Document:

Exhibit 10.2

INTELLECTUAL PROPERTY SECURITY AGREEMENT

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

RECITALS

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

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

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

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

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registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held, including without limitation those set forth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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          6.          Further Assurances; Attorney in Fact.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	
      Address of Grantor:

    	
       GRANTOR:

    
	
        

    	
        

    	
       

    
	
       3055 112th Avenue NE, Suite 106

    	
       TIMELINE, INC.

    
	
       Seattle, WA 98004

    	
       

    	
        

    
	
        

    	
       By:

    	
       /s/ CHARLES
        R. OSENBAUGH

    
	
       

    	
        

    	
      

    
	
        

    	
       Name:

    	
       Charles R. Osenbaugh

    
	
       

    	
       Title:

    	
       President

    

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

EXHIBIT “A”

COPYRIGHTS

SCHEDULE A - ISSUED COPYRIGHTS

	
  
COPYRIGHT 
   DESCRIPTION
  	
  
 
  	
  
REGISTRATION
   NUMBER
  	
   
 	
  
DATE OF
   ISSUANCE
  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 
	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 
	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 

SCHEDULE B - PENDING COPYRIGHT APPLICATIONS

	

  
COPYRIGHT 
   DESCRIPTION
  	
  
 
  	
  
APPLICATION
   NUMBER
  	
   
 	
  
DATE OF
   FILING
  	
   
 	
  
CREATION
  	
   
 	
  
FIRST DATE
   OF PUBLIC
   DISTRIBUTION
  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
  
	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 

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)
  	
   
 
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
  
 
  
	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 	
   
 

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

EXHIBIT “B”

PATENTS

	
  
PATENT
   DESCRIPTION
  	
   
 	
  
DOCKET NO.
  	
   
 	
  
COUNTRY
  	
   
 	
  
SERIAL NO.
  	
   
 	
  
FILING   DATE
  	
   
 	
  
STATUS
  	
   
 
	
  

  	
   
  	
  

  	
  
 
  	
  

  	
  
 
  	
  

  	
  
 
  	
  

  	
  
 
  	
  

  	
  
 
  
	
  
E/Data Retrieval Method
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  And Apparatus With
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Multiple Source Capability
  	
  
 
  	
   
 	
  
 
  	
  
USA
  	
  
 
  	
  
6,631,382
  	
  
 
  	
  
07/31/2000
  	
  
 
  	
  
Filed
  	
  
 
  
	
   
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Modularized Data Retrieval
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Method And Apparatus
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  With Multiple Source
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Capability
  	
  
 
  	
   
 	
  
 
  	
  
USA
  	
  
 
  	
  
6,625,671
  	
  
 
  	
  
12/08/2000
  	
  
 
  	
  
Filed
  	
  
 
  
	
   
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
E/Data Retrieval Method
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
And Apparatus With
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  Multiple Source Capability
  	
  
 
  	
   
 	
  
 
  	
  
USA
  	
  
 
  	
  
6,026,392
  	
  
 
  	
  
06/29/1998
  	
  
 
  	
  
Filed
  	
  
 
  
	
  
 
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  E/ Data Retrieval Method
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
And Apparatus With
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Multiple Source Capability
  	
  
 
  	
   
 	
  
 
  	
  
USA
  	
  
 
  	
  
6,023,694
  	
  
 
  	
  
06/29/1998
  	
  
 
  	
  
Filed
  	
  
 
  
	
   
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
E/Data Retrieval Method
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
And Apparatus With
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  Multiple Source Capability;
  	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  	
   
 	
  
 
  
	
  
Computer-Implemented Method
  	
  
 
  	
   
 	
  
 
  	
  
USA
  	
  
 
  	
  
5,802,511
  	
  
 
  	
  
09/01/1998
  	
  
 
  	
  
Filed
  	
  
 
  

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

EXHIBIT “C”

TRADEMARKS

	
  
TRADEMARK
   DESCRIPTION
  	
   
 	
  
COUNTRY
  	
   
 	
  
SERIAL NO.
  	
