Document:

Exhibit
10.27

 

EXHIBIT
A

 

THE SECURITIES EVIDENCED BY THIS
INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY, AND NOT
WITH A VIEW TO THE DISTRIBUTION THEREOF, AND, EXCEPT AS STATED IN THE NOTE
PURCHASE AGREEMENT DATED APRIL 16, 2004, PURSUANT TO WHICH SUCH SECURITIES WERE
ISSUED, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED OR TRANSFERRED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT OR REGULATION A NOTIFICATION UNDER THE ACT
COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH
MAY BE COUNSEL FOR THE COMPANY), REASONABLY SATISFACTORY IN FORM AND CONTENT TO
THE COMPANY, STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.

 

	
  $500,000.00

  	
   

  	
  April 16, 2004

  	
   

  	
  Tempe, Arizona

  

 

PROMISSORY
NOTE

 

FOR VALUE RECEIVED, Time
America Inc., a Nevada corporation (the “COMPANY”), hereby promises to pay to
the order of Frances L. Simek (“HOLDER”), or Holder’s registered assigns, the
principal sum of Five Hundred Thousand Dollars ($500,000.00) or, if less, the
aggregate unpaid principal amount this Note on the Maturity Date (as defined
herein); together with interest on any and all principal amounts remaining
unpaid hereunder from time to time outstanding from the date hereof until
payment in full.

 

1.             Note
Purchase Agreement.  This Note has
been issued to Holder by the Company pursuant to the Note Purchase Agreement
dated of even date herewith (the “NOTE PURCHASE AGREEMENT”), between the
Company and the Holder.  Capitalized
terms used herein but not herein defined shall have the meanings ascribed
thereto in the Note Purchase Agreement, unless the context otherwise requires.

 

2.             Interest.  Interest on the outstanding principal
balance of this Note shall be payable in arrears on the first day of each month
commencing May 1, 2004 (and on the first day of each month thereafter), and on
the Maturity Date to the extent accrued and unpaid.  Except as otherwise provided below, interest will accrue on the
then unpaid principal balance of this Note outstanding during any month, or
partial month, at the rate of fifteen percent (15.0%) per annum, calculated on
the basis of the actual number of days elapsed and on the basis of a 365 day
year.  Except as provided herein or in
the Note Purchase Agreement, all accrued interest on this Note shall be paid at
Maturity.  If the Company shall default
in the payment of the principal of or interest on this Note, the Company shall
on demand from time to time pay interest (i) on the amount of such defaulted
principal and, (ii) to the extent permitted by law, on the amount of such
defaulted interest up to the date of actual payment of such defaulted principal
and interest

 

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amounts (as well as before judgment), at a rate per annum equal to two
percent (2%) in excess of the rate otherwise applicable to such obligations.

 

(b)           The principal balance
outstanding hereunder shall be payable in sixty (60) monthly principal
installments of $11,820.53 plus all accrued and unpaid interest thereon
commencing on May 1, 2004, and on each month thereafter until April 1, 2009.

 

3.             Prepayment.  This Note may be prepaid at any time without
penalty.  Any prepayment hereunder shall
be credited first upon interest accrued and the remainder, if any, upon the
outstanding principal amount of this Note.

 

4.             Payment
on Maturity Date.  The date (the “Maturity
Date”) upon which this Note matures and the principal hereof and all
interest accrued hereon become due shall be April 1, 2009.

 

5.             Payments.

 

(a)           All payments of
principal and interest due in respect of this Note shall be made without
deduction, defense, set off or counterclaim, in lawful money of the United
States of America, and in same day funds and delivered to the Holder by wire
transfer to a bank account of Holder, as specified by Holder from time to time,
or at such other place as shall be designated by notice for such purpose in
accordance with the terms of the Note Purchase Agreement.

 

(b)           Principal and interest
payments due in respect of this Note shall be payable in sixty (60) monthly
installments payable on the last day of each calendar month commencing on May
1, 2004, and on the first day of each month thereafter until April 1,
2009.  If a payment date is not a
Business Day, then any such payment due under this Note shall be made on the
next succeeding Business Day.

