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Exhibit 10.09
AGREEMENT WITH CERTAIN WHITEBARN SHAREHOLDERS
This AGREEMENT (this "Agreement") is made and entered into as of
this 13th day of March 2000, by and among Talarian Corporation, a California
corporation ("Talarian"), Xxxx Xxxxxxxx, and Xxx Xxxxxxx (each, a "Shareholder,"
and collectively, the "Shareholders") and Xxxxxx & Associates, P.C. (the "Escrow
Agent").
R E C I T A L S
A. Talarian and WhiteBarn, Inc., an Illinois corporation
("WhiteBarn"), are parties to that certain Agreement and Plan of Merger dated as
of March 7, 2000 (the "Merger Agreement") which provides for a merger of
WhiteBarn with and into Talarian (the "Merger").
B. Pursuant to the Merger Agreement, all the shareholders of
WhiteBarn (including the Shareholders) will receive an aggregate of
approximately 348,215 shares (the "Shares") of the common stock, no par value,
of Talarian (the "Talarian Common Stock") and $414,548 in cash, in exchange for
all the outstanding stock of WhiteBarn (the "WhiteBarn Shares").
C. Pursuant to the Merger Agreement, the Shareholders will place
thirty percent (30%) of the Shares in an escrow account to secure certain
indemnification obligations of the Shareholders in favor of Talarian, on the
terms and subject to the conditions set forth herein.
D. The execution and delivery of this Agreement by the Shareholders
is a condition precedent to the consummation of the Merger by Talarian. The
Shareholders, desiring to facilitate the Merger, are willing to enter into this
Agreement in order to induce Talarian to consummate the Merger.
E. All capitalized terms used herein but which are not otherwise
defined shall have the meanings given to them in the Merger Agreement.
A G R E E M E N T
In consideration of the foregoing recitals and the mutual covenants
and conditions contained herein, the parties, intending to be legally bound,
agree as follows:
1. Indemnification by the Shareholders.
1.1 Each of the Shareholders shall indemnify, defend and hold
harmless Talarian and any of its Affiliates and Representatives, and shall
reimburse Talarian and any of its Affiliates and Representatives, on demand, for
any claim, demand, loss, liability, damage or expense including, without
limitation, any claim for direct damages, interest, penalties and reasonable
attorneys' fees and costs of investigation incurred as a result thereof
(collectively "Damages"), resulting from any of the following:
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(a) Any breach or default in the performance by
WhiteBarn of any covenant or agreement of WhiteBarn contained in the Merger
Agreement or pursuant to any agreement, certificate or document delivered to
Talarian by or on behalf of WhiteBarn in connection therewith;
(b) Any breach of warranty or inaccurate or erroneous
representation made by WhiteBarn in the Merger Agreement or pursuant to any
agreement, certificate or document delivered to Talarian by or on behalf of
WhiteBarn in connection therewith;
(c) Any litigation involving WhiteBarn as of the Closing
Date except to the extent described on the Disclosure Schedule and any
litigation arising from the conduct of WhiteBarn's business before the Closing;
(d) any breach of warranty or inaccurate or erroneous
representation made by WhiteBarn in Section 3.20 Taxes of the Merger Agreement;
(e) Any breach or default in the performance by such
Shareholder of any covenant or agreement of such Shareholder contained in
Section 11 of this Agreement;
(f) Any breach of warranty or inaccurate or erroneous
representation made by such Shareholder in Section 11 of this Agreement; and/or
(g) Any breach of warranty or inaccurate or erroneous
representation made by WhiteBarn in Section 3.2 Capitalization of WhiteBarn of
the Merger Agreement.
The Shareholders' obligation to indemnify, defend or hold harmless
Talarian and any of its Affiliates and Representatives from any such Damages
shall terminate on the First Indemnification Termination Date (as defined below)
other than with respect to Damages pursuant to Section 1.1(d) above which shall
terminate on the Applicable Indemnification Termination Date (as defined below)
(other than with respect to proceedings or claims pending at the time of
expiration, which shall continue with respect to such proceedings until such
proceedings are finally resolved). For purposes of this Agreement, an
"Affiliate" of any person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person, where "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise.
The obligation of the Shareholders pursuant to this Section 1.1
shall be several and not joint and shall be shared proportionately among the
Shareholders in accordance with their relative "Percentage Interest" in the
WhiteBarn Shares as set forth on Schedule 1.1 hereto (except with respect to
subparagraphs (e) and (f) above, for which, because these subparagraphs relate
to each Shareholder individually, responsibility shall not be shared
proportionately, but shall be borne entirely by the applicable Shareholder).
