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EXHIBIT 2.03
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of this 7th day of March 2000, by and among Talarian Corporation
("Talarian"), a California corporation, and WhiteBarn, Inc.
("WhiteBarn"), an Illinois corporation.
R E C I T A L S
A. WhiteBarn and Talarian desire to consummate a merger in which
WhiteBarn will merge with and into Talarian (the "Merger") in accordance with
the terms of this Agreement, so that after the Merger, WhiteBarn shall cease to
exist.
B. For federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
C. WhiteBarn and Talarian desire to make certain representations,
warranties and covenants regarding the Merger and to prescribe various
conditions to the Merger.
A G R E E M E N T
In consideration of the foregoing recitals and the respective
covenants, agreements, representations and warranties contained herein, the
parties, intending to be legally bound, hereby agree as follows:
1 ARTICLE
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, the following terms shall
have the following meanings:
"Action" shall mean any action, claim, suit, litigation,
proceeding, arbitration, mediation or other dispute.
"Agreement with Certain WhiteBarn Shareholders" shall have the
meaning defined in Section 7.9.
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"Ancillary Agreements" shall mean the other agreements
executed in connection with this Agreement: the Nondisclosure Agreement, the
Commitment Agreement, the Xxxxxx Agreement and the Agreement with Certain
WhiteBarn Shareholders, each defined below.
"Balance Sheet" shall have the meaning specified in Section
3.8.
"Balance Sheet Date" shall have the meaning specified in
Section 3.8.
"Books and Records" shall mean all books, ledgers, files,
records, manuals and other materials (in any form or medium, including
electronic media) related to WhiteBarn's business, including, but not limited
to, all correspondence, personnel records, vendor lists, operation and quality
control records and procedures, research and development files, Intellectual
Property disclosures and documentation, accounting records and systems,
litigation files, sales order files, purchase order files, advertising
materials, catalogs, product brochures, mailing lists, customer lists,
distribution lists, sales and promotional materials and all other records
utilized by WhiteBarn in connection with its business and all computer hardware,
software and data files necessary to access or review or continue to compile or
utilize any of the foregoing.
"Closing" shall have the meaning defined in Section 9.1.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Contracts" shall have the meaning set forth in Section 3.15.
"Commitment Agreement" shall have the meaning defined in
Section 7.8.
"Disclosure Schedule" shall mean a schedule marked as the
"Disclosure Schedule" prepared by WhiteBarn and delivered to Talarian and
attached to this Agreement.
"Employee Benefit Plan(s)" shall mean any deferred
compensation plan, bonus plan, profit sharing plan, stock option plan, employee
stock purchase plan and any other employee benefit plan, agreement, arrangement
or commitment including, but not limited to, all employee benefit plans as
defined in Section 3(3) of ERISA (a) that WhiteBarn sponsors or to which
WhiteBarn contributes or is required to contribute, or under which WhiteBarn may
incur any liability, and (b) that covers an employee or former employee of
WhiteBarn.
"Encumbrances" shall mean any claim, lien, pledge, option,
charge, security interest, deed of trust, mortgage, restriction, encumbrance or
other right of third parties, of any kind or nature.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute, including the
rules and regulations promulgated thereunder.
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"Financial Statements" shall have the meaning specified in
Section 3.8.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the date of the Agreement.
"Inconsistent Activities" shall have the meaning defined in
Section 5.5.
"Indemnifying Shareholders" shall have the meaning defined in
Section 10.1.
"Intellectual Property" shall mean all of WhiteBarn's
intellectual property rights including, without limitation, all of WhiteBarn's
right, title and interest in and to (a) rights in any patents, patent
applications, trademarks, trademark registrations and applications, service
marks and trade names, copyrights, copyright registrations, trade secrets and
business confidential information; (b) computer software programs and systems
and documentation relating to the foregoing or used or useable in WhiteBarn's
business; and (c) other proprietary information owned, controlled, created or
used or useable by or on behalf of WhiteBarn in connection with the conduct of
WhiteBarn's business in which WhiteBarn has any interest whatsoever, whether or
not registered, including rights or obligations under any license agreement with
any other person.
"Intellectual Property Agreements" shall have the meaning
defined in Section 7.8.
"Laws" shall mean all federal, state or local statutes,
regulations, ordinances, orders, decrees, or any other laws, common law theories
or reported decisions of any state or federal court now or at any time hereafter
in effect, including, without limitation, any of the foregoing relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material.
"Leases" shall have the meaning specified in Section 3.13.
"Major Customers" shall have the meaning set forth in Section
3.16.
"Material Adverse Change" shall have the meaning specified in
Section 3.10.
"Nondisclosure Agreement" shall mean the Nondisclosure
Agreement dated as of February 16, 2000 between Talarian and WhiteBarn.
"Permits" shall mean all franchises, permits, licenses,
qualifications, rights-of-way, easements, municipal and other approvals,
authorizations, orders, consents and other rights from, and filings with, any
governmental authority of any jurisdiction worldwide relating to the conduct of
WhiteBarn's business.
"Regulatory Approvals" shall mean all necessary regulatory
approvals, if any, required for the transfer of ownership or control over
WhiteBarn that is to occur upon consummation of the Merger.
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"Representatives" shall mean any officer, director, principal,
stockholder, partner, attorney, accountant, advisor, agent, employee or other
representative of a party hereto.
"Shareholders" shall mean all the holders of WhiteBarn Stock,
as set forth in the Disclosure Schedule hereto.
"Xxxxxx Agreement" shall have the meaning set forth in Section
7.8.
"Talarian Common Stock" shall mean the no-par-value common
stock of Talarian.
"Talarian Disclosure Schedule" shall have the meaning defined
in Section 4.3.
"Talarian Exchange Stock" shall have the meaning defined in
Section 2.4.
"Tax(es)" shall mean all taxes, charges, fees, levies or other
assessments imposed by and required to be paid to any federal, state, local, or
foreign taxing authority, including, without limitation, income, excise,
property, sales, transfer, ad valorem, payroll and franchise taxes (including
any interest, penalties or additions attributable to or imposed on or with
respect to any such assessment) and any estimated payments or estimated taxes.
"Tax Return" shall mean any return, report, information return
or other document (including any related or supporting information) filed or
required to be filed with any federal, state, local or foreign governmental
entity or other authority in connection with the determination, assessment or
collection of any Tax or the administration of any Laws, regulations or
administrative requirements relating to any Tax.
"WhiteBarn Stock" shall have the meaning defined in Section
2.4.
1 ARTICLE
MERGER
1.1 Merger. On the terms and subject to the conditions of this Agreement, on the
Effective Date (defined below), WhiteBarn shall be merged into Talarian in a
statutory merger in accordance with California and Illinois law and Talarian
shall be the surviving corporation in the Merger. On and after the Effective
Date, the separate existence and corporate organization of WhiteBarn shall
cease, and Talarian shall succeed to and possess all of the properties, rights,
privileges and powers and be subject to all of the liabilities and obligations
of WhiteBarn, all without further act or deed.
1.1 Effective Date of Merger. As soon as practicable following the Closing,
WhiteBarn shall cause a certificate of merger and/or other required documents or
officers' certificates (collectively, the "Certificate of Merger"), executed at
the Closing, to be filed with the Secretaries of State of the States of
California and Illinois in accordance with applicable law.
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The Merger shall become effective at the time of the filing of the Certificates
of Merger. The time and date on which the Merger shall become effective is
referred to herein as the "Effective Date."
1.1 Certificate of Incorporation, Bylaws, Directors and Officers.
(i) Articles of Incorporation. The Articles of Incorporation of Talarian as in
effect at the Effective Date shall remain in effect and will be the Articles of
Incorporation of the surviving corporation, until further amended.
(i) Bylaws. The Bylaws of Talarian, as in effect at the Effective Date, shall
remain in effect as the Bylaws of the surviving corporation until amended in
accordance with the terms of such Bylaws.
(i) Directors and Officers. The directors and officers of Talarian immediately
prior to the Effective Date shall be the directors and officers, respectively,
of the surviving corporation, in each case, to serve until their respective
successors are duly elected and qualified.
