Document:

Exhibit 10.43

 

SECOND AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

 

This Second Amended and Restated Employment Agreement (this “Agreement”)
is made effective as of December 16, 2005 by and between Primal Solutions,
Inc., a Delaware corporation (the “Employer”), and Joseph R. Simrell, an
individual resident in Coto de Caza, California (the “Executive”).

 

RECITALS

 

The Employer desires to employ the Executive, and the Executive wishes
to accept such employment, upon the terms and conditions set forth in this Agreement.  The Employer and the Executive previously
entered into an Amended and Restated Employment Agreement as of May 17, 2004
(the “Prior Agreement”).  This Agreement
amends, restates and supersedes the Prior Agreement.

 

The Executive and the Employer previously entered into an Amended and
Restated Change of Control Agreement as of May 17, 2004 (“Prior Change of
Control Agreement”).  Concurrently with
this Agreement, the parties are entering into a Second Amended and Restated
Change of Control Agreement dated as of the date hereof (the “Change of Control
Agreement”) which amends, restates and supersedes the Prior Change of Control
Agreement.

 

For the purposes of this Agreement, the terms defined in Section 9 of
this Agreement have the meanings specified or referred to in such Section 9.

 

AGREEMENT

 

The parties, intending to be legally bound, agree as follows:

 

1.                                      EMPLOYMENT TERMS AND DUTIES

 

1.1                               EMPLOYMENT

 

The Employer hereby employs the Executive, and the Executive hereby
accepts employment by the Employer, upon the terms and conditions set forth in
this Agreement.

 

1.2                               TERM

 

The term of the Executive’s employment under this Agreement will
commence on the Effective Date and continue until December 31, 2007, unless
earlier terminated as provided in Section 5 of this Agreement.  No later than October 31, 2007, the Board of
Directors will commence negotiations with Executive in good faith over the
terms of a new employment agreement which shall contain a clause providing for
at least twelve (12) months’ severance and benefits continuation.  If the Board of Directors negotiates in good
faith and offers a new employment agreement containing such a severance clause,
but the Employer and the Executive are unable to reach agreement on a new
employment agreement, this Agreement shall expire on December 31, 2007, and the
Executive shall receive no severance compensation but shall be paid

 

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his final compensation as provided for in
Section 5.5(b) of this Agreement, except that the Executive shall receive his
Incentive Compensation for the then current Fiscal Year prorated through
December 31, 2007.  If the Board of
Directors does not negotiate in good faith or if the employment agreement
offered does not include a clause providing for at least twelve (12) months’
severance and benefits continuation, this Agreement will expire on December 31,
2007, and the Executive will be paid the severance benefits provided for in
Sections 5.5(a) and (e) of this Agreement.

 

1.3                               DUTIES

 

The Executive will have such duties as are assigned or delegated to the
Executive in writing by the Board of Directors, and will serve as Chairman of
the Board, Chief Executive Officer and President of the Employer.  The Executive’s job duties shall include
those responsibilities set forth in Exhibit A. 
The Executive will devote his entire business time, attention, skill,
and energy to the business of the Employer, will use his best efforts to
promote the success of the Employer’s business, and will cooperate fully with
the Board of Directors in the advancement of the best interests of the
Employer.  Nothing in this Section 1.3,
however, will prevent the Executive from engaging in additional activities in
connection with personal investments and community affairs that are not
inconsistent with the Executive’s duties under this Agreement.  The Executive will fulfill his duties as a
director of the Employer or officer of any of Employer’s affiliates without
additional compensation as long as the Executive’s employment by the Employer
continues under this Agreement.

 

2.                                      COMPENSATION

 

2.1                               BASIC COMPENSATION

 

(a)           Salary.  The Executive will be paid an annual salary
of $200,000 (the “Salary”), subject to adjustment as provided below, which will
be payable in equal periodic installments according to the Employer’s customary
payroll practices, but no less frequently than monthly.  The Salary will be reviewed by the Board of
Directors not less frequently than annually, and may be adjusted upward in the
sole discretion of the Board of Directors.

 

(b)           Benefits.  The Executive will, during the Employment
Period, be permitted to participate in such stock option, restricted stock,
pension, profit sharing, bonus, life insurance, hospitalization, major medical,
tuition reimbursement, medical flexible spending accounts and other employee
benefit plans provided by the Employer that may be in effect from time to time,
at levels made available to other similarly situated executives of the
Employer, and to the extent the Executive is eligible under the terms of those
plans (collectively, the “Benefits”). 
The Benefits shall include life insurance on the Executive’s life in an
amount not less than the Executive’s Salary.

 

2.2                               INCENTIVE COMPENSATION.

 

As additional compensation (the “Incentive Compensation”) for the
services to be rendered by the Executive pursuant to this Agreement, the
Employer will pay the Executive with respect to each Fiscal Year during the
Employment Period (including Fiscal Year 2005), an amount not less than fifty
percent (50%) of the Executive’s Salary (the “Compensation Plan”), if,

 

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and only if, the Employer meets or exceeds
the performance goals for the Employer established by the Board of Directors
(the “Employer Performance Goal”).  The
Compensation Plan and Employer Performance Goal will be established by the
Board of Directors within 60 days from the beginning of each Fiscal Year and
will be communicated to the Executive in writing within 30 days of being so
established.  Incentive Compensation will
be paid to Executive no later than 2-1/2 months following the close of the
calendar year in which the Incentive Compensation was earned; provided,
however, if the Board of Directors in its discretion determines that the
Employer does not have sufficient available cash to pay such amount on such
date, the Board of Directors may defer, without interest, payment of any or all
of such amount, to not later than December 31 of the calendar year following
the calendar year in which the Incentive Compensation was earned.