 

6.             Note.  Subject to the terms and conditions of the
Subordination Agreement, this Note is secured by all of the Company’s assets,
which security interest is evidenced by the Security Agreement, and is entitled
to the benefits of such Security Agreement.

 

7.             Events
of Default.  If any event of default
set forth below (“Event of Default”) occurs, the entire unpaid principal
balance and accrued interest payable hereunder shall automatically become
immediately due and payable without presentment, demand or notice of any kind,
all of which are hereby expressly waived by the Company:

 

(a)           If
default shall be made in the due and punctual payment of any principal of or
premium (if any) on, the Note when and as the same shall become due and
payable, whether at maturity or a date fixed for prepayment or by declaration
or otherwise, which default is not cured within fifteen (15) days; or

 

(b)           If
default shall be made in the due and punctual payment of any interest on the
Note when and as such interest shall become due and payable, and such default
shall have continued for a period of thirty (30) days; or

 

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(c)           If
any representation or warranty made or deemed to be made by or on behalf of the
Company in the Note Purchase Agreement or this Note or in any certificate,
statement, report or other instrument delivered under or pursuant to any term
hereof or thereof shall prove to have been untrue or incorrect in any material
respect as of the date of this Note or as of the Closing Date and shall not be
cured for a period of fifteen (15) days after the occurrence thereof, or if any
statement, report, certificate, financial statement or financial schedule or
other writing or instrument prepared or purporting to be prepared by the
Company or any officer of the Company that is hereafter furnished or delivered
in connection with or under or pursuant to or contemplated by this Note to
Buyer shall prove to be untrue or incorrect in any material respect as of the
date it was made, furnished or delivered and shall not be cured for a period of
fifteen (15) days after the occurrence thereof; or

 

(d)           If
the Company shall (i) file a petition seeking relief for itself under Title 11
of the United States Code, as now constituted or hereafter amended, or file an
answer consenting to, admitting the material allegations of, or otherwise not
controverting, or fail timely to controvert, a petition filed against it
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or (ii) file such a petition or answer with respect to
relief under the provisions of any other now existing or future applicable
bankruptcy, insolvency, or other similar law of the United States of America,
or State thereof, or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an arrangement,
composition, extension or adjustment with its creditors, and such petition is
not vacated within ninety (90) days; or

 

(e)           If
an order for relief shall be entered against the Company under Title 11 of the
United States Code, as now constituted or hereafter amended, which order is not
stayed; or upon the entry of an order, judgment or decree by operation of law,
or by a court having jurisdiction in the premises which is not stayed,
adjudging it a bankrupt or insolvent under, or ordering relief against it
under, or approving as properly filed a petition seeking relief against it
under, the provisions of any other now existing or future applicable
bankruptcy, insolvency or other similar law of the United States of America or
any State thereof, or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or any arrangement,
composition, extension or adjustment with creditors, or appointing a receiver,
liquidator, assignee, sequestrator, trustee or custodian of the Company or any
Subsidiary or any substantial part of its property, or ordering the
reorganization, winding-up or liquidation of its affairs or upon the expiration
of ninety (90) days after the filing of any involuntary petition against it
seeking any of the relief specified in paragraph (e) or this paragraph (f)
without the petition being dismissed prior to that time; or

 

(f)            If
the Company shall (i) make a general assignment for the benefit of its
creditors, (ii) consent to the appointment of or taking possession by a
receiver, liquidator, assignee, sequestrator, trustee or custodian of the
Company of all or a substantial part of its property, or (iii) admit its
insolvency or inability to pay its debts generally as such debts become due, or
(iv) fail generally to pay its debts as such debts become due, or (v) take any
action (or if such action is taken by its directors or stockholders) looking to
the dissolution or liquidation of the Company; or

 

(g)           If
a final judgment for the payment of money in excess of $250,000 shall

 

3

 

be rendered by a court of record against the Company and the Company or
shall not (i) within 90 days from the date of entry thereof, discharge the same
or provide for its discharge in accordance with its terms, or procure a stay of
execution thereof, and (ii) if execution of such judgment shall be stayed,
within such period of 90 days or such longer period during which the execution
of such judgment shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal, or, after the expiration of
any such stay or the denial of such appeal, forthwith discharge the same or
provide for its discharge.

