EXHIBIT 99.2
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PARTICIPATION AGREEMENT
This Participation Agreement dated as of June 6, 1996 (the "Agreement") by
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and among Pure Software Inc., a Delaware corporation ("Pure"), CST Acquisition
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Corporation, a Massachusetts corporation and a wholly-owned subsidiary of Pure
(the "Merger Sub"), and the stockholders who are signatories hereto (the "Major
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Stockholders") of Atria Software, Inc., a Massachusetts corporation ("Atria").
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Capitalized terms not defined herein have the meanings assigned to them in the
Agreement and Plan of Reorganization (the "Merger Agreement") dated the date
hereof by and among Pure, the Merger Sub and Atria.
WITNESSETH:
WHEREAS, pursuant to the Merger Agreement, Pure, the Merger Sub and Atria
have agreed to merge (the "Merger") the Merger Sub with and into Atria on the
terms and conditions set forth therein; and
WHEREAS, to induce Pure to enter into the Merger Agreement, each of the
Major Stockholders, as principal stockholders of Atria, has agreed to enter into
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
COVENANTS
1.1 Covenants and Agreements. Each of the Major Stockholders hereby
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covenants and agrees with Pure and the Merger Sub as follows:
1.1(a) Cooperation. It shall cooperate fully with Atria, Pure and
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the Merger Sub in furnishing any information or performing any action reasonably
requested by any such party, which information or action is necessary or
appropriate for the speedy and successful consummation of the transactions
contemplated by the Merger Agreement or is necessary or appropriate for the
corporate purposes of Pure. It shall use all reasonable efforts to cause the
Closing to occur at the earliest practical time.
1.1(b) Other Required Information. It shall furnish to Atria, Pure
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and the Merger Sub all information concerning itself and its subsidiaries and
affiliates, if applicable, as is required to be set forth in any application or
statement to be filed with
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any Governmental Entity in connection with the transactions contemplated by the
Merger Agreement or otherwise.
1.1(c) Publicity. Except as otherwise required by applicable law or
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stock exchange or securities market regulations, it shall not issue any press
release or make any other public statement without obtaining the prior approval
of Pure to the contents and the manner of presentation and publication thereof.
1.1(d) Restriction on Sales of Atria Common Stock and Pure Common
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Stock. It agrees to comply with the restrictions on transfer of shares of Atria
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Common Stock or Pure Common Stock set forth in that certain Affiliate Agreement
of even date herewith.
1.1(e) Other Negotiations. It agrees to fully comply with the
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provisions of Section 5.4 of the Merger Agreement.
1.1(f) Agreement to Vote Shares. At every meeting of the
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stockholders of Atria held on or prior to the Expiration Date, and at every
adjournment thereof, and on every action or approval by written consent of the
stockholders of Atria, it shall vote all shares of Atria capital stock owned by
it: (i) in favor of approval and adoption of the Merger Agreement and the
Merger and any matter that could reasonably be expected to facilitate the Merger
and (ii) against approval of any proposal made in opposition to or competition
with consummation of the Merger (an "Opposing Proposal").
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1.1(g) Agreement to Grant Proxy. It shall execute and deliver to
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Pure within five days of Pure's written request therefor a valid and binding
irrevocable proxy in any form reasonably proposed by Pure granting Pure (or its
designees) the authority to vote its shares of capital stock of Atria in
accordance with and subject to the limitations of Section 1.1(f).
1.1(h) No Proxy Solicitations. Except as required by law, including
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actions which it determines upon the written advice of legal counsel are
required pursuant to its fiduciary duties as a Director (as defined below) under
applicable law, it shall not, and will not permit any person under its control
to: (i) solicit proxies or become a "participant" in a "solicitation" (as such
terms are defined in Regulation 14A under the Exchange Act) with respect to an
Opposing Proposal; or (ii) initiate a stockholders' vote or action by consent of
Atria stockholders with respect to an Opposing Proposal.
1.1(i) Obligations as Director and/or Officer. If at any time prior
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to the expiration of this Agreement a representative of the Major Stockholder is
a member of the Board of Directors of Atria ("Director") or an officer of Atria,
nothing in this Agreement
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shall limit or restrict the Director or officer in acting in his capacity as a
Director or officer, as the case may be, of Atria and exercising his fiduciary
duties and responsibilities, it being agreed and understood that this Agreement
shall apply to the Major Stockholder solely in its capacity as a shareholder and
shall not apply to the Director's or officer's actions, judgments or decisions
as a Director or officer of Atria.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Major Stockholders. Each of the
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Major Stockholders hereby represents and warrants to Pure and the Merger Sub as
follows:
2.1(a) Existence and Power. If the Major Stockholder is a
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corporation, partnership or trust, it is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization.