1.1 Conversion of the WhiteBarn Stock. On the Effective Date and by virtue of
the Merger, each outstanding share of Common Stock of WhiteBarn, no par value
per share ("WhiteBarn Stock"), shall be converted, without any action on the
part of the holder thereof, into and represent the right to receive 0.07932
shares of Talarian Common Stock (the "Talarian Exchange Stock") and cash in the
amount of $.09443 (the "Cash Consideration"); provided, however, that fractional
shares of Talarian Exchange Stock to which holders of WhiteBarn Stock are
entitled shall be rounded to the nearest whole share. On the Effective Date,
Talarian shall issue to the Shareholders, upon tender of the WhiteBarn Stock,
the shares of Talarian Exchange Stock into which the WhiteBarn Stock has been
converted as a result of the Merger and the Cash Consideration. The issuance of
the Talarian Exchange Stock under this Agreement shall not be registered under
the federal securities laws, and therefore the stock shall be "restricted stock"
under such laws.
1.1 Existing Options for WhiteBarn Stock. As of the Effective Date, by virtue of
the Merger and without further corporate action, each outstanding option to
purchase shares of WhiteBarn Stock under the WhiteBarn, Inc. Stock Option Plan
and the 2000 WhiteBarn, Inc. Equity Incentive Plan (collectively, the "WhiteBarn
Options"), shall be assumed by Talarian and converted into an option relating to
Talarian Common Stock so as to substitute Talarian Common Stock for WhiteBarn
Stock purchasable thereunder as adjusted as set forth below (each, an "Assumed
Option"). Each Assumed Option shall give the holder thereof the right to
purchase 0.07932 shares of Talarian Common Stock for each share of WhiteBarn
Stock to which such WhiteBarn Options held by such holder relate, at a purchase
price per share equal to (i) 12.60714 multiplied by (ii) the purchase price per
share of WhiteBarn Stock set forth in such WhiteBarn Options (with any
fractional cent being rounded to the next higher full cent); provided, however,
that no Assumed Options shall provide for fractional shares of Talarian Common
Stock and no holder of WhiteBarn Options shall be entitled to any receive cash
in lieu of any fractional shares.
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Assumed Options shall be subject to the vesting provisions set forth in the
WhiteBarn Options and the applicable plan to which they relate.
1.1 Press Release. Upon the execution of this Agreement, the parties will make a
joint press release in a mutually agreeable form. The parties will consult with
each other before issuing any further press release or otherwise making any
public announcement concerning the Merger; provided, however, that after the
consummation of the Merger, Talarian shall be entitled to issue such press
releases and make such public announcements regarding the Merger as it shall
determine in its sole discretion.
1 ARTICLE
REPRESENTATIONS AND WARRANTIES OF WHITEBARN
WhiteBarn hereby expressly acknowledges that Talarian, in agreeing to
consummate the transactions contemplated by this Agreement, has relied upon the
following representations and warranties, and no others. WhiteBarn hereby
represents and warrants to Talarian as follows:
1.1 Organization and Qualification of WhiteBarn. WhiteBarn is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Illinois. WhiteBarn has the requisite corporate power and authority to own,
lease and operate its assets and properties and to conduct its business in the
manner in which it is presently conducted. Except as set forth in the Disclosure
Schedule, WhiteBarn is duly qualified and licensed in each jurisdiction where
the nature of the business conducted by it requires such qualification, except
where the failure to so qualify would not have a material adverse effect upon
WhiteBarn's financial condition or results of operations. WhiteBarn has
delivered to Talarian true and complete copies of its Articles of Incorporation
and Bylaws, each as amended to date. Except as set forth in the Disclosure
Schedule, WhiteBarn has no subsidiaries or affiliated companies and does not
otherwise own or control directly or indirectly, any equity interest in any
corporation, association or business entity.
1.1 Capitalization of WhiteBarn. The total authorized and outstanding amounts of
each class of stock of WhiteBarn is set forth on the Disclosure Schedule. Other
than this Agreement, and except as set forth on the Disclosure Schedule, there
is not outstanding any subscription, option, warrant, call, right or other
agreement or commitment obligating WhiteBarn or any of the Shareholders to
issue, sell, deliver or transfer (including any right of conversion or exchange
under any outstanding security or other instrument) any shares of WhiteBarn
Stock or any shares of any other capital stock of WhiteBarn. No bonds,
debentures, notes or other indebtedness of WhiteBarn having the right to vote
(or convertible into or exchangeable or exercisable for securities having the
right to vote) on any matters on which shareholders of WhiteBarn may vote are
issued, outstanding or subject to issuance. All of the shares of WhiteBarn Stock
are duly and validly authorized, issued and outstanding, fully paid and
non-assessable and free and clear of all Encumbrances, except those that may be
created by Talarian and in compliance with applicable securities laws. Upon the
consummation of the Merger, there
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shall be no outstanding options to purchase shares of WhiteBarn Stock. Each
holder of WhiteBarn Options is a current employee of WhiteBarn.
1.1 Authorization. Except for the approval of its Shareholders which has not yet
been obtained as of the date this Agreement, WhiteBarn has the requisite
corporate power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform all of its
obligations hereunder. All actions and proceedings on the part of WhiteBarn, its
officers, directors and Shareholders necessary to authorize the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly taken or will be taken prior to the Closing
Date.
1.1 Due Execution and Delivery; Binding Obligations. This Agreement has been
duly executed and delivered by WhiteBarn. This Agreement constitutes the legal,
valid and binding agreement and obligation of WhiteBarn, enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or similar Laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability and except as rights of
indemnity or contribution may be limited by federal or state securities or other
laws or the public policy underlying such Laws.
1.1 Compliance with Other Instruments. Except as set forth in the Disclosure
Schedule: (a) WhiteBarn is not in violation of any term of its Articles of
Incorporation or Bylaws, or in any material respect of any term or provision of
any material mortgage, indebtedness, indenture, contract, agreement, instrument,
order, writ, injunction, judgment or decree; (b) WhiteBarn is not in violation
in any material respect of any material order, statute, rule or regulation
applicable to WhiteBarn, its officers, directors or Shareholders; and (c)
WhiteBarn has all material licenses, permits and certificates from governmental
agencies necessary for the conduct of its business as now conducted. No claim
has been made by any governmental authority to the effect that the business
conducted by WhiteBarn fails to comply, in any respect (and no such claim is
anticipated by WhiteBarn), with any law, rule, regulation, or ordinance.
1.1 No Conflict or Violation. Except as provided in the Disclosure Schedule,
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby, will result in: (a) a violation of, or a
conflict with, WhiteBarn's Articles of Incorporation, Bylaws or any
subscription, stockholders' or similar types of agreements or understandings to
which WhiteBarn is a party; (b) a material breach of, or a material default (or
an event which, with notice or lapse of time or both would constitute a material
default) under or result in the termination of, or accelerate the performance
required by, or create a right of termination or acceleration under, any
material Contract, agreement, instrument, license, Encumbrance or Permit to
which WhiteBarn is a party or by which WhiteBarn or WhiteBarn's business is
bound; (c) the payment by, or the creation of any obligation (absolute or
contingent) to pay on behalf of WhiteBarn of any severance, termination, "golden
parachute" or other similar payments pursuant to any employment or other
agreements of WhiteBarn; (d) a violation by WhiteBarn or any Shareholder of any
Law, order, judgment, writ, injunction decree or award to
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which WhiteBarn or any of the Shareholders is a party or by which it is bound;
or (e) an imposition of any material Encumbrance on WhiteBarn or its assets.
1.1 Consents and Approvals. Except as set forth on the Disclosure Schedule, the
execution and delivery of this Agreement by WhiteBarn, and the consummation of
the transactions contemplated hereby, do not and will not require WhiteBarn or
any Shareholder to obtain as of the Closing Date any authorization, registration
or filing with, or consent or approval of, any Person, including, without
limitation, any federal, state or other governmental authority or regulatory
body, other than the filing of the Certificate of Merger as contemplated by
Section 2.2, above, any state and federal filings that may be required under
applicable securities Laws and the Regulatory Approvals.
1.1 Financial Statements. WhiteBarn has furnished to Talarian copies of (a) the
unaudited balance sheet of WhiteBarn as of December 31, 1999 (the "Balance Sheet
Date"), and the related unaudited statements of income and stockholders' equity
for the year then ended. The financial statements referred to in this section
(the "Financial Statements") are complete and fairly and accurately present in
all material respects the financial condition of WhiteBarn as at the respective
dates thereof and the results of operations of WhiteBarn for the respective
periods covered by the statements of income contained therein, subject to normal
recurring year-end adjustments (and except that footnotes may be omitted).