 

8.             Enforcement.
 If any one or more Events of Default
shall have occurred, the Holder may proceed to protect and enforce the rights
of the Holder by suit in equity or action at law or the employment of any other
available right or remedy, as the Holder shall deem most effective to protect
and enforce any such rights.  The
Company promises to pay all costs and expenses, including reasonable attorneys’
fees and expenses, incurred in the collection and enforcement of this Note.  The Company and endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest,
demand and notice of every kind (except such notices as may be required under
the Note Purchase Agreement) and, to the full extent permitted by law, the
right to plead any statute of limitations as a defense to any demand hereunder.

 

9.             Waivers
and Amendments.  The Note Purchase
Agreement and this Note may be amended only with the written consent of the
Holder.

 

10.           Governing
Law.  This Note shall be governed
by, and construed and enforced in accordance with, the internal laws (but not
the law of choice of laws) of the State of Nevada.

 

IN WITNESS WHEREOF, the Company has caused this Note
to be executed and delivered by its duly authorized officer, as of the day and
year first written above.

 

	
   

  	
  TIME AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas S. Bednarik

  	
   

  
	
   

  	
  Name:

  	
  Thomas S. Bednarik

  
	
   

  	
  Title:

  	
  President & Chief Executive Officer

  

 

4Exhibit 10.28

 

EXHIBIT B

 

SECURITY AGREEMENT

 

THIS SECURITY
AGREEMENT is made and executed as of the 16th day of April 2004, by and between
TIME AMERICA, INC., a Nevada corporation (hereinafter called “Debtor”) and
Frances L. Simek (hereinafter called “Secured Party”).  Capitalized terms used but not otherwise
defined herein shall have the meaning assigned to such terms in that certain
Note Purchase Agreement dated as of April 16, 2004 (the “Note Purchase
Agreement”).

 

WITNESSETH:

 

In order to
secure the due and timely payment of all of the Secured Indebtedness (as
hereinafter defined), including the due and timely performance by Debtor of all
of the covenants, agreements and undertakings of Debtor made herein, Debtor
hereby grants to Secured Party a continuous and continuing security interest in
all of the following property now owned or at any time hereafter acquired by
us, or in which we now have or at any time in the future may acquire any right,
title or interest (the “Collateral”): 
all accounts, inventory, equipment, goods, documents, instruments
(including, without limitation, promissory notes), contract rights, general
intangibles (including, without limitation, payment intangibles and an absolute
right to license on terms no less favorable than those currently in effect
among our affiliates, but not own intellectual property), chattel paper,
supporting obligations, investment property, letter-of-credit rights,
trademarks and tradestyles in which we now have or hereafter may acquire any
right, title or interest, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and
substitutions thereto or therefore. In the event Debtor wishes to finance the
acquisition of any hereafter acquired equipment and has obtained a commitment
from a financing source to finance such equipment from an unrelated third
party, Secured Party agrees to release its security interest on such hereafter
acquired equipment so financed by such third party financing source.

 

ARTICLE I

 

SECURED INDEBTEDNESS

 

1.1           This Security Agreement
is made to provide collateral and security for the payment and performance by
Debtor of all of the following:

 

(a)           Debtor’s
Note, dated as of even date herewith, issued pursuant to the Note Purchase
Agreement, payable to the order of Secured Party with interest and with a final
maturity date of April 1, 2009 together with any and all extensions, renewals,
modifications, substitutions and changes in form thereof (collectively, the
“Notes”);

 

(b)           The
amount of all reasonable expenditures made and obligations incurred by Secured
Party in attempting to remedy any material default on the part of Debtor in
respect of this Security Agreement or the Notes;

 

 

(c)           The
amount of all expenditures made and obligations incurred by Secured Party in
attempting to collect any Secured Indebtedness or to enforce any right or
remedy for realizing upon any Collateral for any Secured Indebtedness; and

 

(d)           Interest
on all amounts expended by Secured Party for any of the purposes specified in
(b) and (c) next hereinabove at an annual rate of interest equal to 18% per
annum.

