Insignia Solutions, CASE #: C-97-20265, Securities Class Action

Stanford University Law School - Securities Class Action Clearinghouse

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN (128661)
MARK SOLOMON (151949)
JOY ANN BULL (138009)
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
- and -
KIMBERLY C. EPSTEIN (169012)
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545

WEISS & YOURMAN
JOSEPH H. WEISS
JACK I. ZWICK
551 Fifth Avenue
Suite 1600
New York, NY 10176
Telephone: 212/682-3025
- and -
KEVIN J. YOURMAN (147159)
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
Telephone: 310/208-2800

BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BROOKE GRAUBART, et al., On Behalf
of Themselves and All Others
Similarly Situated,

Plaintiffs,

vs.

INSIGNIA SOLUTIONS PLC, et al.,

Defendants.
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No. C-97-20265-JW(EAI)
[filed Jan. 22, 1998]

CLASS ACTION

STIPULATION
OF SETTLEMENT

This Stipulation of Settlement, dated as of August 8, 1997 (the "Stipulation"), is made and entered into by and among the following parties (as defined further in §V hereof) to the above-entitled action: (i) Representative Plaintiffs (on behalf of themselves and each of the other Settlement Class Members), by and through their counsel of record; and (ii) Defendants, by and through their counsel of record. The Stipulation is intended by the Settling Parties to fully, finally and forever resolve, discharge and settle the Released Claims (as defined herein), upon and subject to the terms and conditions hereof.

I. THE LITIGATION

A. Action In State Court

On April 3, 1996, Kavita Sharma, On Behalf of Herself and All Others Similarly Situated v. Insignia Solutions PLC, Insignia Solutions, Inc., Robert P. Lee, George Buchan, Roger D. Friedberger, Pauline Lo Alker, Paul R. Griffiths, John R. Johnston and Nicholas A. Samuel, Case No. CV757058, was filed in the Superior Court of California, County of Santa Clara (the "State Action"). This action alleged violations of California Corporations Code §§25400-25402, 25500-25502, California Civil Code §§1709-1710, and §§11 and 15 of the Federal Securities Act of 1933 on behalf of all persons who purchased or otherwise acquired Insignia ADSs from November 14, 1995 through January 2, 1996 (the "State Class Period"), excluding the defendants, members of their families and any entity in which a defendant has an interest (the "State Class").

The State Action alleged that Insignia, which develops, markets and supports cross-platform compatibility software solutions, misrepresented the success of and demand for the Company's products in its Registration Statement and Prospectus, misrepresented its projected and actual revenues during the State Class Period and that these misrepresentations caused artificial inflation of Insignia ADSs.

B. Action in Federal Court

On March 24, 1997, Brooke Graubart, Morris Rubin and Solomon Eisenberg, On Behalf of Themselves and All Others Similarly Situated v. Insignia Solutions PLC, Insignia Solutions, Inc., Robert P. Lee, Roger D. Friedberger, Paul R. Griffiths, John R. Johnston, Richard M. Noling, Nicholas A. Samuel and David L. Gibbs, C-97-20265, was filed in the United States District Court for the Northern District of California, San Jose Division (the "Federal Action"). The Federal Action alleged violations of §§10(b) and 20(a) of the Securities and Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, on behalf of all persons who purchased or otherwise acquired Insignia ADSs from November 14, 1995 through February 26, 1997 (the "Federal Class Period"), excluding the defendants, members of their families and any entity in which a defendant has an interest (the "Federal Class").

The Federal Action alleged that Insignia misrepresented the success of and demand for the Company's products during the Federal Class Period, its projected and actual revenues for the first three quarters of 1996, and that as a result of improper revenue recognition in violation of GAAP, the first and second quarter 1996 revenues and net income had to be restated and that these misrepresentations caused artificial inflation of Insignia ADSs.

For purposes of settlement, Representative Plaintiffs will file a First Amended Complaint for Violation of: (1) Sections 11 and 15 of the Securities Act of 1933; (2) Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 Promulgated Thereunder; (3) Section 20(a) of the Securities Exchange Act of 1934; (4) Sections 25400-25402 and 25500-25502 of the California Corporations Code; and (5) Sections 1709-1710 of the California Civil Code (the "Amended Federal Action") in the form attached hereto as Exhibit C. Defendants need not file any pleading in response to this complaint. In the event the Effective Date does not occur, the Amended Federal Action shall be deemed to have been withdrawn and the operative complaint will be the Federal Action defined above.

The State Action, and the Federal Action, and the Amended Federal Action are referred to collectively herein as the "Litigation."

II. PRETRIAL PROCEEDINGS AND DISCOVERY IN THE LITIGATION

A. Discovery, Investigation And Research In The State Action

Counsel for the Representative Plaintiffs have conducted a thorough investigation into the facts and circumstances relevant to the allegations in the Litigation, and have researched the law applicable to the claims asserted against the Defendants and the potential defenses thereto.

On June 11, 1996, and again on August 16, 1996, defendants filed their demurrer to the State Action. On July 8, 1996, the parties appeared exparte and obtained an order permitting an amended briefing schedule for defendants' demurrer.

On June 11, 1996 and again on August 16, 1996, defendants filed a Motion for Protective Order seeking a stay of discovery based on their argument that the federal Private Securities Litigation Reform Act of 1995 (the "PSLRA"), which mandates a stay of discovery until motions to dismiss have been decided, applied to plaintiffs' §11 claims asserted in the State Action. Plaintiffs filed their opposition to defendants' Demurrer and Motion for Protective Order on August 30, 1996, and September 6, 1996, respectively.

On September 4, 1996, plaintiffs served subpoenas on the following customers of Insignia: Ingram Micro, Inc., Sun Microsystems, Inc., Merisel, Inc., Apple Computers, Inc., and Silicon Graphics, Inc. Plaintiffs also served a subpoena on Robertson, Stephens & Co. Plaintiffs obtained approximately 900 pages from Sun Microsystems, Inc., approximately 700 pages from Robertson, Stephens & Co. and engaged in numerous meet-and-confer discussions with the other subpoena holders to obtain the documents requested. The need for an order protecting confidentiality and terms of such an order was negotiated at length.

Plaintiffs also served Defendants with document requests. The parties were continuing meet-and-confer discussions over document production and protective order issues when this settlement occurred. In conjunction with settlement discussions, Defendants provided plaintiffs with approximately 5500 pages of relevant documents.

On November 11, 1996, the parties appeared ex parte and obtained a continuance of the hearings on the demurrers, Case Management Conference and Motion for Protective Order to enable the parties to continue to discuss informal resolution before the hearing.

On January 2, 1997, plaintiffs entered into a tolling agreement with Defendants concerning potential claims in federal court.

On January 16, 1997, defendants' demurrers and Motion for Protective Order were heard. On March 24, 1997, the Court overruled defendants' demurrer to the complaint, sustained with leave to amend the Cal. Corp. Code §§25400-25402 and 25500-25502 allegations, sustained with leave to amend the Cal. Civ. Code §§1709-1710 allegations; and overruled defendants' demurrer to the §11 claims. On May 2, 1997, all defendants except George Buchan (whose demurrer was sustained) answered the State Action complaint as limited by the Court's March 24, 1997 Order.

On May 2, 1997, defendants filed: (1) a Motion for Judgment on the Pleadings Regarding Plaintiff's Third and Fourth Causes of Action, For an Order of Dismissal, or in the Alternative, a Demurrer to the First and Second Causes of Action; and (2) a Motion For a Stay of Proceedings. Settlement negotiations successfully concluded before these motions were heard.

B. Discovery, Investigation And Research In Federal Action

Under the provisions of the PSLRA, counsel for the Representative Plaintiffs in the Federal Action were precluded from conducting any formal discovery pending resolution of Defendants' motion to dismiss. Notwithstanding the stay of formal discovery in the Federal Action, counsel for the Representative Plaintiffs' investigation included meetings and discussions with former Insignia employees and others familiar with Insignia's business and operations.

On May 21, 1997, plaintiffs filed their Motion to Appoint Lead Plaintiffs Pursuant to Section 21D(a)(3)(B) of the Securities Exchange Act of 1934 and for Appointment of Plaintiffs' Lead Counsel. On June 18, 1997, the Court filed its Order granting plaintiffs' motion for appointment of Brooke Graubart, Bruce Lieb and David R. Fried as lead plaintiffs and Milberg Weiss Bershad Hynes & Lerach as Plaintiffs' Lead Counsel.

On July 14, 1997, all defendants except Richard M. Noling ("Noling") and David L. Gibbs ("Gibbs") filed a Motion to Dismiss Plaintiffs' Complaint. On July 14, 1997, defendant Noling filed a Motion to Strike Portions of Complaint Pursuant to Rule 12(f) and Joinder in Motion to Dismiss. On July 22, 1997, defendant Gibbs filed a Joinder in Defendants' Motion to Dismiss Plaintiffs' Complaint. The parties entered into a Stipulation and [Proposed] Order Re Hearing and Briefing Schedule which set the hearing on defendants motions for November 10, 1997. Before briefing in opposition occurred, the parties entered into settlement discussions.

III. DEFENDANTS' STATEMENT AND DENIALS OF WRONGDOING AND LIABILITY

Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Representative Plaintiffs in the Litigation. Defendants also have denied and continue to deny, inter alia, the allegations that the Representative Plaintiffs or other members of the Settlement Class have suffered any damages. Nonetheless, Defendants have concluded that further conduct of the Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like the Litigation. Defendants have, therefore, determined that it is desirable and beneficial to them that the Litigation be settled in the manner and upon the terms and conditions set forth in this Stipulation.

IV. CLAIMS OF THE REPRESENTATIVE PLAINTIFFS AND BENEFITS OF SETTLEMENT

The Representative Plaintiffs believe the claims asserted in the Litigation have merit and that the evidence developed to date supports the claims asserted. However, counsel for the Representative Plaintiffs recognize and acknowledge the uncertainty of prevailing on their claims due to the defenses that have been or could be asserted by Defendants. These include, among other things, whether Defendants ever issued any false or misleading statements; whether any statements, if false or misleading, were material; whether any Defendant acted with scienter; and whether the Representative Plaintiffs or any Settlement Class Member suffered any loss as a result of any alleged action or statement by any of the Defendants. Further considerations supporting the decision to enter into the settlement described herein were the expense and length of continued proceedings necessary to prosecute the Litigation against Defendants through trial and through appeals. Based on these considerations, among others, counsel for the Representative Plaintiffs believe that the settlement set forth in the Stipulation confers substantial benefits upon the Representative Plaintiffs and the other members of the Settlement Class and is in the best interests of the Representative Plaintiffs and the other members of the Settlement Class.

V. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Representative Plaintiffs for themselves and on behalf of the other Settlement Class Members, and Defendants, by and through their respective counsel or attorneys of record, that, subject to the approval of the Court, the Litigation and the Released Claims shall be finally and fully compromised, settled and released, and the Litigation shall be dismissed with prejudice, as to the Defendants, upon and subject to the terms and conditions of the Stipulation, as follows:

1. Definitions

As used in the Stipulation, the following terms have the meanings specified below:

1.1 "Authorized Claimant" means any Settlement Class Member whose claim for recovery has been allowed pursuant to the terms of the Stipulation and the Plan of Allocation.

