Document:

Exhibit 10.16

 

EXECUTION COPY

 

TRANSITION SERVICES AGREEMENT

 

This Transition Services Agreement (this “Agreement”), dated as
of December 17, 2003, is by and between Sensus Metering Systems Inc., a
Delaware corporation formerly known as IMS Meters Holdings, Inc. (“Purchaser”),
Invensys plc, a public limited liability company organized and existing under
the laws of England and Wales (“Invensys”), Invensys Inc., a corporation
organized and existing under the laws of the State of Delaware (“Invensys
Inc.”), Invensys International Holdings Limited, a private limited
liability company organized and existing under the laws of England and Wales (“Invensys
International”), BTR Industries Limited, a private limited liability
company organized and existing under the laws of England and Wales (“BTR
Industries”), Foxboro Iberica SA, a public unlisted limited liability
company organized and existing under the laws of Spain (“Foxboro”), BTR
France SAS, a private limited liability company organized and existing under
the laws of France (“BTR France”), Invensys Holdings Limited, a private
limited liability company organized and existing under the laws of England and
Wales (“Invensys Holdings”), and Invensys SA (Pty) Ltd, a private
limited liability company organized and existing under the laws of South Africa
(“Invensys SA” and each of Invensys Inc., Invensys International, BTR
Industries, Foxboro, BTR France and Invensys Holdings, a “Seller” and,
collectively, “Sellers”). Invensys is a party to this Agreement solely
to the extent needed to provide any Services set forth on Schedule I.

 

RECITALS

 

WHEREAS, Purchaser, Invensys and Sellers have entered into that certain
Stock Purchase Agreement, dated as of October 21, 2003 (with all addenda
thereto, the “Purchase Agreement”), pursuant to which Sellers have
agreed to sell to Purchaser, and Purchaser has agreed to buy from Sellers, the
Shares of capital stock of the Companies listed on Annex A of  the Purchase Agreement;

 

WHEREAS, Purchaser desires to obtain from Invensys, Sellers and their
respective Affiliates, on the terms and conditions set forth herein, certain
services in connection with its operation of the businesses of the Companies
and the Subsidiaries for the time periods set forth herein, and Invensys,
Sellers and their respective Affiliates are willing to provide to Purchaser,
the Companies and the Subsidiaries, on the terms and conditions set forth
herein, such services;

 

WHEREAS, Sellers and/or their Affiliates desire to obtain from
Purchaser and its subsidiaries, on the terms and conditions set forth herein,
certain services in connection with Sellers’ business for the time periods set
forth herein, and Purchaser is willing to provide to Sellers and their
Affiliates, on the terms and conditions set forth herein, such services;

 

WHEREAS, the Purchase Agreement had contemplated the need for a
separate transition service agreement covering information technology matters,
but Purchaser, Invensys and Sellers have subsequently elected to enter into one
agreement covering all transition matters; and

 

WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Purchase Agreement.

 

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, Invensys, Sellers and Purchaser
hereby agree as follows:

 

ARTICLE I.

DEFINITIONS

 

Section 1.1                                      Definitions.
As used in this Agreement and the Schedules attached hereto the following terms
will have the following meanings, applicable both to the singular and the
plural forms of the terms described:

 

“Agreement” has the meaning ascribed thereto in the preamble
hereto, as such agreement may be amended and supplemented from time to time in
accordance with its terms.

 

“Confidential Information” shall mean non-public information
about the disclosing party’s or any of its Affiliates’ businesses or activities
that is proprietary and confidential, which shall include, without limitation,
all business, financial, technical and other information of the disclosing
party or its Affiliates that is marked or designated “confidential” or
“proprietary” or that by its nature or the circumstances surrounding its
disclosure should reasonably be regarded as confidential or proprietary.
Confidential Information includes not only written or other tangible
information, but also information transferred orally, visually, electronically
or by any other means. Confidential Information shall not include information
that (i) is in or enters the public domain without breach of this Agreement,
(ii) the receiving party lawfully receives from a third party without
restriction on disclosure and, to the receiving party’s knowledge, without
breach of a nondisclosure obligation, or (iii) is independently developed by
the receiving party. Purchaser’s Confidential Information includes, but is not
limited to, the information within Purchaser’s and the Companies’ email system
and computer networks, but excluding any such information to the extent that it
falls within any of the exceptions (i), (ii) or (iii) specified above.

 

“BTR France” has the meaning ascribed thereto in the preamble
hereto.

 

“BTR Industries” has the meaning ascribed thereto in the
preamble hereto.

 

“Event of Force Majeure” has the meaning ascribed thereto in
Section 2.5.

 

“Foxboro” has the meaning ascribed thereto in the preamble
hereto.

