Exhibit 10.01

SECURITIES SUBSCRIPTION AGREEMENT

     SECURITIES SUBSCRIPTION AGREEMENT (the “Agreement”), dated as of June 30,
2005 by and among INSIGNIA SOLUTIONS PLC, a public limited company incorporated
under the laws of England and Wales (registered number: 1961960) (the
“Company”), INSIGNIA SOLUTIONS INC. a company incorporated under the laws of
Delaware (the “Issuer”), and _______________ (the “Buyer”). The Issuer is a
wholly owned subsidiary of the Company. Capitalized terms used herein and not
otherwise defined herein are defined in Section 10 hereof.

WHEREAS:

     Subject to the terms and conditions set forth in this Agreement, the Issuer
wishes to sell tothe Buyer, and the Buyer wishes to subscribe for ___ shares of
Series A Preferred Stock, stated value of $100 per share, of the Issuer (the
“Preferred Stock”). Each share of Preferred Stock shall be exchangeable as
described herein for American depository shares (each an “ADS” and collectively,
the “ADSs”), each ADS representing one ordinary share, 20 UK pence per share
nominal value, of the Company (the “Ordinary Shares”). The aggregate purchase
price to be paid by the Buyer shall be _____________ Dollars ($___,000).

     NOW THEREFORE, the Issuer, the Company and the Buyer hereby agree as
follows:

  1.   PURCHASE OF SERIES A PREFERRED STOCK; EXCHANGE FOR ADSs.

     (a)       Closing. Subject to the terms and conditions set forth herein,
the Issuer hereby agrees to issue to the Buyer, and the Buyer hereby agrees to
subscribe for ___ shares of Preferred Stock. The issuance of and subscription
for the ___ shares of Preferred Stock hereunder shall occur (the “Closing”)
within two (2) Trading Days following the date of satisfaction of the conditions
to the Closing set forth in Sections 6 and 7 below, the date of such Closing,
the “Closing Date”). The terms and conditions of the Preferred Stock shall be as
set forth in Exhibit A attached hereto. All payments made under this Agreement
shall be made in lawful money of the United States of America by check or wire
transfer of immediately available funds to such account as the Company or the
Issuer may from time to time designate by written notice in accordance with the
provisions of this Agreement. Whenever any amount expressed to be due by the
terms of this Agreement is due on any day that is not a Trading Day, the same
shall instead be due on the next succeeding day which is a Trading Day.

     (b)       Exchange of Preferred Stock for ADSs.

     (i)       Subject to Section 1(b)(ii), the shares of Preferred Stock shall
be exchangeable for Exchange Shares at the Exchange Rate, as such ratio may be
adjusted from time to time to reflect stock dividends, combinations, splits or
similar events as provided in Section 1(b)(iv) hereof, under the following
circumstances:

(1)       At any time following the date of this Agreement and from time to
time, the Buyer shall have the right to exchange any or all or its shares of
Preferred Stock for Exchange Shares at the Exchange Rate;

(2)       In the event that at any time following the date of this Agreement and
the date that the Registration Statement (as defined in Section 4(a) hereof) is
declared effective by the SEC (the “Effective Date”), the Sale Price of the ADSs
on the Principal Market shall be greater

 

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than $1.50 (as such amount may be adjusted from time to time to reflect stock
dividends, combinations, splits or similar events) for a period of ten
(10) consecutive Trading Days, any and all remaining outstanding shares of
Preferred Stock will, upon written notice from the Company to the Buyer, be
exchanged for Exchange Shares at the Exchange Rate so long as the Registration
Statement remains available for use by the Buyer and the Exchange Shares can be
issued without any restrictive transfer legend; and

(3)       To the extent any shares of the Preferred Stock have not been
exchanged pursuant hereto prior to June 30, 2007, any and all remaining
outstanding shares of Preferred Stock will automatically be exchanged (and the
Buyer, the Issuer and the Company agree to take any and all action needed to
cause the shares of Preferred Stock to be exchanged) for Exchange Shares at the
Exchange Rate.

     (ii)       The Buyer shall not have the right to exchange shares of
Preferred Stock for Exchange Shares pursuant to Section 1(b)(i)(1), nor shall
shares of Preferred Stock be automatically exchanged for Exchange Shares
pursuant to Sections 1(b)(i)(2) or 1(b)(i)(3), to the extent that after giving
effect to such exchange, the Buyer together with its affiliates would
beneficially own in excess of 9.9% of the Company’s issued and outstanding
Ordinary Shares following such exchange. For purposes hereof, the number of
Ordinary Shares beneficially owned by the Buyer and its affiliates or acquired
by the Buyer and its affiliates, as the case may be, shall include the number of
Exchange Shares issuable in connection with an exchange under this Agreement
with respect to which the determination is being made, but shall exclude the
number of ADSs which would be issuable upon exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
(including, without limitation, any other Preferred Shares, notes or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Buyer and its affiliates. For
purposes of this Section 2(b), in determining the number of issued and
outstanding Ordinary Shares, the Buyer may rely on the number of issued and
outstanding Ordinary Shares as reflected in (1) the Company’s most recent Form
10-Q or Form 10-K, as the case may be, (2) a more recent public announcement by
the Company or (3) any other written communication by the Company or its
Transfer Agent setting forth the number of Ordinary Shares issued and
outstanding. Upon the reasonable written or oral request of the Buyer, the
Company shall promptly confirm orally and in writing to the Buyer the number of
Ordinary Shares then issued and outstanding. In any case, the number of issued
and outstanding Ordinary Shares shall be determined after giving effect to the
subscription under this Agreement by the Buyer since the date as of which such
number of issued and outstanding Ordinary Shares was reported. Except as
otherwise set forth herein, for purposes of this Section, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended.

     (iii)       All rights incident to a share of Preferred Stock (excluding
rights to any dividend declared prior to exchange but unpaid as of the exchange)
will terminate automatically upon any exchange of such share for Exchange Shares
in accordance with the terms hereof.

