Exhibit 10.2

EXECUTION VERSION

 

LOGO [g457477dsp9.jpg]   

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

601 W 1st Ave, 8th Floor

Spokane, WA 99201

 

WF INVESTMENT HOLDINGS, LLC

WELLS FARGO SECURITIES, LLC

550 California Street, 12th Floor

San Francisco, CA 94104

September 17, 2017

Itron, Inc.

2111 North Molter Road

Liberty Lake, Washington 99019

Attention: Joan Hooper, Senior Vice President and Chief Financial Officer

 

  Re: Project Snowbird Commitment Letter

$1,102.5 Million Senior Secured Credit Facilities

$350.0 Million Senior Bridge Facility

Ladies and Gentlemen:

You have advised Wells Fargo Bank, National Association (“Wells Fargo Bank”), WF
Investment Holdings, LLC (“WF Investments”) and Wells Fargo Securities, LLC
(“Wells Fargo Securities” and, collectively with Wells Fargo Bank and WF
Investments, the “Commitment Parties” or “we” or “us”) that Itron, Inc., a
Washington corporation (the “Borrower” or “you”) seeks financing to consummate
the Transactions (such term and each other capitalized term used but not defined
herein having the meanings assigned to them in the Term Sheets (as defined
below) or the Existing Credit Agreement, as applicable). As part of the
Transactions, you have advised us that you intend to amend the Existing Credit
Agreement to permit the Acquisition, the Term Loan B Facility, the issuance of
the Notes and/or the borrowings under the Bridge Facility and to make certain
other amendments to the Existing Credit Agreement as described in the Senior
Secured Credit Facilities Summary of Proposed Terms and Conditions attached
hereto as Annex A (the “Bank Term Sheet”) (such amendments, collectively, the
“Backstopped Amendments”; for the avoidance of doubt, in no event shall the
extension of the maturity date of the Term Loan A Facility or the Revolving
Credit Facility constitute a Backstopped Amendment). This letter, including the
Bank Term Sheet, the Senior Unsecured Bridge Facility Summary of Proposed Terms
and Conditions attached hereto as Annex B (the “Bridge Term Sheet”, and together
with the Bank Term Sheet, the “Term Sheets”) and the Conditions Annex attached
hereto as Annex C (the “Conditions Annex”), is hereinafter referred to as the
“Commitment Letter”.

1. Commitments. Upon the terms and subject to the conditions set forth in this
Commitment Letter (including, for the avoidance of doubt, the Conditions Annex)
and in the fee letter dated the date hereof from the Commitment Parties to you
(the “Fee Letter”):

(a) Wells Fargo Bank is pleased to advise you of its commitment to provide to
the Borrower 100% of the principal amount of the Term Loan B Facility (the “Term
Loan B Facility Commitment”);

(b) Wells Fargo Bank is pleased to advise you of its agreement to use
commercially reasonable efforts to arrange each of the Backstopped Amendments,
and solely in the event that the

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requisite consent for the Backstopped Amendments cannot be obtained, its
commitment to (i) provide to the Borrower a new term loan A facility in an
amount equal to the aggregate principal amount of the Term Loans (as defined in
the Existing Credit Agreement) outstanding as of the Acquisition Closing Date
before giving effect to the Backstopped Amendments (the “Term Loan A Backstop
Commitment”), the proceeds of which will be used on the Acquisition Closing Date
to refinance all outstanding loans under the Term Loan A Facility and (ii) to
provide a new revolving credit facility in an amount equal to $500.0 million
(the “Revolver Backstop Commitment” and, together with the Term Loan A Backstop
Commitment, the “Backstop Commitments”), which commitments (and the proceeds of
revolving loans thereunder) will be used on the Acquisition Closing Date to
refinance the commitments in respect of the Revolving Credit Facility and all
the loans outstanding on the Acquisition Closing Date under the Revolving Credit
Facility (the credit facilities in respect of the additional commitments
described in this paragraph (b), the “Backstop Facilities”, and together with
the Term Loan B Facility, the “Senior Credit Facilities”); and

(c) WF Investments is pleased to advise you of its commitment to provide to the
Borrower 100% of the principal amount of the Bridge Facility (the “Bridge
Commitment” and, together with the Term Loan B Facility Commitment and the
Backstop Commitments, the “Commitments”). The Bridge Facility together with the
Senior Credit Facilities shall be known collectively as the “Facilities” and
each individually as a “Facility”.

In the event the requisite consent for the Backstopped Amendments are not
obtained, the Existing Credit Agreement will be terminated and replaced by a new
credit facility (the “New Credit Agreement”) containing the Term Loan B
Facility, the Term Loan A Backstop Commitment and the Revolver Backstop
Commitment. The New Credit Agreement will, subject to the “market flex”
provisions set forth in the Fee Letter, be based upon the Existing Credit
Agreement, but will include the Backstopped Amendments and such other changes to
reflect the Transactions and customary market terms as of the Bank Closing Date.

Wells Fargo Bank and WF Investments are referred to herein collectively as the
“Initial Lenders” and each individually as an “Initial Lender,” with Wells Fargo
Bank being herein called the “Initial Bank Lender” and WF Investments being
herein called the “Initial Bridge Lender.”

2. Titles and Roles. Wells Fargo Securities, acting alone or through or with
affiliates selected by it, will act as the sole bookrunner and sole lead
arranger (in such capacities, the “Lead Arranger”) in arranging and syndicating
the Facilities. Wells Fargo Bank (or an affiliate selected by it) will act as
the sole administrative agent (in such capacity, the “Bank Administrative
Agent”) for the Senior Credit Facilities. WF Investments (or an affiliate
selected by it) will act as the sole administrative agent (in such capacity, the
“Bridge Administrative Agent”) for the Bridge Facility. No additional agents,
co-agents, arrangers or bookrunners will be appointed and no other titles will
be awarded and no other compensation will be paid (other than compensation
expressly contemplated by this Commitment Letter and the Fee Letter) unless you
and we shall agree in writing. If you and we agree to award titles to other
co-agents, arrangers or bookrunners who are Lenders (as defined in Section 4
below) that provide (or whose affiliates provide) commitments in respect of one
or more of the Facilities, then (x) each of the parties hereto shall execute a
revised version of this Commitment Letter or an amendment or joinder hereto to
reflect the commitment or commitments of any such institution (or its
affiliate), (y) no other agent, co-agent, arranger or bookrunner (other than the
Lead Arranger) will have rights in respect of the management of the syndication
of the Facilities (including, without limitation, in respect of “market flex”
rights under the Fee Letter, over which the Lead Arranger will have sole
control) and (z) Wells Fargo Securities will have the “left” and “highest”
placement in any and all marketing materials or other documentation used in
connection with the Facilities and shall hold the leading role and
responsibilities

 

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conventionally associated with such placement, including maintaining sole
physical books for the Facilities.

3. Conditions to Commitment. The Commitments and undertakings of the Commitment
Parties hereunder are subject solely to the satisfaction of the conditions
precedent set forth in the Term Sheets under the heading “Conditions to All
Extensions of Credit” and in the Conditions Annex.

Notwithstanding anything in this Commitment Letter, the Fee Letter or the
Financing Documentation (as defined in the Conditions Annex) or any other letter
agreement or other undertaking concerning the Facilities or the financing of the
Transactions to the contrary, (a) the only representations the accuracy of which
shall be a condition to the availability of the Facilities on the Acquisition
Closing Date shall be (i) such of the representations made by the Acquired
Company or its subsidiaries or affiliates or with respect to the Acquired
Company, its subsidiaries or its business in the Acquisition Agreement as are
material to the interests of the Lenders in their capacities as such (the
“Specified Acquisition Agreement Representations”), but only to the extent that
you or your affiliates have the right to terminate your or their respective
obligations under the Acquisition Agreement or otherwise decline to close the
Acquisition as a result of a breach of any such Specified Acquisition Agreement
Representations or any such Specified Acquisition Agreement Representations not
being accurate and (ii) the Specified Representations (as defined below) and
(b) the terms of the Financing Documentation shall be in a form such that they
do not impair the availability of the Facilities on the Acquisition Closing Date
if the conditions set forth in or referred to in this Commitment Letter are
satisfied (it being understood that, to the extent any security interest in any
Collateral (as defined in the Bank Term Sheet) (other than security interests
that may be perfected by (x) the filing of a financing statement under the
Uniform Commercial Code and (y) the delivery of certificates evidencing the
equity securities required to be pledged pursuant to the Term Sheet) is not or
cannot be perfected on the Acquisition Closing Date after your use of
commercially reasonable efforts to do so without undue burden or expense, then
the perfection of such security interests shall not constitute a condition
precedent to the availability of the Facilities on the Acquisition Closing Date,
but instead shall be required to be perfected within 90 days after the
Acquisition Closing Date (subject to extensions by the Bank Administrative Agent
and the Bridge Administrative Agent acting reasonably), unless a later date is
specified in the applicable Term Sheet. For purposes hereof, “Specified
Representations” means the representations and warranties set forth in the
Financing Documentation relating to corporate existence of the Credit Parties
and good standing of the Credit Parties in their respective jurisdictions of
organization; power and authority, due authorization, execution and delivery and
enforceability, in each case, relating to the Credit Parties entering into and
performance of the Financing Documentation; no conflicts with or consents under
the Credit Parties’ organizational documents; no breach or violation of material
agreements; solvency as of the Acquisition Closing Date (after giving effect to
the Transactions) of the Borrower and its subsidiaries on a consolidated basis
(as determined pursuant to Annex D hereto); use of proceeds; Federal Reserve
margin regulations; the Investment Company Act; the PATRIOT Act; OFAC; FCPA; and
creation, validity and, subject to the parenthetical in the immediately
preceding sentence, perfection of security interests in the Collateral. This
paragraph, and the provisions herein, shall be referred to as the “Limited
Conditionality Provision”.

4. Syndication.

(a) The Lead Arranger intends and reserves the right, both prior to and after
the Bank Closing Date, to secure commitments for the Facilities from a syndicate
of banks, financial institutions and other entities identified by the Lead
Arranger upon consultation with you (such banks, financial institutions and
other entities committing to the Senior Credit Facilities, including Wells Fargo
Bank, the “Bank Lenders”; such financial institutions and other entities
committing to the Bridge Facility, including WF Investments, the “Bridge
Lenders”; and the Bridge Lenders, together with the Bank

 

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Lenders, the “Lenders”)) upon the terms and subject to the conditions set forth
in this Commitment Letter. Until the earlier of (i) the date that a Successful
Syndication (as defined in the Fee Letter) is achieved and (ii) the date that is
90 days following the Bank Closing Date (the earlier of (i) and (ii), the
“Syndication Date”), you agree to, and will use commercially reasonable efforts
to cause appropriate members of management of the Acquired Company to, assist us
actively in achieving a syndication of the Facilities that is satisfactory to us
and you. To assist us in our syndication efforts, you agree that you will, and
will cause your representatives and advisors to, and will use commercially
reasonable efforts to cause appropriate members of management of the Acquired
Company and its representatives and advisors to, (i) provide promptly to the
Commitment Parties and the other prospective Lenders upon request all
information reasonably deemed necessary by the Lead Arranger to assist the Lead
Arranger and each prospective Lender in their evaluation of the Transactions and
to complete the syndication (including, without limitation, projections prepared
by your management of balance sheets, income statements and cash flow statements
of you and your subsidiaries for such periods after the Bank Closing Date and
during the term of the Facilities as are requested by the Lead Arranger), (ii)
make your senior management and (to the extent reasonable and practical)
appropriate members of management of the Acquired Company available to
prospective Lenders on reasonable prior notice and at reasonable times and
places, (iii) host, with the Lead Arranger, one or more meetings and/or calls
with prospective Lenders at mutually agreed times and locations, (iv) assist,
and cause your affiliates and advisors to assist, the Lead Arranger in the
preparation of one or more confidential information memoranda and other
marketing materials in form and substance reasonably satisfactory to the Lead
Arranger to be used in connection with the syndication, (v) use commercially
reasonable efforts to ensure that the syndication efforts of the Lead Arranger
benefit materially from the existing lending relationships of the Borrower and,
to the extent consistent with the terms of the Acquisition Agreement, the
Acquired Company, (vi) use commercially reasonable efforts to obtain, at the
Borrower’s expense, (A) a current public corporate credit rating from Standard &
Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc.
(“S&P”), (B) a current public corporate family rating from Moody’s Investors
Service, Inc. (“Moody’s”) and (C) a current public rating with respect to each
of the Facilities and the Notes from each of S&P and Moody’s, in each case, at
least 30 days prior to the Bank Closing Date (and in any event prior to the
launch of general syndication of the Term Loan B Facility) and to participate
actively in the process of securing such ratings, including having your senior
management and (to the extent reasonable and practical) appropriate members of
management of the Acquired Company meet with such rating agencies and
(vii) ensure (and, to the extent consistent with the terms of the Acquisition
Agreement, using your commercially reasonable efforts to cause the Acquired
Company to ensure) that prior to the later of the Bank Closing Date and the
Syndication Date there will be no competing issues, offerings, placements,
arrangements or syndications of debt securities or commercial bank or other
credit facilities by or on behalf of you or your subsidiaries or the Acquired
Company and its subsidiaries, being offered, placed or arranged (other than the
Facilities and the Notes) without the written consent of the Lead Arranger,
unless such issuance, offering, placement, arrangement or syndication could not
reasonably be expected, in the reasonable discretion of the Lead Arranger, to
materially impair the syndication of the Facilities (it being understood that
indebtedness incurred in the ordinary course of business of the Borrower, the
Acquired Company and their respective subsidiaries (to the extent consistent
with the terms of the Acquisition Agreement) for capital expenditures and
working capital purposes will not materially impair the syndication of the
Facilities).

