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                                                                   EXHIBIT 10.26

                         VALUE ADDED RESELLER AGREEMENT

                              TALARIAN CORPORATION

                            NORTHERN TELECOM LIMITED

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MEMORANDUM OF AGREEMENT effective from the 17th day of December, 1993.

BY AND BETWEEN:

        TALARIAN CORPORATION, a corporation duly incorporated under the laws of
        California, with offices at 444 Castro Street, Suite 140, Mountain View,
        California 94041, United States of America (hereinafter referred to as
        "Talarian"),

AND:

        NORTHERN TELECOM LIMITED, a corporation duly incorporated under the laws
        of Canada, having its executive offices at 3 Robert Speck Parkway,
        Mississauga, Ontario, Canada L4Z 3C8, for itself and its Subsidiaries
        (individually and collectively hereinafter referred to as "Northern
        Telecom").

WHEREAS Talarian is in the business of developing and marketing proprietary
advanced software products, having a commercial name RTworks(TM), for the
performance of intelligent real-time monitoring, analysis, display, and control
of complex systems; and

WHEREAS Northern Telecom wishes to acquire, and Talarian desires to grant
Northern Telecom, a right and license to develop applications using Talarian's
RTworks and distribute such applications incorporating run-time versions of
RTworks under the terms and conditions of this Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES HEREINAFTER SET FORTH,
THE PARTIES AGREE AS FOLLOWS:

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                         VALUE ADDED RESELLER AGREEMENT

1.      DEFINITIONS:

        "Applicable Price List" shall mean Talarian's published U.S. price list
        document effective at the Effective Date and attached hereto as Schedule
        A and made a part hereof or as modified pursuant to the provisions of
        Article 5.1.

        "Critical Problem" shall mean any problem, bug or error caused by a
        defective RTworks Software Product which causes such RTworks Software
        Product to stop functioning.

        "Contractor" shall mean a third party contracted by Northern Telecom to
        develop for the benefit of Northern Telecom a NT System using the
        RTworks Development System.

        "Distribute" and "Distribution" shall mean Northern Telecom's, a
        Manufacturing Licensee's or a Distributor's shipment or transmission of
        a NT System to its customers or Northern Telecom's, a Manufacturing
        Licensee's or a Distributor's use of a NT System within its premises for
        end user purposes.

        "Distributor" shall mean a third party entity, other than a
        Manufacturing Licensee, who enters into an agreement with Northern
        Telecom, a Manufacturing Licensee or a Distributor to lease, (except for
        RTworks Runtime Application which is sublicensed) sell, sublicense or
        Distribute NT Systems.

        "End User" shall mean a third party licensed to use a NT System in the
        Territory.

        "Effective Date" shall mean the date first above mentioned.

        "Knowledge Base" shall mean the application specific instructions, rules
        and objects written by Northern Telecom and which through use of a
        RTworks Development System are incorporated within a RTworks Runtime
        Application.

        "Manufacturing Licensee" shall mean a third party entity who enters into
        an agreement with Northern Telecom or any of its Subsidiaries to
        manufacture and Distribute NT Systems.

        "Minor Problem" shall mean any problem, bug or error caused by a
        defective RTworks Software Product and which is not a Critical Problem
        or a Serious Problem.

        "Northern Telecom Application Program" shall mean software created by
        Northern Telecom other than by the use of a RTworks Development System
        or obtained from sources other than Talarian which when combined with a
        RTworks Runtime Application shall constitute a complete deliverable and
        executable application as part of a NT System.

        "NT System" shall mean a telecommunications system of a Type listed in
        Schedule B attached hereto and made a part hereof, consisting in part of
        either:

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        (a)    software which includes a RTworks Runtime Application and
               Northern Telecom Application Program; or

        (b)    commercially available computing platforms for which Talarian
               commercially provides RTworks Software Products, such platforms
               having one or more CPUs, software which includes a RTworks
               Runtime Application and a Northern Telecom Application Program,
               and associated peripherals;

        such telecommunications system being developed by or for Northern
        Telecom or in modified or unmodified form by or for a Manufacturing
        Licensee, and Distributed, leased, sublicensed or (except for RTworks
        Runtime Application which is sublicensed) sold by Northern Telecom, a
        Manufacturing Licensee, or a Distributor under Northern Telecom's or a
        Manufacturing Licensee's name.

        "RTworks Development System" shall mean a copy of all or any portion of
        Talarian's proprietary product generally known as RTworks, and certain
        tools and means which Talarian may provide to Northern Telecom from time
        to time, RTworks Documentation and other associated documentation for
        such product, and all Updates, enhancements and evolutions of such
        product and its associated tools and means and associated documentation,
        under whatever name, in object code form, which enable a user to develop
        an application using such product and generate executable copies of such
        an application. The RTworks Development System is more fully described
        in the Specifications.

        "RTworks Documentation" shall mean the documentation, whether provided
        in printed form or on machine-readable media, which is generally
        provided by Talarian to its licensees in conjunction with and in support
        of the RTworks Development System, including all modifications,
        revisions and enhancements to such documentation.

        "RTworks Runtime Application" shall mean the executable copy of an
        application developed by Northern Telecom using a RTworks Development
        System. The RTworks Runtime Application consists of portions of software
        included with and generated by a RTworks Development System and also
        includes Knowledge Base but specifically excludes the Northern Telecom
        Application Program and those portions of a RTworks Development System
        which are necessary to enable a user to develop, generate or modify a
        RTworks Runtime Application.

        "RTworks Software Product" shall mean the RTworks Development System and
        RTworks Runtime Application but shall specifically exclude Knowledge
        Base and Northern Telecom Application Program(s).

        "Serious Problem" shall mean any problem, bug or error caused by a
        defective RTworks Software Product which seriously impacts the operation
        of such RTworks Software Product without causing it to stop operating.

        "Specification(s)" shall mean Talarian's published specifications for a
        particular release of RTworks Software Products.

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        "Sublicense Agreement" shall mean a license agreement form providing
        terms and conditions substantially similar to those listed in Schedule C
        attached hereto and made a part hereof.

        "Subsidiary" shall mean any corporation or company in which Northern
        Telecom Limited directly or indirectly owns and controls, and continues
        to own and control, more than fifty percent (50%) of the shares entitled
        to elect the Board of Directors.

        "Technical Support" shall mean technical support Talarian provides to
        Northern Telecom under the terms and conditions as set forth in Article
        7 and Schedule D attached hereto and made a part hereof.

        "Term" shall mean the period extending ten (10) years from the Effective
        Date.

        "Type" shall mean, in respect of NT Systems, a category of NT Systems,
        definitions of which are given in Schedule B attached hereto and made a
        part hereof, each category comprising an original NT System and all
        enhancements, modifications and other evolutions thereof.

        "Update" shall mean one (1) copy of all published revisions and
        corrections to the printed documentation and one (1) copy of corrections
        and new releases of each of the RTworks Software Products obtained by
        Northern Telecom from Talarian pursuant to the provisions of this
        Agreement provided that such new releases are not designated as new
        products for which Talarian charges separately.

2.      GRANT OF LICENSES

        2.1    Talarian grants to Northern Telecom a personal, non-exclusive,
               non-transferable, worldwide license:

               (a)    to use the RTworks Development Systems, at the license fee
                      set forth in Schedule E attached hereto and made a part
                      hereof, solely in connection with Northern Telecom's
                      development, modification, testing, Distribution, and
                      provision of technical support for NT Systems;

               (b)    to make and, directly or indirectly through Distributors,
                      Distribute copies of RTworks Runtime Applications to End
                      Users (pursuant to a Sublicense Agreement) solely when
                      incorporated within a NT System;

               (c)    to use RTworks Runtime Applications incorporated into NT
                      Systems, at no license fee, solely to demonstrate to
                      Northern Telecom's potential customers the features of a
                      NT System;

               (d)    to incorporate portions of RTworks Documentation in
                      Northern Telecom's NT System documentation provided
                      Northern Telecom properly incorporates and references
                      Talarian's copyrights in such documentation;

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               (e)    to authorize its End Users to copy RTworks Runtime
                      Applications for deployment within the End User's
                      telecommunications networks provided Northern Telecom
                      contractually or technically limits the rights of its End
                      Users to copy and use such RTworks Runtime Applications
                      only in connection with NT Systems and Northern Telecom
                      pays and reports royalties to Talarian based on the Type
                      of NT System basis. In the event any technical use
                      limitation code becomes available from Talarian for use by
                      Talarian's general customer base, the Parties shall
                      negotiate in good faith to determine whether to
                      incorporate any such code in RTworks Runtime Systems as
                      part of NT Systems;

               (f)    to make copies of and Distribute Updates to its End Users
                      who have a NT System;

               (g)    to sublicense Manufacturing Licensees within the scope of
                      the licenses granted in preceding sub-paragraphs (a)
                      through (f).

        2.2    Northern Telecom may provide access to the RTworks Development
               System to its Contractors for such Contractors' use in developing
               NT Systems for Northern Telecom, provided such use is exclusively
               for Northern Telecom in connection with work called for in
               written agreements between Northern Telecom and such Contractors
               which shall require that:

               (a)    any claim, demand or right of action arising on behalf of
                      a Contractor from the provision of access to it or use by
                      it of a copy of the RTworks Development System shall be
                      solely against Northern Telecom;

               (b)    a Contractor shall incur the same responsibilities and
                      obligations and other restrictions pertaining to the use
                      of copies of the RTworks Development System as those
                      incurred by Northern Telecom under this Agreement.

               Northern Telecom shall enter into a written agreement with a
               Contractor before or at the time Northern Telecom provides access
               to a copy of the RTworks Development System to such Contractor.

        2.3    Northern Telecom may at any time while this Agreement is in
               effect request in writing the addition of further Types of NT
               Systems to the Types in respect of which licenses are granted
               hereunder and such request shall not unreasonably be refused by
               Talarian. The addition of further Types shall thereupon be made
               by the substitution for then current Schedule B of revised
               Schedule B mutually agreed to and signed by duly authorized
               representatives of the Parties.

3.      LICENSE EXCLUSIONS

        3.1    Except as expressly provided herein, Northern Telecom shall make
               no other use or Distribution of the RTworks Development Systems
               or RTworks Runtime Applications.

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        3.2    Northern Telecom warrants that it will not, without the prior
               written consent, if required, of the U.S. Department of Commerce,
               export directly or indirectly the RTworks Development Systems or
               RTworks Runtime Applications to any prohibited country specified
               in the then current U.S. Department of Commerce Export
               Administration Regulations.