   
 	
  
REG. NO
  	
   
 	
  
STATUS
  	
  
 
  
	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
   
 	
  

  	
  
 
  
	
  Timeline
  	
   
 	
  
USA
  	
   
 	
  
74-143,338
  	
   
 	
  
1,673,332
  	
   
 	
  
Renewed
  	
  
 
  
	
  
T Stylized Letters
  	
   
 	
  
USA
  	
   
 	
  
75-155,898
  	
   
 	
  
2,140,219
  	
   
 	
  
Registered
  	
  
 
  

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

EXHIBIT “D”

MASK WORKS

	
  
MASK WORK
   DESCRIPTION
  	
   
 	
  
COUNTRY
  	
   
 	
  
SERIAL NO.
  	
   
 	
  
REG. NO
  	
   
 	
  
STATUSExhibit 10.3

SVB Securities

Securities Account Control Agreement

	
  
Customer:
  	
  
TIMELINE. INC.
  
	
  
 
  	
  
 
  
	
  
Creditor:
  	
  
SILICON VALLEY BANK
  
	
  
 
  	
  
 
  
	
  
Date:
  	
  
SEPTEMBER 17,.2004
  

 

This Securities Account Control Agreement entered into as of the above date (this “Agreement”) is among SVB Securities, (“SVBS”), Bane of America BrokerDealer Services, a division of Banc of America Securities LLC (“BA-BDS” or “Clearing Broker”), the Customer identifed above (“Customer”), and the Creditor identified above (“Creditor”).

Recitals

          A.          Customer has established a securities account or securities accounts (“Account”) with and/or through SVBS and BA-BDS pursuant to a SVB Securities Client Agreement (“Client Agreement”). The account number and title for the Account (or Accounts) are identified in Exhibit A to this Agreement. SVBS acts as the introducing broker. BA-BDS acts as the clearing broker. Both SVBS and Clearing Broker are securities intermediaries pursuant to Article 8 of the California Uniform Commercial Code (“CUCC”). Customer maintains in the Account securities, financial assets and other investment property as defined under Article 8 and 9 of the CUCC (collectively, the “Securities”).

          B.          Pursuant to a security agreement or similar agreement identified in Exhibit A hereto (the “Security Agreement”), Customer has granted to Creditor a security interest in certain personal property of Customer, including without limitation (i) the Account; (ii) the Securities, (iii) all dividends and distributions, whether payable in cash, securities, or other property, in respect of the Securities, (iv) all of Customer’s rights in respect of the Securities and Account, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property in sections (i) through (iv) (collectively, the “Collateral”).

          C.          SVBS, Clearing Broker, Customer and Creditor are entering into this Agreement in order to perfect Creditor’s security interest in the Collateral and the Account by means of control pursuant to Article 8 of the CUCC.

Agreement

          The parties hereto hereby agree as follows:

          1.          Defined Terms.  All terms used in this Agreement which are defined in the CUCC but are not otherwise defined herein shall have the meanings assigned to such terms in the CUCC, as in effect as of the date of this Agreement. While in the Account, all property credited to the Securities will be treated as financial assets under Article 8 of the CUCC. By this Agreement, Customer grants to Creditor “control” over the Securities within the meaning of Section 8106 of the CUCC.

          2.          The Securities.  SVBS and Clearing Broker represent to Creditor that, on behalf of Customer, Customer maintains the Securities in the Account.

          3.          Acknowledgement of Security Interest.  SVBS and Clearing Broker hereby acknowledge the security interest granted in the Collateral to Creditor by Customer. Creditor hereby acknowledges the security interest granted in the Collateral to SVBS and Clearing Broker by Customer pursuant to the Client Agreement.

          4.          Other Control Agreements.  SVBS represents and warrants that, other than any account control agreement listed in Exhibit A hereto, SVBS has executed no other account control agreement with any other party and SVBS is not presently obligated to accept any entitlement order from any person other than the Customer with respect to the Collateral. Clearing Broker represents and warrants that, other than any account control agreement listed in Exhibit A hereto, Clearing Broker has executed no other account control agreement with any other party and Clearing Broker is not presently obligated to accept any entitlement order from any person other than the Customer with respect to the Collateral.