     (iv)       In case the Company shall at any time after the date of issue of
the Preferred Stock (A) declare a dividend or make a distribution on the
Ordinary Shares payable in Ordinary Shares, (B) subdivide or split the
outstanding Ordinary Shares, (C) consolidate or reclassify the outstanding
Ordinary Shares into a smaller number of shares, (D) issue any shares of its
authorized share capital in a reclassification of Ordinary Shares (including any
such reclassification in connection with a consolidation, amalgamation or merger
in which the Company is the continuing corporation), or (E) consolidate with, or
merge with or into, any other Person, the Exchange Rate in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision, split, combination, consolidation, amalgamation, merger or
reclassification shall be proportionately adjusted so

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that the exchange of the Preferred Stock after such time shall entitle the Buyer
to receive the aggregate number of Exchange Shares or other securities of the
Company (or shares of any security into which the Ordinary Shares have been
combined, consolidated, merged or reclassified) which, if the Preferred Stock
had been exchanged immediately prior to such time, the Buyer would have owned
upon such exchange and been entitled to receive by virtue of such dividend,
distribution, subdivision, split, combination, consolidation, amalgamation,
merger or reclassification, assuming the Buyer (x) is not a Person with which
the Company consolidated or into which the Company merged or which merged into
the Company or to which such recapitalization, sale or transfer was made, as the
case may be (a “constituent person”), or an affiliate of a constituent person
and (y) failed to exercise any rights of election as to the kind or amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, amalgamation, merger, recapitalization, sale or transfer
(provided, that if the kind or amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, amalgamation,
merger, recapitalization, sale or transfer is not the same for each Ordinary
Share held immediately prior to such reclassification, change, consolidation,
amalgamation, merger, recapitalization, sale or transfer by other than a
constituent person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised (“non-electing share”), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such reclassification, change, consolidation,
amalgamation, merger, recapitalization, sale or transfer by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such adjustment shall be made
successively whenever any event listed above shall occur. In the event that, at
any time as a result of the provisions of this Section 1(b)(iv), the Buyer upon
subsequent exchange shall become entitled to receive any shares in the
authorized share capital of the Company other than the Exchange Shares, the
number of such other shares so receivable upon exchange of the Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.
The Company shall notify the Buyer of all adjustments pursuant to this
Section 1(b)(iv) and such notice shall be accompanied by a schedule of
computations of the adjustments.

     (v)       In order to exercise its right to exchange shares of Preferred
Stock for Exchange Shares pursuant to Section 1(b), the Buyer shall surrender
the certificate or certificates representing the Preferred Stock it wants to
exchange for Exchange Shares, together with a duly signed irrevocable exchange
notice (an “Exchange Notice”), stating that the Buyer elects to exchange such
shares of Preferred Stock to the Company. Subject to Section 1(b)(ii) hereof, in
the event that shares of Preferred Stock are to be automatically exchanged for
Exchange Shares pursuant to Sections 1(b)(i)(2) or 1(b)(i)(3), the Buyer shall
promptly surrender the certificate or certificates representing the Preferred
Stock to be automatically exchanged for Exchange Shares to the Company. Shares
of Preferred Stock shall be deemed to have been exchanged immediately prior to
the close of business on the day of surrender of such shares of Preferred Stock
for exchange in accordance with the foregoing provisions, and at such time the
rights of the Buyer as a holder of such shares of the Preferred Stock shall
cease. The Company shall, within three business days after the shares of
Preferred Stock have been deemed exchanged, allot the relevant Exchange Shares,
whereupon the Buyer shall be treated for all purposes as the record holder of
the Exchange Shares issuable upon exchange. As promptly as practicable on or
after the date of allotment of the relevant Exchange Shares (but in no event
later than three business days thereafter), the Company shall issue and deliver
to the Buyer a certificate or certificates for the full number of Exchange
Shares issuable upon exchange. No fractional Exchange Shares shall be issued
upon the exchange of any shares of Preferred Stock and the total number of
Exchange Shares issuable shall be rounded up or down to the nearest whole
Exchange Share.

     (c)       Taxes. The Issuer shall pay any and all transfer, stamp or
similar taxes that may be payable with respect to the issuance and delivery of
any Preferred Shares to the Buyer made under or in

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connection with this Agreement. The Company shall pay any and all transfer,
stamp or similar taxes that may be payable with respect to the issuance and
delivery of any Ordinary Shares, ADSs or Warrants to the Buyer made under or in
connection with this Agreement.

     (d)       No Issuance below Nominal Value. Notwithstanding any provision
hereof to the contrary, the Company shall not effect any issuance of Ordinary
Shares under this Agreement (or have its transfer agent or depository issue any
ADSs) and the Buyer shall not have the right nor the obligation to subscribe for
any ADSs under this Agreement where the Exchange Price for any subscriptions of
Exchange Shares would be less than the equivalent U.S. dollar amount of the then
nominal value of the Ordinary Shares calculated by reference to the Currency
Conversion Rate prevailing at the date the relevant Ordinary Shares are issued
to the Buyer. “Currency Conversion Rate” means on any given day the average
currency conversion rate quoted by the Bank of America in London as the price
for Pounds Sterling purchased with U.S. Dollars. As of the date of this
Agreement, the nominal value of the Ordinary Shares is 20 UK pence. The Company
shall give the Buyer at least five (5) Trading Days prior written notice of any
changes to the nominal value of the Ordinary Shares.

  2.   BUYER’S REPRESENTATIONS AND WARRANTIES.

     The Buyer represents and warrants to the Company and to the Issuer that as
of the date hereof and as of the Closing Date:

     (a)       Investment Purpose. The Buyer is entering into this Agreement and
acquiring the ___ shares of Preferred Stock and the Warrants (as defined in
Section 4(d) hereof) (the ___ shares of Preferred Stock and the Warrants are
collectively referred to herein as the “Securities”), for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof; provided however, by making the
representations herein, the Buyer does not agree to hold any of the Securities
for any minimum or other specific term.