 

(All of the foregoing is
referred to herein as the “Secured Indebtedness”.)

 

ARTICLE II

 

REPRESENTATIONS

 

Debtor
represents to Secured Party as follows:

 

2.1           Debtor is duly
organized and existing under the laws of the State of Nevada.

 

2.2           The execution, delivery
and performance of this Security Agreement are within Debtor’s corporate
powers, have been duly authorized and are not in contravention of law
applicable to Debtor or the powers of Debtor’s charter, bylaws or other
incorporation papers or of any indenture agreement or undertaking to which
Debtor is a party or by which it is bound.

 

2.3           Debtor is the owner of
the Collateral and has good right and authority to grant a security interest in
the Collateral.

 

2.4           There are no presently
outstanding liens, security interests or encumbrances in or on the Collateral
or the proceeds (except those list in 2.5), nor any financing statements
covering the Collateral or the proceeds thereof, except for the security
interest granted in this Security Agreement and the financing statements
executed pursuant hereto.

 

2.5           The address of Debtor’s
place of business is correctly set forth at the beginning of this Security
Agreement.

 

ARTICLE III

 

COVENANTS

 

So long as the
Secured Indebtedness or any part thereof remains unpaid, Debtor, for itself,
its successors and assigns, covenants and agrees with Secured Party, its
successors and assigns, as follows:

 

3.1           Debtor shall make
prompt payment, as the same becomes due, of all the Secured Indebtedness in
accordance with the terms and provisions of the agreements evidencing such
Indebtedness.

 

3.2           Debtor shall maintain
its corporate existence and pay all necessary corporate franchise and license
taxes, fees and charges.

 

2

 

3.3           Debtor shall pay all
reasonable expenses and reimburse Secured Party for any reasonable
expenditures, including reasonable attorneys’ fees and legal expenses, in
connection with Secured Party’s exercise of any of its rights and remedies
under Article IV or Secured Party’s protection of the Collateral and its
security interest therein.

 

3.4           Debtor shall at all
times keep accurate and complete records of the Collateral and its proceeds.

 

3.5           Debtor agrees to
execute such documents and perform all acts and things which Secured Party may
deem necessary to perfect and continue to perfect the security interest created
by this Security Agreement, to protect the Collateral and to enforce the
security interest, including the execution and filing of financing statements,
which appointment as attorney-in-fact is irrevocable and coupled with an
interest.

 

3.6           Notwithstanding the
security interest in proceeds granted herein, Debtor shall not sell, lend,
rent, lease or otherwise dispose of the equipment forming a part of the
Collateral, except for dispositions made in the ordinary course of business
consistent with past practice, or any interest therein, and Debtor shall keep
such Collateral free from unpaid charges, including taxes, and from liens,
encumbrances and security interests other than that of Secured Party and will
warrant and defend the Collateral against the claims and demands of all other
persons, except the holders of the security interests described herein.

 

3.7           Debtor shall pay before
delinquency all taxes and assessments upon the Collateral or for its use or
operation.

 

3.8           Debtor shall insure the
Collateral constituting Goods (as defined in Article 9 of the Arizona Uniform
Commercial Code) with companies acceptable to Secured Party against such
casualties and in such amounts as Secured Party shall require.

 

3.9           The Collateral
constituting Goods will be properly maintained in good condition and will not
be misused or abused, wasted or allowed to deteriorate, except for the ordinary
wear and tear of its intended primary use.

 

3.10         If Debtor shall default
in paying when due any tax, assessment or charge levied upon the Collateral or
any part thereof or if Debtor fails to maintain the Collateral as above
provided, Secured Party may at its option and without waiver of any right
hereunder, pay such tax, assessment or charge, or take whatever action is
necessary to maintain the Collateral and in each such case the amount paid in
respect thereof shall be payable to Secured Party forthwith with interest at
18% per annum until paid and shall become part of the indebtedness secured by
this Security Agreement.

