EXHIBIT 10.73

[j3626ex10d73image002.gif]

 

SILICON VALLEY BANK

ACCOUNTS RECEIVABLE FINANCING AGREEMENT

 

This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the “Agreement”), dated as of
March 28, 2002 is between Silicon Valley Bank, (“Bank”), and INSIGNIA SOLUTIONS
INC. a Delaware corporation, (“Borrower”), whose address is 41300 Christy
Street, Fremont, California 94538 and with a FAX number
of                                       .

 

1.    Definitions.  In this Agreement:

 

“Accounts” are all existing and later arising accounts, contract rights, and
other obligations owed Borrower in connection with its sale or lease of goods
(including licensing software and other technology) or provision of services,
all credit insurance, guaranties, other security and all merchandise returned or
reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

 

“Account Debtor” is defined in the California Uniform Commercial Code and shall
include any person liable on any Financed Receivable, such as, a guarantor of
the Financed Receivable and any issuer of a letter of credit or banker’s
acceptance.

 

“Adjusted Quick Ratio”  A ratio of Quick Assets to Current Liabilities minus
Deferred Revenue of at least 1.25 to 1.00.

 

“Adjustments” are all discounts, allowances, returns, disputes, counterclaims,
offsets, defenses, rights of recoupment, rights of return, warranty claims, or
short payments, asserted by or on behalf of any Account Debtor for any Financed
Receivable.

 

“Administrative Fee” is defined in Section 3.3.

 

“Advance” is defined in Section 2.2.

 

“Advance Rate” is 80%, net of deferred revenue and offsets related to each
specific Account Debtor, or another percentage as Bank establishes under Section
2.2.

 

“Applicable Rate” is a rate per annum equal to the “Prime Rate” plus 2.00
percentage points.

 

“Borrower’s Books” are all Borrower’s books and records including ledgers,
records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.

 

“Code” is the California Uniform Commercial Code.

 

“Collateral” is attached as Exhibit “A”.

 

“Collateral Handling Fee” is defined in Section 3.5.

 

“Collections” are all funds received by Bank from or on behalf of an Account
Debtor for Financed Receivables.

 

“Compliance Certificate” is attached as Exhibit “B”.

 

“Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (ii) any
obligations for undrawn letters of credit for the account of that Person;

 

1

--------------------------------------------------------------------------------

 

and (iii) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices;  but “Contingent Obligation”
does not include endorsements in the ordinary course of business.  The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
the guarantee or other support arrangement.

 

“Copyrights” are all copyright rights, applications or registrations and like
protections in each work or authorship or derivative work, whether published or
not (whether or not it is a trade secret) now or later existing, created,
acquired or held.

 

“Current Liabilities” are the aggregate amount of Borrower’s Total Liabilities
which mature within one (1) year.

 

“Deferred Revenue” is all amounts received in advance of performance under
maintenance contract and not yet recognized as revenue.

 

“Early Termination Fee” is defined in Section 3.6.

 

“Event of Default” is defined in Section 9.

 

“Facility” is an extension of credit by Bank to Borrower in order to finance
receivables with an aggregate Account Balance not exceeding the Facility Amount.

 

“Facility Amount” is $1,500,000.00.

 

“Facility Fee” is defined in Section 3.4.

 

“Facility Period” is the period beginning on this date and continuing until
March 27, 2003, unless the period is terminated sooner by Bank with notice to
Borrower or by Borrower under Section 3.6.

 

“Finance Charges” is defined in Section 3.2.

 

“Financed Receivables” are all those accounts, receivables, chattel paper,
instruments, contract rights, documents, general intangibles, letters of credit,
drafts, bankers acceptances, and rights to payment, and all proceeds, including
their proceeds (collectively “receivables”), which Bank finances and make an
Advance.  A Financed Receivable stops being a Financed Receivable (but remains
Collateral) when the Advance made for the Financed Receivable has been finally
paid.

 

“Financed Receivable Balance” is the total outstanding amount, at any time, of
all Financed Receivables.

 

“Guarantor” means any guarantor of the Obligations.

 

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

 

“Ineligible Receivable” is any accounts receivable:

 

(A)  that is unpaid (90) calendar days after the invoice date; or

(B)  that is owed by an Account Debtor that has filed, or has had filed against
it, any bankruptcy case, assignment for the benefit of creditors, receivership,
or Insolvency Proceeding or who has become insolvent (as defined in the United
States Bankruptcy Code) or who is generally not paying its debts as they become
due; or

(C)  for which there has been any breach of warranty or representation in
Section 6 or any breach of any covenant in this Agreement; or

 

2

--------------------------------------------------------------------------------

 

(D)  for which the Account Debtor asserts any discount, allowance, return,
dispute, counterclaim, offset, defense, right of recoupment, right of return,
warranty claim, or short payment.

 

“Insolvency Proceeding” are proceedings by or against any person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

 

“Intellectual Property” is:

 

(a)  Copyrights, Trademarks, and Patents including amendments, renewals,
extensions, and all licenses or other rights to use and all license fees and
royalties from the use;

 

(b)  Any trade secrets and any Intellectual Property Rights in computer software
and computer software products now or later existing, created, acquired or held;

 

(c)  All design rights which may be available to Borrower now or later created,
acquired or held;

 

(d)  Any claims for damages (past, present or future) for infringement of any of
the rights above, with the right, but not the obligation, to sue and collect
damages for use or infringement of the intellectual property rights above;

 

All proceeds and products of the foregoing, including all insurance, indemnity
or warranty payments.

 

“Invoice Transmittal” shows accounts receivable which Bank may finance and, for
each receivable, includes the Account Debtor’s, name, address, invoice amount,
invoice date and invoice number and is signed by Borrower’s authorized
representative.

 

“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or
other encumbrance.

 

“Loan Documents” are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

 

“Lockbox” is described in Section 6.2.

 

“Minimum Finance Charge” is $1,500.00 per month.