 

3.                                      FACILITIES AND EXPENSES

 

The Employer will furnish the Executive office space, equipment,
supplies, and such other facilities and personnel as the Employer deems
necessary or appropriate for the performance of the Executive’s duties under
this Agreement.  The Employer will pay
the Executive’s dues in such professional societies and organizations as the
Board of Directors deems appropriate, and will pay on behalf of the Executive
(or reimburse the Executive for) reasonable expenses incurred by the Executive
at the request of, or on behalf of, the Employer in the performance of the
Executive’s duties pursuant to this Agreement, and in accordance with the
Employer’s employment policies, including reasonable expenses incurred by the
Executive in attending conventions, seminars, and other business meetings, in
appropriate business entertainment activities, and for promotional
expenses.  The Executive must file
expense reports with respect to such expenses in accordance with the Employer’s
policies.

 

4.                                      VACATIONS AND HOLIDAYS

 

The Executive will be entitled to four weeks’ paid vacation each
calendar year in accordance with the vacation policies of the Employer in
effect for its executive officers from time to time.  The Executive agrees to arrange his vacation
time with due regard for the circumstances and needs of the Employer and to
minimize disturbance of the Employer’s operations.  The Executive will also be entitled to the
paid holidays set forth in the Employer’s policies. Any unused vacation days
may be carried over to the subsequent calendar year.

 

5.                                      TERMINATION

 

5.1                               EVENTS OF TERMINATION

 

(a)           Termination.  The Employment Period, the Executive’s Basic
Compensation and Incentive Compensation, and any and all other rights of the
Executive under this Agreement or otherwise as an employee of the Employer will
terminate (except as otherwise provided in this Section 5 or in the Change of
Control Agreement):

 

(i)            upon the death of the
Executive;

 

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(ii)           upon the disability of
the Executive (as defined in Section 5.2) for 120 consecutive days, or 180 days
during any twelve-month period, immediately upon notice from either party to
the other;

 

(iii)          for cause (as defined in
Section 5.3), immediately upon notice from the Employer to the Executive, or at
such later time as such notice may specify;

 

(iv)          for Good Reason (as
defined in Section 5.4) upon not less than thirty days’ prior notice from the
Executive to the Employer;

 

(v)           without cause
immediately upon notice from either party to the other; or

 

(vi)          upon the expiration of
the Employment Period as provided in Section 1.2.

 

(b)           Notice of Termination.  Any termination of the Executive’s employment
by the Employer (or its successor) or by the Executive (other than termination
based on the Executive’s death), pursuant to this Agreement, shall be
communicated by the terminating party in a written notice to the other party
hereto.  Such written notice shall (i)
set forth the specific termination provision in this Agreement relied upon, if
applicable, (ii) set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated, and (iii) set forth the date the Executive’s
employment with the Employer shall terminate.

 

5.2                               DEFINITION OF DISABILITY

 

The Executive will be deemed to have a “disability” if, for physical or
mental reasons, the Executive is unable to perform the essential functions of
the Executive’s duties under this Agreement, with or without reasonable
accommodation.  The Executive shall be
provided with short term and long term disability benefits in accordance with
the terms of the Employer’s plans then in effect.

 

5.3                               DEFINITION OF “CAUSE”

 

“Cause” means: (a) an intentional act which materially injures the
Employer; (b) an intentional refusal or failure to follow lawful and reasonable
directions of the Board of Directors or an individual to whom the Executive
reports (as appropriate); (c) a willful or habitual neglect of duties; or
(d) the conviction of, or the entering of a guilty plea or plea of no
contest by the Executive with respect to, a felony involving an act of moral
turpitude.

 

5.4                               DEFINITION OF “GOOD REASON”

 

“Good Reason” means any of the following: (a) the Employer’s material
breach of this Agreement or any other agreement between Executive and Employer
concerning Executive’s employment with the Employer; provided, however, that
the Employer shall have ten (10) days to remedy the breach after receipt of
written notice from the Executive that the breach has occurred if the breach is
susceptible of cure; (b) the assignment of the Executive without his express
and voluntary written consent to a title, status, overall position,
responsibilities, duties, reporting relationship, or general working
environment of a materially lesser status or degree of

 

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responsibility than his title, status,
overall position, responsibilities, duties, reporting relationship, and general
working environment at the Effective Date; (c) the requirement by the Employer
that the Executive relocate the Executive’s personal residence outside the
metropolitan Orange County, California area; (d) the relocation by the Employer
of the Executive’s office more than 50 miles from its location as of the
Effective Date; (e) any failure by the Employer to obtain the assumption of any
material written agreement between the Executive and the Employer concerning
Executive’s employment by any successor of the Employer or assignee of
substantially all of the business of the Employer; or (f) any material change
by the Employer in the Benefits or Incentive Compensation offered to the
Executive from those in which the Executive is participating on the Effective
Date, or the taking of any action by the Employer which would materially and
adversely affect the Executive’s participation in or reduce the Executive’s
benefits under any of the Benefits or Incentive Compensation plans or deprive
the Executive of any fringe benefit then enjoyed by the Executive; provided,
however, that nothing contained in this subparagraph (f) shall be deemed to
permit termination by the Executive for Good Reason if the Employer offers a range
of benefit plans and programs to the Executive which, taken as a whole, are at
least comparable to the Benefits and Incentive Compensation in which the
Executive is participating on the Effective Date.

 

5.5                               TERMINATION PAY

 

Effective upon the termination of the Executive’s employment, the
Employer will be obligated to pay the Executive (or, in the event of his death,
his designated beneficiary as defined below) only such compensation as is
provided in this Section 5.5, or, if applicable, as provided in the Change of
Control Agreement, and in lieu of all other amounts and in settlement and
complete release of all claims the Executive may have against the
Employer.  If the Executive receives
payments under the Change of Control Agreement, then he will not also receive
payments under this Agreement.  The
Employer may, as a condition to the Executive receiving any unvested pay or
benefits under this Section 5.5, require the Executive to execute a release of
all claims the Executive may have against the Employer or its affiliates
arising from the Executive’s employment with the Employer or the termination
thereof in a form reasonably satisfactory to the Employer.  Except as set forth herein, all amounts to be
paid under this Section 5.5 shall be paid in equal periodic installments
according to the Employer’s customary payroll practices, including without
limitation any payments of Incentive Compensation; provided, however that Executive’s
Salary and vacation accrued through the date termination is effective shall be
paid in accordance with California law.