     (b)       Accredited Investor Status. The Buyer is an “accredited investor”
as that term is defined in Rule 501(a)(3) of Regulation D.

     (c)       Reliance on Exemptions. The Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company and the Issuer are relying in part upon the truth and accuracy
of, and the Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
the Buyer to acquire the Securities.

     (d)       Information. The Buyer has been furnished with all materials
relating to the business, finances and operations of the Company and the Issuer
and materials relating to the offer and issue of the Securities that have been
reasonably requested by the Buyer, including, without limitation, the SEC
Documents (as defined in Section 3(f) hereof). The Buyer understands that its
investment in the Securities involves a high degree of risk. The Buyer (i) is
able to bear the economic risk of an investment in the Securities including a
total loss, (ii) has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the proposed
investment in the Securities and (iii) has had an opportunity to ask questions
of and receive answers from the officers of the Company and the Issuer
concerning the financial condition and business of the Company and the Issuer
and others matters related to an investment in the Securities. Neither such
inquiries nor any other due diligence investigations conducted by the Buyer or
its representatives shall modify, amend or affect

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the Buyer’s right to rely on the Company’s representations and warranties
contained in Section 3 below. The Buyer has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

     (e)       No Governmental Review. The Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

     (f)       Transfer or Resale. The Buyer understands that except as provided
in the Registration Rights Agreement (as defined in Section 4(a) hereof):
(i) the Securities have not been and are not being registered under the 1933 Act
or any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder or (B) an exemption
exists permitting such Securities to be sold, assigned or transferred without
such registration; (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of the Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.

     (g)       Validity; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.

     (h)       Residency. The Buyer is a resident of the State of ______.

     (i)        No Prior Short Selling. The Buyer represents and warrants to the
Company that at no time prior to the date of this Agreement has any of the
Buyer, its agents, representatives or affiliates engaged in or effected, in any
manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Rule 3b-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) of the Ordinary Shares or ADSs or (ii) hedging transaction, which
establishes a net short position with respect to the Ordinary Shares or ADSs.

  3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE ISSUER.

     Each of the Company and the Issuer jointly and severally represents and
warrants to the Buyer that as of the date hereof and as of the Closing Date:

     (a)       Organization and Qualification. The Issuer is a wholly owned
subsidiary of the Company. The Company and its “Subsidiaries” (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns 50% or more of the voting stock or capital stock or other
similar equity interests) are corporations duly organized and validly existing
in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authority to own their
properties and to carry on their business as now being conducted. Each of the

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Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing could not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, “Material Adverse Effect” means any material
adverse effect on any of: (i) the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations under the Transaction Documents (as defined
in Section 3(b) hereof). The Company has no Subsidiaries except as set forth on
Schedule 3(a).

     (b)       Authorization; Enforcement; Validity. (i) Each of the Company and
the Issuer has the requisite corporate power and authority to enter into and
perform its obligations applicable to it under this Agreement, the terms and
conditions of the Preferred Stock as set forth in Exhibit A attached hereto, the
Registration Rights Agreement, the Warrants and each of the other agreements
entered into by the parties on the Closing Date and attached hereto as exhibits
to this Agreement (collectively, the “Transaction Documents”), and to issue the
Securities in accordance with the terms hereof and thereof, (ii) the execution
and delivery of the Transaction Documents by the Company and the Issuer and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation, the issuance of the Preferred Shares and the
Warrants and the reservation for issuance and the issuance of the Warrant Shares
and Ordinary Shares and ADSs issuable under the Transaction Documents,
respectively, have been duly authorized by the Company’s and the Issuer’s Board
of Directors and no further consent or authorization is required by the Company,
the Issuer, its Board of Directors or its shareholders, (iii) this Agreement has
been, and each other Transaction Document shall be on the Closing Date, duly
executed and delivered by the Company and the Issuer and (iv) this Agreement
constitutes, and each other Transaction Document upon its execution on behalf of
the Company and the Issuer, shall constitute, the valid and binding obligations
of the Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies. The Board of Directors of the Company has approved the
resolutions (the “Company Signing Resolutions”) substantially in the form as set
forth as Exhibit B-1 attached hereto to authorize this Agreement and the
transactions contemplated hereby. The Company Signing Resolutions are valid, in
full force and effect and have not been modified or supplemented in any respect.
The Board of Directors of the Issuer has approved the resolutions (the “Issuer
Signing Resolutions”) substantially in the form as set forth as Exhibit B-2
attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Issuer Signing Resolutions are valid, in full force and effect and
have not been modified or supplemented in any respect. The Company has delivered
to the Buyer a certificate of the Secretary of the Company certifying the
adoption of the Company Signing Resolutions by the members of the Board of
Directors of the Company. No other approvals or consents of the Company’s Board
of Directors and/or shareholders is necessary under applicable laws and the
Company’s Articles of Association (the “Articles of Association”) and/or
Memorandum of Association (the “Memorandum of Association”) to authorize the
execution and delivery of the Transaction Documents or any of the transactions
contemplated hereby or thereby, including, but not limited to, the issuance of
the Warrants, the reservation for issuance and the issuance of the Warrant
Shares upon exercise of the Warrants and the reservation for issuance and the
issuance of the ADSs on exchange of the Preferred Stock. The Issuer has
delivered to the Buyer a certificate of the Secretary of the Issuer certifying
the adoption of the Issuer Signing Resolutions by the members of the Board of
Directors of the Issuer. No other approvals or consents of the Issuer’s Board of
Directors and/or stockholders is necessary under applicable laws and the
Issuer’s Certificate of Incorporation (the “Certificate of Incorporation”)
and/or the Issuer’s By-Laws (the “By-Laws”) to authorize the execution

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and delivery of the Transaction Documents or any of the transactions
contemplated hereby or thereby, including but not limited to the issuance of the
Preferred Stock.

