Document:

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                                                                   EXHIBIT 10.65

                           AMENDMENT NUMBER ONE TO THE
                                  OEM AGREEMENT
                                     BETWEEN
                            WIND RIVER SYSTEMS, INC.
                                       AND
                            INSIGNIA SOLUTIONS, INC.

This Amendment 1 to the OEM Agreement dated December 22, 2000 (the "Agreement")
is entered into as of this 28th day of December 2000, ("Effective Date") by and
between Insignia Solutions, Inc., a Delaware corporation, with its principal
offices at 41300 Christy Street, Fremont, CA 94538 ("Insignia") and Wind River
Systems, Inc., a Delaware corporation having its principal place of business at
500 Wind River Way, Alameda, CA 94501 ("WRS"). The capitalized terms in this
Amendment are as defined in the Agreement, unless expressly defined otherwise in
this Amendment.

RECITALS:

WHEREAS both parties wish to modify some of the provisions of the Agreement as
previously executed;

NOW, THEREFORE, the Parties hereby agree to modify the provisions of the
Agreement as follows:

SECTION 1, DEFINITIONS. This section contains a definition of the term "Product
Roadmap".

The definition of Product Roadmap currently reads: "means the document which
details planned enhancements to Jeode Software and/or Jeode Based Products and
timeframes for the expected release of such enhancements, a specimen of which is
attached at Appendix B;

THE FOREGOING IS REPLACED ENTIRELY BY THE FOLLOWING DEFINITION:

"Product Roadmap" means the document which details planned enhancements to Jeode
Software and/or Jeode Based Products and timeframes for the expected release of
such enhancements.

ADDITIONALLY, Appendix B is entirely deleted.

Other than as stated immediately above, the Parties do not intend to modify any
other provisions of the Agreement. All other provisions and terms remain
unchanged.

IN WITNESS WHEREOF, the parties have caused this Amendment One to be executed by
their authorized representatives as of the Effective Date.

<TABLE>
<CAPTION>

ON BEHALF OF INSIGNIA SOLUTIONS, INC.       ON BEHALF OF WIND RIVER SYSTEMS, INC.

<S>                                          <C>
 /s/ Stephen M. Ambler                       /s/ Richard W. Kraber
--------------------------------------      --------------------------------------
(Signature)                                 (Signature)

 Stephen M. Ambler                           Richard W. Kraber
--------------------------------------      --------------------------------------
(Name)                                      (Name)

 C.F.O.                                      VP Operations
--------------------------------------      --------------------------------------
(Title)                                     (Title)

 30 December 2000                            12/30/2000
--------------------------------------      --------------------------------------
(Date)                                      (Date)
</TABLE>

<PAGE>

                               DATED DECEMBER 2000

                                  OEM AGREEMENT

                                     BETWEEN

                            WIND RIVER SYSTEMS, INC.

                                       AND

                            INSIGNIA SOLUTIONS, INC.

                              [COMPANY LETTERHEAD]

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                              PAGE

<S>  <C>                                                                      <C>
1     DEFINITIONS...............................................................1

2     LICENSES..................................................................4

3     LICENSOR OBLIGATIONS......................................................6

4     TECHNOLOGICAL DEVELOPMENTS................................................7

5     DOCUMENTATION.............................................................8

6     MARKETING AND SALES SUPPORT...............................................9

7     PAYMENT AND CHARGES......................................................10

8     SUPPORT AND MAINTENANCE..................................................14

9     LICENSOR WARRANTIES......................................................14

10    INTELLECTUAL PROPERTY RIGHTS.............................................15

11    WARRANTIES AND REPRESENTATIONS OF THE PARTIES............................16

12    INDEMNIFICATION..........................................................18

13    LIMITATION OF LIABILITY..................................................18

14    OPTION TO PURCHASE.......................................................19

15    CONFIDENTIALITY..........................................................21

16    TERMINATION..............................................................21

17    CONSEQUENCES OF TERMINATION..............................................22

18    GENERAL..................................................................22

SCHEDULE 1.....................................................................27

SCHEDULE 2.....................................................................30

SCHEDULE 3.....................................................................31

SCHEDULE 4.....................................................................32

SCHEDULE 5.....................................................................33

APPENDIX A.....................................................................35

APPENDIX B ....................................................................43

APPENDIX C.....................................................................48

APPENDIX D.....................................................................55

APPENDIX E.....................................................................56

APPENDIX F.....................................................................57
</TABLE>

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THIS AGREEMENT is made on December 2000

BETWEEN:

(1)    WIND RIVER SYSTEMS, INC. a Delaware corporation, whose address is 500
       Wind River Way, Alameda, California 94501, United States of America
       ("Licensee"); and

(2)    INSIGNIA SOLUTIONS, INC., a Delaware corporation whose address is 41300
       Christy Street, Fremont, California 94538, United States of America
       ("Licensor").

INTRODUCTION

(A)    Licensor and its Affiliates (as defined below) have conceived, developed
       and owns Jeode technology. Jeode technology relates to Licensor's
       accelerated software implementation of Sun's PersonalJava and
       EmbeddedJava specifications. Included in Jeode technology is the Jeode
       embedded virtual machine, an accelerated run-time engine that optimizes
       performance and memory. Jeode technology also includes Insignia's
       proprietary dynamic adaptive compilation techniques.

(B)    Licensor wishes to grant to Licensee and Licensee wishes to obtain from
       Licensor, licenses to use, copy, modify, create derivative works of,
       exploit and sub-license the Jeode technology on the terms and conditions
       set out in this Agreement.

(C)    The parties have also agreed that they will cooperate with each other in
       relation to the development, sales and marketing of the Jeode technology
       and Jeode Based Products (as defined below). They have also agreed that
       Licensee will take an option to purchase a perpetual license in relation
       to the Jeode technology on the terms and conditions set out in this
       Agreement.

THE PARTIES AGREE as follows:

1      DEFINITIONS

1.1    IN THIS AGREEMENT:

       "AFFILIATE" means (i) any person that is Controlled by, Controls or is
       under common Control with, a Party, (ii) any person in which a Party owns
       shares representing at least twenty percent (20%) of the outstanding
       equity of such person or (iii) any affiliate (as defined in subsection
       (i) hereof) of a person that owns, directly or indirectly, shares
       representing at least twenty percent (20%) of the outstanding equity of
       such Person. For purposes of this definition, "CONTROL" and correlative
       terms shall mean the possession, directly or indirectly, of the power to
       direct or cause the direction of management or policies (whether through
       ownership of securities or other ownership interests, by contract or
       otherwise);

       "API" means application programming interface;

       "BINARIES" means a compiled machine-readable only version of the Jeode
       Software;

       "COMMENCEMENT DATE" means the date hereof;

       "CONFIDENTIAL INFORMATION" means all non-public or proprietary
       information disclosed by Licensor or Licensee or any of their respective
       Affiliates including, but not limited to,

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       Jeode Source Code and Specifications and any Product Roadmaps (whether
       owned by the disclosing Party or a third party to whom the disclosing
       Party owes a confidentiality obligation) other than information which the
       receiving Party can demonstrate: (i) was known to the receiving Party at
       the time of the disclosure by the disclosing Party as evidenced by
       written or other time-stamped documentation; (ii) becomes publicly known
       through no wrongful act of the receiving Party, its servants or agents;
       (iii) has rightfully been received by the receiving Party from a third
       party with no obligation of confidentiality; or (iv) has been
       independently developed by the receiving Party as evidenced by written or
       time-stamped documentation;

       "DELIVERABLES" means the software and hardware components detailed in
       Schedule 4;

       "DOCUMENTATION" means the operating manuals, user instructions, technical
       literature and all other materials related to Intellectual Property, in
       either printed or machine readable form;

       "INTELLECTUAL PROPERTY" means, wherever existing in the world and
       existing during the term of this Agreement, (i) patents, whether in the
       form of utility patents or design patents, and all pending applications
       for registration thereof, (ii) trademarks, (and, in the case of Licensor,
       the Trademarks) trade names, service marks, domain names, designs, logos,
       trade dress and trade styles, whether or not registered, and all pending
       applications for registration thereof, (iii) copyrights, database rights
       whether or not registered, and all pending applications for registration
       thereof, (iv) know-how, inventions, research records, trade secrets,
       Confidential Information, product designs, engineering specifications and
       drawings, technical information, formulae, lists of actual or potential
       customers or vendors, licensors or licensees and market analyses, (v)
       computer software and programs, including, without limitation, computer
       programs embedded in semiconductor chips or otherwise embodied, and
       related flow charts, programmer notes, documentation, updates and data,
       whether in object or source code form, and (vi) all other similar
       intellectual property rights, whether or not registered;

       "JEODE BASED PRODUCTS" means any Licensee product which incorporates
       Jeode Software for use with Wind River Operating Systems;

       "JEODE SOFTWARE" means the software detailed in Schedule 1 and all
       modifications, updates and future generations of such software created by
       Licensor;

       "JEODE SOURCE CODE" means the Source Code for the Jeode Software;

       "LICENSEE INTELLECTUAL PROPERTY" means Intellectual Property owned or
       possessed by Licensee;

       "LICENSOR INTELLECTUAL PROPERTY" means Intellectual Property owned or
       possessed by Licensor;

       "MINIMUM QUARTERLY FEES" means the prepaid accrued sums covering Run Time
       Royalties, Project Fees and Source Code License Fees as described in
       Clause 7.1;

       "MINIMUM QUARTERLY OPTION FEES" means the prepaid accrued sums covering
       Run Time Royalties, Project Fees and Source Code License Fees as
       described in Clause 14.3.1;

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       "OPTION" means the option detailed in Clause 14;

       "OPTION EXECUTION DATE" means the date of Licensor's receipt of notice
       from Licensee that Licensee intends to exercise the Option;

       "PARTY" or "PARTIES" mean, as the case may be, Licensor and/or Licensee;

       "PRODUCT ENHANCEMENT REQUEST" means a communication in whatever format or
       medium made by Licensee to Licensor requesting enhancements to the Jeode
       Software;

       "PRODUCT ROADMAP" means the document which details planned enhancements
       to Jeode Software and/or Jeode Based Products and timeframes for the
       expected release of such enhancements, a specimen of which is attached at
       Appendix B;

       "PROJECT FEE" means the sum detailed in Clause 7.4 (which includes 1000
       Run Time Royalties) payable by Licensee to Licensor when Licensee
       recognizes revenue from its customers in relation to a license to use
       Jeode Based Products;

       "QUARTER" means the three month period commencing on January 1, 2001, and
       every three month period thereafter, for the term of this Agreement;

       "RUN TIME ROYALTIES" means the sums payable to Licensor by Licensee for
       each copy of Jeode Software licensed or sublicensed by Licensee or its
       customers respectively;

       "SOURCE CODE" means software and/or Documentation in a form in which the
       program logic is easily deduced by a human being, such as a printed
       listing of the programs, or in an encoded machine-readable form, such as
       might be recorded on magnetic tape, disk, or diskette, from which a
       printed listing can be made by processing it with a computer;

       "SOURCE CODE LICENSE FEES" means the fees detailed in Clause 7.5.2;

       "SPECIFICATIONS" means the specifications describing the Jeode Software
       set out in Schedule 1;

       "SUN" means Sun Microsystems Inc., its affiliates and its successors and
       assigns;

       "SUN COMMUNITY SOURCE LICENSE" means Sun's license terms which governs
       use of certain Java Source Codes;

       "TRADEMARKS" means the trademarks set out in Schedule 3, including the
       registrations or the applications for registration thereof;

       "TRANSACTIONAL LICENSE FEES" shall have the same meaning as set out in
       Clause 7.1 or Clause 14.3.1 as the case may be;

       "UPDATES" means maintenance releases, improvements and enhancements which
       are generally provided to licensees who are eligible to receive
       maintenance support services;

       "UPGRADES" means a significant enhancement or extension of the applicable
       product that generally expands the capability of, or includes additional
       capabilities to, such product, and is provided on a fee basis; and

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       "WIND RIVER OPERATING SYSTEMS" means any current or future operating
       system licensed (or to be licensed) by Licensee and either developed by
       Licensee or branded by Licensee, including (without limitation) those
       operating systems listed in Schedule 2 and any amendments, updates or
       modifications thereto.

1.2    In this Agreement (except where the context otherwise requires):

       1.2.1  any reference to a Recital, Clause or Schedule is to the relevant
              Recital, Clause or Schedule of or to this Agreement and any
              reference to a sub-clause or paragraph is to the relevant
              sub-clause or paragraph of the Clause or Schedule in which it
              appears;

       1.2.2  the clause headings are included for convenience only and shall
              not affect the interpretation of this Agreement;

       1.2.3  use of the singular includes the plural and vice versa;

       1.2.4  use of any gender includes the other genders;

       1.2.5  any reference to "persons" includes natural persons, firms,
              partnerships, companies, corporations, associations,
              organisations, governments, states, foundations and trusts (in
              each case whether or not having separate legal personality).

2      LICENSES

2.1    GRANT OF LICENSES

       Licensor grants Licensee the following exclusive, transferable worldwide
       rights and licenses:

       2.1.1  to use, copy, develop, demonstrate and adapt and create derivative
              works of Binaries solely for the purpose of developing Jeode Based
              Products;

       2.1.2  subject to ensuring compatibility with the applicable Sun Java
              specifications, the right to copy, sub-license, create, sell,
              distribute, export and otherwise commercially exploit Binaries to
              its customers as incorporated into Wind River Operating Systems as
              Jeode Based Products;

       2.1.3  subject to the terms of the Sun Community Source License, the
              right to access, use, copy, develop, modify, create derivative
              works of, and adapt the Jeode Source Code so as to enable Licensee
              to use, copy, adapt, modify, create derivative works of,
              incorporate, sublicense and commercially exploit the Jeode
              Software with Wind River Operating Systems as Jeode Based
              Products;

       2.1.4  the right to sub-license the Jeode Source Code in connection with
              a Jeode Based Product to Licensee's OEM customers provided that
              such customers execute Sun's Source Code license agreement and an
              agreement which amongst other things, includes provisions which
              are at least as protective and substantially similar to those
              provisions set out in Appendix A in relation to protection of
              Licensor Intellectual Property in the Source Code;

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       2.1.5  the right for the shipment of Jeode Software for use with any Wind
              River Operating Systems;

       2.1.6  to provide, distribute, export, sublicense and sell Jeode Based
              Products.

2.2    Licensor further grants Licensee an exclusive, transferable license to
       sublicense any of the rights and licenses detailed in Clauses 2.1.1,
       2.1.2, 2.1.5 and 2.1.6 to any of its direct sub-contractors, partners,
       resellers and agents provided such rights solely relate to use or
       incorporation of the Jeode Software with Wind River Operating Systems or
       relate to Jeode Based Products. For the avoidance of doubt the licenses
       detailed in this Agreement and the Option are only transferable to a
       Licensee Affiliate pursuant to Clause 18.11.

2.3    TERM

       This Agreement shall commence on the Commencement Date and unless
       previously terminated in accordance with Clause 16 shall remain in effect
       until three (3) years from the Commencement Date (the "INITIAL TERM") and
       thereafter for successive periods of one year (a "RENEWAL PERIOD"),
       unless either Party gives written notice to the other Party not later
       than ninety (90) days before the end of either the Initial Term or the
       then current Renewal Period to terminate this Agreement at the end of
       either the Initial Term or that Renewal Period, as the case may be.

2.4    LICENSOR'S TRADEMARKS

       2.4.1  Licensor hereby grants to Licensee (and to no third party) a
              limited, non-exclusive, transferable royalty-free and fully paid
              up license to use the Trademarks in the promotion, advertisement,
              sale and licensing of Jeode Based Products. Licensor's grant of a
              limited license to exploit the Trademarks under this Agreement
              will extend during the term of this Agreement until the occurrence
              of the Option Execution Date, if any. In the event the Option
              Execution Date occurs, then the Trademark license granted herein
              will terminate either on the expiry of twelve (12) months from the
              Option Execution Date or upon Licensee's next major revision of
              Jeode Based Products, whichever is the earlier. For the avoidance
              of doubt the license detailed in this Clause is only transferable
              to a Licensee Affiliate pursuant to Clause 18.11.

       2.4.2  Licensee acknowledges that this Agreement does not operate to vest
              any title in the Trademarks in Licensee and that all goodwill
              resulting from Licensee's use of the Trademarks shall accrue to
              Licensor.

       2.4.3  Licensee shall not, at any time while Licensor retains any right
              to the Trademarks, adopt, use or register without the prior
              written consent of Licensor any word or symbol or combination of
              words and symbols which is confusingly similar to any Trademarks
              in relation to any goods similar to the Jeode Software.

       2.4.4  Licensee shall not, without the prior written consent of Licensor,
              alter, deface or remove any reference to the Trademarks, copyright
              notices, any reference to Licensor or any other name attached or
              affixed to the Documentation, Source Code or Binaries or their
              packaging or labelling.

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       2.4.5  Licensee shall attribute any reference to the Trademarks to the
              Licensor in any advertising, brochures, documentation and
              literature that use such trademarks.

       2.4.6  Licensee agrees that it will not knowingly use any Trademark of
              Licensor in any manner which may adversely reflect upon Licensor's
              name, identity, products or goodwill. Licensee agrees that it will
              forbear from using any Trademark in comparative advertising
              featuring Licensor's products.

       2.4.7  Licensee agrees to keep Licensor advised of the manner of use of
              Licensor's Trademarks, to provide Licensor with samples of the
              uses of Licensor's Trademarks, and to work with Licensor on any
              quality concerns that may arise.

       2.4.8  Licensor will have the right to terminate the license to the
              Trademarks granted in this Agreement upon demonstration by
              Licensor that a use of Licensor's Trademarks by Licensee does not
              meet Licensor's quality standards as previously notified in
              writing to Licensee. Licensor may terminate such Trademark License
              rights upon ninety days written notice to Licensee; provided,
              however, that such termination notice shall have no effect if
              Licensee cures the quality defects within the ninety day cure
              period.

3      LICENSOR OBLIGATIONS

3.1    Within fifteen (15) days following the Commencement Date, Licensor
       shall provide the Licensee with the Deliverables.

3.2    During the Jeode Source Code training (a proposal for which is
       detailed in Schedule 5) Licensor shall provide Licensee with specific
       instruction on the use of all external APIs and various lower level
       APIs as Licensee requires. Licensor shall also explain its estimation
       of the probability of potential for change in each available API and
       recommend the APIs that are likely to be best used by Licensee.

