall remain unvacated, unbonded or unstayed for a period of ninety (90) days,  then any and all Obligations shall for
purposes hereof, at Lender’s option, be deemed due and payable without notice
notwithstanding that any such Obligation is not then due and payable by
Borrower.

 

(b)                                 The
Guarantor will promptly notify Lender of any default by the Guarantor in the
performance or observance of any term or condition of any agreement to which
the Guarantor is a party if the effect of such default is to cause, or permit
the holder of any obligation under such agreement to cause, such obligation to
become due prior to its stated maturity and, if such an event occurs, Lender
shall have the right to accelerate the Guarantor’s obligations hereunder.

 

7.                                       Payments
from Guarantors.  Lender, in its
sole and absolute discretion, with or without notice to the Guarantor, may
apply on account of the Obligations any payment from the Guarantor or any other
guarantor, or amounts realized from any security for the Obligations, or may
deposit any and all such amounts realized in a non-interest bearing cash
collateral deposit account to be maintained as security for the Obligations.

 

8.                                       Costs.  The Guarantor shall pay on demand, all
costs, fees and expenses (including expenses for legal services of every kind)
relating or incidental to the enforcement or protection of the rights of Lender
hereunder or under any of the Obligations.

 

9.                                       No
Termination.  This is a continuing
irrevocable guaranty and shall remain in full force and effect and be binding
upon the Guarantor, and the Guarantor’s successors and assigns, until all of the
Obligations have been paid in full.  If
any of the present or future Obligations are guarantied by persons,
partnerships or corporations in addition to the Guarantor, the death, release
or discharge in whole or in part or the bankruptcy, merger, consolidation,

 

5

 

incorporation, liquidation or dissolution of one or more of them shall
not discharge or affect the liabilities of the Guarantor under this Guaranty.

 

10.                                 Recapture.  Anything in this Guaranty to the contrary
notwithstanding, if Lender receives any payment or payments on account of the
liabilities guaranteed hereby, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver, or any other party
under any Insolvency Law, common law or equitable doctrine, then to the extent
of any sum not finally retained by Lender, the Guarantor’s obligations to
Lender shall be reinstated and this Guaranty shall remain in full force and
effect (or be reinstated) until payment shall have been made to Lender, which
payment shall be due on demand.

 

11.                                 Books
and Records.  The books and records
of Lender showing the account between Lender and Borrower shall be admissible
in evidence in any action or proceeding, shall be binding upon the Guarantor
for the purpose of establishing the items therein set forth and shall
constitute prima facie proof thereof.

 

12.                                 No
Waiver.  No failure on the part of
Lender to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise by Lender of any right, remedy or power hereunder preclude any other
or future exercise of any other legal right, remedy or power.  Each and every right, remedy and power
hereby granted to Lender or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by Lender at
any time and from time to time.

 

13.                                 Waiver
of Jury Trial.  THE GUARANTOR DOES
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL
HERETO.  THE GUARANTOR DOES HEREBY
CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

 

14.                                 Governing
Law; Jurisdiction; Amendments.  THIS
INSTRUMENT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED,
CONSTRUED AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  THE GUARANTOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF
THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL
PURPOSES IN CONNECTION HEREWITH.  ANY
JUDICIAL PROCEEDING BY THE GUARANTOR AGAINST LENDER INVOLVING, DIRECTLY OR
INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF
NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK.  THE

 

6

 

GUARANTOR FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS
OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY
NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER
AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.  THE GUARANTOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF
ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM  NON  CONVENIENS.

 

15.                                 Severability.  To the extent permitted by applicable law,
any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

 

16.                                 Amendments,
Waivers.  No amendment or waiver of
any provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
executed by the Guarantor and Lender.

 

17.                                 Notice.  All notices, requests and demands to or upon
the Guarantor, shall be in writing and shall be sent in accordance to
Section 11.8 of the Securities Purchase Agreement.

 

18.                                 Successors.  Lender may, from time to time, without
notice to the Guarantor, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty.  Without limiting the generality of the
foregoing, Lender may assign, or grant participations to, one or more banks,
financial institutions or other entities all or any part of any of the
Obligations.  In each such event,
Lender, its Affiliates and each and every immediate and successive purchaser,
assignee, transferee or holder of all or any part of the Obligations shall have
the right to enforce this Guaranty, by legal action or otherwise, for its own
benefit as fully as if such purchaser, assignee, transferee or holder were
herein by name specifically given such right. 
Lender shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which Lender has not
disposed of, sold, assigned, or otherwise transferred.

 

19.                                 Release.  Nothing except cash payment in full of the
Obligations, either by Borrower, the Guarantor, or any third party on either of
their behalf, shall release the Guarantor from liability under this Guaranty.

 

[Signature page follows.]

 

7

 

IN WITNESS WHEREOF, this
Guaranty has been executed by the Guarantor this 22nd  day of  March, 2004.

 

	
   

  	
  TIME AMERICA, INC.,  an
  Arizona corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Facsimile: (   )

  
										

 

8

 

STATE OF
                            )

                                                ):
ss.:

COUNTY OF
                        )

 

On the         day of
                ,
2004, before me personally came                                                 
to me known, who being by me duly sworn, did depose and say s/he is the
                         
of Time America, Inc., an Arizona corporation, the corporation described in and
which executed the foregoing instrument; and that s/he signed her/his name
thereto by order of the board of directors of said corporation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

9

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