 

“Invensys” has the meaning ascribed thereto in the preamble
hereto.

 

“Invensys Holdings” has the meaning ascribed thereto in the
preamble hereto.

 

“Invensys Inc.” has the meaning ascribed thereto in the preamble
hereto.

 

“Invensys International” has the meaning ascribed thereto in the
preamble hereto.

 

“Invensys SA” has the meaning ascribed thereto in the preamble
hereto.

 

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“Losses” has the meaning ascribed thereto in Section 4.1.

 

“Outsourced Service” has the meaning ascribed thereto in
Section 2.3.

 

“Provider” means any Invensys, Seller, Purchaser or any of their
respective Affiliates, as the case may be, which is providing Services pursuant
to Section 2.1.

 

“Provider Entities” means Provider and its subsidiaries and
Affiliates providing Services hereunder and “Provider Entity” shall mean
any of the Provider Entities.

 

“Provider Indemnified Person” has the meaning ascribed thereto
in Section 4.1.

 

“Purchase Agreement” has the meaning ascribed thereto in the
recitals to this Agreement.

 

“Purchaser” has the meaning ascribed thereto in the preamble
hereto (and any reference to the “Purchaser” in the Schedules attached hereto
shall include the Companies and the Subsidiaries).

 

“Recipient” means any Seller, Purchaser, or any of their
respective subsidiaries or Affiliates, as the case may be, that will receive
the Services from a Provider Entity.

 

“Recipient Indemnified Person” has the meaning ascribed thereto
in Section 4.2.

 

“Seller” has the meaning ascribed thereto in the preamble
hereto.

 

“Sellers” has the meaning ascribed thereto in the preamble
hereto.

 

“Service Charges” has the meaning ascribed thereto in
Section 3.1.

 

“Services” has the meaning ascribed thereto in Section 2.1.

 

“Term” has the meaning ascribed thereto in Section 5.1.

 

Section 1.2                                      Internal
References. References to Articles, Sections and paragraphs shall refer to
the corresponding articles, sections and paragraphs in this Agreement and
references to the parties shall mean the parties to this Agreement.

 

ARTICLE II.

PURCHASE AND SALE OF SERVICES

 

Section 2.1                                      Purchase and
Sale of Services.

 

(a)                                  On
the terms and subject to the conditions of this Agreement and in consideration
of the Service Charges and other consideration described below, Invensys and
Sellers agree to provide or cause to be provided to Purchaser, the Companies
and the Subsidiaries, during the Term of this Agreement, the services,
facilities and other space described in Schedule I in a commercially
reasonable manner and level of service and, where applicable, in a manner and
relative level of service that (i) is consistent in all material respects

 

3

 

with that provided by Sellers or their Affiliates to the Metering
Business of Sellers prior to the date of this Agreement and (ii) is in no event
worse than that provided by Sellers or their Affiliates to other divisions of
Invensys from time to time after the date of this Agreement.

 

(b)                                 On
the terms and subject to the conditions of this Agreement and in consideration
of the Service Charges and other consideration described below, Purchaser
agrees to provide to Sellers and their Affiliates, during the Term of this
Agreement, the services described in Schedule II in a commercially
reasonable manner and level of service (together with the services described in
Schedule I, the “Services”).

 

(c)                                  At
its option, a Provider may cause any Service it is required to provide
hereunder to be provided by any other Provider Entity; provided, however, that
such other Provider Entity shall be held to the service standards set forth in
Sections 2.1(a) and 2.1(b).

 

(d)                                 Recipient
shall act in a commercially reasonable manner in cooperating with Provider
Entities in connection with the provision of Services hereunder. Recipient will
use commercially reasonable efforts to provide each Service for its own account
as soon as reasonably practicable.

 

Section 2.2                                      Additional
Services. In addition to the Services to be provided by a Provider pursuant
to Section 2.1, if requested by Recipient, and to the extent that Provider
and Recipient mutually agree in writing, Provider shall provide additional
services to Recipient. The scope of any such services, as well as the term,
costs and other terms and conditions applicable to such services, shall be as
mutually agreed by Provider and Recipient. Nothing herein shall create any
obligation on the part of Provider to provide any additional services.

 

Section 2.3                                      Services
Performed by Third Parties. At its option, Provider may cause any Service
it is required to provide hereunder to be provided by any third party that at
such time is providing the same or similar services for Provider (an “Outsourced
Service”). Provider shall remain responsible, in accordance with the terms
of this Agreement, for the performance of any Outsourced Service.