 

3.11         The equipment forming a
part of the Collateral will be used in the business of Debtor and shall remain
in Debtor’s possession or control at all times.

 

3.12         Debtor shall provided
notice to Secured Party within ten days after changing the address of its
principal place of business.

 

3.13         If
the Collateral is evidenced by promissory notes, trade acceptances or other

 

3

 

instruments for the payment of
money, Debtor will, at the request of Secured Party, immediately deliver them
to Secured Party, appropriately endorsed to Secured Party’s order, Debtor
waives presentment, demand, notice of dishonor, protest and notice of protest.

 

ARTICLE IV

 

ASSIGNMENT OF PAYMENTS;

CERTAIN POWERS OF SECURED PARTY

 

Subject to the provisions of the Subordination Agreement, Debtor hereby
authorizes and directs each issuer and each account debtor and each other
person or entity obligated to make payment in respect of any of the intangible
property constituting Collateral (each issuer and each such account debtor and
other person or entity being herein called a “Collateral Obligor”) to pay over
to Secured Party (on behalf of all of the holders of the Notes), its officers,
agents or assigns, upon demand by Secured Party, all or any part of the
Collateral without making any inquiries as to the status or balance of the
Secured Indebtedness and without any notice to or further consent of
Debtor.  To facilitate the rights of
Secured Party hereunder, Debtor hereby authorizes Secured Party, its officers,
employees, agents or assigns upon the occurrence of a default hereunder, and at
any time thereafter:

 

(a)           to notify Collateral Obligors of the
security interest in the respective Collateral created hereunder and to collect
all or any part of the Collateral without further notice to or further consent
by Debtor, and Debtor hereby constitutes and appoints Secured Party the true
and lawful attorney of Debtor (such agency being coupled with an interest),
irrevocably, with power of substitution, in the name of Debtor or in its own
name or otherwise, to take any of the actions described in the following
clauses (b), (c), (d), (e) and (f);

 

(b)           to ask, demand, collect, receive, receipt
for, sue for, compound and give acquittance for any and all amounts which may
be or become due or payable under the Collateral and to settle and/or adjust
all disputes and/or claims directly with any Collateral Obligor and to
compromise, extend the time for payment arrange for payment in installments,
otherwise modify the terms of, or release, any of the Collateral, on such terms
and conditions as Secured Party may determine (without thereby incurring
responsibility to or discharging or otherwise affecting the liability of Debtor
to Secured Party under this Security Agreement or otherwise);

 

(c)           to direct delivery of, receive, open and
dispose of all mail addressed to Debtor and to execute, sign, endorse, transfer
and deliver (in the name of Debtor or in its own name or otherwise) any and all
receipts or other orders for the payment of money drawn on the Collateral and
all notes, acceptances, commercial paper, drafts, checks, money orders and
other instruments given in payment or in part payment thereof and all invoices,
freight and express bills and bills of lading, storage receipts, warehouse
receipts and other instruments and documents in respect of any of the
Collateral and any other documents necessary to evidence, perfect and realize
upon the security interests and obligations of this Security Agreement;

 

4

 

(d)           in its discretion to file any claim or take
any other action or proceeding which Secured Party may deem necessary or
appropriate to protect and preserve the rights, titles and interests of Secured
Party hereunder;

 

(e)           to sign the name of Debtor to financing
statements, drafts against Collateral Obligors, assignments or verifications of
any of the Collateral and notices to Collateral Obligors.

 

Secured Party hereby agrees that any action taken by a Secured Party
hereunder shall be taken on behalf of all Holders of the Notes and any amounts
collected shall be paid over to each Holder in accordance with the terms of the
Notes and the Note Purchase Agreement. 
Unless and until a default hereunder shall have occurred, Debtor shall be
entitled, except as herein provided and subject to the terms of any other loan
document, receive and retain all distributions on the Collateral or any part
thereof.

 

The powers conferred on Secured Party pursuant to this Article IV are
conferred solely to protect Secured Party’s interest in the Collateral and
shall not impose any duty or obligation on Secured Party to perform any of the
powers herein conferred.

