Exhibit 10.2
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as of March 31, 2006, is
by and among Primal Solutions, Inc., a Delaware corporation (the "Borrower"),
Wireless Billing Solutions, a California corporation ("WBS"), and such other
parties as may become Grantors hereunder on or after the date hereof (together
with the Borrower and WBS, the "Grantors" and, individually, a "Grantor") and
the Investors named as such in the Purchase Agreement, dated March 31, 2006 (the
"Purchase Agreement"), among the Borrower and such Investors (collectively, the
"Purchasers").
WHEREAS, pursuant to the terms of the Purchase Agreement, the Purchasers are
acquiring from the Borrower, $1,500,000 in an aggregate principal amount of the
Borrower's 5% Senior Secured Convertible Notes (the "Notes"); and
WHEREAS, the Grantors wish to grant security interests in favor of the
Purchasers as herein provided to secure the obligations of the Borrower under
the Notes;
NOW THEREFORE, in consideration of the promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS. ALL CAPITALIZED TERMS USED HEREIN WITHOUT
DEFINITIONS SHALL HAVE THE RESPECTIVE MEANINGS PROVIDED THEREFOR IN THE PURCHASE
AGREEMENT OR THE NOTES. AS USED HEREIN THE TERM "OBLIGATIONS" SHALL MEAN ALL
PRINCIPAL, INTEREST (INCLUDING INTEREST ACCRUED AFTER THE FILING OF A BANKRUPTCY
OR SIMILAR PETITION WHETHER OR NOT A CLAIM THEREFOR IS ENFORCEABLE), FEES,
EXPENSES AND INDEMNITIES PAYABLE FROM TIME TO TIME BY THE GRANTORS UNDER THE
NOTES AND THE OTHER TRANSACTION DOCUMENTS, INCLUDING REIMBURSEMENTS UNDER
SECTION 9.5 OF THE PURCHASE AGREEMENT. THE TERM "STATE," AS USED HEREIN, MEANS
THE STATE OF NEW YORK. ALL TERMS DEFINED IN THE UNIFORM COMMERCIAL CODE OF THE
STATE AND USED HEREIN SHALL HAVE THE SAME DEFINITIONS HEREIN AS SPECIFIED
THEREIN. HOWEVER, IF A TERM IS DEFINED IN ARTICLE 9 OF THE UNIFORM COMMERCIAL
CODE OF THE STATE DIFFERENTLY THAN IN ANOTHER ARTICLE OF THE UNIFORM COMMERCIAL
CODE OF THE STATE, THE TERM HAS THE MEANING SPECIFIED IN ARTICLE 9.
2.
GRANT OF SECURITY INTEREST. EACH GRANTOR HEREBY GRANTS TO THE
PURCHASERS, TO SECURE THE PAYMENT AND PERFORMANCE IN FULL OF ALL OF THE
OBLIGATIONS, A SECURITY INTEREST IN AND SO PLEDGES TO THE PURCHASERS THE
FOLLOWING PROPERTIES, ASSETS AND RIGHTS OF SUCH GRANTOR, WHEREVER LOCATED,
WHETHER NOW OWNED OR HEREAFTER ACQUIRED OR ARISING, AND ALL PROCEEDS AND
PRODUCTS THEREOF (ALL OF THE SAME BEING HEREINAFTER CALLED THE "COLLATERAL"):
(I)
GOODS (INCLUDING INVENTORY, EQUIPMENT AND ANY ACCESSIONS
THERETO),
(II)
INSTRUMENTS (INCLUDING PROMISSORY NOTES),
(III)
DOCUMENTS,
(IV)
ACCOUNTS,
(V)
CHATTEL PAPER (WHETHER TANGIBLE OR ELECTRONIC),
(VI)
DEPOSIT ACCOUNTS,
(VII)
LETTER-OF-CREDIT RIGHTS (WHETHER OR NOT THE LETTER OF CREDIT IS
EVIDENCED BY A WRITING),
(VIII)
COMMERCIAL TORT CLAIMS,
(IX)
SECURITIES AND ALL OTHER INVESTMENT PROPERTY ("INVESTMENT
PROPERTY"),
(X)
SUPPORTING OBLIGATIONS,
(XI)
CONTRACT RIGHTS OR RIGHTS TO THE PAYMENT OF MONEY, INSURANCE
CLAIMS AND PROCEEDS,
(XII)
GENERAL INTANGIBLES INCLUDING, WITHOUT LIMITATION, ALL PAYMENT
INTANGIBLES, PATENTS, PATENT APPLICATIONS, TRADEMARKS, TRADEMARK APPLICATIONS,
TRADE NAMES, COPYRIGHTS, COPYRIGHT APPLICATIONS,