1.2 "Claimant" means any Settlement Class Member who files a Proof of Claim in such form and manner, and within such time, as the Court shall prescribe.

1.3 "Claims Administrator" means Gilardi & Co., P.O. Box 5100, Larkspur, California 94977-5100.

1.4 "Defendants" means Insignia, Robert P. Lee, Roger D. Friedberger, Paul R. Griffiths, John R. Johnston, Richard M. Noling, Nicholas A. Samuel, David L. Gibbs, George Buchan and Pauline Lo Alker.

1.5 "Effective Date" means the first date by which all of the events and conditions specified in ¶8.1 of the Stipulation have been met or have occurred.

1.6 "Escrow Agent" means Milberg Weiss Bershad Hynes & Lerach LLP or its successors.

1.7 "Final" means when the last of the following with respect to the Judgment approving the Stipulation, substantially in the form of Exhibit B hereto, shall occur: (i) the expiration of three (3) business days after the time to file a motion to alter or amend the Judgment under Fed. R. Civ. P. 59(e) has passed without any such motion having been filed; (ii) the expiration of three (3) business days after the time in which to appeal the Judgment has passed without any appeal having been taken (which date shall be deemed to be thirty-three (33) days following the entry of the Judgment, unless the date to take such an appeal shall have been extended by Court order or otherwise, or unless the 33rd day falls on a weekend or a Court holiday, in which case the date for purposes of this Stipulation shall be deemed to be the next business day after such 33rd day); and (iii) if such motion to alter or amend is filed or if an appeal is taken, three (3) business days after the determination of that motion or appeal by the highest court to which such motion or appeal may be taken in such a manner as to permit the consummation of the Settlement substantially in accordance with the terms and conditions of this Stipulation. For purposes of this paragraph, an "appeal" shall include any petition for a writ of certiorari or other writ that may be filed in connection with approval or disapproval of this Settlement, but shall not include any appeal which concerns only the issue of attorneys' fees and reimbursement of costs and disbursements awarded to Representative Plaintiffs' counsel or any Plan of Allocation of the Settlement Fund, as hereinafter defined.

1.8 "Individual Defendants" means each of the Defendants excluding Insignia.

1.9 "Insignia" means Insignia Solutions PLC, Insignia Solutions, Inc., or any of their predecessors, successors, parents, subsidiaries, divisions, officers, directors or employees.

1.10 "Judgment" means the Final Judgment and Order of Dismissal to be rendered by the Court, substantially in the form attached hereto as Exhibit B.

1.11 "Notice Order" means the Order preliminarily approving the Settlement provided for in paragraph 4.1.

1.12 "Parties" means, collectively, each of the Defendants, and the Representative Plaintiffs on behalf of themselves and the other Members of the Settlement Class.

1.13 "Person" means a natural person, individual, corporation, partnership, limited partnership, association, joint venture, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity and their spouses, heirs, executors, administrators, predecessors, successors, representatives, or assignees.

1.14 "Plaintiffs' Settlement Counsel" means Court appointed Lead Counsel, Milberg Weiss Bershad Hynes & Lerach LLP, 600 W. Broadway, Suite 1800, San Diego, California, 92101, Telephone: 619/231-1058.

1.15 "Plan of Allocation" means a plan or formula of allocation of the Settlement Fund which shall be described in the "Notice of Proposed Settlement of Class Action and Settlement Hearing" to be sent to Settlement Class Members in connection with the Settlement whereby the Settlement Fund shall be distributed to Authorized Claimants after payment of expenses of notice and administration of the Settlement, any taxes, penalties or interest or tax preparation fees owed by the Settlement Fund, and such attorneys' fees, costs, expenses and interest as may be awarded by the Court. The Plan of Allocation is not part of the Stipulation.

1.16 "Preliminary Approval" means the day on which the Court signs the Notice Order preliminarily approving the settlement substantially in the form attached hereto as Exhibit A.

1.17 "Related Parties" means each of any Defendants' past, present or future directors, officers, employees, partnerships and partners, principals, agents, underwriters, syndicate members, controlling shareholders, any entity in which any Defendant and/or any member(s) of that Defendant's immediate family has or have a controlling interest, attorneys, accountants, auditors, banks, investment banks or investment bankers, advisors, personal or legal representatives, insurers, co-insurers and reinsurers, predecessors, successors, parents, subsidiaries, divisions, joint ventures and joint venturers, assigns, spouses, heirs, executors, administrators, associates, related or affiliated entities, any members of an Individual Defendant's immediate family, or any trust of which any Defendant is the settlor or which is for the benefit of any Individual Defendant and/or member(s) of his or her family.

1.18 "Released Claims" means the "Released Class Claims" and "Unknown Claims" as defined herein.

1.19 "Released Class Claims" means any and all claims, actions, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, asserted or that could or might have been asserted in any pleading or amended pleading by the Representative Plaintiffs, or by any of the other Settlement Class Members, or any of them, based upon, arising from, or in any way related to both the purchase of Insignia ADSs by the Representative Plaintiffs or the other Settlement Class Members during the Settlement Class Period and the facts, transactions, events, occurrences, disclosures, statements, acts or omissions or failures to act which were or could or might have been alleged in the Litigation or any claim that the Defendants improperly defended or settled the Litigation; provided however, that this release shall not in any way impair or restrict the rights of the Settling Parties to enforce the terms of the settlement as set forth in this Stipulation.

1.20 "Released Persons" means each and all of the Defendants, and their respective Related Parties.

1.21 "Representative Plaintiffs" or "Plaintiffs" means Court appointed Lead Plaintiffs Bruce Lieb, David R. Fried, Brooke Graubart and named plaintiffs Morris Rubin, Solomon Eisenberg and Kavita Sharma.

1.22 "Representative Plaintiffs' Counsel" means Milberg Weiss Bershad Hynes & Lerach LLP, Bernstein Liebhard & Lifshitz and Weiss & Yourman.

1.23 "Settlement Class" means all persons (except Defendants, officers and directors of Insignia during the Settlement Class Period, members of the immediate family of any Individual Defendant, any entity in which any Defendant has a controlling interest, and the legal representatives, heirs, successors or assigns of any such excluded party) who purchased Insignia American Depository Shares ("ADS") during the Settlement Class Period, excluding those Persons who timely and validly request exclusion from the Settlement Class pursuant to the "Notice of Pendency and Proposed Settlement of Class Actions" to be sent to the Settlement Class substantially in the form of Exhibit A-1 hereto.

1.24 "Settlement Class Member" or "Member of the Settlement Class" means a Person who falls within the definition of the Settlement Class as set forth in §1.23 of the Stipulation.

1.25 "Settlement Class Period" or "Class Period" means the period from November 14, 1995 through February 26, 1997, inclusive.

1.26 "Settlement Fund" means the principal amount of Eight Million Dollars ($8.0 million) together with any interest accrued while in escrow or as provided by §2.1 of this Stipulation.

1.27 "Settlement Hearing" means the hearing to determine whether the proposed Settlement of the Litigation should be approved as fair, reasonable and adequate; whether the proposed Plan of Allocation of the Net Settlement Fund should be approved; and whether the application of Representative Plaintiffs' Counsel for attorneys' fees, costs and expenses should be approved.

1.28 "Settling Parties" means, collectively, each of the Defendants, and the Representative Plaintiffs on behalf of themselves and each of the Settlement Class Members.

1.29 "Unknown Claims" means any Released Class Claims which any Representative Plaintiff or any other Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to object to this settlement. With respect to any and all Released Class Claims against the Released Persons, the Parties stipulate and agree that, upon the Effective Date, the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights, and benefits of §1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

With respect to any and all Released Class Claims against the Released Persons, each of the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and upon the Effective Date and by operation of the Judgment shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, or of international or foreign law, which is similar, comparable or equivalent to §1542 of the California Civil Code. Each of the Representative Plaintiffs and the other Settlement Class Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the Released Class Claims, but hereby stipulate and agree that each Representative Plaintiff does and each other Settlement Class Member shall be deemed to, upon the Effective Date and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Class Claims against the Released Persons, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Releasors acknowledge that the foregoing waiver was bargained for and a key element of the settlement of which this release is a part.

2. Establishment And Maintenance Of The Settlement Fund

2.1 Defendants authorize and consent to the applicable directors' and officers' insurer and Insignia paying and shall cause the directors' and officers' insurer and Insignia to pay Eight Million Dollars ($8.0 million) into an interest bearing escrow account maintained by Defendants or their director and officer liability insurers on or before October 17, 1997. If $8.0 million is not paid into said escrow account on or before October 17, 1997, Representative Plaintiffs' Counsel shall have the sole option to withdraw from the settlement or require payment of interest at the 90-day treasury bill rate on October 1, 1997 on any portion of the $8.0 million not paid into said escrow account by October 17, 1997, from October 1, 1997 to the date that portion of the Settlement Fund plus interest owed is deposited into said escrow account.

2.2 The payment described in ¶2.1 is the only payment Defendants shall make or cause to be made in connection with the Settlement of the Released Claims.

2.3 The Settlement Fund shall be transferred to the Escrow Agent within eight days of notice in writing of the Court's preliminary approval of the Settlement.

3. Administration Of The Settlement Fund

a. The Escrow Agent

3.1 The Escrow Agent shall invest the Settlement Fund in instruments backed by the full faith and credit of the United States Government or fully insured by the United States Government or an agency thereof and shall reinvest the proceeds of these instruments as they mature in similar instruments at the then current market rates.

3.2 The Escrow Agent shall not disburse the Settlement Fund except as provided for in the Stipulation, or by an Order of the Court, or with the written agreement of counsel for Defendants' and Plaintiffs' Settlement Counsel.

3.3 The Escrow Agent is authorized to execute such transactions on behalf of the Settlement Class Members as are consistent with the terms of the Stipulation.

3.4 All funds held by the Escrow Agent shall be deemed and considered to be in custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such time as such funds shall be distributed pursuant to the Stipulation, the Plan of Allocation and/or further order(s) of the Court.

3.5 Within ten (10) days after the transfer of the Settlement Fund or a portion thereof to the Escrow Agent, the Escrow Agent may establish a "Notice and Administration Fund," and $50,000 may be transferred from the Settlement Fund to it. The Notice and Administration Fund may be used by Plaintiffs' Settlement Counsel to pay costs and expenses reasonably and actually incurred in connection with providing notice to the Settlement Class, locating Settlement Class Members, assisting with the filing of claims, administering and distributing the Settlement Fund to the Members of the Settlement Class, processing Proof of Claim and Release forms and paying escrow fees and costs, if any. The Notice and Administration Fund may also be invested and earn interest as provided for in ¶3.1 of this Stipulation.