 

For purposes of this Section 5.5, the Executive’s designated
beneficiary will be such individual beneficiary or trust, located at such
address, as the Executive may designate by notice to the Employer from time to
time or, if the Executive fails to give notice to the Employer of such a
beneficiary, the Executive’s estate. 
Notwithstanding the preceding sentence, the Employer will have no duty,
in any circumstances, to attempt to open an estate on behalf of the Executive,
to determine whether any beneficiary designated by the Executive is alive or to
ascertain the address of any such beneficiary, to determine the existence of
any trust, to determine whether any person or entity purporting to act as the
Executive’s personal representative (or the trustee of a trust established by
the Executive) is duly authorized to act in that capacity, or to locate or
attempt to locate any beneficiary, personal representative, or trustee.

 

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(a)           Termination Without
Cause or By the Executive for Good Reason.  If Employer terminates the Executive’s
employment without cause or the Executive terminates his employment for Good
Reason, the Employer will pay the Executive (i) the Executive’s Salary for the
remainder, if any, of the calendar month in which such termination is
effective, and for an additional 12-month period, (ii) 100% of the Executive’s
Incentive Compensation for the Fiscal Year during which the termination is
effective and calculated assuming that 100% of the targets under such bonus
plans are achieved, (iii) accrued vacation through the date of termination, and
(iv) Incentive Compensation accrued and unpaid from the previous Fiscal Year,
if any.  If Executive is terminated
without cause, in no event will payments under (i), (ii) and (iv), above extend
beyond 2-1/2 months following the close of the calendar year in which
termination under this paragraph occurs, and payments will be accelerated, if
necessary, to prevent such 2-1/2 month period to be exceeded.  If Executive terminates his employment for
Good Reason, in no event will payments under (i), (ii) and (iv) above commence
prior to six months following such separation.

 

(b)           Termination by the
Employer for Cause or Voluntarily by the Executive.  If the Employer terminates the Executive’s
employment for cause, or the Executive voluntarily terminates his employment
other than for Good Reason or disability, the Employer will pay the Executive
(i) his Salary and accrued vacation through the date such termination is
effective, and (ii) accrued and unpaid Incentive Compensation, if any, from the
previous Fiscal Year and the then-current Fiscal Year, but the Executive will
only be entitled to Incentive Compensation for the Fiscal Year during which
such termination occurs to the extent it has been earned (i.e. targets
have been achieved) prior to such employment termination.  Payments of under (ii) above shall be made no
later than 2-1/2 months following the close of the calendar year in which the
Incentive Compensation was earned, and payments will be accelerated, if
necessary, to prevent such 2-1/2 month period to be exceeded.

 

(c)           Termination upon
Disability.  Upon the disability
of the Executive for 120 consecutive days, or 180 days during any twelve month
period, the Executive’s employment may be terminated by either party, and upon
such termination the Employer will pay the Executive (i) that part of the
Executive’s Incentive Compensation, if any, for the Fiscal Year during which
the disability occurs, prorated through the end of the calendar month during
which the disability is deemed to have occurred under Section 5.2, as described
in Section 5.5(f), (ii) accrued vacation through the date of termination, (iii)
accrued and unpaid Incentive Compensation, if any, from the previous Fiscal
Year, and (iv) his Salary through the date such termination is effective,
subject to an offset for any Salary payments made or disability insurance
benefits received pursuant to Section 6.1. 
Payments under (i) and (iii) above will be made no later than 2-1/2
months following the close of the calendar year in which termination under this
paragraph occurs, and payments will be accelerated, if necessary, to prevent
such 2-1/2 month period to be exceeded.

 

(d)           Termination upon Death.  If 
Executive’s employment is terminated because of the Executive’s death,
the Employer will pay the Executive’s designated beneficiary (i) the Executive’s
Salary through the end of the calendar month in which his death occurs, (ii)
accrued vacation through the date of termination, (iii) accrued and unpaid
Incentive Compensation, if any, from the previous Fiscal Year, and (iv) that
part of the Executive’s Incentive Compensation, if any, for the Fiscal Year
during which his death occurs, prorated through the end of the

 

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calendar month during which his death occurs,
as described in Section 5.5(f), and calculated assuming that 100% of the
targets under such bonus plans are achieved.

 

(e)           Benefits.

 

(i)            If the Executive’s
employment hereunder is terminated by the Employer without cause or by the
Executive for Good Reason, then the Employer will provide and pay for continued
medical, dental, life, and disability insurance coverage for the Executive and
the Executive’s dependents on the same terms as in effect at the time of
termination of the Executive’s employment, including general premium increases,
for the period from the date of termination until the Executive obtains replacement
coverage through other employment, or for a period of 12 months after such
employment termination, whichever is less.

 

(ii)           If the Executive’s
employment hereunder is terminated by death or disability, then the Employer
will provide and pay for continued medical and dental coverage for the
Executive, if applicable, and the Executive’s dependents, on the same terms as
in effect at the time of termination of the Executive’s employment, including
general premium increases, for a period of 90 days after the effective date of
termination. If such coverage is pursuant to COBRA, the Employer’s obligations
hereunder will be contingent upon the Executive or his dependents, as
applicable, executing all documents required to obtain such coverage.

 

(iii)          Except as set forth in
this Section 5.5(e), the Executive’s accrual of, or participation in plans
providing for, the Benefits will cease at the effective date of the termination
of  his employment, and the Executive
will be entitled to accrued Benefits pursuant to such plans only as provided in
such plans.

