**EXHIBIT10.73**

 

**SILICON VALLEY BANK**

**ACCOUNTS RECEIVABLE FINANCING AGREEMENT**

 

This ACCOUNTSRECEIVABLE FINANCING AGREEMENT (the “Agreement”), dated as of March 28, 2002 isbetween Silicon Valley Bank, (“Bank”), and INSIGNIA SOLUTIONS INC. a Delawarecorporation, (“Borrower”), whose address is 41300 Christy Street, Fremont,California 94538 and with a FAX numberof                                       .

 

**1.    Definitions**. In this Agreement:

 

**“Accounts”** are all existing and later arisingaccounts, contract rights, and other obligations owed Borrower in connectionwith its sale or lease of goods (including licensing software and othertechnology) or provision of services,**allcredit insurance, guaranties, other security and all merchandise returned orreclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

 

**“AccountDebtor”** isdefined in the California Uniform Commercial Code and shall include any personliable on any Financed Receivable, such as, a guarantor of the FinancedReceivable and any issuer of a letter of credit or banker’s acceptance.

 

**“AdjustedQuick Ratio”**  A ratio of Quick Assets to CurrentLiabilities 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 ofreturn, warranty claims, or short payments, asserted by or on behalf of anyAccount Debtor for any Financed Receivable.

 

**“AdministrativeFee”**is definedin Section 3.3.

 

**“Advance”** is defined in Section 2.2.

 

**“AdvanceRate”** is **80**%, net of deferred revenue and offsetsrelated to each specific Account Debtor, or another percentage as Bankestablishes under Section 2.2.

 

**“ApplicableRate”** is a rateper annum equal to the “Prime Rate” plus **2.00**percentage points.

 

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

 

“**Code”** is the California Uniform CommercialCode.

 

**“Collateral”** is attached as Exhibit “A”.

 

**“CollateralHandling Fee”**isdefined in Section 3.5.

 

**“Collections”**are all fundsreceived by Bank from or on behalf of an Account Debtor for FinancedReceivables.

 

**“ComplianceCertificate”** isattached as Exhibit “B”.

 

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

 

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

 

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

 

**“CurrentLiabilities”**arethe aggregate amount of Borrower’s Total Liabilities which mature within one(1) year.

 

“**Deferred Revenue**” is all amounts receivedin advance of performance under maintenance contract and not yet recognized asrevenue.

 

**“EarlyTermination Fee”**is defined in Section 3.6.

 

**“Eventof Default”** isdefined in Section 9.

 

**“Facility”** is an extension of creditby Bank to Borrower in order to finance receivables with an aggregate AccountBalance not exceeding the Facility Amount.

 

**“FacilityAmount”** is **$1,500,000.00**.

 

**“FacilityFee”** is definedin Section 3.4.

 

**“FacilityPeriod”** is theperiod beginning on this date and continuing until **March 27, 2003**, unless the period is terminated sooner by Bankwith notice to Borrower or by Borrower under Section 3.6.

 

**“Finance Charges”** is defined in Section 3.2.

 

**“FinancedReceivables”** areall 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 FinancedReceivable (but remains Collateral) when the Advance made for the FinancedReceivable has been finally paid.

 

**“FinancedReceivable Balance”**isthe total outstanding amount, at any time, of all Financed Receivables.

 

**“Guarantor”**means any guarantor of theObligations.

 

**“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 ofcredit, (b) obligations evidenced by notes, bonds, debentures or similarinstruments, (c) capital lease obligations and (d) Contingent Obligations.

 

**“****Ineligible****Receivable”**is any accounts receivable:

 

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

(B)  that is owed by an Account Debtor that hasfiled, or has had filed against it, any bankruptcy case, assignment for thebenefit of creditors, receivership, or Insolvency Proceeding or who has becomeinsolvent (as defined in the United States Bankruptcy Code) or who is generallynot paying its debts as they become due; or

(C)  for which there has been any breach ofwarranty or representation in Section 6 or any breach of any covenant in thisAgreement; or

 

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

 

**“Insolvency Proceeding”**are proceedings by or against any person under theUnited States Bankruptcy Code, or any other bankruptcy or insolvency law,including assignments for the benefit of creditors, compositions, extensionsgenerally 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 androyalties from the use;

 

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

 

(c)  All designrights which may be available to Borrower now or later created, acquired orheld;

 

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

 

All proceeds and products of the foregoing, includingall 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, invoiceamount, invoice date and invoice number and is signed by Borrower’s authorizedrepresentative.

 

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

 

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

 

**“Lockbox”**is described inSection 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 toBank now or later under this Agreement or any other document, instrument oragreement, account (including those acquired by assignment) primary orsecondary, such as all Advances, Finance Charges, Administrative Fees, interest,fees, expenses, professional fees and attorneys’ fees or other.

 

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

 

**“Person”**is anyindividual, sole proprietorship, partnership, limited liability company, jointventure, company, trust, unincorporated organization, association, corporation,institution, public benefit corporation, firm, joint stock company, estate, entityor government agency.