3.6 On the Effective Date, any balance (including interest) then remaining in the Notice and Administration Fund, less expenses incurred but not yet paid, may be transferred by the Escrow Agent to, and deposited and credited as part of, the Settlement Fund to be applied as set forth in ¶6.2 below. Thereafter, Plaintiffs' Settlement Counsel shall have the right to use such portions of the Settlement Fund as are, in their exercise of reasonable judgment, necessary to carry out the purposes set forth in ¶3.5.

b. Taxes

3.7 (a) The Parties and the Escrow Agent agree to treat the Settlement Fund as being at all times a "qualified settlement fund" within the meaning of Treas. Reg. §1.468B-1. In addition, the Escrow Agent and, as required, the Defendants contributing any settlement consideration shall jointly and timely make the "relation-back election" (as defined in Treas. Reg. §1.468B-1) back to the earliest permitted date. Such election shall be made in compliance with the procedures and requirements contained in such regulations. It shall be the responsibility of the Escrow Agent to timely and properly prepare and deliver the necessary documentation for signature by all necessary parties, and thereunder to cause the appropriate filing to occur.

(b) For the purposes of §468B of the Internal Revenue Code of 1986, and Treas. Reg. §1.468B, the "administrator" shall be the Escrow Agent. The Escrow Agent shall timely and properly file all informational and other tax returns necessary or advisable with respect to the Settlement Fund (including without limitation the returns described in Treas. Reg. §1.468B-2(l)). Such returns (as well as the election described in ¶3.7(a)) shall be consistent with this ¶3.7 and in all events shall reflect that all taxes (including any estimated taxes, interest or penalties) on the income earned by the Settlement Fund shall be paid out of the Settlement Fund as provided in ¶3.7(c) hereof.

(c) All (i) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund ("Taxes"), and (ii) expenses and costs incurred in connection with the operation and implementation of this ¶3.7 (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this ¶3.7) ("Tax Expenses"), shall be paid out of the Settlement Fund; in all events the Defendants shall have no liability or responsibility for the Taxes, the Tax Expenses, or the filing of any tax returns or other documents with the Internal Revenue Service or any other state or local taxing authority. The Escrow Agent shall indemnify and hold Defendants harmless for Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any such indemnification). Further, Taxes and Tax Expenses shall be treated as, and considered to be, a cost of administration of the Settlement and shall be timely paid by the Escrow Agent out of the Settlement Fund without prior order from the Court, and the Escrow Agent shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to Authorized Claimants any funds necessary to pay such amounts (as well as any amounts that may be required to be withheld under Treas. Reg. §1.468B-2(1)-(2)); the Defendants are not responsible and shall have no liability therefor, or for any reporting requirements that may relate thereto. The Settling Parties hereto agree to cooperate with the Escrow Agent, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions of this ¶3.7.

c. Termination

3.8 In the event that the Stipulation is not approved, or is terminated, canceled, or fails to become effective for any reason, the Settlement Fund (including accrued interest) and the funds in the Notice and Administration Fund (described in ¶3.5 above), less expenses actually incurred or due and owing in connection with the settlement provided for herein, shall be refunded to Defendants as provided in ¶8.5 below.

d. Warranties

3.9 Each Defendant warrants as to himself, herself or itself, that, as to the payments made by or on his, her or its behalf, required by this Stipulation, at the time of such payment that the Defendant made or caused to be made pursuant to ¶2.1 above, he, she or it was not insolvent nor did or will the payment required to be made by this Stipulation render such Defendant insolvent within the meaning of and/or for the purposes of United States Bankruptcy Code §101 and/or §547. This warranty is made by each such Defendant and not by such Defendant's counsel.

3.10 If a case is commenced with respect to any Defendant under Title 11 of the United States Code (Bankruptcy), or a trustee, receiver or conservator is appointed under any similar law, and in the event of the entry of a final order of a court of competent jurisdiction determining the transfer of the Settlement Fund, or any portion thereof, by or on behalf of such Defendant to be a preference, voidable transfer, fraudulent conveyance or similar transaction, then, as to such Defendant only, the releases given and Judgment entered in favor of such Defendant pursuant to this Stipulation shall be null and void.

4. Notice Order and Settlement Hearing

4.1 Promptly after execution of the Stipulation, the Parties shall submit the Stipulation together with its Exhibits to the Court and shall jointly apply for entry of an order (the "Notice Order"), substantially in the form of Exhibit A hereto, requesting Preliminary Approval of the settlement set forth in the Stipulation, and approval for the mailing and publication of a Notice of Settlement of Class Action and Settlement Hearing which shall include the general terms of the Settlement set forth in the Stipulation, the proposed Plan of Allocation, the general terms of the Fee and Expense Application (as defined in ¶7.1) and the date of the Settlement Hearing (as defined below in ¶4.2).

4.2 The Parties shall request that, after notice is given, the Court hold a hearing (the "Settlement Hearing") and finally approve this Settlement as set forth herein. At or after the Settlement Hearing, Representative Plaintiffs' Counsel also will request that the Court approve the proposed Plan of Allocation and the Fee and Expense Application.

5. Releases

5.1 Upon the Effective Date, the Representative Plaintiffs and their counsel on their own behalf and on behalf of all other Settlement Class Members shall fully, finally, and forever release, relinquish and discharge all Released Claims against each and all of the Released Persons, whether or not such Settlement Class Member executes and delivers the Proof of Claim and Release.

5.2 Upon the Effective Date, each of the Defendants and their respective counsel shall, and by operation of the Judgment shall, fully, finally, and forever release, relinquish and discharge each and all of the Representative Plaintiffs, the other Settlement Class Members, and counsel to the Representative Plaintiffs from all claims (whether or not known or suspected) arising out of, relating to, or in connection with the institution, prosecution, assertion or resolution of the Litigation or the Released Claims.

5.3 Only those Settlement Class Members filing valid and timely Proofs of Claim and Release shall be entitled to participate in the Settlement and receive a distribution from the Settlement Fund. The Proof of Claim and Release to be executed by the Settlement Class Members shall release all Released Claims against the Released Persons, and shall be in the form contained in Exhibit A-2 hereto. All Settlement Class Members shall be bound by the releases set forth in this ¶5 whether or not they submit a valid and timely Proof of Claim and Release.

5.4 Upon the Effective Date, Insignia shall, and by operation of the Judgment shall, fully, finally and forever release, relinquish and discharge each of the Individual Defendants from all claims for any losses, costs or expenses, including attorneys' fees, incurred in response to, or defense or settlement of, the Litigation. Insignia shall pay all reasonable costs and expenses, including attorneys' fees, incurred by any of the Individual Defendants in response to or defense or settlement of the Litigation. Subject to the foregoing, the rights and obligations of Insignia and the Individual Defendants to each other arising from any other agreements, including separation agreements or indemnification agreements, executed by them shall survive and are not extinguished by this Stipulation of Settlement.

5.5 Nothing in ¶¶5.1 to 5.4 above is intended to release or otherwise affect any claim or defense of Defendants and their Related Parties, on the one hand, and Stuart McIntosh, on the other hand, including but not limited to, any claim or defense asserted or that could or might be asserted in the case styled McIntosh v. Insignia Solutions, Inc., et al., Case No. 774906, pending in Superior Court for the State of California in and for the County of Orange.

6. Administration And Calculation Of Claims, Final Awards And Supervision And Distribution Of Settlement Fund

6.1 Plaintiffs' Settlement Counsel, or their authorized agents, acting on behalf of the Settlement Class shall administer and calculate the claims submitted by Settlement Class Members and shall oversee distribution of that portion of the Settlement Fund which is finally awarded by the Court to the Settlement Class Members. Defendants shall have no role in or responsibility for the review or evaluation of Proof of Claim and Release forms. This is not a claims-made Settlement and, if all conditions under the Stipulation are satisfied and the settlement becomes Final, no portion of the Settlement Fund will be returned to any Defendant.

6.2 The Settlement Fund shall be applied as follows:

(a) To pay all unpaid costs and expenses reasonably and actually incurred in connection with providing Notice including, locating Settlement Class Members, assisting with the filing of claims, administering and distributing the Settlement Fund to the Settlement Class, processing Proofs of Claim and Release and paying escrow fees and costs, if any;

(b) To pay Taxes and Tax Expenses;

(c) To pay counsel to the Representative Plaintiffs attorneys' fees, expenses and costs, with interest thereon (the "Fee and Expense Award"), if and to the extent allowed by the Court; and

(d) To distribute the balance of the Settlement Fund (the "Net Settlement Fund") to Authorized Claimants as allowed by the Stipulation, the Plan of Allocation and the Court.

6.3 After the Effective Date and subject to such further approval and further order(s) of the Court as may be required, the Net Settlement Fund shall be distributed to Settlement Class Members who submit valid, timely filed Proof of Claim and Release forms ("Authorized Claimants"), subject to and in accordance with the following:

(a) Within ninety (90) days after the mailing of the Notice or such other time as may be set by the Court, each Person claiming to be an Authorized Claimant shall be required to submit to the Claims Administrator a separate completed Proof of Claim and Release in the form of Exhibit A-2 hereto, signed under penalty of perjury and supported by such documents as are specified in the Proof of Claim and Release and as are reasonably available to the Authorized Claimant.

(b) Except as otherwise ordered by the Court, all Settlement Class Members who fail to timely submit valid Proof of Claim and Release forms within such period, or such other period as may be ordered by the Court, shall be forever barred from receiving any payments pursuant to the Stipulation and the settlement set forth herein, but will in all other respects be subject to and bound by the provisions of the Stipulation, the settlement and releases contained herein, and the Judgment.

(c) The Net Settlement Fund shall be distributed to the Authorized Claimants in accordance with and subject to the Plan of Allocation to be described in the Notice mailed to Settlement Class Members. The proposed Plan of Allocation shall not be a part of the Stipulation.

6.4 The Defendants shall not have any responsibility for, interest in, or liability whatsoever with respect to the investment or distribution of the Settlement Fund, the Plan of Allocation, the determination or administration of taxes, or any losses incurred in connection therewith. No Person shall have any claim of any kind against Defendants, or their counsel, or director and officer liability insurers and reinsurers with respect to the matters set forth in this paragraph; and the Settlement Class Members and Representative Plaintiffs' counsel release Defendants from any and all liability and claims arising from or with respect to the investment or distribution of the Settlement Fund.

6.5 No Person shall have any claim against Representative Plaintiffs' counsel or the Claims Administrator, or other agent designated by Representative Plaintiffs' Counsel, or Defendants or their counsel, based on distributions made substantially in accordance with the Stipulation and the settlement contained herein, the Plan of Allocation, or further orders of the Court.

6.6 It is understood and agreed by the Settling Parties that any proposed Plan of Allocation of the Net Settlement Fund, including, without limitation, the calculation of an Authorized Claimant's Claim, as set forth therein, is not a part of the Stipulation and is to be considered by the Court separately from the Court's consideration of the fairness, reasonableness and adequacy of the settlement set forth in the Stipulation, and any order or proceeding relating to the Plan of Allocation shall not operate to terminate or cancel the Stipulation or affect the finality of the Court's Judgment approving the Stipulation and the settlement set forth herein, or any other orders entered pursuant to the Stipulation.

7. Representative Plaintiffs' Counsel's Attorneys' Fees And Reimbursement Of Expenses

7.1 The Representative Plaintiffs or their counsel may submit an application or applications (the "Fee and Expense Application") for distributions to them from the Settlement Fund for: (i) an award of attorneys' fees as set forth in the Notice; plus (ii) reimbursement of all expenses and costs, including the fees of any experts or consultants incurred in connection with prosecuting the Litigation, plus interest on such attorneys' fees, costs and expenses at the same rate and for the same periods as earned by the Settlement Fund (until paid), as may be awarded by the Court.