(b) The Lead Arranger and/or one or more of its affiliates will exclusively
manage all aspects of the syndication of the Facilities (in consultation with
you and consistent with the terms of this Commitment Letter), including
decisions as to the selection and number of prospective Lenders to be
approached, when they will be approached, whose commitments will be accepted,
any titles offered to the Lenders and the final allocations of the commitments
and any related fees among the Lenders, and the Lead Arranger will exclusively
perform all functions and exercise all authority as is customarily performed and
exercised in such capacities. Notwithstanding the Lead Arranger’s right to
syndicate the Facilities and receive commitments with respect thereto, unless
otherwise agreed to by you, (i) no Initial

 

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Lender shall be relieved or released from its obligations hereunder (including
its obligation to fund the Facilities on the Acquisition Closing Date) in
connection with any syndication, assignment or participation in the Facilities,
including its Commitments, until the initial funding under the Facilities has
occurred on the Acquisition Closing Date (or, to the extent funded into escrow
prior to the Acquisition Closing Date, the deposit of the proceeds of such
Facilities into escrow), (ii) no assignment by any Initial Lender shall become
effective with respect to all or any portion of any Initial Lender’s Commitments
until the initial funding of the Facilities (or, to the extent funded into
escrow prior to the Acquisition Closing Date, the deposit of the proceeds of
such Facilities into escrow) (except to the extent that Notes are issued and
paid for in lieu of the Bridge Facility or a portion thereof) and (iii) unless
you and we agree in writing, each Initial Lender will retain exclusive control
over all rights and obligations with respect to its Commitments in respect of
the Facilities, including all rights with respect to consents, modifications,
supplements, waivers and amendments, until the Acquisition Closing Date has
occurred. Without limiting your obligations to assist with the syndication
efforts as set forth herein, it is understood that the Commitments hereunder are
not conditioned upon the syndication of, or receipt of commitments in respect
of, the Facilities or the obtaining of any rating from S&P or Moody’s and in no
event shall the successful completion of the syndication of the Facilities or
the obtaining of such ratings constitute a condition to the availability of the
Facilities on the Acquisition Closing Date.

5. Information.

(a) You represent, warrant and covenant that (i) all written information and
written data (other than the Projections (as defined below), other
forward-looking information and information of a general economic or industry
specific nature) concerning the Borrower, the Acquired Company and their
respective subsidiaries and the Transactions that has been or will be made
available to the Commitment Parties or the prospective Lenders or any of their
respective affiliates or representatives by you or any of your representatives,
subsidiaries or affiliates (or on your or their behalf) (the “Information”),
when taken as a whole, (x) is and, in the case of Information made available
after the date hereof, will be complete and correct in all material respects and
(y) does not and, in the case of Information made available after the date
hereof, will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made and after
giving effect to any supplements thereto, not misleading and (ii) all financial
projections concerning the Borrower, the Acquired Company and their respective
subsidiaries, taking into account the consummation of the Transactions, that
have been or will be made available to the Commitment Parties or the prospective
Lenders or any of their respective affiliates or representatives by you or any
of your representatives, subsidiaries or affiliates (or on your or their behalf)
(the “Projections”) have been and will be prepared in good faith based upon
assumptions believed by you to be reasonable at the time made available to the
Commitment Parties or the prospective Lenders or any of their respective
affiliates or representatives, it being understood that such Projections are not
to be viewed as facts and that actual results may vary materially from the
Projections and the can be no assurances that the results therein will be
realized. You agree that if, at any time prior to the later of the Bank Closing
Date and the Syndication Date, you become aware that any of the representations
and warranties contained in the preceding sentence would be incorrect in any
respect if the Information and Projections were being furnished, and such
representations were being made, at such time, then you will promptly supplement
the Information and the Projections (or use commercially reasonable efforts to
supplement, in the case of Information or Projections related to the Acquired
Company or its subsidiaries) so that such representations are correct in all
respects under those circumstances. Solely as they relate to matters with
respect to the Acquired Company and its subsidiaries, the foregoing
representations, prior to the Acquisition Closing Date warranties and covenants
are made to the best of your knowledge. We will be entitled to use and rely
upon, without responsibility to verify independently, the Information and the
Projections. You acknowledge that we may share with any of our affiliates (it
being understood that such affiliates will be subject to the confidentiality
agreements between you and us), and such affiliates may

 

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share with the Commitment Parties, any information related to you, the Acquired
Company, or any of your or their respective subsidiaries or affiliates
(including, without limitation, in each case, information relating to
creditworthiness) and the transactions contemplated hereby.

(b) You acknowledge that (i) the Commitment Parties will make available, on your
behalf, the Information, Projections and other marketing materials and
presentations, including the confidential information memoranda (collectively,
the “Informational Materials”), to the prospective Lenders by posting the
Informational Materials on SyndTrak Online or by other similar electronic means
(collectively, the “Electronic Means”) and (ii) certain prospective Lenders may
be “public side” (i.e., lenders that have personnel that do not wish to receive
material non-public information (within the meaning of the United States federal
securities laws, “MNPI”) with respect to the Borrower, the Acquired Company or
their respective subsidiaries or affiliates or any of their respective
securities, and who may be engaged in investment and other market-related
activities with respect to such entities’ securities (such prospective Lenders,
“Public Lenders”). At the request of the Lead Arranger, (A) you will assist, and
cause your affiliates, advisors and, to the extent possible using commercially
reasonable efforts, appropriate representatives of the Acquired Company to
assist, the Lead Arranger in the preparation of Informational Materials to be
used in connection with the syndication of the Facilities to Public Lenders,
which will not contain MNPI (the “Public Informational Materials”), (B) you will
identify and conspicuously mark any Public Informational Materials “PUBLIC”, and
(C) you will identify and conspicuously mark any Informational Materials that
include any MNPI as “PRIVATE AND CONFIDENTIAL”. Notwithstanding the foregoing
(provided you have been given a reasonable opportunity to review such
documents), you agree that the Commitment Parties may distribute the following
documents to all prospective Lenders (including the Public Lenders) on your
behalf, unless you advise the Commitment Parties in writing (including by email)
within a reasonable time prior to their intended distributions that such
material should not be distributed to Public Lenders: (w) administrative
materials for prospective Lenders such as lender meeting invitations and funding
and closing memoranda, (x) customary notifications of changes in the terms of
the Facilities, (y) financial information regarding the Borrower and its
subsidiaries (other than the Projections and other non-public financial
information) and (z) other materials intended for prospective Lenders after the
initial distribution of the Informational Materials, including drafts and final
versions of the Term Sheets and the Financing Documentation (as defined in the
Conditions Annex). If you advise us in writing (including by email) that any of
the foregoing items (other than the Financing Documentation) should not be
distributed to Public Lenders, then the Commitment Parties will not distribute
such materials to Public Lenders without further discussions with you. Before
distribution of any Informational Materials to prospective Lenders, you shall
provide us with a customary letter authorizing the dissemination of the
Informational Materials and confirming the accuracy and completeness in all
material respects of the information contained therein and, in the case of
Public Informational Materials, confirming the absence of MNPI therefrom.

(c) You hereby authorize the Lead Arranger to download copies of the Borrower’s
trademark logos from its website and post copies thereof on the SyndTrak site or
similar workspace established by the Lead Arranger to syndicate the Facilities
and use the logos on any confidential information memoranda, presentations and
other marketing materials prepared in connection with the syndication of the
Senior Credit Facilities or in any advertisements (to which you consent, such
consent not to be unreasonably withheld) that we may place after the closing of
the Senior Credit Facilities in financial and other newspapers, journals, the
World Wide Web, our home page or otherwise, in each case at our own expense
describing the Lead Arranger’s services to the Borrower hereunder.

6. Expenses. You agree to reimburse each of the Commitment Parties, from time to
time on demand, for all reasonable out-of-pocket costs and expenses of the
Commitment Parties, including, without limitation, reasonable legal fees and
expenses, due diligence expenses and all printing, reproduction, document
delivery, travel, CUSIP, SyndTrak, Markit ClearPar and communication costs,

 

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incurred in connection with the syndication and execution of the Facilities and
the preparation, review, negotiation, execution, delivery and enforcement of
this Commitment Letter, the Fee Letter, the Financing Documentation (as defined
in the Conditions Annex) and any security arrangements in connection therewith
regardless of whether the Acquisition Closing Date occurs.

7. Fees. As consideration for the commitments and agreements of the Commitment
Parties hereunder, you agree to cause to be paid the nonrefundable fees
described in the Fee Letter on the terms and subject to the conditions set forth
therein.

8. Indemnification. You agree to indemnify and hold harmless the Commitment
Parties and each of their respective affiliates, directors, officers, employees,
partners, representatives, advisors and agents and each of their respective
heirs, successors and assigns (each, an “Indemnified Party”) from and against
any and all actions, suits, losses, claims, damages, penalties, liabilities and
expenses of any kind or nature (including legal expenses), joint or several, to
which such Indemnified Party may become subject or that may be incurred or
asserted or awarded against such Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (a) any matters contemplated by this Commitment
Letter, the Transactions or any related transaction (including, without
limitation, the execution and delivery of this Commitment Letter, the Financing
Documentation (as defined in the Conditions Annex), the documentation for debt
financing issued for the purpose of refinancing all or a portion of the
Facilities (the “Permanent Financing”) and the closing of the Transactions) or
(b) the use or the contemplated use of the proceeds of the Facilities, and will
reimburse each Indemnified Party for all out-of-pocket expenses (including
reasonable attorneys’ fees, expenses and charges) on demand as they are incurred
in connection with any of the foregoing; provided that no Indemnified Party will
have any right to indemnification for any of the foregoing to the extent
resulting from (i) such Indemnified Party’s own gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a final
non-appealable judgment, (ii) a material breach of the funding obligations of
such Indemnified Party under this Commitment Letter as determined by a court of
competent jurisdiction in a final non-appealable judgment or (iii) any dispute
solely among Indemnified Parties, other than any claims against any Commitment
Party in its capacity or in fulfilling its role as an administrative agent or
arranger or any similar role hereunder or under the Facilities and other than
any claims arising out of any act or omission on the part of you or your
subsidiaries or affiliates. In the case of an investigation, litigation or
proceeding to which the indemnity in this paragraph applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by you, your equity holders or creditors or an Indemnified Party,
whether or not an Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated. No Indemnified Party
will be liable for any indirect, consequential, special or punitive damages in
connection with this Commitment Letter, the Fee Letter, the Financing
Documentation or any other element of the Transactions. No Indemnified Party
will be liable to you, your affiliates or any other person for any damages
arising from the use by others of Informational Materials or other materials
obtained by Electronic Means, except to the extent that your damages are found
in a final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnified
Party. You shall not, without the prior written consent of each Indemnified
Party affected thereby (which consent not to be unreasonably withheld or
delayed), settle any threatened or pending claim or action that would give rise
to the right of any Indemnified Party to claim indemnification hereunder unless
such settlement (x) includes a full and unconditional release of all liabilities
arising out of such claim or action against such Indemnified Party, (y) does not
include any statement as to or an admission of fault, culpability or failure to
act by or on behalf of such Indemnified Party and (z) requires no action on the
part of the Indemnified Party other than its consent.

9. Confidentiality.

 

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(a) This Commitment Letter and the Fee Letter (collectively, the “Commitment
Documents”) and the existence and contents hereof and thereof shall be
confidential and may not be disclosed, directly or indirectly, by you in whole
or in part to any person without our prior written consent, except for (i) the
disclosure of the Commitment Documents to your directors, officers, employees,
accountants, attorneys and other professional advisors who have been advised of
their obligation to maintain the confidentiality of the Commitment Documents for
the purpose of evaluating, negotiating or entering into the Transactions,
(ii) the disclosure of the Commitment Documents as otherwise required by law or
compulsory legal process (in which case, you shall use commercially reasonable
efforts, to the extent practical and permitted by law, to inform us promptly in
advance thereof), (iii) the disclosure of the Commitment Documents on a
confidential basis to the board of directors, officers and advisors of the
Acquired Company in connection with its consideration of the Acquisition
(provided that any information relating to pricing (including in any “market
flex” provisions that relate to pricing), fees and expenses has been redacted in
a manner reasonably acceptable to us so long as no such redactions relate to any
terms that would adversely affect the conditionality, enforceability,
availability, termination or aggregate principal amount of the financing
contemplated by the Commitment Documents), (iv) the disclosure of this
Commitment Letter, but not the Fee Letter, in any required filings with the
Securities and Exchange Commission and other applicable regulatory authorities
and stock exchanges and (v) the disclosure of the Term Sheets to any ratings
agency in connection with the Transactions.

(b) The Commitment Parties and their respective affiliates shall use all
non-public information provided to it by or on behalf of you or your affiliates
in the course of the Transactions solely for the purposes of providing the
services that are the subject of this Commitment Letter and shall treat all such
information as confidential; provided that nothing herein shall prevent the
Commitment Parties or their respective affiliates from disclosing any such
information (i) to any Lenders or participants or prospective Lenders or
prospective participants (provided that any such disclosure shall be made
subject to the acknowledgment and acceptance by such Lender or participant or
prospective Lender or prospective participant that such information is being
disseminated on a confidential basis in accordance with the standard syndication
processes of the Commitment Parties or customary market standard for
dissemination of such type of information), (ii) pursuant to the order of any
court or administrative agency or in any judicial or administrative proceeding
or as otherwise required by law or compulsory legal process (in which case the
applicable Commitment Party shall use commercially reasonable efforts to
promptly notify you, in advance, to the extent practicable and permitted by
law), (iii) upon the request or demand of any regulatory authority having
jurisdiction over any of the Commitment Parties (in which case the applicable
Commitment Party shall use commercially reasonable efforts to, except with
respect to any audit or examination conducted by bank accountants or any
governmental regulatory authority exercising examination or regulatory
authority, promptly notify you, in advance, to the extent practicable and
permitted by law), (iv) to our respective affiliates involved in the
Transactions and their and their affiliates’ respective directors, officers,
employees, accountants, attorneys, agents and other professional advisors
(collectively, “Representatives”) on a need-to-know basis who are informed of
the confidential nature of such information and are or have been advised of
their obligation to keep information of this type confidential, (v) to ratings
agencies in connection with the Transactions, (vi) to the extent that such
information is independently developed by the Commitment Parties, so long as the
Commitment Parties have not otherwise breached their confidentiality obligations
hereunder and have not developed such information based on information received
from a third party that to their knowledge has breached confidentiality
obligations owing to you, (vii) to the extent any such information becomes
publicly available other than by reason of disclosure by us in breach of this
provision, (viii) to the extent that such information is received by a
Commitment Party or an affiliate of a Commitment Party from a third party that
is not to its knowledge subject to confidentiality obligations to you or your
affiliates, (ix) for purposes of establishing a “due diligence” defense, (x) in
connection with the exercise of any remedies hereunder, any action or proceeding
relating to the Commitment Documents or the enforcement of rights

 

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thereunder or (xi) with your prior written consent. The provisions of this
paragraph with respect to the Commitment Parties and their respective affiliates
shall automatically terminate on the earlier of (x) one year following the date
of this Commitment Letter and (y) the execution of the definitive documentation
for the Senior Credit Facilities (in which case, the confidentiality provisions
in the definitive documentation shall supersede the provisions of this
paragraph). The terms of this paragraph shall supersede all prior
confidentiality or non-disclosure agreements and understandings between you and
the Commitment Parties relating to the Transactions.