 

ARTICLE V

 

REMEDIES IN EVENT OF DEFAULT

 

5.1           The term “default” as
used in this Security Agreement shall mean the occurrence of any event of
default as defined in the Note or the occurrence of any of the following
events:

 

(a)           The
failure of Debtor to make due and punctual payment of the Secured Indebtedness
secured hereby, principal or interest, or any part thereof, as the same shall
become due and payable, whether at the scheduled due date, maturity or when
accelerated pursuant to any power to accelerate held by Secured Party.

 

(b)           The
failure of Debtor punctually and properly to observe, keep or perform any
covenant, agreement or condition relating to the Secured Indebtedness or herein
required to be observed, kept or performed, if such failure continues for
thirty (30) days after written notice and demand by Secured Party for the
performance of such covenant, agreement or condition.

 

(c)           Any
material representation made in this Security Agreement shall prove to be
untrue, and shall not be cured within fifteen (15) days after the discovery
thereof.

 

(d)           Debtor
declares itself insolvent or is determined to be insolvent by a court of competent
jurisdiction, or makes an assignment for the benefit of creditors.

 

(e)           A
receiver is appointed for all or substantially all of the properties of Debtor
or of the Collateral or any part thereof.

 

5

 

(f)            Debtor
is adjudicated a bankrupt or requests, either by way of petition or answer,
that Debtor be adjudicated a bankrupt or that Debtor be allowed or granted any
composition, rearrangement, extension, reorganization or other relief under any
bankruptcy law or under any other law for the relief of debtors now or
hereafter existing; and such judgment is nor vacated within ninety (90) days
thereof.

 

(g)           The
dissolution or other termination of Debtor.

 

5.2           Upon the occurrence of
a default and pursuant to the terms of that certain Subordination Agreement
dated as of March 22, 2004, by and among the Debtor, the Secured Party, Joseph
L. Simek and Laurus Master Fund, Ltd. (the “Subordination Agreement”), Secured
Party shall have the option, with or without notice, of declaring all the
Secured Indebtedness in its entirety to be immediately due and payable.

 

5.3           Upon the occurrence of
a default and pursuant to the provisions of the Subordination Agreement,
Secured Party may exercise its right of enforcement under the Uniform
Commercial Code in force in the State of Arizona at the date of this Security
Agreement.  In conjunction with,
addition to or substitution for those rights and remedies:

 

(a)           Secured
Party may enter upon Debtor’s premises to take possession of, assemble and
collect the Collateral or to render it unusable; and

 

(b)           Secured
Party may require Debtor to assemble the Collateral and make it available at a
place Secured Party designates which is mutually convenient to allow Secured
Party to take possession or dispose of the Collateral; and

 

(c)           Secured
Party may waive any default or remedy any default in any reasonable manner
without waiving the default remedied and without waiving any other prior or
subsequent default; and

 

(d)           Written
notice mailed to Debtor at its address set forth at the beginning of this
Security Agreement ten (10) days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the Collateral will
be made shall constitute reasonable notice.

 

5.4           Also upon the
occurrence of a default and pursuant to the provisions of the Subordination
Agreement, Secured Party may at any time, whether before or after any
revocation of such power and authority or the maturity of any of the Secured
Indebtedness, (i) notify any parties obligated on any of the Accounts, notes
receivable, contracts or General Intangibles to make payment to Secured Party
of any amounts due or to become due thereunder and enforce collection of any
such Accounts, notes receivable, contracts or General Intangibles by suit or
otherwise and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations thereunder or evidenced thereby; (ii) Debtor
will, at its own expense, notify any parties obligated on any of the Accounts,
notes receivable, contracts or General Intangibles to make payment to the
Secured Party of any amounts due or to become due thereunder; and (iii) Secured
Party is authorized to endorse, in the name of Debtor, any item howsoever
received by Secured Party, representing any payment on or other proceeds of any
of the Collateral.  In each instance in
which Secured Party

 

6

 

may elect hereunder to effect
direct collection of any one or more Accounts, notes receivable, contracts or
General Intangibles, Secured Party is also entitled to take possession of all
books and records of Debtor relating to the Debtor’s Accounts, notes receivable,
contracts or General Intangibles and Debtor will not in any manner take or
suffer any action to be taken to hinder, delay or interfere with the Secured
Party’s attempts to effect collection.