     (c)       Capitalization. As of June 24, 2005, 2005, the authorized share
capital of the Company consists of (i) 75,000,000 Ordinary Shares, of which
42,433,025 Ordinary Shares are issued and outstanding, none are held as treasury
shares, 41,604,818 Ordinary Shares are represented by ADSs, 9,772,071 Ordinary
Shares are reserved for issuance pursuant to the Company’s stock option plans
and employee stock purchase plans, of which only approximately 2,115,742
Ordinary Shares remain available for future grants and 6,108,183 Ordinary Shares
are issuable and reserved for issuance pursuant to securities (other than stock
options issued pursuant to the Company’s stock option plans) exercisable or
exchangeable for, or convertible into, Ordinary Shares and (ii) 3,000,000
Preferred Shares, 20 UK pence nominal value, of which as of the date hereof no
Preferred Shares are issued and outstanding. All of such issued and outstanding
Ordinary Shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed in Schedule 3(c), (i) no
shares of the Company’s capital are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities, (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares in the capital of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares in the capital of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares in the capital of the Company or any of its Subsidiaries, (iv) there are
no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except the Registration Rights Agreement), (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. The Company has furnished to the Buyer true and
correct copies of the Articles of Association, as amended and as in effect on
the date hereof, and the Memorandum of Association, as currently in effect on
the date hereof, and summaries of the terms of all securities convertible into
or exercisable for Ordinary Shares or ADSs, if any, and copies of any documents
containing the material rights of the holders thereof in respect thereto. As of
June 30, 2005 the authorized capital stock of the Issuer consists of (i) 1,000
shares of common stock, of which as of the date hereof, 1,000 shares are issued
and outstanding, none are held as treasury shares, no shares are reserved for
issuance pursuant to the Issuer’s stock option plans and no shares are issuable
and reserved for issuance pursuant to securities exercisable or exchangeable
for, or convertible into, shares of common stock of the Issuer and (ii) 20,000
shares of preferred stock of the Issuer, no par value with a $100 per share
liquidation preference, of which as of the date hereof 10,000 shares are issued
and outstanding. All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(c), (i) no shares of the Issuer’s capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Issuer, (ii) there are no outstanding debt
securities of the Issuer, (iii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Issuer or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Issuer or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Issuer or
any of its Subsidiaries or

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options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Issuer or any of its Subsidiaries, (iv) there are
no agreements or arrangements under which the Issuer or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act
(except the Registration Rights Agreement), (v) there are no outstanding
securities or instruments of the Issuer or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Issuer or any of its Subsidiaries is
or may become bound to redeem a security of the Issuer or any of its
Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. The Issuer has furnished to the Buyer true and
correct copies of the Certificate of Incorporation, as amended and as in effect
on the date hereof and the By-laws, as amended and as in effect on the date
hereof, and summaries of the terms of all securities convertible into or
exercisable for its common stock, if any, and copies of any documents containing
the material rights of the holders thereof in respect thereto.

     (d)       Issuance of Securities. The Preferred Stock has been duly
authorized and, upon issuance in accordance with the terms of the Transaction
Documents shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes, liens and charges with respect to the issue thereof.
The Warrants have been duly authorized and, upon issuance in accordance with the
terms hereof and the Warrants, the Warrant Shares and the Ordinary Shares
represented by such Warrant Shares shall be (i) validly issued, fully paid and
non-assessable and (ii) free from all taxes, liens and charges with respect to
the issue thereof. ________ ADSs and ________ Ordinary Shares represented by
such ADSs have been duly authorized and reserved for issuance as Exchange Shares
upon exchange of the Preferred Stock. ________ ADSs and ________ Ordinary Shares
represented by such ADSs have been duly authorized and reserved for issuance
upon exercise of the Warrants. Upon issuance in accordance with the terms and
conditions of the Transaction Documents, the Exchange Shares and the Ordinary
Shares represented by such Exchange Shares shall be validly issued, fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Ordinary Shares.

     (e)       No Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the Issuer and the consummation by the Company and the Issuer of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Preferred Stock by the Issuer and the issuance of the Warrants,
and the reservation for issuance and issuance of the Warrant Shares and the ADSs
and the Ordinary Shares represented by such ADSs) by the Company will not
(i) result in a violation of the Articles of Association, the Memorandum of
Association, the Certificate of Incorporation or By-Laws or (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company, the Issuer or any of their Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the Principal Market applicable to the Company, the
Issuer or any of their Subsidiaries) or by which any property or asset of the
Company, the Issuer or any of their Subsidiaries is bound or affected, except in
the case of conflicts, defaults and violations under clause (ii), which could
not reasonably be expected to result in a Material Adverse Effect. Except as
disclosed in Schedule 3(e), neither the Company, the issuer nor any of their
Subsidiaries is in violation of any term of or in default under its Articles of
Association, Memorandum of Association, Certificate of Incorporation, By-Laws or
their organizational charter or by-laws, respectively. Except as disclosed in
Schedule 3(e), neither the Company, the Issuer nor any of their

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Subsidiaries is in violation of any term of or is in default under any material
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company,
the Issuer or their Subsidiaries, except for possible conflicts, defaults,
terminations or amendments which could not reasonably be expected to have a
Material Adverse Effect. The business of the Company and its Subsidiaries is not
being conducted, and shall not be conducted, in violation of any law, ordinance,
regulation of any governmental entity, except for possible violations, the
sanctions for which either individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and as required under the 1933 Act or applicable
state securities laws, the Company or the Issuer is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by the Transaction Documents in accordance with the terms hereof or
thereof. Except as disclosed in Schedule 3(e), all consents, authorizations,
orders, filings and registrations which the Company or the issuer is required to
obtain pursuant to the preceding sentence shall be obtained or effected on or
prior to the Closing Date. Except as listed in Schedule 3(e), since June 30,
2004, the Company has not received nor delivered any notices or correspondence
from or to the Principal Market. The Principal Market has not commenced any
delisting proceedings against the Company.