1.1 Undisclosed Liabilities. Except as set forth on the Disclosure Schedule,
WhiteBarn does not have any liabilities or obligations (absolute, accrued,
contingent or otherwise) required to be disclosed in a balance sheet prepared in
accordance with cash based accounting principles (or, to the best knowledge of
WhiteBarn, any such material liabilities or obligations which are not required
to be disclosed in a balance sheet, except for liabilities and obligations under
any agreement, contract or commitment to which WhiteBarn is a party or by which
any of its properties or assets is bound), except (a) liabilities reflected on
the Balance Sheet, and (b) liabilities incurred since the Balance Sheet Date in
the ordinary course of conducting WhiteBarn's business.
1.1 Absence of Certain Changes or Events. Since the Balance Sheet Date, except
as set forth on the Disclosure Schedule and except as contemplated herein or in
the Ancillary Agreements, there has not been:
(a) Any material adverse change in the financial condition, assets, liabilities,
earnings, or business ("Material Adverse Change") of WhiteBarn.
(a) Any destruction, damage to, or loss of any of WhiteBarn's material assets
(whether or not covered by insurance) used in WhiteBarn's business;
(a) Any material change in accounting methods or practices by WhiteBarn
(including, without limitation, any change in depreciation, amortization or
valuation policies or rates) or material revaluation of any of its assets,
liabilities or reserves reflected on the
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Balance Sheet, or any material change in any assumption underlying or methods of
calculating any bad debt, contingency or other reserves related to WhiteBarn's
business;
(a) An increase in the salary or other compensation payable or to become payable
by WhiteBarn to any of its officers, directors, independent contractors or
employees; the declaration, payment, or commitment or obligation of any kind for
the payment, by WhiteBarn, of a bonus or other additional salary or compensation
to any such person; the repayment by WhiteBarn of any loan from such person; the
payment by WhiteBarn of any dividends, distributions or any other payments in
respect of the shares of capital stock of WhiteBarn whether in cash or property,
to any such person;
(a) Any amendment or termination of any Contract, Permit or other agreement
related to WhiteBarn's assets or WhiteBarn's business, or by which WhiteBarn or
any of its material assets or properties used or useable in connection with
WhiteBarn's business are subject, other than an amendment or termination made in
the ordinary course of business consistent with past practice which is
explicitly approved by Talarian; or any entrance into any agreement, contract or
commitment which contains exclusivity or other terms which restrict WhiteBarn's
flexibility in doing business with any third party, whether written or oral;
(a) Any cancellation of indebtedness or waiver or release of any material right
or claim of WhiteBarn related in any way to WhiteBarn's business, other than a
cancellation, waiver or release made in the ordinary course of business
consistent with past practice which is explicitly approved by Talarian;
(a) Any declaration of or agreement to declare or make, any payment or
distribution of any material assets used or useable in connection with
WhiteBarn's business of any kind whatsoever;
(a) Any material sales, transfers, disposals of or agreements to sell, transfer
or otherwise dispose of any of the assets, properties or rights of WhiteBarn
related to WhiteBarn's business, other than sales, transfers, disposals of or
agreements made in the ordinary course of business consistent with past practice
which are explicitly approved by Talarian or any material changes in WhiteBarn's
royalty arrangements;
(a) Any capital expenditure or incurring of any obligation to make any capital
expenditure in connection with the conduct of WhiteBarn's business in excess (in
the aggregate) of $100,000;
(b) Any making of any loan by WhiteBarn to any person or entity;
(a) Any creation or assumption of any mortgage, pledge or other Encumbrance on
any material asset of WhiteBarn;
(a) Any failure to pay or satisfy when due any obligation of WhiteBarn except
where such failure would not constitute a Material Adverse Change of WhiteBarn;
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(a) To the best of WhiteBarn's knowledge after reasonable inquiry, any other
event or condition of any character which it is reasonable to expect will,
individually or in the aggregate constitute a Material Adverse Change of
WhiteBarn; or
(a) Any agreement by WhiteBarn or the Shareholders to do or cause any of the
things described in clauses (a) through (l), above.
1.1 Properties. The Disclosure Schedule sets forth a complete and correct list
of all tangible assets owned by WhiteBarn as of the Balance Sheet Date which
have an original book value in excess of $2,000 and that have been treated as
capital assets. WhiteBarn does not own any fee interest in real property. Except
as set forth on the Disclosure Schedule, WhiteBarn has good title to, or a valid
leasehold interest in, or a valid license to use, all of the personal property
material to WhiteBarn's business, in each case free and clear of all
Encumbrances, except for security interests shown on WhiteBarn's financial
statements as securing certain liabilities, purchase money security interests
incurred in connection with the purchase of assets after the Balance Sheet Date
and those relating to assets held under capitalized leases. All material
tangible personal property owned or leased by WhiteBarn is in good order and
operating condition, ordinary wear and tear excepted, and free from any defects,
except for such minor defects which do not substantially interfere with the
continued use thereof in the conduct of normal operations in the manner and to
the extent such assets are presently being used.
1.1 Intellectual Property.
(a) Set forth in the Disclosure Schedule is a complete and correct list of all
of the material Intellectual Property. Except as set forth on the Disclosure
Schedule, (a) the Intellectual Property is owned by WhiteBarn or WhiteBarn has a
valid license or other right to use it, (b) WhiteBarn has not received any
notice or claim disputing WhiteBarn's right to own or use any such Intellectual
Property, (c) to its knowledge, WhiteBarn's right to own or use the Intellectual
Property is not disputed by any third party, and (d) WhiteBarn owns or has
rights to use on reasonable terms all intellectual property needed or used in
its business as it is currently conducted. Except as set forth on the Disclosure
Schedule, the Intellectual Property is owned by WhiteBarn free and clear of any
Encumbrances. WhiteBarn is not infringing upon or otherwise acting adversely to
any property owned by any other person with respect to the Intellectual Property
which has been received and used by WhiteBarn, nor to its knowledge, is there
any Action by any person pending or threatened with respect thereto.
(b) The Disclosure Schedule accurately discloses all material licenses,
sublicenses or agreements by which WhiteBarn holds or has given to others the
right to use the Intellectual Property. WhiteBarn is not in default in any
material respect and, to its knowledge, no third party is in default in any
material respect, under any such license, sublicense or agreement.
(a) WhiteBarn has provided Talarian with a copy of the form or forms of
agreements used by WhiteBarn to protect its proprietary information and trade
secrets and otherwise to protect the Intellectual Property, including without
limitation, any non-solicitation
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agreements. The Disclosure Schedule sets forth a complete and accurate
description of such agreements which have been entered into by and between
WhiteBarn and other persons or entities.
1.1 Leases. The Disclosure Schedule sets forth a true, correct and complete list
of all leases, subleases, licenses and other occupancy or lease agreements,
together with all amendments, supplements and nondisturbance agreements
pertaining thereto, under which WhiteBarn leases, subleases, licenses, occupies
or uses any real or material physical personal property (the "Leases"). All of
the Leases are in good standing, legal, valid, binding and in full force and
effect, and there is not under any of such Leases any existing material default,
violation or breach by WhiteBarn or event or condition which after notice or
lapse of time or both would constitute a material default, violation or breach.
WhiteBarn has provided Talarian with true and correct copies of all such Leases.
1.1 Receivables. All receivables of WhiteBarn which are reflected in the Balance
Sheet and all such receivables which have arisen since the Balance Sheet Date
have arisen only from bona fide transactions in the ordinary course of business.
There are no facts or circumstances which would result in any material increase
in the uncollectability of such receivables as a class in excess of the reserves
therefor set forth on the Balance Sheet. The Disclosure Schedule lists as of
January 31, 2000, all receivables of WhiteBarn, which list taken on an aggregate
basis is accurate in all material respects. Such list also includes the amount
owing, the aging of each such receivable and the name of the party from whom
such receivable is owing.
1.1 Contracts.
(a) The Disclosure Schedule contains a complete and correct list of all
agreements, contracts and commitments (collectively, the "Contracts"), whether
written or oral, (i) to which WhiteBarn is a party or by which it is bound, or
(ii) by which any of the assets, properties or WhiteBarn's business is bound and
in either case, which constitute:
(i) Mortgages, indentures, security agreements, and other agreements and
instruments relating to the borrowing of money by or from, or any extension or
credit to or from, WhiteBarn;
(i) Sales agency or material marketing agreement;
(i) Agreements or commitments for capital expenditures;
(i) Brokerage or finder's agreements;
(i) Partnership, joint venture or other arrangements or agreements involving a
sharing of profits or expenses;
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(i) Contracts or commitments to sell, lease or otherwise dispose of any assets,
properties or business other than in the ordinary course of WhiteBarn's
business;
(i) Contracts or commitments limiting the freedom of WhiteBarn to compete in any
line of business or in any geographic area or with any person;
(i) Other agreements, contracts and commitments which in any case involve
payments or receipts of more than $10,000 per annum; and
(i) To WhiteBarn's knowledge, any other agreements, contracts and commitments
relating to WhiteBarn's business, operations or financial condition;
(a) WhiteBarn has delivered to Talarian or its Representatives complete and
correct copies of all written Contracts, together with all amendments thereto,
described in Section 3.15(a), and accurate written descriptions of all oral
Contracts described in Section 3.15(a). All of such Contracts are valid and in
full force and effect and WhiteBarn has duly performed in all material respects
all of its obligations under each such Contract to the extent those obligations
have accrued and no default, violation or breach by WhiteBarn under any such
Contract has occurred which affects the enforceability of such Contract or any
parties' rights thereunder.