(c) The Commitment Parties shall be permitted to use information related to the
syndication and arrangement of the Facilities in connection with obtaining a
CUSIP number, marketing, press releases or other transactional announcements or
updates provided to investor or trade publications, subject to confidentiality
obligations or disclosure restrictions reasonably requested by you. Prior to the
Bank Closing Date, the Commitment Parties shall have the right to review and
approve any public announcement or public filing made by you or the Acquired
Company or your or their respective representatives relating to the Facilities
or to any of the Commitment Parties in connection therewith, before any such
announcement or filing is made (such approval not to be unreasonably withheld or
delayed).

10. PATRIOT Act Notification. The Commitment Parties hereby notify you that
pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56
(signed into law October 26, 2001) (the “PATRIOT Act”), each of them is required
to obtain, verify and record information that identifies you and any additional
Credit Parties, which information includes your and their respective names,
addresses, tax identification numbers and other information that will allow the
Commitment Parties and the other prospective Lenders to identify you and such
other parties in accordance with the PATRIOT Act. This notice is given in
accordance with the requirements of the PATRIOT Act and is effective for each of
us and the prospective Lenders.

11. Other Services.

(a) Nothing contained herein shall limit or preclude the Commitment Parties or
any of their respective affiliates from carrying on any business with, providing
banking or other financial services to, or from participating in any capacity,
including as an equity investor, in any party whatsoever, including, without
limitation, any competitor, supplier or customer of you, the Acquired Company or
any of your or their respective affiliates, or any other party that may have
interests different than or adverse to such parties.

(b) You acknowledge that the Lead Arranger and its affiliates (the term “Lead
Arranger” as used in this section being understood to include such
affiliates) (i) may be providing debt financing, equity capital or other
services (including financial advisory services) to other entities and persons
with which you, the Acquired Company or your or their respective affiliates may
have conflicting interests regarding the Transactions and otherwise, (ii) may
act, without violation of its contractual obligations to you, as it deems
appropriate with respect to such other entities or persons, and (iii) have no
obligation in connection with the Transactions to use, or to furnish to you, the
Acquired Company or your or their respective affiliates or subsidiaries,
confidential information obtained from other entities or persons.

(c) In connection with all aspects of the Transactions, you acknowledge and
agree that: (i) the Facilities and any related arranging or other services
contemplated in this Commitment Letter constitute an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and the Commitment
Parties, on the other hand, and you are capable of evaluating and understanding
and understand and accept the terms, risks and conditions of the Transactions,
(ii) in connection with the

 

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process leading to the Transactions, each of the Commitment Parties is and has
been acting solely as a principal and not as a financial advisor, agent or
fiduciary, for you, the Acquired Company or any of your or their respective
management, affiliates, equity holders, directors, officers, employees,
creditors or any other party, (iii) no Commitment Party or any affiliate thereof
has assumed or will assume an advisory, agency or fiduciary responsibility in
your or your affiliates’ favor with respect to any of the Transactions or the
process leading thereto (irrespective of whether any Commitment Party or any of
its affiliates has advised or is currently advising you or your affiliates or
the Acquired Company or its affiliates on other matters) and no Commitment Party
has any obligation to you or your affiliates with respect to the Transactions
except those obligations expressly set forth in the Commitment Documents,
(iv) the Commitment Parties and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from yours and
those of your affiliates and no Commitment Party shall have any obligation to
disclose any of such interests, and (v) no Commitment Party has provided any
legal, accounting, regulatory or tax advice with respect to any of the
Transactions and you have consulted your own legal, accounting, regulatory and
tax advisors to the extent you have deemed appropriate. You hereby waive and
release, to the fullest extent permitted by law, any claims that you may have
against any Commitment Party or any of their respective affiliates with respect
to any breach or alleged breach of agency, fiduciary duty or conflict of
interest.

12. Acceptance/Expiration of Commitments.

(a) This Commitment Letter and the Commitments of Wells Fargo Bank and WF
Investments and the undertakings of Wells Fargo Securities set forth herein
shall automatically terminate at 5:00 p.m. (Eastern Time) on September 18, 2017
(the “Acceptance Deadline”), without further action or notice unless signed
counterparts of this Commitment Letter and the Fee Letter shall have been
delivered to the Lead Arranger by such time to the attention of Scott Joyce,
Wells Fargo Securities, LLC, 550 S. Tryon Street, 6th floor, Charlotte, NC 28202
(or by electronic (pdf) transmission to scott.joyce@wellsfargo.com).

(b) In the event this Commitment Letter is accepted by you as provided above,
the commitments and agreements of Wells Fargo Bank and WF Investments and the
undertakings of Wells Fargo Securities set forth herein will automatically
terminate without further action or notice upon the earliest to occur of
(i) consummation of the Acquisition (with or without the use of the Senior
Credit Facilities), (ii) the valid termination of the Acquisition Agreement in
accordance with its terms and (iii) 5:00 p.m. (Eastern Time) on the date that is
six months after the date of the Acquisition Agreement (the date in this prong
(iii), the “End Date”); provided, however, that if the Termination Date under,
and as defined in, the Acquisition Agreement is extended pursuant to the terms
thereof, then the End Date shall automatically be extended to the date that is
nine months after the date of the Acquisition Agreement. For the avoidance of
doubt, in the event the Term Loan B Facility is funded into escrow as provided
in the Fee Letter, Wells Fargo Bank’s Term Loan B Facility Commitment will be
immediately reduced to zero without further action or notice.

13. Survival. The sections of this Commitment Letter and the Fee Letter relating
to “Expenses”, “Indemnification”, “Confidentiality”, “Other Services”,
“Survival”, “Governing Law” and “Miscellaneous” shall survive any termination or
expiration of this Commitment Letter, the commitments of the Commitment Parties
or the undertakings of Wells Fargo Securities set forth herein (regardless of
whether definitive Financing Documentation (as defined in the Conditions Annex)
is executed and delivered), and the sections relating to “Syndication” and
“Information” shall survive until the completion of the syndication of the
Facilities; provided that your obligations under this Commitment Letter (other
than your obligations with respect to the sections of this Commitment Letter
relating to “Syndication”, “Information”, “Confidentiality”, “Other Services”,
“Survival” and “Governing Law”) shall be superseded by the provisions of the
Financing Documentation upon the initial funding thereunder.

 

10

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14. Governing Law. THIS COMMITMENT LETTER AND THE FEE LETTER, AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED THERETO (INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE
SUBJECT MATTER HEREOF OR THEREOF), SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND
SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REFERENCE TO ANY OTHER CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF; PROVIDED
THAT, NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IT IS UNDERSTOOD AND AGREED
THAT ANY DETERMINATIONS AS TO (X) WHETHER ANY SPECIFIED ACQUISITION AGREEMENT
REPRESENTATIONS HAVE BEEN BREACHED AND (Y) WHETHER A MATERIAL ADVERSE EFFECT (AS
DEFINED IN THE CONDITIONS ANNEX) HAS OCCURRED, SHALL, IN EACH CASE BE GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE. THE PARTIES HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS COMMITMENT
LETTER OR THE FEE LETTER. With respect to any suit, action or proceeding arising
in respect of this Commitment Letter or the Fee Letter or any of the matters
contemplated hereby or thereby, the parties hereto hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of any state or federal
court located in the Borough of Manhattan, and irrevocably and unconditionally
waive any objection to the laying of venue of such suit, action or proceeding
brought in such court and any claim that such suit, action or proceeding has
been brought in an inconvenient forum. The parties hereto hereby agree that
service of any process, summons, notice or document by registered mail addressed
to you or each of the Commitment Parties will be effective service of process
against such party for any action or proceeding relating to any such dispute. A
final judgment in any such action or proceeding may be enforced in any other
courts with jurisdiction over you or each of the Commitment Parties.

15. Miscellaneous. This Commitment Letter and the Fee Letter embody the entire
agreement and understanding among the Commitment Parties and you and your
affiliates with respect to the specific matters set forth above and supersede
all prior agreements and understandings relating to the subject matter hereof.
No person has been authorized by any of the Commitment Parties to make any oral
or written statements inconsistent with this Commitment Letter or the Fee
Letter. This Commitment Letter shall not be assignable by you without the prior
written consent of the Commitment Parties, and any purported assignment without
such consent shall be void. This Commitment Letter and the Fee Letter are not
intended to benefit or create any rights in favor of any person other than the
parties hereto, the prospective Lenders and, with respect to indemnification,
each Indemnified Party. This Commitment Letter may be executed in separate
counterparts and delivery of an executed signature page of this Commitment
Letter by facsimile or electronic mail shall be effective as delivery of
manually executed counterpart hereof; provided that, upon the request of any
party hereto, such facsimile transmission or electronic mail transmission shall
be promptly followed by the original thereof. This Commitment Letter may only be
amended, modified or superseded by an agreement in writing signed by each of you
and the Commitment Parties, and shall remain in full force and effect and not be
superseded by any other documentation unless such other documentation is signed
by each of the parties hereto and expressly states that this Commitment Letter
is superseded thereby.

By signing this Commitment Letter, each of the parties hereto hereby
acknowledges and agrees that (a) Wells Fargo Bank is offering to provide the
Senior Credit Facilities separate and apart from WF Investments’ offer to
provide the Bridge Facility and (b) WF Investments is offering to provide the
Bridge Facility separate and apart from Wells Fargo Bank’s offer to provide the
Senior Credit Facilities.

[Signature Pages Follow]

 

11

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If you are in agreement with the foregoing, please indicate acceptance of the
terms hereof by signing the enclosed counterpart of this Commitment Letter and
returning it to the Lead Arranger, together with executed counterparts of the
Fee Letter, by no later than the Acceptance Deadline.

 

Sincerely, WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Thomas Thoen

  Name: Thomas Thoen   Title: Authorized Signatory

 

WF INVESTMENT HOLDINGS, LLC By:  

/s/ Scott Yarbrough

  Name: Scott Yarbrough   Title: Authorized Signatory

 

WELLS FARGO SECURITIES, LLC By:  

/s/ Gregory Fisher

  Name: Gregory Fisher   Title: Authorized Signatory

Project Snowbird

Commitment Letter

Signature Page

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Agreed to and accepted as of the date first above written: ITRON, INC. By:  

/s/ R.H.A. FARROW

  Name: R.H.A. FARROW   Title: VP TREASURY AND STRATEGIC PLANNING

Project Snowbird

Commitment Letter

Signature Page

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EXECUTION VERSION

ANNEX A

$1,102.5 MILLION

SENIOR SECURED CREDIT FACILITIES

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Commitment Letter to which this Summary of Proposed Terms and
Conditions is attached.

 

Transaction:    The Borrower intends to acquire (the “Acquisition”) all of the
equity interests of Silver Springs Networks, Inc., a Delaware corporation (the
“Acquired Company”), pursuant to a purchase agreement to be executed by the
Acquired Company and the Borrower and the other parties thereto in connection
with the Acquisition (together with all exhibits and schedules thereto, the
“Acquisition Agreement”). In connection with the Acquisition, the Borrower will
(a) either (i) issue $350.0 million aggregate principal amount of senior
unsecured notes (the “Notes”) or (ii) to the extent the full amount of the Notes
cannot be placed on the Acquisition Closing Date (as defined below), borrow up
to $350.0 million of senior unsecured loans under the Bridge Facility (as
defined in Annex B), (b) incur the Term Loan B Facility (as defined below) in an
aggregate principal amount of $400.0 million, (c) amend the Amended and Restated
Credit Agreement dated as of June 23, 2015 (as amended on June 13, 2016 and as
further amended or otherwise modified prior to the date hereof, the “Existing
Credit Agreement”) among the Borrower, the Foreign Borrowers from time to time
party thereto, the Lenders from time to time party thereto and Wells Fargo Bank,
National Association, as Administrative Agent, to permit the Acquisition, the
Term Loan B Facility, the issuance of the Notes and/or the borrowings under the
Bridge Facility and the other items reflected in this term sheet or otherwise
agreed between the Borrower and the Lead Arranger (as defined below) and (d) use
the proceeds of the Term Loan B Facility, together with the proceeds of the
Notes and/or the Bridge Facility and the proceeds of up to $50.0 million (or
such other amount as set forth under “Availability” below) of loans under the
Revolving Credit Facility, to (i) pay the purchase price of the Acquisition and
(ii) pay fees and expenses incurred in connection with the Transactions (as
defined below). The Acquisition and other transactions described in this
paragraph are collectively referred to as the “Transactions.” The date on which
the Acquisition is consummated (with the proceeds of the initial funding under
any of the Facilities) is referred to as the “Acquisition Closing Date.”
Borrowers:    Itron, Inc., a Washington corporation (the “Borrower”). It is
understood that the entities listed on Schedule II hereto and other foreign
subsidiaries of the Borrower may be designated as borrowers (collectively, the
“Foreign Borrowers”) under a multicurrency sub-facility (the “Foreign
Sub-Facility”) of the Revolving Credit Facility on terms substantially
consistent with the Existing Credit Agreement, except as otherwise set forth
herein (and, in each case, including with respect to the entities listed on
Schedule II hereto that are not borrowers under the Existing Credit Agreement,
subject to confirmation that no adverse tax or registration

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   requirements will result therefrom). Sole Lead Arranger and Sole Bookrunner:
   Wells Fargo Securities, LLC will act as sole lead arranger and sole
bookrunner (in such capacity, the “Lead Arranger”). Lenders:    Wells Fargo
Bank, National Association (“Wells Fargo Bank”) and a syndicate of financial
institutions and other entities (each a “Lender” and, collectively, the
“Lenders”). Administrative Agent and Swingline Lender:    Wells Fargo Bank (in
such capacity, the “Administrative Agent” or the “Swingline Lender”, as the case
may be). Issuing Banks:    Wells Fargo Bank and other Lenders under the
Revolving Credit Facility as set forth in the Existing Credit Agreement (in such
capacity, the “Issuing Banks”). Multicurrency Issuing Banks:    Wells Fargo Bank
and such other Lenders as determined by the Administrative Agent and the
Borrower and which agree to be a Multicurrency Issuing Bank (in such capacity,
the “Multicurrency Issuing Banks”). Multicurrency Swingline Lenders:    As set
forth in the Existing Credit Agreement and each other Lender as determined by
the Administrative Agent and the Borrower and which agrees to be a Multicurrency
Swingline Lender (in such capacity, the “Multicurrency Swingline Lenders”).
Senior Credit Facilities:    Senior secured credit facilities (the “Senior
Credit Facilities”) in an aggregate principal amount of up to $1,102.5 million,
such Senior Credit Facilities to consist of:   

(a)     Multicurrency Revolving Credit Facility. A multicurrency revolving
credit facility in an aggregate principal amount of up to $500.0 million (the
“Revolving Credit Facility”). Up to $300.0 million of the Revolving Credit
Facility will be available for standby letters of credit (each, a “Letter of
Credit”) and may be drawn by the Borrower in United States dollars or, with
respect to the Foreign Sub-Facility, solely by the Foreign Borrowers, in Euros,
pounds sterling, United States dollars and other currencies approved by one or
more of the Multicurrency Issuing Banks, and up to $50.0 million of the
Revolving Credit Facility will be available for swingline loans (each, a
“Swingline Loan”), each on customary terms and conditions substantially
consistent with the Existing Credit Agreement. Letters of Credit will be issued
by the Issuing Banks or the Multicurrency Issuing Banks, as applicable (provided
that the letter of credit commitments will be allocated among each Issuing Bank
and each Multicurrency Issuing Bank in a manner to be agreed), and Swingline
Loans will, at the sole discretion of the Swingline Lender or the Multicurrency
Swingline Lenders, as applicable, be made available by the Swingline Lender or
the Multicurrency Swingline Lenders, as applicable, and each Lender will
purchase an irrevocable and unconditional participation in each Letter of Credit
and each Swingline Loan.

