EXHIBIT 4.2
SUPPORT AGREEMENT - GFI/OCM
SUPPORT AGREEMENT, dated as of February 14, 2002 (the "Support Agreement"),
by and between Itron, Inc. ("Itron") and OCM/GFI Power Opportunities Fund, L.P.
(the "Shareholder").
RECITALS
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A. Itron, LS Combination, Inc. ("Merger Sub") and LineSoft Corporation
(the "Company") are entering into an Agreement and Plan of Reorganization of
even date herewith in the form attached hereto as Exhibit A (the "Merger
Agreement") which provides (subject to the conditions set forth therein) for the
merger of the Merger Sub with and into the Company (the "Merger").
B. The Shareholder has received and reviewed a copy of the Merger
Agreement.
C. The Shareholder owns the shares of Company Common Stock (the "Common
Stock") as identified on Annex I hereto (such shares, together with all shares
of Common Stock of the Company, if any, subsequently acquired by the Shareholder
during the term of this Support Agreement, being referred to as the "Shares").
D. Itron would not enter into the Merger Agreement without the
Shareholder's execution and delivery of this Support Agreement.
E. In order to induce Itron to enter into the Merger Agreement, the
Shareholder has agreed to enter into and perform the Shareholder's obligations
under this Support Agreement.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the Shareholder and Itron agree as follows:
AGREEMENT
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Capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Merger Agreement.
1. Irrevocable Proxy; Agreement to Vote Shares
The Shareholder shall execute an irrevocable written proxy in substantially
the form of Exhibit B with respect to the Shares, and shall, if requested by
Itron, vote or cause such Shares to be voted (a) in favor of adoption and
approval of the Merger Agreement (as in effect on the date hereof) and all
transactions relating thereto or contemplated thereby at every meeting of the
shareholders of the Company at which such matters are considered and at every
adjournment thereof and in connection with every proposal to take action by
written consent with respect thereto, and (b) against any proposal by a party
other than Itron to merge or consolidate with the Company or any subsidiary of
the Company or to sell all or substantially all the assets of or any sales of
equity interest in the Company or any subsidiary of the Company at every meeting
of the shareholders of the Company at which such matters are considered and at
every adjournment thereof and in connection with every proposal to take action
by written consent with respect thereto. The Shareholder also agrees, if
requested by Itron, to vote or cause such Shares to be voted in favor of any
payment to be made by the Company or Itron to a "disqualified person" (as
defined in Section 280G of the Internal Revenue Code) with respect to the
Company in accordance with the shareholder approval requirements of Section 280G
of the Internal Revenue Code.
2. No Voting Trusts
The Shareholder agrees that the Shareholder will not, nor will the
Shareholder permit any entity under the Shareholder's control to, deposit any
Shares in a voting trust or subject the Shares to any agreement, arrangement or
understanding with respect to the voting of the Shares inconsistent with this
Support Agreement.
3. Limitation on Sales
During the term of this Support Agreement, the Shareholder agrees not to
sell, assign, transfer, pledge, encumber or otherwise dispose of any of the
Shares except to Itron.
4. Waiver of Dissenters' Rights
The Shareholder hereby irrevocably and unconditionally waives, and agrees
to cause to be waived and to prevent the exercise of, any rights of appraisal,
any dissenters' rights and any similar rights relating to the Merger that the
Shareholder may have by virtue of the ownership of any outstanding Shares.
5. Letter of Transmittal
As soon as practicable following the Effective Time of the Merger, the
Shareholder shall execute and deliver a letter of transmittal as contemplated
under Section 3.3(c) of the Merger Agreement.
6. Agreement to Certain Provisions of of Merger Agreement
The Shareholder, by signing in the space provided below, agrees to be bound
(subject to the consummation of the Merger) by the provisions of Section 3.2 and
Section 6.1(c) of the Merger Agreement, as if the Shareholder were a party
thereto. Itron, by signing in the space provided below, acknowledges that the
Shareholder is a third-party beneficiary of the provisions of Section 3.2 and
Section 6.1(c) of the Merger Agreement, and acknowledges that such Sections
provide the Shareholder the right to receive certain Earnout Payments and/or
Earnout Prepayment Amounts and to certain registration rights with respect to
Itron Common Shares issued in connection therewith, subject to the satisfaction
of conditions as specified in the Merger Agreement.
7. Restrictions on Sale of Itron Common Stock
The Shareholder, by signing in the space provided below, agrees that for a
period of [one year] following the Effective Time of the Merger, the Shareholder
will not in any 30-day period sell, contract to sell, transfer or otherwise
dispose of more than fifty percent (50%) of the Itron Common Stock received by
the Shareholder in connection with the consummation of the Merger.