3.3    Prior to Licensee beginning any development of the Jeode Software that
       is dependent on APIs, upon Licensee's request Licensor shall provide
       Licensee with a comprehensive update on the status and outlook for any
       potential changes required to the Jeode Software.

3.4    For APIs that may evolve based on effects of new releases of Java
       technology from Sun, Licensor shall proactively inform Licensee of
       these pending changes promptly after it is informed of the same and
       will keep any API changes to a minimum and provide Licensee with
       advanced specifications and implementations of the API changes.

3.5    At any time Licensee may notify Licensor of any API which Licensee
       considers is important. In which event Licensor shall use commercially
       reasonable endeavours to collaborate with Licensee in relation to any
       proposed changes to such API.

3.6    Licensee may at its sole discretion determine that a new API should be
       created to insulate it from underlying changes in the Jeode Software.
       In such event and consistent with Clause 7.11, Licensor will endeavor
       to co-operate with Licensee to accommodate all Licensee's reasonable
       requests. The specification for each proposed new API or modified API
       shall be agreed to by Licensor (such agreement not to be unreasonably
       withheld or delayed). Licensor shall treat such API as Confidential
       Information for the purposes of this Agreement as requested by
       Licensee.

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3.7    Licensor shall use commercially reasonable endeavours to comply with
       Sun Java specifications for the embedded markets, as evidenced by
       compliance with Sun Java technology compatibility kits. Licensor shall
       promptly notify Licensee if a commercial release fails to comply with
       Sun Java technology compatibility kits or if it no longer is a Sun
       Java licensee.

4      TECHNOLOGICAL DEVELOPMENTS

4.1    The Parties wish to cooperate in developing the definition, direction and
       timing of various enhancements to the Jeode Software. To this end the
       Parties have agreed the following:

       4.1.1  Licensor and Licensee shall each provide to the other by the end
              of each Quarter during the term of this Agreement a Product
              Roadmap. The Product Roadmap is a representation of Licensor's
              current plans and is not a commitment to develop or deliver future
              products.

       4.1.2  Licensee may at any time submit a Product Enhancement Request to
              Licensor. Licensor shall within 5 business days of receipt of the
              Product Enhancement Request:

       4.1.3  consider the contents of the Product Enhancement Request and at
              its sole and absolute discretion advise Licensee that it will
              either decline to participate in the Product Enhancement Request
              or that it will prepare a statement of work setting forth
              Licensor's estimate of the man-hours for completing the Product
              Enhancement Request, a specification for the enhancement, and
              details of any acceptance testing to be undertaken.

              (a)    If Licensor decides a Product Enhancement should be made
                     part of a standard release of Jeode Software Licensor will
                     undertake the development work and (if the enhancement
                     passes the acceptance tests detailed in the statement of
                     works) include the enhancement in a future release of the
                     Jeode Software, all at no cost to Licensee. If Licensor
                     decides that the enhancement should be made as a standard
                     release but that it is unable to create the enhancement
                     within the timescales requested, Licensor will promptly
                     inform Licensee and Licensee may at its sole and absolute
                     discretion undertake (or pursuant to the licenses granted
                     in Clauses 2.1 including 2.1.3 for the purpose of procuring
                     that the work is undertaken so as) to create the
                     enhancement.

       4.1.4  In the event that Licensee wants certain enhancements to the Jeode
              Software and requires an exclusive right to use, copy, adapt,
              create derivative works of, distribute, sell, sublicense and
              commercially exploit the enhancement then Licensee may at its sole
              and absolute discretion decide either:

              (a)    to ask Licensor to undertake the work in which event
                     Licensor shall (pursuant to Clause 7.11) provide the
                     enhancement to Licensee and grant Licensee an exclusive,
                     transferable (pursuant to Clause 18.11), worldwide license
                     to copy, adapt, sublicense and generally exploit the Jeode
                     Software with the enhancement; or

              (b)    may perform the work itself or procure the work from a
                     third party. For the avoidance of doubt all Intellectual
                     Property in the enhancement

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                     (other than the Licensor's underlying Intellectual Property
                     in the Jeode Software not relating to the enhancement)
                     produced pursuant to this Clause 4.1.4(b) shall vest in the
                     Licensee and not in Licensor. Thereafter the Licensee may
                     in its sole and absolute discretion provide the enhancement
                     to Licensor with the license set forth in Clause 4.1.6 to
                     store the Licensee Code (as defined in Clause 4.1.6) and
                     Documentation of the enhancement on Licensor's development
                     or maintenance systems on Licensee's behalf. Such exclusive
                     enhancements may not be copied, modified, translated,
                     reverse engineered, decompiled, disassembled, sub-licensed,
                     demonstrated, lent, hired or otherwise provided to any
                     third party by Licensor. If Licensor stores the enhancement
                     for Licensee then Licensor shall ensure that the
                     enhancement is kept secure from unauthorised access with
                     the same degree of care Licensor uses to protect its own
                     software, and the Parties agree that the enhancement will
                     be treated as Confidential Information.

       4.1.5  Any enhancement made by Licensor for the purposes of fixing bugs
              or errors shall be without charge to Licensee if the bug or error
              is not caused by Licensee or its contractors.

       4.1.6  Treatment of Licensee Code. Subject to Licensor's underlying
              Intellectual Property Rights in the Jeode Software other than the
              enhancement, Licensee will own all right, title and interest in,
              to and under all works made by or on behalf of Licensee to Jeode
              Software, including without limitation, porting-related
              modifications and/or other code owned or possessed by Licensee for
              the development or maintenance of the Jeode Software ("Licensee
              Code"). Licensee, in its sole discretion, may make Licensee Code
              and related Documentation available to Licensor; provided,
              however, that unless otherwise expressly provided in writing by
              Licensee, such Licensee Code and Documentation shall be treated by
              Licensor as Confidential Information and Licensor's use of such
              Licensee Code and Documentation shall be limited solely to the
              purposes of providing services to Licensee under the terms of this
              Agreement, and for no other purpose. Licensor shall not (and shall
              not permit any third party to) copy, modify, translate, reverse
              engineer, decompile, disassemble, sub-license, demonstrate, lend
              or hire the Licensee Code or grant any security interest in
              relation thereto or otherwise provide Licensee Code or
              Documentation to any third party. Notwithstanding any other
              provision hereof or any other agreement between the Parties,
              Licensor's access to Licensee Code and Documentation pursuant to
              this Agreement, shall not be construed as preventing employees of
              Licensor who lawfully have had access to such Licensee Code and
              Documentation from drawing upon or using any skills, knowledge,
              talent or experience of a general nature acquired by them in the
              course of working with such Licensee Code and Documentation,
              provided that (i) such employees may not directly or indirectly
              use, copy, modify, adapt, create derivative works of, refer to or
              rely on the Licensee Code or Documentation and (ii) such employees
              do not infringe Licensee Intellectual Property rights or
              confidentiality obligations not otherwise within the scope of any
              express written licenses granted to Licensor.

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5      DOCUMENTATION

       Licensor shall provide to Licensee electronic copies of the Documentation
       containing all information relating to the Jeode Software which will
       enable Licensee to exercise its license rights hereunder. Licensee may
       copy (in any media or format) adapt, modify or merge the Documentation
       provided that it complies with Clause 2.4 in relation to Licensor's
       Trademarks and copyright notices.

6      MARKETING AND SALES SUPPORT

6.1    LEADS

       Licensor shall immediately pass to Licensee all sales leads and enquiries
       relating to Wind River Operating Systems and provide to Licensee details
       concerning the leads and enquiries by way of completing the proforma lead
       sheet a specimen of which is attached at Appendix E. If Licensor is of
       the reasonable opinion (after making all relevant enquiries) that the
       enquirer is interested in more than one operating system then Licensor
       shall also pass the lead and all details relating thereto to such other
       vendors as Licensor deems appropriate.

6.2    GENERAL SALES SUPPORT

       Licensor will provide Licensee with all support, cooperation and
       resources so as to enable Licensee to sublicense sell and exploit the
       Jeode Software pursuant to the terms of this Agreement.

6.3    PRE-INTEGRATION SALES POLICY

       Licensor acknowledges and accepts that once the terms of this Agreement
       are announced in an agreed upon public statement pursuant to Clause 18.3,
       some of Licensor's customers will want to migrate to Licensee and become
       customers of Licensee. Accordingly, Licensor shall within thirty (30)
       days of Commencement Date implement a non-discriminatory sales
       compensation system among its representatives so as to reasonably ensure
       that such customers are not penalised (financially or otherwise) in doing
       so including (without limitation):

              (a)    disclosing to the customer the nature of the relationship
                     between the Parties (subject to obtaining Licensee's prior
                     written consent and ensuring the customer executes a
                     non-disclosure agreement); and

              (b)    cooperating with Licensee so as to keep redundant fees
                     (such as maintenance fees) payable by the customer to a
                     minimum.

6.4    Licensor shall provide to Licensee electronic versions of all appropriate
       product marketing materials relating to the Jeode Software, including
       without limitation, any data sheets, Licensor presentations, web content,
       and Licensor training materials generated by or in the possession of
       Licensor. Licensee shall have the unfettered right to copy, adapt, modify
       re-brand and re-purpose such material for its own product marketing
       efforts.

6.5    Licensee shall be solely responsible for compliance with and the
       obtaining of any export licenses which may be required for distribution
       by Licensee. Licensor shall promptly provide answers to Licensee
       technical questions relating to the Jeode Software where

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       such questions are not answered by the Documentation to enable Licensee
       to obtain such export licenses.

6.6    Licensor will designate at least two technical experts who will serve as
       points-of-contact to address questions and issues that arise from
       pre-sales opportunities. Licensor will make every reasonable effort to
       assist Licensee in meeting Licensee requests for Jeode Software
       information during pre-sales engagements and accordingly will agree to
       provide additional resources and/or technical experts which are
       reasonably necessary to meet this demand. Such investment of Licensor
       resource for a given case will be reasonably balanced against the value
       of the relevant opportunity and the total pre-sales support load that
       Licensee is requesting from Licensor.

7      PAYMENT AND CHARGES

7.1    MINIMUM QUARTERLY FEES SCHEDULE

       7.1.1  The Parties have agreed that over the term of this Agreement
              Licensee shall pay the Minimum Quarterly Fees. The Parties shall
              treat such Minimum Quarterly Fees as prepayment of the
              transactional royalties and fees detailed in Clauses 7.3, 7.4 and
              7.5.2. The payment of Minimum Quarterly Fees will build up a
              credit against the transactional royalties and fees detailed in
              Clauses 7.3, 7.4 and 7.5.2 which arise as a result of sales or
              licenses of Jeode Based Products and/or Jeode Source Code
              ("TRANSACTIONAL LICENSE FEES"). The Transactional License Fees
              shall be offset against the cumulative Minimum Quarterly Fees
              credit so that (in addition to continuing to pay the Minimum
              Quarterly Fees) Licensee shall only pay an amount exceeding the
              Minimum Quarterly Fees (as Transactional License Fees) if and when
              the total aggregate Transactional License Fees exceeds the unused
              portion of the cumulative Minimum Quarterly Fees credit.

              An illustration of the process described in this Clause 7.1 (and
              Clause 14.3.1) is set out in Appendix F.

       7.1.2  As consideration for the licenses granted in Clause 2.1 and the
              benefits and services pursuant to Clauses 7.3, 7.4 and 7.5.2 (but
              not 7.7 to 7.11), Licensee shall pay the following Minimum
              Quarterly Fees:

              $XXXX on execution of this Agreement;

              $XXXX no later than March 15, 2001;

              $XXXX on each of June 15, 2001, September 15, 2001; and December
              15, 2001;

              $XXXX on each of on or before the 15th day of the last month of
              each Quarter in 2002;

              $XXXX on each of on or before the 15th day of the last month of
              each Quarter in 2003.

              If the Agreement continues into 2003 then no later than six months
              prior to the end of 2003 the Parties shall negotiate new fees
              payable for the year 2004 onwards.

                                       10
<PAGE>

7.2    SPECIAL OPTION

       If, at any time during the course of Licensee FY02 business year
       (February 1, 2001 - January 31, 2002), Licensee determines in its sole
       and absolute discretion that the Minimum Quarterly Fees exceeds
       Licensee's actual distribution rate for Jeode Based Products, it may
       notify Licensor, no earlier than March 1, 2002, that it wishes to
       discontinue paying the Minimum Quarterly Fees 90 days from the date of
       receipt of notice to the Licensor of such an election. All payments due
       Licensor hereunder within that 90-day period nevertheless shall be paid
       by Licensee.

       Upon Licensee's election under this Clause, the exclusive nature of
       Licensee's rights granted under this Agreement shall continue until the
       earlier of either (i) the period of time for the Minimum Quarterly Fees
       paid by Licensee, is actually exceeded by actual Transactional License
       Fees or (ii) the end of the twelve (12) month period immediately
       following the end of the 90-period provided in this Clause 7.2.
       Thereafter, Licensee's rights granted hereunder, to the extent such
       rights are not already non-exclusive, shall be deemed non-exclusive. If
       Licensee exercises this option, it will continue to report its usage
       pursuant to Clause 7.16.1, and once the Minimum Quarterly Fees have been
       fully utilized (as described in Clause 7.1) it shall begin remitting
       Transactional License Fees to Licensor with its reports on and as used
       basis detailed in Clause 7.3.

7.3    RUN TIME ROYALTIES

       To the extent that the aggregate value of Transactional License Fees
       exceeds the cumulative total of Minimum Quarterly Fees, Licensee shall
       pay Licensor Run Time Royalties according to the following schedule in
       payment for the licenses granted herein:

<TABLE>
<CAPTION>

         -------------------------------------------------------------------------------------
                                          RUN TIME ROYALTY RATES
         -------------------------------------------------------------------------------------
         <S>                                                      <C>
          SUN TECHNOLOGY WITHIN JEODE                             INSIGNIA ROYALTY RATE
          BASED PRODUCTS
         ---------------------------------------------- --------------------------------------
          EmbeddedJava                                                    $XXXX

         ---------------------------------------------- --------------------------------------
          PersonalJava                                                    $ XXXX

         ---------------------------------------------- --------------------------------------
          CDC/PersonalJava Profile*                                       $ XXXX
         ---------------------------------------------- --------------------------------------
         * when available
</TABLE>

       If Licensor's independent auditors provide an opinion which in Licensor's
       sole discretion is acceptable to Licensor to the effect that Licensor
       need not recognize as Licensor revenue, Run Time Royalty payments due to
       Sun, then Licensor shall promptly notify Licensee of same and Licensee
       shall have the option to advise Licensor at least forty-five (45) days
       prior to the beginning of any Quarter, that Licensee will make payments
       due Sun by paying Licensor, which payments will pass through Licensor and
       be promptly made to Sun. Pursuant to Licensor's current pricing, the Sun
       portion would be $ XXXX for EmbeddedJava and $ XXXX for PersonalJava. For
       the avoidance of doubt these amounts are not included within the Minimum
       Quarterly Fee.

                                       11
<PAGE>

7.4    PROJECT FEES

       Licensee will pay Licensor a Project Fee of $XXXX, which includes one
       thousand Run Time Royalties.

7.5    SOURCE CODE LICENSE FEE

       7.5.1  In payment for the limited license granted to Licensee for use of
              Licensor's Jeode Source Code, Licensor will pay Licensee a license
              fee in the amount of $XXXX on the Commencement Date.

       7.5.2  For each copy of Jeode Source Code distributed by Licensee
              pursuant to Licensee's rights to sublicense Source Code under
              Clause 2.1.4, Licensee will pay Licensor a fee in the amount of $
              XXXX. For the avoidance of doubt this figure will be included
              within the Minimum Quarterly Fee.

       7.5.3  Licensee agrees not to disclose the sums payable to Licensor in
              respect of each sub-license of Jeode Source Code to the general
              public, but may confidentially disclose it in the context of
              specific customer discussions. For the avoidance of doubt nothing
              in this Agreement shall prevent Licensee from advertising or
              disclosing its own license and other fees.

7.6    SPECIAL PRICING FOR EXTRAORDINARY SITUATIONS

       Licensor agrees that in some extraordinary circumstances, at very high
       volumes (e.g. XXXX units or higher), or in certain special markets,
       special pricing consideration may be required. Licensor and Licensee
       agree to negotiate special pricing and to jointly seek cooperation of any
       third parties (e.g., Sun) needed in these cases, so long as any discounts
       are applied equally to all of the other components in Licensee's
       offering.

7.7    MOST PREFERRED DISTRIBUTOR

       If, during the term of this Agreement, Licensor should enter into a third
       party distributor agreement related to Jeode Software and including the
       same or similar subject matter, documentation, services and cooperation
       provided and licensed to Licensee pursuant to the terms of this Agreement
       on the same or substantially similar terms to the terms of this Agreement
       and at lower prices than those agreed hereunder, then such lower prices
       shall, at the Licensee's option, supersede and be substituted for those
       prices and charges set out or referred to in this Agreement provided any
       other economic terms are also met. Such substituted price and charge
       rates to be made effective as of the date of the relevant third party
       agreement. However, upon the occurrence of the Option Execution Date, if
       any should occur during the term of this Agreement, then the preferred
       prices shall revert to the prices and charges set forth in this Agreement
       without regard to any third party agreements. Such reversion shall be
       deemed effective as of the Option Execution Date.

7.8    TECHNOLOGY TRANSFER TRAINING

       In consideration of the training described in this Agreement, Licensee
       will agree to pay XXXX dollars ($XXXX) for 30 days of technology transfer
       training at date(s) to be agreed in writing.

                                       12
<PAGE>

7.9    ANNUAL MAINTENANCE AND UPDATE SERVICE

       In consideration of the maintenance and update services as described in
       Appendix C to be provided in this Agreement during the first year from
       the Commencement Date, Licensee shall pay Licensor XXXX dollars ($XXXX).

       For the second and subsequent years of service, Licensee may continue
       with (in which case Licensor shall provide) the same level of service as
       the first year for XXXX US dollars ($XXXX) per year, or negotiate a
       higher level of service.

7.10   INTEGRATION SERVICES

       In consideration of the integration services detailed in paragraph 4(g)
       of Appendix C to this Agreement, Licensee shall pay Licensor XXXX dollars
       ($XXXX).