 

 

Annex A – Bank Term Sheet

2

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Letters of Credit and Swingline Loans will be made available in Euros, pounds
sterling, United States dollars and readily available currencies to be
determined.

  

(b)    Term Loan A Facility. A term loan facility under the Existing Credit
Agreement that, as of the Bank Closing Date, is expected to be outstanding in an
aggregate principal amount of $202.5 million (the “Term Loan A Facility”). The
Term Loan A Facility was previously made available to the Borrower.

  

(c)    Term Loan B Facility. A term loan facility in an aggregate principal
amount of up to $400.0 million (the “Term Loan B Facility” and, together with
the Term Loan A Facility, the “Term Loan Facilities”).

Use of Proceeds:    The proceeds of the Term Loan Facilities will be used,
together with the proceeds of the Bridge Facility and/or the Notes and the
proceeds of up to $50.0 million (or such other amount as set forth under
“Availability” below) of loans under the Revolving Credit Facility, as
applicable, to finance (a) the consummation of the Acquisition and (b) the
payment of fees and expenses incurred in connection with the Transactions.   
The Revolving Credit Facility will also be used for ongoing working capital and
for other general corporate purposes of the Borrower and its subsidiaries,
including, without limitation, to fund permitted acquisitions and permitted
restricted payments. Bank Closing Date:    The date of the initial funding under
the Senior Credit Facilities (regardless of whether the proceeds are required to
be funded into escrow as provided in the Fee Letter or are provided directly to
the Borrower on the Acquisition Closing Date) (the “Bank Closing Date”).
Availability:    The Revolving Credit Facility will be available on a revolving
basis from and after the Acquisition Closing Date until the date set forth under
“Final Maturity” below; provided that no more than $50.0 million (or such
greater amount to be determined and acceptable to the Lead Arranger based on the
cash position of the Borrower on the Acquisition Closing Date) is used to
finance the Transactions.    The Term Loan A Facility was previously made
available to the Borrower in a single drawing on the closing date of the
Existing Credit Agreement.    The Term Loan B Facility will be available only in
a single draw of the full amount of the Term Loan B Facility on the Bank Closing
Date. Incremental Term Loans / Revolving Facility Increase:    After the
Acquisition Closing Date, the Borrower will be entitled to incur (a) additional
term loans under a new term facility that will be included in the Senior Credit
Facilities (each, an “Incremental Term Loan”), (b) increases in the Revolving
Credit Facility (with a like increase in the commitment under the Foreign
Sub-Facility) (each, a “Revolving Facility Increase”) and/or (c) additional
tranches of revolving commitments to be

 

 

Annex A – Bank Term Sheet

3

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   included in the Senior Credit Facilities (each an “Incremental Revolving
Facility”), in an aggregate principal amount for all such Incremental Term
Loans, Revolving Facility Increases and Incremental Revolving Facilities of up
to (i) $300.0 million, plus (ii) an unlimited amount, so long as, on a pro forma
basis, the Secured Net Leverage Ratio (as defined in the Existing Credit
Agreement) does not exceed 2.75:1.00 (provided that (x) the full amount of any
Revolving Facility Increase or Incremental Revolving Facilities will be deemed
to be drawn, and all Incremental Term Loans and Incremental Revolving Facilities
will be deemed to be secured, in determining such Secured Net Leverage Ratio,
and (y) no proceeds of any such Incremental Term Loans or borrowings under any
such Revolving Facility Increase or Incremental Revolving Facility may be netted
as unrestricted cash and cash equivalents on hand from indebtedness in
determining such Secured Net Leverage Ratio); provided that (i) no default or
event of default exists immediately prior to or after giving effect thereto,
(ii) after giving effect to any proposed Incremental Term Loans, any Revolving
Facility Increase, and/or Incremental Revolving Facility, the Borrower is in pro
forma compliance with the Financial Covenants (as defined below) (provided that
(x) the full amount of any Revolving Facility Increase or Incremental Revolving
Facilities will be deemed to be drawn in determining the Total Net Leverage
Ratio (as defined in the Existing Credit Agreement), and (y) no proceeds of any
such Incremental Term Loans or borrowings under any such Revolving Facility
Increase or Incremental Revolving Facility may be netted as unrestricted cash
and cash equivalents on hand from indebtedness in determining such Total Net
Leverage Ratio), (iii) the weighted average life to maturity and final maturity
date of any Incremental Term Loans (x) that are “tranche A loans” shall be no
less than, or earlier than, as the case may be, the weighted average life to
maturity and final maturity date of any then-existing term loans under the Term
Loan A Facility or any previously issued Incremental Term Loans that are
“tranche A loans” or (y) that are “tranche B loans” shall be no less than, or
earlier than, as the case may be, the weighted average life to maturity and
final maturity date of the then-existing term Loans under the Term Loan B
Facility or any previously issued Incremental Term Loans that are “tranche B
loans” (except, in each case, by virtue of amortization of or prepayment of such
term loans prior to such date of determination), (iv) the maturity date of any
Incremental Revolving Facility shall be no earlier than the maturity date of the
Revolving Credit Facility or any then-existing Incremental Revolving Facilities,
(v) the interest rate margins and (subject to clause (iii)) amortization
schedule applicable to any Incremental Term Loan shall be determined by the
Borrower and the lenders thereunder; provided that in the event that the
interest rate margins for any Incremental Term Loan that is a “tranche B loan”
(as determined by the Administrative Agent) that is incurred within 12 months
after the Acquisition Closing Date is higher than the interest rate margins for
the Term Loan B Facility or any then-existing Incremental Term Loan that is a
“tranche B loan” (as determined by the Administrative Agent), by more than 50
basis points, then the interest rate margins for the Term Loan B Facility or the
then-existing Incremental Term Loan that is a “tranche B loan”, as the case

 

 

Annex A – Bank Term Sheet

4

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   may be, shall be increased to the extent necessary so that such interest rate
margins are equal to the interest rate margins for such Incremental Term Loan,
as applicable, minus 50 basis points (such requirement set forth in this
proviso, the “MFN”); provided, further, that in determining the interest rate
margins applicable to such Incremental Term Loan or the Term Loan B Facility,
(x) original issue discount (“OID”) or upfront fees (which shall be deemed to
constitute like amounts of OID, with OID being equated to interest based on
assumed four-year life to maturity) payable by the Borrower to the Lenders under
such Incremental Term Loan or the Term Loan B Facility in the initial primary
syndication thereof shall be included and the effect of any and all interest
rate floors shall be included and (y) customary arrangement or commitment fees
payable to the Lead Arranger (or its affiliates) in connection with such
Incremental Term Loan or the Term Loan B Facility to one or more arrangers (or
their affiliates) of the Incremental Term Loan or any of the Term Loan B
Facility shall be excluded, (vi) the other terms and documentation in respect of
any Incremental Term Loans or Incremental Revolving Facility, to the extent not
consistent with any of the Term Loan Facilities or Revolving Credit Facility, as
applicable, will be reasonably satisfactory to the Administrative Agent and the
Borrower and (vii) no Lender will be required or otherwise obligated to provide
any such Incremental Term Loan, Revolving Facility Increase or Incremental
Revolving Facility.    Notwithstanding the foregoing, in the case of any
Incremental Term Loan the proceeds of which are used solely to finance a
substantially concurrent permitted acquisition that is not conditioned upon
obtaining of financing (each, a “Limited Condition Acquisition”) and the related
transaction costs and expenses associated with such Limited Condition
Acquisition, the Senior Credit Documentation (as defined below) shall provide,
on terms and conditions to be agreed, that the foregoing conditions and any
conditions to the consummation of such Limited Condition Acquisition shall, if
agreed to by the Administrative Agent and the applicable lenders providing the
applicable Incremental Term Loan, be subject to customary “certain funds” or
“SunGard” limitations.    Incremental Term Loans, Revolving Facility Increases
and Incremental Revolving Facilities will have the same Guarantees from the
Guarantors and will be secured on a pari passu basis by the same Collateral as
the other Senior Credit Facilities.    The proceeds of any Incremental Term
Loans, Revolving Facility Increases and Incremental Revolving Facilities may be
used for general corporate purposes of the Borrower and its subsidiaries
including, without limitation, to fund permitted acquisitions and permitted
restricted payments. Documentation:    The documentation for the Senior Credit
Facilities will be substantially consistent with the Existing Credit Agreement
and the other Credit Documents (as defined in the Existing Credit Agreement),
with such

 

 

Annex A – Bank Term Sheet

5

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   modifications to reflect the Transactions and customary market conditions as
of the Bank Closing Date and include, among other items, a credit agreement,
guarantees and appropriate pledge, security, mortgage and other collateral
documents (collectively, the “Senior Credit Documentation”), all consistent with
this term sheet. Guarantors:    The obligations of the Borrower under the Senior
Credit Facilities, under any hedging agreements entered into between any Credit
Party (as defined below) and any counterparty that is the Administrative Agent
or a Lender (or any affiliate thereof) at the time such hedging agreement is
executed and under any treasury management arrangements between any Credit Party
and the Administrative Agent or a Lender (or any affiliate thereof)
(collectively, the “U.S. Obligations”) will be unconditionally guaranteed, on a
joint and several basis, by each existing and subsequently acquired or formed
direct and indirect subsidiary of the Borrower other than subsidiaries
(x) individually with assets and revenue not in excess of $25.0 million and
(y) collectively with assets and revenue not in excess of $ 75.0 million (each a
“Guarantor”; and such guarantee being referred to herein as a “Guarantee”);
provided that Guarantees of the obligations of the Borrower (i) by foreign
subsidiaries and (ii) by domestic subsidiaries substantially all of the assets
of which consist of the equity interests of one or more foreign subsidiaries, in
each case, will be required only to the extent such Guarantees would not have
adverse federal income tax consequences for the Borrower or any of its
subsidiaries (including by constituting an investment of earnings in United
States property under Section 956 (or a successor provision) of the Internal
Revenue Code or triggering an increase in the gross income of the Borrower
pursuant to Section 951 (or a successor provision) of the Internal Revenue Code
without corresponding credits or other offsets). The obligations of any Foreign
Borrower under the Senior Credit Facilities (the “Foreign Obligations” and
together with the U.S. Obligations, the “Secured Obligations”) will be
unconditionally guaranteed, on a joint and several basis, (1) by the Borrower
and each other Guarantor and (2) by any foreign subsidiary of the Borrower that
is the direct or indirect parent of such Foreign Borrower; provided that each
Foreign Borrower that is not a subsidiary of Itron Metering Solutions Luxembourg
SARL (“Itron Metering Lux”) and Itron Luxembourg SARL (“Itron Lux”) shall be
required to provide foreign subsidiary guarantees as mutually determined. All
Guarantees shall be guarantees of payment and not of collection. The Borrower
and the Guarantors, excluding any Foreign Borrower and any foreign subsidiary
which is a Guarantor solely with respect to the Foreign Sub-Facility and any
other foreign obligations, are herein referred to as the “Credit Parties” and,
individually, as a “Credit Party.” Security:    There will be granted to the
Administrative Agent, for the benefit of itself, the Lenders, any counterparty
to any hedging agreement that is the Administrative Agent or a Lender (or any
affiliate thereof) at the time such hedging agreement is executed and the
Administrative Agent or any Lender (or any affiliate thereof) with treasury
management arrangements with any Credit Party, valid and perfected first
priority (subject to certain

 

 

Annex A – Bank Term Sheet

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   customary exceptions substantially consistent with the Existing Credit
Agreement and satisfactory to the Administrative Agent and set forth in the
Senior Credit Documentation) security interests in and liens on all of the
following (collectively, the “Collateral”):   

(a)     All present and future capital stock or other membership or partnership
equity ownership or profit interests (collectively, “Equity Interests”) owned or
held of record or beneficially by each of the Credit Parties, limited to 66% of
the voting stock (and 100% of the non-voting stock) of all present and future
first-tier foreign subsidiaries of any Credit Party (to the extent, and for so
long as, the pledge of any greater percentage could reasonably be expected to
have adverse federal income tax consequences for the Borrower or any of its
subsidiaries);

  

(b)     Substantially all of the tangible and intangible personal property and
assets of the Credit Parties (including, without limitation, all equipment,
inventory and other goods, accounts, licenses, contracts, intellectual property
and other general intangibles, deposit accounts, securities accounts and other
investment property and cash) (it being understood that existing real property
shall not be included in the Collateral; provided that the Borrower and its
subsidiaries shall be prohibited from granting a mortgage on existing real
property other than with respect to the Senior Credit Facilities); and

  

(c)     All products, profits, rents and proceeds of the foregoing, in each case
subject to certain customary exceptions.

   All such security interests in personal property and all liens on real
property will be created pursuant to, and will comply with, Senior Credit
Documentation reasonably satisfactory to the Administrative Agent. Subject to
the Limited Conditionality Provision, on the Acquisition Closing Date, such
security interests will have become perfected (or arrangements for the
perfection thereof reasonably satisfactory to the Administrative Agent will have
been made). Notwithstanding the foregoing, assets will be excluded from the
Collateral in circumstances where the Administrative Agent and the Borrower
agree the cost of obtaining a security interest in such assets are excessive in
relation to the value afforded thereby, or if the granting of a security
interest in such asset would be prohibited by contract in effect at the time
such asset is acquired (other than any contract entered into for the purpose of
avoiding such pledge) or applicable law unless such prohibition is not effective
under applicable law.    Documentation with respect to the pledges by a Credit
Party of Equity Interests of foreign subsidiaries will not include foreign
pledge instruments, subject to exceptions substantially consistent with the
Existing Credit Agreement for material first tier foreign subsidiaries.