8. Indemnification of Itron
The Shareholder, by signing in the space provided below, agrees to be bound
(subject to the consummation of the Merger) to pay, on a several (and not joint)
basis, the Shareholder's pro rata
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portion (as specified in Section 10.6(a) of the Merger Agreement) of the Company
Shareholders' indemnification obligations in accordance with Article [X] of the
Merger Agreement, as if the Shareholder were a party thereto, and acknowledges
that such provisions call for the Shareholder as well as other Company
Shareholders to indemnify Itron in accordance with the Merger Agreement, subject
to the limitations thereof.
9. Tax Matters
9.1 The Shareholder shall timely pay, and shall indemnify and hold each of
Itron and Merger Sub harmless from and against, all transfer, documentary,
sales, use, stamp, registration and similar taxes, and the Shareholder's own
income taxes, on the transfer of Shares contemplated by the Merger Agreement, to
the extent they relate specifically to the issuance of shares of Itron Common
Stock to Shareholder, and Shareholder shall, at Shareholder's own expense, file
all necessary tax returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, income, registration, and similar
taxes.
9.2 Except as otherwise required by a Governmental Entity pursuant to a
determination (as defined in Section 1313 of the Code) or otherwise, or by
applicable law, the Shareholder shall not take a position on any tax returns or
take any other action inconsistent with the treatment of the Merger for tax
purposes as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code; provided, however, that if the closing price of a share of Itron Common
Stock as reported by Nasdaq at 4:00 p.m. Eastern Standard Time on the Closing
Date is less than $15.50, then this Section 9.2 shall be of no further force or
effect. Notwithstanding anything to the contrary herein, neither Itron nor
Merger Sub makes any representation or warranty with respect to any tax
consequences to the Company or the Shareholder under this Agreement, the Merger
Agreement or as a result of the Merger, except as otherwise set forth in the
Merger Agreement.
10. Representations and Warranties of Shareholder
The Shareholder represents and warrants to Itron as follows:
10.1 Authority; No Approvals; No Conflicts; No Liens
The Shareholder has the necessary power or capacity (as the case may be)
and authority to execute this Support Agreement, to make the representations,
warranties and covenants herein and to perform the obligations hereunder. This
Support Agreement is duly executed and is a legal, valid and binding obligation
of the Shareholder, enforceable in accordance with its terms.
The execution, delivery and performance of this Support Agreement by the
Shareholder will not (a) constitute a violation (with or without the giving of
notice or lapse of time or both) of any provision of any law applicable to the
Shareholder, (b) require any consent, approval or authorization of, or notice
to, any person, corporation, partnership, domestic or foreign governmental
authority or other organization or entity, (c) result in a default under, an
acceleration or termination of, or the creation in any party of the right to
accelerate, terminate, modify or cancel, any material agreement, lease, note or
other restriction, encumbrance, obligation or liability to which the Shareholder
is a party or by which the Shareholder is bound or (d) result in the creation or
imposition of any lien on any of the Shares of Company Common Stock held by the
Shareholder.
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10.2 Ownership of Shares
Annex I hereto correctly sets forth, as of the date of this Support
Agreement, the number of shares of Common Stock owned beneficially and of record
by the Shareholder. The Shareholder owns beneficially and of record the Shares
set forth on Annex I free and clear of any lien, encumbrance, preemptive right,
right of first offer or refusal, or other prior claim, and delivery of the
certificates representing the Shares by the Shareholder to the Exchange Agent at
the Effective Time of the Merger, pursuant to the terms of the Merger Agreement
will be sufficient to allow the Shares to be cancelled, free and clear of any
lien, encumbrance, preemptive right, right of first offer or refusal, or other
prior claim.
10.3 Sophistication; Accreditation
The Shareholder, either alone or with the assistance of Shareholder's
professional advisor, is a sophisticated investor, able to fend for
Shareholder's interests in the transactions contemplated by the Operative
Documents, and has such knowledge and experience in financial and business
matters that Shareholder is capable of evaluating the merits and risks of the
prospective investment in Itron Common Stock.
The Itron Common Stock being acquired by the Shareholder in the Merger is
for investment for Shareholder's respective account, not as a nominee or agent;
the undersigned has no present intention of selling, granting any participation
in or otherwise distributing any of the Itron Common Stock in a manner contrary
to the Securities Act or to any applicable state securities or Blue Sky law, nor
does the undersigned have any contract, undertaking, agreement or arrangement
with any person or entity to sell, transfer or grant a participation to such
person or entity with respect to any of the Itron Common Stock to be received in
the Merger.
10.4 Claims Against the Company
The Shareholder does not have any past, present or contemplated claims
against the Company or any of its officers and directors. Shareholder and the
Company shall continue to be parties to the agreements and instruments
identified in Section 20.1 of this Agreement until terminated as provided in
Section 20.1.