 

“Obligations” are all advances, liabilities, obligations, covenants and duties
owing, arising, due or payable by Borrower to Bank now or later under this
Agreement or any other document, instrument or agreement, account (including
those acquired by assignment) primary or secondary, such as all Advances,
Finance Charges, Administrative Fees, interest, fees, expenses, professional
fees and attorneys’ fees or other.

 

“Patents” are patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

 

“Person” is any individual, sole proprietorship, partnership, limited liability
company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

 

“Prime Rate” is Bank’s most recently an­nounced “prime rate,” even if it is not
Bank’s lowest rate.

 

“Quick Assets” is, on any date, the Borrower’s consolidated, unrestricted cash,
cash equivalents, net billed accounts receivable and investments with maturities
of fewer than 12 months determined according to GAAP.

 

“Reconciliation Day” is the last calendar day of each month.

 

“Reconciliation Period” is each calendar month.

 

“Subordinated Debt” is debt incurred by Borrower subordinated to Borrower’s debt
to Bank (and identified as

 

3

--------------------------------------------------------------------------------

 

subordinated by Borrower and Bank).

 

“Total Liabilities” is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower’s consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

 

“Trademarks” are trademark and service mark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

 

2.    Financing of Accounts Receivable.

 

2.1. Request for Advances.  During the Facility Period, Borrower may offer
accounts receivable to Bank, if there is not an Event of Default.  Borrower will
deliver an Invoice Transmittal for each accounts receivable it offers.  Bank may
rely on information on or with the Invoice Transmittal.

 

2.2. Acceptance of Accounts Receivable.  Bank is not obligated to finance any
accounts receivable.  Bank may approve any Account Debtor’s credit before
financing any receivable.  When Bank accepts a receivable, it will pay Borrower
the Advance Rate times the face amount of the receivable (the “Advance”).  Bank
may, in its discretion, change the percentage of the Advance Rate.  When Bank
makes an Advance, the receivable becomes a “Financed Receivable.”  All
representations and warranties in Section 6 must be true as of the date of the
Invoice Transmittal and of the Advance and no Event of Default exists would
occur as a result of the Advance.  The aggregate amount of all Financed
Receivables outstanding at any time may not exceed the Facility Amount.

 

3.    Collections, Finance Charges, Remittances and Fees.   The Obligations
shall be subject to the following fees and Finance Charges.  Fees and Finance
Charges may, in Bank’s discretion, be charged as an Advance, and shall
thereafter accrue fees and Finance Charges as described below.  Bank may, in its
discretion, charge fee and Finance Charges to Borrower’s deposit account
maintained with Bank.

 

3.1. Collections. Collections will be credited to the Financed Receivables
Balance, but if there is an Event of Default, Bank may apply Collections to the
Obligation in any order it chooses.   If Bank receives a payment for both
Financed Receivable and a non Financed Receivable, the funds will first be
applied to the Financed Receivable and, if there is not an Event of Default, the
excess will be remitted to the Borrower, subject to Section 3.10.

 

3.2. Finance Charges. In computing Finance Charges on the Obligations, all
Collections received by Bank shall be deemed applied by Bank on account of the
Obligations 3 Business Days after receipt of the Collections.  Borrower will pay
a finance charge (the “Finance Charge”), which is the greater of (i) the
Applicable Rate times the number of days in the Reconciliation Period times the
outstanding average daily Financed Receivable Balance for that Reconciliation
Period or (ii) the Minimum Finance Charge. After an Event of Default,
Obligations accrue interest at 5 percent above the Applicable Rate effective
immediately before the Event of Default.

 

3.3.  Administrative Fee.   Upon receipt of the Collections, Borrower will pay
an Administrative Fee of 0% of the face amount of each Financed Receivable
financed during that Reconciliation Period (the “Administrative Fee”).

 

3.4. Facility Fee. A fully earned, non-refundable facility fee of $5,000.00 is
due upon execution of this Agreement.

 

3.5. Collateral Handling Fee. On each Reconciliation Day, Borrower will pay to
Bank a collateral handling fee, equal to .35% per month of the average daily
Financed Receivable Balance outstanding during the applicable Reconciliation
Period. After an Event of Default, the Collateral Handling Fee will increase an
additional .50% effective immediately before the Event of Default.

 

3.6. Early Termination Fee.  Intentionally Left Blank.

 

4

--------------------------------------------------------------------------------

 

3.7. Accounting.  After each Reconciliation Period, Bank will provide an
accounting of the transactions for that Reconciliation Period, including the
amount of all Financed Receivables, all Collections, Adjustments, Finance
Charges, the Collateral Handling Fee and the Administrative Fee.  If Borrower
does not object to the accounting in writing within 30 days it is considered
correct.  All Finance Charges and other interest and fees calculated on the
basis of a 360 day year and actual days elapsed.

 

3.8.  Deductions.  Bank may deduct fees, finance charges and other amounts due
from any Advances made or Collections received by Bank.

 

3.9.  Due Diligence Fee.  Borrower has paid to Bank a Due Diligence Fee of
$10,000.00 to initiate Banks due diligence review process.  Such fee is fully
earned by Bank and is non-refundable.

 

3.10.  Account Collection Services.  All Borrowers’ receivables are to be paid
to the same address/or party and Borrower and Bank must agree on such address. 
If Bank collects all receivables and there is not an Event of Default or an
event that with notice or lapse of time will be an Event of Default, within five
(5) days of receipt of those collections, Bank will give Borrower, the
receivables collections it receives for receivables other than Financed
Receivables and/or amount in excess of the amount for which Bank has made an
Advance to Borrower, less any amount due to Bank, such as the Finance Charge,
Administrative Fee, Collateral Handling Fee and expenses or otherwise. This
Section does not impose any affirmative duty on Bank to do any act other than to
turn over amounts.  All receivables and collections are Collateral and if an
Event of Default occurs, Bank need not remit collections of Collateral and may
apply them to the Obligations.

