EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
TIBCO SOFTWARE INC.
PANTHER ACQUISITION CORP.
AND
TALARIAN CORPORATION
Dated as of January 4, 2002
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER......................................................................................... 1
1.1 The Merger................................................................................... 1
1.2 Effective Time; Closing...................................................................... 2
1.3 Effect of the Merger......................................................................... 3
1.4 Certificate of Incorporation; Bylaws......................................................... 3
1.5 Directors and Officers....................................................................... 3
1.6 Effect on Capital Stock...................................................................... 3
1.7 Surrender of Certificates.................................................................... 4
1.8 No Further Ownership Rights in Talarian Common Stock......................................... 6
1.9 Lost, Stolen or Destroyed Certificates....................................................... 7
1.10 Taking of Necessary Action; Further Action................................................... 7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF TALARIAN....................................................... 7
2.1 Organization of Talarian..................................................................... 7
2.2 Talarian Capital Structure................................................................... 8
2.3 Obligations With Respect to Capital Stock.................................................... 9
2.4 Authority.................................................................................... 9
2.5 SEC Filings; Talarian Financial Statements................................................... 11
2.6 Absence of Certain Changes or Events......................................................... 11
2.7 Taxes........................................................................................ 12
2.8 Title to Properties; Absence of Liens and Encumbrances....................................... 14
2.9 Intellectual Property........................................................................ 14
2.10 Compliance; Permits; Restrictions............................................................ 19
2.11 Litigation................................................................................... 20
2.12 Employee Benefit Plans....................................................................... 20
2.13 Environmental Matters........................................................................ 24
2.14 Agreements, Contracts and Commitments........................................................ 25
2.15 Statements; Proxy Statement/Prospectus....................................................... 26
2.16 Section 203 Not Applicable................................................................... 27
2.17 Board Approval............................................................................... 27
2.18 Brokers' and Finders' Fees................................................................... 27
2.19 Fairness Opinion............................................................................. 27
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TIBCO AND MERGER SUB.......................................... 28
3.1 Organization of TIBCO and Merger Sub......................................................... 28
3.2 TIBCO and Merger Sub Capital Structure....................................................... 28
3.3 Authority.................................................................................... 28
3.4 SEC Filings; TIBCO Financial Statements...................................................... 29
3.5 Valid Issuance............................................................................... 30
3.6 Proxy Statement/Prospectus................................................................... 30
3.7 Absence of Changes........................................................................... 31
3.8 Financing.................................................................................... 31
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME............................................................. 31
4.1 Conduct of Business by Talarian.............................................................. 31
ARTICLE V ADDITIONAL AGREEMENTS........................................................................... 34
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings............................ 34
5.2 Meeting of Talarian Stockholders............................................................. 35
5.3 Confidentiality: Access to Information...................................................... 36
5.4 No Solicitation.............................................................................. 36
5.5 Public Disclosure............................................................................ 38
5.6 Regulatory Filings; Reasonable Efforts; Notification......................................... 39
5.7 Third Party Consents......................................................................... 41
5.8 Stock Options, Warrants and Restricted Stock................................................. 41
5.9 Certain Employee Benefit Matters............................................................. 43
5.10 Indemnification.............................................................................. 44
5.11 Affiliates................................................................................... 45
5.12 Letter of Talarian's Accountants............................................................. 45
5.13 Tax Matters.................................................................................. 45
5.14 Closing Date Balance Sheet................................................................... 46
5.15 Silicon Valley Bank Loan..................................................................... 47
ARTICLE VI CONDITIONS TO THE MERGER......................................................................... 47
6.1 Conditions to Obligations of Each Party to Effect the Merger................................. 47
6.2 Additional Conditions to Obligations of Talarian............................................. 47
6.3 Additional Conditions to the Obligations of TIBCO and Merger Sub............................. 48
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER............................................................... 49
7.1 Termination.................................................................................. 49
7.2 Notice of Termination Effect of Termination.................................................. 51
7.3 Fees and Expenses............................................................................ 51
7.4 Amendment.................................................................................... 53
7.5 Extension; Waiver............................................................................ 53
ARTICLE VIII GENERAL PROVISIONS............................................................................. 53
8.1 Non-Survival of Representations and Warranties............................................... 53
8.2 Notices...................................................................................... 53
8.3 Interpretation; Certain Defined Terms........................................................ 54
8.4 Counterparts................................................................................. 55
8.5 Entire Agreement; Third Party Beneficiaries.................................................. 55
8.6 Severability................................................................................. 55
8.7 Other Remedies; Specific Performance......................................................... 55
8.8 Governing Law................................................................................ 56
8.9 Rules of Construction........................................................................ 56
8.10 Assignment................................................................................... 56
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8.11 No Waiver; Remedies Cumulative.............................................................. 56
8.12 Waiver of Jury Trial........................................................................ 56
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is made and entered into as of
January 4, 2002 (this "Agreement"), among TIBCO Software Inc., a Delaware
corporation ("TIBCO"), Panther Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of TIBCO ("Merger Sub"), and Talarian Corporation, a
Delaware corporation ("Talarian").
RECITALS
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A. The Board of Directors of Talarian (i) has determined that the
Merger (as defined in Section 1.1) is advisable and fair to, and in the best
interests of, Talarian and its stockholders, (ii) has approved and declared
advisable this Agreement, the Merger and the other transactions contemplated by
this Agreement and (iii) has determined to recommend that the stockholders of
Talarian adopt this Agreement.
B. The Board of Directors of TIBCO (i) has determined that the
Merger is advisable and fair to, and in the best interests of, TIBCO and its
stockholders and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
C. Contemporaneously with the execution and delivery of this
Agreement, and as a condition and inducement to TIBCO's willingness to enter
into this Agreement, certain stockholders of Talarian are entering into a Voting
Agreement with TIBCO in substantially the form attached hereto as Exhibit A (the
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"Talarian Voting Agreement").
D. TIBCO, Merger Sub and Talarian desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, agreements, representations and warranties set forth herein, the
parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger.
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(a) At the Effective Time and subject to and upon the terms
and conditions of this Agreement, including the terms of subsection (b) below,
and the applicable provisions of the Delaware General Corporation Law (the
"DGCL"), Talarian shall be merged with and into Merger Sub (the "Forward
Merger"), the separate corporate existence of Talarian shall cease and Merger
Sub shall continue as the surviving corporation. Subject to subsections (b) and
(c) below, Merger Sub as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "Surviving Corporation."
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(b) In lieu of Talarian being merged with and into Merger
Sub, if all of the conditions set forth in Article VI (excluding conditions
that, by their terms, cannot be satisfied until the Closing Date (as defined in
Section 1.2)) have been satisfied or waived, and if either (i) TIBCO cannot
obtain the Tax Opinion (as defined in Section 5.13), or (ii) TIBCO reasonably
determines in good faith that the combination of (A) the trading price of TIBCO
Common Stock immediately prior to the Effective Time, and (B) the aggregate Cash
Consideration (as defined in Section 1.6(a) below) payable to the Talarian
stockholders as a result of the Merger, would be reasonably likely to result in
the cash payable to or for the benefit of Talarian stockholders as a result of
the Merger exceeding 55% of the total fair market value of the cash and TIBCO
Common Stock payable and deliverable to Talarian stockholders as a result of the
Merger, then, in either case, TIBCO shall have the right, to be exercised only
on the business day immediately prior to, or on the day of, any proposed Closing
Date following satisfaction of the conditions referred to above, to irrevocably
elect by written notice delivered to Talarian, and upon the terms and subject to
the conditions set forth in this Agreement, to cause Merger Sub to be merged
with and into Talarian at the Effective Time (the "Reverse Merger"). Following
the Reverse Merger, the separate corporate existence of Merger Sub shall cease
and Talarian shall continue as the Surviving Corporation. If the Reverse Merger
shall be consummated, then, if requested in writing by Talarian, as soon as
reasonably practicable following the consummation thereof, TIBCO shall cause
Talarian, as the surviving corporation in such Reverse Merger, to be merged (the
"Second-Step Forward Merger") with and into another direct wholly owned
subsidiary of TIBCO (the "Second-Step Sub"). Following the Second-Step Forward
Merger, the separate corporate existence of Talarian shall cease and Second-Step
Sub shall continue as the Surviving Corporation.
(c) The Forward Merger or the Reverse Merger, as the case
may be, is referred to herein as the "Merger." In the event that the Reverse
Merger is consummated, and Talarian elects to have TIBCO consummate the
Second-Step Forward Merger, then, as appropriate, "Merger" shall refer to the
Reverse Merger and the Second-Step Forward Merger, collectively or seriatim, as
appropriate.
1.2 Effective Time; Closing. Subject to the provisions of this
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Agreement, the parties hereto, or in the case of the Second-Step Merger, TIBCO,
shall cause each of the Forward Merger, Reverse Merger and Second-Step Merger,
as appropriate, to be consummated by filing a certificate of merger, in such
appropriate form as determined by the parties, with the Secretary of State of
the State of Delaware in accordance with the relevant provisions of the DGCL
(the "Certificate of Merger") (the time of such filing of the Certificate of
Merger for the Forward Merger or the Reverse Merger, as the case may be (or such
later time as may be agreed in writing by Talarian and TIBCO and specified in
such Certificate of Merger) being the "Effective Time") as soon as practicable
on or after the Closing Date (as herein defined). The closing of the Merger (the
"Closing") shall take place at the offices of Venture Law Group, 0000 Xxxx Xxxx
Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, at a time and date to be specified by the parties,
which shall be no later than the second business day after the satisfaction or
waiver of the conditions set forth in Article VI, or at such other time, date
and location as the parties hereto agree in writing (the "Closing Date").
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1.3 Effect of the Merger. At the Effective Time, the effect of the
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Merger shall be as provided in this Agreement and the applicable provisions of
the DGCL. Without limiting the generality of the foregoing, at the Effective
Time all of the property, rights, privileges, powers and franchises of Talarian
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Talarian and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation. Without limiting the
generality of the foregoing, at the effective time of the Second-Step Forward
Merger, all of the property, rights, privileges, powers and franchises of
Talarian and the Second-Step Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Talarian and the Second-Step Sub shall
become the debts, liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
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(a) At the Effective Time, the Certificate of Incorporation
of Merger Sub, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; provided, however, that Article I of the Certificate of
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Incorporation of the Surviving Corporation shall be amended at the Effective
Time to read: "The name of the corporation is Talarian Corporation."
(b) At the Effective Time, the Bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation until thereafter amended in accordance with the provisions
thereof or as provided by law.
1.5 Directors and Officers. The initial directors of the
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Surviving Corporation shall be the directors of Merger Sub immediately prior to
the Effective Time, until their respective successors are duly elected or
appointed and qualified. The initial corporate officers of the Surviving
Corporation shall be the corporate officers of Merger Sub immediately prior to
the Effective Time, until their respective successors are duly appointed.
1.6 Effect on Capital Stock. At the Effective Time, by virtue
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of the Merger and without any action on the part of Merger Sub, Talarian or the
holders of any of the following securities:
(a) Conversion of Talarian Common Stock. Subject to
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Sections 1.6(d) and (e), each share of common stock, par value $0.001 per share,
of Talarian ("Talarian Common Stock") issued and outstanding immediately prior
to the Effective Time, other than shares of Talarian Common Stock to be canceled
pursuant to Section 1.6(b) and any Dissenting Shares as defined in and to the
extent provided in Section 1.7(g), will be automatically converted into the
right to receive (i) $2.65 in cash, without interest (the "Cash Consideration"),
and (ii) that fraction (rounded to five decimal places) of a share (the "Merger
Exchange Ratio") of common stock, par value $0.001 per share, of TIBCO ("TIBCO
Common Stock") as shall equal the quotient obtained by dividing $2.65 by the
Closing Trading Price (as defined below) (the "Stock Consideration"). For
purposes of this Agreement, "Closing Trading Price" shall be the average of the
closing sales prices for one share of TIBCO Common Stock as reported on the
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Nasdaq National Market for the ten consecutive trading days ending (and
including) one day prior to the Closing Date; provided, however, that if such
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calculation yields a Closing Trading Price that is greater than $16.21, then the
Closing Trading Price shall be deemed to be $16.21; and provided further,
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however, that if such calculation yields a Closing Trading Price that is less
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than $12.16, then the Closing Trading Price shall be deemed to be $12.16. The
Cash Consideration and the Stock Consideration are sometimes collectively
referred to herein as the "Merger Consideration."
(b) Cancellation of Talarian-Owned and TIBCO-Owned Stock.
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Each share of Talarian Common Stock held by Talarian or owned by Merger Sub,
TIBCO or any direct or indirect wholly owned subsidiary of Talarian or of TIBCO
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof.
(c) Capital Stock of Merger Sub. Each share of common
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stock, $0.0l par value per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of common stock, $0.01 par value per
share, of the Surviving Corporation. Each certificate evidencing ownership of
shares of the common stock of Merger Sub shall evidence ownership of such shares
of capital stock of the Surviving Corporation.
(d) Adjustments to Merger Exchange Ratio. The Merger
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Exchange Ratio and the Cash Consideration shall be adjusted to reflect
appropriately the effect of any stock split, reverse stock split, stock dividend
(including any dividend or distribution of securities convertible into TIBCO
Common Stock or Talarian Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to TIBCO Common Stock or
Talarian Common Stock occurring on or after the date hereof and prior to the
Effective Time.
(e) Fractional Shares. No fraction of a share of TIBCO
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Common Stock will be issued by virtue of the Merger or upon the exercise of any
assumed Talarian Option, any assumed Additional Talarian Option or any assumed
Talarian Warrant (as each such term is defined in Section 2.2), but in lieu
thereof each holder of shares of Talarian Common Stock or other such equity
security who would otherwise be entitled to a fraction of a share of TIBCO
Common Stock (after aggregating all fractional shares of TIBCO Common Stock that
otherwise would be received by such holder) shall receive from TIBCO an amount
of cash (rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the average of the closing sales prices for one
share of TIBCO Common Stock as reported on the Nasdaq National Market for the
ten consecutive trading days ending (and including) one day prior to the Closing
Date or the date of exercise, as the case may be.
1.7 Surrender of Certificates.
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(a) Exchange Agent. TIBCO shall select a bank or trust
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company reasonably acceptable to Talarian to act as the exchange agent (the
"Exchange Agent") in the Merger.
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(b) TIBCO to Provide Merger Consideration. Promptly after
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the Effective Time, TIBCO shall make available to the Exchange Agent for
exchange in accordance with this Article I, the Merger Consideration issuable
pursuant to Section 1.6 in exchange for outstanding shares of Talarian Common
Stock, and cash in an amount sufficient for payment in lieu of fractional shares
pursuant to Section 1.6(e) and any dividends or distributions to which holders
of shares of Talarian Common Stock may be entitled pursuant to Section 1.7(d).
(c) Exchange Procedures. Promptly after the Effective Time,
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TIBCO shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "Certificates"), which
immediately prior to the Effective Time represented outstanding shares of
Talarian Common Stock, whose shares were converted into the Merger Consideration
pursuant to Section 1.6 (i) a letter of transmittal in customary form (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall contain such other customary provisions as TIBCO may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration, cash in lieu of any
fractional shares pursuant to Section 1.6(e) and any dividends or other
distributions pursuant to Section 1.7(d). Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by TIBCO, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor the Cash
Consideration and certificates representing the number of whole shares of TIBCO
Common Stock into which their shares of Talarian Common Stock were converted at
the Effective Time, payment in lieu of fractional shares which such holders have
the right to receive pursuant to Section 1.6(e) and any dividends or
distributions payable pursuant to Section 1.7(d), and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all corporate
purposes, to evidence only the ownership of the number of full shares of TIBCO
Common Stock into which such shares of Talarian Common Stock shall have been so
converted and the right to receive the Cash Consideration and an amount in cash
in lieu of the issuance of any fractional shares in accordance with Section
1.6(e) and any dividends or distributions payable pursuant to Section 1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No
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dividends or other distributions declared or made after the date of this
Agreement with respect to TIBCO Common Stock with a record date after the
Effective Time will be paid to the holders of any unsurrendered Certificates
with respect to the shares of TIBCO Common Stock represented thereby until the
holders of record of such Certificates shall surrender such Certificates.
Subject to applicable law, following surrender of any such Certificates, the
Exchange Agent shall deliver to the record holders thereof, without interest,
certificates representing whole shares of TIBCO Common Stock issued in exchange
therefor along with payment of the Cash Consideration and payment in lieu of
fractional shares pursuant to Section 1.6(e) hereof and the amount of any such
dividends or other distributions with a record date after the Effective Time
payable with respect to such shares of TIBCO Common Stock.