4.      LICENSE TO USE TALARIAN'S TRADEMARKS AND TRADENAMES

        4.1    Northern Telecom may use Talarian's tradenames and trademarks
               which relate to the RTworks Development Systems solely in
               connection with Northern Telecom's distribution of marketing
               materials associated with this Agreement, provided Northern
               Telecom clearly identifies Talarian's ownership of such
               tradenames or trademarks and provided further that Northern
               Telecom abides by Talarian's guidelines in this respect. A list
               of such tradenames and trademarks is attached hereto as Schedule
               F and made a part hereof and the associated guidelines document
               is attached hereto as Schedule G and made a part hereof. Talarian
               may at any time request an amendment to Schedule F and/or
               Schedule G by providing a written notice to Northern Telecom and
               such request shall not unreasonably be refused by Northern
               Telecom. Such amendment shall thereupon be made by the
               substitution for the then current Schedules F and/or G of revised
               Schedules F and/or G mutually agreed to and signed by duly
               authorized representatives of the Parties.

5.      ROYALTIES AND FEES

        5.1    In the event Talarian publishes a revised U.S. price list,
               Talarian shall provide a copy of such price list to Northern
               Telecom and such price list shall become the Applicable Price
               List from the date of receipt by Northern Telecom provided that:

               (a)    in the event the new Applicable Price List includes
                      products in the old Applicable Price List with the
                      addition of bug fixes and minor enhancements and
                      improvements, then the percentage increase in the prices
                      between the old Applicable Price List and the new
                      Applicable Price List shall not at any time exceed the
                      cumulative percentage increase in the Unadjusted Consumer
                      Price Index (UCPI), published by the Bureau of Labor
                      Statistics, U.S. Department of Labor between the dates of
                      the most recent price increase (or the Effective Date of
                      this Agreement, whichever is later) and the date of
                      receipt by Northern Telecom of the new Applicable Price
                      List; and

               (b)    in the event the new Applicable Price List includes
                      existing products with major enhancements and
                      improvements, then Northern Telecom shall have the right
                      to exercise its rights hereunder using the version of the
                      RTworks Software Products and the fees, for such products,
                      based on the old Applicable Price List.

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        5.2    For each copy or partial copy of a RTworks Runtime Application
               Distributed by Northern Telecom, a Manufacturing Licensee or a
               Distributor, Northern Telecom shall pay to Talarian a license fee
               based on the Type of NT System as set forth in So1iedule E
               attached hereto and made a part hereof, provided no additional
               royalty shall be payable hereunder in the event Northern Telecom,
               a Manufacturing Licensee or a Distributor furnishes a substitute
               NT System to an End User previously licensed to use a NT System.

        5.3    No additional fee shall be payable to Talarian under this
               Agreement for the transfer of a RTworks Runtime Application from
               one End User to another End User in conjunction with the transfer
               of a NT System between such End Users provided the first End User
               does not retain any portion of the RTworks Runtime Application
               after such transfer and provided the second End User enters into
               a Sublicense Agreement. Such transfer of a RTworks Runtime
               Application may result from, for example, a sale of a NT System
               by the first End User to a second End User or the termination of
               a lease with a first End User and the execution of a new lease
               with the second End User for such NT System.

        5.4    No additional fee shall be payable to Talarian under this
               Agreement for the Updates provided by Northern Telecom, a
               Manufacturing Licensee or a Distributor to an End User having a
               NT System. Fees that may be associated with Updates shall be
               included in the Technical Support fees.

        5.5    Northern Telecom may elect, under conditions such as the
               discontinuation of the marketing, sales and support of a
               particular Type of NT System, to have the provision of Technical
               Support for a Type of NT System and the associated RTworks
               Development Systems suspended by providing written notice to
               Talarian and, thereupon, shall have no further obligation to pay
               Technical Support fees for such Type of NT System or the
               associated RTworks Development Systems. In the event Northern
               Telecom elects to have the provision of Technical Support
               suspended and, at a subsequent date, reverses its decision due to
               conditions such as the opportunity for new sales of the same Type
               of NT System in a new market, and elects to have the provision of
               Technical Support resumed for such a Type of NT System and the
               associated RTworks Development Systems, then on receiving written
               notice thereof from Northern Telecom, Talarian shall resume the
               provision of Technical Support for such Type of NT System and the
               associated RTworks Development Systems and Northern Telecom shall
               resume payment of Technical Support fees for such Type of NT
               System and the associated RTworks Development Systems. In the
               event Northern Telecom elects to have the provision of Technical
               Support suspended, then Northern Telecom shall have no right to
               receive Updates for that Type of NT System or the associated
               RTworks Development Systems.

        5.6    Northern Telecom shall pay all royalties due to Talarian within
               forty-five (45) calendar days of the end of the calendar quarter
               in which a NT System is Distributed by Northern Telecom, a
               Manufacturing Licensee or a Distributor to an End User. Payments
               when provided for in this Agreement, when overdue, bear

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               interest at a rate one and a half percent (1.5%) over the
               Canadian Prime Rate as quoted by the Royal Bank of Canada, at
               Toronto, Ontario, computed on a daily basis.

6.      RTWORKS DEVELOPMENT SYSTEM/AUTHORIZATION STRINGS

        6.1    Northern Telecom shall have the right to order RTworks
               Development Systems adapted by Talarian to any commercially
               available computing platform provided that Talarian commercially
               provides such RTworks Development Systems.

        6.2    The RTworks Development Systems obtained from Talarian hereunder
               shall contain all permanent authorization strings necessary to
               enable the RTworks Development Systems to function fully. In
               respect of the licenses granted under Article 2.1 of this
               Agreement, Talarian shall provide to Northern Telecom, promptly
               after the Effective Date, a copy of the license management system
               Talarian uses in its regular operations in similar situations, so
               as to allow Northern Telecom to copy and provide RTworks Runtime
               Applications as part of NT Systems to End Users.

7.      WARRANTY, TECHNICAL SUPPORT AND TRAINING

        7.1    Talarian represents that it has the right to enter into this
               Agreement. Talarian represents that, to the best of its
               knowledge, the RTworks Development Systems and RTworks Runtime
               Applications do not infringe any third party patent, copyright or
               other intellectual property rights when used in accordance with
               the Specifications.

        7.2    Talarian warrants that, while this Agreement is in effect, and so
               long as Northern Telecom pays for Technical Support hereunder,
               the RTworks Development Systems shall comply, and operate in
               accordance, with the Specifications. Talarian shall use its
               diligent efforts to repair or replace RTworks Software Products
               based on the discrepancies discovered and reported to Talarian by
               Northern Telecom based on the Specifications. Talarian does not
               represent that RTworks Software Products are error-free. These
               are the sole and exclusive remedies of Talarian with respect to
               this Article 7.2. Talarian makes no other warranties,
               representations or conditions, express or implied, in fact or in
               law, including without limitation, the implied warranties on
               conditions of merchantability and fitness for a particular
               purpose.

        7.3    Talarian shall provide Northern Telecom with Technical Support
               for the RTworks Software Products. Notwithstanding anything to
               the contrary elsewhere in the Agreement, Northern Telecom shall
               not be obligated to receive Technical Support from Talarian.

        7.4    Talarian shall provide to Northern Telecom a copy of all Updates
               for all RTworks Software Products obtained from Talarian
               hereunder promptly upon each such

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               Update becoming commercially available provided that Northern
               Telecom pays the applicable fees for Technical Support in respect
               of such RTworks Software Products.

        7.5    Talarian shall provide Technical Support to Northern Telecom for
               the RTworks Software Products provided that Talarian provides
               technical support for the same software to its general customer
               base.

        7.6    Conditional upon Northern Telecom's payment for Technical
               Support, each Party shall designate one (1) senior representative
               for the purpose of discussing and resolving warranty and
               Technical Support issues and disputes. Senior representatives of
               the parties shall meet (face to face or through telephone
               conferences) on the first week of every other calendar month
               during the Term or at any other time mutually agreed to by the
               Parties and discuss, in general, the matters related to Technical
               Support and issues brought to their attention by their respective
               organizations. As of the Effective Date, the names of the senior
               representatives of the Parties are as follows:

               for Northern Telecom:     Glenn Russell
                                         telephone no. (613) 765 4080
                                         facsimile no. (613) 763 7047

               and

               for Talarian:             Tim Young
                                         telephone no. (415) 965 8050
                                         facsimile no. (415) 965 9077.

        7.7    Northern Telecom shall be the sole authority in designating each
               bug or error in RTworks Runtime Applications and in the RTworks
               Development Systems, as a Critical Problem, Serious Problem or a
               Minor Problem.

8.      ANNUAL TECHNICAL SUPPORT FEE

        8.1    For the first year while this Agreement is in effect, Talarian
               shall provide, free of charge, Technical Support for RTworks
               Software Products under terms and conditions listed in Schedule
               D. Thereafter within forty-five (45) days of each Effective Date
               anniversary, Northern Telecom shall pay Talarian a Technical
               Support fee for RTworks Software Products as set forth in
               Schedule E.

9.      PAYMENTS

        9.1    All amounts specified herein are in U.S. dollars. All payments
               shall be made to Talarian in U.S. dollars at the address first
               set forth above or as changed by Talarian with forty-five (45)
               days prior written notice. Unless otherwise specified herein, all
               payments are due within forty-five (45) days of receipt of
               invoice.

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        9.2    Northern Telecom shall pay any withholding tax required to be
               withheld from payments made to Talarian pursuant to this
               Agreement so that Talarian receives the full amounts calculated
               pursuant to Schedules A and E. Talarian shall claim the
               withholding taxes paid by Northern Telecom hereunder to the
               extent such tax is allowable as a credit against U.S. income
               taxes of Talarian covering the period such withholding taxes were
               paid by Northern Telecom. Talarian shall reimburse such credits
               promptly to Northern Telecom. In the event Talarian shall not
               able to claim and use all such credits, Talarian shall provide
               Northern Telecom with a written disclosure, signed by an
               authorized representative of Talarian, indicating such amount it
               was unable to claim and use. To assist in obtaining such credit,
               Northern Telecom shall promptly furnish Talarian with such
               evidence as may be required by U.S. taxing authorities to
               establish that any such tax has been paid. Subject to the
               provisions immediately preceding in this paragraph, Northern
               Telecom shall pay all taxes and duties associated with this
               Agreement, other than taxes based on Talarian's income.

10.     TERM

        10.1   Unless otherwise terminated as provided herein, upon expiration
               of the Term, this Agreement shall be renewed automatically for
               successive one (1) year terms unless either Party requests the
               termination of the Agreement by providing a written notice of
               termination to the other Party sixty (60) days prior to
               expiration of the then-current one year term, such request not to
               be unreasonably refused, provided that the addition of new Types
               of NT Systems to the existing Types of NT Systems after the ten
               (10) year term shall be subject to the mutual written agreement
               of the Parties.