 

4.    Repayment of Obligations.

 

4.1.  Repayment on Maturity.  Borrower will repay each Advance on the earliest
of: (a) payment of the Financed Receivable in respect which the Advance was
made, (b) the Financed Receivable becomes an Ineligible Receivable, (c) when any
Adjustment is made to the Financed Receivable (but only to the extent of the
Adjustment if the Financed Receivable is not otherwise an Ineligible Receivable,
or (d) the last day of the Facility Period (including any early termination).
Each payment will also include all accrued Finance Charges on the Advance and
all other amounts due hereunder.

 

4.2.  Repayment on Event of Default.  When there is an Event of Default,
Borrower will, if Bank demands (or, in an Event of Default under Section 9(B),
immediately without notice or demand from Bank) repay all of the Advances.  The
demand may, at Bank’s option, include the Advance for each Financed Receivable
then outstanding and all accrued Finance Charges, Administrative Fees, attorneys
and professional fees, court costs and expenses, and any other Obligations.

 

5.    Power of Attorney.  Borrower irrevocably appoints Bank and its successors
and assigns it attorney-in-fact and authorizes Bank, regardless of whether there
has been an Event of Default, to:

 

(A)  sell, assign, transfer, pledge, compromise, or discharge all or any part of
the Financed Receivables:

 

(B)  demand, collect, sue, and give releases to any Account Debtor for monies
due and compromise, prosecute, or defend any action, claim, case or proceeding
about the Financed Receivables, including filing a claim or voting a claim in
any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses:

 

(C)  prepare, file and sign Borrower’s name on any notice, claim, assignment,
demand, draft, or notice of or satisfaction of lien or mechanics’ lien or
similar document;

 

(D)  notify all Account Debtors to pay Bank directly;

 

(E)  receive, open, and dispose of mail addressed to Borrower;

 

(F)  endorse Borrower’s name on check or other instruments;

 

(G)  execute on Borrower’s behalf any instruments, documents, financing
statements to perfect Bank’s interests in the Financed Receivables and
Collateral; and

 

5

--------------------------------------------------------------------------------

 

(H)  do all acts and things necessary or expedient.

 

6.    Representations, Warranties and Covenants.

 

 6.1. Representations and Warranties.  Borrower represents and warrants for each
Financed Receivable:

 

(A)  It is the owner with legal right to sell, transfer and assign it;

 

(B)  The correct amount is on the Invoice Transmittal and is not disputed;

 

(C)  Payment is not contingent on any obligation or contract and it has
fulfilled all its obligations as of the Invoice Transmittal date;

 

(D)  It is based on an actual sale and delivery of goods and/or services
rendered, due to Borrower, it is not past due or in default, has not been
previously sold, assigned, transferred, or pledged and is free of any liens,
security interests and encumbrances;

 

(E)  There are no defenses, offsets, counterclaims or agreements for which the
Account Debtor may claim any deduction or discount;

 

(F)  It reasonably believes no Account Debtor is insolvent or subject to any
Insolvency Proceedings;

 

(G)  It has not filed or had filed against it Insolvency Proceedings and does
not anticipate any filing;

 

(H)  Bank has the right to endorse and/ or require Borrower to endorse all
payments received on Financed Receivables and all proceeds of Collateral.

 

(I)   No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statement contained in the certificates or statement not misleading.

 

6.1.1 Additional Representations and Warranties.  Borrower represents and
warrants as follows:

 

(A)  Borrower is duly existing and in good standing in its state of formation
and qualified and licensed to do business in, and in good standing in, any state
in which the conduct of its business or its ownership of property requires that
it be qualified.  The execution, delivery and performance of this Agreement has
been duly authorized, and does not conflict with Borrower’s organizational
documents, nor constitute an Event of Default under any material agreement by
which Borrower is bound.  Borrower is not in default under any agreement to
which or by which it is bound.

 

(B)  Borrower has good title to the Collateral. All inventory is in all material
respects of good and marketable quality, free from material defects.  Borrower
is the sole owner of the Intellectual Property, except for non-exclusive
licenses granted to its customers in the ordinary course of business.  Each
Patent is valid and enforceable and no part of the Intellectual Property has
been judged invalid or unenforceable, in whole or in part, and no claim has been
made that any part of the Intellectual Property violates the rights of any third
party.

 

(C)  Borrower is not an “investment company” or a company “controlled” by an
“investment company” under the Investment Company Act.  Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations G, T and U of the Federal Reserve Board of Governors).  Borrower has
complied with the Federal Fair Labor Standards Act.  Borrower has not violated
any laws, ordinances or rules. None of Borrower’s properties or assets has been
used by Borrower, to the best of Borrower’s knowledge, by previous persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower has timely filed all required tax returns and
paid, or made adequate provision to pay, all taxes.  Borrower has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted.

 

6

--------------------------------------------------------------------------------

 

6.2. Affirmative Covenants.  Borrower will do all of the following:

 

(A)  Maintain its corporate existence and good standing in its jurisdictions of
incorporation and maintain its qualification in each jurisdiction necessary to
Borrower’s business or operations.

 

(B)  Give Bank at least 10 days prior written notice of changes to its name,
organization, chief executive office or location of records.

 

(C)  Pay all its taxes including gross payroll, withholding and sales taxes when
due and will deliver satisfactory evidence of payment if requested.

 

(D)  Provide a written report within 10 days, if payment of any Financed
Receivable does not occur by its due date and include the reasons for the delay.

 

(E)  Give Bank copies of all Forms 10-K, 10-Q and 8-K (or equivalents) within 5
days of filing with the Securities and Exchange Commission, while any Financed
Receivable is outstanding.

 

(F)  Execute any further instruments and take further action as Bank requests to
perfect or continue Bank’s security interest in the Collateral or to effect the
purposes of this Agreement.

 

(G)  Provide Bank with a Compliance Certificate no later than 5 days following
each quarter end or as requested by Bank.

 

(H)  Provide Bank with, as soon as available, but no later than 30 days
following each Reconciliation Period, a company prepared balance sheet and
income statement, prepared under GAAP, consistently applied, covering Borrower’s
operations during the period together with an aged listing of accounts
receivable and accounts payable along with a deferred revenue report.