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(e) Transfers of Ownership. If certificates representing
----------------------
shares of TIBCO Common Stock are to be issued in a name other than that in which
the Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to TIBCO or any agent designated by it
any transfer or other taxes required by reason of the issuance of certificates
representing shares of TIBCO Common Stock or the payment of the Cash
Consideration in any name other than that of the registered holder of the
Certificates surrendered, or established to the satisfaction of TIBCO or any
agent designated by it that such tax has been paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary
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in this Section 1.7, neither the Exchange Agent, TIBCO, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of TIBCO
Common Stock or Talarian Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar law.
(g) Dissenting Shares. Each outstanding share of Talarian
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Common Stock as to which a written demand for appraisal is duly made in
accordance with Section 262 of the DGCL at or prior to the Talarian
Stockholders' Meeting (as defined in Section 2.15) and not withdrawn at or prior
to the Talarian Stockholders' Meeting and which is not voted (or consented in
writing) in favor of adoption of this Agreement shall not be converted into or
represent a right to receive the Merger Consideration unless and until the
holder thereof shall have failed to perfect, or shall have effectively withdrawn
or lost, such appraisal rights under said Section 262, at which time each such
share shall be converted into the right to receive the Merger Consideration (and
any cash paid in respect thereof pursuant to Sections 1.6(e) and 1.7(d)). All
such shares of Talarian Common Stock as to which such a written demand for
appraisal is so filed and not withdrawn at or prior to the Talarian
Stockholders' Meeting and which are not voted (or consented in writing) in favor
of adoption of this Agreement, except any such shares of Talarian Common Stock
the holder of which shall have effectively withdrawn or lost such appraisal
rights under said Section 262, are herein referred to as "Dissenting Shares."
Talarian shall give TIBCO prompt notice upon receipt by Talarian of any written
demands for appraisal, withdrawal of such demands, and any other written
communications delivered to Talarian pursuant to said Section 262, and Talarian
shall give TIBCO the opportunity, to the extent permitted by law, to participate
in all negotiations and proceedings with respect to such demands. Except with
the prior written consent of TIBCO, Talarian shall not voluntarily make any
payment with respect to any demands for appraisal and shall not settle or offer
to settle any such demands.
1.8 No Further Ownership Rights in Talarian Common Stock. All
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shares of TIBCO Common Stock issued in accordance with the terms hereof
(including any cash paid in respect thereof pursuant to Section 1.6(e) and
1.7(d)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Talarian Common Stock, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
shares of Talarian Common Stock which were outstanding immediately prior to the
Effective Time. If after the Effective Time Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Article I.
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1.9 Lost, Stolen or Destroyed Certificates. In the event that any
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Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Cash
Consideration, certificates representing the number of whole shares of TIBCO
Common Stock into which the shares of Talarian Common Stock represented by such
Certificates were converted pursuant to Section 1.6, cash for fractional shares,
if any, as may be required pursuant to Section 1.6(e) and any dividends or
distributions payable pursuant to Section 1.7(d); provided, however, that TIBCO
may, in its discretion and as a condition precedent to the payment of the Cash
Consideration, the issuance of certificates representing shares of TIBCO Common
Stock, cash for fractional shares, if any, and other distributions, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum and with customary provisions as it may reasonably direct as indemnity
against any claim that may be made against TIBCO, the Surviving Corporation or
the Exchange Agent with respect to the Certificates alleged to have been lost,
stolen or destroyed.
1.10 Taking of Necessary Action; Further Action. If, at any time
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after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Talarian and Merger Sub, the officers and directors of
Talarian and Merger Sub will take all such lawful and necessary action. TIBCO
shall cause Merger Sub to perform all of its obligations relating to this
Agreement and the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TALARIAN
Talarian represents and warrants to TIBCO and Merger Sub, subject to
the exceptions specifically disclosed in writing in the disclosure schedules
delivered by Talarian to TIBCO dated as of the date hereof and certified by a
duly authorized officer of Talarian (in such person's capacity as an officer and
not as an individual) (the "Talarian Disclosure Schedules"), as follows:
2.1 Organization of Talarian.
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(a) Talarian and each of its subsidiaries (i) is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized; (ii) has
the corporate or other power and authority to own, lease and operate its assets
and property and to carry on its business as now being conducted; and (iii)
except as would not be material to Talarian, is duly qualified or licensed to do
business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.
(b) Talarian has set forth in the Talarian Disclosure
Schedules a true and complete list of all of Talarian's subsidiaries as of the
date of this Agreement, together with a list of each partnership, joint venture
or other business entity in which Talarian holds an interest,
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whether voting, equity or otherwise (collectively, the "Joint Ventures" ),
indicating the jurisdiction of organization of each such entity and Talarian's
equity interest therein. Except as set forth on such list, neither Talarian nor
any of its subsidiaries owns any equity interest in any corporation, partnership
or joint venture arrangement or other business entity that is material to
Talarian.
(c) Talarian has delivered or made available to TIBCO a true and
correct copy of the Certificate of Incorporation and Bylaws of Talarian and
similar governing instruments of each of its subsidiaries and each Joint
Venture, each as amended to date, and each such instrument is in full force and
effect. Neither Talarian nor any of its subsidiaries nor, to the knowledge of
Talarian, any Joint Venture is in violation of any of the provisions of its
Certificate of Incorporation or Bylaws or equivalent governing instruments.
2.2 Talarian Capital Structure. The authorized capital stock of Talarian
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consists of 50,000,000 shares of Common Stock, par value $0.001 per share, of
which there were 19,303,203 shares issued and outstanding as of November 30,
2001 (none of which were held by Talarian in its treasury), and 5,000,000 shares
of Preferred Stock, par value $0.001 per share, none of which are issued or
outstanding. All outstanding shares of Talarian Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Talarian or any agreement or document to which Talarian is a party or by
which it or its assets is bound. As of November 30, 2001: (i) Talarian had
reserved an aggregate of 3,948,822 shares of Talarian Common Stock for issuance
pursuant to Talarian's 2000 Equity Incentive Plan; (ii) Talarian had reserved an
aggregate of 1,782,500 shares of Talarian Common Stock for issuance pursuant to
Talarian's 1998 Equity Incentive Plan; and (iii) there were options ("Talarian
Options") outstanding to purchase (A) an aggregate of 1,168,926 shares of
Talarian Common Stock pursuant to Talarian's 2000 Equity Incentive Plan, (B) an
aggregate of 735,241 shares of Talarian Common Stock pursuant to Talarian's 1998
Equity Incentive Plan, (C) an aggregate of 250 shares of Talarian Common Stock
pursuant to Talarian's 1991 Stock Option Plan, (D) an aggregate of 18,242 shares
of Talarian Common Stock pursuant to the WhiteBarn, Inc. Stock Option Plan, (E)
an aggregate of 236,250 shares of Talarian Common Stock pursuant to the
WhiteBarn, Inc. 2000 Equity Incentive Plan, and (F) an aggregate of 740,000
shares of Talarian Common Stock pursuant to non-plan grants. As of the date of
this Agreement, there is one warrant (the "Talarian Warrant") outstanding to
purchase 17,367 shares of Talarian Common Stock. As of November 30, 2001,
Talarian had reserved an aggregate of 384,000 shares of Talarian Common Stock
for issuance pursuant to Talarian's 2000 Employee Stock Purchase Plan (the
"ESPP"). Since November 30, 2001 through the date of this Agreement, Talarian
has granted additional options to purchase an aggregate of 45,000 shares of
Talarian Common Stock (the "Additional Talarian Options") pursuant to Talarian's
2000 Equity Incentive Plan and Talarian has reserved a sufficient number of
shares of Talarian Common Stock for issuance upon the exercise of such
Additional Talarian Options. All shares of Talarian Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable. The Talarian Disclosure Schedules
list for each person who held Talarian Options or the Talarian
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Warrant as of November 30, 2001 and for each person who holds the Additional
Talarian Options as of the date of this Agreement the name of the holder of such
option or warrant, the exercise price of such option or warrant, the number of
shares as to which such option or warrant had vested as of November 30, 2001, in
the case of the Talarian Options and the Talarian Warrant, and as of the date of
this Agreement, in the case of the Additional Talarian Options, the vesting
schedule for such option or warrant and whether the exercisability of such
option or warrant will be accelerated in any way by the transactions
contemplated by this Agreement, and indicates the extent of acceleration, if
any. Except as set forth in Sections 2.2 and 4.1(a) of the Talarian Disclosure
Schedules, consummation of the Merger, whether coupled with a termination of
employment or not, will not result in the acceleration of any vesting of any of
the Talarian Options, Additional Talarian Options or Talarian Warrant.
2.3 Obligations With Respect to Capital Stock. Except as set forth in
-----------------------------------------
Section 2.2 and reserved for issuance pursuant to outstanding Talarian Options,
there are no equity securities, partnership interests or similar ownership
interests of any class of Talarian equity security, or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except for securities Talarian owns free and clear of
all claims and encumbrances, directly or indirectly through one or more
subsidiaries, there are no equity securities, partnership interests or similar
ownership interests of any class of equity security of any subsidiary of
Talarian or any Joint Venture, or any security exchangeable or convertible into
or exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 2.2, there are no subscriptions, options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which Talarian or any of its subsidiaries or, to the knowledge of Talarian, any
Joint Venture is a party or by which it is bound obligating Talarian or any of
its subsidiaries or, the knowledge of Talarian, any Joint Venture to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition of, any
shares of capital stock, partnership interests or similar ownership interests of
Talarian or any of its subsidiaries or any Joint Venture or obligating Talarian
or any of its subsidiaries or any Joint Venture to grant, extend, accelerate the
vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. There are no registration rights
and, except as otherwise contemplated by the Voting Agreement, there is no
voting trust, proxy, rights plan, antitakeover plan or other agreement or
understanding to which Talarian is a party or by which it is bound with respect
to any equity security of any class of Talarian or with respect to any equity
security, partnership interest or similar ownership interest of any class of any
of its subsidiaries or any Joint Venture.
2.4 Authority.
---------
(a) Talarian has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Talarian, subject only to the
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adoption of this Agreement by Talarian's stockholders. The affirmative vote of
the holders of a majority of the outstanding shares of Talarian Common Stock is
sufficient for Talarian's stockholders to adopt this Agreement. This Agreement
has been duly executed and delivered by Talarian and, assuming the due execution
and delivery by TIBCO and Merger Sub, constitutes the valid and binding
obligation of Talarian, enforceable against Talarian in accordance with its
terms, except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity. By executing the Voting Agreement, the
signatories thereto have taken all sufficient action necessary to cause the
termination of the registration rights granted pursuant to the Amended and
Restated Investor Rights Agreement dated as of February 3, 2000 (the "Investor
Rights Agreement") effective as of the time of the Effective Time and contingent
in all respects upon the occurrence of the Closing. Talarian hereby consents to
the termination of such registration rights under such Investor Rights Agreement
effective as of the time of the Effective Time and contingent in all respects
upon the occurrence of the Closing.
(b) The execution and delivery of this Agreement by Talarian does not,
and the performance of this Agreement by Talarian will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws of Talarian or the equivalent
organizational documents of any of its subsidiaries, (ii) subject to the
adoption of this Agreement by Talarian's stockholders as contemplated in Section
5.2 and compliance with the requirements set forth in Section 2.4(c) below,
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Talarian or any of its subsidiaries or by which Talarian or any of
its subsidiaries or any of their respective properties is bound or affected, or
(iii) result in any material breach of or constitute a material default (or an
event that with notice or lapse of time or both would become a material default)
under, or impair Talarian's rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a material lien or
encumbrance on any of the material properties or assets of Talarian or any of
its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, concession, or other instrument or
obligation, in each case that is material to Talarian, to which Talarian or any
of its subsidiaries is a party or by which Talarian or any of its subsidiaries
or its or any of their respective assets are bound or affected.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental authority or instrumentality, foreign or domestic
("Governmental Entity"), is required to be obtained or made by Talarian in
connection with the execution and delivery of this Agreement or the consummation
of the Merger, except for (i) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (ii) the filing of the Proxy
Statement/Prospectus (as defined in Section 2.15) with the Securities and
Exchange Commission ("SEC"), (iii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal, foreign and state securities (or related) laws and the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and any similar foreign antitrust or competition filings, and (iv) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not be material to Talarian or TIBCO or have a material
adverse effect on the ability of the parties hereto to consummate the Merger.
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2.5 SEC Filings; Talarian Financial Statements.
------------------------------------------
(a) Talarian has filed all forms, reports and documents required to be
filed by Talarian with the SEC since July 13, 2000, and has made available to
TIBCO such forms, reports and documents in the form filed with the SEC. All such
required forms, reports and documents (including those that Talarian may file
subsequent to the date hereof) are referred to herein as the "Talarian SEC
Reports." As of their respective dates, the Talarian SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Talarian SEC Reports and (ii) did not
at the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
Talarian's subsidiaries or Joint Ventures is required to file any forms, reports
or other documents with the SEC or similar regulatory body.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Talarian SEC Reports (the
"Talarian Financials"), including each Talarian SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act) and (iii) fairly presented the consolidated
financial position of Talarian and its subsidiaries as at the respective dates
thereof and the consolidated results of Talarian's operations and cash flows for
the periods indicated, except that the unaudited interim financial statements
may not contain footnotes and were or are subject to normal and recurring
year-end adjustments. The balance sheet of Talarian as of September 30, 2001
contained in Talarian's Form 10-K filed with the SEC for the fiscal year ended
September 30, 2001 is hereinafter referred to as the "Talarian Balance Sheet."
Except as set forth in the Talarian SEC Reports filed and publicly available
prior to the date of this Agreement, neither Talarian nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Talarian and its subsidiaries taken as a
whole, except for liabilities incurred since the date of the Talarian Balance
Sheet incurred in connection with the negotiation and performance of the
transactions contemplated by this Agreement.
(c) Talarian has heretofore furnished to TIBCO a complete and correct
copy of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Talarian with the SEC pursuant to
the Securities Act or the Exchange Act.
2.6 Absence of Certain Changes or Events. Since the date of the Talarian
------------------------------------
Balance Sheet, there has not been: (i) any Material Adverse Effect with respect
to Talarian and its
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subsidiaries and Joint Ventures, taken as a whole, (ii) any declaration, setting
aside or payment of any dividend on, or other distribution (whether in cash,
stock or property) in respect of, any of Talarian's capital stock, or any
purchase, redemption or other acquisition by Talarian of any of Talarian's
capital stock or any other securities of Talarian or any options, warrants,
calls or rights to acquire any such shares or other securities except for
repurchases from employees following their termination pursuant to the terms of
their pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of Talarian's capital stock, (iv) any
granting by Talarian or any of its subsidiaries of any increase in compensation
or fringe benefits to any of their officers, directors or managers or employees
who earn more than $50,000 per year, or any payment by Talarian or any of its
subsidiaries of any bonus to any of their officers, directors or managers or
employees who earn more than $50,000 per year, or any granting by Talarian or
any of its subsidiaries of any increase in severance or termination pay or any
entry by Talarian or any of its subsidiaries into, or material modification or
amendment of, any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving Talarian of the nature contemplated hereby, (v) any
material change or alteration in the policy of Talarian relating to the granting
of stock options to its employees and consultants, (vi) any entry by Talarian or
any of its subsidiaries or, to the knowledge of Talarian, any Joint Venture
into, or material modification, amendment or cancellation of, any licensing,
distribution, sponsorship, advertising, merchant program or other similar
agreement which either is not terminable by Talarian or its subsidiaries or
Joint Venture, as the case may be, without penalty upon no more than 45 days'
prior notice or provides for payments by or to Talarian or its subsidiaries or a
Joint Venture in an amount in excess of $100,000 over the term of the agreement,
(vii) any material change by Talarian in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP, or (viii) any
revaluation by Talarian of any of its assets, including, without limitation,
writing off notes or accounts receivable other than in the ordinary course of
business.
2.7 Taxes.
-----
(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or
-------------------
"Taxes" refers to (i) any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts, (ii) any liability for payment of any amounts of the
type described in clause (i) as a result of being a member of an affiliated
consolidated, combined or unitary group, and (iii) any liability for amounts of
the type described in clauses (i) and (ii) as a result of any express or implied
obligation to indemnify another person or as a result of any obligations under
any agreements or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor entity.
(b) Tax Returns and Audits.
----------------------
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(i) Talarian and each of its subsidiaries have timely filed all
material federal, state, local and foreign returns, estimates, information
statements and reports ("Returns") relating to Taxes required to be filed by or
on behalf of Talarian and each of its subsidiaries with any Tax authority, such
Returns are true, correct and complete in all material respects, and Talarian
and each of its subsidiaries have paid (where required by law or otherwise
accrued) all Taxes shown to be due on such Returns.
(ii) Talarian and each of its subsidiaries have withheld with
respect to its employees all federal and state income Taxes, Taxes pursuant to
the Federal Insurance Contribution Act ("FICA"), Taxes pursuant to the Federal
Unemployment Tax Act ("FUTA") and other Taxes required to be withheld.