 

**“PrimeRate”** is Bank’smost recently an­nounced “prime rate,” even if it is not Bank’s lowest rate.

 

**“QuickAssets”**is, onany date, the Borrower’s consolidated, unrestricted cash, cash equivalents, netbilled accounts receivable and investments with maturities of fewer than 12months determined according to GAAP.

 

**“ReconciliationDay”**is the lastcalendar day of each month.

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**“ReconciliationPeriod”** is eachcalendar month.

 

**“SubordinatedDebt”** is debtincurred by Borrower subordinated to Borrower’s debt to Bank (and identified as

 

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subordinated by Borrowerand Bank).

 

**“TotalLiabilities”** ison any day, obligations that should, under GAAP, be classified as liabilitieson Borrower’s consolidated balance sheet, including all Indebtedness, andcurrent portion Subordinated Debt allowed to be paid, but excluding all otherSubordinated Debt.

 

**“Trademarks”**are trademark andservice mark rights, registered or not, applications to register andregistrations and like protections, and the entire goodwill of the business ofAssignor connected with the trademarks.

 

**2.    Financing ofAccounts Receivable**.

 

2.1.**Request for Advances**.  During the Facility Period, Borrower mayoffer accounts receivable to Bank, if there is not an Event of Default.  Borrower will deliver an Invoice Transmittalfor 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 anyaccounts receivable.  Bank may approveany Account Debtor’s credit before financing any receivable.  When Bank accepts a receivable, it will payBorrower the Advance Rate times the face amount of the receivable (the“Advance”).  Bank may, in itsdiscretion, change the percentage of the Advance Rate.  When Bank makes an Advance, the receivablebecomes a “Financed Receivable.”  Allrepresentations and warranties in Section 6 must be true as of the date of theInvoice Transmittal and of the Advance and no Event of Default exists wouldoccur as a result of the Advance.  Theaggregate amount of all Financed Receivables outstanding at any time may notexceed the Facility Amount.

 

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

 

3.1. **Collections**. Collections will be creditedto the Financed Receivables Balance, but if there is an Event of Default, Bankmay apply Collections to the Obligation in any order it chooses.   If Bank receives a payment for bothFinanced Receivable and a non Financed Receivable, the funds will first beapplied to the Financed Receivable and, if there is not an Event of Default, theexcess will be remitted to the Borrower, subject to Section 3.10.

 

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

 

3.3.  **AdministrativeFee**.   Upon receipt of theCollections, Borrower will pay an Administrative Fee of **0**% of the face amount of each FinancedReceivable financed during that Reconciliation Period (the “AdministrativeFee”).

 

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 acollateral handling fee, equal to .35% per month of the average daily Financed ReceivableBalance outstanding during the applicable Reconciliation Period. After an Eventof Default, the Collateral Handling Fee will increase an additional .50%effective immediately before the Event of Default.

 

3.6. **Early Termination Fee**.  **IntentionallyLeft Blank**.

 

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3.7. **Accounting.**  After each Reconciliation Period, Bank willprovide 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 theaccounting in writing within 30 days it is considered correct.  All Finance Charges and other interest andfees calculated on the basis of a 360 day year and actual days elapsed.

 

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

 

3.9.  **DueDiligence Fee.**  Borrower haspaid to Bank a Due Diligence Fee of $10,000.00 to initiate Banks due diligencereview process.  Such fee is fullyearned by Bank and is non-refundable.

 

3.10.  **AccountCollection Services**.  AllBorrowers’ receivables are to be paid to the same address/or party and Borrowerand Bank must agree on such address.  IfBank collects all receivables and there is not an Event of Default or an eventthat with notice or lapse of time will be an Event of Default, within **five (5)**days of receipt of thosecollections, Bank will give Borrower, the receivables collections it receivesfor receivables other than Financed Receivables and/or amount in excess of theamount for which Bank has made an Advance to Borrower, less any amount due toBank, such as the Finance Charge, Administrative Fee, Collateral Handling Feeand expenses or otherwise. This Section does not impose any affirmative duty onBank to do any act other than to turn over amounts.  All receivables and collections are Collateral and if an Event ofDefault occurs, Bank need not remit collections of Collateral and may applythem to the Obligations.

 

**4.    Repayment of Obligations**.

 

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

 

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

 

**5.    Powerof Attorney**. Borrower irrevocably appoints Bank and its successors and assigns itattorney-in-fact and authorizes Bank, regardless of whether there has been anEvent 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 toany Account Debtor for monies due and compromise, prosecute, or defend anyaction, claim, case or proceeding about the Financed Receivables, includingfiling a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’sname, as Bank chooses:

 

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

 

(D)  notify all Account Debtors to pay Bankdirectly;

 

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

 

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

 

(G)  execute on Borrower’s behalf anyinstruments, documents, financing statements to perfect Bank’s interests in theFinanced Receivables and Collateral; and

 

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(H)  do all acts and things necessary orexpedient.