 

Section 2.4                                      Force Majeure.
Provider shall not be required to provide any Service to the extent the performance
of such Service becomes infeasible as a result of a cause or causes outside the
reasonable control of Provider, including, without limitation, as a result of
any act of God, governmental action, natural disaster, strike or failure of
essential equipment, or to the extent the provision of such Service would
require Provider to violate any Law (each, an “Event of Force Majeure”).  Provider will notify Recipient, promptly
upon becoming aware thereof, of any Event of Force Majeure affecting the
provision of its Services to Recipient. Provider agrees that following any
Event of Force Majeure, Recipient shall have no obligation to pay for the
Services affected thereby and Provider will use its commercially reasonable
efforts to restore such Services as soon as reasonably practicable.

 

ARTICLE III.

SERVICE CHARGES

 

Section 3.1                                      Service
Charges. The charge for each Service provided to Recipient hereunder
directly by Provider or any Provider Entity shall be equal to the amount

 

4

 

indicated, or determined as set forth, whether as a monthly rate, a per
service charge, or otherwise, in Schedules I and II hereto for such Service
(the “Service Charges”).  In the event
that a Service Charge is not specified in Schedule I or II hereto for the
provision of a Service, the parties hereby acknowledge and agree that they
shall negotiate in good faith to determine such Service Charge based on the
cost actually incurred by the Provider of such Service, excluding any general
overhead allocation; provided, that there shall be no charge to  Purchaser for any Service from or on behalf
of Sellers or Invensys to the extent that such Service is to be provided
without charge pursuant to Section 7.23 of the Purchase Agreement.

 

Section 3.2                                      Invoicing and
Settlement of Costs.

 

(a)                                  Provider
shall invoice Recipient for all Service Charges for each calendar month or any
portion thereof, as applicable, within thirty (30) days following the end of
such calendar month, provided that any failure by Provider to provide an
invoice within such time period shall not relieve Recipient of its obligation
to pay an invoice received after such date. 
Recipient shall only be required to pay Provider a pro rata portion of
the monthly rate for any Service that does not begin on the first Business Day
of the month, or for any Service that is terminated prior to the end of the
last Business Day of the month in accordance with Schedules I and II attached
hereto.  All invoices shall reflect in
reasonable detail a description of the Service performed.

 

(b)                                 Subject
to Section 3.2(c), Recipient shall pay within thirty (30) days following
its receipt of any invoice from Provider pursuant to paragraph (a), by check or
wire transfer of immediately available funds payable to the order of Provider
and without set off, all amounts invoiced by Provider during the preceding
calendar month.  Interest will be
payable on past due payments at a rate equal to 1% per month from the due date
thereof.

 

(c)                                  In
the event of a dispute as to the propriety of the amount invoiced, Recipient
shall pay all undisputed amounts, but shall be entitled to withhold payment of
any amount in bona fide dispute and shall notify Provider within ten (10)
Business Days from receipt of any disputed invoice of the disputed amount and
the reasons each such charge is disputed by Recipient.  Provider shall provide to Recipient, or
shall cause its subsidiaries to so provide, records relating to the disputed
amount so as to enable the Recipient to fully understand the nature, basis and
calculation of the Service Charge and to enable the parties to resolve the
dispute.  The parties shall use
reasonable efforts to resolve any such dispute promptly.

 

ARTICLE IV.

INDEMNIFICATION

 

Section 4.1                                      Indemnification
by Recipient.  Recipient shall
indemnify and hold harmless each Provider Entity and their respective
directors, officers, agents and employees (each, a “Provider Indemnified
Person”) from and against any claims, damages, losses, obligations,
liabilities, reasonable and documented costs and expenses (including, without
limitation, reasonable and documented attorneys’ fees), net of any insurance
coverage received by such Provider Indemnified Person (collectively, “Losses”),
suffered by such Provider Indemnified Person and arising out of or in
connection with (i) Services rendered or to be rendered by any Provider
Indemnified Person Pursuant to this Agreement or the transactions

 

5

 

contemplated hereby, except to the extent that such Losses are the
result of (x) any failure to perform any covenant, agreement or undertaking on
the part of Provider hereunder, including any failure of Provider to perform
the Services in accordance with the standard of care set forth in Sections 2.1(a)
or 2.1(b), or (y) the gross negligence or willful misconduct of any employee,
officer or director of any Provider Entity, (ii) any failure to perform any
covenant, agreement or undertaking on the part of Recipient hereunder,
including any failure of Recipient to act in accordance with the provisions of
Section 2.1(d), or (iii) the gross negligence or willful misconduct of
Recipient or any of its directors, officers, employees, representatives or
Affiliates.

