SECURED NON-CONVERTIBLE REVOLVING NOTEConvertible Promissory Note |
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TIME AMERICA INC | LAURUS MASTER FUND, LTD | M&C Corporate Services Limited,. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.3
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO TIME AMERICA, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED NON-CONVERTIBLE REVOLVING NOTE
FOR VALUE RECEIVED, each of TIME AMERICA, INC., a Nevada corporation (the “Parent”), and the other companies listed on Exhibit A attached hereto (such other companies together with the Parent, each a “Company” and collectively, the “Companies”), jointly and severally, promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”) or its registered assigns or successors in interest, the sum of One Million Five Hundred Thousand Dollars ($1,500,000), without duplication of any amounts owing by the Companies to the Holder under the Minimum Borrowing Notes (as defined in the Security Agreement referred to below), or, if different, the aggregate principal amount of all Loans (as defined in the Security Agreement referred to below), together with any accrued and unpaid interest hereon, on January 3, 2008 (the “Maturity Date”) if not sooner indefeasibly paid in full.
Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Security and Purchase Agreement among the Companies and the Holder dated as of the date hereof (as amended, modified and/or supplemented from time to time, the “Security Agreement”).
The following terms shall apply to this Secured Non-Convertible Revolving Note (this “Note”):
ARTICLE I
CONTRACT RATE
1.1 Contract Rate. Subject to Sections 3.2 and 4.10, interest payable on the outstanding principal amount of this Note (the “Principal Amount”) shall accrue at a rate per annum equal to the “prime rate” published in The Wall Street Journal from time to time (the “Prime Rate”), plus two percent (2.0%) (the “Contract Rate”). The Contract Rate shall be increased or decreased as the case may be for each increase or decrease in the Prime Rate in an amount equal to such increase or decrease in the Prime Rate; each change to be effective as of the day of the change in the Prime Rate. The Contract Rate shall not at any time be less than seven and one quarter percent (7.25%). Interest shall be (i) calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on February 1, 2006 on the first business day of each consecutive calendar month thereafter through and including the Maturity Date, and on the Maturity Date, whether by acceleration or otherwise.
ARTICLE II
[INTENTIONALLY OMITTED]
ARTICLE III
EVENTS OF DEFAULT AND DEFAULT RELATED PROVISIONS
3.1
Events of Default. The occurrence of an Event of Default under the
Security Agreement shall constitute an event of default (“Event of Default”) hereunder.
3.2
Default Interest. Following the occurrence and during the
continuance of an Event of Default, the Companies shall, jointly and severally,
pay additional interest on the outstanding principal balance of this Note in an
amount equal to four percent (4.0%) per annum, and all outstanding Obligations,
excluding unpaid interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such Event
of Default is cured or waived.
3.3
Default Payment. Following the occurrence and during the
continuance of an Event of Default, the Holder, at its option, may elect, in addition
to all rights and remedies of the Holder under the Security Agreement and the
other Ancillary Agreements and all obligations and liabilities of each Company
under the Security Agreement and the other Ancillary Agreements, to require the
Companies, jointly and severally, to make a Default Payment (“Default Payment”). The Default Payment shall be one hundred
twenty-five percent (125%) of the outstanding principal amount of the Note,
plus accrued but unpaid interest, all other fees then remaining unpaid, and all
other amounts payable hereunder. The Default Payment shall be applied
first to any fees due and payable to the Holder pursuant to the Notes, the
Security Agreement and/or the Ancillary Agreements, then to accrued and unpaid
interest due on the Notes and then to the outstanding principal balance of the
Notes. The Default Payment shall be due and payable immediately on the
date that the Holder has exercised its rights pursuant to this
Section 3.3.
ARTICLE IV
MISCELLANEOUS
4.1
[Intentionally Omitted].
4.2
Cumulative Remedies. The remedies under this Note shall be
cumulative.
4.3
Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
4.4
Notices. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effective given (a) upon personal
delivery to the party notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then
on the next business day, (c) five days after having been sent by
registered or
2
certified mail, return receipt requested, postage prepaid,
or (d) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the respective Company at
the address provided for such Company in the Security Agreement executed in
connection herewith, and to the Holder at the address provided in the Security
Agreement for the Holder, with a copy to John E. Tucker, Esq., 825 Third
Avenue, 14th Floor, New York, New York 10022, facsimile number (212)
541-4434, or at such other address as the respective Company or the Holder may
designate by ten days advance written notice to the other parties hereto.
A Notice of Conversion shall be deemed given when made to the Parent pursuant to
the Purchase Agreement.
4.5
Amendment Provision. The term “Note” and all
references thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented, and any successor instrument as such successor
instrument may be amended or supplemented.
4.6
Assignability. This Note shall be binding upon each Company and
its successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns, and may be assigned by the Holder in accordance
with the requirements of the Security Agreement. No Company may not
assign any of its obligations under this Note without the prior written consent
of the Holder, any such purported assignment without such consent being null
and void.
4.7
Cost of Collection. In case of any Event of Default under this
Note, the Companies shall, jointly and severally, pay the Holder the
Holder’s reasonable costs of collection, including reasonable
attorneys’ fees.
4.8
Governing Law, Jurisdiction and Waiver of Jury Trial.
(a)
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
(b) EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