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1.2 The parties shall comply with Sections 3 and 4 below for
settlement of the indemnification obligations of the Shareholders to Talarian or
any other party entitled to indemnification under this Section 1 (each, a
"Claiming Party"). If any new claim for indemnification arises which is covered
by the indemnification in this Section 1, the Claiming Party shall notify Xxxx
Xxxxxxxx (the "Lead Shareholder") and the Lead Shareholder shall promptly notify
all the other Shareholders (or, if such claim is pursuant to Sections 1.1(e) or
(f), the Claiming Party shall notify the applicable Shareholder (the "Relevant
Shareholder")). The Shareholders (or the Relevant Shareholder, as applicable)
may contest and defend in good faith at their own cost any claim of third
parties to the extent subject to indemnification under Section 1.1; provided
that the Shareholders (or the Relevant Shareholder, as applicable) shall not be
permitted to settle any claim requiring an admission of liability by the
Claiming Party without the consent of such Claiming Party; and provided,
further, that within 30 days of the Lead Shareholder's (or the Relevant
Shareholder's) receipt of notice of such claim, the Lead Shareholder (or the
Relevant Shareholder, as applicable) notifies the Claiming Party of the
Shareholders' (or the Relevant Shareholders') desire to defend and contest such
claim. If the Lead Shareholder (or the Relevant Shareholder, as applicable) does
not notify the Claiming Party of the Shareholders' (or the Relevant
Shareholders') desire to contest the claim within such 30-day period, then the
Shareholders (or the Relevant Shareholder) shall reimburse any Claiming Party on
demand for any Damages incurred by such Claiming Party at any time after the
date hereof with respect to such claim.
1.3 Notwithstanding the foregoing, in the absence of finally
adjudged fraud or intentional misrepresentation, the Shareholders shall have no
obligation to indemnify, defend, hold harmless or reimburse Talarian or any of
its Affiliates or its Representatives with respect to the matters described
herein, unless and until the aggregate amount of all Damages with respect to
such matters exceeds $50,000 (inclusive of attorneys' fees and costs) in which
event, such persons shall be entitled to indemnification for the full amount of
all Damages suffered or incurred, subject to the next sentence. Notwithstanding
the foregoing, in the absence of finally adjudged fraud or intentional
misrepresentation, the Shareholders shall have no liability pursuant to Sections
1.1(a) through (f) hereunder for Damages which exceed the lesser of (a) $3
million in the aggregate, or (b) the Escrowed Shares.
1.4 The indemnification obligations of the Shareholders
contained in this Section 1 shall be satisfied by an escrow (the "Escrow") as
described herein, provided, however, in the event of finally adjudged fraud or
intentional misrepresentation or claims in connection with Section 1.1(g) to the
extent not satisfied from the Escrow, claims may be made by the Claiming Party
directly against the Shareholders.
2. Establishment of Escrow; Account.
2.1 Deposit in Escrow. Talarian, on behalf of the
Shareholders, hereby deposits with the Escrow Agent, stock certificates
representing an aggregate of 104,464 shares of the Talarian Common Stock (the
"Initial Escrowed Shares"), issued in the name of the Shareholders as described
in Schedule 2.1 hereto. In addition, each of the Shareholders hereby deposits
four stock powers (separate from certificate) endorsed in favor of Talarian. Any
shares of Talarian capital stock that result from any stock dividend,
reclassification, stock split, subdivision or combination of
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shares, recapitalization, merger or other events generally made with respect to
the Talarian Common Stock in the Escrow Account (as defined below) ("Additional
Shares") shall be delivered to the Escrow Agent and shall be held in the Escrow
Account (and, as required under this Agreement, shall be released from the
Escrow Account). Unless otherwise indicated, as used in this Agreement, the term
"Escrowed Shares" includes the Initial Escrowed Shares and any Additional
Shares. The Escrow Agent agrees to accept delivery of the Escrowed Shares and to
hold the Escrowed Shares in Escrow in accordance with this Agreement and to
release the Escrowed Shares out of Escrow as provided in this Agreement.
2.2 Escrow Account. The Escrow Agent shall maintain the
Escrowed Shares in a separate account (the "Escrow Account").
