Document:

Exhibit 10.64 Amended and Restated Subordination Agreement

    EXHIBIT
      10.64

    

    AMENDED
      AND RESTATED SUBORDINATION AGREEMENT

    

     

    SUBORDINATION
      AGREEMENT,
      dated
      as of March 31, 2006 (as amended and restated as of March 29, 2007), 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 2007 Amended and Restated Secured Promissory Note, dated January 1,
      2007, 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:

            	
              /s/
                David M. Greenhouse

            	
               

            
	
               Name: 

            	 
	
               Title: 

            	 
	
               

            
	
               

            
	
              BORROWER:

            
	
               

            
	
              WIRELESS
                BILLING SYSTEMS

            
	
               

            
	
               

            
	
              By:

            	
              /s/
                Joseph R. Simrell

            	
               

            
	
              Name: 
                Joseph R. Simrell

            
	
              Title: 
                Chief Executive Officer

            
	
               

            
	
               

            
	
              PRIMAL:

            
	
               

            
	
              PRIMAL
                SOLUTIONS, INC.

            
	
               

            
	
               

            
	
              By:

            	
              /s/
                Joseph R. Simrell

            	
               

            
	
              Name: Joseph
                R. Simrell

            
	
              Title: Chief
                Executive Officer, Chairman

            
	
               

            
	
               

            
	
              SUBORDINATED
                LENDER:

            
	
               

            
	
              LIGHTBRIDGE,
                INC.

            
	
               

            
	
               

            
	
              By:

            	
              /s/
                Tim C. O'Brien

            	
               

            
	
              Title:

            	
              Chief
                Financial Officer

            
	
               

            
	
              Address:

            
	
              30
                Corporate Drive

            	
               

            
	
              Burlington,
                MA  01803

            	
               

            
	
               

            	
               

            
	
              Fax:

            	
              781-359-4500

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            	
               

            

    

     

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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.)Exhibit 10.65 Primal Solutions Inc. Executive Incentive Compensation Policy

     

    EXHIBIT
      10.65

    Primal
      Solutions, Inc.

    Executive
      Incentive Compensation Policy

    

     

    Purpose

    The
      purpose of the Primal Solutions Executive Incentive Plan (“EIP”) is to increase
      shareholder value and the success of the company by motivating the Company’s key
      executives to: 1) achieve the Company’s objectives and 2) perform to the best of
      their abilities in support of those objectives. The plan is designed to provide
      financial incentives for those key executives who, by virtue of their position,
      have a significant impact on the success and financial performance of the
      Company. 

    

     

    Eligibility
      

    Eligible
      participants include the members of the Executive Management Team, defined
      as
      the Chief Executive Officer (the “CEO”) and those individuals who report
      directly to the CEO and have a title of Vice President or above. Final approval
      of eligible executives is made by the Board of Directors Compensation Committee.
      Eligibility to participate in the Executive Incentive Plan does not imply
      employment for any specified period of time, nor does it constitute a contract
      of employment, nor does it guarantee continued participation in future plans
      or
      any amount of award.

    

    To
      be
      eligible to be paid a bonus under the EIP for Individual Performance Objectives
      (“IPOs”), the participant must be employed by Primal for six full months of the
      IPO Performance Period for which the bonus is paid and on the last day of the
      IPO Performance Period. Any length of service less than twelve months for the
      IPO Performance Period will be pro-rated accordingly. Bonus amounts for each
      IPO
      Performance Period are earned independently of other IPO Performance
      Periods.

    

    To
      be
      eligible to be paid a bonus on the EIP for Company Performance Objectives
      (“CPOs”), the participant must be employed by Primal at the date that the CPO
      milestone under the CPO schedules is met. Given the CPO milestone is achieved,
      the participant will be considered to have earned the value of the CPO up to
      that milestone, but will have not right to any future milestones if not employed
      by the Company when those milestones are achieved. 