7.2 The attorneys' fees, expenses and costs, including the fees of experts and consultants, as awarded by the Court (the "Fee and Expense Award"), shall be transferred to Plaintiffs' Settlement Counsel from the Settlement Fund, immediately after the Court executes an order awarding such fees and expenses. Plaintiffs' Settlement Counsel shall thereafter allocate the Fee and Expense Award amongst Representative Plaintiffs' Counsel in a manner in which Plaintiffs' Settlement Counsel in good faith believes reflects the contributions of such counsel to the prosecution and settlement of the Litigation; provided, however, that in the event that the Stipulation and the settlement set forth herein do not become effective for any reason, or the Judgment or the Order making the Fee and Expense Award is reversed or modified on appeal, and in the event that the Fee and Expense Award has been paid to any extent, then Representative Plaintiffs' Counsel shall within five (5) business days from the event which precludes the Effective Date from occurring or such reversal or modification, refund to the Settlement Fund the fees, expenses, costs and interest previously paid to them from the Settlement Fund, including accrued interest on any such amount at the average rate earned on the Settlement Fund from the time of withdrawal until the date of refund. Each such Representative Plaintiffs' Counsel's law firm, as a condition of receiving such fees and expenses, on behalf of itself and each partner and/or shareholder of it, agrees that the law firm and its partners and/or shareholders are subject to the jurisdiction of the Court for the purpose of enforcing this ¶7.2 of the Stipulation. Without limitation, each such law firm and its partners and/or shareholders agree that the Court may, upon application of Defendants, summarily issue orders, including but not limited to, judgments and attachment orders, and may make appropriate findings of or sanctions for contempt, against them or any of them should such law firm fail timely to repay fees and expenses pursuant to this ¶7.2 of the Stipulation.

7.3 Defendants and their respective Related Parties shall have no responsibility for, and no liability whatsoever with respect to, any payment to Plaintiffs' Settlement Counsel from the Settlement Fund that may occur before the Effective Date.

7.4 Defendants and their respective Related Parties shall have no responsibility for, and no liability whatsoever with respect to, the allocation among Representative Plaintiffs' Counsel, and any other Person who may assert some claim thereto, of any Fee and Expense Awards that the Court may make in this Litigation, and Defendants and their respective Related Parties take no position with respect to such matters.

7.5 The procedure for and the allowance or disallowance by the Court of any applications by any of the Representative Plaintiffs' Counsel for attorneys' fees, costs and expenses, including the fees of experts and consultants, to be paid out of the Settlement Fund, are not part of the settlement set forth in the Stipulation, and are to be considered by the Court separately from the Court's consideration of the fairness, reasonableness and adequacy of the settlement set forth in the Stipulation, and any order or proceedings relating to the Fee and Expense Application, or any appeal from any order relating thereto, shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Judgment approving the Stipulation and the settlement of the Litigation set forth herein.

8. Conditions Of Settlement, Effect Of Disapproval, Cancellation Or Termination

8.1 The Effective Date of the Stipulation shall be conditioned on the occurrence of all of the following events:

(a) Defendants shall have timely transferred or caused to be timely transferred the Settlement Fund to the Escrow Agent as set forth in ¶2.1 above;

(b) The Court has entered the Notice Order, as required by ¶4.1, above;

(d) Defendants' counsel shall not have given notice of intent to withdraw from the Settlement pursuant to ¶8.5;

(e) The Judgment has become Final, as defined in ¶1.7, above; and

(f) The settlement is further conditioned upon its receiving judicial approval in the Federal Action of all settlement terms in substantially the form and content set forth herein, after notice and a fairness hearing and that approval becoming Final; and upon receipt of a judgment of dismissal with prejudice of the State Action and that judgment becoming Final as well.

8.2 Upon the occurrence of all of the events referenced in ¶8.1 above, any and all remaining interest or right of Defendants to the Settlement Fund shall be absolutely and forever extinguished.

8.3 Neither a modification nor a reversal on appeal of any Plan of Allocation or of any amount of attorneys' fees, costs, expenses and interest awarded by the Court to any of the Representative Plaintiffs' Counsel shall constitute grounds for cancellation and termination of the Stipulation.

8.4 If all of the conditions specified in ¶8.1 are not met, then the Stipulation shall be canceled and terminated unless Plaintiffs, Plaintiffs' Settlement Counsel and Defendants' counsel mutually agree in writing to proceed with the Stipulation.

8.5 If prior to the Settlement Hearing, any Persons who otherwise would be Members of the Settlement Class have timely requested exclusion ("Requests for Exclusion") from the Settlement Class in accordance with the provisions of the Notice Order and the Notice given pursuant thereto, and such Persons in the aggregate purchased a number of Insignia ADSs during the Settlement Class Period in an amount greater than the sum specified in a separate Supplemental Agreement between the Settling Parties, Defendants shall have, in their sole and absolute discretion, the option to terminate this Stipulation in accordance with the procedures set forth in the Supplemental Agreement. The Supplemental Agreement will not be filed with the Court unless and until a dispute among the Settling Parties concerning its interpretation or application arises. Copies of all Requests for Exclusion received, together with copies of all written revocations of Requests for Exclusion, shall be delivered to Defendants' counsel within three (3) business days of receipt by Plaintiffs or Plaintiffs' Settlement Counsel but in no event later than five (5) business days before the Settlement Hearing.

8.6 Unless otherwise ordered by the Court, in the event the Stipulation shall terminate, or be canceled, or shall not become effective for any reason, within five (5) business days after written notification of such event is sent by Defendants' counsel, the Representative Plaintiffs, or Plaintiffs' Settlement Counsel to the Escrow Agent, the Settlement Fund (including accrued interest), plus any amount then remaining in the Notice and Administration Fund (including accrued interest), less expenses and any costs which have either been disbursed pursuant to ¶¶3.5 or 3.6 hereof, or are determined to be chargeable to the Notice and Administration Fund, shall be refunded by the Escrow Agent pursuant to written instructions from the Defendants' counsel. In such event the Defendants shall be entitled to any tax refund, if any, owing to the Settlement Fund. At the request of the Defendants or the Defendants' counsel, the Escrow Agent or its designee shall apply for any such refund and pay to them the proceeds, less the cost of obtaining the tax refund.

8.7 If the Effective Date does not occur, or if the Stipulation is terminated pursuant to its terms, the Settling Parties shall be restored to their respective positions in the Litigation as of August 7, 1997, the date prior to which the agreement in principle to settle the Litigation was reached. In such event, the terms and provisions of the Stipulation, with the exception of ¶¶3.4, 3.5, 3.7, 3.8, 6.4, 6.5, 7.2-7.5, 8.1-8.8 herein, shall have no further force and effect with respect to the Settling Parties and shall not be used in this Litigation or in any other proceeding for any purpose, except as provided herein. Any Judgment or order entered by the Court in accordance with the terms of the Stipulation shall be treated as vacated nunc pro tunc. No order of the Court or modification or reversal on appeal of any order of the Court concerning the Plan of Allocation or the amount of any attorneys' fees, costs, expenses and interest awarded by the Court to the Representative Plaintiffs or Representative Plaintiffs' Counsel shall constitute grounds for cancellation or termination of the Stipulation.

8.8 If the Effective Date does not occur, or if the Stipulation is terminated pursuant to its terms, neither the Representative Plaintiffs nor Representative Plaintiffs' Counsel shall have any obligation to repay any amounts actually and properly disbursed from the Notice and Administration Fund. In addition, any expenses already incurred and properly chargeable to the Notice and Administration Fund pursuant to ¶3.5 hereof at the time of such termination or cancellation but which have not been paid, shall be paid by the Escrow Agent from the Notice and Administration Fund in accordance with the terms of the Stipulation prior to the balance being refunded in accordance with ¶8.6 above.

9. Miscellaneous Provisions

9.1 The Settling Parties (a) acknowledge that it is their intent to consummate this Stipulation; and (b) agree to cooperate to the extent necessary to effectuate and implement all terms and conditions of the Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of the Stipulation.

9.2 Solely for the purposes of the Settlement of the Litigation, the Settling Parties agree to the certification of the Settlement Class as defined in ¶1.23 and agree to jointly request the Court to enter an order substantially similar to Exhibit A which, among other things, certifies the Settlement Class as to all federal, state, and common law claims asserted in the First Amended Complaint. In the event this Stipulation and the settlement proposed herein are not finally approved, or are terminated, are canceled, or fail to become effective for any reason, this class certification, solely for the purpose of the Settlement of this Litigation, shall be null and void and the Settling Parties will revert to their respective positions immediately prior to the Stipulation, i.e., as of August 7, 1997.

9.3 The Settling Parties agree that the amount of the Settlement Fund, as well as the other terms of the Settlement, reflects a good-faith Settlement of Representative Plaintiffs' and the other Settlement Class Members' claims, reached voluntarily after consultation with experienced legal counsel. Neither the Stipulation nor the Settlement contained herein, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the settlement: (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the Defendants, or (ii) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of the Defendants in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal. Released Persons may file the Stipulation and/or the Judgment from this Litigation in any other action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good-faith settlement, judgment bar or reduction or any theory of claim preclusion or issue preclusion or similar defense or counterclaim. Defendants have denied and continue to deny each and all of the claims alleged in the Litigation. Representative Plaintiffs or any other member of the Settlement Class may file the Stipulation in any proceeding brought to enforce any of its terms or provisions. The Settling Parties and their counsel, and each of them, agree, to the extent permitted by law, that all agreements made and orders entered during the course of the Action relating to the confidentiality of information shall survive this Stipulation.

9.4 While retaining their right to deny that the claims advanced in the Litigation were meritorious, Defendants in any statement made to any media representative (whether or not for attribution) will not deny that, based upon the publicly available information at the time, the Litigation was filed in good faith and with an adequate basis in fact to comply with Rule 11 of the Federal Rules of Civil Procedure ("FRCP 11"), and is being settled voluntarily after consultation with competent legal counsel. Defendants may issue a press release announcing the settlement but may not contradict the foregoing language. The final judgment will contain a statement that the parties agree that, during the course of the Litigation, the parties and their respective counsel at all times complied with the requirements of FRCP 11.

9.5 All of the Exhibits to the Stipulation are material and integral parts hereof and are fully incorporated herein by this reference.

9.6 The Stipulation may be amended or modified only by a written instrument signed by or on behalf of all Settling Parties or their successors-in-interest.

9.7 The Stipulation and the Exhibits attached hereto constitute the entire agreement among the Parties hereto, and no representations, warranties or inducements have been made to any Party concerning the Stipulation or its Exhibits other than the representations, warranties and covenants contained and memorialized in such documents. Except as otherwise provided herein, each Party shall bear its own costs.

9.8 Plaintiffs' Settlement Counsel, on behalf of the Settlement Class, are expressly authorized by the Representative Plaintiffs to take all appropriate action required or permitted to be taken by the Settlement Class pursuant to the Stipulation to effectuate its terms and also are expressly authorized to enter into any modifications or amendments to the Stipulation on behalf of the Settlement Class which they deem appropriate.