 

 

Annex A – Bank Term Sheet

7

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Final Maturity:    The final maturity of the Revolving Credit Facility will
occur on June 23, 2020 and the commitments with respect to the Revolving Credit
Facility will automatically terminate on such date.    The final maturity of the
Term Loan A Facility will occur on June 23, 2020.    The final maturity of the
Term Loan B Facility will occur on the seventh anniversary of the Bank Closing
Date (the “Term Loan B Maturity Date”). Amortization:    The Term Loan A
Facility will amortize in quarterly installments pursuant to the terms set forth
in the Existing Credit Agreement, with the remainder due on June 23, 2020.   
The Term Loan B Facility will amortize in equal quarterly installments in an
aggregate annual amount equal to 1% of the original principal amount of the Term
Loan B Facility, with the remainder due on the Term Loan B Maturity Date.
Interest Rates and Fees:    Interest rates and fees in connection with the
Senior Credit Facilities will be as specified in the Fee Letter and on Schedule
I attached hereto. Mandatory Prepayments:    Subject to the next paragraph, the
Senior Credit Facilities will be required to be prepaid with:   

(a)     100% of the net cash proceeds of the issuance or incurrence of debt by
the Borrower or any of its subsidiaries, to the extent such issuance or
incurrence of debt is prohibited by the Senior Credit Documentation;

  

(b)     100% of the net cash proceeds of all asset sales in excess of
$25.0 million per fiscal year and insurance and condemnation recoveries, subject
to baskets, reinvestment provisions and other exceptions to be mutually agreed
upon (it being agreed that “Asset Sale” will be defined in the Senior Credit
Documentation to exclude any transaction or series of transactions involving
property with a fair market value of less than $10.0 million);

  

(c)     100% of the net cash proceeds of any asset sale that would otherwise
require the Borrower or any of its subsidiaries to make an offer to purchase any
unsecured debt securities; and

  

(d)     Solely in the case of Loans under the Term Loan B Facility, 50% of
Excess Cash Flow (to be defined in the Senior Credit Documentation) for each
fiscal year of the Borrower, with reductions to (i) 25% of Excess Cash Flow
based upon achievement and maintenance of a Total Net Leverage Ratio (as defined
in the Existing Credit Agreement) of less than 3.50:1.00 but greater than or
equal to 3.00:1.00 and (ii) 0% of Excess Cash Flow based upon achievement and
maintenance of a Total Net

 

 

Annex A – Bank Term Sheet

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          Leverage Ratio of less than 3.00:1.00.

   Mandatory prepayments made pursuant to clauses (a), (b) and (c) above will be
applied first, to prepay outstanding loans under the Term Loan Facilities and
any Incremental Term Loans on a pro rata basis and second, to prepay outstanding
loans under the Revolving Credit Facility with no permanent reduction in the
commitment under the Revolving Credit Facility. Mandatory prepayments made
pursuant to clause (d) above will be applied solely to prepay outstanding loans
under the Term Loan B Facility and any Incremental Term Loans that are “tranche
B loans”. All such mandatory prepayments of the Term Loan Facilities and any
Incremental Term Loans will be applied to the remaining scheduled amortization
payments on a pro rata basis.    In the event the dollar equivalent of all
amounts outstanding under the Revolving Credit Facility exceeds 105% of the
amount of the commitments under the Revolving Credit Facility then in effect,
the Borrower shall prepay outstanding loans under the Revolving Credit Facility
in an amount such that, after giving effect to such prepayment, the dollar
equivalent of all amounts outstanding under the Revolving Credit Facility does
not exceed the amount of the commitments under the Revolving Credit Facility
then in effect.    Notwithstanding the foregoing, any Lenders under the Term
Loan B Facility and any Incremental Term Loans that are “tranche B loans” may,
so long as there is a corresponding principal amount outstanding under the Term
Loan A Facility, decline to accept any such prepayment, in which case the amount
of such declined payment shall be applied to the prepayment of the Term Loan A
Facility as set forth above.    Notwithstanding the foregoing, the net cash
proceeds of the issuance or incurrence of debt by the Borrower shall be applied
to prepay the Bridge Facility prior to any prepayment under the Senior Credit
Facilities.

Optional Prepayments and

Commitment Reductions:

   Loans under the Senior Credit Facilities may be prepaid and unused
commitments under the Revolving Credit Facility may be reduced at any time, in
whole or in part, at the option of the Borrower, upon notice and in minimum
principal amounts and in multiples consistent with the Existing Credit
Agreement, without premium or penalty (except LIBOR breakage costs and any
premium described under the “Call Premium” section below). Any optional
prepayment of the Term Loan Facilities or any Incremental Term Loan Facility
will be applied as directed by the Borrower. Call Premium:    If, on or prior to
the date that is six months after the Acquisition Closing Date, a Repricing
Transaction (as defined below) occurs, the Borrower will pay a premium (the
“Call Premium”) in an amount equal to 1.0% of the principal amount of loans
under the Term Loan B Facility subject to such Repricing Transaction (other than
any Repricing Transaction made

 

 

Annex A – Bank Term Sheet

9

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   in connection with a change of control).    As used herein, the term
“Repricing Transaction” shall mean (a) any prepayment or repayment of loans
under the Term Loan B Facility with the proceeds of, or any conversion of loans
under the Term Loan B Facility into, any new or replacement bank indebtedness
bearing interest with an “effective yield” (taking into account, for example,
upfront fees, interest rate spreads, interest rate benchmark floors and OID)
less than the “effective yield” applicable to the loans under the Term Loan B
Facility subject to such event (as such comparative yields are determined by the
Administrative Agent) and (b) any repricing of the loans under the Term Loan B
Facility (whether pursuant to an amendment, amendment and restatement, mandatory
assignment or otherwise) which reduces the “effective yield” applicable to all
or a portion of the loans under the Term Loan B Facility (it being understood
that any prepayment premium with respect to a Repricing Transaction shall apply
to any required assignment by a non-consenting Lender in connection with any
such amendment pursuant to so-called yank-a-bank provisions). Conditions to
Closing and Initial Extensions of Credit:    The making of the initial
extensions of credit under the Senior Credit Facilities will be subject to
satisfaction of the conditions precedent set forth in the Conditions Annex.

Conditions to All Extensions of

Credit:

   Each extension of credit under the Senior Credit Facilities will be subject
to satisfaction of the following conditions precedent: (a) all of the
representations and warranties in the Senior Credit Documentation shall be true
and correct in all material respects (or if qualified by materiality or material
adverse effect, in all respects) as of the date of such extension of credit, or
if such representation speaks as of an earlier date, as of such earlier date,
(subject, in respect of any extension of credit on the Acquisition Closing Date
(including any proceeds released from escrow on such date as provided in the Fee
Letter), to the Limited Conditionality Provision) and (b) other than in
connection with any funding on the Acquisition Closing Date relating to the
Transactions, no default or event of default under the Senior Credit Facilities
shall have occurred and be continuing or would result from such extension of
credit, (c) in the case of any borrowing of a loan denominated in a currency
other than United States dollars, the absence of any change that would make
funding in such currency impracticable and (d) delivery of a customary borrowing
notice. Representations and Warranties:    To be substantially consistent with
the Existing Credit Agreement, with such modifications to reflect the
Transactions and customary market conditions as of the Bank Closing Date.
Affirmative Covenants:    To be substantially consistent with the Existing
Credit Agreement, with such modifications to reflect the Transactions and
customary market conditions as of the Bank Closing Date, including, without
limitation the use of commercially reasonable efforts to maintain a public
corporate credit rating from S&P and a public corporate family rating from
Moody’s, in each case with respect to the Borrower, and a public rating of

 

 

Annex A – Bank Term Sheet

10

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   the Term Loan B Facility by each S&P and Moody’s (but, for the avoidance of
doubt, not a minimum rating). Negative Covenants:    To be substantially
consistent with the Existing Credit Agreement, with such modifications to
reflect the Transactions and customary market conditions as of the Bank Closing
Date (which will be applicable to the Borrower and its subsidiaries and be
subject to materiality thresholds and exceptions substantially consistent with
the Existing Credit Agreement or otherwise to be mutually agreed).   
Notwithstanding the foregoing, the Senior Credit Documentation shall contain
provisions to allow the Borrower and its subsidiaries to, subject to customary
limitations:   

(a)    Consummate the Acquisition;

  

(b)    Issue the Notes and/or borrow amounts under the Bridge Facility in an
aggregate principal amount not to exceed $350.0 million; and

  

(c)    Consummate additional acquisitions, so long as, on a pro forma basis
after giving effect to such acquisition, the Total Net Leverage Ratio (as
defined in the Existing Credit Agreement) is not greater than the level which is
0.25x inside the Maximum Total Net Leverage Ratio covenant then in effect.

Financial Covenants:    Solely in the case of the Revolving Credit Facility, any
Incremental Revolving Facilities, Term Loan A Facility and any Incremental Term
Loans that are “tranche A loans”, the following financial covenants:   

(a)    Maximum Total Net Leverage Ratio as of the last day of any fiscal quarter
of 4.75 to 1.00 (with step-downs to 4.50 to 1.00, 4.25 to 1.00 and 4.00 to 1.00
to be agreed); and

  

(b)    Minimum Interest Coverage Ratio as of the last day of any fiscal quarter
of 3.00 to 1.00.

   The financial covenants above (the “Financial Covenants”) will apply to the
Borrower and its subsidiaries on a consolidated basis, with definitions as
substantially set forth in the Existing Credit Agreement with such modifications
to reflect the Transactions. Events of Default:    Substantially consistent with
the Existing Credit Agreement, including, without limitation, the following
(with materiality thresholds, exceptions and grace periods substantially
consistent with those set forth in the Existing Credit Agreement): non-payment
of obligations; inaccuracy of representation or warranty; non-performance of
covenants and obligations, provided that, in the event of a non-performance of
the Financials Covenants, the Lenders under the Term Loan B Facility may only
accelerate if the Lenders under the Term Loan A Facility or Revolving Credit
Facility accelerate or terminate their commitments as a result of

 

 

Annex A – Bank Term Sheet

11

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   such breach; default on other material debt (including hedging agreements);
change of control; bankruptcy or insolvency; impairment of security; ERISA;
material judgments; and actual or asserted invalidity or unenforceability of any
Senior Credit Documentation or liens securing obligations under the Senior
Credit Documentation. Defaulting Lender Provisions, Yield Protection and
Increased Costs:    Customary for facilities of this type, including, without
limitation, in respect of breakage or redeployment costs incurred in connection
with prepayments, cash collateralization for Letters of Credit or Swingline
Loans in the event any lender under the Revolving Credit Facility becomes a
Defaulting Lender (to be defined in a manner substantially consistent with the
Existing Credit Agreement), changes in capital adequacy and capital requirements
or their interpretation, illegality, unavailability, reserves without proration
or offset and payments free and clear of withholding or other taxes. Replacement
of Lenders:    Substantially consistent with the Existing Credit Agreement, the
Borrower shall have the right to replace any Lender that (a) requests
compensation with respect to certain contingencies, (b) refuses to consent to
certain amendments or waivers of the Senior Credit Facilities which require the
consent of such Lender and which have been approved by the Required Lenders (as
defined below) or (c) becomes a Defaulting Lender. Assignments and
Participations:   

(a)     Revolving Credit Facility: Subject to the consents described below
(which consents will not be unreasonably withheld or delayed), each Lender will
be permitted to make assignments to other financial institutions in respect of
the Revolving Credit Facility in a minimum amount equal to $5.0 million.

  

(b)     Term Loan Facilities: Subject to the consents described below (which
consents will not be unreasonably withheld or delayed), each Lender will be
permitted to make assignments to other financial institutions in respect of the
Term Loan Facilities and any Incremental Term Loan in a minimum amount equal to
$5.0 million.

  

(c)     Consents: The consent of the Borrower will be required for any
assignment unless (i) an Event of Default has occurred and is continuing,
(ii) the assignment is to a Lender, an affiliate of a Lender or an Approved Fund
(to be defined in a manner substantially consistent with the Existing Credit
Agreement) or (iii) the assignment is made in connection with the primary
syndication; provided that the Borrower shall be deemed to have consented to any
such assignment if it has not responded within 5 business days. The consent of
the Administrative Agent will be required for any assignment (i) in respect of
the Revolving Credit Facility, to an entity that is not a Lender with a
commitment in respect of the applicable Facility, an affiliate of any such
Lender or an Approved Fund and (ii) in respect of the Term Loan Facility, to an
entity that is not a Lender, an affiliate of a Lender or an Approved Fund. The
consent of the Issuing Banks, the

 

 

Annex A – Bank Term Sheet

12

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Multicurrency Issuing Banks, the Swingline Lender and the Multicurrency
Swingline Lenders will be required for any assignment under the Revolving Credit
Facility. Participations will be permitted without the consent of the Borrower
or the Administrative Agent.

  

(d)    No Assignment or Participation to Certain Persons. No assignment or
participation may be made to natural persons, the Borrower or any of its
affiliates or subsidiaries. No assignments may be made to any Defaulting Lender.