    

     

    Plan
      Overview

    The
      amount of the CEO’s total targeted bonus is determined by the Compensation
      Committee, based on specific position descriptions and responsibilities. The
      amount of any other participant’s total targeted bonus is determined by the CEO
      with approval of the Compensation Committee, also based on specific position
      descriptions and responsibilities. The incentive compensation has two
      components: (i) Corporate Performance Objectives and (ii) Individual Performance
      Objectives.

    

     

    Corporate
      Performance Objectives

    Corporate
      Performance Objectives are established at the start of each fiscal year by
      the
      Executive Management Team and are approved by the Board of Directors. These
      objectives are designed to be achievable with effort and to move the company
      forward in its long-term strategy, while maintaining fiscal responsibility
      and
      creating shareholder value.

    

     

    Individual
      Performance Objectives

    At
      the
      beginning of each IPO Performance Period, the CEO will submit a draft of the
      IPO
      to the Compensation Committee for review and approval, using the form attached
      as “Exhibit A”. The IPO should also be tied directly to Company’s business plan.
      The CEO and Compensation Committee will mutually agree on a minimum of three
      and
      a maximum of five objectives for the IPO Performance Period. Different weights
      may be assigned to each objective. For example, a total of three objectives
      may
      be weighted 50%, 30% and 20% instead of 33 1/3%
      each.

     

    At
      the
      beginning of each IPO Performance Period, any other participant will submit
      a
      draft of the IPO to the CEO for review and approval, using the form attached
      as
“Exhibit A.” The IPO should also be tied directly to Company’s business plan.
      The participant and the CEO will mutually agree on a minimum of three and a
      maximum of five objectives for the IPO Performance Period. Different weights
      may
      be assigned to each objective. For example, a total of three objectives may
      be
      weighted 50%, 30% and 20% instead of 33 1/3%
      each.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Assessing
      Performance Against Objectives/Targets

     

    Individual
      Performance Objectives

    The
      CEO
      and the Compensation Committee will meet and mutually agree upon the level
      of
      attainment of his/her IPO at the end of each calendar quarter covered by the
      Plan. All other participants and the CEO will meet and mutually agree upon
      the
      level of attainment of his/her IPO at the end of each calendar quarter covered
      by the Plan. This assessment, (expressed as a percentage) is provided to the
      Finance Department for payment. The overall evaluation of the IPO must be at
      a
      minimum of 50% or greater to qualify for bonus payments.

     

    Corporate
      Performance Objectives

    Following
      the end of each fiscal quarter, the Finance Department will determine the level
      of attainment of corporate financial goals and provide it to the CEO and
      Compensation Committee for approval. The approved calculations will be provided
      to plan participants on or before the date that Primal releases its results
      for
      the period being measured.

     

    Calculation
      of Bonus Amounts

    The
      following tables set forth the method for calculating payments under the IPO
      and
      CPO components of the EIP:

    

    
      	
               

              Measurement
                Against Objectives

            	
               

              Payment
                (% of Target Bonus)

            
	
              Individual
                Performance 

              (Total
                % earned on IPOs)

            
	
              Achievement
                >
                50% of overall target

            	
              Actual
                percentage

            
	
              Achievement
                <50% of overall target

            	
              0%

            

    

    

    
      	
               

              Measurement
                Against Objectives

            	
               

              Payment
                (% of Target Bonus)

            
	
              Corporate
                Performance Objectives

              (Overall
                % Earned on Corporate Performance Objectives)

            
	
              Achievement
                is per the schedules listed in Exhibit
                A

            

    

    

    Payment

    Following
      the end of each calendar quarter, the CEO will meet with the Compensation
      Committee and all other participants will meet with the CEO to review
      performance against goals for the IPO. Ratings of the IPO are subject to review
      and approval by the Compensation Committee. Bonus payments are also subject
      to
      the Compensation Committee’s determination of the Company’s satisfaction of its
      corporate goals. Eligible participants will receive payments under the EIP
      plan
      according to the following schedule:

    

    For
      the
      IPO Performance Period covering January 1-June 30, payments will be made on
      the
      next scheduled payroll date following approval by the Compensation Committee
      at
      their scheduled meeting after June 30.