 

Section 4.2                                      Indemnification
by Provider.   Provider Entities (other than Invensys) shall
indemnify and hold harmless each Recipient and their respective directors,
officers, agents and employees (each, a “Recipient Indemnified Person”)
from and against any Losses suffered by such Recipient Indemnified Person and
arising out of or in connection with (i) any failure to perform any covenant,
agreement or undertaking on the part of any Provider Entity hereunder,
including any failure of Provider to perform the Services in accordance with
the standard of care set forth in Sections 2.1(a) or 2.1(b), or (ii) the gross
negligence or willful misconduct of any Provider Entity or any of its
directors, officers, employees, representatives or Affiliates.

 

Section 4.3                                      Limitation of
Liability.   Notwithstanding any other provision of this
Agreement, the liability for indemnification of any indemnifying party under
this Agreement shall not exceed the actual damages of the party entitled to
indemnification and shall not otherwise include incidental, consequential, indirect,
special, punitive, exemplary or other similar damages (except to the extent
awarded to a third party pursuant to a final judgment or settlement approved by
the indemnifying party that is otherwise subject to indemnification hereunder).

 

Section 4.4                                      Invensys.   Invensys
is a party to this Agreement solely to the extent needed to provide any
Services set forth on Schedule I, and, notwithstanding any other provision
of this Agreement, Invensys shall not have any liability under this Article IV
or otherwise in connection with this Agreement. Any such liabilities that
Invensys would otherwise have had but for the prior sentence shall instead be
joint and several liabilities of the Sellers.

 

ARTICLE V.

TERM AND TERMINATION

 

Section 5.1                                      Term.   Except
as otherwise provided in this Article V or as otherwise agreed to by the
parties in writing, this Agreement shall have an initial term of six (6) months
from the date hereof (the “Term”), or such shorter or longer period as
may be provided in Schedules I and II attached hereto with respect to
particular Services described therein; provided, that if the Recipient
remains in need of a Service at the end of the Term and is not in breach of
this Agreement, then the Term may be extended by mutual agreement of the parties
hereto, such agreement, in the case of the Services set forth on
Schedule I, Part B hereto, not to be unreasonably withheld.

 

Section 5.2                                      Termination.   Notwithstanding
the Term of this Agreement:

 

6

 

(a)                                  Except
as otherwise provided in Schedules I and II hereto, Recipient may at any time
terminate this Agreement with respect to one or more of the Services, in whole
or in part, upon giving at least 30 days prior written notice to Provider; and

 

(b)                                 Provider
may terminate this Agreement with respect to any one or more of the Services by
written notice to Recipient in the event that (i) Recipient shall have failed
to perform, in all material respects, any of its material obligations under
this Agreement relating to such Service (including, without limitation, its
obligation to pay for such Service in accordance with Article III), (ii)
Provider has notified Recipient in writing of such failure and (iii) such
failure shall have continued for a period of thirty (30) days after receipt by
Recipient of notice of such failure.

 

Section 5.3                                      Effect of
Termination. Other than as required by law, upon termination of any Service
pursuant to Section 5.2, Provider will have no further obligation to
provide the terminated Service (or any Service, in the case of termination of
this Agreement) and Recipient will have no obligation to pay any fees relating
to such Service or make any other payments hereunder; provided that
notwithstanding such termination, (i) Recipient shall remain liable to Provider
for accrued fees owed and payable in respect of Services provided on or prior
to the effective date of the termination and (ii) the provisions of Articles
IV, V and VI shall survive any such termination. Notwithstanding anything herein
to the contrary, the termination of this Agreement by Provider or Recipient
with respect to one or more Services shall not affect the right or obligation
of such Provider or Recipient to continue to provide or receive Services as a
Provider or Recipient, respectively.

 

ARTICLE VI.

MISCELLANEOUS

 

Section 6.1                                      No Agency, Etc.

 

(a)                                  Nothing
in this Agreement shall constitute or be deemed to constitute a partnership or
joint venture between the parties hereto or constitute or be deemed to
constitute any party the agent or employee of the other party for any purpose
whatsoever and neither party shall have authority or power to bind the other or
to contract in the name of, or create a liability against, the other in any way
or for any purpose.

 

(b)                                 Services
provided to any party hereto are solely for the benefit of such party and no
party hereto, nor any employee or agent of any party hereto, shall be deemed an
employee of the other party within the meaning or the application of any Law
including, but not limited to, those related to unemployment insurance,
retirement benefits, workers’ compensation, industrial accidents, labor or
Taxes. No party hereto, nor any employee of any party hereto, shall be deemed
an employee of the other party within the meaning or application of any
employee fringe benefit program of such party, including, but not limited to,
flex-time, vacations, holidays, pension, group life insurance, accidental
death, medical, hospitalization, workers’ compensation and other stated
benefits. Each party hereto shall pay all applicable federal, state and local
Taxes attributable to such party and its employees.

 

7

 

(c)                                  Each
party hereto shall assume full responsibility for the actions and supervision
of its employees and agents in connection with this Agreement.