     (f)       SEC Documents; Financial Statements. Except as disclosed in
Schedule 3(f), since January 1, 2004, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein being hereinafter referred to as the “SEC Documents”). As of
their respective dates (except as they have been correctly amended), the SEC
Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC (except as they may have been properly amended), contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As of
their respective dates (except as they have been properly amended), the
financial statements of the Company included in the SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as listed in Schedule 3(f), the Company has received no
notices or correspondence from the SEC since June 30, 2004. The SEC has not
commenced any enforcement proceedings against the Company or any of its
subsidiaries.

     (g)       Absence of Certain Changes. Except as disclosed in Schedule 3(g),
since January 1, 2005, there has been no material adverse change in the
business, properties, operations, financial condition or results of operations
of the Company or its Subsidiaries. The Company or the Issuer has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any Bankruptcy Law nor does the Company or the Issuer or any of
their Subsidiaries have any knowledge or

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reason to believe that its creditors intend to initiate involuntary bankruptcy
or insolvency proceedings. The Company is financially solvent and is generally
able to pay its debts as they become due.

     (h)       Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or the Issuer or any of its Subsidiaries, threatened against or
affecting the Company, the Issuer,, the Preferred Stock, the Ordinary Shares or
ADSs or any of the Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect. A description of
each action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body which, as
of the date of this Agreement, is pending or threatened in writing against or
affecting the Company, the Issuer, the Preferred Stock, the Ordinary Shares or
ADSs or any of the Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their capacities as such, is
set forth in Schedule 3(h).

     (i)       Acknowledgment Regarding Buyer’s Status. Each of the Company and
the Issuer acknowledge and agree that the Buyer is acting solely in the capacity
of arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby. Each of the Company and the Issuer
further acknowledges that the Buyer is not acting as a financial advisor or
fiduciary of the Company or the Issuer (or in any similar capacity) with respect
to the Transaction Documents and the transactions contemplated hereby and
thereby and any advice given by the Buyer or any of its representatives or
agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to the Buyer’s subscription
for the Securities. Each of the Company and the Issuer further represents to the
Buyer that the Company’s and the Issuer’s decision to enter into the Transaction
Documents has been based solely on the independent evaluation by the Company,
the Issuer and their representatives and advisors.

     (j)       No General Solicitation. Neither the Company, the Issuer, or any
of their affiliates, or any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Securities.

     (k)       Intellectual Property Rights. The Company and its Subsidiaries
own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. Except as set forth on Schedule 3(k), none of the
Company’s material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights have expired or terminated, or, by the terms and
conditions thereof, could expire or terminate within two years from the date of
this Agreement. The Company and its Subsidiaries do not have any knowledge of
any infringement by the Company or its Subsidiaries of any material trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others and, except as set forth on
Schedule 3(k), there is no claim, action or proceeding being made or brought
against, or to the Company’s knowledge, being threatened against, the Company or
its Subsidiaries regarding trademark, trade name, patents, patent rights,
invention, copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement, which could reasonably be
expected to have a Material Adverse Effect.

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     (l)       Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

     (m)       Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 3(m) or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by the Company
and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.

     (n)       Insurance. The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.

     (o)       Regulatory Permits. The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

     (p)       Tax Status. The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

     (q)       Transactions With Affiliates. Except as set forth on Schedule
3(q) and other than the grant or exercise of stock options disclosed on
Schedule 3(c), none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company or any of its

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Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has an interest or is an officer, director, trustee or partner.

     (r)       Application of Takeover Protections. The Company and its board of
directors have taken or will take prior to the Closing Date all necessary
action, if any, in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Certificate of
Incorporation or the laws of the state of its incorporation which is or could
become applicable to the Buyer as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company’s issuance of the
Securities and the Buyer’s ownership of the Securities.

     (s)       Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

  4.   COVENANTS.

     (a)       Filing of Form 8-K and Registration Statement. The Company agrees
that it shall, within the time required under the 1934 Act file a Report on Form
8-K disclosing this Agreement and the transaction contemplated hereby. The
Company shall also file on or before August 31, 2005 a new registration
statement covering the sale of the ________ Warrant Shares and ________ Exchange
Shares in accordance with the terms of the Registration Rights Agreement between
the Company and the Buyer, dated as of the date hereof (“Registration Rights
Agreement”).

     (b)       Blue Sky. The Company and the Issuer shall take such action, if
any, as is reasonably necessary in order to obtain an exemption for or to
qualify (i) the issuance of the Warrants, the Warrant Shares, the shares of
Preferred Stock and the ADSs to be issued to the Buyer under the Transaction
Documents and (ii) any subsequent sale of such securities by the Buyer, in each
case, under applicable securities or “Blue Sky” laws of the states of the United
States in such states as is reasonably requested by the Buyer from time to time,
and shall provide evidence of any such action so taken to the Buyer.

     (c)       Listing. The Company shall promptly secure the listing of all of
the Exchange Shares and Warrant Shares which may be issued to the Buyer under
the Transaction Documents upon each national securities exchange and automated
quotation system, if any, upon which the ADSs are then listed (subject to
official notice of issuance) and shall maintain, so long as any ADSs shall be so
listed, such listing of all ADSs from time to time issuable under the terms of
the Transaction Documents. The Company shall use its best efforts to maintain
the ADSs authorization for quotation on the Principal Market. Neither the
Company nor any of its Subsidiaries shall take any action that would be
reasonably expected to result in the delisting or suspension of the ADSs on the
Principal Market. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section.