 

**6.    Representations, Warranties****andCovenants.**

 

 6.1. **Representations and Warranties. **Borrower represents and warrantsfor each Financed Receivable:

 

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

 

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

 

(C)  Payment is not contingent on any obligationor contract and it has fulfilled all its obligations as of the InvoiceTransmittal date;

 

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

 

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

 

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

 

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

 

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

 

(I)   No representation, warranty or otherstatement of Borrower in any certificate or written statement given to Bankcontains any untrue statement of a material fact or omits to state a materialfact necessary to make the statement contained in the certificates or statementnot misleading.

 

6.1.1 **AdditionalRepresentations and Warranties.** Borrower represents and warrants as follows:

 

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

 

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

 

(C)  Borrower is not an “investment company” or acompany “controlled” by an “investment company” under the Investment CompanyAct.  Borrower is not engaged as one ofits important activities in extending credit for margin stock (underRegulations G, T and U of the Federal Reserve Board of Governors).  Borrower has complied with the Federal FairLabor Standards Act.  Borrower has notviolated any laws, ordinances or rules. None of Borrower’s properties or assetshas been used by Borrower, to the best of Borrower’s knowledge, by previouspersons, in disposing, producing, storing, treating, or transporting anyhazardous substance other than legally. Borrower has timely filed all required tax returns and paid, or madeadequate 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 governmentauthorities that are necessary to continue its business as currently conducted.

 

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6.2.**AffirmativeCovenants. **Borrower will doall of the following:

 

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

 

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

 

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

 

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

 

(E)  Give Bank copies of all Forms 10-K, 10-Q and8-K (or equivalents) within 5 days of filing with the Securities and ExchangeCommission, while any Financed Receivable is outstanding.

 

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

 

(G)  Provide Bank with a Compliance Certificateno later than 5 days following each quarter end or as requested by Bank.

 

(H)  Provide Bank with, as soon as available, butno later than 30 days following each Reconciliation Period, a company preparedbalance sheet and income statement, prepared under GAAP, consistently applied,covering Borrower’s operations during the period together with an aged listingof accounts receivable and accounts payable along with a deferred revenuereport.

 

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

 

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

 

(K)  Borrower will allow Bank to audit Borrower’sCollateral, including but not limited to Borrower’s Accounts, at Borrowersexpense, no later than 360 days of the execution of this Agreement and annuallythereafter.  Provided however, if anEvent of Default has occurred, Bank may audit Borrower’s Collateral, includingbut not limited to Borrower’s Accounts at Bank’s sole discretion and without notificationand authorization from Borrower.

 

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

 

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

 

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

 

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(ii) promptly advise Bank in writing of materialinfringements of the Intellectual Property; and (iii) not allow anyIntellectual Property to be abandoned, forfeited or dedicated to the publicwithout Bank’s written consent.

 

(O)  Borrower will maintain its primary bankingrelationship with Bank.

 

6.3. **NegativeCovenants. **Borrower will notdo any of the following without Bank’s prior written consent:

 

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

 

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

 

## **(E)  Enter into any contractual obligation withInsignia Solutions Inc. (UK) greater than $1,000,000 per month or transfer cashto Insignia Solutions, Inc. (UK) in an amount greater than $1,000,000 permonth.**

 

**7.**    **Adjustments.**  If any Account Debtor asserts a discount, allowance, return,offset, defense, warranty claim, or the like (an “Adjustment”) or if Borrowerbreaches any of the representations, warranties or covenants set forth inSection 6., Borrower will promptly advise Bank.  Borrower will resell any rejected, returned, returned, or recoveredpersonal property for Bank, at Borrower’s expense, and pay proceeds toBank.  While Borrower has returned goodsthat are Borrower property, Borrower will segregate and mark them “property ofSilicon Valley Bank.”  Bank owns theFinanced Receivables and until receipt of payment, has the right to takepossession of any rejected, returned, or recovered personal property.

 

**8.**   **Security Interest**.Borrower grants to Bank a continuing security interest in all presently andlater acquired Collateral.  Any securityinterest 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 toBank when due;

 

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

 

(C)  Borrower becomes insolvent or is generallynot paying its debts as they become due or is left with unreasonably smallcapital;

 

(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 favorof Bank its affiliates or vendors regardless of whether the debt, obligation orliability is direct or indirect, primary or secondary, or fixed or contingent;

 

(G)  An event of default occurs under anyGuaranty of the Obligations or any material provision of any Guaranty is notvalid or enforceable or a Guaranty is repudiated or terminated;

 

(H)  A material default or Event of Default occursunder any agreement between Borrower and any creditor of Borrower that signed asubordination agreement with Bank;

 

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

 

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

 

**10.**    **Remedies.**

 