 

(I)   Immediately notify, transfer and deliver to Bank all collections Borrower
receives for Financed Receivables.

 

(J)  Borrower will remit all payment’s for Accounts to the Bank by the close of
business on each Friday along with a detailed cash receipts journal and shall
immediately notify and direct all of the Borrower’s Account Debtor’s to make all
payment’s for Borrower’s Accounts to a lockbox account established with the Bank
(“Lockbox”) or to wire transfer payments to a cash collateral account that Bank
controls. It will be considered an immediate  Event of Default if the Lockbox is
not set-up and operational within 45 days from the date of this Agreement.

 

(K)  Borrower will allow Bank to audit Borrower’s Collateral, including but not
limited to Borrower’s Accounts, at Borrowers expense, no later than 360 days of
the execution of this Agreement and annually thereafter.  Provided however, if
an Event of Default has occurred, Bank may audit Borrower’s Collateral,
including but not limited to Borrower’s Accounts at Bank’s sole discretion and
without notification and authorization from Borrower.

 

(L)  As of the last day of each Reconciliation Period, maintain the Adjusted
Quick Ratio.

 

(M) Register with the United States Copyright Office (i) any software material
to the business of Borrower it has, develops or acquires, including those in
Exhibit A to the Intellectual Property Security Agreement, within 30 days of the
date of this Agreement, and additional software rights developed or acquired,
including significant revisions, additions or improvements to the software or
revisions, additions or improvements which significantly improve the
functionality of the software, after the date of this Agreement, before the sale
or licensing to any third party of the software or any product based on or
containing any software.  Borrower will promptly notify Bank upon Borrower’s
filing of any application or registration of any Intellectual Property rights
with the United States Patent and Trademark Office and Borrower will execute and
deliver any and all instruments and documents as Bank may require to evidence or
perfect Bank’s security interest in such application or registration.

 

(N) Borrower will:  (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property;

 

7

--------------------------------------------------------------------------------

 

(ii) promptly advise Bank in writing of material infringements of the
Intellectual Property; and (iii) not allow any Intellectual Property to be
abandoned, forfeited or dedicated to the public without Bank’s written consent.

 

(O)  Borrower will maintain its primary banking relationship with Bank.

 

6.3. Negative Covenants.  Borrower will not do any of the following without
Bank’s prior written consent:

 

(A)  Assign, transfer, sell or grant, or permit any lien or security interest in
the Collateral.

 

(B)  Convey, sell, lease, transfer or otherwise dispose of the Collateral.

 

(C)  Create, incur, assume, or be liable for any indebtedness.

 

(D)  Become an “investment company” or a company controlled by an “investment
company,” under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or use
the proceeds of any Advance for that purpose; fail to meet the minimum funding
requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards
Act or violate any other law or regulation, or permit any of its subsidiaries to
do so.

 

(E)  ENTER INTO ANY CONTRACTUAL OBLIGATION WITH INSIGNIA SOLUTIONS INC. (UK)
GREATER THAN $1,000,000 PER MONTH OR TRANSFER CASH TO INSIGNIA SOLUTIONS, INC.
(UK) IN AN AMOUNT GREATER THAN $1,000,000 PER MONTH.

 

7.    Adjustments.  If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like (an “Adjustment”) or if Borrower
breaches any of the representations, warranties or covenants set forth in
Section 6., Borrower will promptly advise Bank.  Borrower will resell any
rejected, returned, returned, or recovered personal property for Bank, at
Borrower’s expense, and pay proceeds to Bank.  While Borrower has returned goods
that are Borrower property, Borrower will segregate and mark them “property of
Silicon Valley Bank.”  Bank owns the Financed Receivables and until receipt of
payment, has the right to take possession of any rejected, returned, or
recovered personal property.

 

8.    Security Interest. Borrower grants to Bank a continuing security interest
in all presently and later acquired Collateral.  Any security interest will be a
first priority security interest in the Collateral.

 

9.    Events of Default. Any one or more of the following is an Event of
Default.

 

(A)  Borrower fails to pay any amount owed to Bank when due;

 

(B)  Borrower files or has filed against it any Insolvency Proceedings or any
assignment for the benefit of creditors, or appointment of a receiver or
custodian for any of its assets;

 

(C)  Borrower becomes insolvent or is generally not paying its debts as they
become due or is left with unreasonably small capital;

 

(D)  Any involuntary lien, garnishment, attachment attaches to the Financed
Receivables or any Collateral;

 

(E)  Borrower breaches any covenant, agreement, warranty, or representation is
an immediate Event of Default;

 

(F)  Borrower is in default under any document, instrument or agreement
evidencing any debt, obligation or liability in favor of Bank its affiliates or
vendors regardless of whether the debt, obligation or liability is direct or
indirect, primary or secondary, or fixed or contingent;

 

(G)  An event of default occurs under any Guaranty of the Obligations or any
material provision of any Guaranty is not valid or enforceable or a Guaranty is
repudiated or terminated;

 

(H)  A material default or Event of Default occurs under any agreement between
Borrower and any creditor of Borrower that signed a subordination agreement with
Bank;

 

8

--------------------------------------------------------------------------------

 

(I)  Any creditor that has signed a subordination agreement with Bank breaches
any terms of the subordination agreement; or

 

(J)  (i) A material impairment in the perfection or priority of the Bank’s
security interest in the Collateral; (ii) a material adverse change in the
business, operations, or conditions (financial or otherwise) of the Borrower
occurs; or (iii) a material impairment of the prospect of repayment of any
portion of the Advances occurs.