Collection Action Mechanism:    The Senior Credit Documentation will contain a
customary collateral allocation mechanism substantially consistent with that set
forth in the Existing Credit Agreement pursuant to which the Lenders will agree
to make assignments and participations among themselves upon bankruptcy or
insolvency defaults or acceleration of amounts due under the Senior Credit
Facilities, such that the obligations owing under each facility and sub-facility
will be held ratably by the Lenders. Required Lenders:    On any date of
determination, those Lenders who collectively hold more than 50% of the
outstanding loans and unfunded commitments under the Senior Credit Facilities,
or if the Senior Credit Facilities have been terminated, those Lenders who
collectively hold more than 50% of the aggregate outstandings under the Senior
Credit Facilities (the “Required Lenders”); provided that if any Lender shall be
a Defaulting Lender at such time, then the outstanding loans and unfunded
commitments under the Senior Credit Facilities of such Defaulting Lender shall
be excluded from the determination of Required Lenders. Amendments and Waivers:
   Amendments and waivers of the provisions of the Senior Credit Documentation
will require the approval of the Required Lenders, except that (a) the consent
of all Lenders directly adversely affected thereby will be required with respect
to (i) increases in the commitment of such Lenders, (ii) reductions of
principal, interest or fees, (iii) extensions of scheduled maturities or times
for payment and (iv) reductions in the voting percentages, and (b) the consent
of all Lenders will be required with respect to releases of all or substantially
all of the value of the Collateral or Guarantees (other than in connection with
transactions permitted pursuant to the Senior Credit Documentation).   
Notwithstanding the foregoing, any amendments to or waivers of the Financial
Covenants (or to any defined terms solely to the extent used in calculating the
Financial Covenants) shall require the consent of lenders holding a majority in
interest of the commitments under the Revolving Credit Facility and the
outstanding Term Loan A Facility, taken as a single class. Indemnification:   
The Credit Parties will indemnify the Lead Arranger, the Administrative Agent,
each of the Lenders (including the Swingline Lender, each Issuing Bank, each
Multicurrency Swingline Lender and each Multicurrency Issuing Bank) and their
respective affiliates, partners, directors, officers,

 

 

Annex A – Bank Term Sheet

13

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   agents and advisors (each, an “indemnified person”) and hold them harmless
from and against all liabilities, damages, claims, costs and expenses (including
reasonable fees, disbursements, settlement costs and other charges of counsel)
relating to the Transactions or any transactions related thereto and the
Borrower’s use of the loan proceeds or the commitments; provided that such
indemnity will not, as to any indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction in a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such indemnitee.
This indemnification shall survive and continue for the benefit of all such
persons or entities. Expenses:    The Credit Parties will reimburse the Lead
Arranger and the Administrative Agent (and all Lenders (including the Swingline
Lender, each Issuing Bank, each Multicurrency Swingline Lender and each
Multicurrency Issuing Bank) in the case of enforcement costs and documentary
taxes) for all reasonable out-of-pocket costs and expenses in connection with
the syndication, negotiation, execution, delivery and administration of the
Senior Credit Documentation and any amendment or waiver with respect thereto
(including, without limitation, reasonable fees and expenses of counsel
thereto). Governing Law and Forum:    New York. Waiver of Jury Trial and
Punitive and Consequential Damages:    All parties to the Senior Credit
Documentation shall waive the right to trial by jury and the right to claim
punitive or consequential damages. Counsel for the Lead Arranger and the
Administrative Agent:    Cravath, Swaine & Moore LLP.

 

 

Annex A – Bank Term Sheet

14

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SCHEDULE I TO ANNEX A

INTEREST AND FEES ON

SENIOR CREDIT FACILITIES

 

Interest:   At the Borrower’s option, loans (other than Swingline Loans) will
bear interest based on the Base Rate or LIBOR, as described below:  

A.     Base Rate Option

  Interest will be at the Base Rate plus the applicable Interest Margin (as
defined below). The “Base Rate” is defined as the highest of (a) the Federal
Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of
1%, (b) the prime commercial lending rate of the Administrative Agent, as
established from time to time at its principal U.S. office (which such rate is
an index or base rate and will not necessarily be its lowest or best rate
charged to its customers or other banks) and (c) the daily LIBOR (as defined
below) for a one-month Interest Period (as defined below) plus the difference
between the Interest Margin for LIBOR Rate Loans and the Interest Margin for
Base Rate Loans. Interest shall be payable quarterly in arrears on the last day
of each calendar quarter and (i) with respect to Base Rate Loans based on the
Federal Funds Rate and LIBOR, shall be calculated on the basis of the actual
number of days elapsed in a year of 360 days and (ii) with respect to Base Rate
Loans based on the prime commercial lending rate of the Administrative Agent,
shall be calculated on the basis of the actual number of days elapsed in a year
of 365/366 days. Any loan bearing interest at the Base Rate is referred to
herein as a “Base Rate Loan”.   Base Rate Loans will be made on same business
day’s notice and will be in minimum amounts to be agreed upon.  

B.     LIBOR Option

  Interest will be determined for periods (“Interest Periods”) of one (including
a daily reset option, the LIBOR Market Index Rate), two, three or six months (or
12 months if agreed to by all relevant Lenders), as selected by the Borrower,
and will be at an annual rate for Eurocurrency deposits for the corresponding
deposits of U.S. dollars administered by ICE Benchmark Administration Limited
(or any applicable successor quoting service) (“LIBOR”) plus the applicable
Interest Margin (as described below); provided that in no event will LIBOR be
less than 0.00%.   LIBOR will be determined by the Administrative Agent at the
start of each Interest Period and, other than in the case of LIBOR used in
determining the Base Rate and in the case of loans bearing interest at the

 

 

Schedule I to Annex A – Interest and Fees

1

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  LIBOR Market Index Rate, will be fixed through such period. Interest will be
paid on the last day of each Interest Period or, in the case of Interest Periods
longer than three months, quarterly, and will be calculated on the basis of the
actual number of days elapsed in a year of 360 days. LIBOR will be adjusted for
maximum statutory reserve requirements (if any). Any loan bearing interest at
LIBOR (other than a Base Rate Loan for which interest is determined by reference
to LIBOR) is referred to herein as a “LIBOR Rate Loan”.   LIBOR Rate Loans will
be made on three business days’ prior notice (or four business days’ prior
notice for multicurrency borrowings) and, in each case, will be in minimum
amounts to be agreed upon.   Swingline Loans will bear interest at the Base Rate
plus the applicable Interest Margin.   The interest rate applicable to
multicurrency loans (including multicurrency Swingline Loans) will be determined
based on benchmark rates to be agreed (it being understood that the EURIBOR
benchmark, including a daily reset option for one-month EURIBOR, will be offered
to the Foreign Borrowers if available) plus the applicable Interest Margins;
provided that in no event will EURIBOR be less than 0.00%. Default Interest:  
(a) Automatically upon the occurrence and during the continuance of any payment
event of default or upon a bankruptcy event of default of the Borrower or any
other Credit Party or (b) at the election of the Required Lenders (or the
Administrative Agent at the direction of the Required Lenders), upon the
occurrence and during the continuance of any other event of default, all
outstanding principal, fees and other obligations under the Senior Credit
Facilities shall bear interest at a rate per annum of 2.00% in excess of (x) in
the case of any loan, the rate then applicable to such loan (including the
applicable Interest Margin), (y) in the case of letter of credit fees, the
Interest Margin applicable to such letter of credit, or (z) in the case of other
fees and any other obligations, the Interest Margin applicable to Base Rate
Loans, and shall be payable on demand of the Administrative Agent. Interest
Margins:   The applicable interest margins (the “Interest Margins”) will be:  

(a)     in the case of the Term Loan B Facility, 2.75% for LIBOR Rate Loans and
1.75% for Base Rate Loans; and

 

(b)     in the case of the Term Loan A Facility and the Revolving Credit
Facility, the Interest Margins will initially be based on Tier V of the Pricing
Grid set forth below; provided that after the date on which the Borrower shall
have initially delivered quarterly financial statements and a compliance
certificate for the first full fiscal quarter ending after the Acquisition
Closing

 

 

Schedule I to Annex A – Interest and Fees

2

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Date, the Interest Margin with respect to the Term Loan A Facility and the
Revolving Credit Facility will be determined in accordance with the Pricing Grid
set forth below.

Commitment Fee:   A commitment fee (the “Commitment Fee”) will accrue on the
unused amounts of the commitments under the Revolving Credit Facility. Swingline
Loans will, for purposes of the commitment fee calculations only, not be deemed
to be a utilization of the Revolving Credit Facility. A Lender that is, and for
so long as it is, a Defaulting Lender shall not be entitled to receive a
Commitment Fee in respect of its commitment under the Revolving Credit Facility,
and the amount of such Defaulting Lender’s commitment under the Revolving Credit
Facility will be deducted from the aggregate commitments under the Revolving
Credit Facility for purposes of calculating the Commitment Fee payable at any
time by the Borrower. Such Commitment Fee will initially be based on Tier V of
the Pricing Grid set forth below per annum; provided that, after the date on
which the Borrower shall have initially delivered quarterly financial statements
and a compliance certificate for the first full fiscal quarter ending after the
Acquisition Closing Date, the Commitment Fee will be determined in accordance
with the applicable Pricing Grid set forth below. All accrued Commitment Fees
will be fully earned and due and payable quarterly in arrears (calculated on a
360-day basis) for the account of the Lenders under the Revolving Credit
Facility and will accrue from the Acquisition Closing Date. Letter of Credit
Fees:   The Borrower will pay to the Administrative Agent, for the account of
the Lenders under the Revolving Credit Facility, letter of credit participation
fees equal to the Interest Margin for LIBOR Rate Loans under the Revolving
Credit Facility, in each case, on the undrawn amount of all outstanding letters
of credit. The Borrower will pay to the Administrative Agent, for the account of
the applicable Issuing Bank or the applicable Multicurrency Issuing Bank, as
applicable, letter of credit issuing fees as agreed to by the Borrower and the
applicable Issuing Bank or the applicable Multicurrency Issuing Bank. Other
Fees:   The Lead Arranger and the Administrative Agent will receive such other
fees as will have been agreed in the Fee Letter.

 

 

Schedule I to Annex A – Interest and Fees

3

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Pricing Grid:   The applicable Interest Margins and the Commitment Fee with
respect to the Revolving Credit Facility and the Term Loan A Facility shall be
based on the Total Leverage Ratio (to be defined in a manner substantially
consistent with the Existing Credit Agreement) pursuant to the following grid:

 

Level

  

Total Leverage Ratio

   Interest
Margin for
LIBOR Rate
Loans     Interest
Margin for
Base Rate
Loans     Commitment
Fee   I    Less than 1.00 to 1.00      1.00 %      0.00 %      0.175 %  II   
Greater than or equal to 1.00 to 1.00 but less than 2.00 to 1.00      1.25 %   
  0.25 %      0.20 %  III    Greater than or equal to 2.00 to 1.00 but less than
2.75 to 1.00      1.50 %      0.50 %      0.25 %  IV    Greater than or equal to
2.75 to 1.00 but less than 3.50 to 1.00      1.75 %      0.75 %      0.25 %  V
   Greater than or equal to 3.50 to 1.00 but less than 4.25 to 1.00      2.00 % 
    1.00 %      0.30 %  VI    Greater than or equal to 4.25 to 1.00      2.25 % 
    1.25 %      0.35 % 

 

 

Schedule I to Annex A – Interest and Fees

4

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SCHEDULE II TO ANNEX A

FOREIGN BORROWERS

Itron Metering Solutions Luxembourg SARL, a Luxembourg limited liability company

Itron Luxembourg SARL, a Luxembourg limited liability company

Each other subsidiary of the Borrower that is not a foreign borrower under the
Existing Credit Agreement, subject to confirmation that no adverse tax or
registration requirements will result therefrom.

 

 

Schedule II to Annex A – Foreign Borrowers

1

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ANNEX B

$350.0 MILLION

SENIOR UNSECURED BRIDGE FACILITY

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Commitment Letter to which this Summary of Proposed Terms and
Conditions is attached or, as applicable, Annex A to the Commitment Letter.

 

Borrower:    The Borrower under the Senior Credit Facilities. Sole Lead Arranger
and Sole Bookrunning Manager:    Wells Fargo Securities, LLC will act as the
sole lead arranger and sole bookrunning manager (in such capacity, the “Lead
Arranger”). Lenders:    WF Investment Holdings, LLC (or one or more of its
affiliates) and a syndicate of financial institutions and other entities (the
“Bridge Lenders”). Administrative Agent:    WF Investment Holdings, LLC (in such
capacity, the “Administrative Agent”). Bridge Loans:    Unsecured senior credit
facility (the “Bridge Facility”) consisting of bridge loans (the “Bridge Loans”)
in an aggregate principal amount of up to $350.0 million, minus the aggregate
principal amount of unsecured senior notes (the “Notes”) issued on or prior to
the Acquisition Closing Date, if any. Use of Proceeds:    The proceeds of the
Bridge Loans will be used, together with the proceeds of the Senior Credit
Facilities, the Notes issued on or prior to the Acquisition Closing Date and up
to $50.0 million (or such other amount as set forth in the Bank Term Sheet) of
loans under the Revolving Credit Facility, to finance (a) the consummation of
the Acquisition and (b) the payment of fees and expenses incurred in connection
with the Transactions. Availability:    The Bridge Facility will be available
only in a single draw of the full amount of the Bridge Facility on the
Acquisition Closing Date. Amounts borrowed under the Bridge Facility that are
repaid or prepaid may not be reborrowed. Documentation:    The documentation for
the Bridge Loans will include, among other items, a bridge loan agreement,
guarantees and other appropriate documents, including an exhibit with the form
of the indenture in connection with the issuance of any Exchange Notes as
contemplated below (collectively, the “Bridge Loan Documentation”), all on terms
consistent with this Bridge Term Sheet. The Bridge Loan Documentation will
contain such other terms as are usual and customary for bridge loan agreements
for

 

 

Annex B – Bridge Facility Term Sheet

1

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   comparably rated companies in a similar industry, consistent with the
operational requirements of the Borrower and its subsidiaries in light of their
size, cash flow, industry business, business practices and operations and with
such modifications to reflect the Transactions and market conditions as of the
Acquisition Closing Date. The Bridge Loan Documentation will contain customary
high yield covenants, events of default and financial definitions, with basket
sizes, exceptions and other modifications as shall be determined by the Lead
Arranger in light of prevailing market conditions on the Acquisition Closing
Date; provided that prior to the Initial Maturity Date, the indebtedness, lien
and restricted payments covenants may be more restrictive than those contained
in the Senior Credit Facilities, otherwise customary for high yield debt
securities or those applicable to the Extended Term Loans (as defined below) and
the Exchange Notes (as defined below). To the extent applicable, and consistent
with the above, the Bridge Loan Documentation will be consistent with the Senior
Loan Documentation. The provisions of this paragraph are referred to as the
“Bridge Documentation Principles.” Ranking:    The Bridge Loans and the
Guarantees thereof will be unsecured senior debt of the Borrower and the
Guarantors (as defined below), pari passu with all other unsecured senior debt
of the Borrower and the Guarantors. Guarantors:    Same guarantors as the
guarantors for the Senior Credit Facilities (each a “Guarantor”; and its
guarantee is referred to herein as a “Guarantee”). The Borrower and the
Guarantors are herein referred to collectively as the “Credit Parties” and each
a “Credit Party.” Security:    None. Interest:    Interest rates and fees in
connection with the Bridge Loans and the Exchange Notes will be as specified in
the Fee Letter and on Schedule I attached hereto. Maturity/Exchange:    The
Bridge Loans will mature on the date (the “Initial Maturity Date”) that is
twelve months after the Acquisition Closing Date. If any Bridge Loan has not
been repaid in full on or prior to the Initial Maturity Date, subject to payment
of the Bridge Rollover Fee (as defined in the Fee Letter) and unless (i) the
Borrower or any of its subsidiaries is subject to a bankruptcy or other
insolvency proceeding or (ii) there exists a default in the payment when due at
final maturity of any indebtedness (of an amount consistent with the terms of
the Senior Loan Documentation) of the Borrower or any of its subsidiaries, or
the maturity of such indebtedness shall have been accelerated, the Bridge Loans
will automatically be converted into term loans (each, an “Extended Term Loan”)
due on the date that is eight years after the Acquisition Closing Date. The
Extended Term Loans will be governed by the provisions of the Bridge Loan