2.3 Cash Dividends; Voting and Rights of Ownership. Any cash
dividends, dividends payable in property or other distributions of any kind made
in respect of the Escrowed Shares shall become part of the Escrow Account. The
Shareholders shall have the right to vote the Escrowed Shares deposited in the
Escrow Account on their behalf during such time that the Escrowed Shares are
held in Escrow, and Talarian shall take all steps necessary to allow the
exercise of such rights. While the Escrowed Shares remain in the Escrow Agent's
possession pursuant to this Agreement, the Shareholders will retain and shall be
able to exercise all other incidents of ownership of the Escrowed Shares that
are not inconsistent with the terms and conditions hereof.
3. Release from Escrow.
3.1 Release of Escrowed Shares to the Shareholders. The
Escrowed Shares shall be held by the Escrow Agent until required to be released
to either the Shareholders or Talarian as provided for in Sections 3.1 and 3.2.
Within five business days after the first anniversary of the Closing Date (the
"First Release Date") and within five business days after the third anniversary
of the Closing Date (the "Second Release Date"), the Lead Shareholder shall
deliver to the Escrow Agent and Talarian a written notice (a "Release Notice")
setting forth the Escrowed Shares to be released (the "Released Escrowed
Shares") and stating the number of shares from the Released Escrowed Shares to
be released to each of the Shareholders. Provided Talarian has not objected to
the Escrow Agent within five business days after receipt of any Release Notice,
the Released Escrowed Shares to be released to the Shareholders, and the payment
to be made to the Shareholders in lieu of fractional shares, if any (as
indicated below in this Section 3.1) shall be sent to the address specified by
the Shareholders.
The Released Escrowed Shares shall not include (a) any Escrowed
Shares delivered to Talarian in accordance with Section 3.2 below in
satisfaction of Claims (as defined in Section 4.2 below) by Talarian, (b) any
Escrowed Shares subject to delivery to Talarian in accordance with Section 4,
below, with respect to any then pending, but unresolved Claims ("Unresolved
Claims") by Talarian, or (c) with respect to the First Release Date, 5,000 of
the original Escrowed Shares, which shall remain in Escrow until the Second
Release Date unless otherwise released to Talarian hereunder.
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Within five business days after receipt of the Release Notice, the
Escrow Agent shall deliver (by registered mail or overnight carrier) to the
Shareholders the number of Released Escrowed Shares specified in the Release
Notice and shall pay by check to the Shareholders the amount payable in lieu of
fractional shares, if any. To facilitate this process, no later than the First
Release Date (or Second Release Date, as applicable), Talarian shall (a) take
such action as may be necessary to cause a stock certificate to be issued in the
name of each Shareholder bearing any legends required by this Agreement and
shall provide such certificates to the Escrow Agent, and (b) deposit with the
Escrow Agent sufficient funds to pay the cash amount for fractional shares. Cash
shall be paid in lieu of fractions of Released Escrowed Shares in an amount
equal to the Fair Market Value thereof as of the date of the Release Notice (as
defined below). The Escrow Agent shall not be required to deliver the Released
Escrowed Shares to the Shareholders until it has received the Release Notice
from Talarian and the Lead Shareholder. Upon the resolution of any Unresolved
Claims, the Escrowed Shares that were subject to the Claim shall be promptly
released by the Escrow Agent to Talarian or to the Shareholders as determined
pursuant to the resolution of the Claim and in accordance with this Agreement.
The Escrow Agent shall not be required to invest the funds deposited with it for
payment in lieu of fractional shares, but will make such investment arrangements
as are expressly requested in writing by the Lead Shareholder to the extent
reasonable.
3.2 Release of Escrowed Shares to Talarian. Within five
business days after resolution of any Claim in accordance with Section 4 below,
Talarian and the Lead Shareholder (or the Relevant Shareholder, as applicable)
shall deliver to the Escrow Agent a Release Notice setting forth the number of
shares from the Escrowed Shares having a value which equals the amount, if any,
deemed to be owing to Talarian pursuant to the resolution of the Claim. The
value of the Escrowed Shares shall be determined based on the fair market value
as of the date of the Release Notice (as determined in accordance with Schedule
3.2) (the "Fair Market Value"). In lieu of any fractional shares, any fraction
of a share that would otherwise be released shall be rounded down to the nearest
whole share. Within five business days after receipt of such Release Notice, or
if no such Release Notice is received, then within 20 calendar days after
receipt of any Talarian Demand provided for in Section 4.4(a) below, or a
Talarian Distribution Notice as provided for in Section 4.4(b), below (unless
the Lead Shareholder (or the Relevant Shareholder, as applicable) gives the
Escrow Agent written notice within such 20-day period that the Shareholders (or
the Relevant Shareholder, as applicable) object to the Talarian Demand or
Distribution Notice as provided in Section 4.4(a) or 4.4(b), below, as the case
may be), the Escrow Agent and Talarian shall cause the transfer agent for
Talarian Common Stock to cancel certificates for the number of Escrowed Shares
to be released pursuant to this Section 3.2 and reissue certificates for
Escrowed Shares that are to be either distributed to the Shareholders pursuant
to Section 3.1, above, or retained by the Escrow Agent in Escrow as Escrowed
Shares. Any Escrowed Shares released from Escrow to Talarian may be canceled by
Talarian, without requiring Talarian to pay any consideration whatsoever in
receipt thereof to the Shareholders.
