Document:

Exhibit 10.41

 

CONFIRMATION OF GUARANTY

BY

PRIMAL SOLUTIONS, INC.

 

THIS CONFIRMATION OF GUARANTY (this “Agreement”) is given on this 31st day of March 2006 by
PRIMAL SOLUTIONS, INC. (“Guarantor”), to
Lightbridge, Inc. (“Beneficiary”).

 

RECITALS:

 

A.            Wireless
Billing Systems, a California corporation (“Wireless”),
executed that certain Secured Promissory Note dated May 26, 1999, in the
principal amount of Two Million Two Hundred Thirty-Eight Thousand Two Hundred
Forty-Two Dollars ($2,238,242.00) in favor of Corsair Communications, Inc.
(“Corsair”) (the “Original
Note”); and

 

B.            Wireless
executed that certain Note Agreement dated as of January 1, 2001 (the “Note Agreement”), and that certain Amended and Restated
Secured Promissory Note on January 1, 2001, in the principal amount of One
Million Six Hundred Ninety-Six Thousand Three Hundred Ninety-Four Dollars and
Eighteen Cents ($1,696,394.18) in favor of Corsair (together, the “January 2001 Amended Note”); and

 

C.            Wireless and
Corsair executed a letter agreement dated December 20, 2001, revising the
terms of the January 2001 Amended Note. The January 2001 Amended
Note, as amended by said letter agreement (the “December 2001
Amended Note”), amended and restated the Original Note; and

 

D.            Beneficiary
succeeded to the assets and liabilities of Corsair by way of merger;

 

E.             Wireless
executed that certain 2002 Amended and Restated Secured Promissory Note dated December 27,
2002, in the principal amount of One Million Seven Hundred Twenty-Two Thousand
Four Hundred Seventeen Dollars ($1,722,417.00) in favor of Beneficiary (the “2002 Amended Note”), which amended and restated the December 2001
Amended Note;

 

F.             Guarantor
executed that certain Guaranty dated as of December 27, 2002 in favor of
Beneficiary in order to induce Beneficiary to agree to the revised payment
terms reflected in the 2002 Amended Note;

 

G.            Wireless
executed that certain 2004 Amended and Restated Secured Promissory Note dated March 27,
2004, in the principal amount of One Million Five Hundred Nine Thousand Nine
Hundred Nineteen Dollars ($1,509,919.00) in favor of Beneficiary (the “2004 Amended Note”), which amended and restated the December 2002
Amended Note;

 

1

 

H.            Guarantor
executed that certain Guaranty dated as of March 27, 2004 in favor of
Beneficiary in order to induce Beneficiary to agree to the revised payment
terms reflected in the 2004 Amended Note;

 

I.              Guarantor
executed that certain 2005 Amended and Restated Secured Promissory Note dated June 30,
2005, in the principal amount of Nine Hundred Eighty Two Thousand Two Hundred
Forty Three Dollars and Forty Cents ($982,243.40) in favor of Beneficiary (the “2005 Amended Note”), which amended and
restated the 2004 Amended Note;

 

J.             Guarantor
executed that certain Guaranty dated as of June 30, 2005 in favor of
Beneficiary in order to induce Beneficiary to agree to the revised payment
terms reflected in the 2005 Amended Note;

 

K.            Guarantor and
Lightbridge acknowledge and agree that Primal Solutions, Inc. (not Primal
Billing Systems, Inc.) was the proper party to the 2002, 2004 and 2005
guarantees referred to above;

 

L.             The balance of
all outstanding principal and accrued but unpaid interest under the 2004
Amended Note on the date hereof is Nine Hundred Eighty Two Thousand Two Hundred
Forty Three Dollars and Forty Cents ($982,243.40) and the 2004 Amended Note
matures on December 26, 2006;

 

M.           Wireless has
requested that the terms reflected in the 2005 Amended Note be revised in order
to reflect a different repayment schedule for the outstanding debt
evidenced thereby, all as set forth more fully in the 2006 Amended and Restated
Secured Promissory Note (the “2006 Amended Note”);

 

N.            Beneficiary
desires to obtain the acknowledgment and consent of Guarantor to the 2006
Amended Note and the confirmation by Guarantor of its obligations under the
Guaranty as a condition to accepting the 2005 Amended Note;

 

2

 

NOW, THEREFORE, Guarantor hereby represents,
warrants, certifies and agrees in favor of Beneficiary as follows:

 

1.             Acknowledgment, Consent and Confirmation. Guarantor hereby (i) acknowledges that
Wireless has disclosed to Guarantor the terms and conditions on which Wireless
and Beneficiary desire to amend and restate the debt owed by Wireless to
Beneficiary, and (ii) consents to the modification of such debt as
provided in the 2006 Amended Note. Guarantor confirms that (a) the term “Obligations”
in the Guaranty shall be deemed to include all of Wireless’ s obligations under
the 2006 Amended Note, as the same may be further amended or modified from
time to time, including the payment of principal and interest on the terms set
forth therein, (b) the Guaranty remains in full force and effect, and
shall be effective as a guaranty of Wireless’s obligations under the 2006
Amended Note, as the same may be further amended or modified from time to
time, and (c) Guarantor remains, pursuant to the terms of the Guaranty,
obligated to perform its obligations thereunder.

