EXHIBIT 99.3
PARTICIPATION AGREEMENT
This Participation Agreement dated as of June 6, 1996 (the "Agreement") by
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and among Atria Software, Inc., a Massachusetts corporation ("Atria") and the
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stockholders of who are signatories hereto (the "Major Stockholder") of Pure
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Software Inc., a Delaware corporation ("Pure"). 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
and CST Acquisition Corporation, a Massachusetts corporation and a wholly-owned
subsidiary of Pure (the "Merger Sub"), and Atria.
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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 Atria to enter into the Merger Agreement, each of the
Major Stockholders, as principal stockholders of Pure, 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 Atria 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 Atria. 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 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 Atria to the contents and the manner of presentation and publication thereof.
1.1(d) Restriction on Sales of Pure Common Stock. It agrees to
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comply with the restrictions on transfer of shares of 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 Pure 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 Pure, it shall vote all shares of Pure 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"). "Expiration Date"
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shall mean the earlier of (i) such time as the Merger shall become effective in
accordance with the terms and provisions of the Merger Agreement and (ii) such
time as the Merger Agreement shall have been terminated pursuant to Article VII
thereof.
1.1(g) Agreement to Grant Proxy. It shall execute and deliver to
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Atria within five days of Atria's written request therefor a valid and binding
irrevocable proxy in any form reasonably proposed by Atria granting Atria (or
its designees) the authority to vote its shares of capital stock of Pure in
accordance with and subject to the limitation of Section 1.1(f)Atria.
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
Pure 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 a Major Stockholder is a
member of the Board of Directors of Pure ("Director") or an officer of Pure,
nothing in this Agreement shall limit or restrict the Director or officer in
acting in his capacity as a director or officer, as the case may be, of Pure 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 Pure.
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 Atria 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.
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 Pure 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 Pure), voting trusts,
proxies or other arrangements or understandings, whether written or oral, and
Major Stockholder has the sole and exclusive right and power to exercise all
voting rights and other rights with respect to such shares.
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.
(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 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.
3.4 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.
3.5 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 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.
3.6 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.
3.7 Assignability. This Agreement shall not be assignable by Atria, on
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the one hand, or the Major Stockholder, on the other hand, without the prior
written consent of the Major Stockholder, on the one hand, or Atria, on the
other hand.
3.8 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.
3.9 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 Atria, and the books and records of Pure, in the case
of the Major Stockholders, 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.
3.10 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.
3.11 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.
3.12 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.
ATRIA SOFTWARE, INC.
By:________________________________
Name:
Title:
MAJOR STOCKHOLDERS
(print name of stockholder above)
By:_________________________________
Name:
Title:
(if applicable)