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     (d)       Issuance of Warrants. Upon the execution of this Agreement, the
Company shall deliver to the Buyer warrants in the form attached hereto as
Exhibit C to purchase ADSs representing (i) ________ Ordinary Shares at an
exercise price of the greater of the U.S. Dollar equivalent of 20.5 UK pence or
US $0.50 (the “Warrants” and the ADSs representing Ordinary Shares issuable upon
exercise of the Warrants, the “Warrant Shares”).

     (e)       Maintenance of the Status of the Issuer. So long as any of the
Preferred Stock is outstanding, neither the Company nor the Issuer shall take
any action or do anything whatsoever that could cause: (1) the Issuer to be
cease to be a wholly-owned subsidiary of the Company, (2) the termination or
impairment of the separate corporate existence of the Issuer, or (3) a
liquidation, dissolution or winding up of the Issuer.

  5.   TRANSFER AGENT INSTRUCTIONS.

     On or after the Effective Date, the Company shall promptly cause any
restrictive legend on any outstanding Exchange Shares or Warrant Shares to be
removed and all of the Exchange Shares and Warrant Shares to be issued under the
Transaction Documents thereafter shall be issued without any restrictive legend
unless the Buyer expressly consents otherwise. The Company shall issue
irrevocable instructions to the Transfer Agent, and any subsequent transfer
agent, to issue Exchange Shares in the name of the Buyer and to issue Warrant
Shares in the name of the Buyer upon exercise of the Warrants (the “Irrevocable
Transfer Agent Instructions”). The Company warrants to the Buyer that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5, will be given by the Company to the Transfer Agent with
respect to the Exchange Shares and the Warrant Shares and that the Warrant
Shares and the Exchange Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement. At any time before the Effective Date,
any Exchange Shares or Warrant Shares issued to the Buyer in connection herewith
shall be issued in certificated form and shall bear the following restrictive
legend and no other legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

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  6.   CONDITIONS TO THE COMPANY’S AND THE ISSUER’S OBLIGATION TO CLOSE

     The obligation of the Company and the Issuer hereunder to consummate the
transactions contemplated hereby is subject to the satisfaction of each of the
following conditions on or before the Closing Date; provided that these
conditions are for the Company’s and the Issuer’s sole benefit and may be waived
by the Company and the Issuer at any time in their sole discretion by providing
the Buyer with prior written notice thereof:

     (a)       The Buyer shall have executed each of the Transaction Documents
and delivered the same to the Company and the Issuer.

     (b)       The Buyer shall have paid $________ to the Issuer for the
Preferred Stock as full and complete payment for the ___ shares of Preferred
Stock and the Warrants to be issued by the Company.

     (c)       The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and the Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Buyer at or prior to the Closing Date.

  7.   CONDITIONS TO THE BUYER’S OBLIGATION TO CLOSE.

     The obligation of the Buyer to complete the subscription for ___ shares of
Preferred Stock and the other transactions as contemplated in the Transaction
Documents is subject to the satisfaction of each of the following conditions on
or before the Closing Date; provided that these conditions are for the Buyer’s
sole benefit and may be waived by the Buyer at any time in its sole discretion
by providing the Company and the Issuer with prior written notice thereof:

     (a)       The Company and the Issuer shall have executed each of the
Transaction Documents applicable to it and delivered the same to the Buyer.

     (b)       The Company shall have issued to the Buyer the Warrants. The
Issuer shall have issued to the Buyer ___ shares of Preferred Stock.

     (c)       The ADSs shall be authorized for quotation on the Principal
Market, trading in the ADSs shall not have been within the last 365 days
suspended by the SEC or the Principal Market and the ADSs and the Warrant Shares
shall be approved for listing upon the Principal Market.

     (d)       The Buyer shall have received the opinions of the Company’s and
the Issuer’s legal counsels dated as of the Closing Date in customary form.

     (e)       The representations and warranties of the Company and the Issuer
shall be true and correct in all material respects (except to the extent that
any of such representations and warranties is already qualified as to
materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as of the
date when made and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date) and the
Company or Issuer shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied

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with by the Company or the Issuer at or prior to the Closing Date. The Buyer
shall have received a certificate, executed by the CEO, President or CFO of the
Company, dated as of the Closing Date, to the foregoing effect in the form
attached hereto as Exhibit D-1. The Buyer shall have received a certificate,
executed by the CEO, President or CFO of the Issuer, dated as of the Closing
Date, to the foregoing effect in the form attached hereto as Exhibit D-2.

     (f)       The Board of Directors of the Company shall have adopted
resolutions in the form attached hereto as Exhibit B-1 which shall be in full
force and effect without any amendment or supplement thereto as of the Closing
Date. The Board of Directors of the Issuer shall have adopted resolutions in the
form attached hereto as Exhibit B-2 which shall be in full force and effect
without any amendment or supplement thereto as of the Closing Date.

     (g)       As of the Closing Date, the Company shall have reserved out of
its authorized and unissued Ordinary Shares, (A) solely for the purpose of
effecting issuances of ADSs upon exchange of the Preferred Stock under the
Transaction Documents, at least ________ Ordinary Shares and (B) ________
Ordinary Shares for issuance upon exercise of the Warrants.

     (h)       The Irrevocable Transfer Agent Instructions, in form acceptable
to the Buyer shall have been delivered to and acknowledged in writing by the
Company and the Company’s Transfer Agent.

     (i)       The Company shall have delivered to the Buyer a certificate
evidencing the existence of the Company under the laws of England and Wales
issued by the appropriate authorities as of a date within ten (10) Trading Days
of the Closing Date. The Issuer shall have delivered to the Buyer a certificate
evidencing the existence and good standing of the Issuer under the laws of the
State of Delaware issued by the appropriate authorities as of a date within ten
(10) Trading Days of the Closing Date.

     (j)       The Issuer shall have delivered to the Buyer a certified copy of
the Certificate of Incorporation as certified by the Secretary of State of the
State of Delaware within ten (10) Trading Days of the Closing Date evidencing
the terms and conditions of the Preferred Stock as set forth in Exhibit A
attached hereto.

