ex10_3.htm


    


    
      

      

    

    Exhibit 10.3

     

    
      
        


        November
          13, 2007

        


        Mr.  Bob
          Richardson

        7072
          Eveningsong Dr.

        Huntington
          Beach, CA 92648

        


        Re:           Side
          Letter Re: Minimum Value of Stock Options in the event of Change of
          Control

        


        Dear
          Bob:

        


        This
          letter agreement confirms the agreement between Primal Solutions, Inc.
          (“Primal”) and you regarding the minimum value of the stock options
          previously granted to you pursuant to those certain Non-Statutory Stock
          Option
          Agreements dated as of August 18, 2003, May 6, 2005 and August 9, 2006
          (collectively, “OptionAgreement”) upon the occurrence of a Change
          of Control of Primal.

         

        Option
          Vesting on Change of Control

         

        As
          discussed and provided in the Option Agreement, to the extent permitted
          under
          applicable law, upon the occurrence of a Change of Control of Primal, all
          outstanding and unvested stock options granted to you pursuant to the Option
          Agreement (the “Options”) shall automatically accelerate and vest in
          full.  The Options may be exercised within thirty (30) days of a
          Change of Control (which is called a Liquidity Event therein), as currently
          provided in the Option Agreement.  Notwithstanding the foregoing, in
          no event shall such thirty (30) day period continue after the last day
          of the
          calendar year in which the Change of Control occurs.  The parties
          hereby reconfirm and agree that this letter agreement does not in any way
          alter,
          amend, or modify the provision in the Option Agreement that vesting of
          the
          Options occurs only upon such a Change of Control.

         

        If,
          upon
          a Change of Control of Primal during the term of this letter agreement,
          the Net
          Value (as hereinafter defined) of the Options is less than $289,347.00
          (the
“Minimum Value”), as measured upon the Change of Control, then the
          Company shall pay to you the amount of such shortfall in a lump sum payment
          payable within ten (10) days following the closing of the Change of
          Control.  Such payment shall be subject to applicable
          withholdings.  For purposes of this letter agreement, “Net
          Value” shall mean the difference between (a) the aggregate consideration
          paid or payable to you in connection with the Change of Control, or if
          no such
          consideration applies, then the fair market value at the time of the Change
          of
          Control, which relates to the shares of Common Stock of Primal underlying
          the
          Options less (b) the unpaid aggregate exercise price which is payable to
          exercise said Options in full.

         

        “Change
          of Control” shall mean in a transaction or series of related transactions, (i)
          the sale of all or substantially all of the assets of the Company, (ii)
          the
          acquisition by any person, entity or group within the meaning of Section
          13(d)
          or 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”) or any
          comparable successor provisions of the beneficial ownership 

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (within
          the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
          successor rules) of more than 50% of the outstanding capital stock of Primal,
          or
          (iii) the merger, consolidation or other reorganization of Primal;
provided, however, that any such merger, consolidation or other
          reorganization of Primal whereby security holders of Primal immediately
          prior to
          such transaction continue to own not less than 50% of the capital stock
          in the
          surviving company following such transaction shall not be deemed to be
          a Change
          of Control.  Additionally, a Change of Control shall be deemed to have
          occurred upon (i) Primal entering into a “going private” transaction,
          (ii) the deregistration of Primal’s securities under the Exchange Act, or
          (iii) Primal otherwise no longer being subject to the reporting
          requirements under the Exchange Act and no longer filing periodic reports
          under
          such Act.

         

        The
          term
          of this letter agreement shall commence on the date hereof and expire on
          December 31, 2008; provided, however, that upon any earlier
          termination of your employment, the term shall automatically terminate,
          and you
          shall no longer be eligible to receive the Minimum Value.  This letter
          agreement does not alter the at-will nature of your employment with Primal
          in
          any way.

         

        If
          this
          arrangement is acceptable to you, please sign the enclosed copy of this
          letter
          and return it to me at your earliest convenience.

         

        
          Very
            truly yours,

          
            	 	 	 
	
                     

                     

                  	 	 


          

          Joseph
            R.
            Simrell

          Chief
            Executive Officer

          


          


          cc:           Personnel
            File

          


          


          I
            agree
            to the terms described above:

          


          
            	 	 	 
	 Signature 	 Date