11.     RECORDS AND REPORTS

        11.1   Northern Telecom, its Manufacturing Licensees and Distributors
               shall keep full, true and accurate records and accounts in
               accordance with generally accepted accounting practices to show
               the amount of fees payable to Talarian for a period of three (3)
               years from the date of Distribution.

        11.2   Talarian shall have the right to appoint an independent auditor
               (under appropriate non-disclosure conditions) reasonably
               acceptable to Northern Telecom to conduct an audit of records of
               Northern Telecom once per year to determine Northern Telecom's
               compliance with this Agreement. For all Manufacturing Licensees
               authorized by Northern Telecom to Distribute NT Systems, Northern
               Telecom, in its sole discretion, shall either.

               (a)    retain the right to audit the records of any such
                      Manufacturing Licensee; or

               (b)    require that such Manufacturing Licensee shall, at the
                      written request of Talarian to Northern Telecom, permit an
                      independent auditor appointed by

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                      Talarian and reasonably acceptable to Northern Telecom
                      annually to audit such records (under appropriate
                      non-disclosure conditions) provided where any such audit
                      is requested by Talarian, it shall be arranged through
                      Northern Telecom.

        11.3   Talarian shall bear the expenses of all audits unless any such
               audit reveals that Northern Telecom has understated the
               cumulative amount of fees that Northern Telecom is obligated to
               pay to Talarian under this Agreement by an amount more than seven
               percent (7%) for any twelve (12) month period, in which case,
               Northern Telecom shall pay all reasonable costs associated with
               the audit.

        11.4   In the event of an audit, prompt adjustment shall be made by the
               proper Party to compensate for any errors or omissions disclosed
               by such audit.

        11.5   Forty-five (45) days after the end of each calendar quarter,
               Northern Telecom shall provide Talarian with a completed
               reporting statement

12.     TITLE AND PROTECTION OF SOFTWARE

        12.1   Talarian (or its third party providers) shall retain all right,
               title, copyright and interest to the RTworks Development Systems
               and RTworks Runtime Applications.

        12.2   Talarian acknowledges that the licenses granted to Northern
               Telecom hereunder shall not imply any ownership by Talarian of
               Northern Telecom's Knowledge Base or Northern Telecom Application
               Programs.

        12.3   Northern Telecom shall obtain (and shall require its
               Manufacturing Licensees and Distributors to obtain) signed
               Sublicense Agreements from each End User prior to the delivery of
               a NT System to such End User.

        12.4   Northern Telecom shall use reasonable efforts to enforce its
               Sublicense Agreements and its agreements with Manufacturing
               Licensees and Distributors. If a Manufacturing Licensee or
               Distributor shall be in material breach of its manufacturing
               license agreement or its distributor agreement, respectively, in
               contravention to the provisions of this Agreement, Talarian may,
               at any time, notify Northern Telecom in writing of such breach
               and require Northern Telecom to terminate all rights granted to
               such entity under the rights granted by Talarian herein by not
               less than two (2) months written notice to such Manufacturing
               Licensee or Distributor specifying any such breach, unless within
               the period of such notice, all breaches specified therein are
               remedied. Upon such termination, such Manufacturing Licensee or
               Distributor shall, within thirty (30) days, immediately
               discontinue use of and return to Northern Telecom or destroy all
               copies of RTworks Development Systems and RTworks Runtime
               Applications in its possession other than copies thereof
               necessary for the Manufacturing Licensee or Distributor to meet
               reasonable support obligations to existing End Users.

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        12.5   Northern Telecom shall affix to any media containing a copy of
               all or any portion of the RTworks Development Systems or RTworks
               Runtime Applications and to each copy or partial copy of RTworks
               Documentation all copyright, proprietary information notices and
               restricted rights legends as were affixed to the original media
               or documents. All NT Systems Distributed to the U.S. Government
               shall contain the correct "Restricted Rights" legend as defined
               in DEAR 52.227-7013 (c) (1) (ii) or pertinent subsequent
               regulation citation.

        12.6   Within a reasonable period of time following the Effective Date
               of this Agreement, the Parties shall enter into an escrow
               agreement containing terms and conditions substantially similar
               to the terms and conditions of the Escrow Agreement attached
               hereto as Schedule H and made a part hereof.

13.     LIMITATION OF LIABILITY

        13.1   Except for the indemnification provided in the section entitled
               "Indemnification" below, Talarian's liability for damages under
               this Agreement in respect of each Type of NT Systems (whether in
               contract or tort) shall not exceed the amount paid by Northern
               Telecom to Talarian for the RTworks Development Systems, RTworks
               Runtime Applications and any technical services including
               Technical Support in respect of such Type of NT Systems. Neither
               Party shall be liable for any lost data, lost profits,
               incidental, consequential or indirect damages of any kind even if
               a Party has been advised of the possibility of such damages.
               Notwithstanding the foregoing in this Article 13.1, nothing
               herein limits Talarian's liability in respect of any claim for
               bodily injury or tangible property damage caused by the negligent
               or willful actions of any Talarian employee or employees,
               provided that such claim shall not include any claims related to
               the functioning of the RTworks Software Products.

14.     INDEMNIFICATION

        14.1   Talarian shall indemnify and defend Northern Telecom against any
               claim that the RTworks Development Systems and RTworks Runtime
               Applications infringes any third party patent, copyright or other
               intellectual property rights in any country which is a member of
               the Berne Convention, when used by Northern Telecom,
               Manufacturing Licensees, Distributors or End Users in accordance
               with the terms of this Agreement. Northern Telecom shall give
               Talarian prompt notice of such claim and shall give information,
               reasonable assistance and authority to defend or settle the
               claim. Talarian shall have the right, at its option, either to
               obtain for Northern Telecom the right to continue using the
               RTworks Development Systems and RTworks Runtime Applications,
               substitute other software with equivalent functional capabilities
               or modify the RTworks Development Systems and RTworks Runtime
               Applications so as to be no longer infringing while retaining
               equivalent functions.

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        14.2   Notwithstanding the provisions of Article 14.1 above, Talarian
               shall have no liability to Northern Telecom, its Manufacturing
               Licensees and Distributors under this Article 14 to the extent
               that any infringement or claim thereof results from:

               (i)    use of RTworks Software Products in combination with
                      equipment, software or documentation not supplied by
                      Talarian where such RTworks Software Products would not
                      themselves be infringing; or

               (ii)   components of a NT System which do not derive directly
                      from RTworks Software Products but which are introduced
                      into RTworks Software Products by Northern Telecom or its
                      Manufacturing Licensees, or from compliance with Northern
                      Telecom's designs, specifications or instructions.

15.     DEFAULT

        15.1   Any of the following shall constitute an event of default:

               (a)    either Party fails to perform any of its material
                      obligations under this Agreement and such failure remains
                      uncured for sixty (60) days after receipt of written
                      notice thereof; or

               (b)    either Party ceases to conduct business, becomes or is
                      declared insolvent or bankrupt, is the subject of any
                      proceeding relating to its liquidation or insolvency which
                      is not dismissed within thirty (30) calendar days or makes
                      an assignment for the benefit of its creditors.

        15.2   In the event Talarian becomes insolvent or is declared bankrupt
               and the Agreement is rejected by a trustee in bankruptcy, then if
               Northern Telecom elects to continue exercising any of the rights
               granted herein, such trustee shall provide to Northern Telecom
               all materials Talarian is obligated to provide hereunder to
               enable Northern Telecom to continue to exercise such rights.
               Unless and until this Agreement is rejected, the trustee shall
               perform the Agreement.

        15.3   In the event of a default, the non-defaulting Party, in addition
               to any other rights available to it under law or equity, may
               withhold its performance hereunder or may terminate this
               Agreement and the licenses granted hereunder by written notice to
               the defaulting Party. Unless otherwise provided in this
               Agreement, remedies shall be cumulative and there shall be no
               obligation to exercise a particular remedy.

16.     TERMINATION

        16.1   All sublicenses of RTworks Runtime Applications properly granted
               by Northern Telecom, Manufacturing Licensees or Distributors to
               End Users pursuant to this Agreement shall survive termination of
               this Agreement.

                                                                   Page 14 of 38
<PAGE>   15
        16.2   Within sixty (60) days of termination, Northern Telecom shall pay
               to Talarian all sums properly due under this Agreement.

        16.3   Within sixty (60) days of termination, Northern Telecom shall
               return to Talarian or certify in writing to Talarian that all
               copies or partial copies of RTworks Development Systems and
               RTworks Runtime Applications in Northern Telecom's possession or
               control have been destroyed except that Northern Telecom shall be
               entitled to retain a necessary number of copies of the RTworks
               Development Systems for use by Northern Telecom solely to provide
               technical support for NT Systems to existing End Users.

        16.4   In addition to this section, the sections entitled "License
               Exclusions", "Royalties", "Title and Protection of Software",
               "Representations", "Limitation of Liability", and
               "Indemnification", shall survive termination of this Agreement.

17.     GENERAL

        17.1   Any and all notices or other information to be given by one of
               the Parties to the other shall be deemed sufficiently given when
               forwarded by prepaid registered or certified first class mail or
               by facsimile transmission or hand delivery to the other Party at
               the following address or such other address as either Party shall
               designate by written notice given to the other Party:

               If to Talarian:

               Talarian Corporation
               444 Castro Street, Suite 140
               Mountain View, California 94041
               United States of America

               Facsimile Number: (415) 965 9077

               Attention: President

               If to Northern Telecom:

               Northern Telecom Limited
               3 Robert Speck Parkway
               Mississauga, Ontario, Canada
               L4Z 3C8

               Facsimile Number: (905) 566 3075

               Attention: Secretary

               with a copy to Vice President, Patents and Licenses

                                                                   Page 15 of 38
<PAGE>   16

               and such notices shall be deemed to have been received fifteen
               (15) business days after mailing if forwarded by mail, and the
               following business day if forwarded by facsimile transmission or
               hand.

        17.2   No agency, partnership or employment relationship is created
               between the Parties by this Agreement.

        17.3   Subject to the provisions of Article 4.1, neither Party shall use
               the name of the other in any advertising or publicity or media
               releases without the prior written consent of the other.

        17.4   Northern Telecom Limited shall have the right to assign this
               Agreement, delegate any duty or assign any right hereunder upon
               the prior written consent of Talarian, such consent not to be
               unreasonably withheld. Except for Northern Telecom's obligation
               to pay Talarian, neither Party shall be liable for any failure to
               perform due to causes beyond its reasonable control.