 

(f)            Incentive Compensation.  That portion of the Executive’s Incentive
Compensation to be paid pursuant to subsections (c)(i) or (d)(iv) above shall
be paid only if the Employer Performance Goal is met for the Fiscal Year during
which the termination is effective.  If
such Employer Performance Goal is met during such Fiscal Year, then the amount
due shall be paid no later than March 15 of the following Fiscal Year.  Notwithstanding the foregoing, if the Board
of Directors in its discretion determines that the Employer does not have
sufficient available cash to pay such amount on such date, the Board of
Directors may defer, without interest, payment of any or all of such amount, to
not later than December 31 of the Fiscal Year following the Fiscal Year in
which the Incentive Compensation was earned; provided, however,
that payments to the Executive may only be deferred if and to the extent that
payments to continuing employees of the Employer entitled to such payments are
deferred.  If the Executive is entitled
to payment of Incentive Compensation pursuant to this Section 5.5(f), then on
or before March 15 of the Fiscal Year following the Fiscal Year in which the
Incentive Compensation was earned, the Employer shall provide the Executive
with a written notice (i) setting forth financial data based on the audited
financial statements of the Employer sufficient for the Executive to determine
if the Employer Performance Goal was met, and the amount of Incentive Compensation
owed to the Executive, and (ii) if Incentive Compensation is owed to the
Executive, stating a good faith determination by the Board of Directors of the
payment schedule for the amount owed.

 

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(g)           Acceleration of Vesting
of Options.  If the Executive’s
employment hereunder is terminated by the Employer without cause or by the
Executive for Good Reason, upon the occurrence of such employment termination
all outstanding unvested stock options and all previously granted unvested
restricted stock awards granted to the Executive by the Employer shall
accelerate and vest.

 

(h)           Internal
Revenue Code Section 409A. 
Notwithstanding any provision of this Agreement to the contrary, if, at
the time of Executive’s termination of employment with the Company, he is a “specified
employee” as defined in Section 409A of the Code, and one or more of the
payments or benefits received or to be received by Executive pursuant to this
Agreement would constitute deferred compensation subject to Section 409A, no
such payment or benefit will be provided under this Agreement until the
earliest of (A) the date which is six (6) months after his “separation from
service” for any reason, other than death or “disability” (as such terms are used
in Section 409A(a)(2) of the Code), (B) the date of his death or “disability”
(as such term is used in Section 409A(a)(2)(C) of the Code) or (C) the
effective date of a “change in the ownership or effective control” of the
Company (as such term is used in Section 409A(a)(2)(A)(v) of the Code).
 The provisions of this Section 5.5(h) shall only apply to the extent
required to avoid Executive’s incurrence of any penalty tax or interest under
Section 409A of the Code or any regulations or Treasury guidance promulgated
thereunder.  In addition, if any provision of this Agreement would cause
Executive to incur any penalty tax or interest under Section 409A of the Code
or any regulations or Treasury guidance promulgated thereunder, the Company may
reform such provision to maintain to the maximum extent practicable the
original intent of the applicable provision without violating the provisions of
Section 409A of the Code.  To the extent
that an insurance benefit received or to be received by Executive constitutes
deferred compensation subject to Section 409A of the Code, Executive will pay
any insurance premiums that would otherwise be due on the first day of each
calendar month during the period the benefits are deferred under this Section
5.5(h).  Executive will be reimbursed for
such insurance premiums on the date that payments and benefits are otherwise
provided under this Section 5.5(h).

 

6.                                      DISABILITY

 

6.1                               DISABILITY PAYMENTS

 

Upon the disability of the Executive, the Employer will pay the
Executive (i) his Salary for the lesser of (A) 90 days from the date the
disability is deemed to have occurred, and (B) the date on which disability
insurance benefits commence under the disability insurance coverage furnished
by the Employer to the Executive or under any state disability program, and
(ii) if the Executive qualifies for such disability insurance benefits, for a
period of up to 180 days from the date the disability is deemed to have
occurred, the difference between (A) the Executive’s Salary at the time the disability
is deemed to have occurred under Section 5.2, and (B) the insurance benefits
under such disability insurance coverage or state disability program, provided
that the period in which the Employer is required to make payments under
subsections (i) and (ii) shall not in the aggregate exceed 180 days in any 12
month period.  Payments under this
Section 6.1 will be made no later than 2-1/2 months following the close of the
calendar year in which the disability is deemed to have occurred, and payments
will be accelerated, if necessary, to prevent such 2-1/2 month period to be
exceeded.

 

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7.                                      NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS

 

7.1                               ACKNOWLEDGMENTS BY THE EXECUTIVE

 

The Executive acknowledges that (a) during the Employment Period and as
a part of his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; (c) because the Executive
possesses substantial technical expertise and skill with respect to the
Employer’s business, the Employer desires to obtain exclusive ownership of each
Employee Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Section 7 are reasonable and
necessary to prevent the improper use or disclosure of Confidential Information
and to provide the Employer with exclusive ownership of all Employee
Inventions.

 

7.2                               AGREEMENTS OF THE EXECUTIVE

 

In consideration of the compensation and benefits to be paid or
provided to the Executive by the Employer under this Agreement, the Executive
covenants as follows:

 

(a)           Confidentiality.

 

(1)           During and following
the Employment Period, the Executive will hold in confidence the Confidential
Information and will not use or disclose it to any person except with the
specific prior written consent of the Employer or except as otherwise expressly
permitted by the terms of this Agreement.

 

(2)           Any trade secrets of
the Employer will be entitled to all of the protections and benefits under
applicable state trade secret and any other applicable law.  If any information that the Employer deems to
be a trade secret is found by a court of competent jurisdiction not to be a
trade secret for purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information for purposes of this
Agreement.

 

(3)           None of the foregoing
obligations and restrictions applies to any part of the Confidential
Information that the Executive demonstrates was or became generally available
to the public other than as a result of a disclosure by the Executive.

 

(4)           The Executive will not
remove from the Employer’s premises (except to the extent such removal is for
purposes of the performance of the Executive’s duties at home or while
traveling, or except as otherwise specifically authorized by the Employer) any
Employer document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other form
(collectively, the “Proprietary Items”). 
The Executive recognizes that, as between the Employer and the
Executive, all of the Proprietary Items, whether or not developed by the
Executive, are the exclusive property of the Employer.  Upon termination of this Agreement by either
party, or upon the request of the Employer during the Employment Period, the
Executive will return to the Employer all of the Proprietary Items in the
Executive’s possession or subject to the Executive’s control, and the Executive
shall not retain any copies, abstracts, sketches, or other physical embodiment
of any of the Proprietary Items.