          5.          Future Control Agreements.  Customer covenants and agrees that it will not enter an account control agreement with any other party without Creditor’s prior written consent. SVBS agrees that it will not enter into a control agreement with any other party with respect to the Account without Creditor’s prior written consent. Clearing Broker agrees that it will not enter into a control agreement with any other party with respect to the Account without Creditor’s prior written consent.

          6.          Limitation on SVBS’ and Clearing Broker’s Rights in the Collateral. SVBS and Clearing Broker will not attempt to assert control and does not claim and will not accept any security or other interest in any part of the Collateral, and SVBS and Clearing Broker will not exercise, enforce or attempt to enforce on their own behalves any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral on SVBS’ or Clearing Broker’s behalves any amount whatsoever, other than for: security interests, liens, encumbrances, claims or rights of setoff for the payment of any amounts owed by Customer to SVBS and/or Clearing Broker arising in connection with SVBS’ and Clearing Broker’s customary fees and commissions pursuant to their agreement with Customer or for the payment for financial
assets and securities purchased for the Account (the “Account Claims”). Customer and Creditor hereby acknowledge that any security interests, liens, encumbrances, claims or rights of setoff for the payment of any amounts owed by Customer to SVBS and Clearing Broker arising in connection with the Account Claims shall at all times be prior to the rights of Creditor in the Collateral and Securities whether or not Creditor sends to SVBS a Notice of Exclusive Control described below.

          7.          Agreement for Control.

          (a)         SVBS and Clearing Broker will comply with all entitlement orders (including requests to withdraw Collateral from the Account) originated by Customer with respect to the Collateral, or any portion of the Collateral, without further consent by Creditor until such time as SVBS receives from Creditor (in accordance with Section 17 below) a written notice to SVBS that Creditor is thereby exercising exclusive control over the Account (a “Notice of Exclusive Control.”). The Notice of Exclusive Control must be in the form set forth in Exhibit B hereto. SVBS or Clearing Broker have no obligation whatsoever to confirm that Creditor is entitled to send a Notice of Exclusive Control in connection with the Account or that the Creditor’s representative who signs any Notice of Exclusive Control is authorized to do so. SVBS and Clearing Broker (upon
instruction from SVBS) will, upon SVBS’ receipt of such Notice of Exclusive Control, proceed in accordance with the remainder of this Section 7 even if Creditor’s instructions are contrary to any instructions or demands that Customer may give to SVBS or Clearing Broker. After SVBS receives a Notice of Exclusive Control and has had reasonable opportunity to comply with it, but no later than two (2) Business Days (“Business Days” means days which SVBS is open to the public for business and are measured in 24 hour increments) after receipt of the Notice of Exclusive Control (in accordance with Section 17 below), SVBS and Customer agree that SVBS and Clearing Broker will: (i) cease complying with entitlement orders or other directions concerning the Account and Collateral that are originated by Customer or its representatives until such time as SVBS receives a written notice from Creditor rescinding the Notice of Exclusive Control; and (ii) comply with the entitlement orders and
instructions provided to SVBS by Creditor without investigating:  the reason for any action taken by Creditor; the amount of any obligations of Customer to Creditor; the validity of any of Creditor’s agreements with Customer; or the existence of any defaults under such agreements.

          (b)         Notwithstanding the foregoing, Creditor agrees that upon receipt of Creditor’s Notice of Exclusive Control, SVBS and Clearing Broker may take all steps necessary to satisfy or settle any Account Claims, may respond as required pursuant to the terms of any other account control agreement with respect to which SVBS believes it previously received a Notice of Exclusive Control or similar notice, and may respond as required by law to any court or government order, writ or other legal process received by SVBS or Clearing Broker. Creditor also agrees that, before SVBS’ receipt of Creditor’s Notice of Exclusive Control, SVBS and Clearing Broker may be required to and may respond to (i) Notices of Exclusive Control or similar notices sent to SVBS by other parties and (ii) a writ or other similar legal process served on SVBS or Clearing Broker
in connection with the Account and Collateral. SVBS and Clearing Broker agree to use good faith efforts to promptly notify Creditor if any other party delivers to SVBS a notice of exclusive control or any party other than Creditor or SVBS asserts a claim against the Collateral by means of a writ or other similar legal process, but failure to provide such notice does not constitute a breach of this Agreement. Customer expressly agrees that SVBS, Clearing Broker and Creditor may act in accordance with the terms of this Section 7.