(iii) There is no material Tax deficiency outstanding, proposed or
assessed against Talarian or any of its subsidiaries, nor has Talarian or any of
its subsidiaries executed any unexpired waiver of any statute of limitations on
or extending the period for the assessment or collection of any Tax that is
still in effect.
(iv) No audit or other examination of any Return of Talarian or any
of its subsidiaries by any Tax authority is presently in progress, nor has
Talarian or any of its subsidiaries been notified of any request for such an
audit or other examination.
(v) No adjustment of Tax relating to any Returns filed by Talarian
or any of its subsidiaries has been proposed in writing formally or informally
by any Tax authority to Talarian or any of its subsidiaries or any
representative thereof.
(vi) Neither Talarian nor any of its subsidiaries has any liability
for unpaid Taxes which has not been accrued for or reserved on the Talarian
Balance Sheet, whether asserted or unasserted, contingent or otherwise, which is
material to Talarian, other than any liability for unpaid Taxes that may have
accrued since the date of the Talarian Balance Sheet in connection with the
operation of the business of Talarian and its subsidiaries in the ordinary
course.
(vii) There is no contract, agreement, plan or arrangement to which
Talarian is a party, including but not limited to the provisions of this
Agreement and the agreements entered into in connection with this Agreement,
covering any employee or former employee of Talarian or any of its subsidiaries
that, individually or collectively, would be reasonably likely to give rise to
the payment of any amount that would not be deductible pursuant to Sections
280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code").
(viii) Neither Talarian nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Talarian.
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(ix) Neither Talarian nor any of its subsidiaries is party to or
has any obligation under any tax-sharing, tax indemnity or tax allocation
agreement or arrangement.
(x) Except as may be required as a result of the Merger,
Talarian and its subsidiaries have not been and will not be required to include
any material adjustment in Taxable income for any Tax period (or portion
thereof) pursuant to Section 481 or Section 263A of the Code or any comparable
provision under state or foreign Tax laws as a result of transactions, events or
accounting methods employed prior to the Closing.
(xi) Talarian has made available to TIBCO or its legal or
accounting representatives copies of all foreign, federal and state income tax
and all state sales and use tax Returns for Talarian and each of its
subsidiaries filed for all periods since its inception.
(xii) There are no liens, pledges, charges, claims, restrictions
on transfer, mortgages, security interests or other encumbrances of any sort
(collectively, "Liens") on the assets of Talarian or any of its subsidiaries
relating to or attributable to Taxes, other than Liens for Taxes not yet due and
payable.
2.8 Title to Properties; Absence of Liens and Encumbrances.
------------------------------------------------------
(a) Neither Talarian nor any of its subsidiaries presently owns or
has at any time in the past owned any real property interests. Section 2.8(a) of
the Talarian Disclosure Schedules list all real property leases to which
Talarian or any of its subsidiaries is a party and each amendment thereto that
is in effect as of the date of this Agreement. All such current leases are in
full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a claim against
Talarian or any of its subsidiaries in an amount greater than $50,000.
(b) Talarian and its subsidiaries have good and valid title to, or,
in the case of leased properties and assets, valid leasehold interests in, all
of its tangible properties and assets, real, personal and mixed, used or held
for use in their respective business, free and clear of any Liens, except as
reflected in the Talarian Financials and except for Liens for Taxes not yet due
and payable and such Liens or other imperfections of title and encumbrances, if
any, which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the present use,
of the property subject thereto or affected thereby.
2.9 Intellectual Property. For the purposes of this Agreement, the
---------------------
following terms have the following definitions:
"Intellectual Property" shall mean any or all of the following and all
---------------------
rights in, arising out of or associated therewith: (i) all United
States, international and foreign patents and applications therefor
and all reissues, divisions, renewals, extensions, provisionals,
continuations and continuations-in-part thereof; (ii) all inventions
(whether patentable or not), invention disclosures, improvements,
trade
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secrets, proprietary information, know how, technology,
technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights,
copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world; (iv)
all industrial designs and any registrations and applications
therefor throughout the world; (v) all trade names, logos,
common law trademarks and service marks, trademark and service
xxxx registrations and applications therefor throughout the
world; (vi) all databases and data collections and all rights
therein throughout the world; (vii) all moral and economic
rights of authors and inventors, however denominated,
throughout the world; and (viii) any similar or equivalent
rights to any of the foregoing anywhere in the world.
"Talarian Intellectual Property" shall mean any Intellectual
------------------------------
Property (inclusive of Registered Intellectual Property, as
defined below) used in the conduct of Talarian's business and
its subsidiaries' businesses as currently conducted.
"Registered Intellectual Property" means all United States,
--------------------------------
international and foreign: (i) patents and patent applications
(including provisional applications); (ii) registered
trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related
to trademarks; (iii) registered copyrights and applications
for copyright registration; and (iv) any other Intellectual
Property that is the subject of an application, certificate,
filing, registration or other document issued, filed with, or
recorded by any state, government or other public legal
authority.
(a)(i) Section 2.9(a)(i) of the Talarian Disclosure Schedules
lists, as of the date hereof, all patents and Registered Intellectual Property
owned by, filed in the name of, or applied for by, Talarian or any of its
subsidiaries and which is used in connection with the business of Talarian or
its subsidiaries (the "Talarian Registered Intellectual Property"), including
the jurisdictions in which each item of such Talarian Registered Intellectual
Property has been issued or registered or in which any such application for such
issuance or registration has been filed. Each material item of Talarian
Registered Intellectual Property is valid and subsisting. All necessary
registration, maintenance and renewal fees currently due in connection with such
Talarian Registered Intellectual Property have been made and all necessary
documents, recordations and certificates in connection with such Talarian
Registered Intellectual Property have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such Talarian
Registered Intellectual Property, except where the failure to do so would not be
reasonably likely to have a Material Adverse Effect on Talarian.
(ii) Section 2.9(a)(ii) of the Talarian Disclosure
Schedules lists, as of the date hereof, all written licenses, sublicenses and
other agreements to which Talarian or any of its subsidiaries is a party and
pursuant to which any person is authorized to use any Talarian Intellectual
Property rights and as to which Talarian has recognized any revenue subsequent
to January 1, 1997 or which would be material on an individual basis to
Talarian, including object
-15-
code, nonexclusive end-user licenses granted to end-users in the ordinary course
of business that permit use of software products without a right to modify,
distribute or sublicense the same ("End-User Licenses").
(iii) Section 2.9(a)(iii) of the Talarian Disclosure
Schedules lists, as of the date hereof, all written licenses, sublicenses and
other agreements to which Talarian or any of its subsidiaries is a party and
pursuant to which Talarian or any such subsidiary is authorized to use any third
party Intellectual Property ("Third Party Intellectual Property") which is
incorporated ("Embedded Third Party Intellectual Property") in any existing
software, hardware, product or service of Talarian or any of its subsidiaries
that is currently supported by Talarian, or any software, hardware, product or
service currently under development by Talarian (the "Talarian Products") or
which is used in the development or support of its products and indicates each
of the Talarian Products in which the Third Party Intellectual Property or
Embedded Third Party Intellectual Property is used or employed.
(iv) Section 2.9(a)(iv) of the Talarian Disclosure
Schedules lists, as of the date hereof, all written agreements or other
arrangements under which Talarian or any of its subsidiaries has provided or
agreed to provide source code of any Talarian Product to any third party.
Talarian has made available to TIBCO correct and complete
copies of all patents, registrations, applications (owned by Talarian or any of
its subsidiaries), and all licenses, sublicenses and agreements referred to in
this Section 2.9(a), each as amended to date. Except for retail purchases of
software, neither Talarian nor any of its subsidiaries is a party to any oral
license, sublicense or agreement which, if reduced to written form, would be
required to be listed in Section 2.9 of the Talarian Disclosure Schedules under
the terms of this Section 2.9(a).
(b) No Talarian Intellectual Property or Talarian Product is
subject to any proceeding or outstanding decree, order, judgment, agreement, or
stipulation restricting in any material manner the use, transfer, or licensing
thereof by Talarian, or which may affect the validity, use or enforceability of
such Talarian Intellectual Property.
(c) With respect to each item of Third Party Intellectual
Property listed in Section 2.9(a)(iii): (i) the license, sublicense or other
agreement covering such item is legal, valid, binding, enforceable and in full
force and effect with respect to Talarian or such subsidiary, and, to Talarian's
knowledge, is legal, valid, binding, enforceable and in full force and effect
with respect to each other party thereto; (ii) neither Talarian nor any of its
subsidiaries is in material breach or default thereunder, and, to Talarian's
knowledge, no other party to such license, sublicense or other agreement is in
material breach or default thereunder, and, to Talarian's knowledge, no event
has occurred which with notice or lapse of time would constitute a material
breach or default by Talarian or any of its subsidiaries or permit termination,
modification or acceleration thereunder by the other party thereto; (iii) to
Talarian's knowledge, the underlying item of Third Party Intellectual Property
is not subject to any outstanding judgment, order, decree, stipulation or
injunction to which Talarian or any of is subsidiaries is a party or has been
specifically named that interferes with the conduct of Talarian's or any of its
-16-
subsidiaries' business as currently conducted, nor, to Talarian's knowledge,
subject to any other outstanding judgment, order, decree, stipulation or
injunction that interferes with the conduct of Talarian's or any of its
subsidiaries' business as currently conducted.
(d) Neither Talarian nor any of its subsidiaries has (i) been
named in any suit, action or proceeding as to which it has been served with
process which involves a claim of infringement or misappropriation of any
Intellectual Property right of any third party or constitutes unfair competition
or trade practices under the laws of any jurisdiction, or (ii) received any
written notice alleging any such claim of infringement or misappropriation or
unfair competition or trade practices, or (iii) knows of any such claim or
infringement or misappropriation or unfair competition or trade practices.
Talarian has made available to TIBCO correct and complete copies of all such
suits, actions or proceedings or written notices. The manufacturing, marketing,
licensing, use or sale of the products or the performance of the services
offered by Talarian and its subsidiaries do not currently infringe or
misappropriate, and have not infringed or misappropriated, any Intellectual
Property right of any third party; and, to the knowledge of Talarian, do not
constitute unfair competition or trade practices under the laws of any
jurisdiction. To the knowledge of Talarian, none of the Talarian Intellectual
Property rights are being infringed by activities, products or services of any
third party.
(e) The execution and delivery of this Agreement by Talarian,
and the consummation of the transactions contemplated hereby, will neither cause
Talarian nor any of its subsidiaries to be in violation or default under any
license, sublicense or other agreement relating to Intellectual Property, nor
terminate nor modify nor entitle any other party to any such license, sublicense
or agreement to terminate or modify such license, sublicense or agreement, nor
limit in any way Talarian's or any of its subsidiaries' ability to conduct its
business as currently conducted or use or provide the use of Talarian
Intellectual Property or any Intellectual Property rights of others. Following
the Closing Date, the Surviving Corporation will be permitted to exercise all of
Talarian's rights under such licenses, sublicenses and other agreements to the
same extent Talarian would have been able to had the transactions contemplated
by this Agreement not occurred and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments which Talarian
would otherwise be required to pay.
(f) Except for (i) Embedded Third Party Intellectual Property
and other licenses listed or referenced on the Talarian Disclosure Schedules, in
each case for which Talarian has valid non-exclusive licenses and which are
adequate for each of Talarian's and its subsidiaries' businesses as presently
conducted, and (ii) usual and customary rights retained by the United States
government with respect to Intellectual Property developed under research
contracts with the Federal government (the "Retained Fed Rights"), Talarian is
the sole and exclusive owner of (with all right, title and interest in and to)
or the sole and exclusive licensee all Talarian Intellectual Property (free and
clear of any liens or encumbrances), and has sole and exclusive rights (and is
not contractually obligated to pay any compensation to any third party in
respect thereof) to the use and distribution thereof or the material covered
thereby in connection with the services or products in respect of which Talarian
Intellectual Property is being used. To Talarian's knowledge, the United States
government has never exercised, and Talarian has no
-17-
notice that the government intends to exercise, its rights to use or provide to
others the use of the Retained Fed Rights with respect to any Talarian
Intellectual Property in a manner that would be material to Talarian's
non-governmental business. The Retained Fed Rights do not materially interfere
with the conduct of Talarian's business.
(g) Talarian has made available to TIBCO copies of Talarian's
and each of its subsidiaries' standard forms of End-User Licenses (collectively,
the "Standard End-User Licenses"). Section 2.9(g) of the Talarian Disclosure
Schedules attaches a copy of such form of Standard End-User License and lists
those End-User Licenses containing terms materially different from the terms set
forth in Standard End-User Licenses.
(h) Talarian and each of its subsidiaries has taken
reasonable security measures to safeguard and maintain the secrecy,
confidentiality and value of, and its property rights in, all Talarian
Intellectual Property. All officers, employees and consultants of Talarian or
any of its subsidiaries who have access to proprietary information or Talarian
Intellectual Property have executed and delivered to Talarian or such subsidiary
an agreement regarding the protection of proprietary information and the
assignment to Talarian or any of its subsidiaries of all Intellectual Property
arising from the services performed for Talarian or any of its subsidiaries by
such persons. No current or prior officers, employees or consultants of Talarian
or any of its subsidiaries claim any ownership interest in any Talarian
Intellectual Property as a result of having been involved in the development of
such property while employed by or consulting to Talarian or any of its
subsidiaries, or otherwise. Except for the Embedded Third Party Intellectual
Property, all Talarian Intellectual Property has been developed by employees or
consultants of Talarian or its subsidiaries, within the course and scope of
their employment or consultancy.
(i) To Talarian's knowledge, there are no material defects in
Talarian's or any of its subsidiaries' Products, and there are no errors in any
technical documentation, specifications, manuals, user guides, promotional
material, internal notes and memos, drawings, flow charts, diagrams, source
language statements, demo disks, benchmark test results, and other written
materials related to, associated with or used or produced in the development of
the Talarian Products (collectively, the "Design Documentation"), which defects
or errors would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Talarian.
(j) No government funding or university or college facilities
were used in the development of the Talarian Products and the Talarian Products
were not developed pursuant to any contract or other agreement with any person
or entity.
(k) Section 2.9(k) of the Talarian Disclosure Schedules lists
all warranty claims (including any pending claims) related to the Talarian
Products and the nature of such claims, except for customary product support and
maintenance claims that are not material to Talarian or any of its subsidiaries.
Neither Talarian nor any of its subsidiaries has made any material oral or
written representations or warranties with respect to the Talarian Products.
-18-
(l) Talarian and its subsidiaries have been and are in
compliance with the Export Administration Act of 1979, as amended, and all
regulations promulgated thereunder.
(m) Section 2.9(m) of the Talarian Disclosure Schedules sets
forth a list of those parties that have paid maintenance fees to Talarian during
the twelve-month period preceding the date of this Agreement. Except for any
nonstandard maintenance agreements specified in Section 2.9(m) of the Talarian
Disclosure Schedules (the "Nonstandard Maintenance Agreements"), all of the
agreements or other arrangements pursuant to which Talarian or any subsidiary is
obligated to provide support services ("Maintenance Agreements") are in all
material respects in the form of the license agreement identified as the
Standard Maintenance Agreement set forth in the Talarian Disclosure Schedules
(the "Standard Maintenance Agreement"). The versions of the products currently
supported by Talarian or any subsidiary are set forth in the Talarian Disclosure
Schedules. Section 2.9(m) of the Talarian Disclosure Schedules sets forth and
indicates the agreements listed in the Talarian Disclosure Schedules with source
code escrow provisions relative to the Talarian Products. Except for any
nonstandard source code escrow provisions specified in Section 2.9(m) of the
Talarian Disclosure Schedules, all of such source code escrow provisions
relative to the Talarian Products are in all material respects in the form of
the source code escrow provision identified in Section 2.9(m) of the Talarian
Disclosure Schedules as the standard provision. Talarian is not a party to any
agreement not listed in the Tiger Disclosure Schedules which permits access to
Talarian source code (whether or not tied to the occurrence of certain events)
and permits use of such source code for any purpose other than support to the
end use of any Talarian Product by the other party to such agreement.
(n) All products licensed by Talarian to N2 Broadband
pursuant to a Reliable Multicast Transport Interface PGM Integration Services
Agreement, as amended, were accepted by N2 Broadband prior to September 30,
2001.