        17.5   This Agreement shall be governed by the laws of the Province of
               Ontario. All proceedings shall be conducted in English. Venue for
               all proceedings shall be Toronto. This Agreement constitutes the
               entire agreement between the Parties, supersedes all other
               agreements between the Parties concerning the subject matter
               herein and may only be modified by a written instrument signed by
               each Party's authorized signatories.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

<TABLE>
<S>                                          <C>
NORTHERN TELECOM LIMITED                     TALARIAN CORPORATION

    /s/ P.T. Erickson                           /s/ Paul A. Larson
---------------------------------------      ----------------------------------------
Authorized Signature                         Authorized Signature

    P.T. Erickson                               Paul A. Larson, Vice President, Sales
---------------------------------------      ----------------------------------------
Vice President, Patents an Licenses                Printed Name and Title

    /s/ D.J. DeGrandis
---------------------------------------
Authorized Signature

    D.J. DeGrandis
---------------------------------------
Secretary
</TABLE>

                                                                   Page 16 of 38
<PAGE>   17

                                   SCHEDULE A
                              APPLICABLE PRICE LIST

                                                                   Page 17 of 38
<PAGE>   18

                                   SCHEDULE B
                              NT SYSTEMS AND TYPES

SuperNode OPC

        SuperNode OPC's data manager is a UNIX based operations, administration
        and maintenance (OAM) platform. The data manager provides an open
        platform for OAM applications. Functions such as surveillance and
        provisioning shall be a part of the OAM applications. Surveillance will
        provide a reduced stream of log information to the switch operations
        systems through real-time log monitoring and analysis, log reduction and
        log correlation. Provisioning will provide a service view of datafill
        needed to add, change, or delete services offered on a switch, reducing
        operations costs as well as the level of knowledge required to perform
        such provisioning tasks.

DMS Maintenance Advisor

        The primary purpose of the DMS Maintenance Advisor is to significantly
        reduce the manual tasks involved in maintaining, analyzing and
        presenting problems from a network of DMS switches. The system provides:
        (i) a problem analyzer using expert system technology, (ii) a configured
        interface to collect DMS switch information, and (iii) a human-machine
        graphical interface. The initial release of the DMS Maintenance Advisor
        shall include capabilities for: (i) real-time DMS maintenance and
        problem analysis, (ii) using expert system technology in the automation
        of the detection, analysis and resolution recommendation of DMS switch
        problems, (iii) reducing work content by organizing and presenting
        complex analysis tasks in user understandable manner, and (iv) providing
        proactive maintenance capabilities of multiple DMS switches from a
        single center.

                                                                   Page 18 of 38
<PAGE>   19
                                   SCHEDULE C
                              SUBLICENSE AGREEMENT

Sublicense Agreements shall include terms and conditions substantially similar
to the following:

1.      restrict use of RTworks Runtime Application to object code form only;

2.      prohibit assignment, time-sharing or rental of RTworks Runtime
        Application;

3.      prohibit use of the RTworks Runtime Application for any purpose outside
        the scope of NT Systems;

4.      prohibit causing or permitting the reverse engineering, disassembly or
        decompilation of RTworks Runtime Application;

5.      prohibit title from passing to the End User;

6.      disclaim Talarian's liability for any damages, whether direct, indirect,
        incidental or consequential arising from the use of the RTworks Runtime
        Application;

7.      require the End User, at the termination of the sublicense, to
        discontinue use and destroy or return to Northern Telecom, Manufacturing
        Licensee or Distributor RTworks Runtime Application, its associated
        documentation and all archival or other copies of RTworks Runtime
        Application.

                                                                   Page 19 of 38
<PAGE>   20

                                   SCHEDULE D
                                TECHNICAL SUPPORT

1.      Talarian shall provide Northern Telecom with Technical Support with
        respect to RTworks Software Products. Talarian shall provide written
        notice to Northern Telecom of the identity of any RTworks Software
        Product that is being dropped from Talarian's Applicable Price List and
        the effective date of such change.

2.      Technical Support shall include those services described in Sections 2.1
        through 2.11 of this Schedule.

        2.1    Technical Support shall be provided so as to maintain compliance
               of RTworks Software Products with Specifications.

        2.2    Technical Support shall be provided to ensure the continued
               operation of RTworks Software Products in accordance with
               Specifications and to ensure they remain free of Critical
               Problems and/or Serious Problems. The accompanying RTworks
               Documentation shall remain substantively complete and accurate.

        2.3    Talarian shall provide to Northern Telecom, promptly, upon
               release by Talarian, a copy of all Updates.

        2.4    Talarian shall provide unlimited telephone support from its US
               support centre(s) between the hours of 9:00 a.m. and 5:30 p.m.
               (at Talarian support centre local time zone), Monday to Friday,
               to technical support contacts designated by Northern Telecom
               ("Support Contacts") for RTworks Software Products provided that
               Northern Telecom shall be responsible for providing the first
               line of technical support.

        2.5    Upon receiving notice from Northern Telecom of a bug or error in
               RTworks Software Products covered by Technical Support, Talarian
               shall verbally acknowledge receipt of such notice. A bug report
               must contain sufficient information, on machine-readable media if
               possible, for Talarian to reproduce the bug on Talarian premises.
               Talarian's acknowledgment shall contain a unique number
               identifying the particular bug or error for tracking purposes.
               Talarian shall provide Northern Telecom with a status on any bug
               or error logged for Northern Telecom, provided that Northern
               Telecom identifies the particular bug or error by the tracking
               number assigned to it by Talarian. Northern Telecom may make
               inquiries regarding the status of any bug or error logged for
               Northern Telecom either orally or in writing. Talarian shall
               provide Northern Telecom with a response (i) verbally via a
               Support Contact, or (ii) in writing, by number, describing the
               closing resolution of the bug or error, including the date that
               the necessary fix will be released and the nature of any known
               workaround. Each bug or error logged for Northern Telecom shall
               remain open until closure notification is received by Northern
               Telecom.

                                                                   Page 20 of 38
<PAGE>   21

        2.6    Upon request by Northern Telecom, but no more often than once a
               month, Talarian shall either provide via an electronic mail
               system operated by Talarian or print and circulate to Support
               Contacts for RTworks Software Products a technical bulletin
               containing generally the following types of information:

               (a)    all known bugs or errors in RTworks Software Products and
                      classification of each.

               (b)    any available workarounds.

               (c)    any resolutions and/or fixes.

               (d)    most common error codes.

        2.7    Talarian shall notify Northern Telecom of each new Update a
               minimum of, in the case of major software changes, ninety (90)
               calendar days, and in the case of minor bug fixes and
               enhancements, thirty (30) calendar days prior to the projected
               release date thereof. The notification from Talarian shall
               consist of a written document containing a summary of planned
               changes, to the best of Talarian's knowledge, including
               enhancements and bug fixes, and the planned schedule for beta
               test and final release. Each bug or error fixed (which was logged
               for Northern Telecom) shall be identified by the tracking number,
               as described in Section 2.5 in this Schedule. At least thirty
               (30) days prior to the projected release date, Talarian shall
               provide a written document containing all of the information
               described in this Section 2.7 in this Schedule plus the final
               schedule and changes. Upon request, Northern Telecom may provide
               a site as a beta test site for Talarian for Updates and, in
               exchange, Talarian shall provide beta test versions of the
               RTworks Software Products.

        2.8    Patches or workarounds, made to fix reliability or specific
               performance deficiencies not reported by Northern Telecom in
               RTworks Software Products, may be made by Talarian when required,
               and, upon request, shall be either delivered to Northern Telecom
               within fourteen (14) days or made available to Northern Telecom
               through electronic mail and a published technical bulletin, if
               requested. Each patch and/or workaround delivered to Northern
               Telecom pursuant to this Section 2.8 requires a written
               description of the problem that the patch and/or workaround
               addresses and the requisite installation procedure.

        2.9    Talarian shall provide support to Northern Telecom's Support
               Contacts for RTworks Software Products via electronic mail.
               Northern Telecom shall notify Talarian of any change in the
               identity of Support Contacts. Talarian's electronic mail system
               shall be accessible 24 hours per day, 7 days per week, 365 days
               per year. Talarian shall provide to Northern Telecom the names
               and electronic addresses of its technical personnel providing
               Technical Support to Northern Telecom. Such personnel shall have
               a detailed, working knowledge of RTworks Software Products.
               Talarian shall make all reasonable efforts to have each

                                                                   Page 21 of 38
<PAGE>   22

               problem logged and responded to within eight (8) working hours by
               a qualified technical expert possessing the ability to discuss
               the details of such problem.

               Talarian shall issue a call number (tracking number) to each
               problem reported by Northern Telecom. In the event of a verbal
               report of a bug or error by Northern Telecom, Northern Telecom
               shall provide a prompt and detailed report, via the electronic
               mail system, in a manner that will allow the Talarian to
               reproduce the bug on Talarian premises.

               Talarian's technical support staff shall interrogate, subject to
               the provisions of Section 2.4 of this Schedule, the appropriate
               electronic mail accounts on a regular basis at intervals not to
               exceed three (3) hours.

        2.10   Talarian shall provide a workaround or resolution for a RTworks
               Software Product problem, as the case may be, and any associated
               changes to the accompanying documentation according to the
               following schedule:

               (a)    Critical Problems

                      -   within eight (8) business hours of the first
                          interrogation by Talarian of the appropriate
                          electronic mail accounts.

               (b)    Serious Problems

                      -   within five (5) business days of the first
                          interrogation by Talarian of the appropriate
                          electronic mail accounts.

               (c)    Minor Problems

                      -   fixed in the next Update or new release of Software,
                          issued by Talarian.

               The Parties acknowledge and understand the potentially
               idiosyncratic nature of any bug or error in software. While the
               turnaround times set forth previously in Section 2.10 of this
               Schedule constitute targeted goals of Technical Support to be
               provided by Talarian to Northern Telecom, it is understood by the
               Parties that Talarian shall provide a workaround or resolution
               for at least ninety-five percent (95%) of the Critical Problems
               logged during any thirty (30) day period while this Agreement is
               in effect and for at least ninety-five percent (95%) of the
               Serious Problems logged in any thirty (30) day period while this
               Agreement is in effect, and that failure to satisfy the
               requirements described above shall be grounds for Northern
               Telecom to pursue its remedies as set forth in this Agreement.
               Sporadic failures by Talarian to meet or beat above targeted
               turnaround times do not constitute a default under the Agreement.

