Exhibit 10.2

INTELLECTUAL PROPERTY SECURITY AGREEMENT

          This Intellectual Property Security Agreement (this “IP Agreement”) is
made as of the Effective Date by and between Timeline, Inc. (“Grantor”), and
Silicon Valley Bank, a California banking corporation (“Bank”).

RECITALS

          A.          Bank will make advances to Grantor (“Advances”) as
described in the Accounts Receivable Financing Agreement (the “Financing
Agreement”), but only if Grantor grants Bank a security interest in its
Copyrights, Trademarks, Patents, and Mask Works.  Defined terms used but not
defined herein shall have the same meanings as in the Financing Agreement.

          B.          Pursuant to the terms of the Financing Agreement, Grantor
has granted to Bank a security interest in all of Grantor’s right title and
interest, whether presently existing or hereafter acquired in, to and under all
of the Collateral.

          NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor’s Indebtedness under the
Financing Agreement, Grantor hereby represents, warrants, covenants and agrees
as follows:

          1.          Grant of Security Interest.  As collateral security for
the prompt and complete payment and performance of all of Grantor’s present or
future Indebtedness, obligations and liabilities to Bank, Grantor hereby grants
a security interest in all of Grantor’s right, title and interest in, to and
under its Intellectual Property Collateral (all of which shall collectively be
called the “Intellectual Property Collateral”), including, without limitation,
the following:

                       (a)          Any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held, including without limitation those set
forth on Exhibit A attached hereto (collectively, the “Copyrights”);

                       (b)          Any and all trade secrets, and any and all
intellectual property rights in computer software and computer software products
now or hereafter existing, created, acquired or held;

                       (c)          Any and all design rights that may be
available to Grantor now or hereafter existing, created, acquired or held;

                       (d)          All patents, patent applications and like
protections including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, including without limitation the patents and patent applications set forth
on Exhibit B attached hereto (collectively, the “Patents”);

                       (e)          Any trademark and servicemark rights,
whether registered or not, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of Grantor
connected with and symbolized by such trademarks, including without limitation
those set forth on Exhibit C attached hereto (collectively, the “Trademarks”)

                      (f)          All mask works or similar rights available
for the protection of semiconductor chips, now owned or hereafter acquired,
including, without limitation those set forth on Exhibit D attached hereto
(collectively, the  “Mask Works”);

                       (g)          Any and all claims for damages by way of
past, present and future infringements of any of the rights included above, with
the right, but not the obligation, to sue for and collect such damages for said
use or infringement of the intellectual property rights identified above;

                        (h)          All licenses or other rights to use any of
the Copyrights, Patents, Trademarks, or Mask Works and all license fees and
royalties arising from such use to the extent permitted by such license or
rights;

                       (i)          All amendments, extensions, renewals and
extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and

                       (j)          All proceeds and products of the foregoing,
including without limitation all payments under insurance or any indemnity or
warranty payable in respect of any of the foregoing.

          2.          Authorization and Request.  Grantor authorizes and
requests that the Register of Copyrights and the Commissioner of Patents and
Trademarks record this IP Agreement.

          3.          Covenants and Warranties.  Grantor represents, warrants,
covenants and agrees as follows:

                       (a)          Grantor is now the sole owner of the
Intellectual Property Collateral, except for non-exclusive licenses granted by
Grantor to its customers in the ordinary course of business.

                       (b)          Performance of this IP Agreement does not
conflict with or result in a breach of any IP Agreement to which Grantor is
bound, except to the extent that certain intellectual property agreements
prohibit the assignment of the rights thereunder to a third party without the
licensor’s or other party’s consent and this IP Agreement constitutes a security
interest.

                       (c)          During the term of this IP Agreement,
Grantor will not transfer or otherwise encumber any interest in the Intellectual
Property Collateral, except for non-exclusive licenses granted by Grantor in the
ordinary course of business or as set forth in this IP Agreement;

                       (d)          To its knowledge, each of the Patents is
valid and enforceable, and no part of the Intellectual Property Collateral has
been judged invalid or unenforceable, in whole or in part, and no claim has been
made that any part of the Intellectual Property Collateral violates the rights
of any third party;

                       (e)          Grantor shall promptly advise Bank of any
material adverse change in the composition of the Collateral, including but not
limited to any subsequent ownership right of the Grantor in or to any Trademark,
Patent, Copyright, or Mask Work specified in this IP Agreement;