9.9 Each counsel or other Person executing the Stipulation or any of its Exhibits on behalf of any Party hereto hereby warrants that such Person has the full authority to do so.

9.10 The Stipulation may be executed in one or more counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. Counsel for the Parties to the Stipulation shall exchange among themselves signed counterparts, and a complete set of original executed counterparts shall be filed with the Court.

9.11 The Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the Parties hereto.

9.12 The Court shall retain jurisdiction with respect to implementation and enforcement of the terms of the Stipulation, and all Parties hereto submit to the jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in the Stipulation.

9.13 The Stipulation and the Exhibits hereto shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of California, and the rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with the laws of the State of California without giving effect to that State's choice of law principles.

IN WITNESS WHEREOF, the Parties hereto have caused the Stipulation to be executed, by their duly authorized attorneys.

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN
MARK SOLOMON
JOY ANN BULL
MICHAEL L. SCHRAG

______________________________
ALAN SCHULMAN

600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
KIMBERLY C. EPSTEIN
222 Kearny Street, 10th Floor
San Francisco, CA 94108
Telephone: 415/288-4545

WEISS & YOURMAN
JOSEPH H. WEISS
JACK I. ZWICK
551 Fifth Avenue
Suite 1600
New York, NY 10176
Telephone: 212/682-3025

WEISS & YOURMAN
KEVIN J. YOURMAN
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
Telephone: 310/208-2800

BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414

Attorneys for Plaintiffs

MORRISON & FOERSTER, LLP
MELVIN R. GOLDMAN
MICHAEL L. ZIGLER

______________________________
MELVIN R. GOLDMAN
425 Market Street
San Francisco, CA 94105-2482
Telephone: 415/268-7000
415/268-7522 (fax)

Attorneys for Defendants Insignia, Robert P. Lee, Roger D. Friedberger, Paul R. Griffiths, John R. Johnston, Richard M. Noling, Nicholas A. Samuel, George Buchan are Pauline Lo Alken

HELLER, EHRMAN, WHITE &
McAULIFFE
NORMAN BLEARS

______________________________
NORMAN BLEARS

525 University Avenue
11th Floor
Palo Alto, CA 94301-1908

Attorneys for Defendant David L. Gibbs

EXHIBIT A

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BROOKE GRAUBART, et al., On Behalf
of Themselves and All Others
Similarly Situated,

Plaintiffs,

vs.

INSIGNIA SOLUTIONS PLC, et al.,

Defendants.
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No. C-97-20265-JW(EAI)

CLASS ACTION

[PROPOSED] ORDER
PRELIMINARILY APPROVING
SETTLEMENT AND APPROVING
THE FORM AND MANNER
OF NOTICE

The Court has received the Stipulation of Settlement (the "Stipulation"), dated as of August 8, 1997, that has been entered into by the Representative Plaintiffs and Defendants. The Court has reviewed the Stipulation and its attached exhibits, and, good cause appearing,

IT IS HEREBY ORDERED as follows: 1. The Court, for purposes of this preliminary order, adopts all defined terms as set forth in the Stipulation.

2. Pursuant to Rule 23 of the Federal Rules of Civil Procedure the Court hereby certifies, for purposes of effectuating this Settlement, a Settlement Class of all persons who purchased Insignia American Depository Shares during the period beginning November 14, 1995 through February 26, 1997, inclusive. Excluded from the Settlement Class are the Defendants, officers and directors of Insignia during the Settlement Class Period, members of the immediate family of any Individual Defendant, any entity in which any Defendant has a controlling interest, and the legal representatives, heirs, successors and assigns of any such excluded party. Also excluded from the Settlement Class are those persons who timely and validly request exclusion from the Settlement Class pursuant to the Notice of Pendency and Proposed Settlement of Class Actions ("Notice") to be sent to the Settlement Class.

3. With respect to the Settlement Class, this Court finds and concludes that: (a) the members of the Class are so numerous that joinder of all Class members in the Litigation is impracticable; (b) there are questions of law and fact common to the Class which predominate over any individual questions; (c) the claims of the Representative Plaintiffs are typical of the claims of the Class; (d) in negotiating and entering into the Stipulation, the Representative Plaintiffs and their counsel have fairly and adequately represented and protected the interests of all of the Class members; and (e) a class action is superior to other available methods for the fair and efficient adjudication of the controversy, considering: (i) the interests of the members of the class in individually controlling the prosecution of the separate actions, (ii) the extent and nature of any litigation concerning the controversy already commenced by members of the class, (iii) the desirability or undesirability of continuing the litigation of these claims in this particular forum, and (iv) the difficulties likely to be encountered in the management of the class action.

4. The Court preliminarily approves: (1) the settlement of the Litigation set forth in the Stipulation and each of the releases set forth therein, as being fair, just, reasonable and adequate as to each of the Settling Parties, and (2) the proposed Plan of Allocation described in the Notice, subject to the right of any Settlement Class Member to challenge the fairness, reasonableness, and adequacy of the Stipulation or the proposed Plan of Allocation and to show cause, if any exists, why a final judgment dismissing the Litigation based on the Stipulation should not be ordered herein after due and adequate notice to the Settlement Class has been given in conformity with this Order.

5. The Court approves as to form and content, and for distribution to Settlement Class Members a Notice of Pendency and Proposed Settlement of Class Actions ("Notice"), substantially in the form of Exhibit A-1 hereto, a Proof of Claim and Release ("Proof of Claim"), in the form of Exhibit A-2 hereto; and for publication of a Summary Notice of Proposed Settlement ("Summary Notice"), in the form of Exhibit A-3 hereto.

6. Pending resolution of these settlement proceedings, no other action now pending or hereafter filed arising out of all or any part of the subject matter of this Action shall be maintained as a class action, and except as provided by this or further Order of the Court, for good cause shown, all persons are hereby enjoined during the pendency of these settlement proceedings from filing or prosecuting purported class actions against any person with respect to any of the Released Claims.

7. Plaintiffs' Settlement Counsel are authorized to act on behalf of the Settlement Class with respect to all acts required by, or which may be given pursuant to, the Stipulation or such other acts which are reasonably necessary to consummate the proposed Settlement set forth in the Stipulation.

8. Plaintiffs' Settlement Counsel are hereby authorized to retain the firm of Gilardi & Co. as Claims Administrator to supervise and administer the Notice and claims procedures.

9. Plaintiffs' Settlement Counsel shall make reasonable efforts to identify all persons who are members of the Settlement Class, including beneficial owners whose Insignia ADSs are held by banks, brokerage firms, or other nominees. Plaintiffs' Settlement Counsel shall cause the Claims Administrator to send the Notice and the Proof of Claim by first class mail to all persons who appear on the transfer records of Insignia as having transferred to their names Insignia ADSs during the period from November 14, 1995 through February 26, 1997, inclusive. The mailing of the Notice and Proof of Claim forms shall be on or before ___________, 1998 (the "Notice Date"). Pursuant to the Notice, each nominee shall either: (1) send the Notice and Proof of Claim to Settlement Class Members for which they act as nominee by first class mail within ten (10) days after the nominee receives the Notice; or (2) send a list of the names and addresses of such beneficial owners to Plaintiffs' Settlement Counsel within ten (10) days after the nominee receives the Notice and, in the event of the latter, Plaintiffs' Settlement Counsel shall send by first class mail the Notice and Proof of Claim to all Settlement Class Members who are on the list received from the nominee. Representative Plaintiffs' Counsel shall, if requested, reimburse banks, brokerage houses or other nominees solely for their reasonable out-of-pocket expenses incurred in providing notice to beneficial owners who are Settlement Class Members, out of the Settlement Fund, which expenses would not have been incurred except for the sending of such notice, subject to further order of this Court with respect to any dispute concerning such compensation. Plaintiffs' Settlement Counsel shall file with the Court and serve upon Defendants' counsel of record no later than seven (7) days prior to the Settlement Hearing an affidavit or declaration describing the efforts taken to comply with this Order and stating that the mailings have been completed in accordance with the terms of this Order.

10. Within ten (10) days of the Notice Date, Plaintiffs' Settlement Counsel shall publish a Summary Notice substantially in the form of Exhibit A-3 hereto once in Investor's Business Daily. Plaintiffs' Settlement Counsel shall file with the Court and serve upon Defendants' counsel no later than seven (7) days prior to the Settlement Hearing an affidavit or declaration stating that the Summary Notice has been published in accordance with the terms of this Order.

11. The Court finds that dissemination of the Notice and Proof of Claim in the manner required by ¶9, and publication of the Summary Notice in the manner required by ¶10, constitute the best notice practicable under the circumstances to Settlement Class Members and meet the requirements of Rule 23 of the Federal Rules of Civil Procedure, due process under the United States Constitution, and any other applicable law and shall constitute due and sufficient notice to all persons entitled thereto.

12. Any person falling within the definition of the Settlement Class may, upon request, be excluded from the Settlement. Any such person must submit to the Claims Administrator a request for exclusion ("Request for Exclusion"), postmarked no later than _____________, 199_. A Request for Exclusion must state: (1) the name, address, and telephone number of the person requesting exclusion; (2) the person's purchases and sales of Insignia ADSs made during the Settlement Class Period, including the dates, the number of ADSs, and price paid or received per ADS for each such purchase or sale; and (3) that the person wishes to be excluded from the Settlement Class. All persons who submit valid and timely Requests for Exclusion in the manner set forth in this paragraph shall have no rights under the Stipulation, shall not share in the distribution of the Settlement Fund, and shall not be bound by the Stipulation or the Final Judgment.

13. Any Settlement Class Member who objects to the settlement of the Litigation, the proposed Plan of Allocation, or the application of counsel for attorneys' fees, costs, and expenses, shall have a right to appear and be heard at the Settlement Hearing. Any Settlement Class Member may enter an appearance through counsel of such member's own choosing and at such member's own expense or may appear on their own. However, no Settlement Class Member shall be heard at the Settlement Hearing unless, on or before ____________, 199_ such person has filed with the Court and delivered to Plaintiffs' Settlement Counsel and Defendants' counsel a written notice of objection, and their grounds for opposing the Settlement, Plan of Allocation, or application for attorneys' fees, costs and expenses, along with proof of membership in the Settlement Class. The manner in which a notice of objection must be prepared, filed, and delivered shall be stated in the Notice. Only Settlement Class Members who have filed and delivered valid and timely written notices of objection will be entitled to be heard at the Settlement Hearing unless the Court orders otherwise.

14. The Court authorizes payment out of the Notice and Administration Fund of the expenses described in ¶3.5 of the Stipulation. After the Effective Date, the notice and administration costs payable out of the Settlement Fund may be disbursed without the necessity of a court order in accordance with ¶3.6 of the Stipulation.

15. A Settlement Hearing will be held on ______________, 199_, at _____ _.m. before this Court in the United States Courthouse, Northern District of California, San Jose Division, to determine whether the proposed settlement of the Litigation as set forth in the Stipulation, should be approved as fair, just, reasonable and adequate as to the Settling Parties, and whether the Final Judgment approving the Settlement should be entered. The Court may adjourn or continue the Settlement Hearing without further notice to Settlement Class Members.