7.11   NON-RECURRING ENGINEERING ("NRE") FEES

       If NRE work is required, Licensor shall charge the following rates: $XXXX
       per staff day; $XXXX per staff month; or $XXXX per staff year for a
       dedicated Licensor engineer. These rates will increase by XX% per year
       from 1 February 2002. Additional fees may also be required for items such
       as equipment, materials, travel and lodging as necessary to facilitate
       the NRE work. Such fees will only be payable if Licensee has previously
       agreed to the type and level of additional fees.

7.12   PAYMENT TERMS

       7.12.1 The first Minimum Quarterly Fees will be due upon the Commencement
              Date. Subsequent Minimum Quarterly Fees will be due on the Quarter
              days specified in Clause 7.1. If the total aggregate value of
              Transactional License Fees should exceed the unused portion of the
              cumulative Minimum Quarterly Fees credit, then Licensee will
              report the difference and (in addition to payment of the Minimum
              Quarterly Fees) pay the excess Transactional License Fees owed to
              Licensor (as illustrated in Appendix F). Payment terms for Sun
              pass through payments pursuant to 7.3 if applicable, shall be
              negotiated at such time.

       7.12.2 The annual maintenance and update service fee is payable in
              advance and may be paid in equal Quarterly instalments. Payment
              for each subsequent Quarter of service will be due prior to the
              expiration of the current Quarterly service period.

       7.12.3 Unless otherwise already stated above, Licensee will pay Licensor
              all fees, including Minimum Quarterly Fees and where appropriate
              fees due under Clause 14.3 within 30 days after receipt of invoice
              from Licensor, and without prejudice to Licensee's rights and
              remedies, all fees are non-refundable.

7.13   Unless specified otherwise in this Agreement, all amounts payable under
       this Agreement shall be paid in US Dollars.

7.14   Any and all payments which may be payable by Licensee to Licensor under
       the terms of this Agreement shall be made by wire transfer on an account
       designated in writing by Licensor.

                                       13
<PAGE>

7.15   Any taxes or duties (other than income or profits taxes assessed or
       imposed upon the sums due to Licensor), upon or with respect to this
       Agreement shall be borne and discharged solely by Licensee provided such
       taxes or duties would be lawfully imposed on Licensee other than pursuant
       to this Clause.

7.16   RECORD KEEPING

       7.16.1 Licensee shall submit reports to Licensor detailing payments
              received and customer details in relation to the licensing and
              sale of Jeode Based Products.

       7.16.2 Both Licensor and Licensee shall maintain complete and accurate
              accounting records, in accordance with sound accounting practices,
              to support and document all license fees and all other sums
              distributed or received in connection with this Agreement. As
              regards Licensee the records need only relate to licences or sales
              of Jeode Based Product. Such records shall be retained for a
              period of at least 3 years, and shall be made available to either
              party, upon reasonable notice.

       7.16.3 Each party ("AUDITING PARTY") shall have the right to inspect the
              books and records of the other party maintained pursuant to Clause
              7.16.2 ("AUDITED PARTY") (upon reasonable, prior written notice to
              the Audited Party, during the Audited Party's normal business
              hours and no more than once a year) using an independent certified
              public accountant retained by the Auditing Party and reasonably
              acceptable to the Audited Party, for the sole purpose of verifying
              any reports, information and/or payments provided or due hereunder
              and verifying compliance with the material terms and conditions of
              this Agreement, provided that the scope of such audit shall be
              limited to the review and examination necessary to accomplish such
              purpose. In the event past audit results indicate discrepancies of
              greater than five percent (5%) between fees paid pursuant to the
              terms of this Agreement and the fees due, then Licensor will be
              entitled to inspect the books and records of Licensee Quarterly.
              Such independent certified public accountant shall be bound to
              hold all information in confidence except as necessary to
              communicate to the Auditing Party the Audited Party's
              underpayments, inaccurate reports or information and/or
              non-compliance with any material terms or conditions of this
              Agreement. The fees and expenses of such inspection shall be paid
              by the Auditing Party unless the results of the audit indicate a
              difference of at least five percent (5%) between fees paid
              pursuant to the terms of this Agreement and fees due, in which
              case the Party at fault will pay said reasonable fees and
              expenses.

       7.16.4 For the avoidance of doubt all reports submitted by Licensee shall
              be regarded as Confidential Information.

7.17   EVALUATION LICENSES

       In the event that Licensee supplies Jeode Based Products for evaluation
       purposes no fee, royalty or charge shall be payable to Licensor.

8      SUPPORT AND MAINTENANCE

       Licensor shall provide support and maintenance of the Jeode Software
       pursuant to the terms of Licensor's standard support and maintenance
       agreement set out at Appendix C.

                                       14
<PAGE>

9      LICENSOR WARRANTIES

9.1    PRODUCT WARRANTIES

       9.1.1  Licensor warrants that the Jeode Software and Jeode Source Code
              will, on delivery and for a period of 90 days thereafter perform
              substantially in accordance with and provide the facilities,
              functions and capacity set out in the Specifications.

       9.1.2  Licensor warrants that no computer viruses, worms, software bombs
              or similar items have been, and shall ensure that no such items
              will be, introduced by it into the Jeode Software or Jeode Source
              Code.

9.2    ADDITIONAL WARRANTIES

       9.2.1  Licensor warrants that:

              (a)    as at the date hereof, except as previously disclosed to
                     Licensee as detailed in Appendix D there are no liens,
                     mortgages, encumbrances, charges over or relating to or
                     affecting the Jeode Software, Jeode Source Code or Licensor
                     Intellectual Property;

              (b)    as of the date hereof Licensor has validly applied for,
                     registered, enforced and maintained all the Licensor
                     Intellectual Property;

              (c)    as of the date hereof, there are no disputes, and to
                     Licensor's knowledge, having made all reasonable enquiries
                     of its employees, there are no threatened claims or
                     proceedings relating to the Jeode Software, Jeode Source
                     Code or Licensor Intellectual Property; and

              (d)    it owns or has rights to all Licensor Intellectual Property
                     and that no employees or other person has any right,
                     interest or title therein.

10     INTELLECTUAL PROPERTY RIGHTS

10.1   OWNERSHIP OF LICENSOR INTELLECTUAL PROPERTY

       Subject to the Licensee's ownership of all Intellectual Property Rights
       in enhancements to the Jeode Software as described in Clauses 4.1.4 and
       4.1.6 nothing in this Agreement shall confer in Licensee any right of
       ownership in Licensor Intellectual Property. At no time during or after
       the term of this Agreement shall Licensee use the rights conferred by
       Licensor under this Agreement as a basis to (i) challenge or assist
       another to challenge Licensor's rights in and to Licensor Intellectual
       Property or (ii) use Licensor Intellectual Property in connection with
       any of its products or services other than in accordance with this
       Agreement.

10.2   OWNERSHIP OF LICENSEE INTELLECTUAL PROPERTY

       Nothing in this Agreement shall confer on Licensor any right of ownership
       in Licensee Intellectual Property. At no time during or after the term of
       this Agreement shall Licensor use the rights conferred by Licensee under
       this Agreement as a basis to (i) challenge or assist another to challenge
       Licensee's rights in and to Licensee Intellectual Property

                                       15
<PAGE>

       or (ii) use Licensee Intellectual Property in connection with any of its
       products or services other than in accordance with this Agreement.

10.3   PROTECTION OF INTELLECTUAL PROPERTY

       10.3.1 In the event that the either Party becomes aware of any
              infringement, misappropriation, threatened misappropriation or any
              other violation by a third party with respect to the other Party's
              Intellectual Property, it shall promptly notify the other Party.
              If the use of any part of Licensor Intellectual Property is, or in
              the reasonable opinion of Licensee and Licensor is likely to
              become an infringement of the rights of another person, Licensor
              shall, at its option but upon notice to Licensee:

              (a)    replace the relevant Licensor Intellectual Property with a
                     comparable non-infringing product provided the product
                     complies with the relevant Specification; or

              (b)    procure for Licensee the right to continue using and
                     exploiting the relevant Licensor Intellectual Property
                     pursuant to the licenses and rights granted in this
                     Agreement.

10.4   If Licensor wishes to take a license in relation to any Licensee
       Intellectual Property then the Parties shall at that stage enter into
       negotiations relating to the applicable license terms.

11     WARRANTIES AND REPRESENTATIONS OF THE PARTIES

11.1   WARRANTIES OF LICENSOR

       Licensor represents and warrants to Licensee that:

       11.1.1 ORGANIZATION

              Licensor is a corporation duly organised and validly existing
              under the laws of Delaware, and has the corporate power and
              authority to enter into and perform this Agreement.

       11.1.2 PERMITS; APPROVALS

              Licensor holds all licenses, permits, certifications and other
              authorisations, the absence of which would have a material adverse
              effect on its financial condition or business, and there has been
              no default or violation under any such authorisation and there is
              no proceeding or investigation that is pending or, to Licensor's
              knowledge, threatened under which any such authorisation may be
              revoked, terminated or suspended.

       11.1.3 AUTHORIZATION

              All corporate action on the part of Licensor necessary for the
              authorization, execution and delivery of this Agreement and for
              the performance of all of its obligations hereunder and thereunder
              has been taken, and this Agreement when fully executed and
              delivered, shall constitute a valid, legally binding and
              enforceable obligation of Licensor.

                                       16
<PAGE>

       11.1.4 GOVERNMENTAL AND OTHER CONSENTS

              No consent, authorisation, license, permit, registration or
              approval of, or exemption or other action by, any governmental or
              public body or authority, or any other person, is required on the
              part of Licensor in connection with Licensor's execution, delivery
              and performance of this Agreement, or if any such consent is
              required, Licensor has satisfied the applicable requirements.

       11.1.5 EFFECT OF AGREEMENT

              Licensor's execution, delivery and performance of this Agreement
              in accordance with its terms will not (i) violate any judgment,
              order, writ, injunction or decree of any court applicable to
              Licensor, (ii) have any effect on the compliance of Licensor with
              any applicable licenses, permits or authorisations which would
              materially and adversely affect Licensor, (iii) result in the
              breach of, give rise to a right of termination, cancellation or
              acceleration of any obligation with respect to (presently or with
              the passage of time), or otherwise be in conflict with any term
              of, or affect the validity or enforceability of, any agreement or
              other commitment to which Licensor is a party and which would
              materially and adversely affect Licensor or (iv) result in the
              creation of any lien, pledge, mortgage, claim, charge or
              encumbrance upon any assets of Licensor.

       11.1.6 LITIGATION

              As at the date of this Agreement, there are no actions, suits or
              proceedings pending or, to Licensor's knowledge, threatened,
              against Licensor before any court or governmental agency which
              question Licensor's right to enter into or perform this Agreement,
              or which question the validity of this Agreement.

       11.1.7 SERVICES

              All services to be provided to Licensee pursuant to the terms of
              this Agreement will be provided with all reasonable skill and care
              and in accordance with best industry practices.

11.2   WARRANTIES OF LICENSEE

       Licensee represents and warrants to Licensor that:

       11.2.1 ORGANIZATION

              Licensee is a corporation duly organised and validly existing
              under the laws of Delaware, and has the corporate power and
              authority to enter into and perform this Agreement.

       11.2.2 AUTHORIZATION

              All corporate action on the part of Licensee necessary for the
              authorization, execution and delivery of this Agreement and for
              the performance of all of its obligations hereunder has been
              taken, and this Agreement when fully executed and delivered, shall
              constitute a valid, legally binding and enforceable obligation of
              Licensee.

                                       17
<PAGE>

       11.2.3 GOVERNMENTAL AND OTHER CONSENTS

              No consent, authorisation, license, permit, registration or
              approval of, or exemption or other action by, any governmental or
              public body or authority, or any other person, is required on the
              part of Licensee in connection with Licensee's execution, delivery
              and performance of this Agreement, or if any such consent is
              required, Licensee has satisfied the applicable requirements.

       11.2.4 LITIGATION

              As at the date of this Agreement there are no actions, suits or
              proceedings pending or, to Licensee's knowledge, threatened,
              against Licensee before any court or governmental agency which
              question Licensee's right to enter into or perform this Agreement
              or which question the validity of this Agreement.

11.3   NO IMPLIED WARRANTIES

       EACH PARTY ACKNOWLEDGES AND AGREES THAT THERE ARE NO WARRANTIES,
       GUARANTEES, CONDITIONS, COVENANTS OR REPRESENTATIONS BY THE OTHER PARTY
       OTHER THAN AS EXPRESSLY PROVIDED HEREIN AND THAT THE EXPRESS WARRANTIES
       SET OUT IN THIS AGREEMENT ARE IN LIEU OF ANY WARRANTIES AS TO FITNESS FOR
       A PARTICULAR PURPOSE OR OTHER ATTRIBUTES, WHETHER EXPRESS OR IMPLIED (IN
       LAW OR IN FACT), ORAL OR WRITTEN.

12     INDEMNIFICATION

12.1   Licensor shall indemnify and hold harmless Licensee and its Affiliates,
       and all of their respective employees, officers, contractors, directors,
       shareholders, legal representatives, agents, successors and assigns (the
       "Licensee Indemnified Parties"), from any liabilities, costs, judgements
       or expenses (including attorneys' fees and court costs) losses, claims
       and damages incurred or suffered by them resulting from the breach by
       Licensor of any of its representations and warranties in this Agreement.
       Licensee shall indemnify and hold harmless Licensor and its Affiliates,
       and all of their respective employees, officers, contractors, directors,
       shareholders, legal representatives, agents, successors and assigns (the
       "Licensor Indemnified Parties"), from any liabilities or expenses
       (including attorney's fees and expenses) incurred by them resulting from
       any breach by Licensee of any of its representations and warranties in
       this Agreement.

12.2   Licensor shall indemnify and hold harmless Licensee Indemnified Parties
       from and against any and all liabilities, losses, damages, claims,
       judgments, costs and expenses (including reasonable attorneys' fees and
       court costs) which Licensee Indemnified Parties may incur, suffer or be
       required to pay based on a claim that: (i) Licensor does not have
       sufficient right, title and interest in Licensor Intellectual Property to
       grant the rights and licenses granted to Licensee hereunder; or (ii)
       Licensor's Intellectual Property infringes any Intellectual Property or
       misappropriates any proprietary right of any third party; provided,
       however, that Licensor shall have no such duty to indemnify to the extent
       such claim is based on (a) any unauthorised modification to Licensor
       Intellectual Property made by Licensee in breach of this Agreement; (b)
       Licensee's use of Licensor Intellectual Property except as permitted
       under this Agreement; (c) any breach of Licensee's obligations under this
       Agreement.

                                       18
<PAGE>

13     LIMITATION OF LIABILITY

       NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE NEITHER
       PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT
       UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
       EQUITABLE THEORY FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE FEES,
       ROYALTIES AND OTHER SUMS (INCLUDING (WITHOUT LIMITATION) PASS THROUGH
       PAYMENTS TO SUN OR OTHER THIRD PARTIES AND CHARGES PAID PURSUANT TO
       CLAUSE 14.3) PAID TO THE OTHER PARTY PURSUANT TO THE TERMS OF THIS
       AGREEMENT.

       IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
       SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES
       INCLUDING (WITHOUT LIMITATION) LOSS OF PROFIT, OR REVENUE WHATSOEVER EVEN
       IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
       INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL.

14     OPTION TO PURCHASE

14.1   OPTION TO PURCHASE

       [Redacted]

14.2   EXERCISE OF OPTION

       14.2.1 Licensee may exercise the Option on notice to Licensor:

              (a)    at any time after eighteen months from the Commencement
                     Date upon giving Licensor sixty (60) days notice;

              (b)    at any time (whether during the period referred to in
                     Clause 14.2.1(a) or otherwise) if Licensor becomes subject
                     to any of the circumstances detailed in Clause 16.1.2.

       14.2.2 In addition, to Licensee's rights under Clause 14.2.4, if
              Licensee, at its sole and absolute discretion, wishes to exercise
              the Option for any reason (including but not limited) reasons
              relating to price, performance, features or quality, then Licensee
              shall give notice stating cause for such notice. The notice shall
              be for a period of sixty (60) days and shall to the extent
              possible recommend a cure. The acceptance of any cure action shall
              be at the sole and absolute discretion of Licensee.

       14.2.3 In addition to Licensee's rights under Clause 14.2.4, at
              Licensee's sole and absolute discretion the notice given may have
              immediate effect or state a period of sixty (60) days. If the
              Notice is for sixty days (or otherwise) Licensor may make
              representations to Licensee regarding the exercise of Option.

       14.2.4 At such time as the Option is exercised Licensor will provide
              Licensee with a written notice setting out Licensor's position and
              circumstances in relation to the matters covered in the warranties
              given in Clause 9.2.

                                       19
<PAGE>

       14.2.5 If Licensee exercises the Option pursuant to Clause 14.2.1(a) and
              the reason is Licensee believes Licensor is in default under this
              Agreement Licensor will have sixty (60) days to remedy the default
              before Licensee can exercise the Option.

14.3   PURCHASE PRICE

              [Redacted]

       14.3.1 [Redacted]

14.4   CONSEQUENCES OF EXERCISED OPTION

       14.4.1 [Redacted]

       14.4.2 [Redacted]

       14.4.3 Upon the occurrence of the Option Exercise Date, Licensor's
              obligations with respect to maintenance and support shall
              immediately terminate.

15     CONFIDENTIALITY

15.1   The Parties recognise that, in connection with the performance of this
       Agreement, each Party (in such capacity, the "Disclosing Party") may
       disclose, or may cause to be disclosed, Confidential Information to the
       other Party (the "Receiving Party"). The Receiving Party agrees (i) not
       to use any such Confidential Information for any purpose other than in
       the performance of its obligations or exercise of its rights under this
       Agreement and (ii) not to disclose any such Confidential Information,
       except to its Affiliates, employees, consultants, sub-contractors or
       representatives who are reasonably required to have the Confidential
       Information in connection with discharging obligations or exercising
       rights under this Agreement (provided that the Receiving Party shall
       ensure that if requested by the Disclosing Party the persons mentioned in
       Clause 15.1(ii) execute a confidentiality undertaking at least equivalent
       to the terms of this Clause 15) or as may be required by applicable law.
       Any Party required by law to disclose Confidential Information shall use
       best efforts to provide notice to the other Party prior to the disclosure
       of the Confidential Information and, in any event, shall provide written
       notice to the other Party within twenty-four (24) hours of providing
       Confidential Information pursuant to applicable law. The Receiving Party
       agrees to take all reasonable measures to protect the secrecy and
       confidentiality of, and avoid disclosure or unauthorized use of,
       Confidential Information. This Clause will remain in full force and
       effect notwithstanding the termination of this Agreement (howsoever
       caused) for a period of ten (10) years following the date of termination
       of this Agreement.