10.1. **RemediesUpon Default**.  When an Eventof Default occurs, (1) Bank may stop financing receivables or extending creditto Borrower;  (2) at Banks option and ondemand, all or a portion of the Obligations or, for to an Event of Defaultdescribed in Section 9(B), automatically and without demand, are due andpayable in full; (3) apply to the Obligations any (i) balances and deposits ofBorrower it holds, or (ii) any amount held by Bank owing to or for the creditor the account of Borrower;  (4) Bank isgranted 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 completingproduction of, advertising for sale, and selling any Collateral and, inconnection with Bank’s exercise of its rights under this Section, Borrower’srights under all licenses and all franchise agreements inure to Bank’s benefitand (5) Bank may exercise all rights and remedies under this Agreement and thelaw, including those of a secured party under the Code, power of attorneyrights in Section 5 for the Collateral, and the right to collect, dispose of,sell, lease, use, and realize upon all Financed Receivables and Collateral inany commercial manner.  Borrower agreesthat any notice of sale required to be given to Borrower is deemed given if atleast five days before the sale may be held.

 

10.2.**DemandWaiver**. ** **Borrower waives demand, notice of default or dishonor,notice of payment and nonpayment, notice of any default, nonpayment atmaturity, release, compromise, settlement, extension, or renewal of accounts,documents, instruments, chattel paper, and guaranties held by Bank on whichBorrower is liable.

 

10.3. **Default Rate**.  If any amount is not paid when due, the amount bears interest atthe Applicable Rate plus five percent until the earlier of (a) payment in goodfunds or (b) entry of a final judgment when the principal amount of any moneyjudgment 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 feeswith costs and expenses) that Bank incurs from:  (a) preparing, negotiating, administering, and enforcing thisAgreement or related agreement, including any amendments, waivers or consents,(b) any litigation or dispute relating to the Financed Receivables, theCollateral, this Agreement or any other agreement, (c) enforcing any rightsagainst Borrower or any guarantor, or any Account Debtor, (d) protecting orenforcing its interest in the Financed Receivables or other Collateral, (e)collecting the Financed Receivables and the Obligations, and (f) any bankruptcy case or insolvency proceedinginvolving Borrower, any Financed Receivable, the Collateral, any AccountDebtor, or any Guarantor.

 

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

 

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

 

**13.**   **Notices.**  Notices or demands by either party aboutthis Agreement must be in writing and personally delivered or sent by anovernight delivery service, by certified mail postage prepaid return receiptrequested, or by FAX to the addresses listed at the beginning of thisAgreement.  A party may change noticeaddress by written notice to the other party.

 

9

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**14.**   **General Provisions**.

 

14.1.  **Successorsand Assigns**.  This Agreementbinds and is for the benefit of successors and permitted assigns of eachparty.  Borrower may not assign thisAgreement or any rights under it without Bank’s prior written consent which maybe 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 benefitsunder this Agreement.

 

14.2.  **Indemnification.**  Borrower will indemnify, defend and holdharmless Bank and its officers, employees, and agents against:  (a) obligations, demands, claims, andliabilities asserted by any other party in connection with the transactionscontemplated by this Agreement; and (b) losses or expenses incurred, or paid byBank from or consequential to transactions between Bank and Borrower (includingreasonable attorneys fees and expenses), except for losses caused by Bank’sgross negligence or willful misconduct.

 

14.3.  **Time ofEssence**.  Time is of theessence for performance of all obligations in this Agreement.

 

14.4. **Severability of Provision**.  Each provision of this Agreement isseverable from every other provision in determining the enforceability of anyprovision.

 

14.5. **Amendments in Writing, Integration**.  All amendments to this Agreement must be inwriting.  This Agreement is the entireagreement about this subject matter and supersedes prior negotiations oragreements.

 

14.6**. Counterparts**.  This Agreement may be executed in any number of counterparts andby different parties on separate counterparts and when executed and deliveredare one Agreement.

 

14.7. **Survival**.  All covenants, representations andwarranties made in this Agreement continue in force while any FinancedReceivable amount remains outstanding. Borrower’s indemnification obligations survive until all statutes oflimitations for actions that may be brought against Bank have run.

 

14.8. **Confidentiality**.  Bank will use the same degree of carehandling Borrower’s confidential information that it uses for its ownconfidential information, but may disclose information; (i) to its subsidiariesor affiliates in connection with their business with Borrower, (ii) to prospectivetransferees or purchasers of any interest in the Agreement, (iii) as requiredby law, regulation, subpoena, or other order, (iv) as required in connectionwith an examination or audit and (v) as it considers appropriate exercising theremedies 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 becomespart of the public domain after disclosure to Bank; or (b) disclosed to Bank bya third party, if Bank does not know that the third party is prohibited fromdisclosing the information.