1.1 Customer Contracts. The Disclosure Schedule sets forth a correct and
complete list of the 20 largest customers (by sales volume) (the "Major
Customers") of WhiteBarn during the 12-month period ended at the Balance Sheet
Date indicating the sales to such Major Customers within such period and listing
any existing contracts between such Major Customer and WhiteBarn. As of the
Balance Sheet Date, WhiteBarn did not have any outstanding Contracts with any
Major Customer requiring material payments or material credits by WhiteBarn to
such customers, except as described on the Disclosure Schedule. Except as set
forth in the Disclosure Schedule, there are no outstanding disputes with any
Major Customer and no Major Customer has refused to do business with WhiteBarn
or, to WhiteBarn's knowledge, has stated its intention not to continue to do
business with or increase or reduce its purchases from WhiteBarn upon
consummation of the transactions contemplated hereby.
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1.1 Employment Matters; Employee Benefits.
(a) The Disclosure Schedule sets forth a complete and correct
list of all the names, current annual rates of salary, bonuses, accrued vacation
benefits, accrued sick pay and other compensation of all the present employees
and agents (including independent contractors) of WhiteBarn who provide services
to WhiteBarn or in connection with WhiteBarn's business and whose current annual
cash compensation from WhiteBarn (including salary and bonus) is expected to
equal or exceed $2,000. To WhiteBarn's knowledge, no employee or agent of
WhiteBarn is in violation of any term of any employment contract,
confidentiality agreement or other contract or agreement relating to the
relationship of such employee with WhiteBarn, or with any other party, because
of the nature of WhiteBarn's business now conducted or proposed to be conducted
by WhiteBarn. Except as disclosed in the Disclosure Schedule, there are no
employment or consulting contracts or arrangements, including Employee Benefit
Plans, bonus or profit sharing plans, or other severance or termination
contracts or arrangements which constitute contractual obligations of WhiteBarn
not terminable on 30 days' notice. As of the date hereof, no key employee or
independent contractor of WhiteBarn has terminated his or her relationship with
WhiteBarn since the Balance Sheet Date, and as of the date hereof, to
WhiteBarn's knowledge, no current key employee or independent contractor has
indicated any present or future intention to terminate his or her relationship
with WhiteBarn.
(b) The Disclosure Schedule contains a complete and correct
list of all material Employee Benefit Plans. WhiteBarn has delivered to Talarian
or its Representatives complete, current, and correct copies of all written
Employee Benefit Plans, together with all amendments thereto. All such Employee
Benefit Plans comply with the provisions of and have been administered in
compliance with their terms and applicable law. There are no pending or, to
WhiteBarn's knowledge, threatened governmental audits of any Employee Benefit
Plan, or any pending or, to WhiteBarn's knowledge, threatened lawsuits involving
any Employee Benefit Plan. None of the persons providing services for WhiteBarn
have been improperly classified as being independent contractors, leased
employees, or as being exempt from the payment of wages for overtime.
1.1 Transactions with Affiliated Parties. Except as disclosed in the Disclosure
Schedule, no director, officer, employee, stockholder, partner or agent of
WhiteBarn, and none of their respective spouses or children, no trust of which
any such person is the grantor, trustee or beneficiary, no corporation of which
any such person or party is a controlling stockholder, employee, officer or
director, or any partnership or other entity in which any such person or party
owns an interest (all such persons, trusts, corporations and partnerships being
herein referred to collectively as "Affiliated Parties" and individually as an
"Affiliated Party"), has, or has had, any ownership interest in any property
used in WhiteBarn's business. Except as disclosed in the Disclosure Schedule, no
Affiliated Party is a party to any agreement, contract or commitment with
WhiteBarn.
1.1 Certain Payments. WhiteBarn has not, nor to WhiteBarn's knowledge, has any
person or other entity, directly or indirectly, on behalf of or with respect to
WhiteBarn: (a)
14
made an unreported political contribution; (b) made or received any material
payment which was not legal to make or receive; (c) engaged in any material
transaction or made or received any material payment which was not properly
recorded in the Books and Records; or (d) created or used any "off-book" bank or
cash account or "slush fund."
1.1 Taxes. WhiteBarn is, and is subject to taxation as, a C corporation. Except
as set forth in the Disclosure Schedule, all Taxes which are due and payable by
WhiteBarn have been paid in full and any Taxes that become due and owing by
WhiteBarn before the Closing Date (whether or not shown on any Tax Return) will
be paid, other than Taxes which are not delinquent and subject to a late
payment; all Tax Returns required to be filed in connection therewith have been
accurately prepared and duly and timely filed, or will be accurately prepared
and duly and timely filed, and all deposits required by Law to be made by
WhiteBarn with respect to any such Taxes have been duly made. WhiteBarn is not
delinquent in the payment of any Taxes nor does WhiteBarn have any Tax
deficiency or claim outstanding, proposed or assessed against it, and there is
no basis for any such deficiency of claim. There is not now in force any
extension of time with respect to the date on which any Tax Return was or is due
to be filed by or with respect to WhiteBarn, or any waiver or agreement by
WhiteBarn for the extension or the assessment of any Tax. WhiteBarn has withheld
and paid all Taxes required to be withheld and paid by WhiteBarn in connection
with amounts paid or owing to any employee, creditor, stockholder or other third
parties. There are no liens on any of the assets of WhiteBarn as a result of any
Tax liabilities except for Taxes not yet due and payable. WhiteBarn has made
available to Talarian complete and correct copies of all federal, state, local
and foreign income or franchise Tax Returns for the last three taxable periods
for which such Tax Returns have been filed and will deliver copies of Tax
Returns filed by WhiteBarn after the date hereof and before the Closing Date.
WhiteBarn is not required to file a Tax Return in any state or local
jurisdiction for any tax period except in the jurisdictions in which it has
filed. WhiteBarn has delivered to Talarian complete and correct copies of all
audit reports (or portions thereof) and statements of deficiencies assessed
against or agreed to by WhiteBarn for any taxable period. WhiteBarn has not been
and will not be required to include any adjustment in taxable income for any
taxable period (or a portion thereof) pursuant to Section 481 or 263A of the
Code or any comparable provision under state or foreign Tax laws as a result of
the transactions, events or accounting methods employed prior to the transaction
contemplated pursuant to this Agreement. WhiteBarn is not now nor has ever been
a party to any Tax sharing, Tax indemnity or Tax allocation agreement. WhiteBarn
has not filed any disclosures under Section 6662 of the Code or comparable
provisions of state, local or foreign law to prevent the imposition of penalties
with respect to any Tax reporting position taken on any Tax return.
1.1 Pending Litigation. Except as disclosed on the Disclosure Schedule, there is
no pending or, to WhiteBarn's knowledge, threatened Action or investigation, at
Law or in equity or otherwise, in, for or by any court or governmental board,
commission, agency, department or office involving WhiteBarn arising from,
relating to or affecting (a) the past, present or proposed operations of
WhiteBarn's business, (b) any alleged act or omission of WhiteBarn or any of
WhiteBarn's officers, directors or employees, or (c) the consummation of the
transactions contemplated hereby.
15
1.1 Compliance with Laws. Except as set forth in the Disclosure Schedule,
WhiteBarn has complied in all material respects with all existing material Law
now or hereafter applicable to WhiteBarn's business, as presently conducted,
including, without limitation, (a) all environmental Laws, and (b) all
provisions of material Laws relating to labor relations, equal employment
practices, fair employment practices, entitlement, prohibited discrimination,
terms and conditions of employment, wages and hours, or other similar employment
practices or acts. WhiteBarn has not received any notice from or otherwise been
advised that any governmental authority or other person is claiming any
violation or potential violation of any Law.