 

 

Annex B – Bridge Facility Term Sheet

2

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   Documentation and will have the same terms as the Bridge Loans except as
expressly set forth on Schedule II hereto.    Lenders under the Extended Term
Loans will have the option at any time or from time to time to receive exchange
notes under an indenture that complies with the Trust Indenture Act of 1939 (the
“Exchange Notes”) in exchange for such Extended Term Loans having the terms set
forth on Schedule III hereto; provided that the Borrower may defer the issuance
of Exchange Notes until such time as the Borrower has received requests to issue
an aggregate principal amount of Exchange Notes equal to at least $50.0 million.
Mandatory Prepayment:    The Borrower will be required to prepay the Bridge
Loans on a pro rata basis, at par plus accrued and unpaid interest with:   

(a)     100% of the net cash proceeds from the issuance of the Notes, any
Permanent Financing and/or any other indebtedness (other than the Senior Credit
Facilities) by the Borrower or any of its subsidiaries, subject to baskets and
other exceptions to be mutually agreed upon in accordance with the Bridge
Documentation Principles;

  

(b)     100% of the net cash proceeds from any issuance of equity securities of,
or from any capital contribution to the Borrower or any of its subsidiaries,
subject to exceptions to be mutually agreed upon in accordance with the Bridge
Documentation Principles; and

  

(c)     100% of the net cash proceeds of all non-ordinary course asset sales,
insurance proceeds and condemnation recoveries and other asset dispositions by
the Borrower or any of its subsidiaries in excess of amounts required to be paid
to the Lenders under the Senior Credit Facilities, subject to exceptions to be
mutually agreed upon in accordance with the Bridge Documentation Principles.

   Each such prepayment will be made together with accrued interest to the date
of prepayment, but without premium or penalty (except breakage costs related to
prepayments not made on the last day of the relevant interest period).   
Notwithstanding anything herein to the contrary, the net cash proceeds of the
issuance or incurrence of debt by the Borrower shall be applied to prepay the
Bridge Facility prior to any prepayment under the Senior Credit Facilities.   
In the event any Bridge Lender or affiliate of a Bridge Lender purchases
Securities (as defined in the Fee Letter) from the Borrower pursuant to the
securities demand provisions in the Fee Letter, the net cash proceeds received
by the Borrower in respect of

 

 

Annex B – Bridge Facility Term Sheet

3

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   such Securities may, at the option of such Bridge Lender or affiliate, be
applied first to prepay the Bridge Loans of such Bridge Lender or affiliate
rather than pro rata (provided that if there is more than one such Bridge Lender
or affiliate then such net cash proceeds will be applied pro rata to prepay the
Bridge Loans of all such Bridge Lenders or affiliates in proportion to such
Bridge Lenders’ or affiliates’ principal amount of Securities purchased from the
Borrower) prior to being applied to prepay the Bridge Loans held by other Bridge
Lenders. Change of Control:    Upon any change of control (to be defined in the
Bridge Loan Documentation in accordance with the Bridge Documentation
Principles), the Borrower will be required to prepay the entire principal amount
of the Bridge Loans (plus any accrued and unpaid interest) at par. Prior to
making any such payment, the Borrower will, within 30 days of the change of
control, repay all obligations under the Senior Credit Facilities or obtain any
required consent of the lenders under the Senior Credit Facilities to make such
prepayment of the Bridge Loans. Voluntary Prepayment:    Subject to the
provisions of the Senior Credit Facilities, the Bridge Loans may be prepaid at
any time, in whole or in part, at the option of the Borrower, upon notice and in
a minimum principal amount and in multiples to be agreed upon, at 100% of the
principal amount of the Bridge Loans prepaid, plus all accrued and unpaid
interest and fees (including any breakage costs) to the date of the repayment.
Conditions Precedent to Funding:    The funding of the Bridge Loans will be
subject to satisfaction of the conditions precedent set forth in the Conditions
Annex. Representations and Warranties:    The Bridge Loan Documentation will
contain usual and customary representations and warranties for facilities of
this type and substantially similar to the representations and warranties
contained in the Senior Credit Documentation, with such changes as are
reasonably appropriate in connection with the Bridge Facility, subject to the
Bridge Documentation Principles and the Limited Conditionality Provision.
Covenants:    The Bridge Loan Documentation will contain affirmative covenants
comparable to those contained in the Senior Credit Documentation (and also
including a covenant to comply with the securities demand provisions in the Fee
Letter, a customary offering cooperation covenant, and a covenant to use all
commercially reasonable efforts to refinance the Bridge Loans as soon as
practicable) and negative covenants customary for high yield debt securities,
subject to the Bridge Documentation Principles; provided that prior to the
Initial Maturity Date, the indebtedness, lien and restricted payments covenants
may be more restrictive than those contained in the Senior Credit Facilities,
otherwise customary for high yield debt securities or those applicable to the
Extended Term Loans and the Exchange

 

 

Annex B – Bridge Facility Term Sheet

4

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   Notes. Events of Default:    Prior to the Initial Maturity Date, the Bridge
Loan Documentation will contain such events of default (and, as appropriate,
grace periods and threshold amounts) as are usual and customary for high yield
debt securities, subject to the Bridge Documentation Principles (and no more
restrictive than those set forth in the Senior Credit Documentation), including
without limitation an event of default for failure to pay fees specified in the
Fee Letter. Defaulting Lender Provisions, Yield Protection and Increased Costs:
   Customary for facilities of this type, including, without limitation, in
respect of breakage or redeployment costs incurred in connection with
prepayments, changes in capital adequacy and capital requirements or their
interpretation, illegality, unavailability, reserves without proration or offset
and payments free and clear of withholding or other taxes. Assignments and
Participations:   

Subject to the prior approval of the Administrative Agent (such approval not to
be unreasonably withheld) and compliance with applicable securities laws, the
Bridge Lenders will have the right to assign Bridge Loans (other than to any
natural person); provided, however, that prior to the Initial Maturity Date and
so long as no Demand Failure Event (as defined in the Fee Letter), payment or
bankruptcy default or event of default is continuing, the consent of the
Borrower (not to be unreasonably withheld or delayed) shall be required with
respect to any assignment if, subsequent thereto, the Initial Bridge Lenders
would hold, in the aggregate, less than 50.1% of the outstanding Bridge Loans.
The Borrower shall be deemed to have consented to an assignment request if the
Borrower has not objected thereto within ten business days after written notice
thereof.

 

The Bridge Lenders will have the right to participate their Bridge Loans (other
than to any natural person) without restriction, other than customary voting
limitations. Participants will have the same benefits as the selling Bridge
Lenders would have (and will be limited to the amount of such benefits) with
regard to yield protection and increased costs, subject to customary limitations
and restrictions.

Required Lenders:    On any date of determination, those Bridge Lenders who
collectively hold more than 50% of the aggregate outstanding Bridge Loans (the
“Required Lenders”). Amendments and Waivers:    Amendments and waivers of the
provisions of the Bridge Loan Documentation will require the approval of the
Required Lenders, except that (a) the consent of all Bridge Lenders directly
adversely affected thereby will be required with respect to: (i) reductions of
principal, interest, fees or other amounts, (ii) except as provided under
“Maturity/Exchange” above, extensions of scheduled maturities or times for
payment (other than for purposes of

 

 

Annex B – Bridge Facility Term Sheet

5

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   administrative convenience), (iii) increases in the amount of any Bridge
Lender’s commitment, (iv) additional restrictions on the right to exchange
Extended Term Loans for Exchange Notes or any amendment to the rate of such
exchange, (v) changes in call dates or call prices (other than notice
provisions) and (vi) changes in pro rata sharing provisions, (b) the consent of
100% of the Bridge Lenders will be required with respect to customary matters,
including (i) releases of all or substantially all of the value of the
Guarantees (other than in connection with transactions permitted pursuant to the
Bridge Loan Documentation) and (ii) modifications in the voting percentages, and
(c) the consent of the Administrative Agent will be required to amend, modify or
otherwise affect its rights and duties. Indemnification:    The Credit Parties
will indemnify the Lead Arranger, the Administrative Agent, each of the Bridge
Lenders and their respective affiliates, partners, directors, officers,
employees, agents and advisors (each, an “indemnified person”) and hold them
harmless from and against all liabilities, damages, claims, costs and expenses
(including reasonable fees, disbursements, settlement costs and other charges of
counsel) relating to the Transactions or any transactions related thereto and
the Borrower’s use of the loan proceeds; provided that such indemnity will not,
as to any indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction in a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such indemnitee. This indemnification
shall survive and continue for the benefit of all such persons or entities.
Expenses:    The Credit Parties will reimburse the Lead Arranger and the
Administrative Agent (and all Bridge Lenders in the case of enforcement costs
and documentary taxes) for all reasonable out-of-pocket expenses costs and
expenses in connection with the syndication, negotiation, execution, delivery
and administration of the Bridge Loan Documentation and any amendment or waiver
with respect thereto (including, without limitation, reasonable fees and
expenses of counsel thereto). Governing Law and Forum:    The Bridge Loan
Documentation will provide that each party thereto will submit to the exclusive
jurisdiction and venue of the federal and state courts of the State of New York
(except to the extent the Administrative Agent or any Lender requires submission
to any other jurisdiction in connection with the exercise of any rights under
any security document or the enforcement of any judgment). New York law will
govern the Bridge Loan Documentation. Waiver of Jury Trial and Punitive and
Consequential Damages:    All parties to the Bridge Loan Documentation waive the
right to trial by jury and the right to claim punitive or consequential damages.

 

 

Annex B – Bridge Facility Term Sheet

6

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Counsel for the Lead Arranger and Cravath, Swaine & Moore LLP.

the Administrative Agent:

 

 

Annex B – Bridge Facility Term Sheet

7

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SCHEDULE I TO ANNEX B

INTEREST RATES ON THE BRIDGE LOANS

 

Interest Rate:    The Bridge Loans will bear interest for the first three month
period commencing on the Acquisition Closing Date and, subject to the first
sentence of the following paragraph, for each three month period thereafter, at
a variable rate per annum (the “Applicable Interest Rate”) equal to the
three-month LIBOR Rate plus 5.00%; provided, that (a) if the Acquisition Closing
Date has not occurred within 119 days of the date of the Commitment Letter, the
Applicable Interest Rate will increase by 0.50%, (b) if the Acquisition Closing
Date has not occurred within 180 days of the date of the Commitment Letter, the
Applicable Interest Rate will further increase by 0.25% and (c) if the
Acquisition Closing Date has not occurred within 270 days of the date of the
Commitment Letter, the Applicable Interest Rate will further increase by 0.25%;
provided, further, that if, at any time, the Borrower fails to obtain or
maintain a corporate/corporate family rating (i) from S&P of BB- or better with
a stable or better outlook, the Applicable Interest Rate will further increase
by 0.25% and (ii) from Moody’s of Ba3 or better with a stable or better outlook,
the Applicable Interest Rate will further increase by 0.25%. For the avoidance
of doubt, (A) in the event that the events described in clauses (i) and (ii) of
the second proviso in the immediately preceding sentence both occur, the
Applicable Interest Rate shall increase by 0.50% and (B) the increases set forth
in the second proviso are in addition to the increases to the Applicable
Interest Rate set forth in the first proviso.    In addition to the foregoing,
the Applicable Interest Rate will increase by an additional 0.50% following each
three-month period after the Acquisition Closing Date. Notwithstanding the
foregoing, the interest rate on the Bridge Loans will not at any time prior to
the Initial Maturity Date exceed the Total Cap (as defined in the Fee Letter).
   Interest will be payable quarterly in arrears and on the Initial Maturity
Date and will be calculated on the basis of the actual number of days elapsed in
a year of 360 days.    Upon the occurrence of a Demand Failure Event (as defined
in the Fee Letter), all outstanding Bridge Loans will accrue interest at the
Total Cap.    The “LIBOR Rate” will be defined and calculated as specified in
the Term Loan Documentation; provided that at no time will the LIBOR Rate be
deemed to be less than 1.00% per annum Default Rate:    (a) Automatically upon
the occurrence and during the continuance of any payment event of default or
upon a bankruptcy event of default of the Borrower or any other Credit Party or
(b) at the election of the

 

 

Schedule I to Annex B – Interest Rates

1

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   Required Lenders, upon the occurrence and during the continuance of any other
event of default, all outstanding principal, fees and other obligations under
the Bridge Facility will bear interest at a rate per annum of 2.00% in excess of
the rate then applicable to the Bridge Loans, payable on demand of the
Administrative Agent. Such Default Rate may be in excess of any cap or
limitation on yield or interest rate set forth in this Commitment Letter or in
the Fee Letter.

 

 

Schedule I to Annex B – Interest Rates

2

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SCHEDULE II TO ANNEX B

EXTENDED TERM LOANS

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms used herein without definition will have the meanings given to
them in the Summary of Proposed Terms and Conditions for the Bridge Facility to
which this Schedule II is attached.