2.10 Compliance with Laws; Permits; Restrictions.
-------------------------------------------
(a) Neither Talarian nor any of its subsidiaries nor, to the
knowledge of Talarian, any Joint Venture is in any material respect in conflict
with, or in default or in violation of (i) any law, rule, regulation, order,
judgment or decree applicable to Talarian or any of its subsidiaries or any
Joint Venture or by which Talarian or any of its subsidiaries or any Joint
Venture or any of their respective properties is bound or affected, or (ii) any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Talarian or any of
its subsidiaries or any Joint Venture is a party or by which Talarian or any of
its subsidiaries or any Joint Venture or its or any of their respective
properties is bound or affected, except for conflicts, violations and defaults
that (individually or in the aggregate) would not be reasonably likely to result
in a Material Adverse Effect on Talarian. No investigation or review by any
Governmental Entity is pending or, to Talarian's knowledge, has been threatened
in a writing delivered to Talarian against Talarian or any of its subsidiaries
or, to the knowledge of Talarian, any Joint Venture, nor, to the knowledge of
Talarian, has any Governmental Entity indicated an intention to conduct an
investigation of Talarian or any of its subsidiaries or any Joint Venture. There
is no material agreement, judgment, injunction, order or
-19-
decree binding upon Talarian or any of its subsidiaries or, to the knowledge of
Talarian, any Joint Venture which has or could reasonably be expected to have
the effect of prohibiting or materially impairing any business practice of
Talarian or any of its subsidiaries or any Joint Venture, any acquisition of
material property by Talarian or any of its subsidiaries or any Joint Venture or
the conduct of business by Talarian as currently conducted. Talarian has
complied in all material respects with all applicable federal, state and local
laws and regulations relating to the collection and use of user information
gathered in the course of Talarian's operations, and Talarian has at all times
complied with the rules, policies and procedures established by Talarian from
time to time with respect to the foregoing. All content distributed through
Talarian's website is being distributed in compliance in all material respects
with applicable law.
(b) Talarian and its subsidiaries and, to the knowledge of
Talarian, the Joint Ventures hold, to the extent legally required, all permits,
licenses, variances, exemptions, orders and approvals from governmental
authorities that are material to and required for the operation of the business
of Talarian and its subsidiaries and the Joint Ventures as currently conducted
(collectively, the "Talarian Permits"). Talarian and its subsidiaries and, to
the knowledge of Talarian, the Joint Ventures are in compliance in all material
respects with the terms of the Talarian Permits.
2.11 Litigation. There are no claims, suits, actions or proceedings
----------
pending or, to the knowledge of Talarian, threatened against Talarian or any of
its subsidiaries or any Joint Venture, before any Governmental Entity or any
arbitrator that seek to restrain or enjoin the consummation of the transactions
contemplated by this Agreement or which could reasonably be expected, either
singularly or in the aggregate with all such claims, actions or proceedings, to
have a Material Adverse Effect on Talarian or the Surviving Corporation
following the Merger or have a material adverse effect on the ability of the
parties hereto to consummate the Merger. No Governmental Entity has at any time
challenged or questioned in a writing delivered to Talarian the legal right of
Talarian to design, offer or sell any of its services or products in the present
manner or style thereof.
2.12 Employee Benefit Plans.
----------------------
(a) Definitions. With the exception of the definition of
-----------
"Affiliate" set forth in Section 2.12(a)(i) below (which definition shall apply
only to this Section 2.12), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity
under common control with Talarian within the meaning of Section 414(b), (c),
(m) or (o) of the Code and the regulations issued thereunder;
(ii) "Talarian Employee Plan" shall mean any plan,
program, policy, practice, contract, agreement or other arrangement providing
for compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether written or unwritten or otherwise, funded or unfunded,
including without limitation, each "employee benefit plan," within the
-20-
meaning of Section 3(3) of ERISA which is or has been maintained, contributed
to, or required to be contributed to, by Talarian or any Affiliate for the
benefit of any Employee and pursuant to which Talarian or any Affiliate has any
material liability;
(iii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
(iv) "DOL" shall mean the Department of Labor;
(v) "Employee" shall mean any current, former, or
retired employee, officer, or director of Talarian or any Affiliate;
(vi) "Employee Agreement" shall mean each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or similar agreement or contract between Talarian or any
Affiliate and any Employee or consultant;
(vii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(viii) "FMLA" shall mean the Family Medical Leave Act of
1993, as amended;
(ix) "HIPAA" shall mean the Health Insurance
Portability Amendments Act, as amended;
(x) "IRS" shall mean the Internal Revenue Service;
(xi) "Multiemployer Plan" shall mean any "Pension Plan"
(as defined below) which is a "multiemployer plan," as defined in Section 3(37)
of ERISA;
(xii) "Multiple Employer Plan" shall mean a multiple
employer plan, as described in Section 413(c) of the Code;
(xiii) "PBGC" shall mean the Pension Benefit Guaranty
Corporation; and
(xiv) "Pension Plan" shall mean each Talarian Employee
Plan which is an "employee pension benefit plan," within the meaning of Section
3(2) of ERISA.
(b) Schedule. The Talarian Disclosure Schedules contain an
--------
accurate and complete list of each Talarian Employee Plan and each Employee
Agreement. Talarian does not have any intention or commitment to establish any
new Talarian Employee Plan, to modify any Talarian Employee Plan or Employee
Agreement (except to the extent required by law or to conform any such Talarian
Employee Plan or Employee Agreement to the requirements of any applicable law,
in each case as previously disclosed to TIBCO in writing, or as required by this
Agreement), or to adopt any Talarian Employee Plan or Employee Agreement, nor
does it have
-21-
any intention or commitment to do any of the foregoing. The Talarian Disclosure
Schedules also contain a list of all Talarian employees as of the date hereof,
each such person's date of hire and each such person's annual compensation.
(c) Documents. Talarian has provided or made available to
---------
TIBCO: (i) correct and complete copies of all material documents embodying to
each Talarian Employee Plan and each Employee Agreement including all amendments
thereto and written interpretations thereof; (ii) the most recent annual
actuarial valuations, if any, prepared for each Talarian Employee Plan; (iii)
the three (3) most recent annual reports (Form Series 5500 and all schedules and
financial statements attached thereto), if any, required under ERISA or the Code
in connection with each Talarian Employee Plan or related trust; (iv) if the
Talarian Employee Plan is funded, the most recent annual and periodic accounting
of Talarian Employee Plan assets; (v) the most recent summary plan description
together with the summary of material modifications thereto, if any, required
under ERISA with respect to each Talarian Employee Plan; (vi) all IRS
determination, opinion, notification and advisory letters, and rulings relating
to Talarian Employee Plans and copies of all applications and correspondence to
or from the IRS or the DOL with respect to any Talarian Employee Plan; (vii) all
material written agreements and contracts relating to each Talarian Employee
Plan, including, but not limited to, administrative service agreements, group
annuity contracts and group insurance contracts; (viii) all communications
material to any Employee or Employees relating to any Talarian Employee Plan and
any proposed Talarian Employee Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events which would result in any
material liability to Talarian; and (ix) all registration statements and
prospectuses prepared in connection with each Talarian Employee Plan.
(d) Employee Plan Compliance. (i) Talarian has performed in
------------------------
all material respects all obligations required to be performed by it under, is
not in default or violation of; and has no knowledge of any material default or
violation by any other party to each Talarian Employee Plan, and each Talarian
Employee Plan has been established and maintained in all material respects in
accordance with its terms and in compliance with all applicable laws, statutes,
orders, rules and regulations, including but not limited to ERISA or the Code;
(ii) each Talarian Employee Plan intended to qualify under Section 401(a) of the
Code and each trust intended to qualify under Section 501(a) of the Code is so
qualified, and has either received a favorable determination letter from the IRS
with respect to each such Plan as to its qualified status under the Code or has
remaining a period of time under applicable Treasury regulations or IRS
pronouncements in which to apply for such a determination letter and make any
amendments necessary to obtain a favorable determination effective as of the
adoption of the Plan, and no event has occurred which would adversely affect the
status of such determination letter or the qualified status of such Plan; (iii)
no "prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of
ERISA, has occurred with respect to any Talarian Employee Plan; (iv) there are
no actions, suits or claims pending, or, to the knowledge of Talarian,
threatened or reasonably anticipated (other than routine claims for benefits)
against any Talarian Employee Plan or against the assets of any Talarian
Employee Plan; (v) each Talarian Employee Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
-22-
without liability to TIBCO, Talarian or any of its Affiliates (other than
ordinary administration expenses typically incurred in a termination event);
(vi) there are no audits, inquiries or proceedings pending or, to the knowledge
of Talarian, threatened by the IRS or DOL with respect to any Talarian Employee
Plan; and (vii) neither Talarian nor any Affiliate is subject
to any penalty or tax with respect to any Talarian Employee Plan under Section
402(i) of ERISA or Sections 4975 through 4980 of the Code.
(e) Pension Plans. Talarian does not now, nor has it ever,
-------------
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer Plans. At no time has Talarian contributed
-------------------
to or been requested to contribute to any Multiemployer Plan or any Multiple
Employer Plan.
(g) No Post-Employment Obligations. No Talarian Employee
------------------------------
Plan provides, or has any liability to provide, retiree life insurance, retiree
health or other retiree employee welfare benefits to any person for any reason,
except as may be required by COBRA or other applicable statute, and Talarian has
never represented, promised or contracted (whether in oral or written form) to
any Employee (either individually or to Employees as a group) or any other
person that such Employee(s) or other person would be provided with retiree life
insurance, retiree health or other retiree employee welfare benefit, except to
the extent required by statute.
(h) COBRA; FMLA. Neither Talarian nor any Affiliate has,
-----------
prior to the Effective Time, and in any material respect, violated any of the
health care continuation requirements of COBRA, the requirements of FMLA, the
requirements of HIPAA, or any similar provisions of state law applicable to its
Employees.
(i) Effect of Transaction. The execution of this Agreement
---------------------
and the consummation of the transactions contemplated hereby will not (either
alone or upon the occurrence of any additional or subsequent events) constitute
an event under any Talarian Employee Plan, Employee Agreement, trust or loan
that will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any Employee.
(j) Employment Matters. Talarian: (i) is in compliance in
------------------
all material respects with all applicable foreign, federal, state and local
laws, rules and regulations respecting employment, employment practices, terms
and conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries, exercise of options and other payments to
Employees; (iii) is not liable in any material respect for any arrears of wages
or any taxes or any penalty for failure to comply with any of the foregoing; and
(iv) is not liable for any material payment to any trust or other fund or to any
governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits or obligations for
Employees (other than routine payments to be made in the normal course of
business and consistent with past practice). There are no pending, or, to
Talarian's knowledge, threatened
-23-
claims or actions against Talarian under any worker's compensation policy or
long-term disability policy which would be reasonably likely to have a Material
Adverse Effect on Talarian. To Talarian's knowledge, no Employee of Talarian has
violated any employment contract, nondisclosure agreement or noncompetition
agreement by which such Employee is bound due to such Employee being employed by
Talarian and disclosing to Talarian or using trade secrets or proprietary
information of any other person or entity. Section 2.12(j) of the Talarian
Disclosure Schedules lists each employee who is currently on leave for any
reason, the reason for such leave, and the date such employee is expected to
return to active duty. Section 2.12(j) of the Talarian Disclosure Schedules also
lists each employment dispute or claim against Talarian which has been filed
with any government agency, the date thereof, and the nature of such claim.
(k) Labor. No work stoppage or labor strike against Talarian
-----
is pending or, to Talarian's knowledge, threatened. To Talarian's knowledge,
there are no activities or proceedings of any labor union to organize any
Employees. There are no actions, suits, claims, labor disputes or grievances
pending, or, to the knowledge of Talarian, threatened relating to any labor,
safety or discrimination matters involving any Employee, including, without
limitation, charges of unfair labor practices or discrimination complaints,
which, if adversely determined, would, individually or in the aggregate, result
in any material liability to Talarian. Neither Talarian nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act. Talarian is not presently, nor has it been in the
past, a party to, or bound by, any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement is
being negotiated by Talarian.
(l) International Employee Plan. No Employee Plan has been
---------------------------
adopted or maintained by Talarian, whether informally or formally, for the
benefit of Employees outside the United States.
(m) Change of Control Payments. The Talarian Disclosure
--------------------------
Schedules sets forth each plan or agreement pursuant to which any amounts may
become payable (whether currently or in the future) to current or former
employees of Talarian as a result of or in connection with the Merger.
2.13 Environmental Matters.
---------------------
(a) Hazardous Material. Except as would not result in
------------------
material liability to Talarian, no underground storage tanks and no amount of
any substance that has been designated by any Governmental Entity or by
applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws, but
excluding office and janitorial supplies, (a "Hazardous Material") are present,
as a result of the actions of Talarian or any of its subsidiaries or any
affiliate of Talarian, or, to Talarian's knowledge, as a result of any actions
of any third party or otherwise, in, on or under
-24-
any property, including the land and the improvements, ground water and surface
water thereof that Talarian or any of its subsidiaries has at any time owned,
operated, occupied or leased.
(b) Hazardous Materials Activities. Except as would not
------------------------------
result in a material liability to Talarian (in any individual case or in the
aggregate) (i) neither Talarian nor any of its subsidiaries has transported,
stored, used, manufactured, disposed of released or exposed its employees or
others to Hazardous Materials in violation of any law, and (ii) neither Talarian
nor any of its subsidiaries has disposed of; transported, sold, used, released,
exposed its employees or others to or manufactured any product containing a
Hazardous Material (collectively "Hazardous Materials Activities") in violation
of any rule, regulation, treaty or statute promulgated by any Governmental
Entity in effect prior to or as of the date hereof to prohibit, regulate or
control Hazardous Materials or any Hazardous Material Activity.
(c) Permits. Talarian and its subsidiaries currently hold
-------
all environmental approvals, permits, licenses, clearances and consents (the
"Talarian Environmental Permits") material to and necessary for the conduct of
Talarian's and its subsidiaries' Hazardous Material Activities and other
businesses of Talarian and its subsidiaries as such activities and businesses
are currently being conducted.
2.14 Agreements, Contracts and Commitments. Except as otherwise set
-------------------------------------
forth in the Talarian Disclosure Schedules, neither Talarian nor any of its
subsidiaries is a party to or is bound by:
(a) any employment agreement, contract or commitment with
any employee or member of Talarian's Board of Directors, other than those that
are terminable by Talarian or any of its subsidiaries on no more than thirty
days notice without liability or financial obligation, except to the extent
general principles of wrongful termination law may limit Talarian's or any of
its subsidiaries' ability to terminate employees at will, or any consulting
agreement;
(b) any agreement or plan, including, without limitation,
any stock option plan, stock appreciation right plan or stock purchase plan, any
of the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement;
(c) any agreement of indemnification outside the ordinary
course of Talarian's business or any guaranty;
(d) any agreement, contract or commitment containing any
covenant limiting in any respect the right of Talarian or any of its
subsidiaries or a Joint Venture to engage in any line of business or to compete
with any person or granting any exclusive distribution rights;
(e) any agreement, contract or commitment currently in force
relating to the disposition or acquisition by Talarian or any of its
subsidiaries or a Joint Venture after the date of this Agreement of a material
amount of assets not in the ordinary course of business or pursuant
-25-
to which Talarian has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than Talarian's
subsidiaries or a Joint Venture;
(f) other than the End-User Licenses set forth in Section
2.9(a)(ii) of the Talarian Disclosure Schedules and End User Licenses not listed
in the Talarian Disclosure Schedules under which Talarian has not recognized
revenue subsequent to January 1, 1997 and which are not material on an
individual basis to Talarian, any licensing, distribution, sponsorship,
advertising, merchant program, encoding services, hosting or other similar
agreement currently in effect to which Talarian or one of its subsidiaries or a
Joint Venture is a party which may not be canceled by Talarian or its
subsidiaries or a Joint Venture, as the case may be, without penalty in excess
of $50,000 upon notice of 45 days or less or which provides for payments by or
to Talarian or its subsidiaries or a Joint Venture in an amount in excess of
$50,000 over the term of the agreement;
(g) other than the End-User Licenses set forth in Section
2.9(a)(ii) of the Talarian Disclosure Schedules and End User Licenses not listed
in the Talarian Disclosure Schedules under which Talarian has not recognized
revenue subsequent to January 1, 1997 and which are not material on an
individual basis to Talarian, any agreement, contract or commitment currently in
force, or that may be triggered upon the completion of the transactions
contemplated by this Agreement, to provide source code to any third party for
any product or technology; or
(h) other than the End-User Licenses set forth in Section
2.9(a)(ii) of the Talarian Disclosure Schedules, any other agreement, contract
or commitment currently in effect that is material to Talarian's business as
presently conducted.
Neither Talarian nor any of its subsidiaries, nor to Talarian's
knowledge any Joint Venture or any other party to a Talarian Contract (as
defined below), is in breach, violation or default under, and neither Talarian
nor any of its subsidiaries nor, to the knowledge of Talarian, any Joint Venture
has received written notice (or to its knowledge, any other form of notice) that
it has breached, violated or defaulted under, any of the material terms or
conditions of any of the agreements, contracts or commitments to which Talarian
or any of its subsidiaries or a Joint Venture is a party or by which it is bound
that are required to be disclosed in the Talarian Disclosure Schedules pursuant
to clauses (a) through (h) above or pursuant to Section 2.9 hereof (any such
agreement, contract or commitment, a "Talarian Contract") in such a manner as
would permit any other party to cancel or terminate any such Talarian Contract
or seek damages or other remedies the effect of which would reasonably be
expected to have a Material Adverse Effect on Talarian.