3.3 No Encumbrance. No Escrowed Shares or any beneficial
interest therein may be pledged, sold, assigned or transferred, including by
operation of law, by an Shareholder or may be taken or reached by any legal or
equitable process in satisfaction of any debt or other liability of such
Shareholder, prior to the delivery of the Escrowed Shares by the Escrow Agent to
such Shareholders pursuant to Section 3.1 above.
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3.4 Power to Transfer Escrowed Shares. The Escrow Agent is
hereby granted the power to effect any transfer of the Escrowed Shares provided
for in this Agreement. Talarian will cooperate with the Escrow Agent in causing
its transfer agent to promptly issue and reissue stock certificates as necessary
to effect such transfers.
4. Resolution of Claims.
4.1 Indemnification Obligations. The Escrowed Shares shall
serve as security only for the indemnity obligations of the Shareholders under
this Agreement. Payment for Damages to be owing to Talarian under such indemnity
shall be made by releasing to Talarian Escrowed Shares as provided in this
Agreement. To the extent the Escrowed Shares are insufficient to fully
compensate Talarian for Damages, Talarian shall only be entitled to pursue any
such Claims against any of the Shareholders to the extent such Damages relate to
claims in connection with Section 1.1(g) or finally adjudged fraud or
intentional misrepresentation.
4.2 Notice of Claims. Promptly after receipt by Talarian of
notice or discovery of any claim, damage or legal action or proceeding giving
rise to indemnification rights under this Agreement (a "Claim"), Talarian shall
give the Lead Shareholder (or Relevant Shareholder, if applicable) written
notice of such Claim and shall provide a copy of such notice to the Escrow
Agent. The Lead Shareholder shall promptly notify the other Shareholders. Each
notice of a Claim by Talarian (the "Notice of Claim") shall be in writing and
shall be delivered on or before the first anniversary of the Closing Date (the
"First Indemnification Termination Date") other than with respect to Claims made
pursuant to Section 1.1(d) which shall be made on or before the expiration of
the statute of limitations for the Tax to which the particular Claim relates
(the "Applicable Indemnification Termination Date").
4.3 No Release to Talarian Until Resolution. Talarian shall
not request the Escrow Agent to release to Talarian any of the Escrowed Shares
held in the Escrow Account pursuant to a Notice of Claim until such Claim has
been resolved in accordance with Section 4.4, below.
4.4 Resolution of Claims. Any Notice of Claim received by the
Shareholders and the Escrow Agent pursuant to Section 4.2, above, shall be
resolved as follows:
(a) Uncontested Claims. If the Lead Shareholder (or the
Relevant Shareholder, as applicable) does not contest a Notice of Claim in a
writing to Talarian within 20 calendar days of receipt of a Notice of Claim,
Talarian may deliver to the Escrow Agent, with a copy to the Shareholders (or
the Relevant Shareholder, as applicable), a written demand by Talarian (a
"Talarian Demand") stating that a Notice of Claim had been given and that no
notice contesting such Claim has been received from the Lead Shareholder (or the
Relevant Shareholder, as applicable) and further stating the number of Escrowed
Shares (valued at the Fair Market Value as of the date of the Talarian Demand)
to be withheld from release to the Shareholders (or the Relevant Shareholder, as
applicable) or to be released to Talarian in accordance with this Section. The
Escrow Agent shall within 20 calendar days after receipt of such Talarian
Demand, unless objected to by the
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Shareholders as described in Section 3.2 above, release to Talarian that number
of Escrowed Shares as specified in the Talarian Demand and shall notify the
Shareholders (or the Relevant Shareholder, as applicable) of such transfer.