 

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(b)           Employee Inventions.  During the Employment Period every Employee
Invention will belong exclusively to the Employer, subject only to the
exception set forth below.  The Executive
acknowledges that all of the Executive’s 
written work product, works of authorship, and other Employee Inventions
are works made for hire and the property of the Employer, including any
copyrights, patents, semiconductor mask protection, or other intellectual
property rights pertaining thereto.  If
it is determined that any such works are not works made for hire, the Executive
hereby assigns to the Employer all of the Executive’s right, title, and
interest, including all rights of copyright, patent, semiconductor mask
protection, and other intellectual property rights, to or in such Employee
Inventions.  The Executive covenants that
he will promptly:

 

(1)           disclose to the
Employer in writing any Employee Invention;

 

(2)           assign to the Employer
or to a party designated by the Employer, at the Employer’s request and without
additional compensation, all of the Executive’s rights to the Employee
Invention for the United States and all foreign jurisdictions;

 

(3)           execute and deliver to
the Employer such applications, assignments, and other documents as the
Employer may request in order to apply for and obtain patents or other
registrations with respect to any Employee Invention in the United States and
any foreign jurisdictions;

 

(4)           sign all other papers
necessary to carry out the above obligations; and

 

(5)           give testimony and
render any other assistance (but without expense to the Executive) in support
of the Employer’s rights to any Employee Invention.

 

This Agreement shall not apply to any invention which qualifies fully
under the provisions of Section 2870 of the California Labor Code, which
includes inventions developed entirely on Executive’s own time without using
the Employer’s equipment, supplies, facilities or trade secret information,
except for those ideas and inventions that either; (i) relate, at the time of
conception or reduction to practice of the invention, to the Employer’s
business, or actual or demonstrably anticipated research or development of the
Employer, or (ii) result from any work performed by the Executive for the
Employer.

 

7.3                               DISPUTES OR CONTROVERSIES

 

The Executive recognizes that should a dispute or controversy arising
from or relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information may be jeopardized. 
To the extent allowed by law, all 
pleadings, documents, testimony, and records relating to any such
Confidential Information will be maintained in secrecy and will be available
for inspection by the Employer, the Executive, and their respective attorneys
and experts, who will agree, in advance and in writing, to receive and maintain
all such information in secrecy, except as may be limited by them in writing.

 

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8.                                      NON-INTERFERENCE

 

8.1                               ACKNOWLEDGMENTS BY THE EXECUTIVE

 

The Executive acknowledges that: (a) the services to be performed by
him under this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (b) the Employer’s business is national in scope and
its products are marketed throughout the United States; (c) the Employer
competes with other businesses that are or could be located in any part of the
United States; and (d) the provisions of this Section 8 are reasonable and
necessary to protect the Employer’s business.

 

8.2                               COVENANTS OF THE EXECUTIVE

 

In consideration of the acknowledgments by the Executive, and in
consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer, the Executive covenants that he will not, directly
or indirectly:

 

(a)           whether for the
Executive’s own account or for the account of any other person, at any time
during the Employment Period and the Post-Employment Period, solicit business
of the same or similar type being carried on by the Employer, from any person
known by the Executive to be a customer of the Employer, whether or not the
Executive had personal contact with such person during and by reason of the
Executive’s employment with the Employer; or

 

(b)           whether for the Executive’s
own account or the account of any other person (i) at any time during the
Employment Period and the Post-Employment Period, solicit as an employee,
independent contractor, or otherwise, any person who is an employee of the
Employer or in any manner induce or attempt to induce any employee of the
Employer to terminate his or her employment with the Employer; or (ii) at any
time during the Employment Period and the Post Employment Period, interfere
with the Employer’s relationship with any person, including any person who at
any time during the Employment Period was an employee, contractor, supplier, or
customer of the Employer.

 

If the Executive breaches any of the terms and provisions of this
Section 8.2 during the Post-Employment Period, the Employer may, in addition to
any other remedies that the Employer may have for any such breach, immediately
terminate the payment of any severance payments or benefits then being paid to
the Executive pursuant to Section 5.5, other than payments vested prior to the
date of termination of the Executive’s employment.

 

For purposes of this Section 8.2, the term “Post-Employment Period”
means the one year period beginning on the date of termination of the Executive’s
employment with the Employer.

 

If any covenant in this Section 8.2 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.

 

11

 

The Executive will, while the covenant under this Section 8.2 is in
effect, give notice to the Employer, within ten days after accepting any other
employment, of the identity of the Executive’s employer.  The Employer may notify such employer that
the Executive is bound by this Agreement and, at the Employer’s election,
furnish such employer with a copy of this Agreement or relevant portions
thereof.

 

9.                                      DEFINITIONS

 

For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 9.

 

“Agreement”—this Second Amended
and Restated Employment Agreement.

 

“Arbitrator”—as defined in
Section 10.9(d).

 

“Basic Compensation”—Salary
and Benefits.

 

“Benefits”—as defined in
Section 2.1(b).

 

“Board of Directors”—the
board of directors of the Employer.

 

“Cause” —as defined in
Section 5.3.

 

“Change of Control Agreement”
—as defined in the Recitals to this Agreement.

 

“Claim”—as defined in
Section 10.9(a).

 

“Compensation Plan”—as
defined in Section 2.2.

 

“Confidential Information”—any
and all:

 

(a)           trade secrets
concerning the business and affairs of the Employer and its affiliates, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned
manufacturing or distribution methods and processes, customer lists, current
and anticipated customer requirements, price lists, market studies, business
plans, computer software and programs (including object code and source code),
computer software and database technologies, systems, structures, and
architectures (and related formulae, compositions, processes, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, methods
and information), and any other information of the Employer or its affiliates,
however documented, that is a trade secret within the meaning of applicable
state trade secret law; and

 

(b)           information concerning
the business and affairs of the Employer and its affiliates (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and techniques and materials),
however documented; and

 

12

 

(c)           notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Employer or its affiliates containing or based, in whole or in part, on any
information included in the foregoing.

 

“disability”—as defined in
Section 5.2.

 

“Effective Date”—the date
stated in the first paragraph of this Agreement.