          8.          Customer Waiver and Authorization.  Customer hereby waives any rights that Customer may have under the Client Agreement to the extent such rights are inconsistent with the provisions of this Agreement, and hereby authorizes SVBS and Clearing Broker to comply with all instructions and entitlement orders delivered by Creditor to SVBS in accordance with the terms of this Agreement.

          9.          Amendments to and Termination of Client Agreement.  SVBS, Clearing Broker and Customer shall not amend, supplement or otherwise modify the Client Agreement insofar as it pertains to the Collateral without prior written notice to Creditor. Customer may not terminate the Client Agreement insofar as it pertains to the Collateral without consent of Creditor. SVBS and Clearing Broker agree to use good faith efforts to notify Creditor if SVBS or Clearing Broker terminate the Client Agreement, but SVBS’ or Clearing Broker’s failure to notify Creditor shall not be a breach of this Agreement.

          10.        Termination of this Agreement.  Creditor may terminate this Agreement by giving SVBS and Customer written notice of termination; provided that, by giving such notice, Creditor acknowledges that it will thereby be confirming that, as of the termination date, it will no longer have a perfected security interest in the Account and Securities in the Collateral which is perfected by control via this Agreement, although Creditor may continue to have a perfected security interest in the Account by other means. SVBS and Clearing Broker may terminate this Agreement by giving Creditor and Customer 30 days prior written notice of termination (unless a shorter notice period is mandated by applicable law). Customer may only terminate this Agreement with the written consent of Creditor; provided that, by giving such notice with Creditor’s written
consent, both Customer and Creditor acknowledge that they will thereby be confirming that, as of the termination date, Creditor will no longer have a perfected security interest in the Collateral which is perfected by control pursuant to this Agreement, although Creditor may continue to have a perfected security interest in the Collateral by other means.

          11.        Delivery of Account Statements.  SVBS and Clearing Broker are hereby authorized by Customer and agree to send to Creditor at its address for notices set forth below Creditor’s signature block at the end of this Agreement, concurrently with the sending thereof to Customer, duplicate copies of any and all monthly statements or reports issued or sent to Customer with respect to the Collateral and the Account. Until this Agreement is terminated, Customer authorizes SVBS to disclose to Creditor at Creditor’s request any information concerning Customer’s Account and the Securities in the Account, including but not limited to the identity of any other party with which Customer and SVBS and Clearing Broker have executed account control agreements or similar agreements.

          12.        Responsibility of SVBS, Clearing Broker and Creditor.  This Agreement does not create any obligation or duty on the part of SVBS, Clearing Broker or Creditor other than those expressly set forth herein.

          13.        No Waiver.  Any forbearance or failure or delay by SVBS, Clearing Broker or Creditor in exercising any right hereunder shall not be deemed a waiver thereof and any single or partial exercise of any right shall not preclude the further exercise thereof.

          14.        Amendments.  This Agreement and all exhibits attached hereto may be amended only in writing signed by all parties hereto.

          15.        Governing Law.  Notwithstanding the terms of any other agreement, the parties hereto agree that this Agreement shall be governed under and in accordance with the laws of the State of California.  All parties hereto each submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County, California.

          16.        Integration Provision.  This Agreement constitutes the entire agreement among SVBS, Clearing Broker, Customer and Creditor with respect to Creditor’s control over the Collateral and Securities and matters specifically set forth herein, and all prior communications, whether verbal or written, between any of the parties hereto with respect to the subject matter hereof shall be of no further effect or evidentiary value.