                       (f)          Grantor shall (i) protect, defend and
maintain the validity and enforceability of the Trademarks, Patents, Copyrights,
and Mask Works, (ii) use its best efforts to detect infringements of the
Trademarks, Patents, Copyrights, and Mask Works and promptly advise Bank in
writing of material infringements detected and (iii) not allow any Trademarks,
Patents, Copyrights, or Mask Works to be abandoned, forfeited or dedicated to
the public without the written consent of Bank, which shall not be unreasonably
withheld, unless Grantor determines that reasonable business practices suggest
that abandonment is appropriate;

                       (g)          Grantor shall not register any Copyrights or
Mask Works with the United States Copyright Office unless it: (i) has given at
least fifteen (15) days’ prior notice to Bank of its intent to register such
Copyrights or Mask Works and has provided Bank with a copy of the application it
intends to file with the United States Copyright Office (excluding exhibits
thereto); (ii) executes a security agreement or such other documents as Bank may
reasonably request in order to maintain the perfection and priority of Bank’s
security interest in the Copyrights proposed to be registered with the United
States Copyright Office; and (iii) records such security documents with the
United States Copyright Office contemporaneously with filing the Copyright
application(s) with the United States Copyright Office.  Grantor shall promptly
provide to Bank a copy of the Copyright application(s) filed with the United
States Copyright Office, together with evidence of the recording of the security
documents necessary for Bank to maintain the perfection and priority of its
security interest in such Copyrights or Mask Works.  Grantor shall provide
written notice to Bank of any application filed by Grantor in the United States
Patent Trademark Office for a patent or to register a trademark or service mark
within 30 days of any such filing;

                       (h)          This IP Agreement creates, and in the case
of after acquired Intellectual Property Collateral, this IP Agreement will
create at the time Grantor first has rights in such after acquired Intellectual
Property Collateral, in favor of Bank a valid and perfected first priority
security interest in the Intellectual Property Collateral in the United States
securing the payment and performance of the obligations evidenced by the Note
and the Financing Agreement upon making the filings referred to in clause (i)
below;

                       (i)          To its knowledge, except for, and upon, the
filing with the United States Patent and Trademark office with respect to the
Patents and Trademarks and the Register of Copyrights with respect to the
Copyrights and Mask Works necessary to perfect the security interests created
hereunder and except as has been already made or obtained, no authorization,
approval or other action by, and no notice to or filing with, any U.S.
governmental authority of U.S. regulatory body is required either (i) for the
grant by Grantor of the security interest granted hereby or for the execution,
delivery or performance of this IP Agreement by Grantor in the U.S. or (ii) for
the perfection in the United States or the exercise by Bank of its rights and
remedies thereunder;

                       (j)          All information heretofore, herein or
hereafter supplied to Bank by or on behalf of Grantor with respect to the
Intellectual Property Collateral is accurate and complete in all material
respects.

                       (k)         Grantor shall not enter into any agreement
that would materially impair or conflict with Grantor’s obligations hereunder
without Bank’s prior written consent, which consent shall not be unreasonably
withheld.  Grantor shall not permit the inclusion in any material contract to
which it becomes a party of any provisions that could or might in any way
prevent the creation of a security interest in Grantor’s rights and interest in
any property included within the definition of the Intellectual property
Collateral acquired under such contracts, except that certain contracts may
contain anti-assignment provisions that could in effect prohibit the creation of
a security interest in such contracts.

                       (l)          Upon any executive officer of Grantor
obtaining actual knowledge thereof, Grantor will promptly notify Bank in writing
of any event that materially adversely affects the value of any material
Intellectual Property Collateral, the ability of Grantor to dispose of any
material Intellectual Property Collateral of the rights and remedies of Bank in
relation thereto, including the levy of any legal process against any of the
Intellectual Property Collateral.

          4.          Bank’s Rights.  Bank shall have the right, but not the
obligation, to take, at Grantor’s sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take, after
fifteen (15) days’ notice to Grantor.  Grantor shall reimburse and indemnify
Bank for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this section 4.

          5.          Inspection Rights.  Grantor hereby grants to Bank and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, and any of Grantor’s
plants and facilities that manufacture, install or store products (or that have
done so during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than one (1) in every six
(6) months; provided, however, nothing herein shall entitle Bank access to
Grantor’s trade secrets and other proprietary information.