 

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

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# 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 hereafteracquired, including, without limitation, all machinery, fixtures, vehicles(including motor vehicles and trailers), and any interest in any of theforegoing, and all attachments, accessories, accessions, replacements,substitutions, additions, and improvements to any of the foregoing, whereverlocated;

 

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 includingsuch inventory as is temporarily out of Borrower’s custody or possession or intransit and including any returns upon any accounts or other proceeds,including insurance proceeds, resulting from the sale or disposition of any ofthe foregoing and any documents of title representing any of the above;

 

All contract rights and general intangibles now ownedor hereafter acquired, including, without limitation, goodwill, trademarks,service marks, trade styles, trade names, patents, patent applications, leases,license agreements, franchise agreements, blueprints, drawings, purchaseorders, 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 obligationsowing to Borrower arising out of the sale or lease of goods, the licensing oftechnology or the rendering of services by Borrower, whether or not earned byperformance, and any and all credit insurance, guaranties, and other securitytherefor, as well as all merchandise returned to or reclaimed by Borrower;

 

All documents, cash, deposit accounts, securities,securities entitlements, securities accounts, investment property, financialassets, letters of credit, certificates of deposit, instruments and chattelpaper now owned or hereafter acquired and Borrower’s Books relating to theforegoing;

 

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

 

All Borrower’s Booksrelating to the foregoing and any and all claims, rights and interests in anyof the above and all substitutions for, additions and accessions to andproceeds thereof.

 

1

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**Exhibit “B”**

 

******

**SILICON VALLEY BANK**

**SPECIALTYFINANCE DIVISION**

#  

Compliance Certificate

 

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

 

**Borrowerrepresents and warrants for each Financed Receivable:**

 

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

 

The correct amount is onthe Invoice Transmittal and is not disputed;

 

Payment is not contingenton any obligation or contract and it has fulfilled all its obligations as ofthe Invoice Transmittal date;

 

It is based on an actual sale and delivery of goodsand/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 ofany liens, security interests and encumbrances;

 

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

 

It reasonably believes noAccount Debtor is insolvent or subject to any Insolvency Proceedings;

 

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

 

Bank has the right to endorse and/ or require Borrowerto endorse all payments received on Financed Receivables and all proceeds ofCollateral.

 

No representation, warranty or other statement ofBorrower in any certificate or written statement given to Bank contains anyuntrue statement of a material fact or omits to state a material fact necessaryto make the statement contained in the certificates or statement notmisleading.

 

**Additionally,Borrower represents and warrants as follows:**

 

Borrower is duly existing and in good standing in itsstate of formation and qualified and licensed to do business in, and in goodstanding in, any state in which the conduct of its business or its ownership ofproperty requires that it be qualified. The execution, delivery and performance of this Agreement has been dulyauthorized, and do not conflict with Borrower’s formations documents, norconstitute an Event of Default under any material agreement by which Borroweris bound.  Borrower is not in defaultunder any agreement to which or by which it is bound.

 

Borrower has good titleto the Collateral. All inventory is in all material respects of good andmarketable 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 itsimportant activities in extending credit for margin stock (underRegulations G, T and U of the Federal Reserve Board of Governors).  Borrower has complied with the Federal FairLabor Standards Act.  Borrower has notviolated any laws, ordinances or rules. None of Borrower’s properties or assetshas been used by Borrower, to the best of Borrower’s knowledge, by previouspersons, in disposing, producing, storing, treating, or transporting anyhazardous substance other than legally. Borrower has timely filed all required tax returns and paid, or madeadequate 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 governmentauthorities that are necessary to continue its business as currently conducted.

 

Allrepresentations and warranties in the Agreement are true and correct in allmaterial respects on this date.

 
| Sincerely,           |   |
|----------------------|--------|
| /s/ Quentin Falconer |   |
|  SIGNATURE      |   |
| Senior V.P.          |   |
|  TITLE          |   |
| 3-29-02              |   |
|  DATE           |   |

 

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**SILICON VALLEY BANK**

**SPECIALTYFINANCE DIVISION**

 

SECRETARY’S CERTIFICATE OF RESOLUTION

 

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

 

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

 
| **NAME** |   | **TITLE** |   | **SIGNATURE** |   |
|----------|--------|-----------|--------|---------------|--------|
| Al Wood  |   | CFO       |   | /s/ Al Wood   |   |
|     |   |      |   |          |   |
|     |   |      |   |          |   |
|     |   |      |   |          |   |
|     |   |      |   |          |   |

 

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

 

Sell the corporation’saccounts receivable to Bank

 

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

 

Execute and deliver certain agreements in connectionwith 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 (includingdocuments or agreement that waive the Corporation’s right to a jury trial) theythink necessary to effectuate these Resolutions.

 

**F**urther resolved that all acts authorizedby these Resolutions and performed before they were adopted are ratified. TheseResolutions remain in effect and Bank may rely on them until Bank receiveswritten notice of their revocation.

 

**I**certify thatthe persons listed above are the Corporation’s officers with the titles andsignatures shown following their names and that these resolutions have not beenmodified 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

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LOCKBOX SERVICESUBSCRIBER 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 ValleyBank (“Bank”) provide Subscriber with the Bank’s Lockbox/Remittance BankingService facilities (the “Service”), This Service will be provided by the Bankor 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 addressassigned by Bank or its agent.  Bank, orits Agent, shall have unrestricted and exclusive access to the mail directed tothis address.  Subscriber agrees it willnot furnish “business reply” mail envelopes to its clients for theirremittances, and any such envelopes mailed to the Bank–designated address maybe refused or returned to sender. Subscriber agrees to notify Bank 30 days in advance of any change inSubscriber’s remittance statement and/or mailing schedule.