 

“Employee Invention”—any
idea, invention, technique, modification, process, or improvement (whether
patentable or not), any industrial design (whether registerable or not), any
mask work, however fixed or encoded, that is suitable to be fixed, embedded or
programmed in a semiconductor product (whether recordable or not), and any work
of authorship (whether or not copyright protection may be obtained for it),
created, conceived, or developed by the Executive, either solely or in
conjunction with others, during the Employment Period, or a period that
includes a portion of the Employment Period, that relates in any way to, or is
useful in any manner in, the business then being conducted or proposed to be
conducted by the Employer or its affiliates, and any such item created by the
Executive, either solely or in conjunction with others, following termination
of the Executive’s employment with the Employer, that is based upon or uses
Confidential Information.

 

“Employer” —as defined in
the opening paragraph of this Agreement.

 

“Employer Performance Goal”
—as defined in Section 2.2.

 

“Employment Period”—the
term of the Executive’s employment with the Employer or its successors.

 

“Executive” —as defined in
the opening paragraph of this Agreement.

 

“Fiscal Year”—the Employer’s
fiscal year, as it exists on the Effective Date or as changed from time to
time.

 

“Good Reason”—as defined
in Section 5.4.

 

“Incentive Compensation”—as
defined in Section 2.2.

 

“person”—any individual,
corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust, association,
organization, governmental body or other entity.

 

“Post-Employment Period”—as
defined in Section 8.2.

 

“Proprietary Items”—as
defined in Section 7.2(a)(4).

 

“Salary”—as defined in
Section 2.1(a).

 

13

 

10.                               GENERAL PROVISIONS

 

10.1                        INJUNCTIVE RELIEF AND ADDITIONAL REMEDY

 

The Executive acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of this Agreement
(including any provision of Sections 7 and 8) would be irreparable and that an
award of monetary damages to the Employer for such a breach would be an
inadequate remedy.  Consequently, the
Employer will have the right, in addition to any other rights it may have, to
obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement, and the
Employer will not be obligated to post bond or other security in seeking such
relief.  Without limiting the Employer’s
rights under this Section 10 or any other remedies of the Employer, if the
Executive breaches any of the provisions of Section 7 or 8, the Employer will
have the right to cease making any payments otherwise due to the Executive
under this Agreement or the Change of Control Agreement.

 

10.2                        COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND
INDEPENDENT COVENANTS

 

The covenants by the Executive in Sections 7 and 8 are essential
elements of this Agreement, and without the Executive’s agreement to comply
with such covenants, the Employer would not have entered into this Agreement or
employed the Executive.  The Employer and
the Executive acknowledge that they have been advised of their right to
independently consult with their respective counsel concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer.

 

The Executive’s covenants in Sections 7 and 8 are independent covenants
and the existence of any claim by the Executive against the Employer under this
Agreement or otherwise will not excuse the Executive’s breach of any covenant
in Section 7 or 8.

 

If the Executive’s employment hereunder is terminated for any reason,
this Agreement will continue in full force and effect as is necessary or
appropriate to enforce the covenants and agreements of the Executive in
Sections 7 and 8.

 

10.3                        REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE

 

The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not, and the
performance by the Executive of the Executive’s obligations hereunder will not,
with or without the giving of notice or the passage of time, or both: (a)
violate any judgment, writ, injunction, or order of any court, arbitrator, or
governmental agency applicable to the Executive; or (b) conflict with, result
in the breach of any provisions of or the termination of, or constitute a
default under, any agreement to which the Executive is a party or by which the
Executive is or may be bound.

 

14

 

10.4                        OBLIGATIONS CONTINGENT ON PERFORMANCE

 

The obligations of the Employer hereunder, including its obligation to
pay the compensation provided for herein, are contingent upon the Executive’s
performance of the Executive’s obligations hereunder.

 

10.5                        WAIVER

 

The rights and remedies of the parties to this Agreement are cumulative
and not alternative.  Neither the failure
nor any delay by either party in exercising any right, power, or privilege
under this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.  To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which
it is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement.

 

10.6                        BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED

 

This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs, and
legal representatives, including any entity with which the Employer may merge
or consolidate or to which all or substantially all of its assets may be
transferred.  The duties and covenants of
the Executive under this Agreement, being personal, may not be delegated.

 

10.7                        NOTICES

 

All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate address and facsimile
number set forth below (or to such other address and facsimile number as a
party may designate by notice to the other party pursuant to the terms of this
Section 10.7):

 

If to the Executive:

 

Joseph R. Simrell

15 Rue Cezanne

Coto de Caza, California  92679

Facsimile No. (949) 709-3957

 

15

 

If to the Employer:

 

Primal Solutions, Inc.

18881 Von Karman Avenue, Suite 500

Irvine, California 92624

Attention:  Chairman of the Compensation
Committee

Facsimile No.:  (949) 260-1515

 

10.8                        ENTIRE AGREEMENT; AMENDMENTS

 

This Agreement, along with the Change of Control Agreement, contains
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral or written,
between the parties hereto with respect to the subject matter hereof.  This Agreement may not be amended orally, but
only by an agreement in writing signed by the parties hereto.

 

10.9                        ARBITRATION OF DISPUTES

 

(a)           Exclusive Remedy.  Except as set forth in Section 10.9(c),
arbitration shall be the sole and exclusive remedy for any dispute, claim, or
controversy of any kind or nature (a “Claim”) arising out of, related to, or
connected with the Executive’s employment relationship with the Employer, or
the termination of the Executive’s employment relationship with the
Employer.  This mutual agreement to
arbitrate includes any Claim by the Executive against any parent, subsidiary,
or affiliated entity of the Employer, or any director, officer, general or
limited partner, employee or agent of the Employer or of any such parent,
subsidiary or affiliated entity.  It also
includes any claim against the Executive by the Employer, or any parent,
subsidiary or affiliated entity of the Employer.