 

2.             Binding Effect. This Agreement shall be binding upon
Guarantor and its respective successors and assigns and shall inure to the
benefit of Beneficiary and its respective successors and assigns.

 

3.             Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

 

4.             Notices. The provisions of Section 12 (Notices) of the Guaranty shall
apply to this Agreement as if the same was set out in full herein.

 

5.             Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

IN WITNESS WHEREOF, Guarantor has caused this
Agreement to be duly executed as of the day and year first above written.

 

	
   

  	
  PRIMAL SOLUTIONS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted as of the

  	
   

  
	
  date below written:

  	
   

  
	
   

  	
   

  
	
  LIGHTBRIDGE, INC..

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:Exhibit 10.42

 

SUBORDINATION AGREEMENT

 

SUBORDINATION
AGREEMENT, dated as of March 31, 2006, by and among
Lightbridge, Inc., a Delaware corporation and the successor by merger to
Corsair Communications, Inc. (a “Subordinated Lender”; collectively,
together with any other holders from time to time of the Subordinated
Obligations, the “Subordinated Lenders”), Wireless Billing Systems, a
California corporation (together with its successors and assigns, the “Borrower”),
Primal Solutions, Inc., a Delaware corporation (“Primal”) and the “Investors”
named in that certain Purchase Agreement by and among the Borrower and the
Investors (the “Purchase Agreement”) (together with their respective
successors and assigns, collectively, the “Senior Lender”).

 

The parties hereto hereby agree as follows:

 

1.             Definitions. (a) Unless
otherwise defined herein, terms defined in the Purchase Agreement or the Senior
Notes and used herein shall have the respective meanings given to them in the
Purchase Agreement or the Senior Notes.

 

(b)           The following terms shall have the
following meanings:

 

“Agreement”: this Subordination
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Blockage Notice”: a written notice
from the Senior Lender to the Subordinated Lenders that (a) a Non-Payment Event
of Default has occurred and is continuing or (b) an Event of Default would
occur if a scheduled interest or principal payment were made under the
Subordinated Notes in accordance with the terms thereof.

 

“Blockage Period”: any period
commencing on the date a Blockage Notice is given and ending on the earlier to
occur of:  (a) the date when (1) the
Event of Default that was the basis for such notice has been cured or waived or
(2) the conditions shall have ceased to exist which would cause an Event of
Default to occur if a scheduled payment were made under the Subordinated Notes
in accordance with the terms thereof; and (b) 90 days after the date such
Blockage Notice is given.

 

“Collateral”: the collective reference
to any and all property from time to time subject to security interests to
secure payment or performance of the Senior Obligations or the Subordinated
Obligations.

 

“Default”: any Event of Default as
defined in the Senior Note, or any event or condition that with notice of lapse
of time, or otherwise results in the acceleration of, or entitles a Senior
Lender to accelerate, any Senior Obligation.

 

“Insolvency Event”: (a) The Borrower
or Primal commencing any case, proceeding or other action (1) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution,

 

 

composition or other relief with respect to it or its debts, or (2)
seeking appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or the
Borrower or Primal making a general assignment for the benefit of its
creditors; or (b) there being commenced against the Borrower or Primal any
case, proceeding or other action of a nature referred to in clause (a) above
which (1) results in the entry of an order for relief or any such adjudication
or appointment or (2) remains undismissed, undischarged or unbonded for a
period of 60 days; or (c) there being commenced against the Borrower or Primal
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (d) the Borrower or
Primal taking any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (a), (b)
or (c) above; or (e) the Borrower or Primal generally not paying, or being
unable to pay, or admitting in writing its inability to pay, its debts as they
become due.

 

“Non-Payment Event of Default”: any
event (other than a Payment Event of Default) the occurrence of which entitles
the Senior Lender to accelerate the maturity of any of the Senior Obligations.

 

“Payment Event of Default”: any
default in the payment of the Senior Obligations (whether upon maturity,
mandatory prepayment, acceleration or otherwise) beyond any applicable grace
period with respect thereto.

 

“Senior Loan Agreement”: the Purchase
Agreement, as the same may be amended, modified or supplemented from time to
time, including, without limitation, amendments, modifications, supplements and
restatements thereof giving effect to increases, renewals, extensions,
refundings, deferrals, restructurings, replacements or refinancings of, or
additions to, the arrangements provided in such agreement (whether provided by
the original Senior Lender or a successor Senior Lender or other Lenders).