     (k)       The Company shall have delivered to the Buyer a secretary’s
certificate executed by the Secretary of the Company, dated as of the Closing
Date, in the form attached hereto as Exhibit E-1. The Issuer shall have
delivered to the Buyer a secretary’s certificate executed by the Secretary of
the Issuer, dated as of the Closing Date, in the form attached hereto as Exhibit
E-2.

     (l)       The Company and the Issuer shall have provided the Buyer with the
information requested by the Buyer in connection with its due diligence requests
made prior to, or in connection with, the Closing.

  8.   INDEMNIFICATION.

     In consideration of the Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company’s and the Issuer’s other obligations under the Transaction Documents, to
the fullest extent permitted by law, the Company and the Issuer shall jointly
and severally defend, protect, indemnify and hold harmless the Buyer and all of
its affiliates, shareholders, officers, directors, employees and direct or
indirect investors and any of the

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foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement or any other Transaction Document) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to
(a) any misrepresentation or breach of any representation or warranty made by
the Company or the Issuer in the Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company or the Issuer contained in the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from the gross negligence or willful misconduct of the Indemnitee. To the
extent that the foregoing undertaking by the Company and the Issuer may be
unenforceable for any reason, the Company and the Issuer shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Promptly after receipt by
an Indemnitee of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) for which indemnification may
be sought hereunder, such Indemnitee shall, deliver to the Company a written
notice of the commencement thereof, and the Company shall have the right to
participate in, and, to the extent the Company so desires, to assume control of
the defense thereof with counsel mutually satisfactory to the Company and the
Indemnitee, as the case may be; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses to be paid by the
Company, if, in the reasonable opinion of counsel retained by the Indemnitee,
the representation by such counsel of the Indemnitee and the Company or the
Issuer would be inappropriate due to actual or potential differing interests
between such Indemnitee and any other party represented by such counsel in such
proceeding. The Indemnitee shall cooperate fully with the Company and the Issuer
in connection with any negotiation or defense of any such action or claim by the
Company or the Issuer and shall furnish to the Company and to the Issuer all
information reasonably available to the Indemnitee which relates to such action
or claim. The Company and the Issuer shall keep the Indemnitee fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. The Company or the Issuer shall not be liable for any
settlement of any action, claim or proceeding effected without its written
consent, provided, however, that the Company or the Issuer shall not
unreasonably withhold, delay or condition its consent. The Company or the Issuer
shall not, without the consent of the Indemnitee, consent to entry of any
judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such claim or
litigation. Following indemnification as provided for hereunder, the Company or
the Issuer shall be subrogated to all rights of the Indemnitee with respect to
all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the
Company or the Issuer within a reasonable time of the commencement of any such
action shall not relieve the Company or the Issuer of any liability to the
Indemnitee under this Section 8, except to the extent that the Company or the
Issuer is prejudiced in its ability to defend such action.

  9.   [Intentionally Omitted.]

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  10.   CERTAIN DEFINED TERMS.

     For purposes of this Agreement, the following terms shall have the
following meanings:

     (a)       “1933 Act” means the Securities Act of 1933, as amended.

     (b)       “Bankruptcy Law” means Title 11, U.S. Code, the United Kingdom
Insolvency Act 1986 or any similar United Kingdom, United States federal or
state law for the relief of debtors.

     (c)       “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

     (d)       “Exchange Amount” means the Stated Value plus accrued and unpaid
dividends which shall accrue at a rate of 15% per year compounded annually
through the date of exchange on any shares of Preferred Stock submitted for
exchange into Exchange Shares pursuant to Section 1(b) hereof.

     (e)       “Exchange Price” means the greater of the US Dollar equivalent of
20.5 UK pence or US $0.40.

     (f)       “Exchange Rate” means the number of Exchange Shares issuable upon
exchange of the Exchange Amount of any Preferred Stock pursuant to Section 1(b)
hereof which shall be determined according to the following formula: Exchange
Amount / Exchange Price, as such ratio may be adjusted from time to time to
reflect stock dividends, combinations, splits or similar events as provided in
Section 1(b)(iv) hereof.

     (g)       “Exchange Shares” means the ADSs issued or issuable when shares
of Preferred Stock are submitted for exchange into ADSs pursuant to
Section 1(b)(i) hereof.

     (h)       “Person” means an individual or entity including any limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

     (i)       “Principal Market” means the Nasdaq SmallCap Market; provided
however, that in the event the ADSs are ever listed or traded on the Nasdaq
National Market, the Nasdaq OTC Bulletin Board, the New York Stock Exchange or
the American Stock Exchange, than the “Principal Market” shall mean such other
market or exchange on which the ADSs are then listed or traded.

     (j)       “Sale Price” means, for the ADSs as of any date, any trade price
for an ADSs on the Principal Market as reported by the Principal Market, or, if
the Principal Market is not the principal securities exchange or trading market
for the ADSs, the trade price of the ADSs on the principal securities exchange
or trading market where such security is listed or traded as reported thereby.

     (k)       “SEC” means the United States Securities and Exchange Commission.

     (l)       “Stated Value” means $100.00 per share of Preferred Stock.

     (m)       “Transfer Agent” means the transfer agent of the Company as set
forth in Section 11(f) hereof or such other person who is then serving as the
transfer agent for the Company in respect of the ADSs.

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     (n)       “Trading Day” means any day on which the Principal Market is open
for trading including any day on which the Principal Market is open for trading
for a period of time less than the customary time.