          17.        Notices.

          (a)         Any notice, other than a Notice of Exclusive Control, or other communication provided for or allowed hereunder shall be in writing and shall be considered to have been validly given (a) when actually received by the recipient at the address or facsimile number, if delivered personally (whether by messenger, air courier service or otherwise) or sent by facsimile to the address or facsimile number identified below the signature of the applicable party’s signature below and addressed to the addressee identified below the signature of the applicable party’s signature below; or (b) 72 hours after being deposited in the United States mail, registered or certified, postage prepaid, return receipt requested, if sent to the address and addressee as set forth below the signature of the applicable party hereto. The addresses to which notices or other
communications are to be given may be changed from time to time by notice served as provided herein.

          (b)         A Notice of Exclusive Control shall be in writing, must be in the form set forth in Exhibit B hereto, must be delivered to the address listed below SVBS’ signature block at the end of this Agreement, must be delivered to SVBS via hand delivery, messenger, overnight delivery or facsimile and shall be considered to have been validly given when actually received, except that a facsimile will be considered to have been validly given only when acknowledged in writing by SVBS (SVBS agrees that it will use its good faith effort to promptly acknowledge receipt of such facsimile). Creditor acknowledges that SVBS may not be able to respond to a Notice of Exclusive Control pursuant to section 7 above, and Creditor agrees that SVBS will not be held liable for any failure to respond to a Notice of Exclusive Control, if the Creditor does not
deliver the Notice of Exclusive Control as set forth in this Section 17 or to the address listed below SVBS’ signature block at the end of this Agreement.

          18.        Indemnification and Hold Harmless of SVBS and Clearing Broker by Customer.  Customer hereby agrees to indemnify and hold harmless SVBS and Clearing Broker, and their respective affiliates and their respective directors, officers, agents and employees (each, an “Indemnified Person”) against any and all claims, causes of action, liabilities, lawsuits, demands and damages (each, a “Claim”) asserted by Creditor or any other party, including without limitation, any and all court costs and reasonable attorneys’ fees, in any way related to or arising out of or in connection with this Agreement or any action taken or not taken pursuant hereto, including any claims arising as a result of SVBS’ and Clearing Broker’s adherence (or alleged failure of adherence) to the foregoing instructions including, without
limitation, Claims that allegedly result from SVBS’ and/or Clearing Broker’s ceasing, based on this Agreement, to permit withdrawals of or from the Collateral or resulting from SVBS’ and/or Clearing Broker’s paying over or delivering all or any part of the Collateral pursuant to the directions of Creditor; provided that no Indemnified Person shall be entitled to be indemnified

to the extent that such Claims arise from the Indemnified Person’s own gross negligence or willful misconduct. Customer agrees that SVBS and/or Clearing Broker shall not be liable for delays or errors occurring by reason of circumstances beyond the control of SVBS or Clearing Broker, including, without limitation, acts of civil, military, or banking authorities, national emergencies, market disorder, labor difficulties, fire, flood or other catastrophes, acts of God, terrorism, insurrection, war, riots, failure of transportation or equipment, or failure of vendors, communication or power supply. Clearing Broker shall have no responsibility or liability under this Agreement to Customer for any acts or omissions by SVBS, its officers, employees or agents; and SVBS shall have no responsibility or liability under this Agreement to Customer for any acts or omissions by Clearing Broker, its officers, employees or agents.