2.15 Statements; Proxy Statement/Prospectus. The information supplied
--------------------------------------
by Talarian for inclusion in the Registration Statement (as defined in Section
3.3(b)) shall not at the time the Registration Statement is filed with the SEC
and at the time it becomes effective under the Securities Act contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The information
supplied by Talarian for inclusion in the proxy statement/prospectus to be sent
to the stockholders of Talarian in
-26-
connection with the meeting of Talarian's stockholders to consider the adoption
of this Agreement (the "Talarian Stockholders' Meeting") (such proxy
statement/prospectus as amended or supplemented is referred to herein as the
"Proxy Statement/Prospectus") shall not, on the date the Proxy
Statement/Prospectus is first mailed to Talarian's stockholders or at the time
of the Talarian Stockholders' Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Talarian
Stockholders' Meeting which has become false or misleading. If at any time prior
to the Effective Time any event relating to Talarian or any of its affiliates,
officers or directors should be discovered by Talarian which is required to be
set forth in an amendment to the Registration Statement or a supplement to the
Proxy Statement/Prospectus, Talarian shall promptly inform TIBCO and provide the
necessary information for inclusion in any such amendment or supplement.
Notwithstanding the foregoing, Talarian makes no representation or warranty with
respect to any information supplied by TIBCO or Merger Sub which is contained in
any of the foregoing documents.
2.16 Section 203 Not Applicable. The Board of Directors of Talarian
--------------------------
has taken all actions so that the restrictions contained in Section 203 of the
DGCL applicable to a "business combination" (as defined in such Section 203)
will not apply to the execution, delivery or performance of this Agreement or
the Voting Agreement or to the consummation of the Merger or the other
transactions contemplated by this Agreement and the Voting Agreement.
2.17 Board Approval. The Board of Directors of Talarian has, as of
--------------
the date of this Agreement, unanimously (i) approved and declared advisable this
Agreement and the transactions contemplated hereby, (ii) determined that the
Merger is advisable and fair to, and in the best interests of Talarian and its
stockholders and (iii) determined to recommend that the stockholders of Talarian
adopt this Agreement.
2.18 Brokers' and Finders' Fees. Except for fees payable to Xxxxxx
--------------------------
Brothers Inc. ("Xxxxxx"), Talarian has not incurred, nor will it incur, directly
or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby. A copy of the engagement letter between Xxxxxx
and Talarian has been provided to TIBCO.
2.19 Fairness Opinion. Talarian's Board of Directors has received an
----------------
opinion from Xxxxxx dated January 3, 2002, to the effect that, as of such date,
the Merger Consideration is fair from a financial point of view to Talarian's
stockholders (the "Fairness Opinion"). Upon Talarian's receipt of the written
version of the Fairness Opinion from Xxxxxx, Talarian shall promptly provide
TIBCO a copy of such written version.
-27-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TIBCO AND MERGER SUB
TIBCO and Merger Sub represent and warrant to Talarian as follows:
3.1 Organization of TIBCO and Merger Sub.
------------------------------------
(a) Each of TIBCO and Merger Sub (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized; (ii) has the corporate or other power and
authority to own, lease and operate its assets and property and to carry on its
business as now being conducted; and (iii) except as would not be material to
TIBCO, is duly qualified or licensed to do business in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary.
(b) TIBCO has delivered or made available to Talarian a true
and correct copy of the Certificate of Incorporation and Bylaws of TIBCO, each
as amended to date, and each such instrument is in full force and effect.
Neither TIBCO nor any of its subsidiaries is in violation of any of the
provisions of its respective Certificate of Incorporation or Bylaws or
equivalent governing instruments.
3.2 TIBCO and Merger Sub Capital Structure. The authorized capital
--------------------------------------
stock of TIBCO consists of 1,200,000,000 shares of TIBCO Common Stock, of which
there were 201,817,139 shares issued and outstanding as of November 30, 2001,
and 75,000,000 shares of Preferred Stock, none of which are issued and
outstanding. All outstanding shares of TIBCO Common Stock are duly authorized,
validly issued, fully paid and nonassessable and are not subject to preemptive
rights created by statute, the Certificate of Incorporation or Bylaws of TIBCO
or any agreement or document to which TIBCO is a party or by which it is bound.
As of November 30, 2001, there were options outstanding to purchase an aggregate
of 34,011,112 shares of TIBCO Common Stock under TIBCO's stock option plans. The
authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock,
$0.01 par value, all of which, as of the date hereof, are duly authorized,
validly issued, fully paid and nonassessable, and are outstanding and held by
TIBCO. Merger Sub was formed for the purpose of consummating the Merger and has
no material assets or liabilities except as necessary for such purpose.
3.3 Authority.
---------
(a) Each of TIBCO and Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of TIBCO and Merger Sub, subject
only to the filing of the Certificate of Merger pursuant to the DGCL. No vote of
TIBCO's stockholders is required under TIBCO's Certificate of Incorporation,
Bylaws, applicable law or securities exchange listing agreement in order for
TIBCO to enter into or perform its obligations under this Agreement or
consummate the Merger or the other transactions
-28-
contemplated hereby. This Agreement has been duly executed and delivered by each
of TIBCO and Merger Sub and, assuming the due authorization, execution and
delivery by Talarian, constitutes the valid and binding obligation of TIBCO and
Merger Sub, enforceable against TIBCO and Merger Sub in accordance with its
terms, except as enforceability may be limited by bankruptcy and other similar
laws and general principles of equity. The execution and delivery of this
Agreement by each of TIBCO and Merger Sub does not, and the performance of this
Agreement by each of TIBCO and Merger Sub will not, (i) conflict with or violate
the Certificate of Incorporation or Bylaws of TIBCO or Merger Sub, (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to TIBCO or Merger Sub or by which any of their respective properties is bound
or affected, or (iii) result in any material breach of or constitute a material
default (or an event that with notice or lapse of time or both would become a
material default) under, or impair TIBCO's rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of; or result in the
creation of a material lien or encumbrance on any of the material properties or
assets of TIBCO or Merger Sub pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, in each case that is material to TIBCO, to which TIBCO or Merger Sub
is a party or by which TIBCO or Merger Sub or any of their respective properties
are bound or affected (except for the required consent of Reuters Limited, which
consent has been obtained on or prior to the date hereof).
(b) No consent, approval, order or authorization of; or
registration, declaration or filing with any Governmental Entity is required to
be obtained or made by TIBCO or Merger Sub in connection with the execution and
delivery of this Agreement or the consummation of the Merger, except for (i) the
filing of a Form S-4 (or any similar successor form thereto) Registration
Statement (the "Registration Statement") with the SEC in accordance with the
Securities Act, (ii) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware, (iii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal, foreign and state securities (or related) laws and the HSR
Act and any similar foreign antitrust or competition filings, and (v) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not be material to TIBCO or have a material adverse
effect on the ability of the parties hereto to consummate the Merger.
(c) Neither TIBCO nor any of its subsidiaries, including Merger Sub,
owns any Talarian Common Stock, and during the period three years prior to the
date hereof (other than by reason of the execution of this Agreement and the
Voting Agreement and the consummation of the transactions contemplated hereby
and thereby), neither TIBCO nor any of its subsidiaries, including Merger Sub,
was an "interested stockholder" of Talarian, as such term is defined in Section
203 of the DGCL.
3.4 SEC Filings; TIBCO Financial Statements.
---------------------------------------
(a) TIBCO has filed all forms, reports and documents required to be
filed by TIBCO with the SEC since July 1, 1999, and has made available to
Talarian such forms, reports
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and documents in the form filed with the SEC. All such required forms, reports
and documents (including those that TIBCO may file subsequent to the date
hereof) are referred to herein as the "TIBCO SEC Reports." As of their
respective dates, the TIBCO SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such TIBCO SEC
Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. None of TIBCO's subsidiaries is required to file any
forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the TIBCO SEC Reports
(including those that TIBCO may file subsequent to the date hereof) (i) complied
as to form in all material respects with the published rules and regulations of
the SEC with respect thereto, (ii) was prepared in accordance with GAAP applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act)
and (iii) fairly presented the consolidated financial position of TIBCO and its
subsidiaries as at the respective dates thereof and the consolidated results of
TIBCO's operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or are
subject to normal and recurring year-end adjustments.
(c) TIBCO has heretofore furnished to Talarian a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by TIBCO with the SEC pursuant
to the Securities Act or the Exchange Act.
3.5 Valid Issuance. The TIBCO Common Stock to be issued in the Merger
--------------
and upon the exercise of assumed Talarian Options, Additional Talarian Options
and the Talarian Warrant, when issued in accordance with the provisions of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, free of all liens and encumbrances and not subject to preemptive
rights, and will be registered in compliance with the Securities Act and
registered or exempt from registration under applicable blue sky laws.
3.6 Proxy Statement/Prospectus. The information supplied by TIBCO for
--------------------------
inclusion in the Registration Statement shall not at the time the Registration
Statement is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The information supplied by TIBCO for inclusion in the Proxy
Statement/Prospectus shall not, on the date the Proxy Statement/Prospectus is
first mailed to Talarian's stockholders or at the time of the Talarian
Stockholders' Meeting contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
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necessary in order to make the statements therein, in light of the circumstances
under which they are made, not false or misleading, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Talarian Stockholders'
Meeting which has become false or misleading. If at any time prior to the
Effective Time, any event relating to TIBCO or any of its affiliates, officers
or directors should be discovered by TIBCO which is required to be set forth in
an amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, TIBCO shall promptly inform Talarian and provide the
necessary information for inclusion in any such amendment or supplement.
Notwithstanding the foregoing, TIBCO makes no representation or warranty with
respect to any information supplied by Talarian which is contained in any of the
foregoing documents.
3.7 Absence of Changes. Since November 30, 2000, there has not been any
------------------
Material Adverse Effect with respect to TIBCO and its subsidiaries, taken as a
whole.
3.8 Financing. TIBCO possesses and will possess sufficient cash funds
---------
and has and will have available to it adequate financial resources to pay all
required cash amounts to the Talarian stockholders pursuant to Section 1.6 of
this Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Talarian. During the period from the date of
-------------------------------
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Talarian and each of its
subsidiaries shall, except as permitted by the terms of this Agreement, as
provided in Section 4.1 of the Talarian Disclosure Schedules, and to the extent
that TIBCO shall otherwise consent in writing (which consent shall not be
unreasonably withheld), carry on its business in the usual, regular and ordinary
course, in substantially the same manner as heretofore conducted and in
compliance in all material respects with all applicable laws and regulations,
pay its debts and taxes when due subject to good faith disputes over such debts
or taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business organization, (ii) keep available the
services of its present officers and employees and (iii) preserve its
relationships with customers, suppliers, licensors, licensees, and others with
which it has business dealings.
In addition, except as permitted by the terms of this Agreement and
except as provided in Section 4.1 of the Talarian Disclosure Schedules, without
the prior written consent of TIBCO (which consent shall not be unreasonably
withheld), during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement pursuant to its terms or
the Effective Time, Talarian shall not do any of the following and shall not
permit its subsidiaries or any Joint Venture to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change
the period of exercisability of options or restricted stock, or reprice options
granted under any employee,
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consultant, director or other stock plans or authorize cash payments in exchange
for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or
employee except pursuant to written agreements in effect, or policies existing,
on the date hereof and as previously disclosed in writing to TIBCO, or adopt any
new severance plan;
(c) Transfer or license to any person or entity or otherwise
extend, amend or modify in any material respect any rights to the Talarian
Intellectual Property, other than Standard End-User Licenses in the ordinary
course of business and consistent with past practice (a "Permitted Standard
End-User License");
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly,
any shares of capital stock of Talarian or its subsidiaries, except repurchases
of unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber
any shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the issuance
delivery and/or sale of (i) shares of Talarian Common Stock pursuant to the
exercise of stock options or warrants therefor, (ii) shares of Talarian Common
Stock issuable to participants in the ESPP consistent with the terms thereof and
(iii) stock options granted to newly hired or promoted employees, consistent in
amounts with Talarian's past practices, not to exceed under this clause (iii) in
the aggregate, options to purchase 50,000 shares of Talarian Common Stock, which
options shall have an exercise price equal to the trading price for Talarian
Common Stock at the time of such grant and shall have vesting schedules that are
consistent with Talarian's past practices except that all such options shall
have a one-year cliff vesting term and none of them shall be entitled to the
vesting acceleration benefits that Talarian Options issued prior to the date of
this Agreement have been provided;
(g) Cause, permit or propose any amendments to its Certificate of
Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with,
or by purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division
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thereof; or otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to the business of Talarian or enter into any
joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license (other than Permitted Standard End-User
Licenses), encumber or otherwise dispose of any properties or assets which are
material, individually or in the aggregate, to the business of Talarian;
(j) Incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
Talarian, enter into any "keep well" or other agreement to maintain any
financial statement condition or enter into any arrangement having the economic
effect of any of the foregoing other than (i) in connection with the financing
of ordinary course trade payables consistent with past practice or (ii) pursuant
to existing credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan or employee stock
purchase or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will"), pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
or fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants;
(l) Modify, amend or terminate any material contract or agreement
to which Talarian or any subsidiary thereof is a party, including any joint
venture agreement, or waive, release or assign any material rights or claims
thereunder;
(m) Other than Permitted Standard End-User Licenses entered into
in the ordinary course of business consistent with past practice, enter into any
licensing, distribution, sponsorship, advertising, merchant program, encoding
services, hosting or other contracts, agreements, or obligations (including
agreements relating to the purchase of capital assets) which may not be canceled
without penalty by Talarian or its subsidiaries upon notice of 45 days or less
or which provide for payments by or to Talarian or its subsidiaries in an amount
in excess of $50,000 over the term of the Agreement or which involve any
exclusive terms of any kind;
(n) Revalue any of its assets or, except as required by GAAP, make
any change in accounting methods, principles or practices;
(o) Fail to make in a timely manner any filings with the SEC
required under the Securities Act or the Exchange Act or the rules and
regulations promulgated thereunder;
(p) Renew the agreement listed on Section 4.1(p) of the Talarian
Disclosure Schedules following its expiration in accordance with its terms;
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(q) Engage in any action with the intent to directly or indirectly
adversely impact any of the transactions contemplated by this Agreement; or
(r) Agree in writing or otherwise to take any of the actions
described in Section 4.1 (a) through (q) above.
All requests for a waiver by TIBCO of any of the foregoing provisions
shall be directed to an employee of TIBCO designated in writing by TIBCO to
Talarian. TIBCO will use its commercially reasonable efforts to respond to any
such request for waiver within two complete business days following receipt of
such request. In the event that no response is received by Talarian within such
two complete business day period, it will be deemed that the requested waiver
was given by TIBCO.
In addition to the foregoing, Talarian shall give TIBCO at least two
complete business days' notice, in the manner provided for in the preceding
paragraph, of its intent to enter into any agreement, contract or commitment for
the purchase of capital assets, or its intent to purchase capital assets, if
such assets would have a purchase price in excess of $25,000 in a single
transaction or in total for a related series of transactions.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement; Other
---------------------------------------------------------
Filings. As promptly as practicable after the execution of this Agreement,
-------
Talarian and TIBCO will prepare, and file with the SEC, the Proxy
Statement/Prospectus and TIBCO will prepare and file with the SEC the
Registration Statement in which the Proxy Statement/Prospectus will be included
as a prospectus. Each of Talarian and TIBCO will respond to any comments of the
SEC, will use its respective commercially reasonable efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and Talarian will cause the Proxy
Statement/Prospectus to be mailed to its stockholders at the earliest
practicable time after the Registration Statement is declared effective by the
SEC. As promptly as practicable after the date of this Agreement, each of
Talarian and TIBCO will prepare and file any other filings required to be filed
by it under the Exchange Act, the Securities Act or any other Federal, foreign
or Blue Sky or related laws relating to the Merger and the transactions
contemplated by this Agreement (the "Other Filings"). Each of Talarian and TIBCO
will notify the other promptly upon the receipt of any comments from the SEC or
its staff or any other government officials and of any request by the SEC or its
staff or any other government officials for amendments or supplements to the
Registration Statement, the Proxy Statement/Prospectus or any Other Filing or
for additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC or its staff or any other government officials, on the other
hand, with respect to the Registration Statement, the Proxy
Statement/Prospectus, the Merger or any Other Filing. Each of Talarian and TIBCO
will cause all documents that it is responsible for filing with the SEC or other
regulatory authorities under this Section 5.1(a) to comply in all material
respects with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required
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to be set forth in an amendment or supplement to the Proxy Statement/Prospectus,
the Registration Statement or any Other Filing, Talarian or TIBCO, as the case
may be, will promptly inform the other of such occurrence and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of Talarian, such amendment or supplement.