 

“Senior Loans”: the loans made by the
Senior Lender to the Borrower pursuant to the Senior Loan Agreement.

 

“Senior Loan Documents”: the
collective reference to the Senior Loan Agreement, the Senior Notes, the Senior
Security Documents and all other documents that from time to time evidence the
Senior Obligations or secure payment or performance thereof.

 

“Senior Notes”: the promissory notes
of the Borrower outstanding from time to time under the Senior Loan Agreement.

 

“Senior Obligations”: the collective
reference to the unpaid principal of and interest on the Senior Notes and all
other obligations and liabilities of the Borrower to the Senior Lender of
whatever kind or nature (including, without limitation, interest accruing at
the then applicable rate provided in the Senior Notes after the maturity of the
Senior Loans and interest accruing at the then applicable rate provided in the
Senior Notes after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such

 

 

proceeding), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, whether or not arising
under, out of, or in connection with, the Senior Loan Agreement, the Senior
Notes, this Agreement, the other Senior Loan Documents or any other document made,
delivered or given by Borrower, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Senior Lender that are required to be paid by the Borrower).

 

“Senior Security Documents”: the
collective reference to all documents and instruments, now existing or
hereafter arising, which create or purport to create a security interest in
property to secure payment or performance of the Senior Obligations.

 

“Subordinated Loan Documents”: the
collective reference to the Subordinated Notes, the Subordinated Security
Documents and any other documents or instruments that from time to time
evidence the Subordinated Obligations or secure or support payment or
performance thereof.

 

“Subordinated Loans”: the loans made
by the Subordinated Lenders pursuant to the Subordinated Notes.

 

“Subordinated Notes”: the Borrower’s
2006 Amended and Restated Secured Promissory Note, dated March 31, 2006, in the
original principal amount of $982,243.40.

 

“Subordinated Obligations”: the
collective reference to the unpaid principal and interest on the Subordinated
Notes and all other obligations and liabilities of the Borrower to the Subordinated
Lenders (including, without limitation, interest accruing at the then
applicable rate provided in the Subordinated Notes after the maturity of the
Subordinated Loans and interest accruing at the then applicable rate provided
in the Subordinated Notes after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Subordinated Notes,
this Agreement, or any other Subordinated Loan Document, in each case whether
or not on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Subordinated Lenders that are required
to be paid by the Borrower).

 

“Subordinated Security Documents”: the
collective reference to (a) the documents listed on Schedule 1, as the
same may be amended, modified or otherwise supplemented from time to time with
the prior written consent of the Senior Lender and (b) any other documents
executed by the Borrower with the prior written consent of the Senior Lender
that from time to time secure payment or performance of the Subordinated
Obligations.

 

(c)           The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless otherwise
specified.

 

 

(d)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.

 

2.             Subordination. (a)  The Borrower, Primal, and each of the
Subordinated Lenders agrees, for itself and each future holder of the
Subordinated Obligations, that the Subordinated Obligations are expressly “subordinate
and junior in right of payment” (as that phrase is defined in paragraph 2(b))
to all Senior Obligations.

 

(b)           “Subordinate and junior in right
of payment” means that (1) no part of the Subordinated Obligations shall
have any claim to the assets of the Borrower on a parity with or prior to the
claim of the Senior Obligations; and (2) unless and until the Senior
Obligations have been paid in full, without the express prior written consent
of the Senior Lender (A) no Subordinated Lender will take or receive from the
Borrower, and the Borrower will not make, give or permit, directly or
indirectly, by set-off, redemption, purchase or in any other manner, any
payment of (of whatever kind or nature, whether in cash, property, securities
or otherwise) or security for the whole or any part of the Subordinated
Obligations, including, without limitation, any letter of credit or similar
credit support facility to support payment of the Subordinated Obligations; provided,
however, that at any time, except during a Blockage Period or when a
Payment Event of Default has occurred and is continuing, the Borrower may make,
and the Subordinated Lenders may receive, regularly scheduled payments on
account of principal of and interest on the Subordinated Notes in accordance
with the terms thereof determined on a pre-default non- accelerated basis, and
(B) no Subordinated Lender will accelerate for any reason the scheduled
maturities of any amount owing under the Subordinated Notes unless or until
Senior Lender accelerates amounts owing under the Senior Obligations.

 

(c)           Upon the termination of any Blockage
Period or if any Payment Event of Default has been cured or waived or shall
have ceased to exist, as confirmed in writing by Senior Lender, the
Subordinated Lenders’ right to receive payments as provided in clause
2(b)(2)(A) shall be reinstated, and the Borrower may resume making such
payments to the Subordinated Lenders (including any payments that were deferred
as a result thereof).