 

Section 6.2                                      Recipient as
Sole Beneficiary. Purchaser acknowledges that the Services shall be
provided only with respect to the operation of the Companies and the
Subsidiaries as currently operated and their respective successors and
permitted assigns or as mutually agreed in writing by the parties hereto.
Purchaser shall not request performance of any Service for the benefit of any
entity other than the Companies and the Subsidiaries and their respective
successors and permitted assigns. Recipient represents and agrees that
Recipient will use the Services only in accordance with applicable federal,
state and local laws and regulations. Provider reserves the right to modify any
particular Service as Provider reasonably believes to be necessary to ensure
compliance with applicable laws and regulations. Provider will notify Recipient
of the reasons for any such modification of Services in writing and, where
practicable, in advance of such modification.

 

Section 6.3                                      Confidentiality.

 

(a)                                  Nondisclosure.
Purchaser, Invensys and each Seller agrees that (i) it will not, and will cause
each of the Provider Entities, not to, disclose to any third party or use
any  Confidential Information disclosed
hereunder to such Person, except as expressly permitted in this Agreement or in
the exercise of its rights hereunder, and (ii) it will take reasonable measures
to maintain the confidentiality of all Confidential Information of any other
party in its or the Provider Entities’ possession or control, which will in no
event be less than the measures it uses to maintain the confidentiality of its
own information of similar type and importance.

 

(b)                                 Permitted
Disclosure.  Notwithstanding the
foregoing, each of Purchaser and each Seller may disclose Confidential
Information of any other party (i) to the extent required by a court of
competent jurisdiction or other Governmental Body or otherwise as required by
Law, provided that such party has given such other party prior notice of such
requirement when legally permissible and to the extent reasonably possible to
permit such other party to take such legal action to prevent the disclosure as
it deems reasonable, appropriate or necessary, (ii) to employees, agents and
representatives of any provider of Outsourced Services on a “need-to-know”
basis to the extent necessary to provide or access and use, as applicable, the
Services, or (iii) to its or any Provider Entity’s employees, agents,
representatives, legal counsel, auditors, accountants and advisors; provided,
however, that such persons shall be specifically informed of the confidential
character of such Confidential Information and that by receiving such
information they are agreeing to be bound by the terms of this Agreement relating
to the confidential treatment of such Confidential Information.

 

(c)                                  Ownership
of Confidential Information.  All
Confidential Information disclosed hereunder shall be and shall remain the sole
and exclusive property of the disclosing party.

 

(d)                                 Tax
Structure.  Notwithstanding anything
to the contrary set forth herein or in any other agreement to which the parties
hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the transactions
contemplated by this Agreement, shall not apply to the U.S. federal Tax
structure or

 

8

 

U.S. federal Tax treatment of the transactions contemplated by this
Agreement, and each party hereto (and any employee, representative, or agent of
any party hereto) may disclose to any and all Persons, without limitation of
any kind, the U.S. federal Tax structure and U.S. federal Tax treatment of the
transactions contemplated by this Agreement. For this purpose, “Tax
structure” is limited to any facts relevant to the U.S. federal Tax
treatment of the transaction and does not include information relating to the
identity of the parties. The preceding sentences are intended to cause the
transactions contemplated by this Agreement not to be treated as having been
offered under conditions of confidentiality for purposes of
Section 1.6011-4(b)(3) (or any successor provision) of the Treasury
Regulations promulgated under Section 6011 of the Code, and shall be
construed in a manner consistent with such purpose. In addition, each party
hereto acknowledges that it has no proprietary or exclusive rights to the Tax
structure of the transactions contemplated by this Agreement or any Tax matter
or Tax idea to the transactions contemplated by this Agreement.

 

Section 6.4                                      Entire
Agreement. This Agreement (including the Schedules and Exhibits hereto),
the Purchase Agreement and any other writing signed by the parties that
specifically references this Agreement constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect to the subject matter hereof. This Agreement is not intended
to confer upon any Person other than the parties hereto and the Persons
indemnified under Section 4.1 any rights or remedies hereunder. In the
event of a conflict between the terms of the Purchase Agreement and this
Agreement, the terms of the Purchase Agreement shall govern.

 

Section 6.5                                      Information.
Subject to applicable law and privileges, each party hereto covenants and
agrees to provide the other party with all information regarding itself and the
transactions under this Agreement that the other party reasonably believes is
required to comply with all applicable federal, state, county and local laws,
ordinances, regulations and codes, including, but not limited to, securities
laws and regulations.