 

10.    Remedies.

 

10.1. Remedies Upon Default.  When an Event of Default occurs, (1) Bank may stop
financing receivables or extending credit to Borrower;  (2) at Banks option and
on demand, all or a portion of the Obligations or, for to an Event of Default
described in Section 9(B), automatically and without demand, are due and payable
in full; (3) apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;  (4) Bank is granted a non-exclusive, royalty–free license
or other right to use, without charge, Borrower’s labels, Patents, Copyrights,
Mask Works, rights of use of any name, trade secrets, trade names, Trademarks,
service marks, and advertising matter, or any similar property as it pertains to
the Collateral, in completing production of, advertising for sale, and selling
any Collateral and, in connection with Bank’s exercise of its rights under this
Section, Borrower’s rights under all licenses and all franchise agreements inure
to Bank’s benefit and (5) Bank may exercise all rights and remedies under this
Agreement and the law, including those of a secured party under the Code, power
of attorney rights in Section 5 for the Collateral, and the right to collect,
dispose of, sell, lease, use, and realize upon all Financed Receivables and
Collateral in any commercial manner.  Borrower agrees that any notice of sale
required to be given to Borrower is deemed given if at least five days before
the sale may be held.

 

10.2. Demand Waiver.  Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guaranties held by Bank on which Borrower is
liable.

 

10.3. Default Rate.  If any amount is not paid when due, the amount bears
interest at the Applicable Rate plus five percent until the earlier of (a)
payment in good funds or (b) entry of a final judgment when the principal amount
of any money judgment will accrue interest at the highest rate allowed by law.

 

11.    Fees, Costs and Expenses.  The Borrower will pay on demand all fees,
costs and expenses  (including attorneys’ and professionals fees with costs and
expenses) that Bank incurs from:  (a) preparing, negotiating, administering, and
enforcing this Agreement or related agreement, including any amendments, waivers
or consents, (b) any litigation or dispute relating to the Financed Receivables,
the Collateral, this Agreement or any other agreement, (c) enforcing any rights
against Borrower or any guarantor, or any Account Debtor, (d) protecting or
enforcing its interest in the Financed Receivables or other Collateral, (e)
collecting the Financed Receivables and the  Obligations, and (f) any bankruptcy
case or insolvency proceeding involving Borrower, any Financed Receivable, the
Collateral, any Account Debtor, or any Guarantor.

 

12.    Choice of Law, Venue and Jury Trial Waiver.  California law governs this
Agreement.  Borrower and Bank each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County, California.

 

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. 
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

13.    Notices.  Notices or demands by either party about this Agreement must be
in writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses listed at the beginning of this Agreement.  A party may change notice
address by written notice to the other party.

 

9

--------------------------------------------------------------------------------

 

14.    General Provisions.

 

14.1.  Successors and Assigns.  This Agreement binds and is for the benefit of
successors and permitted assigns of each party.  Borrower may not assign this
Agreement or any rights under it without Bank’s prior written consent which may
be granted or withheld in Bank’s discretion.  Bank may, without the consent of
or notice to Borrower, sell, transfer, or grant participation in any part of
Bank’s obligations, rights or benefits under this Agreement.

 

14.2.  Indemnification.  Borrower will indemnify, defend and hold harmless Bank
and its officers, employees, and agents against:  (a) obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) losses or expenses
incurred, or paid by Bank from or consequential to transactions between Bank and
Borrower (including reasonable attorneys fees and expenses), except for losses
caused by Bank’s gross negligence or willful misconduct.

 

14.3.  Time of Essence.  Time is of the essence for performance of all
obligations in this Agreement.

 

14.4. Severability of Provision.  Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

 

14.5. Amendments in Writing, Integration.  All amendments to this Agreement must
be in writing.  This Agreement is the entire agreement about this subject matter
and supersedes prior negotiations or agreements.

 

14.6. Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when executed
and delivered are one Agreement.

 

14.7. Survival.  All covenants, representations and warranties made in this
Agreement continue in force while any Financed Receivable amount remains
outstanding.  Borrower’s indemnification obligations survive until all statutes
of limitations for actions that may be brought against Bank have run.

 

14.8. Confidentiality.  Bank will use the same degree of care handling
Borrower’s confidential information that it uses for its own confidential
information, but may disclose information; (i) to its subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the Agreement, (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with an
examination or audit and (v) as it considers appropriate exercising the remedies
under this Agreement.  Confidential information does not include information
that is either: (a) in the public domain or in Bank’s possession when disclosed,
or becomes part of the public domain after disclosure to Bank; or (b) disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.

 

14.9. Other Agreements.  This Agreement may not adversely affect Banks rights
under any other document or agreement.  If there is a conflict between this
Agreement and any agreement between Borrower and Bank, Bank may determine in its
sole discretion which provision applies.  Borrower acknowledges that any
security agreements, liens and/or security interests securing payment of
Borrower’s Obligations also secure Borrower’s Obligations under this Agreement
and are not adversely affected by this Agreement.  Additionally, (a) any
Collateral under other agreements or documents between Borrower and Bank secures
Borrowers Obligations under this Agreement and (b) a default by Borrower under
this Agreement is a default under agreements between Borrower and Bank.

 

BORROWER:

INSIGNIA SOLUTIONS INC.

 

By

/s/ Al Wood

 

Title

CFO

 

 

 

BANK: SILICON VALLEY BANK

 

By

/s/ Quentin Falconer

 

Title

Senior VP

 

 

10

--------------------------------------------------------------------------------

 

EXHIBIT A

 

The Collateral consists of all of Borrower’s right, title and interest in and to
the following:

 

All goods and equipment now owned or hereafter acquired, including, without
limitation, all machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

 

All inventory, now owned or hereafter acquired, including, without limitation,
all merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products including such inventory as is temporarily
out of Borrower’s custody or possession or in transit and including any returns
upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing and any documents of title
representing any of the above;

 

All contract rights and general intangibles now owned or hereafter acquired,
including, without limitation, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, leases, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer discs, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;

 

All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations owing to Borrower arising out
of the sale or lease of goods, the licensing of technology or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower;

 

All documents, cash, deposit accounts, securities, securities entitlements,
securities accounts, investment property, financial assets, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower’s Books relating to the foregoing;

 

All copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; all trade secret
rights, including all rights to unpatented inventions, know–how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired; all claims
for damages by way of any past, present and future infringement of any of the
foregoing;

 

All Borrower’s Books relating to the foregoing and any and all claims, rights
and interests in any of the above and all substitutions for, additions and
accessions to and proceeds thereof.