1.1 Permits. The Disclosure Schedule contains a complete and correct list of all
material Permits which are necessary for the lawful operation of WhiteBarn's
business. All such Permits have been duly made or obtained and are in full force
and effect, and there are no proceedings pending or to WhiteBarn's knowledge,
threatened which may result in the revocation, cancellation or suspension, or
any adverse modification, of any such Permit.
1.1 Insurance. WhiteBarn maintains insurance on all of its properties of a
character generally comparable to insurance carried by persons engaged in the
same or similar business similarly situated against loss or damage of the kinds
and in the amounts customarily insured against. The Disclosure Schedule contains
a true and complete list of all insurance maintained by WhiteBarn with respect
to WhiteBarn's business during the past year.
1.1 Brokers, Finders, etc. All negotiations relating to this Agreement and the
transaction contemplated hereby have been carried on without the intervention of
any person acting on behalf of WhiteBarn or any Shareholder in such a manner as
to give rise to any claim against Talarian, WhiteBarn or any of their respective
Representatives for any brokerage or finders' commission, fee or similar
compensation.
1.1 Books and Records. Except as set forth in the Disclosure Schedule, WhiteBarn
has made and kept (and given Talarian's Representatives access to) the Books and
Records, which, accurately and fairly reflect in all material respects the
activities and transactions of WhiteBarn related to WhiteBarn's business.
1.1 Full Disclosure. No representation, warranty or other statement of WhiteBarn
contained in this Agreement or other written statement furnished by WhiteBarn to
Talarian in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein relating to
this Agreement and the transactions contemplated thereby or to the business or
financial condition of WhiteBarn not materially misleading when taken as a whole
in the light of the circumstances under which they were made. All financial
statements furnished by WhiteBarn to Talarian in connection with the Agreement,
including without limitation the Financial Statements, were prepared in good
faith.
16
1 ARTICLE
REPRESENTATIONS AND WARRANTIES OF TALARIAN
Talarian hereby expressly acknowledges that WhiteBarn, in agreeing to
consummate the transactions contemplated by this Agreement, has relied upon the
following representations and warranties, and no others. Talarian hereby
represents and warrants to WhiteBarn as follows:
1.1 Organization. Talarian is a corporation duly organized, validly existing and
in good standing under the Laws of the State of California. Talarian has the
requisite corporate power and authority to own, lease and operate its assets and
to conduct its business in the manner in which it is presently conducted.
Talarian is duly qualified and licensed in each jurisdiction where the nature of
Talarian's business conducted by it requires such qualification, except where
the failure to so qualify would not have a material adverse effect upon
Talarian's financial condition or results of operations. Talarian has delivered
to WhiteBarn true and complete copies of its Articles of Incorporation and
Bylaws, each as amended to date.
1.1 Authorization. Except for the approval of its shareholders, which has not
yet been obtained as of the date of this Agreement, Talarian has the requisite
corporate power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby, and to perform all of its
obligations hereunder. All actions and proceedings on the part of Talarian
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
taken.
1.1 Capitalization. The authorized capital stock of Talarian consists of
20,000,000 shares of Talarian Common Stock and 8,920,970 shares of Talarian
Preferred Stock, of which 2,152,692 shares have been designated as Series A
Preferred Stock, 1,422,223 shares have been designated as Series B Preferred
Stock, 3,775,000 shares have been designated as Series C Preferred Stock and
1,571,055 shares have been designated as Series D Preferred Stock. As of the
date of this Agreement, 5,631,992 shares of Talarian Common Stock, 2,017,552
shares of Series A Preferred Stock, 1,388,889 shares of Series B Preferred
Stock, 3,775,000 shares of Series C Preferred Stock and 1,571,055 shares of
Series D Preferred Stock are issued and outstanding. All of such issued and
outstanding shares are duly and validly authorized and issued, fully paid and
non-assessable. Other than pursuant to this Agreement or in connection with the
conversion of Talarian Preferred Stock, there is not outstanding any
subscription, option, warrant, call right or other agreement or commitment
obligating Talarian to issue, sell, deliver or transfer (including any right of
conversion or exchange under any outstanding security or other instrument) any
shares of its capital stock, other than (i) outstanding options to purchase, in
the aggregate, 1,806,153 shares of Talarian Common Stock granted pursuant to
Talarian's option plans for employees, directors and others performing services
for Talarian and (ii) warrants to purchase, in the aggregate, 96,768 shares of
Series A Preferred Stock and 33,334 shares of Series B Preferred Stock.
17
1.1 Valid Issuance of Talarian Common Stock. Each of the shares of Talarian
Exchange Stock when issued and delivered in accordance with the terms hereof,
will be duly and validly issued, fully paid and non-assessable and free and
clear of Encumbrances, except those that may be created by WhiteBarn or any
Shareholder.
1.1 Due Execution and Delivery; Binding Obligations. This Agreement has been
duly executed and delivered by Talarian. This Agreement constitutes the legal,
valid and binding agreement and obligation of Talarian enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or conveyance or
similar Laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability and except as rights of indemnity or
contribution may be limited by federal or state securities or other laws or the
public policy underlying such Laws.
1.1 No Conflict or Violation. Neither the execution and delivery of this
Agreement, nor Talarian's consummation of the transactions contemplated hereby,
will result in: (a) a violation of, or a conflict with, Talarian's charter
documents, or any subscription, stockholders' or similar types of agreements or
understandings; or (b) a violation by Talarian of any Law, order, judgment,
writ, injunction decree or award to which it is a party or by which any of its
assets are bound.
1.1 Consents and Approvals. The execution and delivery by Talarian of this
Agreement and the consummation of the transactions contemplated hereby, do not
and will not require as of the Closing Date any authorization, registration or
filing with, or consent or approval of, any Person, except any state and federal
filings that may be required under applicable securities Laws and the Regulatory
Approvals.
1.1 Pending Litigation. Except as disclosed on the Talarian Disclosure Schedule,
there is no pending or, to Talarian's knowledge, threatened Action or
investigation, at Law or in equity or otherwise, in, for or by any court or
governmental board, commission, agency, department or office involving Talarian
arising from, relating to or affecting (a) the past, present or proposed
operations of Talarian, (b) any alleged act or omission of Talarian, or (c) the
consummation of the transactions contemplated hereby.
1.1 Certain Changes. Since January 1, 2000, there has been no: (a) Material
Adverse Change of Talarian; (b) destruction, damage to, or loss of any of
Talarian's material assets; (c) amendment, termination or other loss of any
contract involving payments or receipts by Talarian in excess of $500,000 per
year, or Permit related to Talarian's assets or business or by which Talarian or
any of its material assets or properties are subject, other than an amendment or
termination made in the ordinary course of business consistent with past
practice; or (d) dispute between Talarian and any customer or supplier of
Talarian whose transactions with Talarian involve payments or receipts by
Talarian in excess of $500,000 per year and no such customer or supplier has
stated its intention to discontinue to do business with Talarian.
18
1.1 Brokers, Finders, etc. All negotiations relating to this Agreement and the
transaction contemplated hereby have been carried on without the intervention of
any person acting on behalf of Talarian in such a manner as to give rise to any
claim against Talarian, WhiteBarn, or any of their respective Representatives
for any brokerage or finders' commission, fee or similar compensation.
1.1 Financial Statements. Talarian has furnished to WhiteBarn copies of (a) the
unaudited balance sheet of Talarian as of September 30, 1999, and the related
statement of income and stockholders' equity for the year then ended and (b)
Talarian's unaudited balance sheet as of December 31, 1999, and the related
statement of income and stockholders' equity for the period beginning October 1,
1999 and ending on December 31, 1999. The financial statements referred to in
this section have been prepared in accordance with GAAP, applied on a consistent
basis, and fairly present in all material respects the financial condition of
Talarian as at the respective dates thereof and the results of operations of
Talarian for the respective periods covered by the statements of income
contained therein, subject to normal recurring year-end adjustments (and except
that footnotes may be omitted).