2.1(b) Authorization; Binding Agreement. The execution, delivery and
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performance by the Major Stockholder, if it is a corporation, partnership or
trust, of this Agreement are within its corporate, partnership or trust power
and authority and have been duly authorized by all necessary corporate,
partnership or trust action on the part of the Major Stockholder. This
Agreement has been duly executed and delivered by the Major Stockholder and
constitutes a valid and binding agreement of the Major Stockholder, enforceable
against the Major Stockholder in accordance with its terms.
2.1(c) Governmental Authorization. The execution, delivery and
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performance by it of this Agreement does not require any action by or in respect
of, or declaration, filing or registration with, any Governmental Entity.
2.1(d) Non-Contravention. The execution, delivery and performance by
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it of this Agreement does not and will not (i) if it is a corporation,
partnership or trust, contravene or conflict with its organizational documents,
or (ii) contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding upon or
applicable to it.
2.1(e) Litigation. There is no action, suit, investigation or
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proceeding (or any basis therefor) pending against or, to the knowledge of the
Major Stockholder, threatened against or affecting, the Major Stockholder or any
of its respective properties before any court or arbitrator or any governmental
body, agency, official or authority that in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement or the Merger Agreement.
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2.1(f) Finders' Fees. There is no investment banker, broker, finder
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or other intermediary that has been retained by or is authorized to act on
behalf of the Major Stockholder who might be entitled to any fee or commission
from Pure, Atria or any of their affiliates upon consummation of the
transactions contemplated by this Agreement or the Merger Agreement.
2.1(g) Ownership of Stock. The Major Stockholder is the record and
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beneficial owner of the shares of Atria Common Stock set forth in the Affiliate
Agreement, and owns all such shares free and clear of any and all liens,
pledges, charges, security interests, restrictions or encumbrances of any kind
or any rights of first refusal (other than in favor of Atria), voting trusts,
proxies or other arrangements or understandings, whether written or oral, and
the Major Stockholder has the sole and exclusive right and power to exercise all
voting rights and other rights with respect to such shares.
2.1(h) Certain Tax Matters. The Major Stockholder has no plan or
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intention to engage in a direct or indirect sale, exchange, redemption,
disposition or conveyance or any transaction that would have the effect of
reducing in any way the Major Stockholder's risk of ownership, including, but
not limited to, distributions by a partnership to its partners and by a
corporation to its stockholders, of the shares of Pure Common Stock to be
received by the Major Stockholder in the Merger. The Major Stockholder
acknowledges that it is giving this representation and covenant to enable Testa,
Hurwitz & Thibeault, LLP and Wilson, Sonsini, Goodrich & Rosati to opine that
the Merger constitutes a reorganization within the meaning of Section 368 of the
Code and further recognizes that significant adverse tax consequences might
result if such representation is not true. The Major Stockholder understands
and agrees that, in connection with the Merger, the Major Stockholder will be
required to restate the foregoing representation on or about the Effective Time
of the Merger.
ARTICLE III
MISCELLANEOUS
3.1 Survival; Termination. (a) All representations and warranties in this
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Agreement shall survive the Closing. Any investigation or other examination
that may have been made or may be made at any time by or on behalf of the party
to whom representations and warranties are made shall not limit, diminish or in
any way affect the representations and warranties in this Agreement, and the
parties may rely on the representations and warranties in this Agreement
irrespective of any information obtained by them by any investigation,
examination or otherwise.
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(b) The covenants contained in Sections 1.1(a), 1.1(b), 1.1(e),
1.1(f), 1.1(g), 1.1(h) and 1.1(i) (but not any liability for any breach
thereof) shall terminate at the Effective Time. All other covenants contained
in this Agreement shall survive the Merger.
(c) This Agreement shall terminate in all respects upon termination of
the Merger Agreement (but not any liability for any breach hereof).