 

1

--------------------------------------------------------------------------------

 

Exhibit “B”

 

[j3626ex10d73image003.gif]

SILICON VALLEY BANK

SPECIALTY FINANCE DIVISION

 

Compliance Certificate

 

I, as authorized officer of INSIGNIA SOLUTIONS INC.  (“Borrower”) certify under
the Accounts Receivable Financing Agreement (the “Agreement”) between Borrower
and Silicon Valley Bank (“Bank”) as follows.

 

Borrower represents and warrants for each Financed Receivable:

 

It is the owner with legal right to sell, transfer and assign it;

 

The correct amount is on the Invoice Transmittal and is not disputed;

 

Payment is not contingent on any obligation or contract and it has fulfilled all
its obligations as of the Invoice Transmittal date;

 

It is based on an actual sale and delivery of goods and/or services rendered,
due to Borrower, it is not past due or in default, has not been previously sold,
assigned, transferred, or pledged and is free of any liens, security interests
and encumbrances;

 

There are no defenses, offsets, counterclaims or agreements for which the
Account Debtor may claim any deduction or discount;

 

It reasonably believes no Account Debtor is insolvent or subject to any
Insolvency Proceedings;

 

It has not filed or had filed against it proceedings and does not anticipate any
filing;

 

Bank has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral.

 

No representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statement contained in
the certificates or statement not misleading.

 

Additionally, Borrower represents and warrants as follows:

 

Borrower is duly existing and in good standing in its state of formation and
qualified and licensed to do business in, and in good standing in, any state in
which the conduct of its business or its ownership of property requires that it
be qualified.  The execution, delivery and performance of this Agreement has
been duly authorized, and do not conflict with Borrower’s formations documents,
nor constitute an Event of Default under any material agreement by which
Borrower is bound.  Borrower is not in default under any agreement to which or
by which it is bound.

 

Borrower has good title to the Collateral. All inventory is in all material
respects of good and marketable quality, free from material defects.

 

Borrower is not an “investment company” or a company “controlled” by an
“investment company” under the Investment Company Act.  Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations G, T and U of the Federal Reserve Board of Governors).  Borrower has
complied with the Federal Fair Labor Standards Act.  Borrower has not violated
any laws, ordinances or rules. None of Borrower’s properties or assets has been
used by Borrower, to the best of Borrower’s knowledge, by previous persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally.  Borrower has timely filed all required tax returns and
paid, or made adequate provision to pay, all taxes.  Borrower has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted.

 

All representations and warranties in the Agreement are true and correct in all
material respects on this date.

 

Sincerely,

 

/s/ Quentin Falconer

 

 SIGNATURE

 

Senior V.P.

 

 TITLE

 

3-29-02

 

 DATE

 

 

2

--------------------------------------------------------------------------------

 

[j3626ex10d73image005.gif]

SILICON VALLEY BANK

SPECIALTY FINANCE DIVISION

 

SECRETARY’S CERTIFICATE OF RESOLUTION

 

I, as Secretary of INSIGNIA SOLUTIONS INC., a Delaware corporation (the
“Corporation”), certify that the Board of Directors of the Corporation has
empowered

 

It is resolved that any one of the following officers of the Corporation, whose
name, title and signature is below:

 

NAME

 

TITLE

 

SIGNATURE

 

Al Wood

 

CFO

 

/s/ Al Wood

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to conduct any ordinary business of the corporation including but not limited to
the following:

 

Sell the corporation’s accounts receivable to Bank

 

Grant to Bank a security interest in any of the corporation’s assets

 

Execute and deliver certain agreements in connection with the sale of
receivables, and granting of security interests.

 

Designate other individuals to request advances, pay fees and costs and execute
other documents or agreements (including documents or agreement that waive the
Corporation’s right to a jury trial) they think necessary to effectuate these
Resolutions.

 

Further resolved that all acts authorized by these Resolutions and performed
before they were adopted are ratified. These Resolutions remain in effect and
Bank may rely on them until Bank receives written notice of their revocation.

 

I certify that the persons listed above are the Corporation’s officers with the
titles and signatures shown following their names and that these resolutions
have not been modified are currently effective.

 

X

/s/ Al Wood

 

 

*Secretary or Assistant Secretary

Date

 

 

 

 

 

X

/s/ Mark McMillen

 

 

* If the certifying officer is designated as a signer in these resolutions then
another corporate officer must also sign.

 

3

--------------------------------------------------------------------------------

 

LOCKBOX SERVICE SUBSCRIBER AGREEMENT

 

SILICON VALLEY BANK (“Bank”) and the undersigned company (“Subscriber”) agree as
follows:

 

1.                                       Remittance Banking Service.  Commencing
                         , 2002, INSIGNIA SOLUTIONS INC. (“Subscriber”) has
requested that Silicon Valley Bank (“Bank”) provide Subscriber with the Bank’s
Lockbox/Remittance Banking Service facilities (the “Service”), This Service will
be provided by the Bank or its agent (“Agent”), for the deposit of its clients’
remittance items.

 

2.                                       Client Remittances.  Clients of
Subscriber will be directed to  forward their remittances to Subscriber at a
post office address assigned by Bank or its agent.  Bank, or its Agent, shall
have unrestricted and exclusive access to the mail directed to this address. 
Subscriber agrees it will not furnish “business reply” mail envelopes to its
clients for their remittances, and any such envelopes mailed to the
Bank–designated address may be refused or returned to sender.  Subscriber agrees
to notify Bank 30 days in advance of any change in Subscriber’s remittance
statement and/or mailing schedule.

 

3.                                       Collection of Mail.  Bank, or its
Agent, will collect mail from the post office at multiple times each business
day.