(b) Contested Claims. If the Lead Shareholder (or the
Relevant Shareholder, as applicable) gives written notice contesting all or a
portion of a Notice of Claim to Talarian and the Escrow Agent (a "Contested
Claim") within the 20 calendar day period provided above, matters that are
subject to third party Claims brought against Talarian or any other Claiming
Party in a litigation or arbitration shall await the final decision, award or
settlement of such litigation or arbitration, while matters that arise between
Talarian or any other Claiming Party on the one hand and the Shareholders (or
the Relevant Shareholder, as applicable) on the other hand, including any
disputes regarding performance or non-performance of a party's obligations under
this Agreement ("Arbitrable Claims") shall be settled in accordance with Section
4.4(c), below. Any portion of the Notice of Claim that is not contested shall be
resolved as set forth above in Section 4.4(a), above. If notice is received by
the Escrow Agent that a Notice of Claim is contested by the Shareholders (or the
Relevant Shareholder, as applicable), then the Escrow Agent shall hold in the
Escrow Account, after what would otherwise be the First Release Date (or Second
Release Date, as applicable), Escrowed Shares having a value sufficient to cover
Damages alleged in such Claim (valuing any Escrowed Shares at the Fair Market
Value as of the date the Escrow Agent receives notice that such Claim is being
contested) until the earlier of (i) receipt of a settlement agreement executed
by Talarian and the Shareholders (or the Relevant Shareholder, as applicable)
setting forth the resolution of the Notice of Claim and setting forth the number
of Escrowed Shares to be released to Talarian, or (ii) receipt of a written
notice from Talarian (a "Talarian Distribution Notice") attaching a copy of the
final award or decision of the arbitrator and setting forth the number of
Escrowed Shares, if any, to be released to Talarian as a result of such award,
unless objected to by the Shareholders as described in Section 3.2 above.
Talarian shall provide a copy of the Talarian Distribution Notice to the
Shareholders at the same time as it provides such notice to the Escrow Agent. If
the Escrow Agent institutes an action for interpleader in accordance with
Section 5.6 of this Agreement as a result of a dispute between the parties, the
parties agree to jointly seek to stay such interpleader action pending the
resolution of any arbitration commenced by the parties or, if the parties are
unable to agree, pursuant to this Section 4.4(b) and 4.4(c), below.
(c) Arbitration.
(i) AAA Rules. Any Arbitrable Claim, in any
dispute between Talarian or any other Claiming Party and the Shareholders (or
the Relevant Shareholder, as applicable) under this Agreement, shall be
submitted to final and binding arbitration in the County of Santa Xxxxx, State
of California, which arbitration shall, except as herein specifically stated, be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA") then in effect; provided, however, that the
parties agree first to try in good faith to resolve any Arbitrable Claim that
does not exceed $100,000 by mediation under the Commercial Mediation Rules of
the American Arbitration Association, before resorting to arbitration; provided,
further, that in the event of an arbitration, the arbitration provisions of this
Agreement shall govern over any conflicting rules which may now or hereafter be
contained in the AAA rules.
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(ii) Binding Affect. The final decision of the
arbitrator shall be furnished in writing to the Escrow Agent, the Shareholders
and Talarian and will constitute a conclusive determination of the issue in
question, binding upon the Shareholders and Talarian. The arbitrator shall have
the authority to grant any equitable and legal remedies that would be available
in any judicial proceeding. Any judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction over the subject
matter thereof.
(iii) Compensation of Arbitrator. Any such
arbitration shall be conducted before a single arbitrator who will be
compensated for his or her services at a rate to be determined by the parties
and by the AAA, but based upon reasonable hourly or daily consulting rates for
the arbitrator in the event the parties are not able to agree upon his or her
rate of compensation.
(iv) Selection of Arbitrator. The AAA shall have
the authority to select an arbitrator from a list of arbitrators who are
partners in a nationally recognized firm of independent certified public
accountants from the management advisory services department (or comparable
department or group) of such firm or who are partners in a major law firm;
provided, however, that neither the accounting firm, law firm nor the individual
arbitrator shall be a firm or individual that has within the last three years
rendered, or is then rendering, services to any party or, also in the case of a
law firm, a firm or an individual lawyer, who has appeared, or is then
appearing, as counsel of record in opposition to any party; provided, further,
that the individual arbitrator cannot have any other prior relationship or
affiliation to the Shareholders, Talarian or any of its officers, directors,
consultants, contractors, or employees which is likely to affect or compromise
the arbitrator's independence.
(v) Payment of Costs. The Shareholders (or the
Relevant Shareholder, as applicable) and Talarian will share responsibility for
the attorneys' fees and costs and all costs of arbitration, including those
provided for above, based on the degree to which the arbitrator accepts the
respective positions of the parties, as conclusively determined by the
arbitrator.