 

(d)           The expressions “prior payment in
full,” “payment in full,” “paid in full” and any other similar terms or phrases
when used herein with respect to the Senior Obligations shall mean the payment
in full, in immediately available funds, of all of the Senior Obligations.

 

3.             Additional Provisions Concerning
Subordination. (a)  The Subordinated
Lenders, the Borrower and Primal agree that upon the occurrence of any
Insolvency Event:

 

(1) all Senior Obligations shall be paid in
full before any payment or distribution of whatever kind or nature is made with
respect to the Subordinated Obligations; and

 

(2) any payment or distribution of assets of
the Borrower, whether in cash, property or securities, to which any
Subordinated Lender would be entitled except for the provisions hereof, shall
be paid or delivered by the Borrower, or any receiver, trustee in bankruptcy,
liquidating trustee, disbursing agent or other Person making such payment or
distribution, directly to the Senior Lender, to the extent necessary to pay in
full all Senior Obligations, before any payment or distribution of any kind or
nature shall be made to any Subordinated Lender.

 

 

(b)           Upon the occurrence of any “Insolvency
Event”:

 

(1) each Subordinated Lender irrevocably
authorizes and empowers the Senior Lender (A) to demand, sue for, collect and
receive every payment or distribution on account of the Subordinated
Obligations payable or deliverable in connection with such event or proceeding
and give acquittance therefor, and (B) to file claims and proofs of claim in
any statutory or non-statutory proceeding and take such other actions, in its
own name as Senior Lender, or in the name of the Subordinated Lenders or
otherwise, as the Senior Lender may deem necessary or advisable for the enforcement
of the provisions of this Agreement; provided, however, that the
foregoing authorization and empowerment imposes no obligation on the Senior
Lender to take any such action;

 

(2) each Subordinated Lender shall take such
commercially reasonable action, duly and promptly, as the Senior Lender may
request from time to time (A) to collect the Subordinated Obligations for the
account of the Senior Lender and (B) to file appropriate proofs of claim in
respect of the Subordinated Obligations; and

 

(3) each Subordinated Lender shall execute
and deliver such powers of attorney, assignments or proofs of claim or other
instruments as the Senior Lender may request to enable the Senior Lender to
enforce any and all claims in respect of the Subordinated Obligations and to
collect and receive any and all payments and distributions which may be payable
or deliverable at any time upon or in respect of the Subordinated Obligations.

 

(c)           If any payment or distribution,
whether consisting of money, property or securities, shall be collected or
received by any Subordinated Lender in respect of the Subordinated Obligations,
except payments permitted to be made at the time of payment as provided in
paragraph 2(b), such Subordinated Lender forthwith shall deliver the same to the
Senior Lender, in the form received, duly indorsed to the Senior Lender, if
required, to be applied to the payment or prepayment of the Senior Obligations
until the Senior Obligations are paid in full. Until so delivered, such payment
or distribution shall be held in trust by such Subordinated Lender as the
property of the Senior Lender, segregated from other funds and property held by
such Subordinated Lender.

 

4.             Rights in Collateral.
(a)  Notwithstanding anything to the
contrary contained in the Senior Loan Agreement, any Senior Security Document,
any other Senior Loan Document or any Subordinated Security Document or other
Subordinated Loan Document and irrespective of:

 

(1) the time, order or method of attachment
or perfection of the security interests created by any Senior Security Document
or any Subordinated Security Document;

 

(2) the time or order of filing or recording
of financing statements or other documents filed or recorded to perfect
security interests in any Collateral;

 

(3) anything contained in any filing or
agreement to which the Senior Lender or any Subordinated Lender now or
hereafter may be a party; and

 

 

(4) the rules for determining perfection or
priority under the Uniform Commercial Code or any other law governing the
relative priorities of secured creditors,

 

any security interest in any Collateral
pursuant to any Senior Security Document has and shall have priority, to the
extent of any unpaid Senior Obligations, over any security interest in such
Collateral pursuant to any Subordinated Security Document.

 

(b)           So long as the Senior Obligations
have not been paid in full and any Senior Security Document remains in effect,
whether or not any Insolvency Event has occurred, and whether or not demand for
payment of any Subordinated Obligations has been made,

 

(1) no Subordinated Lender will (A) exercise
or seek to exercise any rights or exercise any remedies with respect to any
Collateral or (B) institute any action or proceeding with respect to such
rights or remedies, including without limitation, any action of foreclosure or
(C) contest, protest or object to any foreclosure proceeding, postpetition
financing, use of cash collateral or action brought by the Senior Lender or any
other exercise by the Senior Lender of any rights and remedies under any Senior
Loan Documents; and

 

(2) the Senior Lender shall have the
exclusive right to enforce rights and exercise remedies with respect to the
Collateral and Senior Lender shall not be required to marshal any Collateral.