1.1 Taxes. Talarian is, and is subject to taxation as, a C corporation. All
Taxes which are due and payable by Talarian have been paid in full and any Taxes
that become due and owing by Talarian before the Closing Date (whether or not
shown on any Tax Return) will be paid, other than Taxes which are not delinquent
and subject to a late payment; all Tax Returns required to be filed in
connection therewith have been accurately prepared and duly and timely filed, or
will be accurately prepared and duly and timely filed, and all deposits required
by Law to be made by Talarian with respect to any such Taxes have been duly
made. Talarian is not delinquent in the payment of any Taxes nor does Talarian
have any Tax deficiency or claim outstanding, proposed or assessed against it,
and there is no basis for any such deficiency of claim. There is not now in
force any extension of time with respect to the date on which any Tax Return was
or is due to be filed by or with respect to Talarian, or any waiver or agreement
by Talarian for the extension or the assessment of any Tax. Talarian has
withheld and paid all Taxes required to be withheld and paid by Talarian in
connection with amounts paid or owing to any employee, creditor, stockholder or
other third parties. There are no liens on any of the assets of Talarian as a
result of any Tax liabilities except for Taxes not yet due and payable. Talarian
has made available to WhiteBarn complete and correct copies of all federal,
state, local and foreign income or franchise Tax Returns for the last three
taxable periods for which such Tax Returns have been filed and will deliver
copies of Tax Returns filed by Talarian after the date hereof and before the
Closing Date. Talarian is not required to file a Tax Return in any state or
local jurisdiction for any tax period except in the jurisdictions in which it
has filed. Talarian has delivered to WhiteBarn complete and correct copies of
all audit reports (or portions thereof) and statements of deficiencies assessed
against or agreed to by Talarian for any taxable period. Talarian has not been
and will not be required to include any adjustment in taxable income for any
taxable period (or a portion thereof) pursuant to Section 481 or 263A of the
Code or any comparable provision under state or foreign Tax laws as a result of
the transactions, events or accounting methods employed prior to the transaction
contemplated pursuant to this Agreement. Talarian is not now nor has ever been a
party to any Tax sharing, Tax indemnity or Tax
19
allocation agreement. Talarian has not filed any disclosures under Section 6662
of the Code or comparable provisions of state, local or foreign law to prevent
the imposition of penalties with respect to any Tax reporting position taken on
any Tax return.
1.1 Full Disclosure. No representation, warranty or other statement of Talarian
contained in this Agreement or other written statement furnished by Talarian to
WhiteBarn in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein relating to
this Agreement and the transactions contemplated thereby or to the business or
financial condition of Talarian not materially misleading when taken as a whole
in the light of the circumstances under which they were made. All financial
statements furnished by Talarian to WhiteBarn in connection with the Agreement,
including, without limitation, the financial statements referred to in Section
4.11, were prepared in good faith.
1 ARTICLE
WHITEBARN'S OBLIGATIONS BEFORE CLOSING
WhiteBarn covenants that during the period from the date of this
Agreement to the Closing Date:
1.1 Notice of Changes. WhiteBarn shall give Talarian prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 3 referred to herein, which occurs prior to the
Closing Date; provided, however, that providing such notice shall not relieve
WhiteBarn for any breach of, or in any way alter any of, WhiteBarn's
representations and warranties contained herein to the extent such
representations and warranties were untrue as of the date hereof.
1.1 Conduct of Business. Except as specifically contemplated by this Agreement,
WhiteBarn will conduct WhiteBarn's business in the ordinary course of business
and consistent with past practice, and will use all commercially reasonable
effort to preserve intact its advantageous business relationships, to keep
available the service of its employees and to maintain satisfactory
relationships with its contractors, distributors, customers and other persons
sharing business relationships with them. Without limiting the generality of the
foregoing, WhiteBarn will not (1) without consulting with Talarian, terminate
any employees or (2) without the prior written consent of Talarian, take or
undertake or incur or permit to exist any of the acts, transactions, events or
occurrences specified in Section 3.10, above, unless such actions are
specifically contemplated by this Agreement. WhiteBarn shall give Talarian
prompt written notice of any change in any of the information contained in the
representations and warranties made in Article 3 referred to herein which occurs
prior to the Closing Date. Notwithstanding the foregoing, WhiteBarn shall be
permitted to grant additional options to purchase shares of WhiteBarn Stock
under the 2000 WhiteBarn, Inc. Equity Incentive Plan (up to a maximum of
3,530,005 shares thereunder) on terms and conditions mutually agreeable to
Talarian and WhiteBarn.
20
1.2 Access to Information. Talarian and its counsel, accountants and other
Representatives shall have full access during normal business hours to all
properties, Books and Records, Contracts, Permits and other documents of or
relating to WhiteBarn and WhiteBarn's business so that Talarian may have full
opportunity to make such investigation as it shall desire to make of the affairs
of WhiteBarn relating to WhiteBarn's business. WhiteBarn shall furnish or cause
to be furnished to Talarian and its Representatives all data and information
concerning WhiteBarn's business, finances and properties that may reasonably be
requested. WhiteBarn shall remain fully liable and responsible for all
WhiteBarn's representations, warranties, covenants, agreements and conditions in
this Agreement subject to any limitations contained herein, notwithstanding any
such investigation performed or information received by Talarian.
1.1 Confidentiality. WhiteBarn will hold, and will cause each of WhiteBarn's
employees, officers, directors and other Representatives to hold, in strict
confidence, and to not use to the detriment of Talarian, any confidential or
proprietary information or data concerning Talarian furnished to them in
connection with the transaction contemplated by this Agreement, except for
information generally known to the public; and if the transaction contemplated
by this Agreement is not consummated, such confidence shall be maintained and
WhiteBarn will return to Talarian all such information and data as Talarian may
request.
1.1 No Solicitation. WhiteBarn will not, and will not permit its officers,
directors, employees, investment bankers, financial advisors, attorneys,
accountants, agents or representatives to, solicit, encourage, initiate, enter
into, continue or participate in, or take any other action designed to
facilitate, any negotiations or discussions with or provide any information to
any third party concerning the possible acquisition or sale of WhiteBarn or its
stock, business or assets or any other transaction that would be inconsistent
with the Merger (all of the foregoing, "Inconsistent Activities"). WhiteBarn
will immediately inform Talarian, orally and in writing, of any Inconsistent
Activities or any request for information from, or any contacts, proposals or
other indications by, third parties regarding Inconsistent Activities.
1.1 Consents; Regulatory Approvals; Reasonable Efforts. WhiteBarn agrees to use
its commercially reasonable efforts to take, as promptly as possible, or cause
to be taken, all action and do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement and WhiteBarn will use its commercially
reasonable efforts to obtain the Regulatory Approvals, all waivers, Permits,
consents, other approvals, authorizations and clearances and to effect all
registrations, filings and notices with or to third parties or governmental,
regulatory or public bodies or authorities which are necessary in connection
with the transactions contemplated by this Agreement. Notwithstanding the
foregoing, Talarian waives all right to assert any claim for damages against
WhiteBarn relating to any breach of a non-assignment provision contained in the
contracts set forth in Section 3.6 of the Disclosure Schedule that is caused
solely by the consummation of the Merger.
1.1 Fulfillment of Conditions and Covenants. WhiteBarn shall not take any course
of action inconsistent with the satisfaction of the requirements or conditions
applicable to WhiteBarn set forth in this Agreement. WhiteBarn shall promptly do
all acts and take all
21
measures as may be appropriate to enable it to perform as early as reasonably
possible the obligations herein required to be performed by it.
1 ARTICLE
TALARIAN'S OBLIGATIONS BEFORE CLOSING
Talarian covenants that during the period from the date of this
Agreement to the Closing Date:
1.1 Notice of Changes. Talarian shall give WhiteBarn prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 4 referred to herein, which occurs prior to the
Closing Date; provided, however, that providing such notice shall not relieve
Talarian for any breach of, or in any way alter any of, Talarian's
representations and warranties contained herein to the extent such
representations and warranties were untrue as of the date hereof.
1.1 Consents; Regulatory Approvals; Reasonable Efforts. Talarian agrees to
utilize reasonable efforts to take, as promptly as possible, or cause to be
taken, all action and do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement and will use its reasonable efforts to assist WhiteBarn in obtaining
the Regulatory Approvals, all waivers, Permits, consents, other approvals,
authorizations and clearances and to effect all registrations, filings and
notices with or to third parties or governmental, regulatory or public bodies or
authorities which are necessary in connection with the transactions contemplated
by this Agreement.
1.1 Confidentiality. Talarian will hold, and will cause each of its affiliates,
employees, officers, directors and other Representatives to hold, in strict
confidence, and to not use to the detriment of WhiteBarn, any confidential or
proprietary information or data concerning WhiteBarn furnished to them in
connection with the transaction contemplated by this Agreement, except for
information generally known to the public; and if the transaction contemplated
by this Agreement is not consummated, such confidence shall be maintained and
Talarian will return to WhiteBarn all such information and data as WhiteBarn may
request.