15.2   Each Party agrees that its obligations under this Clause 15 are necessary
       and reasonable to protect the other Party and its business, that any
       violation of these provisions could cause irreparable injury to the other
       Party for which money damages may be inadequate, and that, in addition to
       any other remedies that may be available in law, the other Party shall be
       entitled to obtain injunctive relief against the threatened breach of the
       provisions of this Clause 15 without the necessity of proving actual
       damages. The Parties agree that the remedies set forth in this Clause 15
       are in addition to and in no way preclude any other remedies or actions
       that may be available under this Agreement.

                                       20
<PAGE>

16     TERMINATION

16.1   Either Party may terminate this Agreement with immediate effect on notice
       if:

       16.1.1 the other party breaches a material provision of this Agreement
              (and if having received sixty days notice, the breaching party
              fails to remedy that breach); or

       16.1.2 the other party ceases to do business, seeks protection under any
              bankruptcy, trust deed, creditors arrangement composition or
              arrangement with creditors, becomes or is deemed insolvent and
              thereby unable to perform its obligations under this Agreement,
              has a receiver, manager, administrator, administrative receiver or
              similar officer appointed in respect of the whole or any part of
              its assets or business, makes any composition or arrangement with
              its creditors, takes or suffers any similar action in consequence
              of debt or an order or resolution is made for its dissolution or
              liquidation (other than for the purpose of solvent amalgamation or
              reconstruction), or any equivalent or similar action or proceeding
              is taken or suffered in any jurisdiction.

16.2   Termination of this Agreement, for whatever cause, shall be without
       prejudice to the rights or liabilities of either Party accrued prior to
       the date of termination and shall not affect either Party's ownership of
       its Intellectual Property Rights.

16.3   Clauses 2 (pursuant to Clause 17), 4.1.4, 4.1.6, 9, 10, 11, 12, 13, 14,
       15, 17, 18.1, 18.5, 18.6, 18.8 and 18.11 shall survive termination of
       this Agreement.

17     CONSEQUENCES OF TERMINATION

17.1   Subject to Clause 17.3 if Licensee terminates this Agreement or this
       Agreement expires then:

       17.1.1 Licensee shall be entitled to have the benefit of the Licenses
              granted in this Agreement in respect of Jeode Based Products
              existing at the effective date of termination and shall have the
              benefit of such licenses for a transitional period of upto one
              year after the effective date of termination;

       17.1.2 Licensee shall continue to pay the Transactional License Fees (but
              not the Minimum Quarterly Fees) to Licensor provided the
              applicable conditions concerning revenue recognition detailed in
              Clause 7 apply

       so that in all respects Licensee may, amongst other things, continue to
       derive revenue from and fully support its customers.

17.2   If Licensor terminates this Agreement pursuant to Clause 16.1 then Clause
       17.1 shall apply save that the one year transitional period referred to
       in Clause 17.1.1 shall be reduced to six (6) months from effective date
       of termination.

17.3   For the avoidance of doubt Clauses 17.1 and 17.2 shall not apply if the
       Option Exercise Date occurs before the effective date of termination in
       which event the [redacted] license detailed in Clause 14.4.1 shall
       survive termination or expiry of this Agreement.

17.4   Notwithstanding termination of this Agreement (howsoever caused) Licensee
       shall continue to use Licensor Trademarks pursuant to Clause 2.4 until
       either the expiry of

                                       21
<PAGE>

       twelve (12) months from the effective date of termination or upon
       Licensee's next major revision of Jeode Based Products, whichever is the
       earlier.

18     GENERAL

18.1   GOVERNING LAW; DISPUTE RESOLUTION

       This Agreement shall be governed in all respects by the laws of the
       United States of America and the State of California. All disputes
       arising under or related to this Agreement or the rights granted
       hereunder shall be brought in Superior Court of the State of California
       in Santa Clara County or the United States District Court for the
       Northern District of California in San Francisco. The Superior Court of
       the State of California in Santa Clara County and the United States
       District Court for the Northern District of California in San Francisco
       shall each have non-exclusive jurisdiction over disputes under this
       Agreement. The parties agree that the United Nations Convention on
       Contracts for the International Sale of Goods is specifically excluded
       from application to this Agreement.

18.2   EXPORT RESTRICTIONS

       All software and technical information delivered under this Agreement are
       subject to U.S. export control laws and may be subject to export or
       import regulations in other countries. Licensee agrees to strictly comply
       with all such laws and regulations.

18.3   PUBLICITY

       18.3.1 Licensee and Licensor agree to issue a joint press release
              announcing the existence of this Agreement (the "PRESS RELEASE").

       18.3.2 During the term of this Agreement, neither Party may make or send
              a public announcement, communication or circular referring to or
              using the other Party's trademarks, or referring to the content of
              this Agreement (other than the existence of this Agreement subject
              to 18.3.3 below) unless it has first obtained the other Party's
              written consent, which will not be unreasonably withheld.

       18.3.3 The Licensee shall announce its relationship with the Licensor no
              later than 90 days prior to shipment of Jeode Software as
              incorporated within Wind River Operating Systems and announce
              details concerning any Jeode Based Product no later than 30 days
              prior to product launch. The Licensor shall not disclose any of
              the aforementioned information before these dates and will use
              reasonable endeavours to avoid unauthorised disclosure.

18.4   NOTICES AND OTHER COMMUNICATIONS

       Any and all notices, requests, demands and other communications required
       or otherwise contemplated to be made under this Agreement shall be in
       writing and in English and shall be provided by one or more of the
       following means and shall be deemed to have been duly given (i) if
       delivered personally, when received, (ii) if transmitted by facsimile, on
       the first (1st) business day following receipt of a transmittal
       confirmation or (iii) if by international courier service, on the fourth
       (4th) business day following the date of deposit with such courier
       service, or such earlier delivery date as may be confirmed to the

                                       22
<PAGE>

       sender by such courier service. All such notices, requests, demands and
       other communications shall be addressed as follows:

         If to Licensor:

                  Insignia Solutions, Inc.
                  41300 Christy Street
                  Fremont, CA 94538
                  USA

                  Attention:   Director of Legal Affairs
                  Fax:         510-360-3702

         If to Licensee :

                  Wind River Systems, Inc.
                  500 Wind River Way
                  Alameda CA 94501
                  USA

                  Attention:   Vice-President Intellectual Property and
                               Legal Affairs]
                  Fax:         [510-749 2255

       or, in each case, to such other address or facsimile number as a Party
       may have furnished to the other Party in writing.

18.5   SEVERABILITY

       If any provision in this Agreement shall be found or be held to be
       invalid or unenforceable, then the meaning of said provision shall be
       construed, to the extent feasible, so as to render the provision
       enforceable, and if no feasible interpretation would save such provision,
       it shall be severed from the remainder of this Agreement which shall
       remain in full force and effect unless the severed provision is essential
       and material to the rights or benefits received by any Party. In such
       event, the Parties shall use best efforts to negotiate, in good faith, a
       substitute, valid and enforceable provision or agreement which most
       nearly effects the Parties' intent in entering into this Agreement.

18.6   RELATIONSHIPS OF THE PARTIES

       Both parties are independent contractors under this Agreement. Nothing
       contained in this Agreement is intended nor is to be construed so as to
       constitute the Parties as partners, agents or joint ventures with respect
       to this Agreement. Neither party hereto shall have any express or implied
       right or authority to assume or create any obligations on behalf of or in
       the name of the other party or to bind the other party to any contract,
       agreement or undertaking with any third party.

18.7   REFERENCES; SUBJECT HEADINGS

       The subject headings of the Clauses in this Agreement are included for
       the purpose of convenience of reference only, and shall not affect the
       construction or interpretation of any of its provisions.

18.8   FURTHER ASSURANCES

                                       23
<PAGE>

       The Parties shall each perform such acts, execute and deliver such
       instruments and documents, and do all such other things as may be
       reasonably necessary to accomplish the transactions contemplated in this
       Agreement.

18.9   NO WAIVER

       No waiver of any term or condition of this Agreement shall be valid or
       binding on a Party unless the same shall have been mutually assented to
       in writing by all Parties. The failure of a Party to enforce at any time
       any of the provisions of this Agreement, or the failure to require at any
       time performance by the other Party of any of the provisions of this
       Agreement, shall in no way be construed to be a present or future waiver
       of such provisions, nor in any way affect the ability of a Party to
       enforce each and every such provision thereafter.

18.10  ENTIRE AGREEMENT; AMENDMENTS

       The terms and conditions contained in this Agreement (including the
       Schedules and Appendixes) constitute the entire agreement between the
       Parties and supersede all previous agreements and understandings, whether
       oral or written, between the Parties with respect to the subject matter
       of this Agreement. No agreement or understanding amending this Agreement
       shall be binding upon any Party unless set forth in a written document
       which expressly refers to this Agreement and which is signed and
       delivered by duly authorised representatives of each Party.

18.11  BINDING EFFECT; ASSIGNMENT

       Licensor shall not assign, transfer or novate its rights or obligations
       under this Agreement without obtaining Licensee's prior written consent,
       such consent not to be unreasonably withheld. Licensor may assign, novate
       or transfer its rights or obligations under this Agreement to an
       Affiliate without requiring Licensor's consent provided it notifies
       Licensor.

18.12  NO BENEFICIARIES

       Nothing herein, express or implied, is intended to or shall be construed
       to confer upon or give to any person, firm, corporation or legal entity,
       other than the Parties, any interests, rights, remedies or other benefits
       with respect to or in connection with any agreement or provision
       contained herein or contemplated hereby.

18.13  FORCE MAJEURE

       Neither Party shall be held responsible for failure of or delay
       hereunder, if such failure of delay is due to act of God or public enemy,
       war, government acts or regulations, fire, flood, embargo, quarantine,
       epidemic, differences with workman (other than the staff of the Party
       claiming under this Clause accident, unusually severe, weather or other
       cause similar or dissimilar to the foregoing, beyond their reasonable
       control (each such event a "Force Majeure").

       If the performance of this Agreement by either Party or any obligation
       hereunder is prevented, restricted or interfered with by reason of a
       Force Majeure event, the Party whose performance is so affected, upon
       giving prompt notice to the other Party, shall be excused from such
       performance to the extent of such Force Majeure event; provided

                                      24
<PAGE>

       however, that the party so affected shall take all reasonable steps to
       avoid or remove such causes of non performance and shall continue
       performance hereunder with dispatch whenever such causes are removed.

18.14  COUNTERPARTS

       This Agreement may be executed in any number of counterparts, and each
       counterpart shall constitute an original instrument, but all such
       separate counterparts shall constitute only one and the same instrument.

IN WITNESS WHEREOF, the Parties have caused their respective duly authorised
representatives to execute this Agreement as of the date hereof.

                                       25
<PAGE>

WIND RIVER SYSTEMS, INC.

         By: ________________________
             Name:

             Title:

INSIGNIA SOLUTIONS INC.

         By: _________________________
             Name:

             Title:

                                       26
<PAGE>

                                   SCHEDULE 1
                                 JEODE SOFTWARE

JEODE PRODUCT SUMMARY

The Jeode product is Insignia's implementation of Sun's Java(TM) technology,
compatible with specifications published by Sun, and specifically developed to
run Java applications on embedded systems and Internet Appliances.

Jeode allows developers to create reliable, efficient, and predictable Java
applications for these types of device.

COMPONENTS OF JEODE

The Jeode product consists of two components: JeodeRUNTIME(TM)and
JeodeSUITE(TM).

JEODERUNTIME

JeodeRUNTIME is the Jeode product runtime environment on your target platform.
It consists of the Jeode EVM(TM) (Embedded Virtual Machine(TM)), and the
JeodeCLASS(TM) embedded class libraries:

     1.   JEODE EVM
          The Jeode EVM allows you to run Java applications on embedded
          systems. The EVM is highly configurable and tunable for the
          specific embedded application, with a dynamic compiler for combined
          fast execution and a small memory footprint.

     2.   JEODECLASS
          JeodeCLASS embedded class libraries are compatible with Sun's Java
          specifications (for Personal or Embedded Java, depending on the
          platform).

JEODESUITE

JeodeSUITE is the set of tools provided to help you develop and run Java
applications using your host platform. It consists of JeodeBUILD(TM) and
JeodeDEBUG(TM):

     1.   JEODEBUILD
          JeodeBUILD is the set of build-time tools for editing, compiling, and
          browsing the Java application. These tools are available either with
          the Jeode product or from third-party suppliers (such as the Sun JDK).

     2.   JEODEDEBUG
          JeodeDEBUG is the set of runtime utilities for examining the behavior
          of the Java application and JeodeRUNTIME. JeodeDEBUG tools currently
          include JeodeMONITOR. Source-level debuggers are provided by
          third-party vendors - for example, Sun's jdb tool. Jeode also supports
          standard tool interfaces, as specified by Sun, such as for debugging
          (JVMDI/JDWP) and for profiling (JVMPI).

                                       27
<PAGE>

CD COMPONENTS

The Jeode product is available as a Binary or a Source CD.

BINARY CD

The binary CD is installable on a Windows NT PC, and provides JeodeSuite tools
for the NT PC, and the JeodeRuntime product for the selected target device.
JeodeRuntime should then be downloaded onto the required target device from the
PC.

So, for example, with the Jeode 1.7 release, binary CD components include:

<TABLE>
<CAPTION>

   ------------------   ---------------------------------------------------------------------
   DIRECTORY NAME         CONTAINS

   ------------------   ---------------------------------------------------------------------
  <S>                    <C>
   BIN                    Tools executable wrappers.

   ------------------   ---------------------------------------------------------------------
   DEMO                   Demonstration java applications and launch files.

   ------------------   ---------------------------------------------------------------------
   DOCS                   Binary HTML documentation.

   ------------------   ---------------------------------------------------------------------
   INCLUDE                Header files (for Sun interfaces such as JVMPI).

   ------------------   ---------------------------------------------------------------------
   LIB                    JeodeSuite tools.

   ------------------   ---------------------------------------------------------------------
   SAMPLE                 sample source for JNI invocation.

   ------------------   ---------------------------------------------------------------------
   [TARGET OS NAME]       JeodeRuntime for the target device.

   ------------------   ---------------------------------------------------------------------
</TABLE>

SOURCE CD

The source CD contains the source code comprising the Jeode product, and the
tools required to build the binary Jeode product.

So, for example, with the Jeode 1.7 release, source CD components include:

<TABLE>
<CAPTION>

   ------------------   ---------------------------------------------------------------------
   DIRECTORY NAME         CONTAINS

   ------------------   ---------------------------------------------------------------------
  <S>                     <C>
   ARCHS                  Target architecture-specific code (for example, for MIPS devices).

   ------------------   ---------------------------------------------------------------------
   BASE                   Base (common) code for the Jeode product.

   ------------------   ---------------------------------------------------------------------
   DEMO                   Demonstration java applications and launch files.

   ------------------   ---------------------------------------------------------------------
   DOCS                   Source HTML documentation.

   ------------------   ---------------------------------------------------------------------
   DOCS-BIN               Binary-only HTML documentation.

   ------------------   ---------------------------------------------------------------------
</TABLE>

                                       28
<PAGE>

<TABLE>
<CAPTION>

  <S>                    <C>
   ------------------   ---------------------------------------------------------------------
   DRL                    Defines the contents of the Jeode product.

   ------------------   ---------------------------------------------------------------------
   GEN                    Generated files.

   ------------------   ---------------------------------------------------------------------
   JAVA                   JeodeRuntime for the target device.

   ------------------   ---------------------------------------------------------------------
   OS                     Target OS-specific code (for example, for Windows CE OS's).

   ------------------   ---------------------------------------------------------------------
</TABLE>

                                       29
<PAGE>

                                   SCHEDULE 2

                          WIND RIVER OPERATING SYSTEMS

VxWorks and successors

VxWorks AE and successors

pSOS and successors

Wind River Linux and successors

pOSEK and successors

OSEKWorks and successors

IxWorks and successors

                                       30
<PAGE>

                                   SCHEDULE 3

                                   TRADEMARKS

Attachment A
Insignia Trademarks

[JEODE LOGO]

[INSIGNIA SOLUTIONS LOGO]

EVM(TM)

Jeode(TM)

Insignia(TM)

Insignia Solutions(TM)

                                       31
<PAGE>

                                   SCHEDULE 4

                                  DELIVERABLES

Licensor will agree to provide Licensee with a standard implementation of the
Jeode 1.5.2 (or later if more current release) technology in binary and source
code forms, tested with the Sun EmbeddedJava compatibility test suites, ported
to: 1) the PowerPC processor and running on Licensee's VxWorks v 5.4 operating
system (excluding java.awt) 2) X86 processor and running on the RedHat Linux
version 6.2 operating system, 3) Windows CE ports to the SA, SH and MIPS
processors.

Licensor will agree to provide Licensee with a standard implementation of the
Jeode 1.5.2 (or later if more current release) technology in binary and source
code forms, tested with the Sun PersonalJava compatibility test suites, ported
to: ARM, Hitachi SH, and MIPS processors running on the Windows CE operating
system.

Licensor will provide Licensee with other non-proprietary ports of the Jeode
Software.