 

(c)           In exercising rights and remedies
with respect to the Collateral, the Senior Lender may enforce the provisions of
the Senior Security Documents and exercise remedies thereunder and under any
other Senior Loan Documents, all in such order and in such manner as it may determine
in the exercise of its sole business judgment. Such exercise and enforcement
shall include, without limitation, the rights to sell or otherwise dispose of
Collateral, to incur expenses in connection with such sale or disposition and
to exercise all the rights and remedies of a secured lender under the Uniform
Commercial Code of any applicable jurisdiction.

 

(d)           When all Senior Obligations have been
paid in full and the Senior Security Documents no longer are in effect, the
Subordinated Lenders shall have the right to enforce the provisions of the
Subordinated Security Documents and exercise remedies thereunder.

 

(e)           Any money, property or securities
realized upon the sale, disposition or other realization by the Senior Lender
upon all or any part of the Collateral, shall be applied by the Senior Lender
in the following order:

 

(1) First, to the payment in full of
all costs and expenses (including, without limitation, attorneys’ fees and
disbursements) paid or incurred by the Senior Lender in connection with the
such realization on the Collateral or the protection of their rights and
interests therein;

 

(2) Second, to the payment in full of
all Senior Obligations in such order as the Senior Lender may elect in its sole
discretion;

 

(3) Third, to the payment in full of
all Subordinated Obligations then due and which are secured by such Collateral,
which shall be paid to the Subordinated Lenders; and

 

 

(4) Fourth, to pay to the Borrower, or
its representative or as a court of competent jurisdiction may direct, any
surplus then remaining.

 

(f)            The Senior Lender’s rights with
respect to the Collateral include the right to release any or all of the
Collateral from the Lien of any Senior Security Document or Subordinated
Security Document in connection with the sale of such Collateral,
notwithstanding that the net proceeds of any such sale may not be used to
permanently prepay any Senior Obligations or Subordinated Obligations. If the
Senior Lender shall determine, in connection with any sale of Collateral, that
the release of the Lien of any Subordinated Security Document on such
Collateral in connection with such sale is necessary or advisable, the
Subordinated Lenders shall execute such release documents and instruments and
shall take such further actions as the Senior Lender shall request. Each
Subordinated Lender hereby irrevocably constitutes and appoints the Senior
Lender and any officer or Senior Lender, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of such Subordinated Lender and in the name of such
Subordinated Lender or in the Senior Lender’s own name, from time to time in
the Senior Lender’s discretion, for the purpose of carrying out the terms of
this paragraph, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this paragraph, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer or
release. Each Subordinated Lender hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
this paragraph.

 

5.             Consent of Subordinated Lenders.
(a)  Each Subordinated Lender consents
that, without the necessity of any reservation of rights against any
Subordinated Lender, and without notice to or further assent by any
Subordinated Lender:

 

(1) any demand for payment of any Senior
Obligations made by the Senior Lender may be rescinded in whole or in part by
the Senior Lender, and any Senior Obligation may be continued, and the Senior
Obligations, or the liability of the Borrower or any guarantor or any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, or any obligation or
liability of the Borrower or any other party under the Senior Loan Agreement or
any other agreement, may, from time to time, in whole or in part, be renewed,
extended, modified, accelerated, compromised, waived, surrendered, or released
by the Senior Lender; and

 

(2) the Senior Loan Agreement, the Senior
Notes and any other Senior Loan Document may be amended, modified, supplemented
or terminated, in whole or in part, as the Senior Lender may deem advisable
from time to time, and any collateral security at any time held by the Senior
Lender for the payment of any of the Senior Obligations may be sold, exchanged,
waived, surrendered or released,

 

in each case all without notice to or further
assent by any Subordinated Lender, which will remain bound under this
Agreement, and all without impairing, abridging, releasing or affecting the
subordination provided for herein. Notwithstanding the foregoing, Senior Lender
shall provide Subordinated Lender notice of any and all demands for payment of
any Senior Obligations made by the Senior Lender.

 

 

(b)           Each Subordinated Lender waives any
and all notice of the creation, renewal, extension or accrual of any of the
Senior Obligations and notice of or proof of reliance by the Senior Lender upon
this Agreement. The Senior Obligations, and any of them, shall be deemed
conclusively to have been created, contracted or incurred in reliance upon this
Agreement, and all dealings between the Borrower and the Senior Lender shall be
deemed to have been consummated in reliance upon this Agreement. Each
Subordinated Lender acknowledges and agrees that the Senior Lender has relied
upon the subordination provided for herein in entering into the Senior Loan
Agreement and in making funds available to the Borrower thereunder. Each
Subordinated Lender waives notice of or proof of reliance on this Agreement and
protest, demand for payment and notice of default.