 

Borrower:    The Borrower. Guarantors:    Same as the Guarantors of the Bridge
Loans. Security:    None. Ranking:    Same as the Bridge Loans. Maturity:   
Eight years from the Acquisition Closing Date. Interest Rate:    The Extended
Term Loans will bear interest at the Total Cap. Default Rate:    The Extended
Term Loans will bear default interest at a rate per annum of 2.00% in excess of
the rate otherwise applicable thereto, which may be in excess of the Total Cap.
Mandatory Prepayment:    Same as the mandatory prepayments for the Bridge Loans.
Voluntary Prepayment:    Until the date that is three years after the
Acquisition Closing Date (the “Non-Call Date”), the Extended Term Loans may not
be prepaid. From and after the Non-Call Date, the Extended Term Loans may be
prepaid at any time, in whole or in part, at the option of the Borrower, upon
notice and in a minimum principal amount and in multiples to be agreed upon, at
100% of the principal amount of the Extended Term Loans prepaid, plus all
accrued and unpaid interest and fees (including any breakage costs) to the date
of the repayment, plus a premium of 75% of the Total Cap in the first year
following the Non-Call Date and declining ratably on an annual basis to zero in
the final year. Change of Control:    Substantially similar to the Bridge Loans,
plus a prepayment fee equal to 1.00% of the entire principal amount of the
Extended Term Loans outstanding at such time. Covenants, Events of Default and
Offers to Repurchase:    The covenants, events of default and offers to
repurchase (other than with respect to a change of control as described above)
that would be applicable to the Exchange Notes, if issued, will also be
applicable to the Extended Term Loans in lieu of the corresponding provisions
applicable to the Bridge Loans. Governing Law and Forum:    Substantially
similar to the Bridge Loans.

 

 

Schedule II to Annex B – Extended Term Loans

1

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SCHEDULE III TO ANNEX B

EXCHANGE NOTES

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms used herein without definition will have the meanings given to
them in the Summary of Proposed Terms and Conditions for the Bridge Facility to
which this Schedule III is attached.

 

Issuer:    The Borrower. Guarantors:    Same as the Guarantors of the Bridge
Loans. Security:    None. Principal Amount:    The Exchange Notes will be
available only in exchange for the Extended Term Loans at the option of the
Bridge Lenders. The principal amount of the Exchange Notes will equal 100% of
the aggregate principal amount of the outstanding Extended Term Loans for which
they are exchanged and will have the same ranking as the Extended Term Loans for
which they are exchanged. Ranking:    Same as the Bridge Loans. Maturity:   
Eight years from the Acquisition Closing Date. Interest Rate:    The Exchange
Notes will bear interest at the Total Cap. Default Rate:    The Exchange Notes
will bear default interest at a rate per annum of 2.00% in excess of the rate
otherwise applicable thereto, which may be in excess of the Total Cap. Mandatory
Redemption:    No mandatory redemption provisions other than 101% change of
control put and customary asset sale offer to redeem provisions. Optional
Redemption:    Non-callable until the date that is three years after the
Acquisition Closing Date and thereafter callable at par plus a premium of 75% of
the Total Cap in the first year and declining ratably on an annual basis to zero
in the final year. Right to Resell Notes:    Any Bridge Lender (and any
subsequent holder) will have the absolute and unconditional right to resell the
Exchange Notes to one or more third parties, whether by assignment or
participation and subject to compliance with applicable securities laws.
Representations and Warranties; Covenants; Events of Default:    Substantially
similar to those for the Bridge Loans. Governing Law and Forum:    Substantially
similar to the Bridge Loans.

 

 

Schedule III to Annex B – Exchange Notes

1

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Miscellaneous:    Customary provisions regarding consent to jurisdiction, waiver
of jury trial and punitive and consequential damages service of process, yield
protection, tax gross-ups and other miscellaneous matters. Counsel to the Lead
Arranger:    Cravath, Swaine & Moore LLP.

 

 

Schedule III to Annex B – Exchange Notes

2

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ANNEX C

$1,102.5 MILLION SENIOR SECURED CREDIT FACILITIES

$350.0 MILLION SENIOR UNSECURED BRIDGE FACILITY

CONDITIONS ANNEX

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the

Commitment Letter to which this Annex is attached, Annex A to the Commitment
Letter or Annex B

to the Commitment Letter.

The making of the initial extensions of credit under the Facilities are subject
solely to satisfaction of the following conditions precedent:

1. The negotiation, execution and delivery of Senior Credit Documentation and
Bridge Loan Documentation (collectively, the “Financing Documentation”), which
shall be consistent, in each case, with the Commitment Documents and shall be
otherwise reasonably satisfactory to the Lead Arranger and the Borrower
(provided such terms do not include any additional conditions precedent to the
initial funding under the Facilities).

2. The Administrative Agent and the Lead Arranger shall have received customary
legal opinions (which shall expressly permit reliance by the successors and
permitted assigns of each of the Administrative Agent and the Lenders), evidence
of authorization, organizational documents, customary insurance certificates,
good standing certificates (with respect to the applicable jurisdiction of
incorporation or organization of each Credit Party) and officer’s certificates.

3. To the extent required by the Financing Documentation and subject to the
Limited Conditionality Provision, on the Acquisition Closing Date, the Lead
Arranger shall have received satisfactory evidence that the Administrative Agent
(on behalf of the Lenders) shall have a valid and perfected first priority
(subject to the exceptions set forth in the Financing Documentation) lien and
security interest in the Collateral and has received customary insurance
certificates with respect thereto.

4. Since the Company Balance Sheet Date (as defined in the Acquisition
Agreement), there shall not have occurred a Company Material Adverse Effect (as
defined in the Acquisition Agreement).

5. The Agreement and Plan of Merger, including the disclosure schedules and all
exhibits and annexes and other attachments thereto (the “Acquisition
Agreement”), and all related documents and the terms thereof are reasonably
satisfactory to the Lead Arranger (it being acknowledged that the copy of the
Acquisition Agreement delivered to counsel to the Lead Arranger on September 17,
2017, at 5:42 p.m. New York time has been reviewed and is satisfactory to the
Lead Arranger). The Acquisition and the other Transactions shall be consummated
substantially concurrently with the funding of the Term Loan B Facility and the
issuance of the Notes and/or funding under the Bridge Facility in accordance
with applicable law and the Acquisition Agreement without giving effect to any
waiver, modification or consent thereunder that is materially adverse to the
interests of the Lenders in their capacities as such unless approved by the Lead
Arranger, it being understood that, without limitation, any change in the amount
or form of the purchase price, the third party beneficiary rights applicable to
the Lead Arranger and the Lenders or the governing law shall be deemed to be
materially adverse to the interests of the Lenders.

 

 

Annex C – Conditions Annex

1

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6. On the funding date of any of the Facilities (each a “Funding Date”), after
giving effect to the Transactions, neither the Borrower nor any of its
subsidiaries (including, for the avoidance of doubt, the Acquired Company) shall
have any outstanding indebtedness or liens (other than indebtedness and liens
permitted under the Financing Documentation).

7. The Lead Arranger shall have received:

(a) with respect to the Borrower and its subsidiaries, (i) audited consolidated
balance sheets and related consolidated statements of income, shareholder’s
equity and cash flows for the three most recently completed fiscal years ended
at least 90 days prior to the applicable Funding Date and (ii) unaudited
consolidated balance sheets and related consolidated statements of income and
cash flows for each interim fiscal quarter ended since the last audited
financial statements and at least 45 days prior to the applicable Funding Date;

(b) with respect to the Acquired Company and its subsidiaries, (i) audited
consolidated balance sheets and related consolidated statements of income,
shareholder’s equity and cash flows for the three most recently completed fiscal
years ended at least 90 days prior to the applicable Funding Date and
(ii) unaudited consolidated balance sheets and related consolidated statements
of income and cash flows for each interim fiscal quarter ended since the last
audited financial statements and at least 45 days prior to the applicable
Funding Date;

(c) a pro forma consolidated balance sheet and related pro forma consolidated
statements of income and cash flows of the Borrower for the fiscal year most
recently ended for which audited financial statements are provided and for the
four-quarter period ending on the last day of the most recent fiscal quarter
ending at least 45 days before the applicable Funding Date, prepared after
giving pro forma effect to each element of the Transactions (in accordance with
Regulation S-X under the Securities Act of 1933, as amended) as if the
Transactions had occurred on the last day of such four quarter period (in the
case of such balance sheet) or at the beginning of such period (in the case of
such other financial statements); and

(d) a certificate from the chief financial officer of the Borrower (in form and
substance as set forth on Annex D) certifying that after giving pro forma effect
to each element of the Transactions the Borrower and its subsidiaries (on a
consolidated basis) are solvent.

8. The Lead Arranger shall have received, at least three business days prior to
the applicable Funding Date, all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the PATRIOT
Act.

9. The Lead Arranger shall have been afforded a period in which to syndicate the
Senior Credit Facilities of at least 15 consecutive business days after the
receipt of all of the necessary information and certifications in order to
complete, and a customary authorization letter with respect to, the final
confidential information memorandum or memoranda to be used in connection with
the syndication of the Senior Credit Facilities (such information,
certifications and authorization letter, collectively, the “CIM Information”);
provided that such period shall not include any date from and including
November 22, 2017 through and including November 27, 2017, and if such period
has not ended on or before December 21, 2017, it shall not commence before
January 2, 2018. If the Borrower in good faith reasonably believes that it has
delivered the CIM Information, it may deliver to the Lead Arranger written
notice to that effect (stating when it believes it completed any such delivery),
in which case the receipt of the CIM Information shall be deemed to have
occurred and the 15 consecutive business

 

 

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day period described above shall be deemed to have commenced on the second
business day following the date of receipt of such notice, unless the Lead
Arranger in good faith reasonably believes that the Borrower has not completed
delivery of the CIM Information and, within two business days after its receipt
of such notice from the Borrower, the Lead Arranger delivers a written notice to
the Borrower to that effect (stating with specificity which information is
required to complete the delivery of the CIM Information).

10. All fees and expenses due to the Lead Arranger, the Administrative Agent and
the Lenders required to be paid on the applicable Funding Date (including the
fees and expenses of counsel for the Lead Arranger and the Administrative Agent)
will have been paid.

11. With respect to the Bridge Facility, (i) one or more investment banks
satisfactory to Wells Fargo Securities (collectively, the “Investment Bank”)
shall have been engaged to publicly sell or privately place the Notes and the
Investment Bank and the Lead Arranger shall have received, not later than 15
business days prior to the Acquisition Closing Date (provided that such period
shall not include any date from and including November 22, 2017 through and
including November 27, 2017, and if such period has not ended on or before
December 21, 2017, it shall not commence before January 2, 2018), a complete
printed preliminary prospectus or preliminary offering memorandum or preliminary
private placement memorandum (collectively, an “Offering Document”) suitable for
use in a customary high-yield road show relating to the issuance of the Notes,
which contains all audited and unaudited historical and pro forma financial
statements and other data to be included therein (including other financial data
of the type and form customarily included in offering memoranda, and all other
data that the Securities and Exchange Commission would require in a registered
offering of such Notes or would be necessary for the Investment Bank to receive
customary “comfort” (including “negative assurance” comfort) from independent
accountants and customary legal opinions in connection with the offering of the
Notes and (ii) the Investment Bank shall have been afforded a period of at least
15 consecutive business days (provided that such period shall not include any
date from and including November 22, 2017 through and including November 27,
2017, and if such period has not ended on or before December 21, 2017, it shall
not commence before January 2, 2018) following receipt of an Offering Document,
including the information described in clause (i) above, to seek to place the
Notes with qualified purchasers thereof. The comfort letters to be provided by
the independent accountants of the Borrower and the Acquired Company shall be in
usual and customary form (including satisfying the requirements of SAS 72), and
the auditors shall be prepared to deliver such letters at the pricing date, and
shall cover both the financial statements of the Borrower and the Acquired
Company as well as financial data derived from the books and records of the
Borrower and the Acquired Company included in such Offering Document. During
such 15 business day period, the senior management of the Borrower and the
Acquired Company shall have participated and assisted in at least one customary
“roadshow” and in investor calls and meetings at times and locations as
reasonably determined by the Investment Bank. The independent accountants of the
Borrower and the Acquired Company shall also have (i) consented to the inclusion
of the audited financial statements of the Borrower and the Acquired Company in
the Offering Document and (ii) cooperated in preparing the Offering Document,
including participating in standard due diligence in connection therewith as
well as cooperate in preparing the pro forma financials for the Acquisition.

12. The Specified Acquisition Agreement Representations and the Specified
Representations will be true and correct in all material respects (or if
qualified by materiality or material adverse effect, in all respects).

 

 

 

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ANNEX D

[FORM OF] SOLVENCY CERTIFICATE

                    , 2017

I, the undersigned, the chief financial officer of ITRON, INC., a Washington
corporation (the “Company”), DO HEREBY CERTIFY on behalf of the Company that:

1. This solvency certificate (this “Certificate”) is furnished pursuant to
Section [•] of Amendment No. [•] dated as of [•], 2017 (the “Amendment”;
capitalized terms used in this Certificate but not otherwise defined herein
shall have the meanings set forth in the Amendment or the Credit Agreement, as
applicable), among the Company, the Foreign Borrowers, the lenders party thereto
and Wells Fargo Bank, National Association, as the administrative agent for the
lenders (the “Administrative Agent”), amending that certain Amended and Restated
Credit Agreement dated as of June 23, 2015 (as amended on June 13, 2016 and as
further amended or otherwise modified prior to the date hereof, the “Credit
Agreement”), among the Company, the Foreign Borrowers, the Guarantors, the
lenders, issuing banks and swingline lenders from time to time party thereto and
the Administrative Agent.

2. As of the date hereof after giving effect to the consummation of the
Transactions (including the Acquisition) and immediately following the making of
each Loan made on the Acquisition Closing Date, and after giving effect to the
application of the proceeds of each such Loan on the Acquisition Closing Date,
(a) the fair value of the assets of the Company and its subsidiaries, on a
consolidated basis, exceeds, on a consolidated basis, their debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of the Company and its subsidiaries, on a
consolidated basis, is greater than the amount that will be required to pay the
probable liability, on a consolidated basis, of their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Company and its subsidiaries,
on a consolidated basis, are able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; (d) the Company and its subsidiaries, on a consolidated
basis, do not have unreasonably small capital with which to conduct the business
in which they are engaged as such business is now conducted and is proposed to
be conducted following the Acquisition Closing Date; and (e) the Company and its
subsidiaries, on a consolidated basis, are “solvent” within the meaning given to
that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this Certificate, the amount of any
contingent liability has been computed as the amount that, in light of all of
the facts and circumstances existing as of the date hereof, represents the
amount that can reasonably be expected to become an actual or matured liability.

3. In reaching the conclusions set forth in this Certificate, the undersigned
has (i) reviewed the Amendment, the Credit Agreement and such other documents
deemed relevant, (ii) reviewed the financial statements (including the pro forma
financial statements) referred to in Section [•] of the Amendment and (iii) made
such other investigations and inquiries as the undersigned has deemed
appropriate.

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, I have hereunto set my hand as of the date first written
above.

 

 

ITRON, INC.

By:

 

 

 

Name:

 

Title: Chief Financial Officer

 

 

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