10.5 Residency
The Shareholder is a resident of the state as set forth on Annex I.
10.6 Accuracy of Representations
The representations and warranties contained in this Support Agreement are
accurate in all respects as of the date of this Support Agreement and will be
accurate in all respects at all times through the Effective Time of the Merger.
11. Specific Performance
The Shareholder acknowledges that in the event of any breach of this
Support Agreement by the Shareholder, Itron would be irreparably harmed, no
adequate remedy at law or in damages would exist and damages would be difficult
to determine. Accordingly, the Shareholder agrees that injunctive
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relief or other equitable remedy, in addition to all remedies at law or in
damages, is the appropriate remedy for any such failure and will not oppose the
granting of such relief on the basis that Itron has an adequate remedy at law.
The Shareholder agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with the
seeking or obtaining of such equitable relief by Itron.
12. Attorneys' Fees
If any action at law or in equity is necessary to enforce or interpret the
terms of this Support Agreement, the prevailing party will be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
13. Non-Exclusivity
The rights and remedies of Itron under this Support Agreement are not
exclusive of or limited by any other rights or remedies which it may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative).
14. Term of Support Agreement; Termination
The term of this Support Agreement shall commence on the date hereof and
terminate upon the first to occur of (a) the date on which the Merger Agreement
is terminated in accordance with its terms, or (b) the latest to occur of (i)
the date on which the determination of the final Earnout Payment, if any,
becomes conclusive and binding, (ii) the date on which the final Earnout
Payment, if any, has been paid, (iii) the date on which each required payment
related to, or in lieu of, each Earnout Payment, if any, has been paid, (iv) the
date on which Itron has fully satisfied its registration obligations specified
in Section 6.1(c) of the Merger Agreement in connection with Itron Common Shares
issued as part of an Earnout Payment and/or Earnout Payment Amount, and (v) the
expiration of the survival and indemnification periods applicable to the
Shareholder and Itron as specified in the Merger Agreement. Upon such
termination, no party shall have any further obligations or liabilities
hereunder; provided, however, such termination shall not relieve any party from
liability for any breach of this Support Agreement prior to such termination.
15. Entire Support Agreement
This Support Agreement and the Merger Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersedes all prior agreements and understandings between the
parties with respect thereto.
16. Assignment; Binding Effect
Except as provided herein, neither this Support Agreement nor any of the
interests or obligations hereunder may be assigned or delegated by the
Shareholder and any attempted or purported assignment or delegation of any of
such interests or obligations shall be void. Subject to the preceding sentence,
this Support Agreement shall be binding upon the Shareholder and Shareholder's
heirs, estate, executors, personal representatives, successors and assigns, and
shall inure to the benefit of Itron and its successors and assigns. This Support
Agreement shall be binding upon any person or entity to whom any Shares are
transferred.
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17. Indemnification
Each party hereto shall hold harmless and indemnify the other party (the
"Indemnified Party") from and against, and shall compensate and reimburse the
Indemnified Party for, any loss, damage, claim, liability, fee (including
reasonable attorneys' fees), demand, cost or expense (regardless of whether or
not such loss, damage, claim, liability, fee, demand, cost or expense relates to
a third-party claim) that is directly or indirectly suffered or incurred by the
Indemnified Party, or to which the Indemnified Party becomes subject, and that
arises directly or indirectly from, or relates directly or indirectly to, any
inaccuracy in or breach of any representation, warranty, covenant or obligation
of the indemnifying party contained in this Support Agreement.
18. Expenses
All costs and expenses incurred in connection with the transactions
contemplated by this Support Agreement shall be paid by the party incurring such
costs and expenses.
19. Notices
Any notice or other communication required or permitted to be delivered to
Itron or the Shareholder under this Support Agreement shall be in writing and
shall be deemed properly delivered, given and received when delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile
confirmation obtained) to the address or facsimile number set forth beneath the
name of such party below (or to such other address or facsimile number as such
party shall have specified in a written notice given to the other party):
If to the Shareholder:
At the address or facsimile number set forth on the signature page.
With a copy to:
C. Xxxx Xxxxxxx
Xxxxxxx Xxxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
and to:
Xxxxxxx X. Xxxx
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
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If to Itron:
Xxxxx X. Xxxxxxxxx
Itron, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Xxxxxx Xxx
Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
20. Miscellaneous
20.1 Termination of Rights
Effective immediately prior to, and subject to the consummation of the
Merger, any past, present or future rights that the Shareholder may have
pursuant to the Securities Purchase Agreement dated April 20, 2000, the Warrant
to Purchase Shares of Common Stock of the Company dated May 11, 2000, the
Security Holders Agreement dated May 11, 2000, the Side Letter Agreement dated
May 11, 2000 and the Amended and Restated Stock Restriction Agreement for the
Company dated May 11, 2000, and any other agreement, contract or understanding
relating to corporate governance, registration rights, rights of first refusal
or first offer, co-sale rights, stock purchase rights and similar rights
relating to securities of the Company shall terminate.