          19.        Indemnification and Hold Harmless of SVBS and Clearing Broker by Creditor. Creditor hereby agrees to indemnify Indemnified Persons against any and all Claims asserted by Customer or any other party (including, without limitation, any and all court costs and reasonable attorneys’ fees) arising directly out of SVBS’ and/or Clearing Broker’s adherence or failure of adherence to Creditor’s instructions in its Notice of Exclusive Control, including, without limitation, any Claim that arises directly out of SVBS’ and/or Clearing Broker’s ceasing, based on this Agreement, to permit withdrawals of or from the Collateral or resulting from SVBS’ and/or Clearing Broker’s paying over or delivering all or any part of the Collateral pursuant to Creditor’s instructions in its Notice of Exclusive Control;
provided, that no Indemnified Person shall be entitled to be indemnified (a) to the extent that such Claim results from an Indemnified Person’s gross negligence or willful misconduct; or (b) for any special, indirect, consequential or punitive damages asserted by Customer if the waiver in Section 21 of this Agreement is enforceable. Creditor agrees that it will not hold Indemnified Persons liable for any Claim arising out of or relating to any Indemnified Person’s performance or failure of performance under this Agreement other than those Claims that result directly from the acts or omissions of the Indemnified Person which are deemed gross negligence or willful misconduct by a civil court or other similar judicial body. Clearing Broker shall have no responsibility or liability under this Agreement to Creditor for any acts or omissions by SVBS, its officers, employees or agents; and SVBS shall have no responsibility or liability under this Agreement to Creditor for any acts or
omissions by Clearing Broker, its officers, employees or agents.

          20.        Jury Trial Waiver.  CUSTOMER, CREDITOR, SVBS AND CLEARING BROKER 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 ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

          21.        Waiver.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, CUSTOMER WAIVES AND AGREES THAT IT SHALL NOT SEEK FROM SVBS, CLEARING BROKER OR CREDITOR UNDER ANY THEORY OF LIABILITY (INCLUDING WITHOUT LIMITATION ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

          22.        Unpaid Account Claims.  Before Creditor exercises exclusive control over the Account, SVBS and/or Clearing Broker may, in the ordinary course of business, debit from the Account any unpaid Account Claims. After Creditor exercises exclusive control over the Account, if (a) funds are not available in the Account to pay SVBS and/or Clearing Broker for any Account Claims, and (b) Customer fails to pay such Account Claims within fifteen (15) Business days of SVBS’ and/or Clearing Broker’s written demand therefore, Creditor will pay to SVBS and/or Clearing Broker, within ten (10) Business days of a written demand by SVBS and/or Clearing Broker, any amounts owed for an Account Claim and that is not paid in full by Customer up to the amount of the proceeds received by Creditor from the Account.

          23.        Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Customer and SVBS, between Customer and Clearing Broker, between Creditor and SVBS, or between Creditor and Clearing Broker, arising out of this Agreement, the prevailing party will be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled, whether or not a lawsuit is filed.

          24.        No Conflict.  To the extent that the terms or conditions of this Agreement are inconsistent with the Client Agreement or any other document, instrument or agreement between SVBS, Clearing Broker and Customer, the terms and conditions of this Agreement shall prevail.

          25.        Successors. The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and to each party’s respective successors or heirs and personal representatives. The parties may assign this Agreement and any rights under the Agreement only if that party’s successor or assign assume all obligations under this Agreement.

          26.        Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, are one Agreement.

          27.        Survival. Sections 15 and 18 through 25 shall survive the termination of this Agreement.

          [The rest of this page intentionally left blank)

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.

	
  CUSTOMER:
  	
  
Timeline, Inc.
  
	
  
 
  	
  
By:  /s/ Charles R. Osenbaugh
  
	
  
 
  	
  
Name:  Charles R. Osenbaugh
  
	
  
 
  	
  
Title:  President
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Address for Notices:
  
	
  
 
  	
  
3055 112th   Avenue N.E., Ste. 106
  
	
  
 
  	
  
Bellevue, WA  98004
  
	
  
 
  	
  
Telephone:  
  	
  
425-822-3140
  
	
  
 
  	
  
Facsimile:
  	
  
425-822-1120
  
	
   
  	
  
 
  	
  
 
  
	
  
CREDITOR:
  	
  
Silicon Valley Bank.
  