                                       32
<PAGE>

                                   SCHEDULE 5
                              SOURCE CODE TRAINING
                    Insignia Standard Source Training Agenda

<TABLE>
<CAPTION>

LOCATION:   Insignia UK

DATE:

------------------------------- -------------------------- --------------------- ---------------------------- ----------------------
MONDAY                          TUESDAY                    WEDNESDAY             THURSDAY                     FRIDAY
------------------------------- -------------------------- --------------------- ---------------------------- ----------------------
<S>                            <C>                        <C>                   <C>                          <C>
10:00                           10:00                      10:00                 10:00                        10:00

Introduction to Insignia        Dynamic Adaptive           Tools                 Debugging                    JeodeAssist
                                Compiler, DAC 1
Tour of facilities &                                       - Jeode Configurator  - Overview of debugging      - Support
introduction to departments     -  Target processor                                techniques
                                   prerequisites &         - Jeode Monitor                                    - Bug reporting
Product Presentation               alternatives                                  - EVM debug variants
                                                           - debugging                                        - Change submission
                                -  Cuckoo builds                                 - Asserts
                                                           - profiling                                        - Taking new code
                                -  Compiler porting                              - JAB debugger in depth
                                                           - deployment

11:30

Architecture Intro              12:00
                                                                                                              12:00

                                DAC 2 - Glue
                                                                                                              Q&A
                                - Base glue

                                - Host glue
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       33
<PAGE>

<TABLE>
<CAPTION>

------------------------------- -------------------------- ----------------------- -------------------------- ----------------------
LUNCH                           LUNCH                      LUNCH                   LUNCH                      LUNCH

------------------------------- -------------------------- ----------------------- -------------------------- ----------------------
<S>                            <C>                        <C>                     <C>                        <C>

14:00                           14:00                      14:00                   14:00                      14:00

Source Intro                    DAC 3 - GRASP              -  OS Porting           Testing and Certification   Q&A

-  Masterpack overview          -  Introduction to GRASP   -  OSAPI Interface      - strategy

-  Building overview            -  Writing GRASP           -  Porting Jeode        - process
                                   definitions
-  Development environment                                                         - Bytecode Tests
                                -  GRASP test suite
    -  Build system                                                                - TCK
                                                                                   - benchmarking
                                15:30                      16:00

15:30                           Garbage Collector          Graphics - porting AWT
                                - design
    - OSAPI
                                - configuration

------------------------------- -------------------------- ----------------------- -------------------------- ----------------------
</TABLE>

                                       34
<PAGE>

                                   APPENDIX A
                   JEODE SOURCE DEVELOPMENT LICENCE AGREEMENT

                           SOURCE DEVELOPMENT LICENSE
                               (JEODE TECHNOLOGY)

This Source Development License ("SOURCE LICENSE") is entered into this the ____
day of __________________, 2000, ("EFFECTIVE DATE") between Wind River Systems
Inc., a Delaware corporation, with its principal offices at 500 Wind River Way,
Alameda, CA 94501 ("WRS") and ____________________________________, a(n)
____________________________ corporation, with its principal offices at
______________________________________________________________________________
("LICENSEE").

Whereas WRS has entered into certain agreements with its supplier, Insignia
Solutions, Inc. ("INSIGNIA") which gives WRS certain rights and abilities
concerning certain software technology and;

Whereas Licensee desires to receive and use that same software technology;

Therefore the parties hereto agree as follows:

1      DEFINITIONS.

1.1    "DOCUMENTATION" means any and all forms of user materials related to the
       Jeode Technology that WRS makes available to Licensee.

1.2    "ERROR" means any failure of the Jeode Technology to conform in all
       material respects to the Documentation.

1.3    "ERROR CORRECTION" means an action taken, that, whether in the form of a
       modification, addition, procedure, or routine, when taken or observed,
       establishes material conformity to the Documentation therefor or
       eliminates the practical adverse effect of an Error in the regular
       operation of the Jeode Technology.

1.4    "JEODE TECHNOLOGY" means JeodeRuntime plus related software development
       tools marketed by Insignia under the name "Jeode" and as licensed to
       Licensee on the Licensed O/S.

1.5    "JEODERUNTIME" means, in whole or in part, Insignia's proprietary
       implementation of Sun's PersonalJava (pJava) specifications in effect as
       of the Effective Date for the Java virtual machine ("Embedded Virtual
       Machine" or "EVM") plus related embedded class libraries.

1.6    "INTELLECTUAL PROPERTY RIGHTS" means all worldwide statutory and common
       law rights associated solely with (i) patents and patent applications;
       (ii) works of authorship including copyrights, copyright applications,
       copyright registrations and "moral rights"; (iii) the protection of trade
       and industrial secrets and confidential information; and (iv)

                                       35
<PAGE>

divisions, continuations, renewals, and re-issuances of the foregoing now
existing, acquired or devised in the future.

1.7    "LICENSED OPERATING SYSTEM" or "LICENSED O/S" means pJava JeodeRuntime
       ported to the _________________ operating system.

1.8    "PRODUCT" means any finished product that includes in binary form the
       Jeode Technology in whole or in part and is manufactured by or for
       Licensee and/or an OEM and sold, licensed, leased, or otherwise put into
       service by any of the above. A Product must: (i) have a principal purpose
       that is substantially different from that of the Jeode Technology; (ii)
       represent a significant functional and value enhancement to the Jeode
       Technology; and (iii) not be marketed as a technology that replaces or
       substitutes for the Jeode Technology.

1.9    "REFERENCE PLATFORM" means the Jeode Technology as ported to
       the___________ platform.

1.10   "SUN" means Sun Microsystems, Inc., its affiliates and its successors and
       assigns.

1.11   "TECHNOLOGY COMPATIBILITY KIT" or "TCK" means the test programs,
       procedures and/or other requirements, designated by Sun for use in
       verifying compliance of the Jeode Technology.

1.12   "TRADE SECRET" means any scientific or technical information, design,
       process, procedure, formula, or improvement that is commercially valuable
       and secret (in the sense that its confidentiality affords Insignia a
       competitive advantage over its competitors). Trade Secrets include
       (without limitation) any and all forms of computer code, system design
       and specifications, programming sequences, algorithms, flow charts, and
       formats pertaining to the Jeode Technology.

1.13   "UPDATE" means new versions of the Jeode Technology developed by or on
       behalf of Insignia or WRS, which may include Error Corrections and/or
       other modifications, and may be released by WRS from time to time.

2      LICENSE GRANT.

2.1    DELIVERY AND GRANT. Prior to WRS's delivery of the Jeode Technology,
       Licensee must have entered into the appropriate Sun Community Source
       License Agreement. WRS shall deliver the Reference Platform in the
       following format: plus Documentation. WRS grants to Licensee, to the
       extent of Insignia's Intellectual Property Rights, *[a worldwide, /
       within the territory of ____________, a] non-transferable, non-exclusive,
       license to modify, port to different target processor architectures, and
       use, during the Term, the Jeode Technology and any Updates Licensee
       receives pursuant to separate agreement, solely for the purpose of
       researching, developing, maintaining, testing and supporting Product(s).
       The preceding development rights include the right to produce up to ten
       (10) copies of the Jeode Technology in whole or in part for inclusion
       within any prototype(s) for each Product for internal development,
       demonstration, or evaluation purposes.

                                       36
<PAGE>

2.2    RESTRICTIONS.

       2.2.1  Licensee may not modify the Jeode Technology, or any component
              thereof, except as reasonably necessary for the exercise of
              Licensee's porting rights pursuant to Section 2.1.

       2.2.2  Licensee may not port the Jeode Technology to any operating system
              other than the Licensed O/S.

       2.2.3  Licensee may not make any more than one (1) copy of the Jeode
              Technology or Documentation, which copy may be used as a backup
              only.

       2.2.4  Licensee may not, directly or indirectly, reproduce or distribute
              any copies of the Jeode Technology or JeodeRuntime under this
              Source License.

       2.2.5  Licensee may not sublicense or contract with any third party
              regarding the exercise of any rights or obligations contained
              within this Source License.

2.3    OWNERSHIP, LICENSE, AND ASSIGNMENT TO INSIGNIA.

       2.3.1  Licensee Ports. Subject always to Insignia's Intellectual Property
              Rights in the Jeode Technology, Licensee will own all
              porting-related modifications ("Licensee Ports") that Licensee
              makes to the Jeode Technology. Licensee grants to Insignia a
              worldwide, royalty-free, non-exclusive, perpetual, and irrevocable
              license, to the extent of Licensee's Intellectual Property Rights
              covering Licensee Ports, to use, reproduce, modify, display and
              distribute Licensee Ports in any form, including the right to
              sublicense such rights. Licensee agrees to deliver such Licensee
              Ports, if any, to Insignia no later than Licensee's first
              transfer, license, or delivery of such Licensee Port to any third
              party.

       2.3.2  Licensee Modifications. In the event that Licensee modifies the
              Jeode Technology in any manner other than development of a
              Licensee Port (for example, any patches, workarounds, bug fixes or
              other modifications or enhancements ("Licensee Modification(s)")),
              then Licensee shall deliver to WRS: 1) all source code and related
              documentation promptly upon the earlier of a) completion of
              testing of such Licensee Modification, b) internal deployment
              within Licensee, or c) release or delivery to any third party; and
              2) Licensee shall, in a timely manner, take all steps reasonably
              requested by WRS to effect the full and effective assignment of
              ownership of such Licensee Modification to WRS. THIS ASSIGNMENT OF
              OWNERSHIP OF LICENSEE MODIFICATION(S) CONSTITUTES AN ESSENTIAL
              PART OF THIS SOURCE LICENSE. NO USE OF THE JEODE TECHNOLOGY IS
              AUTHORIZED HEREUNDER EXCEPT SUBJECT TO THIS REQUIREMENT.

2.4    WRS Deliverables. To assist Licensee in its exercise of the rights
       granted by this Source License, WRS shall, promptly upon completion of
       this Source License, provide to Licensee one (1) copy of the Jeode
       Technology ported to the *_____________ platform(s) in source code form,
       for use as a reference implementation.

                                       37
<PAGE>

2.5    License Fee. Licensee's rights under this Source License are expressly
       conditioned upon payment in full of the non-refundable development
       license fee associated with this license of the Jeode Technology. The
       license fee in the amount of * _____________________ ($_____________)
       must be paid by Licensee to WRS in advance of WRS's delivery to Licensee
       of the Jeode Technology.

3      LIMITED WARRANTY.

3.1    THE JEODE TECHNOLOGY IS PROVIDED UNDER THIS LICENSE "AS IS", AND WRS
       EXCLUDES TO THE FULL EXTENT ALLOWED BY APPLICABLE LAWS ALL TERMS,
       WARRANTIES, AND CONDITIONS, INCLUDING, WITHOUT LIMITATION, THAT THE JEODE
       TECHNOLOGY IS FREE OF DEFECTS, MERCHANTABLE, SATISFACTORY, OR FIT FOR A
       PARTICULAR PURPOSE. WRS DOES NOT WARRANT THAT THE JEODE TECHNOLOGY WILL
       MEET LICENSEE'S REQUIREMENTS OR THAT ITS USE WILL BE UNINTERRUPTED OR
       ERROR FREE. THIS DISCLAIMER OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF
       THIS LICENSE. NO USE OF THE JEODE TECHNOLOGY IS AUTHORIZED HEREUNDER
       EXCEPT SUBJECT TO THIS DISCLAIMER.

3.2    NOTE ON JAVA TECHNOLOGY. The Jeode Technology contains support for
       programs written in the Java programming language. Java Technology is not
       fault tolerant and is not designed, manufactured, or intended for use or
       resale as on-line control equipment in hazardous environments requiring
       fail-safe performance, such as in the operation of nuclear facilities,
       aircraft navigation or communication systems, air traffic control,
       certain medical devices, or weapons systems, in which the failure of Java
       Technology could lead directly to death, personal injury, or severe
       physical or environmental damage. WRS for itself and its supplier
       disclaims any express or implied warranties for any such use. If Licensee
       uses Jeode Technology and/or JeodeRuntime for such applications, Licensee
       will indemnify and hold harmless WRS and its suppliers from any claims,
       loss, cost, damage, expense, or liability, including attorneys' fees,
       arising out of or in connection with such applications.

4      INTELLECTUAL PROPERTY RIGHTS

4.1    All Intellectual Property Rights in the Jeode Technology and
       Documentation provided hereunder, and any copies of the Jeode Technology
       and Documentation, are owned by WRS or its suppliers. This Source License
       will not affect any other confidential disclosure agreement between the
       parties.

4.2    WRS represents and Licensee hereby acknowledges that the Jeode Technology
       contains substantial Trade Secrets of WRS. These Trade Secrets have been
       entrusted to Licensee for use only as expressly authorized under this
       Source License.

4.3    WRS may exercise all rights as it might have at law or in equity for the
       protection of its Intellectual Property Rights, including an injunction
       enjoining the breach or threatened breach of this Section. Licensee and
       WRS agree that, in the event of legal proceedings, the party with
       judgment against it will be responsible for the reasonable legal fees and
       costs of the other party.

4.4    Licensee's Protective Obligation and WRS Audit Rights. Licensee will use
       commercially reasonable efforts, consistent with the practices and
       procedures under which Licensee protects Licensee's own most valuable
       proprietary information and materials, to protect

                                       38
<PAGE>

       WRS's Intellectual Property Rights in the Jeode Technology and the
       Documentation against any unauthorized or unlawful use, disclosure, or
       copying. WRS has the right, at WRS's expense, to audit Licensee's
       practices and procedures upon reasonable notice to Licensee and at a time
       that is mutually agreeable.

5      CONFIDENTIALITY.

5.1    Confidential Information. "Confidential Information" means any business
       or technical information belonging to WRS or Licensee, that is designated
       by the disclosing party as "confidential" or "proprietary" regardless of
       the form of the disclosure. WRS hereby designates the source code form of
       the Jeode Technology and the terms and conditions of this Source License
       as WRS's Confidential Information.

5.2    Exclusions. Confidential Information shall not include information that:
       (i) is or becomes generally known or available by publication, commercial
       use or otherwise through no fault of the receiving party; (ii) is know to
       the receiving party at the time of disclosure without violation of any
       confidentiality restriction and without any restrictions on the receiving
       party's further use or disclosure; (iii) is independently developed by
       the receiving party; (iv) is received from a third party not under an
       obligation as to disclosure of such information; (v) is permitted for
       release or disclosure to any third party by the written prior consent of
       the disclosing party; or (vi) is furnished to a third party by disclosure
       without imposing similar restrictions on such third party.

5.3    Use and Disclosure Restrictions. For a term of two (2) years from the
       last disclosure of Confidential Information, each party will refrain from
       using the other party's Confidential Information except as permitted
       herein, and will use the same level of care to prevent disclosure of the
       other party's Confidential Information that it uses with its own
       information of similar sensitivity and importance, but in any event will
       not use less than reasonable care to prevent disclosure of the other
       party's Confidential Information. However, each party may disclose
       Confidential Information of the other party: (i) pursuant to the order or
       requirement of a court, administrative agency, or other governmental
       body, provided that the receiving party gives reasonable notice to the
       disclosing party to contest such order or requirement; (ii) on a
       confidential basis to Licensee's parent, subsidiary, and affiliated
       companies; and (iii) on a confidential basis to legal or financial
       advisors.

6      TERM AND TERMINATION.

6.1    Term. Subject to Section 6.2, the term of this Source License shall be
       for a period of *three (3) years, commencing on the Effective Date. Upon
       the natural expiration of the first *three (3) year period ("Term" or
       "Initial Term" as the context provides), this Source License shall
       automatically renew for one (1) year periods ("Term"), unless either
       party provides the other party written notice of its desire not to renew
       at least ninety (90) days prior to the conclusion of the current Term.

6.2    Termination.

       6.2.1  Either party may terminate this Source License, with or without
              cause, upon ninety (90) days' written notice to the other party,
              except during the first three (3) months of the Initial Term
              during which advance written notice of one hundred eighty (180)
              days is required.

                                       39
<PAGE>

       6.2.2  This Source License and the rights granted hereunder will
              terminate automatically if Licensee fails to comply with the terms
              of this Source License and fail to cure such breach within thirty
              (30) days of WRS's notice to Licensee regarding such breach. This
              Source License will terminate immediately as contemplated in
              Section 7.1 or at WRS's discretion upon any action initiated in
              the first instance by Licensee alleging that use or distribution
              of the Jeode Technology i) infringes any Intellectual Property
              Right owned or controlled by Licensee or ii) is in any way
              invalid.

       6.2.3  Upon termination of this Source License, Licensee shall
              immediately discontinue use of the Jeode Technology, this Source
              License and all rights granted hereunder shall cease, and Licensee
              shall return or an authorized officer shall certify the
              destruction of all copies of the Jeode Technology to WRS.

       6.2.4  Survival. The termination of this Source License will not prevent
              the continuation of any other agreement Licensee may have with
              WRS. Provisions in this Source License that should remain in
              effect beyond termination, because of their nature, will survive.
              These provisions include, without limitation, Sections 2.3, 3, 4,
              5, 6.2, 7, 8.4, 8.5, and 8.6.

7      LIABILITY.

7.1    Infringement.

       7.1.1  WRS's Obligation. Should the Jeode Technology or any component of
              the Jeode Technology, as delivered by WRS to Licensee, become the
              subject of an Intellectual Property Right infringement claim, WRS
              may, at its sole option, (i) procure the rights necessary for
              Licensee to continue using the Jeode Technology, (ii) modify the
              Jeode Technology so that it is no longer infringing, or (iii)
              terminate Licensee's right to use the Jeode Technology,
              immediately upon written notice, and refund to Licensee the fees
              that Licensee has paid under this Source License. WRS will have no
              obligation under this Section 7.1 with regard to infringement or
              misappropriation arising out of (i) modifications to the Jeode
              Technology that were not done by WRS; (ii) the development, use or
              distribution of the Products; and (iii) the use of the Jeode
              Technology in combination with hardware or software not provided
              by WRS.

       7.1.2  Licensee's Obligation. Should any Licensee Port or Licensee
              Modification or any component thereof, as delivered by Licensee to
              WRS, become the subject of an Intellectual Property Right
              infringement claim, Licensee must either (i) procure the rights
              necessary for WRS to continue using such port or modification
              without cost to WRS, or (ii) modify the same so that it is no
              longer infringing.

7.2    LIMITATION OF LIABILITY. TO THE FULL EXTENT ALLOWED BY APPLICABLE LAW,
       (i) WRS'S LIABILITY TO LICENSEE FOR CLAIMS RELATING TO THIS SOURCE
       LICENSE AND (ii) LICENSEE'S LIABILITY TO WRS FOR CLAIMS RELATING TO THIS
       SOURCE LICENSE, WHETHER FOR BREACH OR IN TORT, SHALL BE LIMITED TO ONE
       HUNDRED PERCENT (100%) OF THE AMOUNT HAVING THEN ACTUALLY BEEN PAID BY
       LICENSEE TO WRS FOR ALL DEVELOPMENT COPIES LICENSED HEREUNDER,

                                       40
<PAGE>

       IF ANY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
       ANY DAMAGES RELATING TO, RESPECTIVELY, THE JEODE TECHNOLOGY AND LICENSEE
       MODIFICATIONS THAT HAS BEEN MODIFIED BY THE RECEIVING PARTY, TO THE
       EXTENT THAT ANY CLAIMS RELATE TO SUCH MODIFICATION. IN NO EVENT WILL
       EITHER PARTY BE LIABLE FOR ANY INDIRECT, PUNITIVE, SPECIAL, INCIDENTAL OR
       CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS SOURCE
       LICENSE (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, USE, DATA, OR
       OTHER ECONOMIC ADVANTAGE), HOWEVER IT ARISES AND ON ANY THEORY OF
       LIABILITY, WHETHER IN AN ACTION FOR CONTRACT, STRICT LIABILITY OR TORT
       (INCLUDING NEGLIGENCE) OR OTHERWISE, WHETHER OR NOT SUCH PARTY HAS BEEN
       ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE
       OF ESSENTIAL PURPOSE OF ANY REMEDY.