        2.11   In the event Northern Telecom requests on-site presence of a
               Talarian engineer at an End User site to diagnose and resolve a
               bug or error due to, for example, such bug or error's peculiar
               nature or, the expectation that such bug or error may not be

                                                                   Page 22 of 38
<PAGE>   23

               easily reproducible at Talarian's premises, then Talarian shall
               make reasonable efforts to have a knowledgeable engineer
               available at such End User site at the shortest time frame
               possible provided that Northern Telecom shall re-imburse Talarian
               for reasonable travel, living and out of pocket expenses related
               to such travel.

                                                                   Page 23 of 38
<PAGE>   24

                                   SCHEDULE E
                                  LICENSE FEES

1.      RTworks Development System

Northern Telecom shall pay to Talarian for each copy of the RTworks Development
System provided by Talarian or made by Northern Telecom a license fee based on
the Applicable Price List and the discount schedule given below. The cumulative
amounts of such license fees shall be computed separately for each Type of NT
System.

<TABLE>
<CAPTION>
       Cumulative amount of
       license fees paid for RTworks
       Development System
       associated with a particular               Discount from
       Type of NT System ($)                      Applicable Price List (%)
       -----------------------------              -------------------------
       <S>                                        <C>
                  0  to 100,000                                0
            100,001  to 250,000                               10
            250,001  to 500,000                               15
            500,000  to 1,000,000                             20
          1,000,000  plus                                     25
</TABLE>

In the event Northern Telecom makes any advance payment to Talarian in respect
of copies of RTworks Development Systems, such amount shall be included in the
computation of cumulative amounts given above and any RTworks Development
Software ordered by Northern Telecom thereafter shall attract license fees based
on the then applicable discount percentage. As an example, in the event Northern
Telecom makes an advance payment of $100,001 to Talarian, any RTworks
Development System license fee shall be computed using a 10% (and not 0%)
discount based on the Applicable Price List and the advance payment shall be
reduced by the discounted amount to compute the available credit.

The Parties acknowledge that Northern Telecom Inc. ordered from Talarian,
through a purchase order numbered EX 191920 and dated 14 April, 1993, RTworks
Development Systems totalling an amount of $33,000 and agree that this amount
shall be grand-fathered in respect of RTworks Development Systems for the DMS
Maintenance Advisor Type of NT System and included in the cumulative amount
given above for such Type of NT System.

2.      RTworks Runtime Application

Northern Telecom shall pay to Talarian for each copy made of the RTworks Runtime
Application Distributed by Northern Telecom, a Manufacturing Licensee or a
Distributor, a license fee based on the Applicable Price List and the discount
schedule given below. The cumulative amounts of such license fees shall be
computed separately for each Type of NT System and shall include the cumulative
amounts for the RTworks Runtime Application and RTworks Development System
associated with such Type of NT System.

                                                                   Page 24 of 38
<PAGE>   25

<TABLE>
<CAPTION>

       Cumulative amount of
       license fees paid for RTworks
       Runtime Application and RTworks
       Development System associated
       with a particular Type of               Discount from
       NT System ($)                           Applicable Price List (%)
       -------------------------------         -------------------------
       <S>                                     <C>
                  0  to 150,000                            25
            150,001  to 400,000                            50
            400,001  to 1,000,000                          70
          1,000,000  plus                                  80
</TABLE>

In the event Northern Telecom makes any advance payment to Talarian in respect
of copies of RTworks Runtime Application, such amount shall be included in the
computation of cumulative amounts given above in this Article (2) and any
RTworks Runtime Application ordered by Northern Telecom thereafter shall attract
license fees based on the then applicable discount percentage. As an example, in
the event Northern Telecom makes an advance payment of $150,001 to Talarian, any
RTworks Runtime Application license fee shall be computed using a 50% (and not
25%) discount based on the Applicable Price List and the advance payment shall
be reduced by the discounted amount to compute the available credit for such
Type of NT System.

The Parties acknowledge that Northern Telecom Inc. ordered from Talarian,
through a purchase order numbered EX191920 and dated 14 April, 1993, RTworks
Runtime Applications totalling an amount of $5,000 and agree that this amount
shall be grand-fathered in respect of RTworks Runtime Applications for the DMS
Maintenance Advisor Type of NT System and included in the cumulative amount
given above for such Type of NT System.

3.      Fees for Technical Support

Northern Telecom shall, subject to the provisions of Article 5.5 and Article 8
of this Agreement, pay to Talarian, at each anniversary of the Effective Date of
this Agreement, for Technical Support in respect of RTworks Development Systems,
an annual amount equal to 18% of the cumulative license fees paid for (excluding
any remaining credits) RTworks Development Systems.

In respect of each Type of NT System, Northern Telecom shall, subject to the
provisions of Article 5.5 and Article 8 of this Agreement, pay to Talarian, at
each anniversary of the Effective Date of this Agreement, for Technical Support
in respect of RTworks Runtime Applications, an annual amount equal to 18% of the
cumulative license fees paid for (excluding any remaining credits) RTworks
Runtime Applications. In the event the cumulative license fees paid to Talarian
in respect of RTworks Development Systems and RTworks Runtime Systems in respect
of each Type of NT System (excluding any remaining credits) reaches $400,000,
then 9% shall be applied to any amount beyond the $400,000 (and not 18%) in the
calculation of the fees for Technical Support.

                                                                   Page 25 of 38
<PAGE>   26

Notwithstanding the provisions of this Article 3 in this Schedule E, fees for
Technical Support in respect of each Type of NT System shall not exceed $180,000
for any period between successive anniversary dates of the Effective Date.

                                                                   Page 26 of 38

<PAGE>   27
                                   SCHEDULE F
                               TALARIAN TRADEMARKS

Registered Trademarks of Talarian Corporation
---------------------------------------------
        RTworks

        Talarian

Trademarks of Talarian Corporation
----------------------------------
        RTie

        RTdaq

        RThci

        RTdraw

        RTsdb

        RTsdbtool

        RTserver

        RTgen

        RTarchive

        RTplayback

                                                                   Page 27 of 38
<PAGE>   28

                                   SCHEDULE G
                          TALARIAN TRADEMARK GUIDELINES

Northern Telecom shall use its own general guidelines.

                                                                   Page 28 of 38

<PAGE>   29

                                   SCHEDULE H
                                ESCROW AGREEMENT

THIS SOFTWARE ESCROW AGREEMENT EFFECTIVE AS OF THE _______________ DAY OF
__________________ 19__.

BY AND BETWEEN:         Talarian Corporation;

                        (hereinafter referred to as "TALARIAN");

AND:                    NORTHERN TELECOM LIMITED, a corporation incorporated
                        under the laws of Canada, with its executive offices at
                        3 Robert Speck Parkway, Mississauga, Ontario, Canada L4Z
                        3C8

                        (hereinafter referred to as "Northern Telecom");

AND:                                                            ,
                        -----------------------------------

                        (hereinafter referred to as "Trustee");

WHEREAS:

(a)   TALARIAN and Northern Telecom have entered into a Value Added Reseller
      Agreement (the "VAR Agreement") whereby TALARIAN has granted to Northern
      Telecom a license or other rights permitting Northern Telecom to use and
      distribute certain software products described in Appendix "A" hereof
      (herein referred to as the "Software");

(b)   To assure the continued availability of such products, and their continued
      support, for Northern Telecom in accordance with the VAR Agreement,
      TALARIAN agrees to establish and maintain in trust the source code and
      other items applicable to the products as identified in the VAR Agreement
      ("Escrow Materials");

(c)   Trustee is agreeable to store and release such Escrow Materials under the
      terms of this Agreement; and

(d)   TALARIAN consents to this Agreement.

NOW THEREFORE, in consideration of the premises and the terms and conditions
contained herein, TALARIAN, Northern Telecom and Trustee covenant and agree as
follows:

1.    PREAMBLE AND DEFINITIONS

1.1   The preamble shall form part of this Agreement as if recited at length
      herein.

                                                                   Page 29 of 38

<PAGE>   30
1.2   In this Agreement:

      (a)   "Escrow Materials" shall have the meaning assigned to it in the
            preamble hereto.

2.    DEPOSIT AND SUBSTITUTION

2.1   Within five (5) business days of execution of this Agreement by all the
      Parties hereto, and upon release to Northern Telecom of any modification
      to RTworks Development System or RTworks Runtime Application respectively,
      pursuant to the VAR Agreement, while the VAR Agreement is in force,
      TALARIAN shall, following the provision to Northern Telecom of the
      technical assistance contemplated in the VAR Agreement, deposit a copy of
      the current version of the Escrow Materials with the Trustee with the name
      of Northern Telecom thereon and identification as to program name and
      revision number, whereupon the Trustee shall return any prior version in
      its possession to TALARIAN.

2.2   The Trustee shall be under no obligation to verify upon deposit or
      subsequently that RTworks Development System so deposited is the basis for
      the Software subject to the VAR Agreement.

3.    INSPECTION

3.1   In order to verify that TALARIAN has satisfied its obligations hereunder
      Northern Telecom may at any time call for inspection of Escrow Materials
      in the manner and subject to the conditions below:

      3.1.1. Northern Telecom shall notify TALARIAN and the Trustee of its
             request for an inspection in writing not less than (10) business
             days in advance, and shall appoint a time between 9:00 and 17:00
             hours and place for such inspection.

      3.1.2. Trustee shall attend at the appointed time and place and shall
             thereat produce the sealed container to be inspected.

      3.1.3. TALARIAN shall attend thereat, failing which a determination that
             TALARIAN has, or has not, satisfied its obligations hereunder, may
             be made in TALARIAN's absence.

      3.1.4. The contents of the sealed container shall be inspected by
             TALARIAN, Northern Telecom, and a determination made as to whether
             they are as purported to be by TALARIAN on the face of the
             container.

      3.1.5. If the contents are determined to be as purported, then they will
             be resealed and returned to the Trustee to hold in escrow.

      3.1.6. If the contents are determined not to be as purported, then a copy
             of RTworks Development System complying with TALARIAN's obligations
             hereunder shall be made by TALARIAN, and delivered forthwith to
             Trustee with notice to Northern Telecom.

                                                                   Page 30 of 38

<PAGE>   31

      3.1.7. The parties shall do all things and produce all materials in their
             possession or control necessary to comply with the letter and
             intent of this paragraph.

3.2   Expenses and fees for the first two (2) inspections of Escrow Materials in
      any calendar year shall be borne by TALARIAN. In the event Northern
      Telecom requires further inspections of Escrow Materials, then Northern
      Telecom shall be responsible from such fees and expenses of such
      additional inspections.

4.    TERM OF AGREEMENT

4.1   This Agreement shall remain in full force and effect until the
      cancellation or termination of the VAR Agreement, unless terminated
      earlier in accordance with the terms of this Agreement. Northern Telecom
      may retain this Agreement in effect following the termination of the VAR
      Agreement, if not terminated because of breach by Northern Telecom, in the
      event it pays the Trustee's full charges associated with such continuance
      and provides prior written notice of such election to TALARIAN.