16. At or after the Settlement Hearing, the Court will determine whether Plaintiffs' Settlement Counsel's proposed Plan of Allocation of the Net Settlement Fund should be approved.

17. The passage of title and ownership of the Settlement Fund to the Escrow Agent in accordance with the terms of the Stipulation is approved. No person that is not a Settlement Class Member or counsel for the Representative Plaintiffs shall have any right to any portion of, or in the distribution of, the Settlement Fund unless otherwise ordered by the Court or otherwise provided in the Stipulation.

18. All funds held by the Escrow Agent shall be deemed and considered to be in custodia legis of the Court in accordance with the Stipulation, and shall remain subject to the jurisdiction of the Court, until such time as such funds shall be distributed pursuant to the Stipulation, Plan of Allocation and/or further order(s) of the Court.

19. At or after the Settlement Hearing, the Court will determine whether the application of Representative Plaintiffs' Counsel for an award of attorneys' fees, costs, and expenses should be approved.

20. No later than 90 days after the Notice Date, any Settlement Class Member who wishes to participate in the Settlement Fund must submit a valid Proof of Claim form to the Claims Administrator. Proof of Claim forms shall be deemed to have been submitted when postmarked, if mailed by first class, or registered or certified mail, postage prepaid, addressed in accordance with the instructions given in the Proof of Claim and Release. All other Proof of Claim and Release forms shall be deemed to have been submitted at the time they are actually received by the Claims Administrator. To be valid, a Proof of Claim must be: (1) completed in a manner that permits the Claims Administrator to determine the eligibility of the claim as set forth in the Proof of Claim; and (2) signed with an affirmation that the information is true and correct. All Settlement Class Members who do not submit valid and timely Proof of Claim forms shall be forever barred from receiving any payments from the Settlement Fund, but will in all other respects be subject to and bound by the provisions of the Stipulation and the Final Judgment, if entered.

21. Neither Defendants nor Defendants' counsel shall have any responsibility for the Plan of Allocation of the Settlement Fund submitted by Plaintiffs' Settlement Counsel and it will be considered separately from the fairness, reasonableness and adequacy of the settlement.

22. No later than seven (7) days before the Settlement Hearing, all briefs supporting the Settlement, Plan of Allocation, and the request for attorneys' fees and costs, shall be served and filed.

23. Neither the Stipulation, nor any of its terms or provisions, nor any of the negotiations or proceedings connected with it, shall be construed as an admission or concession by Defendants of the truth of any of the allegations in the Litigation, or of any liability, fault, or wrongdoing of any kind, or by the Representative Plaintiffs or any other member of the Settlement Class of the merit of any defense or lack of merit of any claim.

24. All discovery and other proceedings in the Litigation are stayed until further order of the Court, except as may be necessary to implement the settlement or comply with the terms of the Stipulation. The Representative Plaintiffs and the other Settlement Class Members are barred from commencing or prosecuting any direct or representative action, or any action in any other capacity, asserting any of the Released Claims unless and until the Stipulation is terminated according to its terms.

25. The Court may, for good cause, extend any of the deadlines set forth in this Order without further notice to Settlement Class Members.

DATED: __________________ ___________________________________
THE HONORABLE JAMES WARE
UNITED STATES DISTRICT JUDGE

BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414

Attorneys for Plaintiffs

EXHIBIT A-1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BROOKE GRAUBART, et al., On Behalf
of Themselves and All Others
Similarly Situated,

Plaintiffs,

vs.

INSIGNIA SOLUTIONS PLC, et al.,

Defendants.
___________________________________

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No. C-97-20265-JW(EAI)

CLASS ACTION

NOTICE OF PENDENCY
AND PROPOSED
SETTLEMENT OF
CLASS ACTIONS

TO: ALL PERSONS WHO PURCHASED AMERICAN DEPOSITORY SHARES ("ADS") OF INSIGNIA SOLUTIONS PLC ("INSIGNIA") DURING THE PERIOD FROM NOVEMBER 14, 1995 THROUGH AND INCLUDING FEBRUARY 26, 1997.

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION. PLEASE NOTE THAT IF YOU ARE A SETTLEMENT CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE. TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST SUBMIT A VALID PROOF OF CLAIM ON OR BEFORE __________________, 1998.

This notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an order of the United States District Court for the Northern District of California (the "Court"). The purpose of this Notice is to inform you of the proposed settlement of this class action litigation and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the settlement. This notice describes the rights you may have in connection with the settlement and what steps you may take in relation to the settlement and this class action litigation.

The proposed settlement creates a fund in the amount of $8 million in cash and will include any interest that accrues on the fund prior to distribution. Your recovery from this fund will depend on a number of variables including the number of shares you purchased and the timing of your purchases and sales. Plaintiffs estimate as many as 8.2 million shares which traded during the class period may have been affected by the wrongdoing plaintiffs alleged in this matter. Assuming that all affected shares elect to participate in the settlement, the average recovery per ADS will be approximately $0.97 before deduction of Court-approved fees and expenses.

Plaintiffs believe that the proposed settlement is a good recovery and is in the best interests of the class. Because of the inherent risks associated with continuing to litigate and proceeding to trial, there was a danger that Plaintiffs would not have prevailed on any of their claims, in which case the class would receive nothing. For example, Plaintiffs faced the possibility that all or many of the claims in this case could have been dismissed. A motion to dismiss the case in it entirety was pending at the time of settlement and it is unknown which, if any, claims would have remained at the end of the day. In addition, the amount of damages would have been subject to rigorous attack by defendants. Damages are limited to losses attributed to actionable securities fraud and at trial defendants would try to prove that all or most of the damages were caused by non-fraud related market factors. In light of these risks and uncertainties, Plaintiffs believe a more realistic assessment of recoverable damages would result in a recovery after trial of approximately $1.93 per share, before any deduction for attorneys' fees and expenses. This estimate assumes a fifty percent success rate on plaintiffs' claims at trial. Plaintiffs estimate that, in the event they were able to prevail on all of their claims at trial, the average damage per ADS could have been as high as $3.87. However, the potential maximum recovery must be weighed against the very significant risk that defendants could prevail at trial and the class would receive nothing. The proposed settlement eliminates this risk and provides an immediate and sizable recovery.

Defendants, using plaintiffs' analysis and theory of calculating damages for purposes of this settlement only, agree that the average amount of recoverable damages if plaintiffs were able to prevail on all claims alleged could be as high as $3.87 per ADS.

Plaintiffs' counsel have not received any payment for their services in conducting this litigation on behalf of Plaintiffs and the members of the class, nor have they been reimbursed for their out-of-pocket expenditures. If the settlement is approved by the Court, counsel for the Plaintiffs will apply to the Court for attorneys' fees and reimbursement of out-of-pocket expenses to be paid from the settlement proceeds. If the amount requested by counsel is approved by the Court, the average cost per share would be $___.

This Notice is not an expression of any opinion by the Court about the merits of any of the claims or defenses asserted by any party in this litigation or the fairness or adequacy of the proposed settlement.

For further information regarding this settlement you may contact: Rick Nelson, Milberg Weiss Bershad Hynes & Lerach LLP, 600 West Broadway, Suite 1800, San Diego, California 92101 Telephone: 619/231-1058.

1. Notice Of Hearing On Proposed Settlement

A settlement hearing will be held on __________, 199_, at ____ _.m., before the Honorable James Ware, United States District Judge, at the United States Courthouse, 280 South First Street, San Jose, California (the "Settlement Hearing"). The purpose of the Settlement Hearing will be to determine: (1) whether the settlement consisting of $8.0 million in cash plus accrued interest should be approved as fair, just, reasonable and adequate; (2) whether the proposed plan to distribute the settlement proceeds (the "Plan of Allocation") is fair, just, reasonable, and adequate; (3) whether the application by Plaintiffs' counsel for an award of attorneys' fees and expenses should be approved; and (4) whether the Litigation should be dismissed with prejudice. The Court may adjourn or continue the Settlement Hearing without further notice to the Settlement Class.

2. Definitions Used In This Notice

a. "Defendants" means Insignia, Robert P. Lee, Roger D. Friedberger, Paul R. Griffiths, John R. Johnston, Richard M. Noling, Nicholas A. Samuel, David L. Gibbs, George Buchan and Pauline Lo Alker.

b. "Individual Defendants" means each of the Defendants excluding Insignia.

c. "Related Parties" means each of any Defendants' past, present or future directors, officers, employees, partnerships and partners, principals, agents, underwriters, syndicate members, controlling shareholders, any entity in which any Defendant and/or any member(s) of that Defendant's immediate family has or have a controlling interest, attorneys, accountants, auditors, banks, investment banks or investment bankers, advisors, personal or legal representatives, insurers, co-insurers and reinsurers, predecessors, successors, parents, subsidiaries, divisions, joint ventures and joint venturers, assigns, spouses, heirs, executors, administrators, associates, related or affiliated entities, any members of an Individual Defendant's immediate family, or any trust of which any Defendant is the settlor or which is for the benefit of any Individual Defendant and/or member(s) of his or her family.

d. "Released Claims" means the "Released Class Claims" and "Unknown Claims" as defined herein.

e. "Released Class Claims" means any and all claims, actions, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, asserted or that could or might have been asserted in any pleading or amended pleading by the Representative Plaintiffs, or by any of the other Settlement Class Members, or any of them, based upon, arising from, or in any way related to both the purchase of Insignia ADSs by the Representative Plaintiffs or the other Settlement Class Members during the Settlement Class Period and the facts, transactions, events, occurrences, disclosures, statements, acts or omissions or failures to act which were or could or might have been alleged in the Litigation or any claim that the Defendants improperly defended or settled the Litigation; provided however, that this release shall not in any way impair or restrict the rights of the Settling Parties to enforce the terms of the settlement as set forth in this Stipulation.

f. "Unknown Claims" means any Released Class Claims which any Representative Plaintiff or any other Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to object to this settlement. With respect to any and all Released Class Claims against the Released Persons, the Parties stipulate and agree that, upon the Effective Date, the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights, and benefits of §1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. With respect to any and all Released Class Claims against the Released Persons, each of the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and upon the Effective Date and by operation of the Judgment shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, or of international or foreign law, which is similar, comparable or equivalent to §1542 of the California Civil Code. Each of the Representative Plaintiffs and the other Settlement Class Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the Released Class Claims, but hereby stipulate and agree that each Representative Plaintiff does and each other Settlement Class Member shall be deemed to, upon the Effective Date and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Class Claims against the Released Persons, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Releasors acknowledge that the foregoing waiver was bargained for and a key element of the settlement of which this release is a part.

g. "Settlement Class" means all persons (except Defendants, officers and directors of Insignia during the Settlement Class Period, members of the immediate family of any Individual Defendant, any entity in which any Defendant has a controlling interest, and the legal representatives, heirs, successors or assigns of any such excluded party) who purchased Insignia American Depository Shares ("ADS") during the Settlement Class Period, excluding those Persons who timely and validly request exclusion from the Settlement Class pursuant to this Notice.

h. "Settlement Class Period" or "Class Period" means the period from November 14, 1995 through February 26, 1997, inclusive.