8      MISCELLANEOUS.

8.1    Export/Import Laws. The Jeode Technology is subject to U.S. export
       control laws and may be subject to export or import regulations in other
       countries. Licensee agrees to comply strictly with all such laws and
       regulations and acknowledge that Licensee has the responsibility to
       obtain such licenses to export, re-export, or import as may be required
       after delivery to Licensee.

8.2    Intellectual Property Protection. Because this Source License will be
       providing Licensee with Sun source code, and due to limited intellectual
       property protection and enforcement in certain countries, Licensee agrees
       not to redistribute the Jeode Technology or any component thereof in
       source form to any country that is not on the list of identified
       countries, which list is presently available on the Internet at
       HTTP://WWW.SUN.COM/SOFTWARE/COMMUNITYSOURCE/COUNTRIES.HTML.

8.3    Publicity. Licensee agrees that WRS may use Licensee's name and may
       disclose that Licensee is a licensee of WRS's products in WRS's standard
       advertising, press, promotion and similar public disclosure with respect
       to the Jeode Technology; provided, however that any such public
       disclosure shall not indicate that Licensee in any way endorses any WRS
       product, without prior written permission from Licensee. Licensee agrees
       that, upon Licensee's public announcement of any product designed with or
       containing the WRS products, WRS may publicly disclose the nature of the
       WRS involvement in said project if the parties have not already agreed to
       a joint announcement or press release.

8.4    Assignment. Licensee may not assign this Source License or any of
       Licensee's rights hereunder, (including by way of merger or acquisition
       unless Licensee is the surviving entity) or delegate any of Licensee's
       duties hereunder, without WRS's prior written consent. Any attempted
       assignment in violation of this provision will be void.

8.5    Severability. If any provision of this Source License is held to be
       unenforceable, such provision shall be reformed only to the extent
       necessary to make it enforceable and all other terms shall continue in
       full force and effect.

8.6    Governing Law and Jurisdiction. This Source License is governed by the
       laws of the United States and the State of California, without regard for
       choice of law rules.

                                       41
<PAGE>

8.7    Entire Agreement. This Source License represents the complete agreement
       concerning the subject matter hereof.

       IN WITNESS WHEREOF, the parties have caused this Source License to be
       executed by their authorized representatives as of the Effective Date.

ON BEHALF OF WIND RIVER SYSTEMS, INC.       ON BEHALF OF LICENSEE

By:      ____________________________       By:     ____________________________
                  (Signature)                            (Signature)

Name:    ____________________________       Name:   ____________________________
                   (Printed)                              (Printed)

Title:   ____________________________       Title:  ____________________________

Date:    ____________________________       Date:   ____________________________

                                       42
<PAGE>

                                   APPENDIX B
                                PRODUCT ROAD MAP

                                   [REDACTED]

                                       43
<PAGE>

                                   APPENDIX C
                             SUPPORT AND MAINTENANCE

1      SUPPORT

       (a)    Licensor offers support services that are designed to help
              Licensee's engineers proceed more efficiently during their
              Jeode-based development projects. These services include standard
              product support for the current version of the Jeode technology
              that entitles Licensee's engineers access to the JeodeAssist
              web-based support system facilities. This on-line system is used
              to track all outstanding customer cases, and generally serves as a
              central repository for all issues and their current disposition.

       (b)    Licensor will provide technical support for the standard
              deliverables (described previously) and the NRE and consulting
              services described below, directly to Licensee's engineers, under
              the terms of an active annual maintenance agreement.

       (c)    Licensor will agree to respond to all support cases submitted by
              Licensee using the JeodeAssist web-based support system within
              Licensor's standard response guidelines and time scales (see
              Attachment 1 for details).

       (d)    Licensor will agree to follow its standard escalation process for
              all of Licensee's high priority outstanding support cases that are
              not resolved according to the standard guidelines for resolution.

       (e)    Licensor will provide Licensee access to a monthly support case
              report.

       (f)    Additional extended or special support services are available on a
              case-by-case basis. See the NRE and Consulting section below for
              examples of these services.

2      MAINTENANCE AND UPDATES

       (a)    Licensor offers a maintenance and update service that provides for
              access to any regularly scheduled updates to the standard product
              deliverables (maintenance and update services for any custom NRE
              deliverables is as described in a Statement of Work). These
              updates generally include fixes to product defects and minor
              enhancements to the current version of the Jeode technology. In
              addition, the maintenance service provides a mechanism to provide
              corrections to critical product defects on an as-needed basis.

       (b)    Licensor will use good commercial efforts to fix all critical
              software defects within a reasonable amount of time after they are
              isolated and can be duplicated by Licensor.

       (c)    Licensor will provide Licensee with updates to the standard Jeode
              product when they are generally made publicly available.

       (d)    Licensor will update Licensee with full source code releases on
              their supported reference platforms as soon as they are generally
              made publicly available.

                                       44
<PAGE>

       (e)    Licensor will provide Licensee reasonable access to those portions
              of source code on Licensor's Source Code Control System that are
              relevant to the Jeode technology exclusively optimized for
              Licensee.

3      NRE AND CONSULTING

       (a)    Licensee may request special fee-based engineering services from
              Licensor related to the Jeode technology, including such services
              as; ports of Jeode to other processor architectures, Jeode
              enhancements, non-standard support escalation, direct end customer
              support, on-site support, product integration and testing, or
              application consulting. Upon receipt of such written requests,
              Licensor will respond with a written Statement of Work (SOW)
              describing the work to be completed, estimated amount of
              engineering man days required to complete the work, and a daily
              rate for the requested work. Once both parties agree to the SOW,
              and work has begun, Licensee may submit a written Engineering
              Change Request (ECR) for changes and/or additions to the original
              effort. Licensor will determine what impact the ECR will have on
              the original estimates for the project and provide a new written
              estimate.

       (b)    In addition to other requests, Licensor will respond to Licensee's
              specific future requests for: a) optimizing the Jeode technology
              for Licensee's VxWorks operating system, b) providing extended
              support to Licensee for its creation of new ports of the Jeode
              technology to other processor architectures running on the VxWorks
              operating system, and/or c) Licensor to develop new ports of the
              Jeode technology to other processor architectures.

4      LICENSEE'S RESPONSIBILITIES

       (a)    TECHNICAL LIAISONS

              Licensee will designate up to two (2) of their software engineers
              per Licensee site who will be responsible for logging all support
              cases with Licensor via JeodeAssist, and generally serve as
              technical liaisons for all problem resolution.

       (b)    PROBLEM REPORTING

              (i)    Licensee will register all bug fix and enhancement requests
                     with Licensor directly via their two technical liaisons
                     using the JeodeAssist web-based problem reporting facility.

              (ii)   Licensee will determine the priority of all outstanding
                     support cases.

       (c)    SUPPORTING ITS CUSTOMERS

              Licensee will be responsible for direct support to its customers
              with back-up support provided by Licensor to Licensee's technical
              liaisons.

       (d)    ENGINEERING CHANGE REQUESTS

              Licensee will be responsible for providing all necessary
              information to properly assess any NRE or consulting work
              requested. Licensor will prepare an SOW based on the information
              provided, and any changes to an agreed work statement will require
              a written Engineering Change Request from Licensee. Licensor will

                                       45
<PAGE>

              determine what impact the ECR may have on the original estimates
              for the project.

       (e)    ROYALTY REPORTING AND AUDITS

              Licensee will agree to submit quarterly reports, with payment,
              including customer specific details, for all products shipped
              incorporating Jeode technology during the previous quarter within
              thirty (30) days following the last day of each calendar quarter.
              Licensor will have the right to audit such reports, for proper
              reporting and associated payments.

       (f)    LOANER EQUIPMENT

              If Licensee should require any engineering work, which in
              Licensor's opinion will require the use of equipment from
              Licensee, Licensor will make a reasonable request for the
              necessary equipment to complete and support the work. Licensee
              will agree to provide the equipment specified for use during the
              development and support phase of the project. Licensee will be
              responsible for its proper maintenance, including enhancements and
              updates, as necessary to support Licensor's efforts to complete
              the work.

       (g)    INTEGRATION ASSISTANCE

              Licensor will dispatch a full time engineer to Licensee for forty
              five (45) contiguous days, or for over no more than two (2) time
              periods, to assist Licensee in integrating Jeode with Licensee's
              branded OSes O/Ses and related products.

              Subsequent to this initial integration period(s), said engineer
              will be on call to Licensee for technical assistance & coding for
              an additional forty five (45) days.

              Additional fees may also be required for items such as equipment,
              materials, travel and lodging as necessary to facilitate the
              integration work.

ENGINEERING SUPPORT MODEL FOR SOURCE CUSTOMERS AND WIND RIVER SYSTEMS

1      SOURCE CODE RELEASE POLICY

       (a)    Insignia would only update source customers with a full source
              code release on their supported reference platform when Insignia
              updates and releases its own reference platform release. This is
              typically every 6 to 12 months.

       (b)    Insignia supplies a single platform to source customers as the
              supported reference platform. This release is certified on a
              specific named piece of hardware supplied by the source customer.

       (c)    Support is only provided on the reference platform as described
              above for the current release of Jeode and the previous release.

2      SOURCE CODE CHANGE REQUEST REPORTING (BUGS AND ENHANCEMENT REQUESTS)

       (a)    All bugs and request for enhancements will be registered with
              Insignia via the source customer's support group. This includes
              both bugs and requests for

                                       46
<PAGE>

              enhancements originating from the source customer's development
              team and from the end users.

       (b)    The source customer will nominate 2 engineers from their support
              group who will be responsible for logging support cases with
              Insignia.

       (c)    All support cases will be logged with Insignia via the JeodeAssist
              web based support problem reporting facility.

       (d)    All support cases will be prioritized by the source customer's
              support group according to Insignia's standard support case
              prioritization guidelines as detailed in section 4.

       (e)    The response times for source customer cases will be in accordance
              with Insignia's standard support response timescales as detailed
              in section 4.

       (f)    In the event that a case requires escalation the process will be
              in the following order:

              (i)    The Source Customer to increases the case priority

              (ii)   The Source Customer's support manager contacts Insignia's
                     support manager directly

              (iii)  The Source Customer's senior business manager contacts
                     Insignia's senior business manager

       (g)    Insignia undertakes to provide a monthly support case report for
              major support customers including case statistics and response
              time metrics.

3      THE BUG FIX/DEVELOPMENT ASSISTANCE PROCESS

       The following scenarios are envisaged:

       (a)    Insignia receives a problem report and a proposed fix from the
              source customer:

              (i)    Insignia either accepts a fix and incorporates into
                     Insignia Main development line or issues Insignia `approved
                     fix'. This will go through the Insignia's Java Change
                     Notification (JCN) process

              (ii)   Source code fixes/changes will be identified by a Insignia
                     JCN number

              (iii)  JCN updates will be issued to source code customers for
                     their specific reference platform on a regular basis.

       (b)    Insignia receives a problem report that can be verified on the
              reference platform:

              (i)    Should be verified by the source customer's support group
                     on the reference platform before logging a case with
                     Insignia

              (ii)   Should be submitted with results of verification + test
                     applications

              (iii)  Insignia identifies problem and issues a `test' fix

                                       47
<PAGE>

              (iv)   The `test' fix is verified by the source customer/their
                     customer

              (v)    If the fix is verified Insignia issues a JCN and
                     incorporates change into the main line

       (c)    Insignia receives a bug report that can not be verified on the
              reference platform:

              (i)    In order to obtain support from Insignia the source
                     customer must send Insignia the source code, object code
                     and build environment for the specific platform along with
                     hardware on which the problem can be reproduced. The case
                     details should be submitted with results of verification +
                     test applications.

              (ii)   The source customer will be charged for the support time to
                     resolve the problem at standard Insignia engineering rates.
                     This includes full expenses for on-site customer visits.

4      STANDARD INSIGNIA MAINTENANCE AND SUPPORT GUIDELINES

       (a)    General Classification of Difficulties. Upon Acceptance, the
              source customer shall provide First Level Support to all
              Distributors and End Users. Insignia shall provide support to
              source customers only, and agrees to use reasonable business
              efforts to rectify support cases for the Product when identified,
              classified and reported by the source customer on JeodeAssist web
              based support problem reporting facility:

              Priority Codes (based in customer impact)

              P1 - Critical - the fix is usually a patch or workaround

              P2 - Urgent - the fix is usually a patch or workaround

              P3 - Normal - these bugs normally get fixed in maintenance
              releases or the next major release, only rarely do they get issued
              as patches

              P4 - Low - Address possibly for the next release - could be a
              patch release. Keep these on record in case we want to fix them
              later, or the number of customers reporting on the problem becomes
              significant and we decide to increase the priority.

       (b)    The final classification of Priority Codes for each Software
              Change Request will be mutually agreed among Insignia and the
              source customer.

       (c)    Priority Codes

<TABLE>
<CAPTION>

---------------------------------------- -----------------------------------------------------
          PRIORITY CODES

---------------------------------------- -----------------------------------------------------
     <S>                                  <C>
      LICENSEE CLASSIFICATION              CRITERIA

---------------------------------------- -----------------------------------------------------
P1 Critical                                A `Fatal' or `Showstopper' condition.

----------------------------------------------------------------------------------------------
</TABLE>

                                       48
<PAGE>

<TABLE>
<CAPTION>

<S>                                       <C>
-----------------------------------------------------------------------------------------------
                                           Precludes all useful work from being done, a problem
                                           in critical functionality without a workaround,
                                           emergency condition that causes the end user to be
                                           unable to use the program and that has a critical
                                           impact on such end user's operations.This condition
                                           requires an immediate solution.

---------------------------------------- -----------------------------------------------------
P2 Urgent                                  A `Severe Impact' condition. Precludes one or more
                                           major functions from being performed. A problem in
                                           critical functionality with a workaround, a
                                           condition that severely restricts the End User's
                                           operation but such user can continue to use the
                                           program, or a condition, which makes the
                                           performance of any or  more functions difficult.
                                           This problem cannot be readily circumvented or
                                           avoided on a temporary basis by the End User and
                                           requires a rapid solution.

---------------------------------------- -----------------------------------------------------
P3 Normal                                  A `Degradation' condition. Disables one or
                                           more non-essential functions. Problem in a
                                           non-critical functionality without a
                                           workaround, a limited condition that cannot
                                           be readily circumvented or avoided on a
                                           temporary basis by the End-User.

---------------------------------------- -----------------------------------------------------
P4 Low                                     A `Minimal Impact' condition. Any condition, which
                                           requires rectification and is not classified as P1,
                                           P2, or P3. A problem in a non-critical
                                           functionality  with a workaround, a minor condition
                                           that can be readily circumvented or avoided on a
                                           temporary basis by the End  User. Insignia shall
                                           have no obligation to rectify code modified or
                                           provided by anyone other than Insignia.

---------------------------------------- -----------------------------------------------------
</TABLE>

       (d)    Response to Problem Report. Upon receiving a Problem Report from
              source customer's designated representative(s), Insignia shall
              respond on a reasonable business effort basis as follows:

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
INSIGNIA'S RESPONSE SCHEDULE

-------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                 <C>
Classification                        First Level                         Final Level

------------------------------------- ----------------------------------- -----------------------------------
</TABLE>

                                       49
<PAGE>

<TABLE>
<CAPTION>

<S>                                  <C>                                 <C>
-------------------------------------------------------------------------------------------------------------
P1 Critical                           Continuing effort until relief      Within 90 days
                                      provided

------------------------------------- ----------------------------------- -----------------------------------
P2 Urgent                             10 work days                        100 days

------------------------------------- ----------------------------------- -----------------------------------
P3 Normal                             15 work days                        120 days

------------------------------------- ----------------------------------- -----------------------------------
P4 Low                                30 work days                        180 days

------------------------------------- ----------------------------------- -----------------------------------
</TABLE>

       Insignia's response for each difficulty classification will be:

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
                                               RESPONSE LEVEL

------------------------------------- -----------------------------------------------------------------------
<S>                                  <C>
First Level                           Patch, work around, temporary fix
                                      (where possible) or unofficial update
                                      release.

------------------------------------- -----------------------------------------------------------------------
Final Level                           Official fix, update or major
                                      release (i.e., the revisions have gone
                                      through the standard Insignia Final
                                      release testing procedures).

------------------------------------- -----------------------------------------------------------------------
</TABLE>

       Final level releases will be provided no more that once every six months.

       (e)    Final level Tests. Insignia shall conduct tests on the Final Level
              Response sufficient to demonstrate that each reported difficulty
              has been rectified and that the Product continues to meet the
              Specifications in all material aspects. The results of such tests
              shall be delivered to the source customer along with modified
              source and object code for the Product. The source customer shall
              have thirty (30) business days following receipt of any Final
              Level Response to either notify Insignia of its Acceptance or
              provide Insignia with a written report (including test results and
              test data concerning the problem) specifying any and all
              deficiencies requiring further response by Insignia. Failure by
              source customer to provide any such notice by the end of the
              thirty- (30) business day period shall be construed as Acceptance.

       (f)    Further Response. Within thirty (30) business days of receipt of a
              written report pursuant to Section 4.3, Insignia shall modify the
              Product to rectify any reported deficiencies.

       (g)    Acceptance or Rejection. Within thirty (30) business days
              following receipt of all modifications performed pursuant to
              Section 4.4, the source customer shall either accept or reject the
              modified Product by written notice to Insignia. Failure to give
              such notice by the end of the said thirty- (30) business day
              period shall be construed as Acceptance. In the event of
              rejection, such written notice shall specify all residual
              deficiencies. The source customer will not unreasonably reject
              delivered modifications of the Product.