 

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

 

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

 

5.                                       Subscriber’s Account. Bank, or its Agent, will process the checks and other deposited itemsand the Bank shall credit the total amount to the account described below (the“Account”).  During the term of thisAgreement, all collected funds held in the Account shall be deemed to beSubscriber’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 sameterms and conditions as apply to other commercial deposits.  Subscriber acknowledges receipt of a copy ofBank’s account rules and regulations. Subscriber will have access to funds collected by Service when creditedto Subscriber’s account with Bank.

 

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

 

7.                                       Record of Deposited Items. All checks and other deposited items will be microfilmed by Bank, or itsAgent, and the film will be retained by Bank, or its Agent, for a period notless than one (1) year.

 

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

 

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

 

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

 

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

 

1

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LOCKBOX under theService must be commingled with other funds in one or more accounts during thecourse of processing.  Therefore, nopayments that, by virtue of a statutory, regulatory, contractual or similarrestriction, cannot be commingled with other payments or funds will be acceptedunder the Service.  Subscriber herebyunderstands that it will not request the Service if commingling of funds is notpermitted due to regulatory, contractual, or similar restrictions.  Bank, or its Agent will not be responsiblefor the identification of these items nor will they accept any responsibilityor liability which may occur as a result of processing such an item in theLOCKBOX.

 

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 withany creditor of a LOCKBOX Subscriber with respect to any payments or fundsprocessed through the LOCKBOX system as part of the Service.  Subscriber agrees not to participate in theService if required to enter into a third party secured creditor agreement byanother party.

 

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

 

14.                                 Fees.  Unlessotherwise agreed by Bank, Subscriber shall pay Bank the fees set forth for thisservice in Bank’s most current Fee Schedule, plus additional fees for theperformance of services beyond the terms of this Agreement, or resulting fromincreased 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 exceedBank’s fees and charges to Subscriber in connection with the Service for themonth in which damages are suffered. Under no circumstances will Bank, or its Agent, be held liable for anygeneral or consequential damages or damages caused, in whole or in part, by theaction 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 delaycaused by accidents, strikes, fire, flood, war, riot, equipment breakdown,electrical or mechanical failure, acts of God, or any cause which is reasonablyunavoidable or beyond its reasonable control. Subscriber agrees that the fees charged by Bank for the performance ofthis service shall be deemed to have been established in contemplation of theselimitations 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, whichresults, directly or indirectly, in whole or in part, from any negligence orfraud of Subscriber, its Agent, or any employee of Subscriber or from anyperformance 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 itsservices hereunder shall not relieve Subscriber of any obligation imposed bylaw or contract regarding the maintenance of records or from employing adequateaudit, account and review practices as are customarily followed by similarbusinesses.

 

18.                                 Amendment and Termination. Bank may amend the terms of this Agreement from time to time by givingwritten notice to Subscriber at the address set forth below or by sendingSubscriber a copy of the amended Agreement. If Bank raises any fee(s) or deletes any service(s), it agrees to giveSubscriber 30 days’ prior notice.  Bankmay immediately terminate this Agreement in the event that Subscriber or anythird party disputes the ownership of the Account or of the funds on deposit inthe Account.  Otherwise, either partymay 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 ofCalifornia.  Any dispute between theparties to this contract shall be filed in the Court having the appropriatejurisdiction in the County of Santa Clara, California.

 

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

 

2

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| 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

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**AMENDED LOCKBOX AGREEMENT**

 

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

 

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

 
| 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

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## **INTELLECTUAL PROPERTY SECURITY AGREEMENT**

 

This Intellectual Property Security Agreement (this “IP Agreement”) ismade 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”) asdescribed in the Accounts Receivable Financing Agreement (the “FinancingAgreement”), but only if Grantor grants Bank a security interest in itsCopyrights, Trademarks, Patents, and Mask Works.  Defined terms used but notdefined herein shall have the same meanings as in the Financing Agreement.

 

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

 

**NOW, THEREFORE,**for good and valuableconsideration, receipt of which is hereby acknowledged and intending to belegally bound, as collateral security for the prompt and complete payment whendue of Grantor’s Indebtedness under the Financing Agreement, Grantor hereby represents,warrants, covenants and agrees as follows:

 

1.       Grant of SecurityInterest.  As collateral securityfor the prompt and complete payment and performance of all of Grantor’s presentor future Indebtedness, obligations and liabilities to Bank, Grantor herebygrants a security interest in all of Grantor’s right, title and interest in, toand under its Intellectual Property Collateral (all of which shall collectivelybe called the “Intellectual Property Collateral”), including, withoutlimitation, the following:

 