1.1 Fulfillment of Conditions and Covenants. Talarian shall not take any course
of action inconsistent with the satisfaction of the requirements or conditions
applicable to it set forth in this Agreement. Talarian shall promptly do all
acts and take all measures as may be appropriate to enable it to perform as
early as possible the obligations herein required to be performed by it.
22
1 ARTICLE
CONDITIONS TO OBLIGATIONS OF TALARIAN
The obligations of Talarian to perform its obligations under this
Agreement are subject to the satisfaction, on or before to the Closing Date, of
each of the following conditions, unless waived in writing by Talarian:
1.1 Accuracy of Representations and Warranties. All representations and
warranties of WhiteBarn contained in this Agreement shall be true and correct in
all material respects when made and on and as of the Closing Date as though made
on and as of the Closing Date regardless of any additional disclosures made by
WhiteBarn pursuant to Section 5.1 (unless waived by Talarian).
1.1 WhiteBarn's Performance of Covenants. All covenants, agreements and
obligations required by the terms of this Agreement to be performed, satisfied
or complied with by WhiteBarn at or before the Closing Date shall have been duly
and properly performed in all material respects.
1.1 Absence of any Material Adverse Change. There shall not have occurred any
Material Adverse Change in WhiteBarn's business, condition (financial or
otherwise), assets, properties or results of operations of WhiteBarn since the
Balance Sheet Date.
1.1 WhiteBarn's Officers' Certificate. Talarian shall have received a
certificate, dated the Closing Date, signed and verified by each of the
President and Chief Financial Officer of WhiteBarn, and certifying (i) that the
conditions specified in Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.10, 7.11 and 7.12
have been fulfilled, (ii) the true, correct and complete Articles and Bylaws of
WhiteBarn and the resolutions which have been duly adopted by WhiteBarn's Board
of Directors and the Shareholders with respect to the transactions contemplated
by the Agreement and (iii) the amount of cash and accounts receivables that
WhiteBarn has as of the Closing.
1.1 Opinion of Counsel. Talarian shall have received from Xxxxxx & Xxxxxxxx LLC,
legal counsel for WhiteBarn, an opinion, dated the Closing Date, in the form set
forth in Exhibit A hereto.
1.1 Authorization of WhiteBarn. All actions necessary to authorize the
execution, delivery and performance of this Agreement by WhiteBarn, and the
consummation of the transactions contemplated herein, shall have been duly and
validly taken.
1.1 Consents and Regulatory Approvals. The Regulatory Approvals, all licenses,
Permits, authorizations, consents and other approvals of and filings with any
governmental or regulatory agency required to be obtained or made in connection
with the consummation of the transactions contemplated by this Agreement shall
have been duly obtained or made by or on behalf of WhiteBarn. All material
consents of other third-parties required to
23
have been obtained in connection with the consummation of such transactions
shall have been obtained by or on behalf of WhiteBarn.
1.2 Commitment Agreement; Xxxxxx Agreement; Intellectual Property Agreements.
Talarian shall have obtained fully executed original counterparts of (1) the
Commitment Agreement to be entered into between Talarian and Xxxx Xxxxxxxx in
the form of Exhibit B attached hereto (the "Commitment Agreement"), (2) the
Xxxxxx Agreement between Talarian and Xxxxxxx Xxxxxx in the form of Exhibit C
attached hereto and (3) the Intellectual Property Agreements to be entered into
between Talarian and each employee and independent contractor of WhiteBarn in
the form attached hereto as Exhibit D (the "Intellectual Property Agreements").
1.1 Agreement with Certain WhiteBarn Shareholders. Talarian shall have obtained
fully executed original counterparts of the Agreement with Shareholders to be
entered into among Talarian, Xxxx Xxxxxxxx, Xxx Xxxxxxx and the escrow agent
named therein in the form of Exhibit E attached hereto (the "Agreement with
Certain WhiteBarn Shareholders").
1.1 Absence of Certain Changes. WhiteBarn shall have certified in writing to
Talarian that, as of the Closing Date, no key employee of WhiteBarn has
terminated his or her relationship with WhiteBarn since the Balance Sheet Date
or indicated any present or future intention to terminate his or her
relationship with WhiteBarn.
1.1 Shareholder Approval; Option Plan Amendments. Talarian shall have obtained
the approval of the Merger by the holders of Talarian Preferred Stock. WhiteBarn
shall have: (1) obtained the approval of the Merger by its shareholders as
required under Illinois law and such approval shall have been made by all
WhiteBarn shareholders; (2) amended the WhiteBarn Inc. Stock Option Plan (and
obtained the consent of each optionee thereunder to such amendment) to provide,
among other things, that in the event of a merger of WhiteBarn in which
WhiteBarn is not the survivor, the surviving corporation may assume such
options; and (3) amended the 2000 WhiteBarn, Inc. Equity Incentive Plan (if
requested by Talarian), with the amendments acceptable to Talarian in form and
substance.
1.1 Minimum Cash - A/R Requirement. WhiteBarn shall have at least $450,000 prior
to Closing in cash and accounts receivable (collectively, the "Minimum Cash -
A/R Requirement") as of the Closing and shall have provided evidence thereof to
Talarian's satisfaction.
1.1 Termination of Certain Agreements. WhiteBarn shall have caused the
termination of the agreements represented by (i) that certain letter dated
October 14, 1996 by and among Xxxx Xxxxxxxx, Xxxxxx Xxxxxxxx and Xxx Xxxxxxx and
(ii) that certain letter dated November 4, 1997 by and between Xxxx Xxxxxxxx and
Xxx Xxxxxxx, each relating to Xxx Xxxxxxx'x investment in WhiteBarn.
24
1 ARTICLE
CONDITIONS TO OBLIGATIONS OF WHITEBARN
The obligations of WhiteBarn to perform its obligations under this
Agreement are subject to the satisfaction, on or before the Closing Date, of
each of the following conditions, unless waived in writing by WhiteBarn:
1.1 Accuracy or Representations and Warranties. All representations and
warranties of Talarian contained in this Agreement shall be true and correct in
all material respects when made and on and as of the Closing Date as though made
on and as of the Closing Date regardless of any additional disclosures made by
Talarian pursuant to Section 6.1 (unless waived by WhiteBarn).
1.1 Performance of Covenants. All covenants, agreements and obligations required
by the terms of this Agreement to be performed, satisfied or complied with by
Talarian at or before the Closing Date shall have been duly and properly
performed in all material respects.
1.1 Absence of any Material Adverse Change. There shall not have occurred any
Material Adverse Change in Talarian's business condition (financial or
otherwise), assets, properties or results of operation since the date of the
Talarian balance sheet referred to in Section 4.11.
1.1 Officers' Certificate. WhiteBarn shall have received a certificate, dated
the Closing Date, signed and verified by the President and Chief Financial
Officer of Talarian, certifying (i) that the conditions specified in Sections
8.1, 8.2, 8.3, 8.5, 8.6, 8.7 and 8.8 have been fulfilled and (ii) the true,
correct and complete Articles and Bylaws of Talarian and the resolutions which
have been duly adopted by Talarian's Board of Directors and the shareholders
with respect to the transactions contemplated by the Agreement.
1.1 Authorization. All actions necessary to authorize the execution, delivery
and performance of this Agreement by Talarian, and the consummation of the
transactions contemplated herein, shall have been duly and validly taken.
1.1 Shareholder Approval. Talarian shall have obtained the approval of the
Merger by the holders of Talarian Preferred Stock. WhiteBarn shall have obtained
the approval of the Merger by its shareholders as required under Illinois law.
1.1 Registration Rights. Talarian shall have taken all action and obtained all
consents necessary to amend that certain Amended and Restated Investors' Rights
Agreement dated as of February 3, 2000, by and among Talarian and the other
parties thereto, to cause each Shareholder to be included as a Holder under
Section 2 thereof (the "Investors' Rights Amendment").
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1.1 Consents and Regulatory Approvals. The Regulatory Approvals, all licenses,
Permits, authorizations, consents and other approvals of and filing with any
governmental or regulatory agency required to be obtained or made in connection
with the consummation of the transactions contemplated by this Agreement shall
have been duly obtained or made by or on behalf of the WhiteBarn. All material
consents of other third-parties required to have been obtained in connection
with the consummation of such transactions shall have been obtained by or on
behalf of WhiteBarn.
1.1 Opinion of Counsel. WhiteBarn shall have received from Xxxxxxx & XxXxxxxx,
legal counsel for Talarian, an opinion, dated the Closing Date, in the form set
forth in Exhibit F, attached hereto.