 

6.             Negative Covenants of the Subordinated
Lenders. So long as any of the Senior Obligations shall remain outstanding
or the obligation of Senior Lender to extend credit to Borrower remains in
effect, no Subordinated Lender shall, without the prior written consent of the
Senior Lender:

 

(a)           sell, assign, or otherwise transfer,
in whole or in part, the Subordinated Obligations or any interest therein to
any other Person (a “Transferee”) or create, incur or suffer to exist
any security interest, lien, charge or other encumbrance whatsoever upon the
Subordinated Obligations in favor of any Transferee unless (1) such action is
made expressly subject to this Agreement and (2) the Transferee expressly
acknowledges to the Senior Lender, by a writing in form and substance
satisfactory to the Senior Lender, the subordination provided for herein and
agrees to be bound by all of the terms hereof, or (3) such sale, assignment or
transfer is to a subsidiary, affiliate or parent company of Subordinated Lender
which expressly acknowledges to the Senior Lender, by a writing in form and
substance satisfactory to the Senior Lender, the subordination provided for
herein and agrees to be bound by all of the terms hereof, or any entity which
succeeds to substantially all of Subordinated Lender’s assets by merger, sale
or otherwise;

 

(b)           permit any of the Subordinated Loan
Documents to be amended, modified or otherwise supplemented;

 

(c)           commence, or join with any creditors
other than the Senior Lender in commencing any case or proceeding referred to
in the definition of Insolvency Event.

 

7.             Senior Obligations Unconditional.
All rights and interests of the Senior Lender hereunder, and all agreements and
obligations of the Subordinated Lenders, the Borrower and Primal hereunder,
shall remain in full force and effect irrespective of:

 

(a)           any lack of validity or
enforceability of any Senior Security Documents or any other Senior Loan
Documents;

 

(b)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the Senior
Obligations, or any amendment or waiver or other modification, whether by
course of conduct or otherwise, of the terms of the Senior Loan Agreement or
any other Senior Security Document;

 

 

(c)           any exchange, release or
non-perfection of any security interest in any Collateral, or any release,
amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of all or any of the Senior Obligations or any guarantee
thereof; or

 

(d)           any other circumstances which
otherwise might constitute a defense available to, or a discharge of, the
Borrower in respect of the Senior Obligations, or of either any Subordinated
Lender or the Borrower in respect of this Agreement.

 

8.             Representations and Warranties.
Each Subordinated Lender represents and warrants to the Senior Lender that:

 

(a)           its Subordinated Notes (1) have been
issued to it for good and valuable consideration, (2) are owned by the such
Subordinated Lender free and clear of any security interests, liens, charges or
encumbrances whatsoever arising from, through or under such Subordinated
Lender, other than the interest of the Senior Lender under this Agreement, (3)
are payable solely and exclusively to such Subordinated Lender and to no other
Person and are payable without deduction for any defense, offset or
counterclaim, and (4) constitute the only evidence of the obligations evidenced
thereby;

 

(b)           such Subordinated Lender has the
requisite power and authority and the legal right to execute and deliver and to
perform its obligations under this Agreement and has taken all necessary action
to authorize its execution, delivery and performance of this Agreement;

 

(c)           this Agreement constitutes a legal,
valid and binding obligation of such Subordinated Lender;

 

(d)           the execution, delivery and performance
of this Agreement will not violate any provision of any Requirement of Law or
Contractual Obligation of such Subordinated Lender and will not result in the
creation or imposition of any Lien on any of the properties or revenues of such
Subordinated Lender pursuant to any statute, law, rule or regulation or any
judgment, decree or order of any governmental authority affecting or any
contract, understanding or arrangement to which such Subordinated Lender is
bound or subject, except the interest of the Senior Lender under this
Agreement; and

 

(e)           no consent or authorization of,
filing with, or other act by or in respect of, any arbitrator or governmental
authority and no consent of any other Person (including, without limitation,
any equity holder or creditor of such Subordinated Lender), is required in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement.

 

9.             No Representation.

 

(a)           The Senior Lender has not made, and
does not hereby or otherwise make to the Subordinated Lenders, any
representations or warranties, express, or implied, nor does the Senior Lender
assume any liability to any Subordinated Lender, with respect to: (a) the
financial or other condition of obligors under any instruments of guarantee with
respect to the Senior Obligations, (b) the enforceability, validity, value or
collectibility of the Senior Obligations or the Subordinated Obligations, any
collateral therefor, or any guarantee or security which may have been granted
in connection with any of the Senior Obligations or the Subordinated
Obligations, or (c) the Borrower’s title or right to transfer any collateral or
security.

 

 

(b)           The Subordinated Lender has not made,
and does not hereby or otherwise make to the Senior Lenders, any representations
or warranties, express, or implied, nor does the Subordinated Lender assume any
liability to any Senior Lender, with respect to: (a) the financial or other
condition of obligors under any instruments of guarantee with respect to the
Subordinated Obligations, (b) the enforceability, validity, value or
collectibility of the Subordinated Obligations or the Senior Obligations, any
collateral therefor, or any guarantee or security which may have been granted
in connection with any of the Subordinated Obligations, or (c) the Borrower’s
title or right to transfer any collateral or security.