(a)  Any and all copyrightrights, copyright applications, copyright registrations and like protections ineach work or authorship and derivative work thereof, whether published orunpublished and whether or not the same also constitutes a trade secret, now orhereafter existing, created, acquired or held, including without limitationthose 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 computersoftware products now or hereafter existing, created, acquired or held;

 

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

 

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

 

(e)  Any trademark andservicemark rights, whether registered or not, applications to register andregistrations of the same and like protections, and the entire goodwill of thebusiness of Grantor connected with and symbolized by such trademarks, includingwithout limitation those set forth on Exhibit C attached hereto(collectively, the “Trademarks”)

 

(f)  All mask works or similar rights availablefor the protection of semiconductor chips, now owned or hereafter acquired,including, without limitation those set forth on Exhibit D attachedhereto (collectively, the  “MaskWorks”);

 

(g)  Any and all claims fordamages by way of past, present and future infringements of any of the rightsincluded above, with the right, but not the obligation, to sue for and collectsuch damages for said use or infringement of the intellectual property rightsidentified above;

 

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

 

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

 

1

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

 

2.       Authorization andRequest.  Grantor authorizes andrequests that the Register of Copyrights and the Commissioner of Patents andTrademarks record this IP Agreement.

 

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

 

(a)  Grantor is now the soleowner of the Intellectual Property Collateral, except for non-exclusivelicenses granted by Grantor to its customers in the ordinary course ofbusiness.

 

(b)  Performance of this IPAgreement does not conflict with or result in a breach of any IP Agreement towhich Grantor is bound, except to the extent that certain intellectual propertyagreements prohibit the assignment of the rights thereunder to a third partywithout the licensor’s or other party’s consent and this IP Agreementconstitutes a security interest.

 

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

 

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

 

(e)  Grantor shall promptlyadvise Bank of any material adverse change in the composition of theCollateral, including but not limited to any subsequent ownership right of theGrantor in or to any Trademark, Patent, Copyright, or Mask Work specified inthis 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 infringementsof the Trademarks, Patents, Copyrights, and Mask Works and promptly advise Bankin writing of material infringements detected and (iii) not allow anyTrademarks, Patents, Copyrights, or Mask Works to be abandoned, forfeited ordedicated to the public without the written consent of Bank, which shall not beunreasonably withheld, unless Grantor determines that reasonable businesspractices suggest that abandonment is appropriate.

 

(g)  Grantor shall promptlyregister the most recent version of any of Grantor’s Copyrights, if not soalready registered, and shall, from time to time, execute and file such otherinstruments, and take such further actions as Bank may reasonably request fromtime to time to perfect or continue the perfection of Bank’s interest in theIntellectual Property Collateral;

 

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

 

(i)  To its knowledge, exceptfor, and upon, the filing with the United States Patent and Trademark officewith respect to the Patents and Trademarks and the Register of Copyrights withrespect to the Copyrights and Mask Works necessary to perfect the securityinterests created hereunder and except as has been already made or obtained, noauthorization, 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 theexecution, 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 itsrights and remedies thereunder;

 

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

 

(k)  Grantor shall not enter intoany agreement that would materially impair or conflict with Grantor’sobligations hereunder without Bank’s prior written consent, which consent shallnot be unreasonably withheld.  

 

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Grantorshall not permit the inclusion in any material contract to which it becomes aparty of any provisions that could or might in any way prevent the creation ofa security interest in Grantor’s rights and interest in any property includedwithin the definition of the Intellectual property Collateral acquired undersuch contracts, except that certain contracts may contain anti-assignmentprovisions that could in effect prohibit the creation of a security interest insuch contracts.

 

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

 

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

 

5.     Inspection Rights.  Grantor hereby grants to Bank and itsemployees, representatives and agents the right to visit, during reasonablehours upon prior reasonable written notice to Grantor, and any of Grantor’splants and facilities that manufacture, install or store products (or that havedone so during the prior six-month period) that are sold utilizing any of theIntellectual Property Collateral, and to inspect the products and qualitycontrol records relating thereto upon reasonable written notice to Grantor andas 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 toGrantor’s trade secrets and other proprietary information.

 

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6.     Further Assurances;Attorney in Fact.

 

(a)  On a continuing basis,Grantor will, subject to any prior licenses, encumbrances and restrictions andprospective licenses, make, execute, acknowledge and deliver, and file andrecord in the proper filing and recording places in the United States, all suchinstruments, including appropriate financing and continuation statements andcollateral agreements and filings with the United States Patent and TrademarksOffice and the Register of Copyrights, and take all such action as mayreasonably be deemed necessary or advisable, or as requested by Bank, toperfect Bank’s security interest in all Copyrights, Patents, Trademarks, andMask Works and otherwise to carry out the intent and purposes of this IPAgreement, or for assuring and confirming to Bank the grant or perfection of asecurity interest in all Intellectual Property Collateral.