5.2 Meeting of Talarian Stockholders.
--------------------------------
(a) Promptly after the date hereof, Talarian will take all action
necessary in accordance with applicable law and its Certificate of Incorporation
and Bylaws to convene the Talarian Stockholders' Meeting to be held as promptly
as practicable after the declaration of effectiveness of the Registration
Statement for the purpose of voting upon this Agreement. Subject to Section
5.2(c), Talarian will use its commercially reasonable efforts to solicit from
its stockholders proxies in favor of the adoption of this Agreement and will
take all other action necessary or advisable to secure the vote or consent of
its stockholders required by the rules of the NASD or the DGCL to obtain such
approvals. Notwithstanding anything to the contrary contained in this Agreement,
Talarian may adjourn or postpone Talarian Stockholders' Meeting to the extent
necessary to ensure that any necessary supplement or amendment to the Proxy
Statement/Prospectus is provided to Talarian's stockholders in advance of a vote
on this Agreement or, if as of the time for which Talarian Stockholders' Meeting
is originally scheduled (as set forth in the Proxy Statement/Prospectus) there
are insufficient shares of Talarian Common Stock represented (either in person
or by proxy) to constitute a quorum necessary to conduct the business of the
Talarian's Stockholders' Meeting. Talarian shall ensure that the Talarian
Stockholders' Meeting is called, noticed, convened, held and conducted, and
subject to Section 5.2(c) that all proxies solicited by Talarian in connection
with the Talarian Stockholders' Meeting are solicited, in compliance with
applicable law, its Certificate of Incorporation and Bylaws, the rules of the
NASD and all other applicable legal requirements. Talarian's obligation to call,
give notice of, convene and hold the Talarian Stockholders' Meeting in
accordance with this Section 5.2(a) shall not be limited to or otherwise
affected by the commencement, disclosure, announcement or submission to Talarian
of any Acquisition Proposal (as defined in Section 5.4(a)), or by any
withdrawal, amendment or modification of the recommendation of the Board of
Directors of Talarian with respect to the Merger.
(b) Subject to Section 5.2(c): (i) the Board of Directors of
Talarian shall recommend that Talarian's stockholders vote in favor of adoption
of this Agreement at the Talarian Stockholders' Meeting; (ii) the Proxy
Statement/Prospectus shall include a statement to the effect that the Board of
Directors of Talarian has recommended that Talarian's stockholders vote in favor
of adoption of this Agreement at the Talarian Stockholders' Meeting; and (iii)
neither the Board of Directors of Talarian nor any committee thereof shall
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to TIBCO, the recommendation of the Board of Directors of
Talarian that Talarian's stockholders vote in favor of adoption of this
Agreement.
(c) Notwithstanding any of the foregoing to the contrary, nothing
in this Agreement shall prevent the Board of Directors of Talarian from
withholding, withdrawing,
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amending or modifying its recommendation in favor of the Merger if the Board of
Directors of Talarian concludes in good faith, after consultation with its
outside counsel, that the failure to take such action would be reasonably likely
to result in a breach of its fiduciary obligations to Talarian's stockholders
under applicable law. Nothing contained in this Section 5.2(c) shall limit
Talarian's obligation to hold and convene the Talarian Stockholders' Meeting
(regardless of whether the recommendation of the Board of Directors of Talarian
shall have been withdrawn, amended or modified).
5.3 Confidentiality; Access to Information.
--------------------------------------
(a) The parties acknowledge that Talarian and TIBCO have previously
executed a Mutual Nondisclosure Agreement dated July 30, 2001 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.
(b) Talarian will afford TIBCO and its accountants, counsel and other
representatives reasonable access during normal business hours to the
properties, books, records and personnel of Talarian during the period prior to
the Effective Time to obtain all information concerning the business, including
the status of product development efforts, properties, results of operations and
personnel of Talarian, as TIBCO may reasonably request. TIBCO will afford
Talarian and its representatives reasonable access to information concerning
TIBCO's business that Talarian may reasonably request in order to permit, and
solely for the purpose of permitting, Talarian to confirm the accuracy of the
representations and warranties made by TIBCO in Article III. No information or
knowledge obtained by TIBCO or Talarian in any investigation pursuant to this
Section 5.3 will affect or be deemed to modify any representation or warranty
contained herein or the conditions to the obligations of the parties to
consummate the Merger.
5.4 No Solicitation.
---------------
(a) From and after the date of this Agreement until the Effective
Time or termination of this Agreement pursuant to Article VII, Talarian and its
subsidiaries will not, nor will they authorize or permit any of their respective
officers, directors, affiliates or employees or any investment banker, attorney
or other advisor or representative retained by any of them to, directly or
indirectly, (i) solicit, initiate or induce the making, submission or
announcement of any Acquisition Proposal (as defined below), (ii) participate in
any discussions or negotiations regarding, or furnish to any person any
non-public information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to, any Acquisition Proposal, (iii) engage in discussions
with any person with respect to any Acquisition Proposal, except as to the
existence of these provisions, (iv) subject to Section 5.2(c), approve, endorse
or recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any contract, agreement or commitment contemplating or
otherwise relating to any Acquisition Proposal; provided, however, that prior to
-------- -------
the adoption of this Agreement by the required Talarian stockholder vote, this
Section 5.4(a) shall not prohibit Talarian from furnishing nonpublic information
regarding Talarian and its subsidiaries to, entering into a confidentiality
agreement with or entering into discussions with, any person or
-36-
group in response to a Superior Offer (as defined below) or any offer or
proposal that the Board of Directors of Talarian reasonably determines in good
faith is reasonably likely to lead to a Superior Offer submitted by such person
or group (and not withdrawn) if (1) neither Talarian nor any representative of
Talarian or its subsidiaries shall have violated any of the restrictions set
forth in this Section 5.4, (2) the Board of Directors of Talarian concludes in
good faith, after consultation with its outside legal counsel, that such action
is required in order for the Board of Directors of Talarian to comply with its
fiduciary obligations to Talarian's stockholders under the DGCL, (3) prior to
furnishing any such nonpublic information to, or entering into discussions with,
such person or group, Talarian gives TIBCO written notice of the identity of
such person or group and of Talarian's intention to furnish nonpublic
information to, or enter into discussions with, such person or group and
Talarian receives from such person or group an executed confidentiality
agreement containing customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such person or group by or
on behalf of Talarian, and (4) contemporaneously with furnishing any such
nonpublic information to such person or group, Talarian furnishes such nonpublic
information to TIBCO (to the extent such nonpublic information has not been
previously furnished by Talarian to TIBCO); provided, further, that nothing in
-------- -------
this Agreement shall prevent the Board of Directors of Talarian from taking, and
disclosing to Talarian's stockholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act. Talarian and its subsidiaries
will, and will cause their respective officers, directors, affiliates,
employees, investment bankers, attorneys and other advisors and representatives
to, immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding two sentences by any
officer, director or employee of Talarian or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of Talarian or
any of its subsidiaries shall be deemed to be a breach of this Section 5.4 by
Talarian. In addition to the foregoing, Talarian shall (i) provide TIBCO with at
least twenty-four (24) hours prior notice of any meeting of Talarian's Board of
Directors at which Talarian's Board of Directors is reasonably expected to
consider the matters described in clause (2) of the first proviso to the first
sentence of this subsection, (ii) provide TIBCO with at least forty-eight (48)
hours prior written notice of a meeting of Talarian's Board of Directors at
which Talarian's Board of Directors is reasonably expected to consider
withholding, withdrawing, amending or modifying its recommendation in favor of
the Merger and together with such notice a copy of the documentation relating to
any Superior Offer that exists at such time and (iii) provide TIBCO with
reasonable notice of the material terms of the Superior Offer and reasonable
opportunity (which shall not be required to exceed such same forty-eight hour
period) to make a counter-offer prior to any commitment by Talarian with respect
to the Superior Offer.
For purposes of this Agreement, "Acquisition Proposal" shall mean any bona
fide offer or proposal (other than an offer or proposal by TIBCO) relating to
any Acquisition Transaction. For the purposes of this Agreement, "Acquisition
Transaction" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from Talarian by any person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a
-37-
20% interest in the total outstanding voting securities of Talarian or any of
its subsidiaries or any tender offer or exchange offer that if consummated would
result in any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) beneficially owning 20% or more of
the total outstanding voting securities of Talarian or any of its subsidiaries;
(B) any merger, consolidation, business combination or similar transaction
involving Talarian in which subsequent to such transaction the prior
stockholders shall own less than 80% of the total outstanding voting securities
of the surviving entity in such transaction; (C) any sale, lease (other than in
the ordinary course of business), exchange, transfer, license (other than in the
ordinary course of business), acquisition or disposition of more than 20% of the
assets of Talarian; or (D) any liquidation or dissolution of Talarian.
For purposes of this Agreement, the term "Superior Offer" shall mean an
unsolicited, bona fide written offer made by a third party to consummate any of
the following transactions: (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Talarian pursuant to which the stockholders of Talarian immediately preceding
such transaction hold less than 50% of the equity interest in the surviving or
resulting entity of such transaction; (ii) a sale or other disposition by
Talarian of all or substantially all of its assets, or (iii) the acquisition by
any person or group (including by way of a tender offer or an exchange offer or
issuance by Talarian), directly or indirectly, of beneficial ownership or a
right to acquire beneficial ownership of shares representing in excess of 50% of
the voting power of the then outstanding shares of capital stock of Talarian, in
each case on terms that the Board of Directors of Talarian determines, in its
reasonable judgment (after consultation with a financial advisor of nationally
recognized reputation) to be more favorable to Talarian stockholders than the
terms of the Merger (after taking into account all relevant factors, including
all conditions to the offer, the timing of the transaction contemplated by the
offer, the risk of nonconsummation thereof and the need for any required
governmental or other consents, filings or approvals); provided, however, that
-------- -------
any such offer shall not be deemed to be a "Superior Offer" if any financing
required to consummate the transaction contemplated by such offer is not
committed and is not likely in the reasonable judgment of Talarian's Board of
Directors to be obtained by such third party on a timely basis.
(b) In addition to the obligations of Talarian set forth in
subsection (a) of this Section 5.4, Talarian as promptly as practicable shall
advise TIBCO orally and in writing of any request for non-public information or
other inquiry which Talarian reasonably believes could lead to an Acquisition
Proposal or of any Acquisition Proposal, the material terms and conditions of
such Acquisition Proposal (to the extent known), and the identity of the person
or group making any such request, inquiry or Acquisition Proposal. Talarian will
keep TIBCO informed on a current basis of the status and details (including any
material amendments or proposed amendments) of any such request, inquiry or
Acquisition Proposal.
5.5 Public Disclosure. TIBCO and Talarian will consult with each other,
-----------------
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Merger, this Agreement
or an Acquisition Proposal and will not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
law or any listing agreement with a national securities exchange. The
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parties have agreed to the text of the joint press release announcing the
execution of this Agreement.
5.6 Regulatory Filings; Reasonable Efforts; Notification.
----------------------------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its commercially reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including using all reasonable efforts to cause any ultimate parent
entities to provide all necessary information and make all necessary filings and
give its consent to the inclusion of information regarding it in all necessary
filings and using commercially reasonable efforts to accomplish the following:
(i) the taking of all reasonable acts necessary to cause the conditions
precedent set forth in Article VI to be satisfied; (ii) the making of all
necessary filings with respect to the Merger and this Agreement under the
Securities Act, the Exchange Act and applicable blue sky or similar securities
laws and obtain required approvals and clearances with respect thereto and
supply all additional information requested in connection therewith; (iii) the
obtaining of all necessary actions or nonactions, waivers, consents, approvals,
orders and authorizations from Governmental Entities and the making of all
necessary registrations, declarations and filings (including registrations,
declarations and filings with Governmental Entities, if any) and the taking of
all reasonable steps as may be necessary to avoid any suit, claim, action,
investigation or proceeding by any Governmental Entity; (iii) the obtaining of
all necessary consents, waivers, approvals, authorizations and orders required
in connection with the authorization, execution and delivery of this Agreement
and the consummation of the Merger, including those required under the HSR Act;
(iv) the defending of any suits, claims, actions, investigations or proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed; and (v) the execution or delivery of
any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement. In connection with
and without limiting the foregoing, Talarian and its Board of Directors shall,
if any state takeover statute or similar statute or regulation is or becomes
applicable to the Merger, this Agreement or any of the transactions contemplated
by this Agreement, use all reasonable efforts to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this Agreement
and the transactions contemplated hereby.
(b) Each of TIBCO and Talarian shall use all reasonable efforts to
resolve such objections, if any, as may be asserted by any Governmental Entity
with respect to the transactions contemplated by this Agreement under the HSR
Act, the Xxxxxxx act, as amended, the Xxxxxxx Act, as amended, the Federal Trade
Commission Act, as amended, and any other Federal, state or foreign statutes,
rules, regulations, orders or decrees that are designed to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
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trade (collectively, "Antitrust Laws"). In connection therewith, if any
administrative or judicial action or proceeding is instituted (or, to Talarian's
or TIBCO's knowledge, threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Antitrust Law, each of TIBCO
and Talarian shall cooperate and use all reasonable efforts to contest and
resist any such action or proceeding and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction or other order, whether temporary,
preliminary or permanent (each an "Order"), that is in effect and that
prohibits, prevents, or restricts consummation of the Merger or any such other
transactions, unless by mutual written agreement TIBCO and Talarian decide that
litigation in not in their respective best interests. The parties hereto will
consult and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted by or on
behalf of any party hereto in connection with proceedings under or relating to
any Antitrust Laws. Notwithstanding the provisions of the immediately preceding
sentence, it is expressly understood and agreed that TIBCO shall have no
obligation to litigate or contest any administrative or judicial action or
proceeding or any Order beyond June 30, 2002. Each of TIBCO and Talarian shall
use all reasonable efforts to take such action as may be required to cause the
expiration of the waiting periods under the HSR Act or other Antitrust Laws with
respect to such transactions as promptly as possible after the execution of this
Agreement; provided, however, that nothing contained herein shall require either
party to seek early termination of any such waiting period under the Antitrust
Laws.
(c) Notwithstanding anything to the contrary in Section 5.6(a) or
(b), (i) neither TIBCO nor any of its subsidiaries shall be required to divest
any of their respective businesses, product lines or assets, or to take or agree
to take any other action or agree to any limitation that could reasonably be
expected to adversely affect TIBCO or adversely affect TIBCO as combined with
the Surviving Corporation after the Effective Time and (ii) nothing in this
Agreement shall be deemed to require TIBCO or any of its affiliates to make
proposals, execute or carry out agreements or submit to orders providing for the
license, sale or other disposition or holding separate (through the
establishment of a trust or otherwise) of any assets or categories of assets of
TIBCO, any of its affiliates or Talarian or the holding separate of the shares
of Talarian Common Stock or imposing or seeking to impose any limitation on the
ability of TIBCO or any of its subsidiaries or affiliates to conduct their
business or own such assets or to acquire, hold or exercise full rights of
ownership of the shares of Talarian Common Stock.
(d) Talarian shall give prompt notice to TIBCO of any representation
or warranty made by it contained in this Agreement becoming untrue or
inaccurate, or any failure of Talarian to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement, in each case, such that the conditions set forth in
Section 6.3(a) or 6.3(b) would not be satisfied; provided, however, that no such
-------- -------
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
(e) TIBCO shall give prompt notice to Talarian of any representation
or warranty made by it or Merger Sub contained in this Agreement becoming untrue
or inaccurate,
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or any failure of TIBCO or Merger Sub to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement, in each case, such that the conditions set forth in
Section 6.2(a) or 6.2(b) would not be satisfied; provided, however, that no such
-------- -------
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
5.7 Third Party Consents. As soon as practicable following the date
--------------------
hereof, TIBCO and Talarian will each use its commercially reasonable efforts to
obtain any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby. In
addition, Talarian shall use its commercially reasonable efforts to cause the
agreements listed on Section 5.7 of the Talarian Disclosure Schedules to be
extended at least through December 31, 2003 on terms substantially similar to
those under such existing agreements, and to obtain the consent to the
assignment of such extended agreements in connection with the transactions
contemplated by this Agreement.