(vi) Terms of Arbitration. The arbitrator chosen
in accordance with these provisions shall not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
the Merger Agreement or any other documents that are executed in connection
therewith.
(vii) Exclusive Remedy. Arbitration or mediation
under this Section 4.4(c) shall be the sole and exclusive remedy of the parties
for any Arbitrable Claim arising out of this Agreement.
5. Escrow Agent.
5.1 Duties. The duties of the Escrow Agent hereunder shall be
entirely administrative and not discretionary. The Escrow Agent shall be
obligated to act only in accordance with written instructions received by it as
provided in this Agreement and is authorized herewith to
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comply with any orders, judgments or decrees of any court with or without
jurisdiction and shall not be liable as a result of its compliance with the
same.
5.2 Legal Opinions. As to any legal questions arising in
connection with the administration of this Agreement, the Escrow Agent may rely
absolutely upon the joint instruction of Talarian and the Lead Shareholder or
the opinions given to the Escrow Agent by its outside independent counsel and
shall be free of liability for acting and relying on such opinions.
5.3 Signatures. The Escrow Agent may rely absolutely upon the
genuineness and authorization of the signature and purported signature of any
party upon any instruction, notice, release, receipt or other document delivered
to it pursuant to this Agreement.
5.4 Receipts and Releases. The Escrow Agent may, as a
condition to the disbursement of monies or disposition of securities as provided
herein, require from the payee or recipient a receipt therefor and, upon final
payment or disposition, a release of the Escrow Agent from any liability arising
out of its execution or performance of this Agreement, with such release to be
in a form reasonably satisfactory to the Escrow Agent.
5.5 Refrain from Action. The Escrow Agent shall be entitled to
refrain from taking any action contemplated by this Agreement in the event it
becomes aware of any dispute between the Shareholders and Talarian as to any
material facts or as to the happening of any event precedent to such action.
5.6 Interpleader. If any controversy arises between the
parties or with any third party, the Escrow Agent shall not be required to
determine the same or to take any action, but the Escrow Agent in its discretion
may institute such interpleader or other proceedings in connection therewith as
the Escrow Agent may deem proper, and in following such other course, the Escrow
Agent shall not be liable.
5.7 Tax Forms. All persons or entities entitled to receive
interest from the Escrow Account will provide the Escrow Agent with W-9 tax
forms prior to disbursement of interest. Interest earned in the Escrow Account
will be reported as income to the party receiving such interest.
6. Indemnification of Escrow Agent.
6.1 Waiver Indemnification. Talarian and the Shareholders
agree to and hereby do waive any suit, claim, demand or cause of action of any
kind which they may have or may assert against the Escrow Agent arising out of
or relating to the execution or performance by the Escrow Agent of this
Agreement, in accordance with the terms and conditions hereof, unless such suit,
claim, demand or cause of action is based upon the willful neglect or gross
negligence or bad faith of the Escrow Agent. They further agree to indemnify the
Escrow Agent against and from any and all claims, demands, costs, liabilities
and expenses, including reasonable counsel fees, which may be asserted against
it or to which it may be exposed or which it may incur by reason of its
execution or performance of this Agreement, except to the extent attributable to
its willful neglect,
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gross negligence or bad faith. Such agreement to indemnify shall survive until
extinguished by any applicable statute of limitations.
6.2 Conditions to Indemnification. In case any litigation is
brought against the Escrow Agent in respect of which indemnity may be sought
hereunder, the Escrow Agent shall give prompt notice of that litigation to the
parties, and the parties, upon receipt of that notice, shall have the obligation
and the right to assume the defense of such litigation, provided that failure of
the Escrow Agent to give the notice shall not relieve the parties from any of
their obligations under this Section 6 unless that failure prejudices the
defense of any of such litigation by said parties. The cost of defense of any
such litigation shall be borne by Talarian unless the litigation is brought by
or on behalf of the Shareholders, in which case the cost of defense of any such
litigation shall be borne by the Shareholders. At its own expense, the Escrow
Agent may employ separate counsel and participate in the defense. Parties shall
not be liable for any settlement agreed to by the Escrow Agent without their
respective consents.
7. Acknowledgment by the Escrow Agent. By execution and delivery of
this Agreement, the Escrow Agent acknowledges that the terms and provisions of
this Agreement are acceptable and agrees to carry out the provisions of this
Agreement on its part.