 

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

 

(i)  To modify, in its solediscretion, this IP Agreement without first obtaining Grantor’s approval of orsignature to such modification by amending Exhibit A, Exhibit B, Exhibit C, andExhibit D hereof, as appropriate, to include reference to any right, title orinterest in any Copyrights, Patents, Trademarks or Mask Works acquired by Grantorafter the execution hereof or to delete any reference to any right, title orinterest in any Copyrights, Patents, Trademarks, or Mask Works in which Grantorno 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 signatureof Grantor where permitted by law.

 

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

 

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

 

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

 

8.     Remedies.  Upon the occurrence and continuance of anEvent of Default, Bank shall have the right to exercise all the remedies of asecured party under the California Uniform Commercial Code, including withoutlimitation the right to require Grantor to assemble the Intellectual PropertyCollateral and any tangible property in which Bank has a security interest andto make it available to Bank at a place designated by Bank.  Bank shall have a nonexclusive, royalty freelicense to use the Copyrights, Patents, Trademarks, and Mask Works to theextent reasonably necessary to permit Bank to exercise its rights and remediesupon 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 rightshereunder, including without limitation any expense incurred in disposing ofthe Intellectual Property Collateral. All of Bank’s rights and remedies with respect to the IntellectualProperty Collateral shall be cumulative.

 

9.     Indemnity.  Grantor agrees to defend, indemnify and holdharmless Bank and its officers, employees, and agents against:  (a) all obligations, demands, claims, andliabilities claimed or asserted by any other party in connection with thetransactions contemplated by this IP Agreement, and (b) all losses or expensesin any way suffered, incurred, or paid by Bank as a result of or in any wayarising out of, following or consequential to transactions between Bank andGrantor, whether under this IP Agreement or otherwise (including withoutlimitation, reasonable attorneys fees and reasonable expenses), except forlosses arising from or out of Bank’s gross negligence or willful misconduct.

 

10.     Reassignment.  At such time as Grantor shall completelysatisfy all of the obligations secured hereunder, Bank shall execute anddeliver to Grantor all deed, assignments, and other instruments as may benecessary or proper to reinvest in Grantor full title to the property assignedhereunder, subject to any disposition thereof which may have been made by Bankpursuant hereto.

 

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

 

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

 

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

 

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

 

15.     Law and Jurisdiction.  This IP Agreement shall be governed by andconstrued in accordance with the laws of the State of California, withoutregard for choice of law provisions. Grantor and Bank consent to the nonexclusive jurisdiction of any stateor 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 toits own proprietary information of the same types to maintain theconfidentiality of any non-public information thereby received or receivedpursuant to this IP Agreement except that the disclosure of this informationmay be made (i) to the affiliates of the Bank, (ii) to prospective transfereeor purchasers of an interest in the obligations secured hereby, provided thatthey have entered into comparable confidentiality agreement in favor of Grantorand have deliver a copy to Grantor, (iii) as required by law, regulation, ruleor order, subpoena judicial order or similar order and (iv) as may be requiredin connection with the examination, audit or similar investigation of Bank.

 

IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement onthe 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          |   |
|                            |                          |              |  |  |  |  |

 

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

 

EXHIBIT “A”

 

COPYRIGHTS

 

SCHEDULEA – ISSUED COPYRIGHTS

 
| **COPYRIGHT  DESCRIPTION** |   | **REGISTRATION  NUMBER** |   | **DATE OF  ISSUANCE** |   |
|----------------------------|--------|--------------------------|--------|-----------------------|--------|

 

 

SCHEDULEB – PENDING COPYRIGHT APPLICATIONS

 
|                       |   | **FIRST DATE  OF PUBLIC  DISTRIBUTION** |
|----------------------------|--------|-----------------------------------------|
| **COPYRIGHT  DESCRIPTION** |   | **APPLICATION  NUMBER**                 |   | **DATE OF  FILING** |   | **CREATION** |
|                            |        |                                         |  |  |  |  |  |  |

 

 

SCHEDULEC – 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 datedMarch 28, 2002

 

EXHIBIT “B”

 

PATENTS

 
| **PATENT  DESCRIPTION** |   | **DOCKET NO.** |   | **COUNTRY** |   | **SERIAL NO.** |   | **FILING DATE** |   | **STATUS** |   |
|-------------------------|--------|----------------|--------|-------------|--------|----------------|--------|-----------------|--------|------------|--------|

 

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

 

EXHIBIT “C”

 

TRADEMARKS

 
| **TRADEMARK  DESCRIPTION** |   | **COUNTRY** |   | **SERIAL NO.** |   | **REG. NO** |   | **STATUS** |   |
|----------------------------|--------|-------------|--------|----------------|--------|-------------|--------|------------|--------|

 

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

 

EXHIBIT “D”

 

MASK WORKS

 
| **MASK WORK  DESCRIPTION** |   | **COUNTRY** | ** ** | **SERIAL NO.** | ** ** | **REG. NO** | ** ** | **STATUS** | ** ** |
|----------------------------|--------|-------------|------------|----------------|------------|-------------|------------|------------|------------|

 

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