 

10.           Waiver of Claims. To the
maximum extent permitted by law, each Subordinated Lender waives any claim it
might have against the Senior Lender with respect to, or arising out of, any
action or failure to act or any error of judgment, negligence, or mistake or
oversight whatsoever on the part of the Senior Lender, or its directors,
officers, employees or agents with respect to any exercise of rights or
remedies under the Senior Loan Documents or any transaction relating to the
Collateral, except for claims based on gross negligence or willful misconduct.
Neither the Senior Lender, nor any of its directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of the Borrower or
any Subordinated Lender or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.

 

11.           Provisions Applicable After
Bankruptcy: No Turnover. The provisions of this Agreement shall continue in
full force and effect notwithstanding the occurrence of any Insolvency Event. To
the extent that any Subordinated Lender has or acquires any rights under
Section 362, 363 or 364 of the Bankruptcy Code with respect to the Collateral,
such Subordinated Lender hereby agrees not to assert such rights without the
prior written consent of the Senior Lender, which shall not be unreasonably
withheld or delayed; provided that, if requested by the Senior Lender,
such Subordinated Lender shall seek to exercise such rights in the manner
requested by the Senior Lender, including the rights in payments in respect of
such rights. Each of the Subordinated Lenders (both in its capacity as
Subordinated Lender and in its capacity as a party which may be obligated to
Borrower or any of Borrower’s Affiliates with respect to contracts which are
part of the Senior Lender’s Collateral) agrees not to initiate or prosecute or
encourage any other Person to initiate or prosecute any claim, action,
objection or other proceeding (i) challenging the enforceability of the Senior
Lender’s claim (ii) challenging the enforceability of any liens or security
interests in assets securing the Senior Obligations or (iii) asserting any
claims which the Borrower may hold with respect to the Senior Lender, (iv)
objecting to any sale or other disposition of Borrower’s assets consented to by
Senior Lender in any bankruptcy or other proceeding or any borrowing or grant
of any lien by Borrower consented to by Senior Lender in any such proceeding.

 

12.           Further Assurances. The
Subordinated Lenders, the Borrower and Primal, at their own expense and at any
time from time to time, upon the written request of the Senior Lender will
promptly and duly execute and deliver such further instruments and documents
and take such further actions as the Senior Lender reasonably may request for
the purposes of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted.

 

13.           Expenses. (a)  The Borrower will pay or reimburse the Senior
Lender and Subordinated Lender, upon demand, for all its costs and expenses in
connection with the

 

 

enforcement or
preservation of any rights under this Agreement, including, without limitation,
reasonable fees and disbursements of counsel to the Senior Lender and
Subordinated Lender.

 

(b)           The Borrower will pay, indemnify, and
hold each Senior Lender and Subordinated Lender harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions
(whether sounding in contract, tort or on any other ground), judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of, or
in any other way arising out of or relating to this Agreement or any action
taken or omitted to be taken by any Senior Lender or Subordinated Lender with
respect to any of the foregoing.

 

14.           Provisions Define Relative Rights.
This Agreement is intended solely for the purpose of defining the relative
rights of the Senior Lender on the one hand and the Subordinated Lenders on the
other, and no other Person shall have any right, benefit or other interest
under this Agreement.

 

15.           Legend. Each Subordinated Lender and the
Borrower will cause each of the Subordinated Notes and each Subordinated
Security Document to bear upon its face a legend referring to this Agreement
and indicating that such documents are subordinated as provided herein.

 

16.           Powers Coupled With An Interest.
All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until the Senior Obligations are paid in
full and the obligation of the Senior Lender to extend credit under the Senior
Loan Documents is irrevocably terminated.

 

17.           Notices. All notices, requests
and demands to or upon the Senior Lender or the Borrower or Primal or any
Subordinated Lender to be effective shall be in writing (or by telex, fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (1) when delivered by hand or (2) if given by mail,
when deposited in the mails by certified mail, return receipt requested, or (3)
if by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:

 

If to the Senior Lender:

 

Special Situations Fund III (QP), L.P.

527 Madison Avenue, 26th Floor

New York, New York 10022

Facsimile: 
(212) 207-6515

Attention: 
Austin W. Marxe

 

 

If to the Borrower:

 

Wireless Billing Systems

c/o Primal Solutions, Inc.

18881 Von Karman Avenue, Suite 500

Irvine, California 92612

Facsimile: 
(949) 221-8594

Attention: 
Joseph R. Simrell

 

 

If to Primal:

 

Primal Solutions, Inc.