 

(b)           Claims Subject to
Arbitration.  This agreement to arbitrate
specifically includes (without limitation) any Claim for breach of this
Agreement; any Claim under or relating to any federal, state or local law or
regulation prohibiting discrimination, harassment or retaliation based on race,
color, religion, national origin, sex, age, disability or any other condition
or characteristic protected by law; demotion, discipline, termination or other
adverse action in violation of any contract, law or public policy; entitlement
to wages or other economic compensation; any Claim for personal, emotional,
physical, economic or other injury; and any claim for misappropriation of confidential
information or trade secrets or business torts.

 

(c)           Claims Not Subject to
Arbitration.  This Section 10.9 does not
preclude either party from making an application to a court of competent
jurisdiction for:  (a)  provisional remedies (e.g., temporary
restraining order or preliminary injunction) pursuant to California Code of
Civil Procedure section 1281.8; or (b) a temporary restraining order or
injunction under California Code of Civil Procedure section 527.8 in order to
obtain protection against employee violence or threats of violence.  This Section 10.9 also does not apply to any
claims by the Executive:  (i) for workers’
compensation benefits; (ii) for unemployment insurance benefits; (iii) under a
benefit plan where the plan specifies a separate arbitration procedure; (iv)
filed with an administrative agency which are not legally subject to
arbitration under this Agreement; or (v) which are otherwise expressly
prohibited by law from being subject to arbitration under this Agreement.

 

16

 

(d)           Procedure.  The arbitration proceedings shall be
conducted in Orange County, California. 
Any Claim submitted to arbitration shall be decided by a single, neutral
arbitrator (the “Arbitrator”).  The
parties to the arbitration shall mutually select the Arbitrator not later than
45 days after service of the demand for arbitration.  If the parties for any reason do not mutually
select the Arbitrator within the 45 day period, then any party may apply to any
court of competent jurisdiction to appoint a retired judge as the
Arbitrator.  The parties agree that
arbitration shall be conducted in accordance with California Code of Civil
Procedure sections 1280 et seq., including Code of Civil Procedure section
1283.05 regarding discovery, except as modified in this Agreement.  The Arbitrator shall apply the substantive
federal, state, or local law and statute of limitations governing any Claim
submitted to arbitration.  In ruling on
any Claim submitted to arbitration, the Arbitrator shall have the authority to
award only such remedies or forms of relief as are provided for under the
substantive law governing such Claim. 
The Arbitrator shall issue a written decision revealing the essential
findings and conclusions on which the decision is based.  Judgment on the Arbitrator’s decision may be
entered in any court of competent jurisdiction.

 

(e)           Costs.  The Employer shall be responsible for paying
the fees and costs incurred in the arbitration (e.g., filing fees, transcript
costs and Arbitrator’s fees).  The
parties shall be responsible for their own attorneys’ fees and costs, except
that the Arbitrator shall have the authority to award attorneys’ fees and costs
to the prevailing party in accordance with the applicable law governing the
dispute.

 

(f)            Interpretation of
Arbitrability.  The Arbitrator, and not
any federal or state court, shall have the exclusive authority to resolve any
issue relating to the interpretation, formation or enforceability of this
Agreement, or any issue relating to whether a Claim is subject to arbitration
under this Agreement, except that any party may bring an action in any court of
competent jurisdiction to compel arbitration in accordance with the terms of
this Agreement.

 

10.10                 HEADINGS; CONSTRUCTION

 

The headings in this Agreement are provided for convenience only and
will not affect its construction or interpretation.  All references to “Section” or “Sections”
refer to the corresponding Section or Sections of this Agreement unless
otherwise specified.  All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word “including”
does not limit the preceding words or terms.

 

10.11                 SEVERABILITY

 

If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction or Arbitrator, then to the extent that the
rights or obligations of the parties under this Agreement will not be
materially and adversely affected thereby, the other provisions of this
Agreement will remain in full force and effect. 
Any provision of this Agreement held invalid or unenforceable only in
part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

 

17

 

10.12                 COUNTERPARTS

 

This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

 

10.13                 GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with
the laws of the State of California applicable to contracts entered into and
wholly to be performed within the State of California.  If any legal action is necessary to enforce
the terms and conditions of this Agreement, the prevailing party shall be
entitled to recover all reasonable attorneys’ fees and disbursements as
determined by the court or arbitrator.

 

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joseph R. Simrell

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYER

  
	
   

  	
   

  
	
   

  	
  PRIMAL SOLUTIONS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

18

 

Exhibit A

 

Job Description

Chairman of the Board/Chief Executive Officer/President

 

19

 

Exhibit A

 

Job Description

 

	
  Job Title:

  	
   

  	
  Chairman of
  the Board, Chief Executive Officer/President

  
	
  Department:

  	
   

  	
  Executive

  
	
  Reports To:

  	
   

  	
  Board of
  Directors

  
	
  Job Code:

  	
   

  	
  TBD

  
	
  FLSA Status:

  	
   

  	
  Exempt

  

 

Summary:  Manages and directs the organization toward
its primary objectives, based on profit and return on capital, by performing
the following duties personally or through subordinate managers.

 

Essential Duties and Responsibilities
include the following.  Other duties may
be assigned.

 

•                              Plans,
coordinates, and controls the daily operation of the organization through the
organization’s managers.

 

•                              Establishes
current and long range goals, objectives, plans and policies, subject to
approval by the Board of Directors.

 

•                              Dispenses
advice, guidance, direction, and authorization to carry out major plans,
standards and procedures, consistent with established policies and Board
approval.

 

•                              Meets
with the organization’s other executives to ensure that operations are being
executed in accordance with the organization’s policies.

 

•                              Oversees
the adequacy and soundness of the organization’s financial structure.

 

•                              Reviews
operating results of the organization, compares them to established objectives,
and takes steps to ensure that appropriate measures are taken to correct
unsatisfactory results.

 

•                              Plans
and directs all investigations and negotiations pertaining to mergers, joint
ventures, the acquisition of businesses, or the sale of major assets with
approval of the Board of Directors.

 

•                              Establishes
and maintains an effective system of communications throughout the
organization.

 

•                              Represents
the organization with major customers, stockholders, the financial community,
and the public.

