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, xxx 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;
|
| (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;
|
| (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
|
| (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.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxx
Wireless
Billing Systems
c/o
Primal Solutions, Inc.
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx
If
to
Primal:
Primal
Solutions, Inc.
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxx
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.
|
| 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/
Xxxxx X. Greenhouse
|
|
||||||||
|
Name:
|
||||||||||
|
Title:
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
BORROWER:
|
||||||||||
|
|
||||||||||
|
WIRELESS
BILLING SYSTEMS
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx
|
|
||||||||
|
Name:
Xxxxxx X. Xxxxxxx
|
||||||||||
|
Title:
Chief Executive Officer
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
PRIMAL:
|
||||||||||
|
|
||||||||||
|
PRIMAL
SOLUTIONS, INC.
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx
|
|
||||||||
|
Name: Xxxxxx
X. Xxxxxxx
|
||||||||||
|
Title: Chief
Executive Officer, Chairman
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
SUBORDINATED
LENDER:
|
||||||||||
|
|
||||||||||
|
LIGHTBRIDGE,
INC.
|
||||||||||
|
|
||||||||||
|
|
||||||||||
|
By:
|
/s/
Xxx X. X'Xxxxx
|
|
||||||||
|
Title:
|
Chief
Financial Officer
|
|||||||||
|
|
||||||||||
|
Address:
|
||||||||||
|
00
Xxxxxxxxx Xxxxx
|
|
|||||||||
|
Xxxxxxxxxx,
XX 00000
|
|
|||||||||
|
|
|
|||||||||
|
Fax:
|
000-000-0000
|
|
||||||||
|
|
|
|
|
|
|
|
||||
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.)