  11.   MISCELLANEOUS.

     (a)       Governing Law; Jurisdiction; Jury Trial. The corporate laws of
England and Wales shall govern all issues concerning the relative rights of the
Company and its shareholders and the powers and capacity of the Company. The
corporate laws of the State of Delaware shall govern all issues concerning the
relative rights of the Issuer and its shareholders and the powers and capacity
of the Issuer. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of ________,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of ________ or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
________. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of _______, for the
adjudication of any dispute hereunder or under the other Transaction Documents
or in connection herewith or therewith, or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

     (b)       Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

     (c)       Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

     (d)       Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

     (e)       Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyer, the Company, the Issuer,
their affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the
instruments referenced herein contain the entire understanding of the parties
with

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respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company, the Issuer nor the Buyer makes
any representation, warranty, covenant or undertaking with respect to such
matters. Any provision of this Agreement may be amended or modified by mutual
agreement of the Company, the Issuer and the Buyer, and any provision hereof may
be waived only by the party against whom enforcement is sought. The Company, the
Issuer and Buyer each acknowledge and agree that it is has not relied on, in any
manner whatsoever, any representations or statements, written or oral, other
than as expressly set forth in the Transaction Documents.

     (f)       Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Trading Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

     If to the Company:

Insignia Solutions plc
41300 Christy Street
Fremont, CA 94538
Telephone:    510-360-3700
Facsimile:       510-360-3701
Attention:      Chief Executive Officer

     With a copy to:

Fenwick & West LLP
275 Battery St.
San Francisco, CA 94111
Telephone:    415-875-2455
Facsimile:       415-281-1350
Attention:      David Michaels

     If to the Issuer:

Insignia Solutions Inc.
41300 Christy Street
Fremont, CA 94538
Telephone:    510-360-3700
Facsimile:       510-360-3701
Attention:      Chief Executive Officer

     With a copy to:

Fenwick & West LLP
275 Battery St.
San Francisco, CA 94111
Telephone:    415-875-2455
Facsimile:       415-281-1350
Attention:      David Michaels

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     If to the Buyer:

[Name of Buyer]
[Address]
Telephone:
Facsimile:
Attention:

     If to the Transfer Agent:

Bank of New York
ADR Department
620 Avenue of the Americas, 6th Floor
New York, NY 10011
Telephone:    212-815-4305
Facsimile:       212-571-3050
Attention:      Administrator for Insignia Solutions plc

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Trading Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

     (g)       Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The Company and the Issuer shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Buyer, including
by merger or consolidation.

     (h)       No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

     (i)       Publicity. The Buyer shall have the right to approve before
issuance any press release, SEC filing or any other public disclosure made by or
on behalf of the Company or the Issuer whatsoever with respect to, in any
manner, the Buyer, its purchase hereunder or any aspect of this Agreement or the
transactions contemplated hereby or by the other Transaction Documents;
provided, however, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or other public disclosure
(including any filings with the SEC) with respect to such transactions as is
required by applicable law and regulations; provided however, the Company and
its counsel must consult with the Buyer in connection with any such press
release or other public disclosure at least one (1) Trading Day prior to its
release. The Buyer must be provided with a copy thereof at least one (1) Trading
Day prior to any release or use by the Company thereof. The Company and the
Issuer each agree and acknowledge that its failure to fully comply with this
provision constitutes a material adverse effect on its ability to perform its
obligations under this Agreement.

     (j)       Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements,

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certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.

     (k)       No Financial Advisor, Placement Agent, Broker or Finder. The
Buyer represents and warrants to the Company and the Issuer that it has not
engaged any financial advisor, placement agent, broker or finder in connection
with the transactions contemplated hereby, the fees of whom would be payable by
the Company or the Issuer. The Issuer and the Company represents and warrants to
the Buyer that neither of them have engaged any financial advisor, placement
agent, broker or finder in connection with the transactions contemplated hereby,
the fees of whom would be payable by the Buyer.

     (l)       No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

     (m)       Remedies, Other Obligations, Breaches and Injunctive Relief. The
Buyer’s remedies provided in this Agreement shall be cumulative and in addition
to all other remedies available to the Buyer under this Agreement, at law or in
equity (including a decree of specific performance and/or other injunctive
relief), no remedy of the Buyer contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit the Buyer’s right to pursue actual damages for any failure by the
Company or the Issuer to comply with the terms of this Agreement or any
Transaction Document. The Company and the Issuer acknowledge that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer and that
the remedy at law for any such breach may be inadequate. The Company and the
Issuer therefore agree that, in the event of any such breach or threatened
breach, the Buyer shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being required.

     (n)       Changes to the Terms of this Agreement. This Agreement and any
provision hereof may only be amended by an instrument in writing signed by the
Company, the Issuer and the Buyer. The term “Agreement” and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

     (o)       Enforcement Costs. If: (i) this Agreement is placed by the Buyer
in the hands of an attorney for enforcement or is enforced by the Buyer through
any legal proceeding; or (ii) an attorney is retained to represent the Buyer in
any bankruptcy, reorganization, receivership or other proceedings affecting
creditors’ rights and involving a claim under this Agreement; or (iii) an
attorney is retained to represent the Buyer in any other proceedings whatsoever
in connection with this Agreement, then the Company and the Issuer shall pay to
the Buyer, as incurred by the Buyer, all reasonable costs and expenses including
attorneys’ fees incurred in connection therewith, in addition to all other
amounts due hereunder.

     (p)       Failure or Indulgence Not Waiver. No failure or delay in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.

*     *     *     *     *

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     IN WITNESS WHEREOF, the Company, the Issuer and the Buyer have caused this
Securities Subscription Agreement to be duly executed as of the date first
written above.

            THE COMPANY:

INSIGNIA SOLUTIONS PLC
      By:         Name:  Mark McMillan      Title:  President and Chief
Executive Officer        THE ISSUER:

INSIGNIA SOLUTIONS INC.
      By:         Name:  Mark McMillan      Title:  President and Chief
Executive Officer        BUYER:

[NAME OF BUYER]
      By:         Name:       Title:      

 

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SCHEDULES

[Intentionally Omitted.]

EXHIBITS

[Intentionally Omitted.]