5.8 Stock Options, Warrants and Restricted Stock.
--------------------------------------------
(a) At the Effective Time, each outstanding Talarian Option and
Additional Talarian Option, whether or not exercisable, will be assumed by
TIBCO. Each Talarian Option and Additional Talarian Option so assumed by TIBCO
under this Agreement will continue to have, and be subject to, the same terms
and conditions applicable to such option immediately prior to the Effective Time
as set forth in the plans and agreements under which such option was granted
(including, without limitation, any repurchase rights or vesting provisions),
except that each Talarian Option and each Additional Talarian Option will be
exercisable (or will become exercisable in accordance with its terms) for,
calculated on a per share of Talarian Common Stock basis, (A) cash in the amount
of the Cash Consideration and (B) a fraction of a share of TIBCO Common Stock
equal to the Stock Consideration. Accordingly, (i) the exercise price per each
share of TIBCO Common Stock issuable upon exercise of such assumed option will
be equal to the quotient determined by dividing the exercise price per share of
Talarian Common Stock at which such option was exercisable immediately prior to
the Effective Time by the Merger Exchange Ratio, rounded to the nearest whole
cent, and (ii) each share of TIBCO Common Stock issued upon the exercise of any
such assumed option following the Effective Time shall be issued together with
the pro rata portion of the Cash Consideration attributable to the option, and
(iii) the pro rata portion of the Cash Consideration that will be issued
together with each share of TIBCO Common Stock acquired upon the exercise of an
assumed option following the Effective Time shall be equal to the quotient
obtained by dividing (x) the aggregate amount of Cash Consideration that would
have been issued in the Merger in respect of the shares of Talarian Common Stock
issuable upon exercise of such option had such option been exercised in full
immediately prior to the Effective Time, by (y) the aggregate number of shares
of TIBCO Common Stock that would be issuable in respect of such option pursuant
to clause (i) above had it been exercised in full immediately following the
Effective Time. TIBCO shall (A) on or prior to the Effective Time, reserve for
issuance the number of shares of TIBCO Common Stock that will become subject to
assumed Talarian Options and Additional Talarian Options pursuant to
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this Section 5.8(a), and (B) from and after the Effective Time, upon exercise of
the assumed Talarian Options and Additional Talarian Options in accordance with
the respective terms thereof, make available for issuance all cash and shares of
TIBCO Common Stock covered thereby..
(b) [Intentionally omitted.]
(c) TIBCO agrees to file a registration statement on Form S-8 for the
shares of TIBCO Common Stock issuable with respect to assumed Talarian Stock
Options, assumed Additional Talarian Options and the Talarian ESPP as soon as is
reasonably practicable after the Effective Time, and in any event within 20
business days after the Effective Time, and shall maintain the effectiveness of
such registration statement thereafter for so long as any of such options,
shares or other rights remain outstanding.
(d) The Talarian Warrant, to the extent it survives the Merger by its
terms and remains outstanding at the Effective Time, whether or not exercisable
and whether or not vested at the Effective Time, shall remain outstanding at the
Effective Time. At the Effective Time, the Talarian Warrant shall, by virtue of
the Merger and without any further action on the part of Talarian or the holder
of the Talarian Warrant (unless further action may be required by its terms), be
assumed by TIBCO and shall be exercisable upon the same terms and conditions as
under the warrant agreement that governs the Talarian Warrant, except that each
Talarian Warrant will be exercisable (or will become exercisable in accordance
with its terms) for, calculated on a per share of Talarian Common Stock basis,
(A) cash in the amount of the Cash Consideration and (B) a fraction of a share
of TIBCO Common Stock equal to the Stock Consideration. Accordingly, (i) the
exercise price per each share of TIBCO Common Stock issuable upon exercise of
such assumed warrant will be equal to the quotient determined by dividing the
exercise price per share of Talarian Common Stock at which such warrant was
exercisable immediately prior to the Effective Time by the Merger Exchange
Ratio, rounded to the nearest whole cent, and (ii) each share of TIBCO Common
Stock issued upon the exercise of any such assumed warrant following the
Effective Time shall be issued together with the pro rata portion of the Cash
Consideration attributable to the warrant, and (iii) the pro rata portion of the
Cash Consideration that will be issued together with each share of TIBCO Common
Stock acquired upon the exercise of an assumed warrant following the Effective
Time shall be equal to the quotient obtained by dividing (x) the aggregate
amount of Cash Consideration that would have been issued in the Merger in
respect of the shares of Talarian Common Stock issuable upon exercise of such
warrant had such warrant been exercised in full immediately prior to the
Effective Time, by (y) the aggregate number of shares of TIBCO Common Stock that
would be issuable in respect of such warrant pursuant to clause (i) above had it
been exercised in full immediately following the Effective Time. From and after
the Effective Time, all references to Talarian in the warrant agreement
underlying the Talarian Warrant shall be deemed to refer to TIBCO. TIBCO further
agrees that, notwithstanding any other term of this Section 5.8(d) to the
contrary, if required (or if otherwise appropriate) under the terms of the
Talarian Warrant, it will execute a supplemental agreement with the holder of
the Talarian Warrant to effectuate the foregoing. TIBCO shall (A) on or prior to
the Effective Time, reserve for issuance the number of shares of TIBCO Common
Stock comprising the Stock Consideration issuable upon the exercise
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in full of the Talarian Warrant to be assumed by TIBCO pursuant to this Section
5.8(d) (as so assumed, the "TIBCO Warrant"), and (B) from and after the
Effective Time, upon exercise of the TIBCO Warrant in accordance with its terms,
make available for payment and issuance the Cash Consideration and Stock
Consideration covered thereby.
(e) Each share of Talarian Common Stock that, as of the Effective Time
remains subject to repurchase by Talarian in the event a Talarian employee
ceases to be employed by Talarian ("Talarian Restricted Stock") shall be
converted into the right to receive the Merger Consideration pursuant to Section
1.6(a) hereof; provided, however, that (i) the payment of the Cash Consideration
-------- -------
in exchange for such share of Talarian Restricted Stock shall occur only upon
the satisfaction of the applicable vesting schedules and acceleration terms
pursuant to existing agreements in effect at the Effective Time and (ii) the
Stock Consideration shall be registered in such holder's name, but shall be held
by the Surviving Corporation or TIBCO pending the satisfaction of the applicable
vesting periods and acceleration terms pursuant to existing agreements in effect
at the Effective Time. Talarian hereby assigns to the Surviving Corporation all
repurchase rights relating to the Talarian Restricted Stock, effective at the
Effective Time. A listing of the holders of Talarian Restricted Stock as of
November 30, 2001, together with the number of shares of Talarian Restricted
Stock held by each, is set forth in Section 5.8(e) of the Talarian Disclosure
Schedules.
(f) Holders of assumed Talarian Options, assumed Additional Talarian
Options and assumed Talarian Warrants will also be entitled to receive upon
exercise thereof in accordance with the foregoing following the Effective Time
cash in lieu of fractional shares of TIBCO Common Stock in the manner set forth
in Section 1.6(e) hereof.
5.9 Certain Employee Benefit Matters.
--------------------------------
(a) Tiger shall prior to the Closing Date take all actions necessary
pursuant to the terms of the ESPP in order to accelerate the Purchase Date for
the Purchase Period that includes the Effective Time of the Offering Period that
commenced on August 1, 2001 under such plan (the "2001 Offering Period") such
that a new Purchase Date for the 2001 Offering Period shall occur on the day
prior to the Closing Date and shares shall be purchased by ESPP participants
prior to the Effective Time. The 2001 Offering Period shall expire immediately
following such new Purchase Date and the ESPP shall terminate immediately prior
to the Effective Time. Tiger shall amend the ESPP prior to the Closing Date to
provide that the Offering Period scheduled to commence on February 1, 2002 (the
"February Offering Period") shall terminate on the earlier of the Closing Date
or January 31, 2004 and that if terminated on the Closing Date, each participant
shall receive a full refund of all contributions made in the February Offering
Period. Capitalized terms in this Section if not otherwise defined in this
Agreement, have the meanings ascribed to them in the ESPP.
(b) Talarian shall take all necessary action to cause any 401(k) plan
sponsored or maintained by Talarian to be terminated at least one day prior to
the Closing Date, and shall use commercially reasonable efforts to cause such
401(k) plan to be amended prior to or as of such termination so as to comply
with all requirements of the Retirement Protection Act of 1994,
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the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and the
Internal Revenue Service Restructuring and Reform Act of 1998.
(c) The Talarian shall take or cause to be taken all reasonable steps
as may be required to cause the transactions relating to the Merger by each
individual who is a director or officer of the Talarian to be exempt under Rule
16b-3 promulgated under the Exchange Act, such steps to be taken in accordance
with the Interpretive Letter dated January 12, 1999, issued by the SEC to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP. Furthermore, the Board of Directors of
TIBCO shall prior to the Effective Time, to the extent permitted by applicable
law, take or cause to be taken all actions necessary to obtain approval in the
form required by Rule 16b-3 of the Exchange Act so that, with respect to persons
who will or may become officers or directors of TIBCO, the transactions relating
to the Merger that may be considered acquisitions under such Rule for such
persons will be exempt thereunder. The TIBCO Board of Directors' actions shall
comply with the approval conditions of Rule 16b-3 under the Exchange Act for
purposes of such Section 16(b) exemption, including, but not limited to,
specifying the name of each subject person, the number of securities to be
acquired or disposed of for each such person, the material terms of any
derivative securities, and that the approval is intended to make the receipt of
such securities exempt pursuant to Rule 16b-3(d).
(d) As soon as practicable after the execution of this Agreement,
Talarian and TIBCO shall confer and work together in good faith to agree upon
mutually acceptable employee benefit and compensation arrangements (and
terminate Talarian Employee Plans immediately prior to the Closing Date if
appropriate). To the extent permitted under the governing plan documents,
Employees of Talarian and its subsidiaries will be granted credit for all
service with Talarian, its subsidiaries or its affiliates under each Talarian
employee benefit plan, program or arrangement of TIBCO or its affiliates in
which such Employees are eligible to participate for all purposes, except for
purposes of benefit accrual under a defined benefit pension plan. TIBCO and
Talarian shall each perform and undertake all acts as may be necessary to comply
with the applicable provisions of the Workers Adjustment and Retaining Act
("WARN") and laws for all of their respective employees. TIBCO shall be
responsible for any pay any liability for severance payments, pursuant to WARN
or otherwise, to any TIBCO employee that accrues or becomes payable during the
period of such employee's employment or service with TIBCO or arises out of the
termination of such person's employment with TIBCO. Talarian shall be
responsible for and pay any liability for severance payments, pursuant to WARN
or otherwise, to any Talarian employee that accrues or becomes payable during
the period of such employee's employment or service with Talarian or arises out
of the termination of such persons employment with Talarian.
5.10 Indemnification.
---------------
(a) For a period of six years after the Effective Time, TIBCO will
cause the Surviving Corporation to fulfill and honor in all respects the
obligations of Talarian pursuant to any indemnification agreements between
Talarian and its directors and officers as of the Effective Time (the
"Indemnified Parties") and any indemnification provisions under Talarian's
Certificate of Incorporation or Bylaws as in effect on the date hereof. The
Certificate of
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Incorporation and Bylaws of the Surviving Corporation will contain provisions
with respect to exculpation and indemnification that are at least as favorable
to the Indemnified Parties as those contained in the Certificate of
Incorporation and Bylaws of Talarian as in effect on the date hereof, which
provisions will not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who, immediately prior to the Effective Time,
were directors or officers of Talarian, unless such modification is required by
law. Notwithstanding any provision of this Section 5.10 to the contrary, nothing
in this Section 5.10 shall be construed to restrict the ability of TIBCO to
cause the merger of the Surviving Corporation with and into TIBCO at any time
following consummation of the Merger.
(b) For a period of six years after the Effective Time, TIBCO shall,
or shall cause the Surviving Corporation to, use its commercially reasonable
efforts to maintain in effect, if available, directors' and officers' liability
insurance covering those persons who are currently covered by Talarian's
directors' and officers' liability insurance policy on terms comparable to those
applicable to the current directors and officers of Talarian; provided, however,
-------- -------
that in no event will TIBCO or the Surviving Corporation be required to expend
in respect of any year in excess of 125% of the annual premium currently paid by
Talarian for such coverage (or such coverage as is available for 125% of such
annual premium), which annual premium for the policy year ended July 20, 2002 is
$667,980.
(c) This Section 5.10 shall survive the consummation of the Merger, is
intended to benefit Talarian, the Surviving Corporation and each Indemnified
Party, shall be binding on all successors and assigns of the Surviving
Corporation and TIBCO, and shall be enforceable by the Indemnified Parties.
5.11 Affiliates. TIBCO will be entitled to place appropriate legends
----------
on the certificates evidencing any TIBCO Common Stock to be received by an
affiliate of Talarian within the meaning of Rule 145 promulgated under the
Securities Act pursuant to the terms of this Agreement, and to issue appropriate
stop transfer instructions to the transfer agent for the TIBCO Common Stock.
Section 5.11 of the Talarian Disclosure Schedules sets forth a list of those
persons reasonably deemed by Talarian to be an affiliate of Talarian as of the
date of this Agreement.
5.12 Letter of Talarian's Accountants. Talarian shall use all reasonable
--------------------------------
efforts to cause to be delivered to TIBCO a letter of KPMG LLP, dated no more
than two (2) business days before the date on which the Registration Statement
becomes effective (and reasonably satisfactory in form and substance to TIBCO
and its representatives), that is customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.
5.13 Tax Matters.
-----------
(a) The parties acknowledge their respective desire to structure the
Merger to constitute a reorganization within the meaning of Section 368(a) of
the Code; provided, however,
-------- -------
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such tax treatment shall not be a condition to either parties' obligation to
close the transactions contemplated herein; provided, further, that in no event
shall the parties be required to amend or otherwise modify the terms of this
Agreement to achieve such tax treatment. Subject to the qualifications set forth
in the preceding sentence, (i) TIBCO and Talarian will use their reasonable good
faith efforts to achieve such tax treatment, and (ii) the parties hereto adopt
this Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a). TIBCO shall use its reasonable best efforts to obtain
an opinion of Venture Law Group, A Professional Corporation, or a "Big Five"
accounting firm (based on the facts and customary representations and
assumptions) that the Forward Merger will be treated as a "reorganization"
within the meaning of Section 368(a) of the Code (the "Tax Opinion"). TIBCO,
Talarian, Merger Sub and Second-Step Sub (if applicable) agree to provide
certifications reasonably requested by counsel issuing such Tax Opinion or an
opinion that the combined Reverse Merger and Second-Step Forward Merger will be
treated as a "reorganization" within the meaning of Section 368(a) of the Code.
(b) In Talarian's sole discretion, it may request Fenwick & West LLP
to provide Talarian with an opinion that either the Forward Merger or the
combined Reverse Merger and Second-Step Forward Merger will be treated as a
"reorganization" within the meaning of Section 368(a) of the Code. TIBCO,
Talarian, Merger Sub and Second-Step Sub (if applicable) agree to provide
certifications reasonably requested by such counsel in the event that such
counsel has been requested to issue such tax opinion.
5.14 Closing Date Balance Sheet. Talarian shall prepare and deliver to
--------------------------
TIBCO prior to Closing (i) an unaudited consolidated balance sheet of Talarian
as of the last business day of the most recently completed full month ending
immediately preceding the Closing Date (or, if the Closing Date is before the
15th day of the month, as of the last business day of the month immediately
preceding the most recently completed full month ending immediately preceding
the Closing Date), which balance sheet shall be prepared in accordance with GAAP
(except as permitted by Form 10-Q of the SEC) and on a basis consistent with the
unaudited balance sheets of Talarian included in the SEC Documents and shall
fairly present in all material respects the consolidated financial position of
Talarian and its consolidated subsidiaries as of the date thereof, and (ii)
Talarian's best estimate (using actual data through at least the end of the
third business day immediately preceding the Closing Date) of closing account
information for all line items that would appear on a consolidated balance sheet
of Talarian as of the business day immediately preceding the Closing Date.
Talarian shall provide to TIBCO any information and back-up materials (including
bank account information) reasonably requested by TIBCO with respect thereto.
5.15 Silicon Valley Bank Loan. During the period from the date of this
------------------------
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Talarian shall not make any
borrowings under its revolving credit facility with Silicon Valley Bank pursuant
to the Amended and Restated Loan and Security Agreement dated August 6, 1998, as
amended on February 22, 2001, between Talarian and Silicon Valley Bank (the "SVB
Loan Agreement"). Talarian shall use its commercially reasonable efforts to
cause
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the SVB Loan Agreement to be terminated and all collateral (including
intellectual property collateral) and guaranties securing Talarian's obligations
thereunder to be released and terminated prior to the Closing.
5.16 Nasdaq Listing. To the extent required, TIBCO shall authorize for
--------------
listing on the Nasdaq Stock Market the shares of TIBCO Common Stock issuable,
and those required to the reserved for issuance, in connection with the Merger,
effective upon official notice of issuance.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
------------------------------------------------------------
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Talarian Stockholder Approval. This Agreement shall have been
-----------------------------
adopted by the requisite vote under applicable law and Talarian's Certificate of
Incorporation and Bylaws by the stockholders of Talarian.
(b) Registration Statement Effective; Proxy Statement. The SEC shall
-------------------------------------------------
have declared the Registration Statement effective. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose, and no similar proceeding in respect
of the Proxy Statement/Prospectus, shall have been initiated or threatened in
writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
-----------------
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early and all material
foreign antitrust approvals required to be obtained prior to the Merger in
connection with the transactions contemplated hereby shall have been obtained.