 

Section 6.6                                      Notices.
Any notice, instruction, direction or demand under the terms of this Agreement
required to be in writing will be duly given upon delivery, if delivered by
hand, facsimile transmission, intercompany mail, or mail, to the following
addresses:

 

(a)                                  If
to Purchaser:

 

Sensus Metering Systems Inc.

c/o The Jordan Company LLC

767 Fifth Avenue

48th Floor

New York, New York 10153

Attn: Jonathan F. Boucher

Facsimile: (212) 572-0817

 

9

 

With a copy to:

 

Mayer, Brown, Rowe & Maw LLP

1675 Broadway

New York, New York 10019

Attn: James B. Carlson

Facsimile: (212) 262-1910

 

(b)                                 If
to Invensys or any Seller, to:

 

c/o Invensys plc

Carlisle Place

London, SWIP 1 BX

United Kingdom

Attn: Company Secretary

Facsimile: 44 207 821 3806

 

With a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attn:                    Ellen
J. Odoner, Esq.

Marita A. Makinen, Esq.

Facsimile: (212) 310-8007

 

or to such other addresses or telecopy numbers as may be specified by
like notice to the other party.

 

Section 6.7                                      Binding Effect;
Assignment.  This Agreement shall be binding against and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Subject to Section 2.3, this Agreement may not be assigned by
operation of law or otherwise without the express written consent of Sellers
and Purchaser (which consent may be granted or withheld in the sole discretion
of Sellers and Purchaser) and any attempted assignment without the required
consents shall be void; provided, however, that Purchaser may assign
this Agreement and any or all rights or obligations hereunder to (i) any lender
of Purchaser as collateral security or (ii) any successor in interest to
Purchaser, provided that such successor in interest acquires all or
substantially all of the Shares or all or substantially all of the assets of
all of the Companies and all of  the
Subsidiaries. Upon any such permitted assignment, the references in this
Agreement to Purchaser shall also apply to any such assignee unless the context
otherwise requires.

 

Section 6.8                                      Governing Law. This
Agreement shall be governed by, and construed exclusively in accordance with,
the laws of the State of New York applicable to contracts executed in and to be
performed entirely within that state.

 

Section 6.9                                      Severability.  If
any term or other provision of this Agreement is held to be invalid, illegal or
incapable of being enforced by and any law or public policy, all

 

10

 

other terms and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

Section 6.10                                Headings. The
descriptive headings contained in this Agreement are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

Section 6.11                                Amendment. This
Agreement may only be amended, restated or otherwise modified or waived by a
written agreement executed by both parties hereto.

 

Section 6.12                                Counterparts.
This Agreement may be executed in multiple counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.

 

[The Remainder of this Page Is Intentionally
Left Blank.]

 

11

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized representatives

 

 

	
   

  	
  SENSUS METERING SYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan F. Boucher

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVENSYS PLC,
  solely to the extent needed to

  provide any Services set forth on Schedule I

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy Morcom

  	
   

  
	
   

  	
  Name:

  	
  JEREMY MORCOM

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT, INVENSYS PLC 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INVENSYS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy Morcom

  	
   

  
	
   

  	
  Name:

  	
  JEREMY MORCOM

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT, INVENSYS PLC 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVENSYS INTERNATIONAL HOLDINGS

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy Morcom

  	
   

  
	
   

  	
  Name:

  	
  JEREMY MORCOM

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT, INVENSYS PLC 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BTR INDUSTRIES LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeremy Morcom

  	
   

  
	
   

  	
  Name:

  	
  JEREMY MORCOM

  	
   

  
	
   

  	
  Title:

  	
  VICE PRESIDENT, INVENSYS PLCExhibit
10.17

NON-COMPETITION AGREEMENT

THIS NON-COMPETITION AGREEMENT (this “Agreement”)
is dated as of December __, 2003, by and between Invensys plc, a corporation
organized under the laws of England and Wales, having its registered office at
Invensys House, Carlisle Place, London, SW1P1 BX (“Invensys”) and Sensus
Metering Systems Inc., a Delaware corporation formerly known as IMS Meters
Holdings, Inc. (“Purchaser”).

WHEREAS, Purchaser, Invensys and certain subsidiaries
and affiliates of Invensys entered into that certain Stock Purchase Agreement,
dated as of October 21, 2003 (with all addenda thereto, the “Stock Purchase
Agreement”), providing for the acquisition by Purchaser of the Shares.  Capitalized terms used, but not otherwise
defined, herein shall have the meanings ascribed to such terms in the Stock
Purchase Agreement.

WHEREAS, Invensys, through the operations of the
Companies and the Subsidiaries, was engaged in the conduct of the Metering
Business (as defined in Section 2(a)(iv) herein) prior to the Closing Date.

WHEREAS, it was contemplated by the Stock Purchase
Agreement that Invensys  would, and
would cause its present and future Affiliates to, agree to refrain from
competing with Purchaser, on the terms and conditions set forth in this Agreement.