                                       50
<PAGE>

                                   APPENDIX D
            DISCLOSED RESTRICTIONS, ENCUMBRANCES OVER JEODE SOFTWARE

       Quantum Corporation, as security for a loan to the Licensor, has a
       security interest in all intellectual property of the Licensor. The loan
       is convertible into equity on December 31, 2000 and Quantum has
       informally indicated its intent to convert.

                                       51
<PAGE>

                                   APPENDIX E
                               PROFORMA LEAD SHEET

Date:

Source:

Company:

Address:

City:

State:

ZIP:

Country:

Contact:

Telephone:

E-mail:

Comments:

                                       52
<PAGE>

                                   APPENDIX F

                      EXAMPLE OF FEE ACCRUALS AND PAYMENTS

<TABLE>
<CAPTION>

                    TRANSACTIONAL FEES     MINIMUM QUARTERLY FEES          Actual Payment      Credit Accrual               Total

               for Quarter (estimated)                                        to Licensor         For Quarter     Accrued Credits
           ----------------------------------------------------------------------------------------------------------------------
  <S>                      <C>                            <C>                     <C>                 <C>                  <C>
   Quarter 1                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX

   Quarter 2                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX

   Quarter 3                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX

   Quarter 4                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX

   Quarter 5                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX

   Quarter 6                $XXXX                          $XXXX                   $XXXX               $XXXX                $XXXX
</TABLE>

                                       53<PAGE>

                              EMPLOYMENT AGREEMENT

This agreement made as of the 1st day of  November, 2000

BETWEEN:

                              THE LOEWEN GROUP INC.

                                                                 (the "Company")

                                      -And-

                                  JOHN S. LACEY

                                                                (the "Chairman")

WHEREAS:

         The Company is engaged in the operation of funeral homes and cemeteries
         in Canada, the United States and England;

         The Company and the Chairman have previously (on October 21, 1999)
         entered into a short-term agreement providing for the services of the
         Chairman (the "October Agreement"); and

         The Company and the Chairman wish to enter into a new agreement which
         will provide the Chairman with an incentive to continue in his position
         as Chairman of the Company for a longer term than contemplated by the
         October Agreement.

IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:

DEFINITIONS

1.       "CHANGE IN CONTROL" means any one of the following events that occurs
         during the term of this Agreement other than pursuant to a plan of
         reorganization submitted by the Company and confirmed by the Bankruptcy
         Court:

         a)       the acquisition by any individual, entity or group (a
                  "Person") of beneficial ownership of 30% or more of the
                  combined voting power of the then outstanding Voting Stock (as
                  defined below) of the Company; provided, however, that the
                  following acquisitions will not constitute a Change in
                  Control: (1) any issuance of Voting Stock of the Company
                  directly from the Company that is approved by the Incumbent
                  Board (as defined below), (2) any acquisition by the Company
                  of Voting Stock of the Company, (3) any acquisition of Voting
                  Stock of the Company by any employee benefit plan (or related
                  trust) sponsored or maintained by the Company or any
                  subsidiary of the Company, or (4) any acquisition of Voting
                  Stock of the Company by any Person pursuant to a Business
                  Combination (as defined below) that would not constitute a
                  Change in Control;

         b)       the consummation of a reorganization, amalgamation, merger or
                  consolidation, a sale or other disposition of all or
                  substantially all of the assets of the Company, or other
                  transaction (each, a "Business Combination") in which all or
                  substantially all of the individuals and entities who were

<PAGE>

                  the beneficial owners of Voting Stock of the Company
                  immediately prior to such Business Combination beneficially
                  own, directly or indirectly, immediately following such
                  Business Combination less than 40% of the combined voting
                  power of the then outstanding shares of Voting Stock of the
                  entity resulting from such Business Combination;

         c)       individuals who, as of the effective date of the plan of
                  reorganization confirmed by the Bankruptcy Court, constitute
                  the Board of Directors of the Company (the "Incumbent Board")
                  cease for any reason to constitute at least a majority of the
                  Board; provided, however, that any individual becoming a
                  Director subsequent to such effective date whose election, or
                  nomination for election by the Company's shareholders, was
                  approved by a vote of at least two-thirds of the Directors
                  then comprising the Incumbent Board (either by a specific vote
                  or by approval of the proxy statement of the Company in which
                  such person is named as a nominee for director, without
                  objection to such nomination) will be deemed to have been a
                  member of the Incumbent Board, but excluding, for this
                  purpose, any such individual whose initial assumption of
                  office occurs as a result of an actual or threatened election
                  contest with respect to the election or removal of Directors
                  or other actual or threatened solicitation of proxies or
                  consents by or on behalf of a Person other than the Board; or

         d)       the approval by the shareholders of the Company of a complete
                  liquidation or dissolution of the Company, except pursuant to
                  a Business Combination that would not constitute a Change in
                  Control.

2.       "JUST CAUSE" means wilful misconduct or wilful neglect of duty by the
         Chairman, including, but not limited to, intentional wrongful
         disclosure of confidential or proprietary information of the Company or
         any of its subsidiaries; intentional wrongful engagement in any
         competitive activity prohibited by paragraph 21; and the intentional
         material breach of any provision of this Agreement.

3.       "STATED GOOD REASON" means the occurrence, other than pursuant to a
         plan of reorganization confirmed by the Bankruptcy Court, of one or
         more of the following events (regardless of whether any other reason,
         other than Just Cause, exists for the termination of Chairman's
         employment):

         a)       the geographic relocation by more than 25 miles of the
                  Chairman's principal work location, excluding, however, the
                  relocation of the Company's principal executive offices in
                  connection with a plan of reorganization confirmed by the
                  Bankruptcy Court;

         b)       any material reduction in the Chairman's job duties or
                  responsibilities;

         c)       any material reduction in the Chairman's level of compensation
                  or benefits;

         d)       any adverse change to the Chairman's title or function;

         e)       any change in the organizational reporting relationship
                  between the Chairman and the Board of Directors;

         f)       harassment; or

         g)       any circumstance in which the Chairman was induced by the
                  actions of the Company to terminate his employment other than
                  on a purely voluntary basis.

4.       "TERMINATION WITHOUT JUST CAUSE" includes, but is not limited to, any
         unilateral change in the material terms and conditions of the
         Chairman's employment.

5.       "VOTING STOCK" means securities entitled to vote generally in the
         election of directors.

                                       2

<PAGE>

ENTIRE AGREEMENT

6.       The Chairman and the Company agree that this Agreement represents the
         entire employment agreement between the parties and that any and all
         prior agreements, written or verbal, express or implied, between the
         parties relating to or in any way connected with the employment of the
         Chairman by the Company or any related, associated, affiliated,
         predecessor or parent corporations are declared null and void and are
         superseded by the terms of this Agreement. There are no
         representations, warranties, forms, conditions, undertaking, or
         collateral agreements, express, implied or statutory between the
         parties other than as expressly set forth in this Agreement. No waiver
         or modification of this Agreement shall be valid unless in writing and
         duly executed by both the Company and the Chairman.

EMPLOYMENT

7.       The Company and the Chairman agree that the Chairman shall commence
         employment with the Company on the effective date of the Company's Plan
         of Reorganization (the "Employment Date"), such employment to be for a
         fixed term ending August 1, 2004. As used in this Agreement, the phrase
         "term of this Agreement" means the period ending on the earlier of
         August 1, 2004, or the effective date of the termination of Chairman's
         employment. Prior to the Employment Date, the Company shall pay fees
         for the services of the Chairman pursuant to clause 3 ("Base Fees") of
         the October Agreement.

8.       The Chairman agrees that he will at all times faithfully,
         industriously, and to the best of his skill, ability, and talents,
         perform all of the duties required of his position in a manner which is
         in the best interests of the Company and in accordance with the
         Company's objectives.

COMPENSATION

9.       a)       Commencing from the Employment Date, the Chairman will
                  receive a base salary of $500,000 U.S. per annum which amount
                  of such shall be subject to review and improvement on a
                  periodic basis in accordance with Company practice, but in no
                  event shall such amount be reduced. The Chairman's base salary
                  is payable in accordance with the Company's customary payroll
                  practices and is subject to deductions required by applicable
                  law.

         b)       The Company shall reimburse the Chairman for all reasonable
                  expenses incurred by the Chairman during the term of this
                  Agreement in the course of the Chairman performing his duties
                  under this Agreement. These reimbursements shall be consistent
                  with the Company's policies in effect from time to time with
                  respect to travel, entertainment and other reimbursable
                  business expenses, subject to the Company's requirements
                  applicable generally with respect to reporting and
                  documentation of such expenses.

SHORT TERM INCENTIVE PLAN - ANNUAL BONUS

10.      The Chairman will be entitled to participate in a short term incentive
         plan as adopted by the Company from time to time, subject to a maximum
         of 100% of the Chairman's annual base salary, less deductions required
         by applicable law. The bonus payable under such plan will be paid in
         full within 90 days after the end of each year. With the exception of
         the bonus that becomes payable under paragraphs 14, 15 or 16, the
         Chairman's entitlement to a bonus under the short term incentive plan
         will be based entirely on the financial performance of the Company as
         determined under the terms of such incentive plan. Prior to the
         Employment Date, Doncaster Consolidated Ltd. will be entitled to short
         term incentive bonuses pursuant to the Corporate Incentive Plan of the
         Company's Key Employee Retention Program, and the October Agreement.

11.      The short term incentive plan bonus is subject to the following
         conditions and exceptions:

         a)       In order to qualify for and receive the annual bonus, the
                  Chairman must be employed by the Company or its successor at
                  the time the bonus is paid unless the Chairman is terminated
                  without

                                       3

<PAGE>

                  Just Cause or the Chairman resigns in compliance with
                  paragraphs 15 or 16. If the Chairman's employment is
                  terminated without Just Cause or the Chairman resigns in
                  compliance with paragraphs 15 or 16 after the end of the year
                  but before the bonus amount is paid, the Chairman shall
                  receive the bonus for that completed year calculated in
                  accordance with terms of the short term incentive plan. The
                  payment shall be made by the Company within seven days of the
                  termination or resignation and will be subject to deductions
                  required by applicable law. If the bonus amount has not been
                  determined within seven days of the termination or resignation
                  it will be paid in full within 90 days of the subject year
                  end.

         b)       If, before the end of a year, the Chairman's employment is
                  terminated by the Company or its successor without Just Cause
                  or the Chairman resigns in compliance with paragraphs 15 or
                  16, the bonus which the Chairman will be entitled to receive
                  under paragraphs 14, 15 or 16 for that year will be equal to
                  the bonus that would have been paid for the full year based
                  upon a bonus level equal to 100% of the Chairman's base salary
                  without regard to the financial performance of the Company,
                  but will be prorated on the basis of the number of days in the
                  year up to and including the date of termination.

STOCK OPTION PLAN

12.      The Chairman is eligible for participation in the Company's stock
         option plan or plans. Twenty percent of the pool of stock options
         granted to management employees pursuant to such plan or plans within
         180 days of the effective date of the plan of reorganization confirmed
         by the Bankruptcy Court will be granted to the Chairman, with a vesting
         period of 3 years (25% 1ST year, 25% 2ND year, and 50% 3rd year), it
         being understood that all such options granted to the Chairman will
         vest prior to August 1, 2004. Further grants of stock options shall be
         as determined by the Board of Directors of the reorganized company.

BENEFITS

13.      The Chairman will continue to participate in the following benefit
         plans:

         a)       GROUP BENEFITS

                  The Chairman will participate in the Company's Group Benefit
                  Plan and any other group perquisites all as in effect from
                  time to time.

         b)       VEHICLE ALLOWANCE

                  The Chairman will be entitled to a vehicle allowance of
                  $1,000.00 U.S. per month plus auto insurance and operating
                  expense coverage for the term of this Agreement.

         c)       FINANCIAL PLANNING

                  The Chairman will be entitled to the amount of $10,000.00.
                  U.S. per year for the purposes of obtaining financial and
                  retirement planning services, expenses and advice for the term
                  of this Agreement, as directed by the Chairman.

         d)       CLUB MEMBERSHIP

                  The Chairman will be entitled to the amount of $2,500.00 U.S.
                  per year for club memberships as directed by the Chairman.

TERMINATION OF EMPLOYMENT

14.      The parties agree that the Chairman's employment under this Agreement
         may be terminated as follows:

                                       4

<PAGE>

         a)       by the Company, in writing, without notice of termination or
                  pay in lieu thereof, for Just Cause; or,

         b)       by the Company, in writing, at its sole discretion and for any
                  reason other than Just Cause upon payment to the Chairman in a
                  lump sum, within seven days of such termination, of an amount
                  equal to:

                  i)       24 months' base salary;

                  ii)      the replacement value of all Chairman's benefit
                           coverage, including the full vesting of all stock
                           options granted to the Chairman, exercised or not,
                           and all monies due from the Registered Retirement
                           Savings Plan, following the date of the Chairman's
                           termination (such benefit coverage being calculated
                           over 24 months following resignation or termination);

                  iii)     the amount of any unpaid bonus earned by the Chairman
                           up to and including the date of termination
                           calculated in accordance with paragraph 11. Such
                           bonus shall be payable regardless of the financial
                           performance of the Company; and

                  iv)      the amount of any unpaid salary or vacation earned by
                           the Chairman up to and including the date of
                           termination.

Payments identified in sub-paragraphs (i) - (iv) will be subject to deductions
required by applicable law.

CHANGE IN CONTROL

15.      If a Change in Control occurs and, within two years of the effective
         date of the Change in Control, the Company, in writing, terminates the
         Chairman without Just Cause or the Chairman submits a written
         resignation for Stated Good Reason to the Board of Directors of the
         Company, the Company shall, within seven days of the date of
         resignation or termination, pay to the Chairman in a lump sum the
         following payments:

                  i)       24 months' base salary;

                  ii)      the replacement value of all Chairman's benefit
                           coverage, including the full vesting of all stock
                           options granted to the Chairman, exercised or not,
                           and all monies due from the Registered Retirement
                           Savings Plan, following the date of the Chairman's
                           termination termination (such benefit coverage being
                           calculated over 24 months following resignation or
                           termination);

                  iii)     the amount of any unpaid bonus earned by the Chairman
                           up to and including the date of termination
                           calculated in accordance with paragraph 11. Such
                           bonus will be payable regardless of the financial
                           performance of the Company; and

                  iv)      the amount of any unpaid salary or vacation earned by
                           the Chairman up to and including the date of
                           resignation or termination.

Payments identified in sub-paragraphs (i) - (iv) will be subject to deductions
required by applicable law.

VOLUNTARY RESIGNATION DUE TO CHANGE IN CONTROL

16.      In the event that an agreement is reached which would result in a
         Change of Control, but the Change of Control has not yet occurred, the
         Chairman can, for any reason, submit his resignation in writing to the
         Company prior to the effective date of the Change in Control. Any such
         resignation will be effective as of the date of the Change in Control,
         and the Chairman shall continue to work for the Company up until that

                                       5

<PAGE>

         date. Further, if the Chairman resigns in these circumstances and
         continues to work for the Company until the effective date of Change in
         Control, then on the effective date of the Change in Control the
         Company shall pay to the Chairman a lump sum amount equal to the
         payments prescribed under paragraph 15 (i) - (iv). In the event that
         the Change in Control does not occur, the Chairman shall not be
         entitled to the payments prescribed under paragraph 15 (i) - (iv), and
         the resignation shall be deemed to not have been tendered.

17.      Immediately prior to the effective date of a Change in Control, the
         Company shall allow the Chairman to exercise all stock options or share
         appreciation rights, whether vested or not, granted to the Chairman
         including shares with respect to which such options would not otherwise
         be exercisable. The Chairman shall be entitled to receive all dividends
         declared and paid by the Company upon a Change of Control on the shares
         received by the Chairman following the exercise of the Chairman's stock
         options or share appreciation rights.

CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

18.      In the event that it is determined (as hereinafter provided) that any
         payment (other than the Gross-Up Payments provided for in this
         paragraph 18 and Annex A) or distribution by the Company or any of its
         affiliates to or for the benefit of the Chairman, whether paid or
         payable or distributed or distributable pursuant to the terms of this
         Agreement or otherwise pursuant to or by reason of any other agreement,
         policy, plan, program or arrangement, including without limitation the
         lapse or termination of any restriction on the vesting or
         exercisability of any benefit under any of the foregoing (a "Payment"),
         would be subject to the excise tax imposed by Section 4999 of the
         United States Internal Revenue Code of 1986, as amended (the "Code")
         (or any successor provision thereto), by reason of being considered
         "contingent on a change in ownership or control" of the Company, within
         the meaning of Section 280G of the Code (or any successor provision
         thereto) or to any similar tax imposed by U. S. state or local law, or
         any interest or penalties with respect to such tax (such tax or taxes,
         together with any such interest and penalties, being hereafter
         collectively referred to as the "Excise Tax"), then the Chairman will
         be entitled to receive an additional payment or payments (collectively,
         a "Gross-Up Payment"). The Gross-Up Payment will be in an amount such
         that, after payment by the Chairman of all U. S. taxes (including any
         interest or penalties imposed with respect to such taxes), including
         any Excise Tax imposed upon the Gross-Up Payment, the Chairman retains
         an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
         the Payment. For purposes of determining the amount of the Gross-Up
         Payment, the Chairman will be considered to pay any applicable U. S.
         federal, state and local income taxes at the highest rate applicable to
         the Chairman in effect in the year in which the Gross-Up Payment will
         be made, net of the maximum reduction in U. S. federal income tax that
         could be obtained from deduction of such state and local taxes.

19.      The obligations set forth in paragraph 18 will be subject to the
         procedural provisions described in Annex A.

CONFIDENTIAL INFORMATION; COMPETITIVE ACTIVITY

20.      a)       The Chairman agrees that he will not, without the prior
                  written consent of the Company, during the term of this
                  Agreement or at any time thereafter, disclose to any person
                  not employed by the Company, or use in connection with
                  engaging in competition with the Company, any confidential or
                  proprietary information of the Company. For purposes of this
                  Agreement, the term "confidential or proprietary information"
                  includes all information of any nature and in any form that is
                  owned by the Company and that is not publicly available (other
                  than by Chairman's breach of this paragraph 20) or generally
                  known to persons engaged in businesses similar or related to
                  those of the Company. Confidential or proprietary information
                  will include, without limitation, the Company's financial
                  matters, customers, employees, industry contracts, strategic
                  business plans, product development (or other proprietary
                  product data), marketing plans, and all other secrets and all
                  other information of a confidential or proprietary nature. For
                  purposes of the preceding two sentences, the term "Company"
                  will also include any subsidiary of the Company. The foregoing
                  obligations imposed by this paragraph 20 will not apply (i)
                  during the Term, in the course of the business of and for the
                  benefit of the Company, (ii) if such confidential or
                  proprietary information has become, through no fault of the
                  Chairman, generally known to the

                                       6

<PAGE>

                  public or (iii) if the Chairman is required by law to make
                  disclosure (after giving the Company notice and an opportunity
                  to contest such requirement).

         b)       The Chairman agrees that, upon termination of this Agreement
                  for any reason, the Chairman will return to the Company, in
                  good condition, all property of the Company in his possession
                  or under his control.