 

20Exhibit 10.44

 

AMENDMENT NO.
1 TO

 

EMPLOYMENT LETTER
AGREEMENT

 

This Agreement is made effective as of December 16, 2005 by and between
Primal Solutions, Inc., a Delaware corporation (the “Employer”), and William C.
Bousema, an individual resident in Newport Beach, California (the “Executive”).

 

RECITALS

 

A.            The Employer and the
Executive are parties to an Employment Letter Agreement dated March 25, 2005
(the “Employment Agreement”) and a Change of Control Agreement dated March 25,
2005 (the “Change of Control Agreement”).

 

B.            The Executive and the
Employer mutually desire to extend the Employment Agreement for a period of two
years and to effect certain other amendments to the Employment Agreement and
the Change of Control Agreement. The Executive and the Employer are
concurrently entering into an Amended and Restated Change of Control Agreement
dated the same date as this Agreement.

 

C.            Except as otherwise
provided in this Agreement, the capitalized terms used herein shall have the
same meaning ascribed to such terms in the Employment Agreement.

 

AGREEMENT

 

In consideration of the mutual covenants contained herein, and such
other good and valuable consideration, the parties agree as follows:

 

1.             AMENDMENTS TO THE EMPLOYMENT AGREEMENT

 

The following portions of the Employment Agreement are amended as
follows:

 

1.1           The following sentence
is added to the end of the Executive Incentive Compensation Section:

 

“Incentive Compensation will be paid to
Executive no later than 2-1/2 months following the close of the calendar year
in which the Incentive Compensation was earned; provided, however, if the Board
of Directors in its discretion determines that the Employer does not have
sufficient available cash to pay such amount on such date, the Board of
Directors may defer, without interest, payment of any or all of such amount, to
not later than December 31 of the calendar year following the calendar year in
which the Incentive Compensation was earned.”

 

1.2           The second paragraph in
the Termination section of the Employment Agreement is deleted and the
following substituted in its place:

 

“The following paragraphs of this Termination
section (the “Severance Provisions”) shall expire on December 31, 2007 and are
applicable to circumstances other than a Change in Control:”

 

1

 

1.3           The last sentence in paragraph
(A) in the Termination Section is deleted and the following substituted in its
place:

 

“If Executive is terminated without cause, in
no event will payments under (i), (ii), (iv), (v) and (vi) above extend beyond
2-1/2 months following the close of the calendar year in which termination
under this paragraph occurs, and payments will be accelerated, if necessary, to
prevent such 2-1/2 month period to be exceeded. If Executive terminates his
employment for Good Reason, in no event will payments under (i), (ii), (iv) and
(vi) above commence prior to six months following such separation.”

 

1.4           The following sentence
is added to the end of paragraph (B) in the Termination Section:

 

“Payments under (ii) above shall be made no
later than 2-1/2 months following the close of the calendar year in which the
Incentive Compensation was earned, and payments will be accelerated, if
necessary, to prevent such 2-1/2 month period to be exceeded.”

 

1.5           The last paragraph in
the Termination section of the Employment Agreement is deleted and the
following substituted in its place:

 

“Notwithstanding the foregoing, for the 60
day period prior to October 31, 2007, Primal will commence negotiations with
you in good faith regarding the new terms of this Termination section (the “New
Severance Provisions”). If, following such good faith negotiations of the New
Severance Provisions, you and Primal are unable to reach agreement regarding
the New Severance Provisions, the Severance Provisions contained herein shall
expire on their terms. If Primal does not negotiate in good faith, this letter
agreement will expire on December 31, 2007, your employment with Primal will be
terminated and you will be paid the severance benefits provided for in
paragraph A of this Termination section and all outstanding unvested stock
options granted to you will accelerate and vest.”

 

1.5           The
following additional paragraph shall be added to the end of the Termination
section of the Employment Agreement:

 

Notwithstanding any provision of this letter agreement to the contrary,
if, at the time of Executive’s termination of employment with the Company, he
is a “specified employee” as defined in Section 409A of the Code, and one or
more of the payments or benefits received or to be received by Executive
pursuant to this Agreement would constitute deferred compensation subject to
Section 409A, no such payment or benefit will be provided under this Agreement
until the earliest of (A) the date which is six (6) months after his “separation
from service” for any reason, other than death or “disability” (as such terms
are used in Section 409A(a)(2) of the Code), (B) the date of his death or “disability”
(as such term is used in Section 409A(a)(2)(C) of the Code) or (C) the
effective date of a “change in the ownership or effective control” of the
Company (as such term is used in Section 409A(a)(2)(A)(v) of the Code).  The
provisions of this paragraph shall only apply to the extent required to avoid
Executive’s incurrence of any penalty

 

2

 

tax or interest under Section 409A of the
Code or any regulations or Treasury guidance promulgated thereunder.  In
addition, if any provision of this Agreement would cause Executive to incur any
penalty tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder, the Company may reform such provision
to maintain to the maximum extent practicable the original intent of the
applicable provision without violating the provisions of Section 409A of the
Code. To the extent that an insurance benefit received or to be received by
Executive constitutes deferred compensation subject to Section 409A of the
Code, Executive will pay any insurance premiums that would otherwise be due on
the first day of each calendar month during the period the benefits are
deferred under this paragraph. Executive will be reimbursed for such insurance
premiums on the date that payments and benefits are otherwise provided under
this paragraph.

 

2.             TERM

 

This Agreement shall commence on the date first written above and
continue in effect until the expiration or sooner termination of the Employment
Agreement.

 

3.             EFFECT ON EMPLOYMENT AGREEMENT

 

This Agreement shall supersede and replace any inconsistent provisions
of the Employment Agreement. Except, as amended by this Agreement, the
Employment Agreement shall continue in full force and effect in accordance with
its terms. The provisions of the Employment Agreement which are not
inconsistent with those of this Agreement shall be incorporated herein by this
reference.

 

4.             GOVERNING LAW

 

This Agreement shall be interpreted and construed under California law.

 

5.             COUNTERPARTS

 

This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

[Remainder of
Page Intentionally Left Blank]

 

3

 

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  William C. Bousema

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYER

  
	
   

  	
   

  
	
   

  	
  PRIMAL SOLUTIONS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

4

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