WHEREAS, Invensys understands that Purchaser shall be
entitled to protect and preserve the going concern value of the Metering
Business to the extent permitted by law and that Purchaser would not have
entered into the Stock Purchase Agreement absent the provisions of this
Agreement.

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants, agreements and understandings contained herein and for
other good and valuable consideration, the receipt, adequacy and sufficiency of
which hereby are acknowledged, the parties hereto agree as follows:

1.             Purchase Price. 
In consideration of the covenants and agreements contained in Sections
2, and 3 below, at the Closing, Purchaser shall pay Invensys Thirty Million
Dollars ($30,000,000) by wire transfer of immediately available funds to an
account or accounts designated by Invensys in writing at least three (3)
Business Days prior to the Closing Date.

2.             Non-Competition. 
(a)  Invensys hereby covenants
and agrees that:

(i)            Except as otherwise provided herein
or in Section 8.11 of the Stock Purchase Agreement, for a period of four (4)
years immediately following the Closing Date, Invensys shall not, and shall
cause its Affiliates (including, subject to Section 2(a)(ii) below, those
Persons that become Affiliates during the four (4) years following the Closing
Date) not to, directly or indirectly engage in activities or

 

 

businesses, establish any
new businesses, or enter into joint ventures that compete with the Metering
Business as it was conducted as of the Closing anywhere in the world.  Nothing contained herein shall prohibit
Invensys, or any Affiliate of Invensys, from being a passive owner of less than
one percent (1%) of the outstanding stock or any class of securities of a
corporation or other entity which is publicly traded and which would otherwise
constitute a Competing Business (as such term is defined herein).

(ii)           Notwithstanding the provisions of
Section 2(a)(i), Invensys or any Affiliate (including those Persons that become
Affiliates during the four (4) years following the Closing Date), may acquire
control of an entity (an “Acquired Entity”) which engages in a business
that competes with the Metering Business (a “Competing Business”), if
the Acquired Entity derived not more than ten percent (10%) of its revenues
during its most recent fiscal year prior to acquisition by Invensys or an
Affiliate from the Competing Business; provided, that Invensys
shall, within six months following the closing of the acquisition of the
Acquired Entity, commence to negotiate in good faith with Purchaser for the
sale of the Competing Business to (in Purchaser’s discretion) Purchaser, any
Company or any Subsidiary; provided  further, however, that
in the event that Invensys or an Affiliate engages in a bona fide solicitation
of offers to purchase the Competing Business from one or more third parties,
Invensys shall be deemed to have complied with its obligation to commence to
negotiate in good faith with Purchaser if it provides Purchaser with an
opportunity to participate in such solicitation process on the same terms and
conditions applicable to any other third party.  For four (4) years following the Closing Date, neither Invensys
nor its Affiliates shall transfer any materials, confidential information or
personnel who have knowledge of the Metering Business to any Acquired Entity
which engages in a Competing Business. 
For the avoidance of doubt, Purchaser hereby acknowledges and agrees
that in the event that Invensys commences to negotiate in good faith with
Purchaser for the sale of the Competing Business as required in this Section
2(a)(ii), and the parties are unable to reach a mutually acceptable agreement
with respect to such sale, Invensys shall be entitled to retain and operate the
Competing Business.

(b)           (i)            Notwithstanding
anything to the contrary contained herein, if any third party not currently an
Affiliate of Invensys as of the date hereof acquires, prior to the fourth
anniversary of the Closing Date, (A) fifty percent (50%) or more of the voting
securities of Invensys, including by way of merger or any other business
combination with Invensys or (B) all or substantially all assets of Invensys,
then, nothing in this Agreement shall: (y) be a limitation on any activities of
such acquiring party or any entity directly or indirectly controlling,
controlled by or under common control with such acquiring party (other than
Invensys or Invensys’ Affiliates who are

 

2

 

acquired and are subject to the provisions of this
Agreement, who shall remain subject to the provisions of this Agreement through
the fourth anniversary of the Closing Date) or (z) give rise to any obligation
of Invensys with respect to the activities of such acquiring party or any entity
directly or indirectly controlling, controlled by or under common control with
such acquiring party (other than Invensys or Invensys’ Affiliates who are
acquired and are subject to the provisions of this Agreement at the time of
such acquisition).

(ii)           Notwithstanding anything to the
contrary contained herein, any Subsidiary or business sold or otherwise
disposed of by Invensys shall no longer be subject to the provisions of this
Agreement (and neither Invensys nor any other Person shall be subject to the
provisions of this Agreement with respect to such Subsidiary or business); provided,
that such Subsidiary or business (and Invensys with respect thereto) shall not
be so released if Invensys retains a greater than twenty-five percent (25%)
interest in such Subsidiary or business.