          6.          Further Assurances; Attorney in Fact.

                       (a)          On a continuing basis, Grantor will, subject
to any prior licenses, encumbrances and restrictions and prospective licenses,
make, execute, acknowledge and deliver, and file and record in the proper filing
and recording places in the United States, all such instruments, including
appropriate financing and continuation statements and collateral agreements and
filings with the United States Patent and Trademarks Office and the Register of
Copyrights, and take all such action as may reasonably be deemed necessary or
advisable, or as requested by Bank, to perfect Bank’s security interest in all
Copyrights, Patents, Trademarks, and Mask Works and otherwise to carry out the
intent and purposes of this IP Agreement, or for assuring and confirming to Bank
the grant or perfection of a security interest in all Intellectual Property
Collateral.

                       (b)          Grantor hereby irrevocably appoints Bank as
Grantor’s attorney-in-fact, with full authority in the place and stead of
Grantor and in the name of Grantor, Bank or otherwise, from time to time in
Bank’s discretion, upon Grantor’s failure or inability to do so, to take any
action and to execute any instrument which Bank may deem necessary or advisable
to accomplish the purposes of this IP Agreement, including:

                                      (i)          To modify, in its sole
discretion, this IP Agreement without first obtaining Grantor’s approval of or
signature to such modification by amending Exhibit A, Exhibit B, Exhibit C, and
Exhibit D hereof, as appropriate, to include reference to any right, title or
interest in any Copyrights, Patents, Trademarks or Mask Works in which Grantor
no longer has or claims any right, title or interest; and

                                      (ii)          To file, in its sole
discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Intellectual Property Collateral without the
signature of Grantor where permitted by law.

          7.          Events of Default.  The occurrence of any of the following
shall constitute an Event of Default under this IP Agreement:

                       (a)          An Event of Default occurs under the
Financing Agreement; or

                       (b)          Grantor breaches any warranty or agreement
made by Grantor in this IP Agreement.

          8.          Remedies.  Upon the occurrence and continuance of an Event
of Default, Bank shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including without limitation
the right to require Grantor to assemble the Intellectual Property Collateral
and any tangible property in which Bank has a security interest and to make it
available to Bank at a place designated by Bank.  Bank shall have a
nonexclusive, royalty free license to use the Copyrights, Patents, Trademarks,
and Mask Works to the extent reasonably necessary to permit Bank to exercise its
rights and remedies upon the occurrence of an Event of Default.  Grantor will
pay any expenses (including reasonable attorney’s fees) incurred by Bank in
connection with the exercise of any of Bank’s rights hereunder, including
without limitation any expense incurred in disposing of the Intellectual
Property Collateral.  All of Bank’s rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.

          9.          Indemnity.  Grantor agrees to defend, indemnify and hold
harmless Bank and its officers, employees, and agents against:  (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this IP Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by Bank as a
result of or in any way arising out of, following or consequential to
transactions between Bank and Grantor, whether under this IP Agreement or
otherwise (including without limitation, reasonable attorneys fees and
reasonable expenses), except for losses arising from or out of Bank’s gross
negligence or willful misconduct. 

          10.          Reassignment.  At such time as Grantor shall completely
satisfy all of the obligations secured hereunder, Bank shall execute and deliver
to Grantor all deed, assignments, and other instruments as may be necessary or
proper to reinvest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Bank pursuant
hereto.

          11.         Course of Dealing.  No course of dealing, nor any failure
to exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.

          12.          Attorneys’ Fees.  If any action relating to this IP
Agreement is brought by either party hereto against the other party, the
prevailing party shall be entitled to recover reasonable attorneys’ fees, costs
and disbursements.

          13.          Amendments.  This IP Agreement may be amended only by a
written instrument signed by both parties hereto.

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

          15.          Law and Jurisdiction.  This IP Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without regard for choice of law provisions.  Grantor and Bank
consent to the nonexclusive jurisdiction of any state or federal court located
in Santa Clara County, California.