20.2 Severability
If any provision of this Support Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability, and the
remainder of this Support Agreement shall not be affected.
20.3 Capacity
The covenants contained herein shall apply to the Shareholder solely in the
Shareholder's capacity as a shareholder of the Company, and no covenant
contained herein shall apply to the Shareholder in any capacity of the
Shareholder as an officer and/or director of the Company.
20.4 Counterparts
This Support Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
20.5 Headings
All Section headings herein are for convenience of reference only and are
not part of this Support Agreement, and no construction or reference shall be
derived therefrom.
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20.6 Choice of Law
This Support Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of
Washington, without reference to its conflicts of law principles.
20.7 WAIVER OF JURY TRIAL
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS SUPPORT
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
20.8 Amendment or Modification
This Support Agreement may be amended, modified and supplemented only by
written agreement of all parties.
(remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Support Agreement as of the date first written above.
SHAREHOLDER
OCM/GFI Power Opportunities Fund, L.P.
By: GFI Energy Ventures, LLC, its general partner
---------------------------------------------
BY: /s/ Xxx Xxxxxxxx
----------------------------------------
TITLE: Chief Financial Officer
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Address: 00000 Xxx Xxxxxxx Xxxx., Xxxxx 000
-----------------------------------
Xxx Xxxxxxx, XX 00000
-----------------------------------
Fax: (000) 000-0000
ITRON, INC.
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BY: /s/ Xxxxx Xxxxxxx
----------------------------------------
TITLE: Chief Executive Officer
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ANNEX I
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Number of Shares
of Common Stock
Name of Shareholder State of Residency Owned
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OCM/GFI Power Opportunities Delaware 11,401,520
Fund, L.P.
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EXHIBIT A
AGREEMENT AND PLAN OF
REORGANIZATION
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EXHIBIT B
IRREVOCABLE PROXY TO VOTE STOCK OF
LINESOFT CORPORATION
The undersigned shareholder of LineSoft Corporation, a Washington
corporation ("LineSoft"), hereby irrevocably (to the full extent permitted by
Section 23B.07.220 of the Washington Business Corporation Act) appoints [the
President and Chief Financial Officer of Itron, Inc.], as the sole and exclusive
attorneys and proxies of the undersigned, with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to the full
extent that the undersigned is entitled to do so) with respect to all of the
shares of capital stock of LineSoft that now are or hereafter may be
beneficially owned by the undersigned, and any and all other shares or
securities of LineSoft issued or issuable in respect thereof on or after the
date hereof (collectively, the "Shares") in accordance with the terms of this
Proxy, including the limitations set forth in the following paragraph. The
Shares beneficially owned by the undersigned shareholder of LineSoft as of the
date of this Proxy are listed below. Upon the undersigned's execution of this
Proxy, any and all prior proxies given by the undersigned with respect to any
Shares are hereby revoked and the undersigned agrees not to grant any subsequent
proxies with respect to the Shares until this Proxy shall have terminated as
provided below.
This Proxy is irrevocable (as provided in Section 23B.07.220 of the
Washington Business Corporation Act) and is granted in consideration of LineSoft
entering into that certain Agreement and Plan of Reorganization, dated as of the
date hereof (the "Merger Agreement"), by and among LineSoft, LS Combination,
Inc. and Itron, Inc. ("Itron"). This Proxy is limited to the voting and the
exercise of all other rights of the undersigned with respect to the Shares (a)
in favor of adoption and approval of the Merger Agreement and all transactions
relating thereto or contemplated thereby at every meeting of the shareholders of
the Company at which such matters are considered and at every adjournment
thereof and in connection with every proposal to take action by written consent
with respect thereto, and (b) against any proposal by a party other than Itron
or its affiliate to merge or consolidate with the Company or any subsidiary of
the Company or to sell all or substantially all the assets of or any sales of
equity interest in the Company or any subsidiary of the Company at every meeting
of the shareholders of the Company at which such matters are considered and at
every adjournment thereof and in connection with every proposal to take action
by written consent with respect thereto. The undersigned shareholder retains the
right to vote the Shares on all other matters.
This Proxy shall terminate on the earlier of June 30, 2002 or the
"Effective Time of the Merger" (as defined in the Merger Agreement).
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: February __, 2002
________________________________________________
OCM/GFI Power Opportunities Fund, L.P.
Shares beneficially owned: __________ shares of
LineSoft Corporation Common Stock
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