5.    CHARGES

5.1   TALARIAN shall pay Trustee's charges for services which charges shall not
      exceed as follows:

      5.1.1 $________ on account of the receipt and handling of the Escrow
             Materials pursuant to Article 2 herein, payable within thirty (30)
             days of the effective date of the Agreement;

      5.1.2. $________ on account of receipt of each updated Escrow Materials
             payable within thirty (30) days of such receipt.

      5.1.3. Upon each anniversary of this Agreement on at least two (2) months'
             prior written notice to TALARIAN and Northern Telecom, Trustee may
             increase the charges payable during the next twelve (12) month
             period. Any increase in such charges shall be limited to the
             percentage increase in the Consumer Price Index (All Items) as
             published by Statistics Canada during the period since the last
             increase or any successor like measurement. In no event however,
             shall the charges hereunder exceed the published standard list
             prices for such services generally charged by Trustee.

      5.1.4. In addition to the charges set out in this Agreement, TALARIAN
             shall pay any applicable taxes, or fees or amounts in lieu of such
             taxes, paid or payable by the Trustee, and levied or based upon
             such charges or on this Agreement or services rendered, exclusive
             however of taxes based on the Trustee's net income.

      5.1.5. Northern Telecom shall pay directly to the Trustee all applicable
             inspection charges and related taxes.

                                                                   Page 31 of 38

<PAGE>   32
6.    TITLE TO AND RETENTION OF RTWORKS DEVELOPMENT SYSTEM

6.1   The parties hereby agree that Trustee is hereby appointed to act as
      depository for Northern Telecom and to receive copy of the Escrow
      Materials in accordance with the provisions of this Agreement

6.2   Ownership of the copy of the Escrow Materials which is deposited with
      Trustee will vest in Trustee immediately upon deposit, and will be
      transferred to Northern Telecom upon release of such copy by the Trustee
      in accordance with this Agreement and such ownership of the copy shall
      entitle Northern Telecom to use the Escrow Materials in accordance with
      this Agreement and the VAR Agreement. Notwithstanding this transfer of
      ownership in the copy of the Escrow Materials, TALARIAN will at all times
      retain ownership of the copyright and all other intellectual property
      rights in the Escrow Materials.

7.    RELEASE OF THE ESCROW MATERIALS TO LICENSEE

7.1   In the event TALARIAN gives notice to Trustee consenting to release of the
Escrow Materials to Northern Telecom, or in the event Northern Telecom becomes
entitled to access the Escrow Materials for the reasons set out in the VAR
Agreement between TALARIAN and Northern Telecom, or in the event that TALARIAN
makes a general assignment to the benefit of creditors, is adjudged bankrupt by
final judgment, makes any proposal to its creditors under bankruptcy or
insolvency legislation or if a custodian, receiver or manager is appointed for
all the property of TALARIAN, Trustee shall release all copies of the Escrow
Materials in its possession for the benefit of Northern Telecom to Northern
Telecom on the thirtieth (30th) day (or the next business day thereafter) after
receipt of a written request for release, provided:

      7.1.1. Northern Telecom has delivered to Trustee a written request for the
             release of the Escrow Materials, accompanied by a Statutory
             Declaration in a form satisfactory to Trustee from a senior officer
             of Northern Telecom stating the particulars of the reasons for its
             request and confirm that copy of such request has been delivered to
             TALARIAN;

      7.1.2. a copy of the request and Statutory Declaration have been delivered
             to TALARIAN, and TALARIAN has received at least fifteen (15) days
             notice prior to the contemplated release of RTworks Development
             System; and

      7.1.3. no written notice of dispute by TALARIAN has been received by
             Trustee within fifteen (15) days of receipt of Northern Telecom's
             notice by Trustee.

7.2   In the event that Trustee received such notice of dispute, Trustee shall
      not deliver copies of the Escrow Materials to Northern Telecom until
      directed to do so by a final judgment of a court of competent
      jurisdiction, and upon receipt and compliance with such directions by
      Trustee, this Agreement shall terminate.

7.3   Notwithstanding the preceding provisions of this Article 7, in the event
      Northern Telecom provides a written request to Trustee for the release of
      the Escrow Materials, accompanied by a Statutory Declaration from a senior
      officer of Northern Telecom,

                                                                   Page 32 of 38

<PAGE>   33
      alleging that one or more of the stipulations in Article __, Escrow of the
      Value Added Reseller Agreement between Northern Telecom and TALARIAN dated
      _____________ has been realized, and provides to TALARIAN copy of such
      request and Statutory Declaration no later than the day on which they are
      given to Trustee, Trustee shall deliver the Escrow Materials to Northern
      Telecom forthwith without delay after having verified with TALARIAN by
      telecopier that TALARIAN has received copy of such request and Statutory
      Declaration or having made a reasonable effort to do so. Trustee shall
      notify TALARIAN of such delivery, but shall in no event delay such
      delivery, pending the giving of notice, or the receipt of any reply from
      TALARIAN.

      In the event that any of Northern Telecom's operative allegations
      contained in a notice delivered pursuant to the immediately preceding
      paragraph is incorrect, Northern Telecom shall pay to TALARIAN an amount
      not to exceed $10,000 Canadian funds representing TALARIAN's liquidated
      damages resulting from Northern Telecom's action or an amount equal to the
      actual damages incurred by TALARIAN as a result of such action, whichever
      amount is the greater.

7.4   This Agreement shall be terminated upon delivery to Northern Telecom of a
      copy of the Escrow Materials in accordance with the provisions of this
      Article 7 of this Agreement.

8.    OBLIGATION OF TRUSTEE AND NORTHERN TELECOM UPON TERMINATION

8.1   In case Northern Telecom wishes to terminate the present Agreement, it
      must give written notice to TALARIAN and Trustee, upon which the Trustee
      shall remit the Escrow Materials to TALARIAN.

8.2   Upon the expiration or termination of the VAR Agreement, TALARIAN shall
      give written notice of such termination or expiration to Trustee with copy
      to Northern Telecom, failing which Northern Telecom may give such notice.
      Following the expiration of thirty (30) days from the receipt of such
      notice by Trustee:

      8.2.1 Trustee shall cease to have any obligation to Northern Telecom with
            regard to the Escrow Materials; and

      8.2.2 Trustee shall return all copies of the Escrow Materials to TALARIAN
            provided Trustee has not received any written notice of dispute by
            Northern Telecom within twenty-five (25) days of receipt of notice
            of expiration or termination of the VAR Agreement by Trustee.

8.3   In the event that Trustee received such notice of dispute, Trustee shall
      not deliver copies of the Escrow Materials to Northern Telecom until
      directed to do so by a judgment of a court of competent jurisdiction, and,
      upon receipt and compliance with such directions by Trustee, this
      Agreement shall terminate.

                                                                   Page 33 of 38

<PAGE>   34

9.    INDEMNIFICATION OF TRUSTEE

9.1   Trustee shall not, by reason of its signing this Agreement, assume any
      responsibility or liability for any transaction between TALARIAN and
      Northern Telecom other than the performance of its obligations in
      accordance with this Agreement. Except for a breach of the obligations set
      out herein, in no event shall Trustee be liable to any Party hereto for
      indirect, consequential or incidental damages.

9.2   The Party on whose behalf, or pursuant to whose direction the Trustee
      acts, shall indemnity and hold harmless the Trustee from any and all
      liability, damages, costs or expenses, including reasonable counsel fees,
      that shall be sustained or incurred by the Trustee as a result of such
      actions by the Trustee, except for a breach by the Trustee of its
      obligations set out herein.

10.   NON-DISCLOSURE BY TRUSTEE

10.1  Trustee recognizes and agrees that the Escrow Materials are valuable
      proprietary and confidential information of TALARIAN and agrees to hold
      same in strict confidence and to take all appropriate actions to preserve
      its confidentiality. Except as expressly provided for in this Agreement,
      Trustee agrees that it will not use of disclose, divulge or make available
      the Escrow Materials to any person, association, firm, partnership or
      corporation either directly or indirectly, in any manner whatsoever.

11.   NON-DISCLOSURE BY NORTHERN TELECOM

11.1  Northern Telecom recognizes and agrees that the Escrow Materials are
      valuable proprietary and confidential information of TALARIAN. Northern
      Telecom agrees to hold same in confidence and to preserve its
      confidentiality in the event that it obtains same from Trustee pursuant to
      this Agreement. Northern Telecom agrees that, if it obtains the Escrow
      Materials as provided for in this Agreement, Northern Telecom shall be
      entitled to use the Escrow Materials solely for the purposes set forth in
      the VAR Agreement. Northern Telecom further agrees not to disclose the
      Escrow Materials to any third party except as may be required to enable
      Northern Telecom to obtain support or manufacturing services or supplies
      of necessary components, or in accordance with the VAR Agreement. Northern
      Telecom shall secure from any party to whom such disclosure may be made
      written covenant that it will not disclose the Escrow Materials or make
      use thereof for any purposes except performing services or supplying goods
      to Northern Telecom.

12.   NOTICES

12.1  All notices or other communications to be given by any party shall be in
      writing and may be given by personal delivery or sent by registered or
      certified mail and if given by mail, shall be deemed given five (5) days
      after such is deposited in the mail, during normal postal conditions
      throughout such period, to the party for which it is intended at the
      following addresses:

                                                                   Page 34 of 38

<PAGE>   35

TALARIAN:
                   -----------------------
                   -----------------------
                   -----------------------

Northern Telecom:

                   -----------------------
                   -----------------------
                   -----------------------

Trustee:

                   -----------------------
                   -----------------------
                   -----------------------

until further notice.

13.   CHANGE OF TRUSTEE

13.1  In case the Trustee becomes insolvent or winds up or surrenders to its
      creditors or is in the process of making arrangement with them, or if a
      receiver or any such officer if appointed for the administration of the
      Trustee's assets, or if a bankruptcy is petitioned by or against the
      Trustee or any action is levied with regard to reorganization or
      liquidation of the Trustee according to any applicable legislation, then
      TALARIAN and Northern Telecom shall by common agreement choose another
      trustee (the "New trustee") to whom the Escrow Materials should be
      remitted under the same terms and conditions as this Agreement's.

13.2  In such event, upon receipt by the Trustee of a joint written notice from
      TALARIAN and Northern Telecom, Trustee must remit the Escrow Materials to
      the New trustee designated in such notice.

13.3  In case the Trustee fails to carry out the stipulations of the previous
      paragraph, TALARIAN may remit to the New trustee a new copy of the Escrow
      Materials to be governed by the terms of a new Software Escrow Agreement.