8. Resignation or Removal of Escrow Agent; Successor.
8.1 Resignation and Removal.
(a) The Escrow Agent may resign as such following the
giving of 30 days' prior written notice to the other parties. Similarly, the
Escrow Agent may be removed and replaced following the giving of 30 calendar
days' prior written notice to be given to the Escrow Agent jointly by the
Shareholders and Talarian. In either event, the duties of the Escrow Agent shall
terminate 30 calendar days after the date of such notice (or as of such earlier
date as may be mutually agreeable); and the Escrow Agent shall then deliver the
balance of the Escrowed Shares then in its possession to a successor Escrow
Agent as shall be appointed by the other parties as evidenced by a written
notice filed with the Escrow Agent.
(b) If the parties are unable to agree upon a successor,
or shall have failed to appoint a successor prior to the expiration of 30
calendar days following the date of the notice of resignation or removal, then
the acting Escrow Agent may petition any court of competent jurisdiction for the
appointment of a successor Escrow Agent or other appropriate relief and any such
resulting appointment shall be binding upon all of the parties.
8.2 Successors. Every successor appointed hereunder shall
execute, acknowledge and deliver to its predecessor and also to the Shareholders
and Talarian, an instrument in writing accepting such appointment hereunder, and
thereupon such successor, without any further act, shall become fully vested
with all the duties, responsibilities and obligations of its predecessor; and
such predecessor, upon the written request of its successor or any of the
parties, shall execute and deliver an instrument or instruments transferring to
such successor all the rights of such predecessor hereunder, and shall duly
assign, transfer and deliver all property, securities and monies
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held by it pursuant to this Agreement to such successor (a "Successor
Transfer"). Should any instrument be required by any successor for more fully
vesting in such successor, the duties, responsibilities and obligations hereby
vested or intended to be vested in the predecessor, any and all such instruments
in writing shall, on the request of any of the other parties, be executed,
acknowledged and delivered by the predecessor.
8.3 New Custodian. In the event of an appointment of a
successor, upon the consummation of the Successor Transfer, the predecessor
shall cease to be custodian of any funds, securities or other assets and records
previously held by it pursuant to this Agreement, and the successor shall become
such custodian.
8.4 Release. Upon acknowledgment by any successor Escrow Agent
of the receipt of the then remaining balance of the Escrowed Shares, the then
acting Escrow Agent shall be fully released and relieved of all duties,
responsibilities and obligations under this Agreement that may arise and accrue
thereafter.
9. Fee. The Escrow Agent shall be paid for service hereunder in
accordance with the fee schedule attached hereto as Schedule 9. Talarian shall
be responsible for paying all such fees to the Escrow Agent and any successor
thereof. In the event that the Escrow Agent is required to render any service
not provided for in this Agreement and fee schedule, or there is any assignment
of the interest of this Escrow or any modification hereof, the Escrow Agent
shall be entitled to receive from the party requesting the service, assignment
or amendment reasonable compensation for such extraordinary services and
reimbursement for all fees, costs, liability and expenses, including attorneys'
fees.
10. Termination of Escrow. The Escrow created hereby shall terminate
following the Escrow Agent's delivery of all remaining Escrowed Shares to the
Shareholders and/or Talarian pursuant to Section 3 above.
11. Shareholder Representations, Warranties and Covenants. Each
Shareholder represents, warrants and covenants as follows:
11.1 Stock Ownership. Shareholder has good and marketable
title to the WhiteBarn Shares being sold by the Shareholder pursuant to the
Merger Agreement and has full power and authority to surrender the WhiteBarn
Shares without any restrictions, liens, charges, claims, encumbrances or rights
of others of any nature whatsoever. Shareholder, upon request, will execute and
deliver any additional documents necessary or desirable to complete the
surrender of the certificates representing the WhiteBarn Shares surrendered
herewith. All authority herein conferred shall survive the death or incapacity
of the undersigned and any obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned.
11.2 Business or Financial Experience. Shareholder, by reason
of his or her business or financial experience or the business or financial
experience of his or her professional advisors who are unaffiliated with, and
are not compensated by, Talarian or any Affiliate or selling
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agent of Talarian, directly or indirectly, is capable of evaluating the merits
and risks of the transactions contemplated herein and in the Merger Agreement
and has the capacity to protect his or her own interests in connection
therewith. Shareholder is able to bear the economic risk of this investment, and
has such knowledge and experience in financial and business matters that
Shareholder is capable of evaluating the merits and risks of the investment in
the securities to be purchased.
