Insignia accelerates development of secure system provisioning business via strategic agreement with esmertec.

Insignia Solutions (Nasdaq:INSG) and esmertec have announced an agreement whereby esmertec acquires all of Insignia's Java Virtual Machine (JVM) related assets, with the exception of Jeode (Insignia's JVM) intellectual property. esmertec becomes the exclusive master distributor of Insignia's JVM business. The transaction is valued at approximately $11 million, and includes an asset purchase agreement with cash payments over a 3-year period, a license agreement and a co-marketing agreement to promote Insignia's Over-The-Air Repair solution to esmertec mobile platform customers. esmertec will manage the existing Insignia JVM customer relationships and license the Insignia and esmertec technologies to sell to the combined customer base and silicon partners. esmertec will assume the entire JVM business through a final asset purchase in June 2004.

Insignia gains significant financing to continue to execute on its innovative Over-The-Air Repair firmware update software, Secure System Provisioning, as well as a highly leveraged entry into esmertec's customer base and markets. The ability to repair mobile devices in the field, avoiding costly recalls that have become so prevalent, is becoming a crucial issue in the mobile industry as device sophistication increases.

"The ability to repair mobile devices in the field has become a crucial issue and Insignia is now well positioned to solve this problem for esmertec's silicon partners, customers and markets. The cash infusion enables Insignia to exclusively focus on capturing this significant market opportunity in a timely manner," said Mark McMillan, President and COO of Insignia. "Through this strategic partnership, both Insignia and esmertec will have better access to more customer relationships and a broader, industry leading product portfolio."

esmertec gains the technology and customer base of Insignia, which has developed industry leading Java technology enabling virtual machine technology since 1996. Combining the Insignia and esmertec customer bases as well as best in class technologies provides the mobile industry with a best-of-breed supplier for the mobile services industry. esmertec also gains access to firmware update capabilities using the new Insignia Secure System Provisioning software.

"This agreement will enable mobile device manufacturers and operators to benefit from the combined efforts of Insignia and esmertec," said Alain Blancquart, CEO of esmertec. "Combining Insignia's and esmertec's research and development teams, VM technologies, customer bases, and Secure System Provisioning software makes esmertec the leading worldwide provider of mobile services enabling software in the industry."