1 ARTICLE
THE CLOSING
1.1 The Closing. On the terms and subject to the satisfaction of the conditions
contained in this Agreement, the closing of the Merger (the "Closing") will take
place on a date to be specified by the parties, which shall be no later than the
second Business Day after satisfaction or waiver of the conditions set forth in
Articles 7 and 8 (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions), in the offices of Talarian commencing at 9:00 a.m., or at such
other place, time and date as may be mutually agreed to by the parties. The date
and time at which the Closing actually occurs is herein referred to as the
"Closing Date."
1.1 Deliveries by WhiteBarn. At the Closing, WhiteBarn shall deliver the
following:
(a) The stock certificates representing all of the shares of the Shareholders'
WhiteBarn Stock which shall be marked to reflect the cancellation and conversion
thereof as a result of the Merger, together with all stock books and records
reflecting the ownership and transfer of shares of WhiteBarn's capital stock;
(a) The certificate contemplated by Section 7.4, above;
(a) The legal opinion contemplated by Section 7.5, above;
(a) Evidence of having obtained consents, if any, required to be obtained by
WhiteBarn pursuant to Section 7.7, above;
(a) The Commitment Agreement and Intellectual Property Agreements contemplated
by Section 7.8, above;
(a) The Agreement with Certain WhiteBarn Shareholders contemplated by Section
7.9, above;
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(a) The Certificate of Merger contemplated by Section 2.2, above, executed and
in a form ready for filing with the Secretary of State of the State of Illinois;
(a) All other agreements, documents, instruments and writings required to be
delivered by WhiteBarn at the Closing pursuant to this Agreement; and
(a) Evidence that the agreements referenced in Section 7.14 have been
terminated.
1.1 Deliveries by Talarian. At the Closing, Talarian shall deliver the
following:
(a) Stock certificates representing the number of shares of Talarian Exchange
Stock required to be delivered at the Closing pursuant to Section 2.4, above;
(a) The Cash Consideration required to be delivered at the Closing pursuant to
Section 2.4, above;
(a) The officer's certificate contemplated by Section 8.4, above;
(a) The legal opinion contemplated by Section 8.9, above;
(a) The Certificate of Merger contemplated by Section 2.2 above, executed and in
a form ready for filing with the California Secretary of State;
(a) An executed copy of the Investors' Rights Amendment; and
(a) All other agreements, documents, instruments and writings required to be
delivered by Talarian at the Closing pursuant to this Agreement.
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1 ARTICLE
POST CLOSING
1.1 Survival of Representations and Warranties; Indemnification. The Agreement
with Certain WhiteBarn Shareholders shall govern the indemnity made by Xxxx
Xxxxxxxx and Xxx Xxxxxxx (the "Indemnifying Shareholders") to Talarian.
Regardless of any investigation at any time made by or on behalf of Talarian, or
of any information any party may have in respect thereof, all representations
and warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby by WhiteBarn shall survive the Closing for a
period ending 12 months from the Closing Date, except that all representations
and warranties with respect to tax matters shall survive through the applicable
statute of limitations (each, a "Survival Date"). From and after the applicable
Survival Date, no Indemnifying Shareholder shall have any liability under the
Agreement with Certain WhiteBarn Shareholders with respect to such
representations and warranties and neither Talarian nor any of its shareholders,
affiliates or their Representatives shall assert any claims against any
Indemnifying Shareholder with respect thereto. Notwithstanding the foregoing,
and other than with respect to Section 3.2, above, in the absence of fraud or
intentional misrepresentation, no representation or warranty made hereunder or
pursuant hereto or in connection with the transactions contemplated hereby by
Talarian shall survive the Closing and neither WhiteBarn nor any Shareholder
shall assert any claims against Talarian with respect thereto.
1.1 Expenses. Each of the parties shall pay all costs and expenses incurred by
it or on its behalf in connection with this Agreement and the transactions
contemplated hereby, including, without limiting the generality of the
foregoing, fees and expenses of its own financial consultants, accountants and
counsel. In the event the Merger is consummated, Talarian will pay the
reasonable fees and expenses of WhiteBarn's accountants and attorneys with
respect to the Merger, not to exceed a combined total of $50,000.
1.1 Employee Bonuses. On or before the date of the first Talarian payroll
following the Closing Date, Talarian will pay to the WhiteBarn employees the
cash bonuses set forth on Exhibit G attached hereto.
1 ARTICLE
MISCELLANEOUS PROVISIONS
1.1 Entire Agreement. This Agreement, the Ancillary Agreements, the Disclosure
Schedule and the Talarian Disclosure Schedule together set forth the entire
agreement between the parties with regard to the subject matter of this
Agreement.
1.1 Governing Law. The validity, construction and performance of this Agreement,
and any Action arising out of or relating to this Agreement or any of the
Ancillary Agreements, shall be governed by the Laws, without regard to the Laws
as to choice or conflict of Laws, of the State of California.
28
1.1 Interpretation. The language in all parts of this Agreement and each of the
other Ancillary Agreements shall be in all cases construed simply according to
its fair meaning and not strictly for or against any party. Whenever the context
requires, all words used in the singular will be construed to have been used in
the plural, and vice versa. The captions of the Sections and Subsections of this
Agreement are for convenience only and shall not affect the construction or
interpretation of any of the provisions of this Agreement. This Agreement shall
be construed without regard to any presumption or other rule requiring
construction against the party causing this Agreement to be drafted. If any
words or phrases in this Agreement or any preliminary draft of this Agreement
shall have been stricken out or otherwise eliminated, whether or not any other
words or phrases have been added, this Agreement shall be construed as if those
words or phrases were never included in this Agreement, and no implication or
inference shall be drawn from the fact that the words or phrases were so
stricken out or otherwise eliminated.
1.1 Waiver and Amendment. This Agreement may be amended, supplemented, modified
and/or rescinded only through an express written instrument signed by all
parties or their respective successors and permitted assigns. Any party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but only to the extent such provision is for the benefit of the
waiving party, and no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any act for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future, and no forbearance by a
party to seek a remedy for noncompliance or breach by another party shall be
construed as a waiver of any right or remedy with respect to such noncompliance
or breach.
1.1 Assignment. Except as specifically provided otherwise in this Agreement,
neither this Agreement nor any interest herein shall be assignable (voluntarily,
involuntarily, by judicial process, operation of Law or otherwise), in whole or
in part, by either party without first obtaining the prior written consent of
the non-assigning party. Any voluntary attempt at such an assignment, except
pursuant to this Section 11.5 shall be void and, at the option of the
non-assigning party, shall be an incurable breach of this Agreement resulting in
the termination of this Agreement.
1.1 Successors and Assigns. Each of the terms, provisions and obligations of
this Agreement shall be binding upon, shall inure to the benefit of, and shall
be enforceable by the parties and their respective legal representatives,
successors and permitted assigns.
1.1 Notices. All notices, requests, demands and other communications made under
this Agreement shall be in writing, correctly addressed to the recipient at the
addresses set forth under such recipient's signature on the signature page
hereto and shall be deemed to have been duly given: (i) upon delivery, if served
personally on the party to whom notice is to be given; or (ii) on the date or
receipt, refusal or non-delivery indicated on the receipt if mailed to the party
to whom notice is to be given by first class mail, registered or certified,
postage prepaid, or by air courier. Any party may give written notice of a
change of address in
29
accordance with the provisions of this Section 11.7 and after such notice of
change has been received, any subsequent notice shall be given to such party in
the manner described at such new address.
1.1 Severability. Each provision of this Agreement is intended to be severable.
Should any provision of this Agreement or the application thereof be judicially
declared to be or becomes illegal, invalid, unenforceable or void, 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 illegal, 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 illegal, void or unenforceable
provision.
1.1 Warranty of Authority. Each of the individuals signing this Agreement on
behalf of a party hereto warrants and represents that such individual is duly
authorized and empowered to enter into this Agreement and bind such party
hereto.
1.1 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute a single agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first set forth above.
WHITEBARN, INC.,
an Illinois corporation
By: /s/ XXXX XXXXXXXX
----------------------
Xxxx Xxxxxxxx
President
By: /s/ XXXXXX X. XXXXXXXX
----------------------
Xxxxxx X. Xxxxxxxx
Secretary
Address:
00X000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
TALARIAN CORPORATION,
a California corporation
By: /s/ XXXXXXX X. XXXXXX
----------------------
Xxxxxxx X. Xxxxxx
Vice President
By: /s/ XXXXXX X. XXXXXX
----------------------
Xxxxxx X. Xxxxxx
Secretary
Address:
000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