 

5.5           In addition to the
above, Secured Party shall have and may exercise, pursuant to the provisions of
the Subordination Agreement, all other rights conferred by law or under this
Security Agreement and may resort to any remedy existing at law or in equity
for the collection of the Secured Indebtedness and for the enforcement of the
covenants and agreements contained herein and the resort to any remedy shall
not prevent the concurrent or subsequent employment of any other appropriate
remedy or remedies.

 

5.6           The rights granted
hereunder are cumulative of any and all other security now or hereafter held by
Secured Party or other holder for payment of the Secured Indebtedness and
Secured Party may resort to any security now or hereafter existing for the
payment of such indebtedness in such portions and in such order as may seem
best to Secured Party in its sole and uncontrolled discretion.  No failure on the part of Secured Party to
exercise and no delay in exercising any right, power or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise by Secured
Party of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any right, power or remedy.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1           When all of the Secured
Indebtedness has been paid in full and all obligations and liabilities of
Debtor hereunder shall have been performed and discharged, then and in that
case only the security interests evidenced hereby or provided for herein shall
terminate and shall be released at the expense of Debtor and the Collateral
then held as such by Secured Party shall become free and clear of such security
interests.  In such event, Secured Party
shall execute such instruments, including, but not limited to, Termination
Statements, necessary to give effect to this Section 6.1.

 

6.2           No modification or
waiver of any provision of this Security Agreement nor consent to any departure
by Debtor therefrom shall in any event be effective unless the same shall be in
writing and signed by Secured Party and then such waiver or consent shall be
effective only in the specific instances, for the purpose for which given and
to the extent therein specified.  No
notice to nor demand on Debtor in any case shall of itself entitle Debtor to
any other or further notice or demand in similar or other circumstances.

 

6.3           Secured Party may enter
upon Debtor’s premises at any reasonable time to inspect the Collateral and
Debtor’s books and records pertaining to the Collateral or its proceeds and
Debtor shall assist Secured Party in whatever way necessary to make any such
inspection.

 

6.4           Secured Party may at
any time notify the account debtors or obligors of any accounts, chattel paper,
negotiable instruments or other evidences of indebtedness remitted by Debtor to
Secured Party as proceeds to pay Secured Party directly.

 

7

 

6.5           Secured Party may, by
any employee or employees Secured Party may designate, execute, sign, endorse,
transfer or deliver in the name of Debtor, notes, checks, drafts or other instruments,
for the payment of money and receipts, certificates of origin, applications for
certificates of title or any other documents necessary to evidence, perfect and
realize upon the security interests and obligations of this Security Agreement.

 

6.6           Secured Party may
assign this Security Agreement so that the assignee shall be entitled to the
rights and remedies of Secured Party hereunder and in the event of such
assignment, Debtor will assert no claims or defenses it may have against the
assignee except those granted in this Security Agreement.

 

6.7           All notices and
communications provided for herein shall be delivered or mailed, registered or
certified, postage prepaid, addressed to the parties hereto at their addresses
set forth at the beginning of this Security Agreement, or such other address as
any party hereto shall hereafter designate by written notice to the other
party.

 

6.8           A determination that
any provision of this Security Agreement is unenforceable or invalid shall not
affect the validity or enforceability of any other provision.

 

6.9           Unless the context
clearly indicates otherwise, “Debtor” and “Secured Party” as used in this
Security Agreement include the respective successors and assigns of those
parties.

 

6.10         The law governing this
Security Agreement shall be that of the State of Arizona in force at the date
of this Security Agreement.

 

IN WITNESS
WHEREOF, this Security Agreement has been duly executed as of the date first
above written.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

8

 

	
   

  	
  TIME
  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  S. Bednarik

  	
   

  
	
   

  	
  Name: Thomas
  S. Bednarik

  
	
   

  	
  Title:
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frances
  L. Simek

  	
   

  
	
   

  	
  Name:
  Frances L. Simek

  
					

 

9

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