21.      In addition, during the term of this Agreement and for a period of 12
         months thereafter, the Chairman will not, without the prior written
         consent of the Company, which consent will not be unreasonably
         withheld:

         a)       Engage in any Competitive Activity. For purposes of this
                  Agreement, "Competitive Activity" means the Chairman's
                  participation in the management of any business enterprise if
                  such enterprise engages in substantial and direct competition
                  with the Company and such enterprise's sales of any product or
                  service competitive with any product or service of the Company
                  amounted to 10% of such enterprise's net sales for its most
                  recently completed fiscal year and if the Company's net sales
                  of said product or service amounted to 10% of the Company's
                  net sales for its most recently completed fiscal year.
                  "Competitive Activity" will not include (i) the mere ownership
                  of securities in any such enterprise and the exercise of
                  rights appurtenant thereto or (ii) participation in the
                  management of any such enterprise other than in connection
                  with the competitive operations of such enterprise.

         b)       On behalf of the Chairman or on behalf of any person, firm or
                  company, directly or indirectly, attempt to influence,
                  persuade or induce, or assist any other person in so
                  persuading or inducing, any employee of the Company or any of
                  its subsidiaries to give up, or to not commence, employment or
                  a business relationship with the Company or any of its
                  subsidiaries.

22.      a)       The Chairman and the Company agree that the covenants
                  contained in paragraphs 20 and 21 are reasonable under the
                  circumstances, and further agree that if in the opinion of any
                  court of competent jurisdiction any such covenant is not
                  reasonable in any respect, such court will have the right,
                  power and authority to excise or modify any provision or
                  provisions of such covenants as to the court will appear not
                  reasonable and to enforce the remainder of the covenants as so
                  amended. The Chairman acknowledges and agrees that the remedy
                  at law available to the Company for breach of any of his
                  obligations under this paragraph 22 would be inadequate and
                  that damages flowing from such a breach may not readily be
                  susceptible to being measured in monetary terms. Accordingly,
                  the Chairman acknowledges, consents and agrees that, in
                  addition to any other rights or remedies that the Company may
                  have at law, in equity or under this Agreement, upon adequate
                  proof of his violation of any such provision of this
                  Agreement, the Company will be entitled to immediate
                  injunctive relief and may obtain a temporary order restraining
                  any threatened or further breach, without the necessity of
                  proof of actual damage.

         b)       During the term of this Agreement, the Chairman will not serve
                  as Chairman or employee of, nor consultant to, any other
                  company or business without the prior express approval of:

                  (i)      the Creditors' Committee of the Company, prior to the
                           effective date of the confirmed Plan of
                           Reorganization of the Company; or

                  (ii)     a majority of the independent Directors of the
                           Company, after the effective date of the confirmed
                           Plan of Reorganization of the Company.

                  The provisions of this paragraph 22 (b) are in addition to,
                  and in no way derogate from, any and all other provisions of
                  this Agreement.

                                       7

<PAGE>

GENERAL

23.      The parties confirm that the provisions of this Agreement are fair and
         reasonable and that the total compensation and benefits payable under
         paragraphs 14, 15 or 16 are reasonable estimates of the damages which
         would be suffered by the Chairman. Any amount paid under paragraphs 14,
         15 or 16 shall be in full satisfaction of all claims whatsoever
         relating to the Chairman's employment or for the termination of the
         Chairman's employment, including claims for salary, bonus, benefits,
         vacation pay, termination pay and/or severance pay pursuant to the
         Ontario EMPLOYMENT STANDARDS ACT, as amended, including sections 57 and
         58 thereof.

24.      Any payment made to the Chairman under paragraphs 14, 15 or 16 of this
         Agreement shall be paid to the Chairman by the Company regardless of
         any offer of alternate employment made to the Chairman by the Company
         or by any other prospective employer, whether accepted by the Chairman
         or not. The Chairman will not be required to mitigate any damages
         arising from this Agreement and any amounts and benefits to be provided
         to the Chairman hereunder shall not be reduced or set off against any
         amounts earned by the Chairman from alternate employment, including
         self-employment, or by other means.

25.      Any payment other than for base salary made to the Chairman under this
         Agreement shall be made by way of a lump sum payment or, at the
         Chairman's option, in such other manner as he may direct, less
         deductions required by applicable law.

26.      Where the context requires, the singular shall include the plural and
         the plural shall include the singular. Masculine pronouns shall be
         deemed to be read as feminine pronouns and VICE VERSA. Words importing
         persons shall include individuals, partnerships, associations, trusts,
         unincorporated organizations and corporations and VICE VERSA.

27.      The division of this Agreement into paragraphs and the insertion of
         headings are for the convenience of reference only and shall not affect
         the construction or interpretation of this Agreement. The terms "this
         Agreement", "hereof", "hereunder" and similar expressions refer to this
         Agreement only and not to any particular paragraph and include any
         agreement or instrument supplemental or ancillary to the Agreement.
         References herein to paragraphs are to paragraphs of this Agreement
         unless something in the subject matter or context is inconsistent
         therewith.

28.      All dollar amounts identified in this contract are in U.S. $ currency.

29.      The parties' respective rights and obligations under paragraphs 21, 22,
         33 and 34 will survive any termination or expiration of this Agreement
         or the termination of the Chairman's employment for any reason
         whatsoever.

GOVERNING LAWS

30.      This Agreement shall be governed by the laws of the Province of
         Ontario.

SEVERABILITY

31.      All terms and covenants contained in this Agreement are severable and
         in the event that any of them is held to be invalid by any competent
         court in the Province of Ontario, the invalid provision shall be
         deleted and the balance of this Agreement shall be interpreted as if
         such invalid clause or covenant were not contained herein.

CONTINUITY

32.      a)       This Agreement shall be binding upon and enure to the benefit
                  of (i) the Chairman and his heirs, executors, administrators
                  and legal representatives and (ii) the Company, its related
                  corporations, affiliates, and associates, and any other entity
                  or organization which shall succeed to substantially

                                       8

<PAGE>

                  all or any distinct portion of the business, divisions or
                  property of the Company or its related corporations,
                  affiliates, and associates, whether by means of amalgamation,
                  merger, consolidation, acquisition, and/or sale of all or part
                  of the shares or assets of the Company or otherwise, including
                  by operation of law or by succession to the business of the
                  Company pursuant to a Plan of Reorganization approved by the
                  Bankruptcy Court. In addition, the Company will require any
                  such successor expressly to assume and agree, by written
                  agreement, to perform this Agreement in the same manner and to
                  the same extent the Company would be required to perform if no
                  such succession had taken place.

         b)       If the Chairman should die while any amount would still be
                  payable to the Chairman hereunder if the Chairman had
                  continued to live, all such amounts, unless otherwise provided
                  herein, shall be paid in accordance with the terms of this
                  Agreement to the devisee, legatee or other designee of the
                  Chairman or, if there is no such designee, to the estate of
                  the Chairman.

LEGAL ADVICE

33.      The Chairman acknowledges that he has obtained or has had an
         opportunity to obtain independent legal advice in connection with this
         Agreement, and further acknowledges that he has read, understands, and
         agrees to be bound by all of the terms and conditions contained herein.

34.      The Company agrees to reimburse the Chairman for all reasonable legal
         expenses incurred in connection with any dispute involving the
         Chairman, the Company, its related corporations, affiliates,
         successors, or assigns, or any other third party, as between any of
         them, arising from the validity, interpretation, or enforcement of this
         Agreement or any of its terms, including all reasonable legal expenses
         incurred by the Chairman in respect of any action or actions commenced
         by the Chairman to obtain, enforce, or retain any right, benefit or
         payment provided for in this Agreement regardless of whether such
         expenses are incurred during the term of this Agreement or after;
         provided that, in regard to such matters, the Chairman has not acted in
         bad faith or with no colorable claim of success. However, the Company
         shall not be required to reimburse the Chairman for any legal costs or
         expenses in relation to any action commenced by the Company to enforce
         the confidentiality and non-competition provisions hereof and in
         respect of which in a court of competent jurisdiction the Company is
         the prevailing party for either preliminary or final remedy.

NOTICE

35.      Any demand, notice or other communication to be given in connection
         with this Agreement shall be given in writing by personal delivery, by
         registered mail or by electronic means of communication addressed to
         the recipient as follows:

         TO THE CHAIRMAN:

         John S. Lacey
         18 Concorde Place, P.H. #7
         Don Mills, Ontario N3C 3T9

         TO THE COMPANY:

         The Loewen Group Inc.
         11th Floor
         2225 Sheppard Avenue East
         Toronto, Ontario   M2J 5B5

         Attention: Senior Vice-President, Legal & Asset Management

         WITH A COPY TO:

                                       9

<PAGE>

         The Loewen Group Inc.
         311 Elm Street
         Suite 1000, First Floor
         Cincinnati, OH  45202

         Attention: Senior Vice-President, Legal & Asset Management
         or such other address, individual or electronic communication as may be
         designated by notice given by either party to the other.

ADDITIONAL

36.      The failure of a party to insist upon strict adherence to any term of
         this Agreement on any occasion shall not be considered a waiver of such
         party's rights or deprive such party of the right thereafter to insist
         upon strict adherence to that term or any other term of this Agreement.

37.      This Agreement shall be effective only upon the concurrent execution of
         two agreements as follows:

         (i)      execution of this Employment Agreement by the Chairman
                  following execution by the Company; and concurrently

         (ii)     execution of an "Amending Agreement" by the Chairman following
                  execution by the Company and Doncaster Consolidated Ltd. and
                  Doncaster Racing Ltd.

                                                                    ...CONTINUED

                                      10

<PAGE>

IN WITNESS WHEREOF the Chairman has hereunto set his hand and the parties
corporate have affixed hereto their corporate seals attested by the hand of
their duly authorized officers as of the date set forth on the first page of
this Agreement.

                                          THE LOEWEN GROUP INC.

                                          Per:
                                              --------------------------------

                                          Per:
                                              --------------------------------
                                              CHAIRMAN, COMPENSATION COMMITTEE

WITNESS:

-------------------------------------         --------------------------------
                                                        JOHN. S. LACEY

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                                     ANNEX A

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

1.       Subject to the provisions of paragraph 5 of this Annex, all
         determinations required to be made under paragraph 18 of this Agreement
         and this Annex A, including whether an Excise Tax is payable by the
         Chairman and the amount of such Excise Tax and whether a Gross-Up
         Payment is required to be paid by the Company to the Chairman and the
         amount of such Gross-Up Payment, if any, will be made by a U. S.
         nationally recognized accounting firm (the "National Firm") selected by
         the Chairman in his sole discretion. The Chairman will direct the
         National Firm to submit its determination and detailed supporting
         calculations to both the Company and the Chairman within 30 calendar
         days after the date of his termination of employment, if applicable,
         and any such other time or times as may be requested by the Company or
         the Chairman. If the National Firm determines that any Excise Tax is
         payable by the Chairman, the Company will pay the required Gross-Up
         Payment to the Chairman within five business days after receipt of such
         determination and calculations with respect to any Payment to the
         Chairman. If the National Firm determines that no Excise Tax is payable
         by the Chairman with respect to any material benefit or amount (or
         portion thereof), it will, at the same time as it makes such
         determination, furnish the Company and the Chairman with an opinion
         that the Chairman has substantial authority not to report any Excise
         Tax on his U. S. federal, state or local income or other tax return
         with respect to such benefit or amount. As a result of the uncertainty
         in the application of Section 4999 of the Code and the possibility of
         similar uncertainty regarding applicable U. S. state or local tax law
         at the time of any determination by the National Firm hereunder, it is
         possible that Gross-Up Payments that will not have been made by the
         Company should have been made (an "Underpayment"), consistent with the
         calculations required to be made hereunder. In the event that the
         Company exhausts or fails to pursue its remedies pursuant to paragraph
         5 of this Annex and the Chairman thereafter is required to make a
         payment of any Excise Tax, the Chairman will direct the National Firm
         to determine the amount of the Underpayment that has occurred and to
         submit its determination and detailed supporting calculations to both
         the Company and the Chairman as promptly as possible. Any such
         Underpayment will be promptly paid by the Company to, or for the
         benefit of, the Chairman within five business days after receipt of
         such determination and calculations.

2.       The Company and the Chairman will each provide the National Firm access
         to and copies of any books, records and documents in the possession of
         the Company or the Chairman, as the case may be, reasonably requested
         by the National Firm, and otherwise cooperate with the National Firm in
         connection with the preparation and issuance of the determinations and
         calculations contemplated by paragraph 1 of this Annex. Any
         determination by the National Firm as to the amount of the Gross-Up
         Payment will be binding upon the Company and the Chairman.

3.       The U. S. federal, state and local income or other tax returns filed by
         the Chairman will be prepared and filed on a consistent basis with the
         determination of the National Firm with respect to the Excise Tax
         payable by the Chairman. The Chairman will report and make proper
         payment of the amount of any Excise Tax, and at the request of the
         Company, provide to the Company true and correct copies (with any
         amendments) of his federal income tax return as filed with the U. S.
         Internal Revenue Service and corresponding state and local tax returns,
         if relevant, as filed with the applicable taxing authority, and such
         other documents reasonably requested by the Company, evidencing such
         payment. If prior to the filing of the Chairman's federal income tax
         return, or corresponding state or local tax return, if relevant, the
         National Firm determines that the amount of the Gross-Up Payment should
         be reduced, the Chairman will within five business days pay to the
         Company the amount of such reduction.

4.       The fees and expenses of the National Firm for its services in
         connection with the determinations and calculations contemplated by
         paragraph 1 of this Annex will be borne by the Company. If such fees
         and expenses are initially paid by the Chairman, the Company will
         reimburse the Chairman the full amount of such fees and expenses within
         five business days after receipt from the Chairman of a statement
         therefor and reasonable evidence of his payment thereof.

5.       The Chairman will notify the Company in writing of any claim by the U.
         S. Internal Revenue Service or any other U. S. taxing authority that,
         if successful, would require the payment by the Company of a Gross-

                                      A-1

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         Up Payment. Such notification will be given as promptly as practicable
         but no later than 10 business days after the Chairman actually receives
         notice of such claim and the Chairman will further apprise the Company
         of the nature of such claim and the date on which such claim is
         requested to be paid (in each case, to the extent known by the
         Chairman). The Chairman will not pay such claim prior to the expiration
         of the 30-calendar-day period following the date on which he gives such
         notice to the Company or, if earlier, the date that any payment of
         amount with respect to such claim is due. If the Company notifies the
         Chairman in writing prior to the expiration of such period that it
         desires to contest such claim, the Chairman will:

                           (A) provide the Company with any written records or
         documents in his possession relating to such claim reasonably requested
         by the Company;

                           (B) take such action in connection with contesting
         such claim as the Company reasonably requests in writing from time to
         time, including without limitation accepting legal representation with
         respect to such claim by an attorney competent in respect of the
         subject matter and reasonably selected by the Company;

                           (C) cooperate with the Company in good faith in order
         effectively to contest such claim; and

                           (D) permit the Company to participate in any
         proceedings relating to such claim;

         provided, however, that the Company will bear and pay directly all
         costs and expenses (including interest and penalties) incurred in
         connection with such contest and will indemnify and hold harmless the
         Chairman, on an after-tax basis, for and against any Excise Tax or
         income or other tax, including interest and penalties with respect
         thereto, imposed as a result of such representation and payment of
         costs and expenses. Without limiting the foregoing provisions of this
         paragraph 5, the Company will control all proceedings taken in
         connection with the contest of any claim contemplated by this paragraph
         5 and, at its sole option, may pursue or forego any and all
         administrative appeals, proceedings, hearings and conferences with the
         taxing authority in respect of such claim (provided, however, that the
         Chairman may participate therein at his own cost and expense) and may,
         at its option, either direct the Chairman to pay the tax claimed and
         sue for a refund or contest the claim in any permissible manner, and
         the Chairman agrees to prosecute such contest to a determination before
         any administrative tribunal, in a court of initial jurisdiction and in
         one or more appellate courts, as the Company determines; provided,
         however, that if the Company directs the Chairman to pay the tax
         claimed and sue for a refund, the Company will advance the amount of
         such payment to the Chairman on an interest-free basis and will
         indemnify and hold the Chairman harmless, on an after-tax basis, from
         any Excise Tax or income or other tax, including interest or penalties
         with respect thereto, imposed with respect to such advance; and
         provided further, however, that any extension of the statute of
         limitations relating to payment of taxes for the taxable year of the
         Chairman with respect to which the contested amount is claimed to be
         due is limited solely to such contested amount. Furthermore, the
         Company's control of any such contested claim will be limited to issues
         with respect to which a Gross-Up Payment would be payable hereunder and
         the Chairman will be entitled to settle or contest, as the case may be,
         any other issue raised by the Internal Revenue Service or any other
         taxing authority.

6.       If, after the receipt by the Chairman of an amount advanced by the
         Company pursuant to paragraph 5 of this Annex, the Chairman receives
         any refund with respect to such claim, the Chairman will (subject to
         the Company's complying with the requirements of such paragraph 5)
         promptly pay to the Company the amount of such refund (together with
         any interest paid or credited thereon after any taxes applicable
         thereto). If, after the receipt by the Chairman of an amount advanced
         by the Company pursuant to paragraph 5 of this Annex, a determination
         is made that the Chairman is not entitled to any refund with respect to
         such claim and the Company does not notify the Chairman in writing of
         its intent to contest such denial or refund prior to the expiration of
         30 calendar days after such determination, then such advance will be
         forgiven and will not be required to be repaid and the amount of any
         such advance will offset, to the extent thereof, the amount of Gross-Up
         Payment required to be paid by the Company to the Chairman pursuant to
         paragraph 18 if this Agreement and this Annex A.

                                     A-2

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