	
  
 
  	
  
By:  /s/ Paul Heimstra
  
	
  
 
  	
  
Name:  Paul Heimstra
  
	
  
 
  	
  
Title:  Vice President
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Address for Notices:
  
	
  
 
  	
  
3003 Tasman Drive
  
	
  
 
  	
  
Santa Clara, CA  95054
  
	
  
 
  	
  
Telephone:  
  	
  
425-576-2070
  
	
   
  	
  
Facsimile:
  	
  
425-827-5998
  
	
  
 
  	
  
 
  	
  
 
  
	
  
SVBS:
  	
  
SVB Securities
  
	
  
 
  	
  
By:
  
	
  
 
  	
  
Name:  
  
	
  
 
  	
  
Title:  Operations Manager
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Address for Notices:
  
	
  
 
  	
  
SVB Securities
  
	
  
 
  	
  
3003 Tasman Drive
  
	
   
  	
  
Mail Sort HG250
  
	
  
 
  	
  
Santa Clara, CA  95054
  
	
  
 
  	
  
Telephone:  
  	
  
408-654-7256
  
	
  
 
  	
  
Facsimile:
  	
  
408-496-2407
  
	
  
 
  	
  
 
  	
  
 
  
	
  
CLEARING   BROKER:
  	
  
Banc of America Securities   LLC
  
	
  
 
  	
  
By:  
  
	
  
 
  	
  
Name:  
  
	
  
 
  	
  
Title:
  

SVB Securities
 Securities Account Control Agreement
 Exhibit A

	
  
1.
  	
  
Account   Title and Number:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
Account   Title:    TIMELINE. INC.
  
	
  
 
  	
   
 
	
  
 
  	
  
Account   Number:   886-02973
  
	
  
 
  	
  
 
  
	
  
2.
  	
  
“Security   Agreement” (This section to be completed by Creditor):
  
	
  
 
  	
  
 
  
	
   
  	
  
THAT CERTAIN ACCOUNTS   RECEIVABLE FINANCING AGREEMENT DATED SEPTEMBER 16, 2004, AS MAY BE AMENDED   AND MODIFIED FROM TIME TO TIME.
  
	
  
 
  	
  
 
  
	
  
3.
  	
  
Account   Control Agreements Previously Executed by SVB Securities and Clearing Broker   with other Parties Asserting an Interest in the Account (This Section to be   completed by SVBS):
  

SVB Securities Securities Account Control
 Agreement
 Exhibit B Notice of Exclusive
 Control

	
  
To:
  	
  
SVB Securities (“SVBS”)
  
	
  
From:
  	
  
(“Creditor”)
  
	
  
Re:
  	
  
(“Customer”)
  
	
  
Date:
  	
  
                             
  

Pursuant to the Securities Account Control Agreement dated                (“Agreement”) entered among SVBS, Clearing Broker (as defined in the Agreement) Customer and Creditor, Creditor hereby notifies SVBS of Creditor’s exercise of Creditor’s rights under the Agreement and directs SVBS to cease complying with trading instructions or any entitlement orders originated by Customer or its agents.

Creditor understands and agrees that SVBS and Clearing Broker shall have no duty or obligation whatsoever of any kind or character to determine the validity of Creditor’s exercise of its rights under the Agreement or the certification above, to determine if SVBS and/or Clearing Broker is/are obligated to take further instructions from Customer, or to determine whether Creditor has a right to all or part of the Collateral. Creditor hereby agrees to indemnify and hold harmless SVBS and Clearing Broker, their respective affiliates, and their respective directors, officers, employees and agents pursuant to the terms of Section 19 of the Agreement.

Creditor agrees that upon receipt of Creditor’s Notice of Exclusive Control, SVBS and Clearing Broker may exercise their rights and remedies as permitted under the Agreement.

Creditor hereby certifies that the person executing this Notice of Exclusive Control is an officer, representative or agent of Creditor authorized to act on the behalf of Creditor and to make the representations and agreements contained in this Notice of Exclusive Control.

	
  
CREDITOR:
  
	
  
 
  	
  

  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
Title:
  
	
  
 
  	
  
 
  
	
  
ACKNOWLEDGED BY:
  	
  
SVB SECURITIES
  
	
  
(for facsimile only)
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
   
  	
  Name: 
  
	
   
  	
  Title: 
  
	
   
  	
  Date: 
  
	
   
  	
  Time:
  
	
   
  	
   
  
	
  SVBS Form Dated October 22,   2002
  	
   
  

9

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