11.3 Accredited Investors. Shareholder is an "accredited
investor" within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
11.4 No Distribution. Shareholder is acquiring the Shares for
investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof.
11.5 Legends. Shareholder understands that (a) the Shares have
not been registered under the Securities Act by reason of a specific exemption
therefrom, and may not be transferred or resold except pursuant to an effective
registration statement or exemption from registration, and (b) each certificate
representing the Shares will be endorsed with any legend required to be placed
thereon by applicable federal or state securities laws and with legends in
substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Talarian will instruct the transfer agent not to register the transfer of any of
the Shares unless the conditions specified in the foregoing legend are
satisfied.
11.6 Information. In addition, Shareholder has been furnished
with such materials and has been given access to such information relating to
Talarian as it or its qualified representative has requested and has been
afforded an opportunity to ask questions regarding Talarian and the Shares, all
as Shareholder has found necessary to make an informed investment decision.
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11.7 Residency. Shareholder is a resident of the State of
Illinois and all communications regarding Shareholder's purchase of the Shares
were sent to Shareholder in Illinois.
11.8 Market Stand-Off. In connection with an underwritten
initial public offering by Talarian of its equity securities pursuant to an
effective registration statement filed under the Securities Act, Shareholder
shall not, directly or indirectly, (1) offer, sell, solicit an offer to buy,
pledge, contract to sell, make any short sale of, loan, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise dispose or transfer of any shares of
Talarian Common Stock or any securities convertible into or exercisable or
exchangeable for Talarian Common Stock, (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any economic
consequences of ownership of Talarian Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Talarian
Common Stock or such other securities, in cash or otherwise, or (3) otherwise
agree to engage in any of the foregoing transactions without the prior written
consent of the Talarian and its underwriters, for such period of time (not to
exceed six months) from and after the effective date of such registration
statement as may be requested by Talarian or such underwriters (with such period
to be no longer than that requested by Talarian (or its underwriters) by
officers, directors and ten parent shareholders of Talarian). Shareholder also
further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing.
12. Miscellaneous Provisions.
12.1 Governing Law. The validity, construction and performance
of this Agreement, and any Action arising out of or relating to this Agreement
shall be governed by the Laws, without regard to the Laws as to choice or
conflict of Laws, of the State of California.
12.2 Amendment. This Agreement may be amended, supplemented,
modified and/or rescinded only through an express written instrument signed by
all parties or their respective successors and permitted assigns.
12.3 Assignment. Neither this Agreement nor any interest
herein shall be assignable (voluntarily, involuntarily, by judicial process,
operation of Law or otherwise), in whole or in part, by any of the Shareholders
without the prior written consent of Talarian which consent may not be
unreasonably withheld or delayed
12.4 Notices. All notices, requests, demands and other
communications made under this Agreement shall be in writing, correctly
addressed to the recipient at the addresses set forth under such recipient's
signature on the signature page hereto and shall be deemed to have been duly
given; (a) upon delivery, if served personally on the party to whom notice is to
be given; or (b) on the date or receipt, refusal or non-delivery indicated on
the receipt if mailed to the party to whom notice is to be given by first class
mail, registered or certified, postage prepaid, or by air courier. Any party may
give written notice of a change of address in accordance with the provisions of
this Section 12.4 and after such notice of change has been received, any
subsequent notice shall be given to such party in the manner described at such
new address.
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12.5 Warranty of Authority. Each of the individuals signing
this Agreement on behalf of a party hereto warrants and represents that such
individual is duly authorized and empowered to enter into this Agreement and
bind such party hereto.
12.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement
as of the date first set forth above.
"TALARIAN": THE "SHAREHOLDERS":
TALARIAN CORPORATION,
a California corporation
Xxxx Xxxxxxxx
By: ______________________________ Address:
Name:______________________________ ___________________________________
Its: ______________________________ ___________________________________
___________________________________
Address: Tel. No.:
000 Xxxxxx Xxxxxx Fax. No.:
Xxx Xxxxx, XX 00000-0000
Tel. No.: (000) 000-0000
Fax. No.: (000) 000-0000
"ESCROW AGENT":
XXXXXX & ASSOCIATES, P.C.
Xxx Xxxxxxx
By: ______________________________ Address:
Its: ______________________________ ___________________________________
Address: ___________________________________
00 Xxxxxxxxx Xxxxx, Xxxxx 000 ___________________________________
Xxxxxx, Xx 00000 Tel. No.: _________________________
Tel. No.: (000) 000-0000 Fax. No.: _________________________
Fax. No.: (000) 000-0000
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