 

4.                                       Endorsement of Items.  Bank, or its
Agent, will endorse, on behalf of Subscriber, checks and other deposited items
that appear to be for deposit to the credit of Subscriber.  Subscriber shall
indemnify Bank and its Agent from any liability that may arise by virtue of
Bank’s, or its Agent’s, endorsement and negotiation of such checks.

 

5.                                       Subscriber’s Account.  Bank, or its
Agent, will process the checks and other deposited items and the Bank shall
credit the total amount to the account described below (the “Account”).  During
the term of this Agreement, all collected funds held in the Account shall be
deemed to be Subscriber’s funds for all legal  purposes (e.g., attachment,
execution and other forms of legal  process).  The crediting and collection of
items will be handled under the same terms and conditions as apply to other
commercial deposits.  Subscriber acknowledges receipt of a copy of Bank’s
account rules and regulations.  Subscriber will have access to funds collected
by Service when credited to Subscriber’s account with Bank.

 

6.                                       Processing of Items.  The processing of
checks and other deposited items will be accomplished in accordance with the
various services and options recited in the attached End-User Set-up Form.

 

7.                                       Record of Deposited Items.  All checks
and other deposited items will be microfilmed by Bank, or its Agent, and the
film will be retained by Bank, or its Agent, for a period not less than one (1)
year.

 

8.                                       Restrictive Endorsements.  Although
Bank, or its Agent, normally forwards, without processing, checks discovered
bearing the typed or handwritten notation “PAYMENT IN FULL” or other notations
(“restrictive endorsements”), Bank or its Agent, assumes no responsibility for
its failure to do so. Bank, or its Agent, will process in the usual manner any
checks bearing restrictive endorsements where the wording is imprinted as part
of the check or voucher, indicating a general business practice of the payor. 
Subscriber will instruct their clients to send all payments with restrictions
such as “paid in full” to a separate location or person other than the LOCKBOX
address or regular payment location so that the payee can decide whether or not
to accept or reject the check, rather that have the check possibly processed
without thought to the issue.  Subscriber has reviewed and understands the
California Commercial Code (Section 3311) relating accord and satisfaction.

 

9.                                       Stock Certificates.  Bank, or its
Agent, will not be held liable in the event a stock certificate, bond and/or
stock power is received by Bank, or its Agent, in error; however, Bank, or its
Agent, will endeavor to identify such items and  to forward them to Subscriber.

 

10.                                 Returned Merchandise.  Subscriber agrees to
instruct its clients not to send any returned merchandise to the post office
address assigned by Bank, and Subscriber hereby holds Bank, or its Agent, free
of liability in the event such merchandise is received at the address.  Bank, or
its Agent, will make all reasonable attempts to forward merchandise received to
Subscriber, at the risk and expense of Subscriber.

 

11.                                 Commingling.  The Bank hereby acknowledges
that, of operational necessity, payments to a given

 

1

--------------------------------------------------------------------------------

 

LOCKBOX under the Service must be commingled with other funds in one or more
accounts during the course of processing.  Therefore, no payments that, by
virtue of a statutory, regulatory, contractual or similar restriction, cannot be
commingled with other payments or funds will be accepted under the Service. 
Subscriber hereby understands that it will not request the Service if
commingling of funds is not permitted due to regulatory, contractual, or similar
restrictions.  Bank, or its Agent will not be responsible for the identification
of these items nor will they accept any responsibility or liability which may
occur as a result of processing such an item in the LOCKBOX.

 

12.                                 Third Party Secured Creditor.  The
Subscriber hereby acknowledges that Bank shall not be obligated to, and Bank
shall not, enter into a third party secured creditor agreement with any creditor
of a LOCKBOX Subscriber with respect to any payments or funds processed through
the LOCKBOX system as part of the Service.  Subscriber agrees not to participate
in the Service if required to enter into a third party secured creditor
agreement by another party.

 

13.                                 Confidentiality.  Bank, or its Agent, agrees
that all information concerning the clients of the Subscriber which comes into
Bank’s, or its Agent’s, possession pursuant to this Agreement will be treated in
the same confidential manner as is information relating to the accounts of
Bank’s depositors.

 

14.                                 Fees.  Unless otherwise agreed by Bank,
Subscriber shall pay Bank the fees set forth for this service in Bank’s most
current Fee Schedule, plus additional fees for the performance of services
beyond the terms of this Agreement, or resulting from increased expenses
incurred by the failure of Subscriber to furnish, on demand, data in a form
acceptable to Bank.

 

15.                                 Limitations on Bank Liability.  In addition
to the limitations set forth in paragraph 8, above, Bank’s, or its Agent’s,
liability will be limited only to acts resulting from Bank’s, or its Agent’s,
gross negligence or willful misconduct and shall not exceed Bank’s fees and
charges to Subscriber in connection with the Service for the month in which
damages are suffered.  Under no circumstances will Bank, or its Agent, be held
liable for any general or consequential damages or damages caused, in whole or
in part, by the action or inaction of Subscriber or any agent or employee of
Subscriber. Bank, or its Agent, will not be liable for any damage, loss,
liability or delay caused by accidents, strikes, fire, flood, war, riot,
equipment breakdown, electrical or mechanical failure, acts of God, or any cause
which is reasonably unavoidable or beyond its reasonable control.  Subscriber
agrees that the fees charged by Bank for the performance of this service shall
be deemed to have been established in contemplation of these limitations on
Bank’s, or its Agent’s, liability.

 

16.                                 Indemnification.  Subscriber agrees to
indemnify Bank, its parent Company, affiliates, subsidiaries, or its Agent,
against any and all damages, losses or liabilities, including without limitation
reasonable attorneys’ fees and court costs, which results, directly or
indirectly, in whole or in part, from any negligence or fraud of Subscriber, its
Agent, or any employee of Subscriber or from any performance by Bank, or its
Agent, of Bank’s obligations under this Agreement.

 

17.                                 Subscriber’s Records.  This Agreement and
the performance by Bank, or its Agent, or its services hereunder shall not
relieve Subscriber of any obligation imposed by law or contract regarding the
maintenance of records or from employing adequate audit, account and review
practices as are customarily followed by similar businesses.