          16.          Confidentiality.  In handling any confidential
information, Bank shall exercise the same degree of care that it exercises with
respect to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this IP Agreement except that the disclosure of this information may
be made (i) to the affiliates of the Bank, (ii) to prospective transferee or
purchasers of an interest in the obligations secured hereby, provided that they
have entered into comparable confidentiality agreement in favor of

Grantor and have deliver a copy to Grantor, (iii) as required by law,
regulation, rule or order, subpoena judicial order or similar order and (iv) as
may be required in connection with the examination, audit or similar
investigation of Bank.

          IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement
on the day and year first above written.

Address of Grantor:

GRANTOR:

 

 

 

3055 112th Avenue NE, Suite 106

TIMELINE, INC.

Seattle, WA 98004

 

 

 

By:

/s/ CHARLES R. OSENBAUGH

 

 

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Name:

Charles R. Osenbaugh

 

Title:

President

Exhibit “A” attached to that certain Intellectual Property Security Agreement.

EXHIBIT “A”

COPYRIGHTS

SCHEDULE A - ISSUED COPYRIGHTS

COPYRIGHT
DESCRIPTION

 

REGISTRATION
NUMBER

 

DATE OF
ISSUANCE

 

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SCHEDULE B - PENDING COPYRIGHT APPLICATIONS

COPYRIGHT
DESCRIPTION

 

APPLICATION
NUMBER

 

DATE OF
FILING

 

CREATION

 

FIRST DATE
OF PUBLIC
DISTRIBUTION

 

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SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)

COPYRIGHT
DESCRIPTION

 

DATE OF
CREATION

 

FIRST DATE
OF
DISTRIBUTION

 

ORIGINAL
AUTHOR OR
OWNER OF
COPYRIGHT
(IF DIFFERENT
FROM GRANTOR)

 

DATE AND
RECORDATION
NUMBER OF
IP AGREEMENT TO
OWNER OF
GRANTOR (IF
ORIGINAL AUTHOR
OR OWNER OF
COPYRIGHT IS
DIFFERENT FROM
GRANTOR)

 

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Exhibit “B” attached to that certain Intellectual Property Security Agreement.

EXHIBIT “B”

PATENTS

PATENT
DESCRIPTION

 

DOCKET NO.

 

COUNTRY

 

SERIAL NO.

 

FILING DATE

 

STATUS

 

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E/Data Retrieval Method

 

 

 

 

 

 

 

 

 

 

 

And Apparatus With

 

 

 

 

 

 

 

 

 

 

 

Multiple Source Capability

 

 

 

USA

 

6,631,382

 

07/31/2000

 

Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

Modularized Data Retrieval

 

 

 

 

 

 

 

 

 

 

 

Method And Apparatus

 

 

 

 

 

 

 

 

 

 

 

With Multiple Source

 

 

 

 

 

 

 

 

 

 

 

Capability

 

 

 

USA

 

6,625,671

 

12/08/2000

 

Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

E/Data Retrieval Method

 

 

 

 

 

 

 

 

 

 

 

And Apparatus With

 

 

 

 

 

 

 

 

 

 

 

Multiple Source Capability

 

 

 

USA

 

6,026,392

 

06/29/1998

 

Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

E/ Data Retrieval Method

 

 

 

 

 

 

 

 

 

 

 

And Apparatus With

 

 

 

 

 

 

 

 

 

 

 

Multiple Source Capability

 

 

 

USA

 

6,023,694

 

06/29/1998

 

Filed

 

 

 

 

 

 

 

 

 

 

 

 

 

E/Data Retrieval Method

 

 

 

 

 

 

 

 

 

 

 

And Apparatus With

 

 

 

 

 

 

 

 

 

 

 

Multiple Source Capability;

 

 

 

 

 

 

 

 

 

 

 

Computer-Implemented Method

 

 

 

USA

 

5,802,511

 

09/01/1998

 

Filed

 

Exhibit “C” attached to that certain Intellectual Property Security Agreement.

EXHIBIT “C”

TRADEMARKS

TRADEMARK
DESCRIPTION

 

COUNTRY

 

SERIAL NO.

 

REG. NO

 

STATUS

 

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Timeline

 

USA

 

74-143,338

 

1,673,332

 

Renewed

 

T Stylized Letters

 

USA

 

75-155,898

 

2,140,219

 

Registered

 

Exhibit “D” attached to that certain Intellectual Property Security Agreement.

EXHIBIT “D”

MASK WORKS

MASK WORK
DESCRIPTION

 

COUNTRY

 

SERIAL NO.

 

REG. NO

 

STATUS

 

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