6.2 Additional Conditions to Obligations of Talarian. The obligation of
------------------------------------------------
Talarian to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Talarian:
(a) Representations and Warranties. Each representation and warranty
------------------------------
of TIBCO and Merger Sub contained in this Agreement (i) shall have been true and
correct as of the date of this Agreement, and (ii) shall be true and correct on
and as of the Closing Date with the same force and effect as if made on the
Closing Date except, for purposes of each of clauses (i) and (ii), (A)
individually or in the aggregate, as does not constitute a Material Adverse
Effect on TIBCO and Merger Sub, (B) for changes contemplated by this Agreement,
and (C) for those
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representations and warranties which address matters only as of a particular
date (which representations shall have been true and correct except as does not
constitute a Material Adverse Effect on TIBCO and Merger Sub as of such
particular date) (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (1) all "Material Adverse
Effect" qualifications and other qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded, and (2) any update of or modification to the TIBCO Disclosure
Schedules made or purported to have been made after the date of this Agreement
shall be disregarded). Talarian shall have received a certificate with respect
to the foregoing signed on behalf of TIBCO by an authorized officer of TIBCO.
(b) Agreements and Covenants. TIBCO and Merger Sub shall have
------------------------
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Closing Date, and Talarian shall have received a certificate to such
effect signed on behalf of TIBCO by an authorized officer of TIBCO.
6.3 Additional Conditions to the Obligations of TIBCO and Merger Sub. The
----------------------------------------------------------------
obligations of TIBCO and Merger Sub to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
TIBCO:
(a) Representations and Warranties. Each representation and warranty
------------------------------
of Talarian contained in this Agreement (i) shall have been true and correct as
of the date of this Agreement, and (ii) shall be true and correct on and as of
the Closing Date with the same force and effect as if made on and as of the
Closing Date except, for purposes of each of clauses (i) and (ii), (A)
individually or in the aggregate, as does not constitute a Material Adverse
Effect on Talarian, (B) for changes contemplated by this Agreement, and (C) for
those representations and warranties which address matters only as of a
particular date (which representations shall have been true and correct except
as does not constitute a Material Adverse Effect on Talarian as of such
particular date) (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (1) all "Material Adverse
Effect" qualifications and other qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded, and (2) any update of or modification to the Talarian Disclosure
Schedules made or purported to have been made after the date of this Agreement
shall be disregarded). TIBCO shall have received a certificate with respect to
the foregoing signed on behalf of Talarian by an authorized officer of Talarian.
(b) Agreements and Covenants. Talarian shall have performed or
------------------------
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date, and TIBCO shall have received a certificate to such effect signed on
behalf of Talarian by the Chief Executive Officer and the Chief Financial
Officer of Talarian.
(c) Consents. Talarian shall have obtained all consents, waivers and
--------
approvals identified on Section 6.3(c) of the Talarian Disclosure Schedules or
alternatively
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Talarian shall secure rights to functionally similar alternative Third Party
Technology with different vendors on terms which will not materially and
adversely affect the operating results for Talarian as compared to the terms
provided for in the agreements set on such Section 6.3(c) of the Talarian
Disclosure Schedules and shall have integrated such alternative Third Party
Technology into the relevant Talarian Products in a manner that would not
materially and adversely affect Talarian's continuing business operations.
(d) No Litigation. There shall not be pending or threatened in writing
-------------
any suit, action or proceeding brought by any Governmental Entity (i)
challenging or seeking to restrain or prohibit the consummation of the Merger;
or (ii) seeking to prohibit or limit in any material respect the ownership or
operation by Talarian, TIBCO or any of their respective affiliates of any
portion of the business or assets of Talarian or its subsidiaries or TIBCO or
its subsidiaries, or to require any such person to dispose of or hold separate
any portion of the business or assets of the Talarian or its subsidiaries, or
TIBCO or its subsidiaries as a result of the Merger; or (iii) seeking to impose
limitations on the ability of TIBCO or any of its affiliates to acquire or hold,
or exercise full rights of ownership of, any shares of Talarian Common Stock,
including the right to vote Talarian Common Stock on all matters properly
presented to the stockholders of Talarian; or (iv) seeking to prohibit TIBCO or
any of its affiliates from effectively controlling any material portion of the
business or operations of Talarian or its subsidiaries.
(e) Closing Net Working Capital Amount. Talarian shall have net
----------------------------------
working capital at the Effective Time, as reflected on the estimated Balance
Sheet as of the Closing Date contemplated by Section 5.14, of at least
$40,000,000 less all out-of-pocket transaction expenses associated with the
Merger, including legal, accounting, printing, HSR and financial advisor fees
incurred by Talarian in connection with the Merger if the Effective Time shall
occur on or prior to March 31, 2002, which amount shall be reduced by $2,000,000
for each full month (pro rated for any portion of a full month) that elapses
between March 31, 2002 and the Effective Time. For purposes of this Section
6.3(d), "net working capital" shall mean current assets less current liabilities
(excluding the current portion of deferred revenue).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated, and the Merger
-----------
contemplated hereby may be abandoned, at any time prior to the Effective Time,
by action taken or authorized by the terminating party or parties, whether
before or after the adoption of this Agreement by the stockholders of Talarian
or of Merger Sub:
(a) by mutual written consent of TIBCO, Merger Sub and Talarian;
(b) by either Talarian or TIBCO if the Effective Time shall not have
occurred on or before June 30, 2002 (the "Termination Date"); provided; however,
-------- -------
that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement (including without limitation such party's
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obligations set forth in Section 5.6) has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the Termination Date;
(c) by either Talarian or TIBCO if any Governmental Entity (i) shall have
issued an order, decree or ruling or taken any other action (which such party
shall have used its reasonable best efforts to resist, resolve or lift, as
applicable, in accordance with Section 5.6) permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable; or (ii) shall have failed to issue an order, decree or ruling or
to take any other action (which order, decree or ruling or other action such
party shall have used its reasonable best efforts to obtain, in accordance with
Section 5.6), in the case of each of clauses (i) and (ii) which is necessary to
fulfill the condition set forth in Section 6.1(c) and such denial of a request
to issue such order, decree, ruling or take such other action shall have become
final and nonappealable; provided, however, that the right to terminate this
-------- -------
Agreement under this Section 7.1(c) shall not be available to any party whose
failure to comply with Section 5.6 has been the cause of such action or
inaction;
(d) by either Talarian or TIBCO if the required approval of the
stockholders of Talarian contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Talarian stockholders duly convened therefor or at any adjournment thereof
(provided that the right to terminate this Agreement under this Section 7.1(d)
--------
shall not be available to Talarian where the failure to obtain Talarian
stockholder approval shall have been caused by the action or failure to act of
Talarian and such action or failure to act constitutes a breach by Talarian of
this Agreement);
(e) by TIBCO if any of the following events shall have occurred: (i) the
Board of Directors of Talarian or any committee thereof having authority to bind
the Board shall for any reason have withheld or withdrawn or shall have amended
or modified in a manner adverse to TIBCO its recommendation in favor of the
adoption and approval of the Agreement or the approval of the Merger; (ii)
Talarian shall have failed to include in the Proxy Statement/Prospectus the
recommendation of the Board of Directors of Talarian in favor of the adoption
and approval of the Agreement and the approval of the Merger; (iii) the Board of
Directors of Talarian shall have failed to reaffirm its recommendation in favor
of the adoption and approval of the Agreement and the approval of the Merger
within ten (10) days after TIBCO requests in writing that such recommendation be
reaffirmed; (iv) the Board of Directors of Talarian or any committee thereof
having authority to bind the Board shall have approved or publicly recommended
any Acquisition Proposal; (v) a tender or exchange offer relating to securities
of Talarian in excess of 20% of its outstanding voting securities shall have
been commenced by a person unaffiliated with TIBCO and Talarian shall not have
sent to its stockholders pursuant to Rule 14e-2 promulgated under the Exchange
Act, within ten (10) business days after such tender or exchange offer is first
published sent or given, a statement disclosing that Talarian's Board of
Directors recommends rejection of such tender or exchange offer; or (vi)
Talarian shall have intentionally breached its obligations under Section 5.4;
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(f) by Talarian, upon a breach of any representation, warranty,
covenant or agreement on the part of TIBCO set forth in this Agreement, or if
any representation or warranty of TIBCO shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided that if such inaccuracy in
--------
TIBCO's representations and warranties or breach by TIBCO is curable by TIBCO
through the exercise of its commercially reasonable efforts, then Talarian may
not terminate this Agreement under this Section 7.1(f) for twenty (20) days
after delivery of written notice from Talarian to TIBCO of such breach, provided
TIBCO continues to exercise commercially reasonable efforts to cure such breach
(it being understood that Talarian may not terminate this Agreement pursuant to
this Section 7.1(f) if it shall have materially breached this Agreement or if
such breach by TIBCO is cured during such 20-day period, provided that such cure
--------
shall be completed on or prior to the Termination Date); or
(g) by TIBCO, upon a breach of any representation, warranty, covenant
or agreement on the part of Talarian set forth in this Agreement, or if any
representation or warranty of Talarian shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided that if such inaccuracy in
--------
Talarian's representations and warranties or breach by Talarian is curable by
Talarian through the exercise of its commercially reasonable efforts, then TIBCO
may not terminate this Agreement under this Section 7.1(g) for twenty (20) days
after delivery of written notice from TIBCO to Talarian of such breach, provided
Talarian continues to exercise commercially reasonable efforts to cure such
breach (it being understood that TIBCO may not terminate this Agreement pursuant
to this Section 7.1(g) if it shall have materially breached this Agreement or if
such breach by Talarian is cured during such 20-day period, provided that such
--------
cure shall be completed on or prior to the Termination Date).
7.2 Notice of Termination Effect of Termination. Any termination of this
-------------------------------------------
Agreement properly made under Section 7.1 above will be effective immediately
upon the delivery of written notice of the terminating party to the other
parties hereto. In the event of the termination of this Agreement as provided in
Section 7.1, this Agreement shall be of no further force or effect and there
shall be no liability hereunder on the part of Talarian, TIBCO, Merger Sub or
their respective officers or directors, except (i) as set forth in this Section
7.2, Section 7.3 and Article VIII (General Provisions), each of which shall
survive the termination of this Agreement, and (ii) nothing herein shall relieve
any party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
7.3 Fees and Expenses.
-----------------
(a) General. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided,
--------
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however, that TIBCO and Talarian shall share equally all fees and expenses,
-------
other than attorneys' and accountants fees and expenses, incurred in relation to
the filing of the required materials under the HSR Act and the printing and
filing with the SEC of the Proxy Statement/Prospectus (including any preliminary
materials related thereto) and the Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto.
(b) Talarian Payments.
-----------------
(i) In the event that this Agreement is terminated by TIBCO pursuant
to Section 7.1(e), Talarian shall promptly, but in no event later than one
business day after the date of such termination, pay TIBCO a fee equal to
$3,850,000 (the "Termination Fee") and pay TIBCO an amount equal to TIBCO's
reasonable, documented out-of-pocket expenses incurred in connection with the
transactions contemplated by this Agreement (up to a maximum of $550,000), in
each case, in immediately available funds.
(ii) In the event that this Agreement is terminated (A) by TIBCO or
Talarian, as the case may be, pursuant to Section 7.1(d) or (B) by TIBCO
pursuant to Section 7.1(g), Talarian shall promptly, but in no event later than
one business day after the date of such termination, pay TIBCO an amount equal
to TIBCO's reasonable, documented expenses incurred in connection with the
transactions contemplated by this Agreement (up to a maximum of $550,000), and
furthermore, in the event that within six (6) months following such termination
Talarian shall enter into a definitive agreement with a third party with respect
to a Talarian Acquisition (as defined below) or shall publicly announce its
intention to enter into a Talarian Acquisition, Talarian shall contemporaneously
with the consummation of such Talarian Acquisition (and only upon such
consummation, if ever) pay TIBCO a fee equal to the Termination Fee. For
purposes of this Section, "Talarian Acquisition" shall mean (i) a merger,
consolidation or business combination involving Talarian pursuant to which the
stockholders of Talarian immediately preceding such transaction hold less than
50% of the equity interest in the surviving or resulting entity of such
transaction; (ii) a sale or other disposition by Talarian of all or
substantially all of its assets, or (iii) the acquisition by any person or group
(including by way of a tender offer or an exchange offer or issuance by
Talarian), directly or indirectly, of beneficial ownership or a right to acquire
beneficial ownership of shares representing in excess of 50% of the voting power
of the then outstanding shares of capital stock of Talarian.
(iii) Talarian acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, TIBCO would not enter into this
Agreement. Accordingly, if Talarian fails promptly to pay the amounts due
pursuant to this Section 7.3(b), and, in order to obtain such payment, TIBCO
commences a suit which results in a judgment against Talarian for the amounts
set forth in this Section 7.3(b), Talarian shall pay to TIBCO its reasonable
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amounts set forth in this Section
7.3(b) at the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made.
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7.4 Amendment. Subject to applicable law, this Agreement may be amended by
---------
the parties hereto at any time, whether before or after adoption of this
Agreement by the stockholders of Talarian or of Merger Sub, by execution of an
instrument in writing signed on behalf of each of TIBCO, Merger Sub and
Talarian.
7.5 Extension; Waiver. At any time prior to the Effective Time any party
-----------------
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
----------------------------------------------
and warranties of Talarian, TIBCO and Merger Sub contained in this Agreement
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via facsimile (receipt confirmed) to the parties at
the following addresses or facsimile numbers (or at such other address or
facsimile numbers for a party as shall be specified by like notice):
(a) if to TIBCO or Merger Sub:
TIBCO Software Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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(b) if to Talarian:
Talarian Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
8.3 Interpretation; Certain Defined Terms.
-------------------------------------
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement unless otherwise indicated. The words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When reference is
made herein to "the business of" an entity, such reference shall be deemed to
include the business of all direct and indirect subsidiaries of such entity.
Reference to the subsidiaries of an entity shall be deemed to include all direct
and indirect subsidiaries of such entity.
(b) For purposes of this Agreement the term "knowledge" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party has actual knowledge of such matter.
(c) For purposes of this Agreement, the term "Material Adverse Effect"
when used with respect to an entity means any change, event, circumstance or
effect that is materially adverse to the business, assets (including intangible
assets), capitalization, condition (financial or otherwise), or results of
operations of such entity and its subsidiaries taken as a whole; provided,
--------
however , that none of the following shall be deemed in themselves, either alone
-------
or in combination, to constitute, and none of the following shall be taken into
account in determining whether there has been a Material Adverse Effect: (i) in
the case of Talarian only, any adverse change, event, circumstance or effect
arising from or relating to the loss of existing or prospective customers or
suppliers (other than suppliers of intellectual property) of Talarian or
-54-
employees of Talarian, in each case due to the effect of the public announcement
or pendency of the transactions contemplated by this Agreement, or (ii) any
adverse change, event, circumstance or effect arising from or relating to
changes in general economic conditions or changes affecting the software
industry generally, or (iii) any change in the trading price or the trading
volume of TIBCO Common Stock or Talarian Common Stock, as the case may be.
(d) For purposes of this Agreement, the term "person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
(e) For purposes of this Agreement, "subsidiary" of a specified entity
will be any corporation, partnership, limited liability Talarian, joint venture
or other legal entity of which the specified entity (either alone or through or
together with any other subsidiary) owns, directly or indirectly, fifty percent
(50%) or more of the stock or other equity or partnership interests the holders
of which are generally entitled to vote for the election of the Board of
Directors or other governing body of such corporation or other legal entity.
8.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by facsimile, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
-------------------------------------------
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Talarian Disclosure
Schedules and the TIBCO Disclosure Schedules (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in Section 5.10.
8.6 Severability. In the event that any provision of this Agreement or the
------------
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
------------------------------------
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not
-55-
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
---------------------
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
----------
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Any attempt to make any such assignment without such
consent shall be null and void. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
8.11 No Waiver; Remedies Cumulative. No failure or delay on the part of any
------------------------------
party hereto in the exercise of any right hereunder will impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive to, and not exclusive of, any rights or
remedies otherwise available.
8.12 Waiver of Jury Trial. Each party hereto hereby waives, to the fullest
--------------------
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or other proceeding directly or indirectly arising
out of, under or in connection with this Agreement. Each party hereto (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event of
any action, suit or proceeding, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 8.12.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
TIBCO SOFTWARE INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxxx
Executive Vice President, Marketing &
Engineering
PANTHER ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx X. X'Xxxxx
-------------------------------------
Xxxxxxxxxxx X. X'Xxxxx
Chief Financial Officer and Treasurer
TALARIAN CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
President & Chief Executive Officer
**** AGREEMENT AND PLAN OF MERGER ****