18881 Von Karman Avenue, Suite 500

Irvine, California 92612

Facsimile: 
(949) 221-8594

Attention: 
Joseph R. Simrell

 

If to any Subordinated Lender, at its address
or transmission number for notices set forth under its signature below. The
Senior Lender, the Borrower and any Subordinated Lender may change their
respective addresses and transmission numbers for notices by notice in the
manner provided in this Section.

 

18.           Counterparts. This Agreement
may be executed by one or more of the parties on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the counterparts of this
Agreement signed by all the parties shall be lodged with the Senior Lender.

 

19.           Severability. Any provision of
this Agreement 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.

 

20.           Integration. This Agreement
represents the agreement of the Senior Lender and the Subordinated Lenders with
respect to the subject matter hereof and there are no promises or
representations by the Senior Lender or any Subordinated Lender relative to the
subject matter hereof not reflected herein.

 

21.           Amendments in Writing; No Waiver:
Cumulative Remedies. (a)  None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Senior
Lender, the Borrower and each Subordinated Lender; provided that any
provision of this Agreement may be waived by the Senior Lender in a letter or
agreement executed by the Senior Lender or by telex or facsimile transmission
from the Senior Lender.

 

 

(b)           No failure to exercise, nor any delay
in exercising, on the part of the Senior Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

(c)           The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

 

22.           Section Headings. The section
headings used in this Agreement are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

23.           Successors and Assigns. (a)
This Agreement shall be binding upon the successors, heirs, administrators,
executors and assigns of the Borrower and the Subordinated Lenders and shall
inure to the benefit of the Senior Lender and their successors and assigns.

 

(b)           Upon a successor Senior Lender
becoming the Senior Lender under the Senior Loan Agreement, such successor
Senior Lender automatically shall become the Senior Lender hereunder with all
the rights and powers of the Senior Lender hereunder without the need for any
further action on the part of any party hereto.

 

24.           Invalidated Payments. To the
extent that the Senior Lender receives payments on, or proceeds of Collateral
for, the Senior Obligations which are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to Borrower,
a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law, or equitable cause, then to the extent of such payment
or proceeds received, the Senior Obligations, or part thereof, intended to be
satisfied shall be revived and continue in full force and effect as if such
payments or proceeds had not been received by the Senior Lender.

 

25.           Specific Performance. The
Senior Lender is hereby authorized to demand specific performance of this
Agreement at any time when any Subordinated Lender shall have failed to comply
with any of the provisions of this Agreement applicable to such Subordinated
Lender whether or not the Borrower shall have complied with any of the provisions
hereof applicable to the Borrower, and the Subordinated Lender hereby
irrevocably waives any defense based on the adequacy of a remedy at law which
might be asserted as a bar to such remedy of specific performance.

 

26.           GOVERNING LAW: CONSENT TO
JURISDICTION AND VENUE. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH OF THE
BORROWER, THE SUBORDINATED LENDERS, PRIMAL AND THE SENIOR LENDER HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES

 

 

AMONG THE
BORROWER, PRIMAL, THE SUBORDINATED LENDERS AND THE SENIOR LENDER PERTAINING TO
THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE SENIOR LOAN DOCUMENTS, PROVIDED, THAT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK AND, PROVIDED, FURTHER THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE SENIOR LENDER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SENIOR OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE SENIOR LENDER. EACH OF
THE BORROWER, PRIMAL AND THE SUBORDINATED LENDERS EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH OF THE BORROWER, PRIMAL AND THE SUBORDINATED LENDERS
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH OF THE
BORROWER, PRIMAL AND THE SUBORDINATED LENDERS HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINTS AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO IT AT THE ADDRESS SET FORTH IN THE
CREDIT AGREEMENT OR BENEATH ITS SIGNATURE LINE BELOW, AS THE CASE MAY BE, AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE BORROWER’S,
PRIMAL’S OR ANY SUBORDINATED LENDER’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

 

27.           MUTUAL WAIVER OF JURY TRIAL. THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE SENIOR LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.

 

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

 

[remainder of page
intentionally left blank]

 

 

SENIOR LENDERS:

 

SPECIAL SITUATIONS FUND III QP, L.P.

SPECIAL SITUATIONS FUND III, L.P.

SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name: 
  Austin W. Marxe

  
	
   

  	
  Title: 
  General Partner

  
	
   

  
	
   

  
	
  BORROWER:

  
	
   

  
	
  WIRELESS BILLING SYSTEMS

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  PRIMAL:

  
	
   

  
	
  PRIMAL SOLUTIONS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  SUBORDINATED LENDER:

  
	
   

  
	
  LIGHTBRIDGE, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  
	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  
							

 

 

Schedule 1

 

Description of all Subordinated Security
Documents

 

Security Agreement, dated as of May 26, 1999, between Borrower (as the
successor to Wireless Billing Systems, a California corporation) and
Subordinated Lender (as the successor to Corsair Communications, Inc.)

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