14.   GENERAL

14.1  This Agreement shall not be assigned by any Party hereto without the prior
      written consent of the other Parties hereto.

14.2  This Agreement shall be governed by the laws in force in the Province of
      Ontario.

14.3  Should any provision of this Agreement be held illegal by final judgment,
      the remaining provisions shall continue in full force and effect. In such
      event, the parties shall use their best efforts to replace the illegal
      provision by a legal provision having the same commercial effect.

14.4  This Agreement constitutes the entire agreement between the Parties with
      respect to the subject matter hereof and merges all prior agreements and
      negotiations, and there are no warranties, representations or agreements
      among the parties in connection with the subject matter hereof except as
      specifically set forth and referred to herein.

                                                                   Page 35 of 38

<PAGE>   36

14.5  The Agreement has been drafted in English at the express wish of the
      Parties.

IN WITNESS WHEREOF, the Parties have executed this Agreement by their officers
duly authorized as they so declare as of the date first written above.

TALARIAN CORPORATION                        NORTHERN TELECOM LIMITED

Per:                                        Per:
     -------------------------------            ------------------------------
     Name in Print                              Name in Print

------------------------------------        ----------------------------------
Title                                       Title

"TRUSTEE"

Per:
    --------------------------------
     Name in Print

------------------------------------
Title

                                                                   Page 36 of 38

<PAGE>   37

APPENDIX "A"

DESCRIPTION OF SOFTWARE

TITLE:
                          ----------------------------

RELEASE NUMBER:
                          ----------------------------

                                                                   Page 37 of 38

<PAGE>   38

SCHEDULE "B"

ESCROW MATERIALS

                                                                   Page 38 of 38

<PAGE>   39

                            AMENDING AGREEMENT NO. 1

This is an agreement to amend the Value Added Reseller Agreement effective
December 17, 1993 (the "Agreement") between Talarian Corporation, a corporation
duly incorporated under the laws of California, with offices at 444 Castro
Street, Suite 140, Mountain View, California, 94041, United States of America
("Talarian"), and Northern Telecom Limited, a corporation duly incorporated
under the laws of Canada, having its executive offices at 8200 Dixie Road,
Brampton, Ontario, Canada L6T 5P6, and its subsidiaries ("Northern Telecom").

WHEREAS the parties desire to amend the Agreement to revise the license fees and
fees for Technical Support applicable to the SuperNode Data Manager;

NOW THEREFORE, in consideration of the premises and the mutual obligations
herein contained, the parties hereto agree as follows:

1.    The definition of "NT System" in Section 1 of the Agreement is amended by
      replacing the words "Schedule B" in the first line thereof with the words
      "an NT System Schedule".

2.    The following is added immediately following the definition of "NT System"
      in Section 1 of the Agreement:

               "NT System Schedule" shall mean a schedule substantially in the
               form of Schedule "B" hereto completed with respect to each NT
               System subject to this Agreement which provides a brief
               description of the NT System pertaining thereto and any special
               terms and conditions applicable in respect of such NT System."

3.    Section 2.3 of the Agreement is amended in its entirety as follows:

               "Northern Telecom may at any time while this Agreement is in
               effect add a new NT System to this Agreement by completing a new
               NT System Schedule and providing a copy thereof to Talarian,
               provided that Northern Telecom shall not specify any additional
               terms and conditions with respect to such new NT System without
               Talarian's consent. In the event Northern Telecom requests
               additional terms and conditions (such specific terms and
               conditions including but not limited to provisions for royalty,
               buy-out or a revised fee structure) with respect to such new NT
               System, the parties shall negotiate in good faith to agree on
               such specific terms and conditions."

4.    In Section 5.2 of the Agreement the words "and the applicable NT System
      Schedule" are inserted immediately following the words "Schedule E".

5.      In the last line of Section 8, the words "and the applicable NT System
        Schedule" are added immediately following the words "Schedule "E".

                                       1
<PAGE>   40

6.    Schedule B of the Agreement is deleted in its entirety and replaced by the
      NT System Schedules attached hereto.

7.    Within 30 days following execution of this Amending Agreement No. 1,
      Northern Telecom shall pay Talarian the sum of $12,500 in partial
      consideration of the inclusion of the NT System Schedule governing the
      licensing of the NT System known as SuperNode Data Manager.

IN WITNESS WHEREOF the parties hereto have caused this Amending Agreement No. 1
to be executed by their duly authorized representatives which shall be effective
as of the date of the last signature below.

NORTHERN TELECOM LIMITED                        TALARIAN CORPORATION

By:      /s/ W.M. Campbell                      By:   /s/ Paul A. Larson
    -------------------------------------          ---------------------------

Name:    W.M. Campbell                          Name:    Paul A. Larson
      -----------------------------------            -------------------------

Title:   Director, DMS OAM Evolution            Title:   President
      -----------------------------------             ------------------------

By:      /s/ Richard A. Brait
   --------------------------------------
Name:    Richard A. Brait
     ------------------------------------
Title:   Asst. General Counsel
      -----------------------------------

                                       2
<PAGE>   41

                               NT SYSTEM SCHEDULE

IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THE TERMS AND CONDITIONS OF THIS NT
SYSTEM SCHEDULE AND THE AGREEMENT, THE PROVISIONS OF THIS NT SYSTEM SCHEDULE
SHALL BE CONTROLLING WITH RESPECT TO THE TYPE OF NT SYSTEM PERTAINING HERETO.

NT System:     DMS Maintenance Advisor

The Primary purpose of the DMS Maintenance Advisor is to significantly reduce
the manual tasks involved in maintaining, analyzing and presenting problems from
a Network of DMS switches. The system provides:

(i)   a problem analyzer using expert system technology;

(ii)  a configured interface to collect DMS switch information; and

(iii) a Human machine graphical interface.

The initial release of the DMS Maintenance Advisor shall include capabilities
for:

(i)   real-time DMS maintenance and problem analysis;

(ii)  using expert system technology in the automation of the detection,
analysis and resolution recommendation of DMS switch problems;

(iii) reducing work content by organizing and presenting complex analysis tasks
in user-understandable manner; and

(iv)  providing proactive maintenance capabilities of multiple DMS switches from
a single center.

Special terms:  none.
--------------

                                       3
<PAGE>   42

                               NT SYSTEM SCHEDULE

IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THE TERMS AND CONDITIONS OF THIS NT
SYSTEM SCHEDULE AND THE AGREEMENT, THE PROVISIONS OF THIS NT SYSTEM SCHEDULE
SHALL BE CONTROLLING WITH RESPECT TO THE TYPE OF NT SYSTEM PERTAINING HERETO.

NT System:     Integrated Network Management

Integrated Network Management is a series of applications which provide
consolidated operations, administration, management and provisioning (OAM&P) for
a variety of Nortel and non-Nortel SONET network elements. The capabilities
provided include centralized network surveillance, alarm management, connection
provisioning, software Delivery, remote inventory and performance monitoring.

Special terms:  none.
--------------

                                       4
<PAGE>   43

                               NT SYSTEM SCHEDULE

IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THE TERMS AND CONDITIONS OF THIS NT
SYSTEM SCHEDULE AND THE AGREEMENT, THE PROVISIONS OF THIS NT SYSTEM SCHEDULE
SHALL BE CONTROLLING WITH RESPECT TO THE TYPE OF NT SYSTEM PERTAINING HERETO.

NT System:     Network Resource Manager

Network Resource Manager is a series of applications which provide consolidated
operations, administration, management and provisioning (OAM&P) for a variety of
Nortel and non-Nortel SDH network elements. The capabilities provided include
centralized network surveillance, alarm management, connection provisioning,
software Delivery, remote inventory and performance monitoring.

Special terms:  none.
--------------

                                       5

<PAGE>   44

                               NT SYSTEM SCHEDULE

IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THE TERMS AND CONDITIONS OF THIS NT
SYSTEM SCHEDULE AND THE AGREEMENT, THE PROVISIONS OF THIS NT SYSTEM SCHEDULE
SHALL BE CONTROLLING WITH RESPECT TO THE TYPE OF NT SYSTEM PERTAINING HERETO.

NT System: SuperNode Data Manager ("SDM")
---------

SDM is a Unix-based operations, administration and maintenance ("OAM") server
within the DMS SuperNode architecture comprised of computing hardware, a UNIX
Base Operating System, and Northern Telecom system software and OAM
applications. Functions such as surveillance and provisioning form part of the
OAM applications.

Special terms:

1.    In this NT System Schedule,

      a)    "Northern Telecom Application Program" means a software application
            developed by Northern Telecom for incorporation into the SDM product
            using the RTie component and no other components of the RTworks
            Development System;

      b)    "Knowledge Base Upgrade" means software that increases the number of
            rules contained in the Knowledge Base of a Northern Telecom
            Application Program;

      c)    "RTworks Functionality Upgrade" means an Update to the RTworks
            Development System which adds new functionality thereto; .

      d)    "Delivery" means a sale or lease by Northern Telecom or a
            Manufacturing Licensee directly or indirectly through a Distributor
            to an End User.

2.    Northern Telecom shall pay Talarian the following fees in respect of each
      Delivery mentioned below:

      a)    For the Delivery of a copy of a Northern Telecom Application Program
            for incorporation into an SDM:

            i)    $500, only if as a result of the installation of that copy,
                  the Knowledge Base thereof employs no more than 120 rules;

            ii)   $750, only if as a result of the installation of that copy,
                  the Knowledge Base thereof employs more than 120 and no more
                  than 300 rules;

            iii)  $1000, only if as a result of the installation of that copy,
                  the Knowledge Base thereof employs more than 300 rules; or

            iv)   $0 in any other case; and

                                       6
<PAGE>   45

      b)    Subject to paragraph 3 below, for the Delivery of an SDM to a DMS100
            NA100 End User without a copy of the Northern Telecom Application
            Program known as RTie/Exception Reporting:

            i)    $500, only if that DMS100 NA100 End User is taking Delivery of
                  that SDM for integration with a DMS SuperNode Switch within
                  which an SDM is not already installed; or

            ii)   $0 in any other case; and

      c)    For the Delivery of a copy of a Knowledge Base Upgrade for
            integration in a Northern Telecom Application Program in respect of
            which a license fee has been paid pursuant to sub-paragraph 2(a):

            i)    $250 only if immediately prior to the installation of that
                  copy, the Knowledge Base component of the Northern Telecom
                  Application Program employs no more than 120 rules and
                  immediately thereafter employs more than 120 rules and no more
                  than 300 rules;

            ii)   $500 only if immediately prior to the installation of that
                  copy, the Knowledge Base component of the Northern Telecom
                  Application Program employs no more than 120 rules and,
                  immediately thereafter employs more than 300 rules;

            iii)  $250 only if immediately prior to the installation of that
                  copy, the Knowledge Base component of the Northern Telecom
                  Application Program employs more than 120 rules and no more
                  than 300 rules and immediately thereafter employs more than
                  300 rules; or

            iv)   $0 in any other case; and

      d)    For the Delivery of a copy of a Northern Telecom Application Program
            in respect of which a license fee has been paid pursuant to
            sub-paragraph 2(a) and which utilizes new functionality derived from
            an RTworks Functionality Upgrade:

            i)    $45.00 only if immediately before the installation of that
                  copy of the Northern Telecom Application Program, the
                  Knowledge Base component thereof employs no more than 120
                  rules;

            ii)   $67.50 only if immediately before the installation of that
                  copy of the Northern Telecom Application Program, the
                  Knowledge Base component thereof employs more than 120 rules
                  and no more than 300 rules;

            iii)  $90.00 only if immediately before the installation of that
                  copy of the Northern Telecom Application Program, the
                  Knowledge Base component thereof employs more than 300 rules;
                  or

            iv)   $0 in any other case.