3.2 Specific Performance. Each of the parties to this Agreement hereby
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acknowledges that the other party will have no adequate remedy at law if it
fails to perform any of its obligations under this Agreement. In such event,
each of the parties agrees that the other party shall have the right, in
addition to any other rights it may have (whether at law or in equity), to
specific performance of this Agreement.
3.3 Further Assurances. If at any time after the Effective Time, Pure or
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the Merger Sub shall consider it advisable that any further conveyance,
agreements, documents, instruments and assurances of law or any other things are
necessary or desirable to vest, perfect, confirm or record in the Merger Sub the
title to any property, rights, privileges, powers and franchises of Atria, the
officers of Atria last in office and such other persons, if any, as the Board of
Directors of Atria last in office may authorize shall execute and deliver, upon
Pure or the Merger Sub's request, any and all proper conveyances, agreements,
documents, instruments and assurances of law, and do all things necessary or
proper to vest, perfect, confirm or record title to such property, rights,
privileges, powers and franchises in the Merger Sub, and otherwise to carry out
the provisions of this Agreement.
3.4 Parties in Interest. All the terms and provisions of this Agreement
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shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective successors and permitted assigns of the parties hereto. Nothing
expressed or implied in this Agreement is intended or shall be construed to
confer upon or give any person, firm or corporation other than the parties
hereto, their permitted successors or assigns, and their respective stockholders
any rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.
3.5 Entire Agreement. This Agreement and the Merger Agreement (together
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with the Exhibits, the Pure Disclosure Schedule, the Atria Disclosure Schedule
and the other documents delivered pursuant thereto) constitute the entire
agreement between the parties and supersede all prior agreements and
understandings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof.
3.6 Amendment or Modification. At any time before or after the adoption
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of the Agreement by the stockholders of Atria or the approval of the proposals
contained in
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the Proxy Statement by the stockholders of Pure and Atria, this Agreement may be
amended or supplemented by additional agreements, articles or certificates, in
writing, as may be determined by the parties hereto to be necessary, desirable
or expedient to further the purposes of this Agreement, or to clarify the
intention of the parties hereto, or to add to or to modify the covenants, terms
or conditions hereof or to effect or facilitate any governmental approval or
acceptance of the Merger or of this Agreement or to effect or facilitate the
filing or recording of the Agreement or the consummation of any of the
transactions contemplated hereby or thereby.
3.7 No Waiver. The failure of any party hereto to enforce at any time any
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of the provisions of this Agreement shall in no way be construed to be a waiver
of any such provision, nor in any way to affect the validity of this Agreement
or any part hereof or the right of such party thereafter to enforce each and
every such provision. No waiver of any breach of or non-compliance with this
Agreement shall be held to be a waiver of any other or subsequent breach or non-
compliance.
3.8 Assignability. This Agreement shall not be assignable by the Major
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Stockholder, on the one hand, or Pure or the Merger Sub, on the other hand,
without the prior written consent of Pure or the Merger Sub, on the one hand, or
the Major Stockholder, on the other hand.
3.9 Headings and Interpretation. The headings contained in this Agreement
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are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement. Terms such as "herein", "hereof",
"hereinafter" refer to this Agreement as a whole and not to the particular
sentence or paragraph where they appear, unless the context otherwise requires.
Unless the context otherwise requires, (i) terms used in the plural include the
singular, and vice versa, and (ii) words in the masculine gender include the
feminine, and vice versa.
3.10 Notices. All notices, requests, claims, demands and other
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communications under this Agreement shall be in writing and shall be deemed to
have been duly given when received at the addresses set forth in the Merger
Agreement, in the case of Pure, the Merger Sub, and the books and records of
Atria, in the case of the Major Stockholder, or to such other address as any
party may have furnished to the others in writing in accordance herewith, except
that notices of change of address shall only be effective upon receipt.
3.11 Law Governing. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
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3.12 Invalidity of Provisions. Each of the provisions contained in this
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Agreement is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of competent
jurisdiction shall not affect the validity or enforceability of any other
provision hereof.
3.13 Counterparts. This Agreement may be executed simultaneously in one or
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more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties on the date first above written.
PURE SOFTWARE INC.
By:___________________________
Name:
Title:
CST ACQUISITION CORPORATION
By:___________________________
Name:
Title:
MAJOR STOCKHOLDERS
(print name of stockholder above)
By:____________________________
Name:
Title:
(if applicable)