    

    For
      the
      IPO Performance Periods ending September 30 and December 31, payments will
      be
      made on the next scheduled payroll date following the Compensation Committee
      review and approval at their scheduled meetings after 9/30 and 12/31,
      respectively. 

    

    For
      the
      CPO, payment will be made on the next scheduled payroll date following approval
      by the Board of Directors of the Q2, Q3, and Q4 10-QSB filings.

    

    Payments
      under the EIP plan are subject to all federal, state and local tax withholding
      requirements. 

    

    The
      Board
      of Directors reserve the right to change the plan as required, including the
      timing and manner of payments earned under the plan. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Administration,
      Amendment and Termination of the Plan

    

    The
      EIP
      will be administered by the Board of Directors Compensation Committee, which
      is
      authorized to interpret the Plan, to establish rules and regulations necessary
      to administer the Plan and to take all other actions it determines are necessary
      for the proper administration of the Plan. All actions, determinations,
      interpretations and decisions made by the Compensation Committee and/or the
      Board will be final, conclusive and binding upon all other parties concerned.
      The Compensation Committee and/or the Board reserve the right to amend, suspend,
      or terminate the EIP and any award opportunities at any time in whole or in
      part, for any reason, and without the consent of any participant or
      beneficiary.

    

    Definitions

    

    “BOARD”
      means
      the
      Board of Directors of Primal.

    

    “COMMITTEE”
      means
      the Compensation Committee appointed by the Board.

    

    “COMPANY”
      means
      Primal Solutions, Inc., a Delaware corporation.

    

    “FISCAL
      YEAR”
      means
      the fiscal year of the company, January 1-December 31.

    

    “BOOKING”
      means
      the
      quantifiable value of a revenue generating contract with a customer or partner
      as determined by the CEO.

    

    “OPERATING
      INCOME” means
      the
      Company’s income from operations but excluding any unusual non-cash items such
      as depreciation and stock option expense, determined in accordance with
      generally accepted accounting principles.

    

    "IPO
      PERFORMANCE PERIOD"
      shall
      mean a three-month period of time based upon the quarters of the Company's
      Fiscal Year, or such other time period as shall be determined by the
      Committee.

    

    “REVENUE”
      means
      the Company’s net sales, determined in accordance with generally accepted
      accounting principles

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    Individual
      Performance Objectives

    (Name)

    

    Each
      participant of the Executive Incentive Plan should complete this worksheet
      at
      the start of each Performance Period. All objectives and measurements should
      be
      mutually agreed upon by the executive and the CEO, and approved by the
      Compensation Committee. For the CEO, all objective and measurements should
      be
      mutually agreed upon by the CEO and the Compensation Committee, and ultimately
      approved by the Compensation Committee. Please refer to the Executive Incentive
      Plan policy for plan details. There should be no fewer than 3 and no more than
      5
      objectives set each semi-annual Performance Period. 

    

    
      	
              Name:

            	 
	
               

              CEO
                Signature:     

               

              Executive
                Signature:     

            	
               

              Date:   

               

              Date:   

            
	
              PERFORMANCE
                OBJECTIVES

            
	
              Objectives
                and Measurements

            	
              Weighting
                (A)

            	
              Achievement

              (B)

            	
              Results

              (C)

            
	 	
              Target
                

            	
              Actual
                Results

            	
              Total
                % Earned

              (A
                x B = C)

            
	
              Objective
                I:

            	
               %

            	
                %

            	
               %

            
	
              Objective
                II: 

            	
               %

            	
                %

            	
               %

            
	
              Objective
                III: 

            	
               %

            	
                %

            	
               %

            
	
              Objective
                IV: 

            	
               %

            	
                %

            	
               %

            
	
               

              TOTAL
                % FOR ALL OBJECTIVES

            	
               

              100
                %

            	
               

              TOTAL
                % EARNED= %
                

            

    

    

    Final
      Evaluation Signatures

     

    
      	
               

              Date:

            	 	 
	
               

              Executive:

            	 	 
	
               

              CEO/Approver:

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