                                       7
<PAGE>   46

                  provided that the aggregate of all amounts paid under this
                  sub-paragraph 2(d) shall not exceed $20,000 in any calendar
                  year.

3.    If, for any reason, Northern Telecom should decide to discontinue the
      marketing and distribution of the Northern Telecom Application Program
      known as RTie/Exception Reporting to DMS100 NA100 End Users, sub-paragraph
      2(b) shall cease to be of force and effect.

4.    Sub-paragraph 2(d) notwithstanding, the payment by Northern Telecom of
      Technical Support fees under this Agreement entitles Northern Telecom to
      distribute, without liability for additional fees, copies of Northern
      Telecom Application Programs within which may be integrated Updates to the
      RTworks Development System.

5.    Provided Talarian agrees to execute a confidentiality and non-disclosure
      agreement on terms satisfactory to Northern Telecom, Talarian reserves the
      right to inspect the source code expression of Northern Telecom
      Application Programs and to inspect those records of Northern Telecom
      which record the Delivery of copies of Northern Telecom Application
      Programs and copies of RTworks Functionality Upgrades solely for the
      purpose of verifying the number of rules employed by Northern Telecom
      Application Programs.

IN WITNESS WHEREOF the parties hereto consent to aforementioned special terms by
causing the execution of this NT System Schedule by their duly authorized
representatives.

TALARIAN CORPORATION                          NORTHERN TELECOM LIMITED

By:      /s/ Paul A. Larson                   By:      /s/ W.M. Campbell
    ----------------------------------           -----------------------------

Name:    Paul A. Larson                       Name:    W.M. Campbell
      --------------------------------             ---------------------------

Date:    9/15/97                              Date:    9/29/97
      --------------------------------             ---------------------------

                                              By:      /s/ Richard A. Brait
                                                  ----------------------------

                                              Name:    Richard A. Brait
                                                   ---------------------------

                                              Date:    9/30/97
                                                   ----------------------------

                                       8<PAGE>   1

                                                                 EXHIBIT 10.17.7

                                            SECURITIES ACCOUNT CONTROL AGREEMENT
WELLS FARGO BANK                                 (WELLS FARGO BANK INTERMEDIARY)
--------------------------------------------------------------------------------

THIS SECURITIES ACCOUNT CONTROL AGREEMENT (this "Agreement") is entered into as
of MAY 1, 2000, by and among CHOLESTECH CORPORATION ("Customer"), WELLS FARGO
BANK, NATIONAL ASSOCIATION, acting through its Investment Group
("Intermediary"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, acting through its
EAST BAY RCBO Office ("Secured Party").

                                    RECITALS

  A. Customer maintains that certain INVESTMENT MANAGEMENT Account No.
358-210114 (the "Securities Account") with Intermediary pursuant to an agreement
between Intermediary and Customer dated as of DECEMBER 2, 1996, and governed by
the laws of the State of CALIFORNIA (the "Account Agreement"), and Customer has
granted to Secured Party a security interest in the Securities Account and all
financial assets and other property now or at any time hereafter held in the
Securities Account.

  B. Secured Party, Customer and Intermediary have agreed to enter into this
Agreement to perfect Secured Party's security interests in the Collateral, as
defined below.

NOW, THEREFORE, in consideration of their mutual covenants and promises, the
parties agree as follows:

  1.  DEFINITIONS.  As used herein:

  (a) the term "Collateral" shall mean: (i) the Securities Account; (ii) all
financial assets credited to the Securities Account; (iii) all security
entitlements with respect to the financial assets credited to the Securities
Account; (iv) any and all other investment property or assets maintained or
recorded in the Securities Account; and (v) all replacements or substitutions
for, and proceeds of the sale or other disposition of, any of the foregoing,
including without limitation, cash proceeds; and

  (b) the terms "investment property," "entitlement order," "financial asset"
and "security entitlement" shall have the respective meanings set forth in the
California Uniform Commercial Code. The parties hereby expressly agree that all
property, including without limitation, cash, certificates of deposit and mutual
funds, at any time held in the Securities Account is to be treated as a
"financial asset."

  2. AGREEMENT FOR CONTROL. Intermediary is authorized by Customer and agrees to
comply with all entitlement orders originated by Secured Party with respect to
the Securities Account, and all other requests or instructions from Secured
Party regarding disposition and/or delivery of the Collateral, without further
consent or direction from Customer or any other party.

  3. CUSTOMER'S RIGHTS WITH RESPECT TO THE COLLATERAL.

  (a) Until Intermediary is notified otherwise by Secured Party: (i) Customer,
or any party authorized by Customer to advise or otherwise act with respect to
the Securities Account, may give trading instructions to Intermediary with
respect to Collateral in the Securities Account; and (ii) Intermediary may
distribute to Customer or any other party in accordance with Customer's
directions that portion of the Collateral which consists of interest and/or cash
dividends earned on financial assets maintained in the Securities Account.

<PAGE>   2

  (b) Without Secured Party's prior written consent, except to the permitted by
Section 3(a) hereof: (i) neither Customer nor any party other than Secured Party
may withdraw any Collateral from the Securities Account; and (ii) Intermediary
will not comply with any entitlement order or request to withdraw any Collateral
from the Securities Account given by any party other than Secured Party.

  (c) Upon receipt of either written or oral notice from Secured Party: (i)
Intermediary shall promptly cease complying with entitlement orders and other
instructions concerning the Collateral, including the Securities Account, from
all parties other than Secured Party; and (ii) Intermediary shall not make any
further distributions of any Collateral to any party other than Secured Party,
nor permit any further voluntary changes in the financial assets.

  4. INTERMEDIARY'S ACKNOWLEDGEMENTS. Intermediary acknowledges that:

  (a) The Securities Account is maintained with Intermediary solely in
Customer's name.

  (b) Intermediary has no knowledge of any claim to, security interest in or
lien upon any of the Collateral, except: (i) the security interests in favor of
Secured Party; and (ii) Intermediary's liens securing fees and charges, or
payment for open trade commitments, as described in Section 4(c) hereof.

  (c) Any claim to, security interest in or lien upon any of the Collateral
which Intermediary now has or at any time hereafter acquires shall be junior and
subordinate to the security interests of Secured Party in the Collateral, except
for Intermediary's liens securing: (i) fees and charges owed by Customer with
respect to the operation of the Securities Account; and (ii) payment owed to
Intermediary for open trade commitments for purchases in and for the Securities
Account.

  5. AGREEMENTS OF INTERMEDIARY AND CUSTOMER. Intermediary and Customer agree
that:

  (a) Intermediary shall flag its books, records and systems to reflect Secured
Party's security interest in the Collateral, and shall provide notice thereof to
any party making inquiry as to Customer's accounts with Intermediary to whom
Intermediary is legally required or permitted to provide information.

  (b) Intermediary shall send copies of all statements relating to the
Securities Account simultaneously to Customer and Secured Party.

  (c) Intermediary shall promptly notify Secured Party if any other party
asserts any claim to, security interest in or lien upon any of the Collateral,
and Intermediary shall not enter into any control, custodial or other similar
agreement with any other party that would create or acknowledge the existence of
any such other claim, security interest or lien.

  (d) Without Secured Party's prior written consent, Intermediary and Customer
shall not amend, modify or terminate the Account Agreement, other than: (i)
amendments to reflect ordinary and reasonable changes in Intermediary's fees and
charges for handling the Securities Account; and (ii) operational changes
initiated by Intermediary as long as they do not alter any of Secured Party's
rights hereunder.

  6.  MISCELLANEOUS.

  (a) This Agreement shall not create any obligation or duty of Intermediary
except as expressly set forth herein.

  (b) In the event of any conflict between this Agreement and the Account
Agreement or any other agreement between Intermediary and Customer, the terms of
this Agreement shall control.

<PAGE>   3

  (c) All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing (unless otherwise specifically provided) and delivered to each party
at the address or facsimile number set forth below its signature, or to such
other address or facsimile number as any party may designate by written notice
to all other parties. Each such notice, request and demand shall be deemed given
or made as follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by
facsimile, upon receipt; and (iii) if sent by mail, upon the earlier of the date
of receipt or 3 days after deposit in the U.S. mail, first class and postage
prepaid.

  (d) This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties. This Agreement may be amended or modified only in writing signed
by all parties hereto.

  (e) This Agreement shall terminate upon Intermediary's receipt of written
notice from Secured Party expressly stating that Secured Party no longer claims
any security interest in the Collateral.

  (f) This Agreement shall be governed by and construed in accordance with the
laws of the State of California.

  IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first set forth above.

WELLS FARGO BANK,                           WELLS FARGO BANK,
NATIONAL ASSOCIATION,                       NATIONAL ASSOCIATION,
Acting through its                          acting through its
Investment Group                            East Bay RCBO Office
  WELLS CAPITAL MANAGEMENT

By: /s/ Paul Johnson                        By:/s/ Jose B. Henriquez
   -----------------------------------         ---------------------------------
    PAUL JOHNSON, Client Administrator      JOSE B. HENRIQUEZ
Title: Client Administrator                 Title: Relationship Manager

Address: 525 MARKET STREET, 10TH FLOOR      Address: ONE KAISER PLAZA
         SAN FRANCISCO, CA 94105                     SUITE 850
                                                     OAKLAND, CA 94612

CHOLESTECH CORPORATION

By: /s/ Warren Pinckert
   -----------------------------------
    Warren Pinckert, President

Address: 3347 INVESTMENT BLVD.
         HAYWARD, CA 94545

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]