3. The Litigation

A. Action In State Court

On April 3, 1996, Kavita Sharma, On Behalf of Herself and All Others Similarly Situated v. Insignia Solutions PLC, Insignia Solutions, Inc., Robert P. Lee, George Buchan, Roger D. Friedberger, Pauline Lo Alker, Paul R. Griffiths, John R. Johnston and Nicholas A. Samuel (CV 757058) was filed in the Superior Court of California, County of Santa Clara (the "State Action"). This action alleged violations of California Corporations Code §§25400-25402, 25500-25502, California Civil Code §§1709-1710, and §§11 and 15 of the Federal Securities Act of 1933 on behalf of all persons who purchased or otherwise acquired Insignia ADS from November 14, 1995 through January 2, 1996 (the "State Class Period"), excluding the defendants, members of their families and any entity in which a defendant has an interest.

B. Action in Federal Court

On March 24, 1997, Brooke Graubart, Morris Rubin and Solomon Eisenberg, On Behalf of Themselves and All Others Similarly Situated v. Insignia Solutions PLC, Insignia Solutions, Inc., Robert P. Lee, Paul R. Griffiths, John R. Johnston, Richard M. Noling, Nicholas A. Samuel and David L. Gibbs (C-97-20265) was filed in the United States District Court for the Northern District of California, San Jose Division (the "Federal Action"). The Federal Action alleged violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, on behalf of all persons who purchased or otherwise acquired Insignia ADS from November 14, 1995 through February 26, 1997 (the "Federal Class Period"), excluding the defendants, members of their families and any entity in which a defendant has an interest.

The State Action and the Federal Action are referred to collectively herein as the "Litigation."

4. Terms of the Proposed Settlement

The Defendants have paid into an escrow account, pursuant to the terms of the Stipulation of Settlement dated as August 8, 1997 (the "Stipulation"), cash in the amount of $8,000,000 (the "Settlement Fund"). A portion of the settlement proceeds will be used for certain administrative expenses, including costs of printing and mailing this notice, cost of publishing a newspaper notice, payment of any taxes assessed against the Settlement Fund and costs associated with the processing of claims submitted. In addition, as explained below, a portion of the Settlement Fund may be awarded by the Court to counsel for Representative Plaintiffs as attorneys' fees and for reimbursement of out-of-pocket expenses. The balance of the Settlement Fund (the "Net Settlement Fund") will be distributed according to the Plan of Allocation described below to Settlement Class members who submit valid and timely proof of claim forms.

4. Plan Of Allocation

The Net Settlement Fund will be distributed to Settlement Class Members who submit valid, timely Proof of Claim forms ("Authorized Claimants") under this Plan of Allocation. The Plan of Allocation provides that you will be eligible to participate in the distribution of the Settlement Fund only if you have a net loss on all transactions in Insignia ADSs during the Settlement Class Period.

For purposes of determining the amount an Authorized Claimant may recover under the Plan of Allocation, the Settlement Class Period has been divided into three groups. The differences in allowed claims among the three groups were arrived at by Plaintiffs' Counsel in consultation with their damage consultant and reflect the maximum damages that could have been recovered if Plaintiffs were successful in establishing liability on all claims. However, the Plan of Allocation does not provide compensation for all trading losses that may have occurred during the Settlement Class Period because some trading losses are not related to the alleged wrongful conduct.

To the extent there are sufficient funds in the Net Settlement Fund, each Authorized Claimant will receive an amount equal to the Authorized Claimant's Claim, as defined below. If, however, the amount in the Net Settlement Fund is not sufficient to permit payment of the total Claim of each Authorized Claimant, then each Authorized Claimant shall be paid the percentage that each Authorized Claimant's Claim bears to the total of the Claims of all Authorized Claimants. Payment in this manner shall be deemed conclusive against all Authorized Claimants.

A Claim will be calculated as follows:

(ii) sold on or after April 3, 1996, the Claim per ADS is $12.00 minus the greater of the sales price or $6.063.

(iii) held at the close of trading on February 26, 1997, the Claim per ADS is $5.937.

(ii) sold on or between January 3, 1996 and February 26, 1997, the Claim per ADS is the lesser of:

(b) $6.675;

(b) $8.087.

(ii) held at the close of trading on February 26, 1997, the Claim per ADS is the lesser of:

(b) $1.412.

e. For Settlement Class Members who made multiple purchases or multiple sales during the Settlement Class Period, the earliest subsequent sale shall be matched with the earliest purchase and chronologically thereafter for purposes of the Claim calculations.

f. All profits shall be subtracted from the total of all losses to determine if a Settlement Class Member has a claim. Only if a Settlement Class Member had a net loss, after profits from all transactions in Horizon common stock during the Settlement Class Period are subtracted from the total of losses, will such class member be eligible to receive a distribution from the Net Settlement Fund.

g. The Court has reserved jurisdiction to allow, disallow or adjust the Claim of any Settlement Class Member on equitable grounds.

5. Reasons For Settlement

In evaluating the reasonableness of the settlement, plaintiffs' counsel analyzed the likelihood of success on the claims asserted. Counsel for the Plaintiffs believe that the evidence developed to date would support their claims; however, the pending motion to dismiss raised serious questions about the viability of certain claims. Even if these claims passed muster and survived the motion to dismiss, defendants would have attempted to defeat the claims in a motion for summary judgment and if necessary at trial. Counsel for the Plaintiffs also recognize the significant risks necessary to prosecute the Litigation against the Defendants through trial and subsequent appeals, as well as the inherent difficulties and delays complex litigation like this entails. Moreover, counsel for the Plaintiffs are mindful of the many problems of proof under and possible defenses to the securities law violations asserted and, therefore, believe that it is in the best interest of the class to resolve the Litigation for the amount obtained. Even if plaintiffs were successful after years of litigation, any recovery would be offset by the significant expenses incurred in continuing to litigate the case. Finally, consideration was given to the ability of Insignia to pay a judgment substantially larger than the amount settled for and the fact that certain defendants are not U.S. residents and collecting any judgment obtained against them at trial would be very difficult.

6. Defendants' Statement And Denials Of Wrongdoing And Liability

9. Order Certifying A Class For Purposes Of Settlement

On ________________, 1997, the Court certified a class, for settlement purposes only. The Settlement Class is defined above.

10. Participation In The Class

If you fall within the definition of the Settlement Class, you will remain a Settlement Class Member unless you elect to be excluded from the Settlement Class. If you do not request to be excluded from the Settlement Class, you will be bound by any judgment entered in the Litigation whether or not you file a Proof of Claim.

If you wish to remain a Settlement Class Member, you need do nothing (other than timely file a Proof of Claim and Release if you wish to participate in the distribution of the Net Settlement Fund) your interests will be represented by Plaintiffs' counsel. IF you choose, you may enter a legal appearance individually or through your own counsel at your own expense.

TO PARTICIPATE IN THE DISTRIBUTION OF THE NET SETTLEMENT FUND, YOU MUST TIMELY COMPLETE AND RETURN THE PROOF OF CLAIM AND RELEASE FORM THAT ACCOMPANIES THIS NOTICE. The Proof of Claim and Release must be postmarked on or before ___________, 1998, and delivered to the Claims Administrator at the address below. Unless the Court orders otherwise, if you do not timely submit a valid Proof of Claim, you will be barred from receiving any payments from the Net Settlement Fund, but will in all other respects be bound by the provisions of the Stipulation and the Final Judgment.

11. Exclusion From The Class

You may request to be excluded from the Settlement Class. To do so, you must mail a written request to:

Insignia Solutions Securities Litigation

The request for exclusion must state: (1) your name, address, and telephone number; (2) all purchases and sales of Insignia ADS made during the Settlement Class Period, including the dates, the number of ADSs, and price paid or received per ADS for each such purchase or sale; and (3) that you wish to be excluded from the Settlement Class. TO BE VALID, A REQUEST FOR EXCLUSION MUST STATE ALL OF THE FOREGOING INFORMATION. YOUR EXCLUSION REQUEST MUST BE POSTMARKED ON OR BEFORE _________, 1998. If you submit a valid and timely request for exclusion, you shall have no rights under the settlement, shall not share in the distribution of the Net Settlement Fund, and shall not be bound by the Stipulation or the Final Judgment.

12. Dismissal And Releases

If the proposed Settlement is approved, the Court will enter a Final Judgment and Order of Dismissal ("Judgment"). The Judgment will dismiss the Released Claims with prejudice as to all Defendants.

The Judgment will provide that all Settlement Class Members who do not validly and timely request to be excluded from the Settlement Class shall be deemed to have released and forever discharged all Released Claims (to the extent members of the Settlement Class have such claims) against all Released Persons.

13. Application For Fees, Expenses And Awards

At the Settlement Hearing, counsel for Plaintiffs will request the Court to award attorneys' fees not to exceed 30% of the Settlement Fund, or an average of $0.29 per share. In addition, Plaintiffs' Counsel will seek reimbursement of the expenses, not to exceed $________, which were advanced in connection with the Litigation, including expenses incurred for experts. Settlement Class Members are not personally liable for any fees and expenses.

To date, Plaintiffs' counsel have not received any payment for their services in conducting this Litigation on behalf of Plaintiffs and the members of the class, nor have counsel been reimbursed for their out-of-pocket expenses. The fee requested by Plaintiffs' counsel would compensate counsel for their efforts in achieving the Settlement Fund for the benefit of the class, and for their risk in undertaking this representation on a contingency basis. If approved by the Court, the fee requested would be within the range of fees awarded to plaintiffs' counsel under similar circumstances in litigation of this type.

14. Conditions For Settlement

The Settlement is conditioned upon the occurrence of certain events. Those events include, among other things: (1) entry of the Judgment by the Court, as provided for in the Stipulation; and (2) expiration of the time to appeal from or alter or amend the Judgment. If, for any reason, any one of the conditions described in the Stipulation is not met, the Stipulation might be terminated and, if terminated, will become null and void, and the parties to the Stipulation will be restored to their respective positions as of August 7, 1997, the date before an agreement in principle to settle the Litigation was reached.

15. The Right To Be Heard At The Hearing

Any Settlement Class Member who has not validly and timely requested to be excluded from the Settlement Class, and who objects to any aspect of the Settlement, the Plan of Allocation, or the application for attorneys' fees, costs and expenses, may appear and be heard at the Settlement Hearing. Any such Person must submit a written notice of objection, postmarked on or before _________________, 199_, to each of the following:

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN
JOY ANN BULL
600 West Broadway, Suite 1800
San Diego, CA 92101

MORRISON & FOERSTER, LLP
MELVIN R. GOLDMAN
MICHAEL L. ZIGLER
425 Market Street
San Francisco, CA 94105-2482

The notice of objection must demonstrate the objecting Person's membership in the Settlement Class, and contain a statement of the reasons for objection. Only members of the Settlement Class who have submitted written notices of objection in this manner will be entitled to be heard at the Settlement Hearing, unless the Court orders otherwise.

16. Special Notice To Nominees

If you hold or purchased any Insignia ADS during the Settlement Class Period as nominee for a beneficial owner, then, within ten (10) days after you receive this Notice, you must either: (1) send a copy of this Notice and the Proof of Claim by first class mail to all such Persons; or (2) provide a list of the names and addresses of such Persons to the Claims Administrator:

Insignia Solutions Securities Litigation

If you choose to mail the Notice and Proof of Claim yourself, you may obtain from the Claims Administrator (without cost to you) as many additional copies of these documents as you will need to complete the mailing.

Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement for or advancement of reasonable administrative costs actually incurred in connection with forwarding the Notice and Proof of Claim and which would not have been incurred but for the obligation to forward the Notice and Proof of Claim, upon submission of appropriate documentation.

17. Examination Of Papers

This Notice is a summary and does not describe all of the details of the Stipulation. For full details of the matters discussed in this Notice, you may desire to review the Stipulation filed with the Court, which may be inspected during business hours, at the office of the Clerk of the Court, United States Courthouse, 280 South First Avenue, San Jose, CA.

If you have any questions about the settlement of the Litigation, you may contact Plaintiffs' Settlement Counsel by writing:

MILBERG WEISS BERSHAD
HYNES & LERACH LLP
ALAN SCHULMAN
JOY ANN BULL
600 West Broadway, Suite 1800
San Diego, CA 92101

DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.

DATED: _________________, 1997

BY ORDER OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

EXHIBIT A-2

BERNSTEIN LIEBHARD & LIFSHITZ
MEL E. LIFSHITZ
274 Madison Avenue
New York, NY 10016
Telephone: 212/779-1414

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

BROOKE GRAUBART, et al., On Behalf
of Themselves and All Others
Similarly Situated,

Plaintiffs,

vs.

INSIGNIA SOLUTIONS PLC, et al.,

Defendants.
___________________________________

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No. C-97-20265-JW(EAI)

CLASS ACTION

PROOF OF CLAIM
AND RELEASE

TO: ALL PERSONS WHO PURCHASED AMERICAN DEPOSITORY SHARES ("ADS") OF INSIGNIA SOLUTIONS PLC ("INSIGNIA") DURING THE PERIOD FROM NOVEMBER 14, 1995 THROUGH AND INCLUDING FEBRUARY 26, 1997

If you purchased Insignia ADSs during the period described above, have not requested exclusion from the Settlement Class and are not a Defendant in this Litigation, or a member of the immediate family of any of the Individual Defendants, an entity in which any of the Defendants has a controlling interest, or the legal representative, heir, successor or assign of any Defendant, you should read the accompanying Notice of Pendency and Proposed Settlement of Class Actions ("Notice") and complete this Proof of Claim and Release Form

IN ORDER TO BE ELIGIBLE TO PARTICIPATE IN THE SETTLEMENT DESCRIBED IN THE ACCOMPANYING NOTICE, YOU MUST MAIL YOUR COMPLETED PROOF OF CLAIM AND RELEASE TO THE CLAIMS ADMINISTRATOR ON OR BEFORE ____________________, 1998.

GENERAL INSTRUCTIONS

1. To recover as a member of the Settlement Class based on your claims in the Insignia class actions (the "Litigation"), you must complete and on page __ hereof, sign this Proof of Claim and Release. If you fail to file a properly addressed (as set forth in paragraph 3 below) Proof of Claim and Release, your claim may be rejected and you may be precluded from any recovery from the Settlement Fund created in connection with the proposed Settlement of the Litigation.

2. Submission of this Proof of Claim and Release, however, does not assure that you will share in the proceeds of the settlement of the Litigation.

3. YOU MUST MAIL YOUR COMPLETED AND SIGNED PROOF OF CLAIM AND RELEASE POSTMARKED ON OR BEFORE __________, 1998 ADDRESSED AS FOLLOWS:

Insignia Solutions Securities Litigation

4. If you are a member of the Settlement Class and you do not timely request exclusion in connection with the proposed settlement, you are bound by the terms of any judgment entered in the Litigation, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM AND RELEASE.

5. If you are NOT a member of the Settlement Class as defined in the Notice, DO NOT submit a Proof of Claim and Release Form.

CLAIMANT IDENTIFICATION

1. If you purchased Insignia American Depository Shares ("ADS"), and held the certificate(s) in your name, you are the beneficial purchaser as well as the record purchaser. If, however, you purchased these securities, and the certificate(s) were registered in the name of a third party, such as a nominee or brokerage firm, you are the beneficial purchaser and the third party is the record purchaser.

2. Use Part I of this form entitled "Claimant Identification" to identify each purchaser of record, if different from the beneficial purchaser ("nominee") of Insignia ADSs which form the basis of this claim. THIS CLAIM MUST BE FILED BY THE ACTUAL BENEFICIAL PURCHASER OR PURCHASERS, OR THE LEGAL REPRESENTATIVE OF SUCH PURCHASER OR PURCHASERS, OF THE ADSs, UPON WHICH THIS CLAIM IS BASED.

3. All joint purchasers must sign this claim. Executors, administrators, guardians, conservators and trustees must complete and sign this claim on behalf of persons represented by them and their authority must accompany this claim and their titles or capacities must be stated. The Social Security (or taxpayer identification) number and telephone number of the beneficial owner may be used in verifying the claim. Failure to provide the foregoing information could delay verification of your claim or result in rejection of the claim.

4. A claimant whose stock was held in a custodian account under a Uniform Gift to Minors Act ("UGMA"), may file in his or her own name, if he or she is now of age. In this event, the former custodian does not have to sign the Proof of Claim. Custodians UGMA should identify themselves as beneficial purchasers, not nominees (e.g., John Smith, Custodian for Jack Smith UGMA). In this instance, use the minor's Social Security Number.

5. Corporate officers or partners filing for a claimant corporation or partnership should fill in the name of the entity as the Beneficial Purchaser, and sign their names and titles where indicated on the signature page.

CLAIM FORM

1. Use Part II of this form entitled "Schedule of Transactions in Insignia ADS" to supply all required details of your transaction(s) in these securities. If you need more space or additional schedules, attach separate sheets giving all of the required information in substantially the same form. Sign and print or type your name on each additional sheet.

2. On the schedules, provide all of the requested information with respect to all of your purchases and all of your sales of Insignia ADSs which took place at any time between November 14, 1995 through and including February 26, 1997 (the "Settlement Class Period"), whether such transactions resulted in a profit or a loss. Failure to report all such transactions may result in the rejection of your claim.

3. List each transaction in the Settlement Class Period separately and in chronological order, by trade date, beginning with the earliest. You must accurately provide the month, day and year of each transaction you list.

4. The term "Purchase Price" means the amount paid for the securities (including commissions and transfer taxes) and the term "Sales Price" means the amount realized on the sale of the securities (net of commissions and transfer taxes). The date of purchase or sale is the "contract" or "trade" date as distinguished from the "settlement" date. The date of covering a "short sale" is deemed to be the date of purchase of the security. The date of a "short sale" is deemed to be the date of sale of the security.

5. Broker's confirmations or other documentation of your transactions in Insignia ADSs should be attached to your claim. Failure to provide this documentation could delay verification of your claim or result in rejection of your claim. Documentation submitted will not be returned to claimants. You are, therefore, urged to make a copy for your files of the Proof of Claim and Release and all documentation that you submit with it.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
Graubart, et al. v. Insignia Solutions PLC, et al.
No. C-97-20265-JW(EAI)

PROOF OF CLAIM AND RELEASE
Must be Postmarked No Later Than:
__________________, 1998

Please Type or Print

PART I: CLAIMANT IDENTIFICATION

____________________________________________________________________________________
Beneficial Owner's Name (First, Middle, Last)

____________________________________________________________________________________
Street Address

________________________________________    ________________________________________
City                                        State                           Zip Code

________________________________________    ________________________________________
Foreign Province                            Foreign Country

________________________________________    _________   Individual
Social Security Number or
Taxpayer Identification Number              _________   Corporation/Other

_________   ____________________________    (work)
Area Code   Telephone Number

_________   ____________________________    (home)
Area Code   Telephone Number

____________________________________________________________________________________
Record Owner's Name (if different from beneficial owner listed above)

PART II: SCHEDULE OF TRANSACTIONS IN INSIGNIA ADS

A) Purchases (November 14, 1995 - February 26, 1997, inclusive) of Insignia ADS

   Trade Date                   No. of Shares 
   Mo Day Year                    Purchased                Purchase Price

1. __________                                              $         .   
2. __________                                              $         .   
3. __________                                              $         .

B) Sales (November 14, 1995 - February 26, 1997, inclusive) of Insignia ADS

   Trade Date                   
   Mo Day Year                  No. of Shares Sold         Sales Price

1. __________                                              $         .   
2. __________                                              $         .   
3. __________                                              $         .

C) Number of Insignia ADS held at close of trading on February 26, 1997:

__________________.

YOU MUST READ AND SIGN THE RELEASE ON PAGE ___.

If you require additional space, attach extra schedules in the same format as above. Copies of broker's confirmations or other documentation evidencing your transactions in Insignia ADS should be attached.

PART III: SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGEMENTS

I submit this Proof of Claim and Release under the terms of the Stipulation of Settlement described in the Notice. I also submit to the jurisdiction of the United States District Court for the Northern District of California with respect to my claim as a Settlement Class Member and for purposes of enforcing the release set forth herein and any Judgment which may be entered in the Litigation. I further acknowledge that I am bound by and subject to the terms of any judgment that may be entered in the Litigation. I agree to furnish additional information to the Claims Administrator to support this claim if required to do so.

PART IV: RELEASE

A. I hereby acknowledge full and complete satisfaction of, and do hereby fully, finally and forever settle, discharge and release all Released Class Claims and Unknown Claims against all Released Persons.

B. The terms used in this release are defined below:

1. "Released Class Claims" means any and all claims, actions, demands, rights, liabilities, and causes of action of every nature and description whatsoever, known or unknown, asserted or that could or might have been asserted in any pleading or amended pleading by the Representative Plaintiffs, or by any of the other Settlement Class Members, or any of them, based upon, arising from, or in any way related to both the purchase of Insignia ADS, by the Representative Plaintiffs or the other Settlement Class Members during the Settlement Class Period and the facts, transactions, events, occurrences, disclosures, statements, acts or omissions or failures to act which were or could or might have been alleged in the Litigation; or any claim that the Defendants improperly defended or settled the Litigation; provided however, that this release shall not in any way impair or restrict the rights of the Settling Parties to enforce the terms of the settlement as set forth in the Stipulation.

2. "Unknown Claims" means any Released Class Claims which any Representative Plaintiff or any other Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to object to this settlement. With respect to any and all Released Class Claims against the Released Persons, the Parties stipulate and agree that, upon the Effective Date, the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights, and benefits of §1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. With respect to any and all Released Class Claims against the Released Persons, each of the Representative Plaintiffs shall expressly and the other Settlement Class Members shall be deemed to have, and upon the Effective Date and by operation of the Judgment shall have, waived any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, or of international or foreign law, which is similar, comparable or equivalent to §1542 of the California Civil Code. Each of the Representative Plaintiffs and the other Settlement Class Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the Released Class Claims, but hereby stipulate and agree that each Representative Plaintiff does and each other Settlement Class Member shall be deemed to, upon the Effective Date, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Class Claims against the Released Persons, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Releasors acknowledge that the foregoing waiver was bargained for and a key element of the settlement of which this release is a part.

3. "Released Persons" means