 

18.                                 Amendment and Termination.  Bank may amend
the terms of this Agreement from time to time by giving written notice to
Subscriber at the address set forth below or by sending Subscriber a copy of the
amended Agreement.  If Bank raises any fee(s) or deletes any service(s), it
agrees to give Subscriber 30 days’ prior notice.  Bank may immediately terminate
this Agreement in the event that Subscriber or any third party disputes the
ownership of the Account or of the funds on deposit in the Account.  Otherwise,
either party may terminate this Agreement on 30 days’ written notice to the
other.

 

19.                                 Governing Law.  This Agreement shall be
governed by the laws of the State of California.  Any dispute between the
parties to this contract shall be filed in the Court having the appropriate
jurisdiction in the County of Santa Clara, California.

 

20.                                 Notices.  All written notices required by
this Agreement shall be delivered or mailed to the other party at the address
set  forth below or to such other address as the party may specify in writing.

 

2

--------------------------------------------------------------------------------

 

Depository Account Number:

 

 

 

Dated

 

/

 

/

 

 

Dated

 

/

 

/

 

 

 

 

INSIGNIA SOLUTIONS INC.

SILICON VALLEY BANK

 

 

41300 Christy Street

3003 Tasman Drive, NC431

 

 

Fremont, California 94538

Santa Clara, CA 95054

 

 

By

/s/ Al Wood

 

By

/s/ Quentin Falconer

 

(authorized signature)

(authorized signature)

 

 

 

Title

CFO

 

Title

Senior V.P.

 

 

3

--------------------------------------------------------------------------------

 

AMENDED LOCKBOX AGREEMENT

 

INSIGNIA SOLUTIONS INC. (“Subscriber”) shall hold all payments on, and proceeds
of, Receivables in trust for Silicon Valley Bank (“Bank”), and Subscriber shall
immediately deliver all such payments and proceeds to Bank in their original
form, duly endorsed in blank, to be applied to the Obligations in such order as
Bank shall determine.

 

Subscriber hereby agrees to accept a change in the disposition of its lockbox #
                      proceeds from the current account #                  to
the Bank Cash Collateral Account #                    beginning immediately.  We
understand that Bank may, in its discretion, require that all proceeds of
Collateral be deposited by Subscriber into a lockbox account, or such other
“blocked account” as Bank may specify, pursuant to a blocked account agreement
in such form as Bank may specify.  Bank or its designee may, at any time, notify
Account Debtors that Receivables have been assigned to Bank.

 

DATED:

March 28, 2002

 

 

 

AGREED TO AND ACKNOWLEDGED BY:

 

 

 

 

Subscriber:

 

 

 

 

 

INSIGNIA SOLUTIONS INC.

 

 

 

By

/s/ Al Wood

 

 

President or Vice President

 

 

 

 

 

By

/s/ Al Wood

 

 

Secretary or Ass’t Secretary

 

 

 

Bank:

 

 

 

 

 

SILICON VALLEY BANK

 

 

 

 

By

/s/ Quentin Falconer

 

 

Title

Senior V.P.

 

 

1

--------------------------------------------------------------------------------

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property Security Agreement (this “IP Agreement”) is made as
of March 28, 2002 by and between INSIGNIA SOLUTIONS 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 which 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; and

 

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

 

1

--------------------------------------------------------------------------------

 

(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 promptly register the most recent version of any of Grantor’s
Copyrights, if not so already registered, and shall, from time to time, execute
and file such other instruments, and take such further actions as Bank may
reasonably request from time to time to perfect or continue the perfection of
Bank’s interest in the Intellectual Property Collateral;

 

(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. 

 

2

--------------------------------------------------------------------------------

 

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.

 

3

--------------------------------------------------------------------------------

 

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 acquired by Grantor after the execution hereof or to
delete any 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.

 

4

--------------------------------------------------------------------------------

 

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:

 

 

 

41300 Christy Street

INSIGNIA SOLUTIONS INC.

Fremont, California 94538

 

 

 

By:

/s/ Al Wood

 

 

Name:

Al Wood

 

 

Title:

CFO

 

 

5

--------------------------------------------------------------------------------

 

Exhibit “A” attached to that certain Intellectual Property Security Agreement
dated March 28, 2002

 

EXHIBIT “A”

 

COPYRIGHTS

 

SCHEDULE A – ISSUED COPYRIGHTS

 

COPYRIGHT
DESCRIPTION

 

REGISTRATION
NUMBER

 

DATE OF
ISSUANCE

 

 

 

SCHEDULE B – PENDING COPYRIGHT APPLICATIONS

 

 

 

FIRST DATE
OF PUBLIC
DISTRIBUTION

COPYRIGHT
DESCRIPTION

 

APPLICATION
NUMBER

 

DATE OF
FILING

 

CREATION

 

 

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)

 

 

6

--------------------------------------------------------------------------------

 

Exhibit “B” attached to that certain Intellectual Property Security Agreement
dated March 28, 2002

 

EXHIBIT “B”

 

PATENTS

 

PATENT
DESCRIPTION

 

DOCKET NO.

 

COUNTRY

 

SERIAL NO.

 

FILING DATE

 

STATUS

 

 

7

--------------------------------------------------------------------------------

 

Exhibit “C” attached to that certain Intellectual Property Security Agreement
dated March 28, 2002

 

EXHIBIT “C”

 

TRADEMARKS

 

TRADEMARK
DESCRIPTION

 

COUNTRY

 

SERIAL NO.

 

REG. NO

 

STATUS

 

 

8

--------------------------------------------------------------------------------

 

Exhibit “D” attached to that certain Intellectual Property Security Agreement
dated March 28, 2002

 

EXHIBIT “D”

 

MASK WORKS

 

MASK WORK
DESCRIPTION

 

COUNTRY

 

SERIAL NO.

 

REG. NO

 

STATUS

 

 

9

--------------------------------------------------------------------------------