(iii)          For purposes of this Agreement, the
“Metering Business” will be defined as the business of providing the following
products and services for metering and communication by or for utilities or
residential/commercial submetering entities of water, gas, electricity and heat
consumption by their customers:

(A)                              Residential Water Meters (Velocity,
Positive Displacement, Piston or otherwise);

(B)                                Commercial / Industrial Water Meters
(Turbine, Combination, Propeller, Irrigation, Fire Hydrant, Fire Service, or
otherwise);

(C)                                Sub Meters - Water, Gas, Electric and
Heat;

(D)                               Residential Gas Meters (Diaphragm and
Ultrasonic);

(E)                                 Intermediate and Large Capacity Gas
Meters (Diaphragm and Ultrasonic);

(F)                                 Turbine Gas Meters;

(G)                                Pressure Regulation Products;

(H)                               Correlative Natural Gas, Energy and
Density Measurement Products;

(I)                                    Residential and Polyphase Solid-State
Electricity Meters;

(J)                                   Heat Meters (Velocity and Ultrasonic);

(K)                               Heat Integrators;

(L)                                 Bulk Hot Water Meters;

(M)                            Automatic Meter Reading Devices or
Systems for any of the foregoing;

(N)                               Meter Test Equipment for any of the
foregoing;

(O)                               Instrumentation for any of the foregoing;

(P)                                 Meter accuracy testing and recalibration
services;

(Q)                               Project management services related to Metering
and AMR activities; and

the business of providing other products and services
as follows:

(R)                                Pipe Repair, Pipe Tapping and Pipe
Joining Products;

(S)                                 High Pressure, Low Porosity Aluminum Die
Castings;

(T)                                Services to utilities related to the
procurement, testing, repair and management of meter populations; and

 

3

 

(U)                               Software applications sold, licensed or
offered as a service to utilities and used to manage billing and meter data
management for utilities and submetering entities.

(c)           It is the intention of the parties
hereto that this Agreement be enforced to the fullest extent permitted by
applicable law and, therefore, in the event that any provision of this
Agreement or the application thereof is held to be unenforceable in any
jurisdiction because of the duration or scope thereof, the parties hereto agree
that the court or panel or arbitrators making such determination shall have the
power to reduce the duration and scope of such provision to the extent
necessary to make it enforceable, and that the Agreement in its reduced form
shall be valid and enforceable to the full extent permitted by law, but no such
reduction shall affect the enforceability of the express terms hereof in any
other jurisdiction.

3.             Non-Solicitation.  Invensys hereby covenants and agrees that for a period of two (2)
years following the Closing Date that it shall not, and shall cause its
Affiliates (including those Persons that become Affiliates during the two (2)
years following the Closing Date) not to: (a) solicit, entice, persuade or
induce any of the management employees of 
the Companies and the Subsidiaries to terminate his or her employment
with Purchaser or its Affiliates; (b) solicit the employment of any such
individual; (c) approach any such individual for any of the foregoing purposes;
or (d) assist in taking such actions by any third party, in each case without
the prior written consent of Purchaser; provided, however, that
this Agreement shall not prohibit soliciting the employment of any such
individual who has been terminated by Purchaser or its Affiliates; and provided,
further, that the placement of advertisements in newspapers or journals
of general circulation not directed or targeted to any such individual shall
not constitute solicitation for purposes of this Section 3.

4.             Referral of Business Opportunities.  From and after the Closing, for a period of
4 years, Invensys and Sellers and their respective Affiliates shall use their
commercially reasonable efforts to (i) refer to Purchaser and its
Affiliates all incoming business inquiries, customer orders and other matters
related to the Metering Business, including, without limitation, all customer
orders received by Invensys, Sellers and their respective Affiliates via
computer or other automated inventory control systems, and (ii) timely
deliver to the Purchaser such customer orders in printed form for use by
Purchaser and its Affiliates.  To the
extent customers orders are delivered to third party electronic data
interchange providers, such providers will be instructed to transmit such
orders to the Purchaser or the Purchaser’s designated Affiliate or providers.

5.             Acknowledgement. 
Invensys acknowledges that the restrictions on its activities under this
Agreement are necessary for the reasonable protection of Purchaser and
constitute a material inducement to Purchaser’s entering into and performing
its obligations under the Stock Purchase Agreement.  Invensys further acknowledges, stipulates and agrees that a breach
of any of such obligations and agreements will result in irreparable harm and
continuing damage to Purchaser for which there will be no

 

4

 

adequate remedy at law
and further agrees that in the event of any breach of said obligations and
agreements, Purchaser and its successors and assigns will be entitled to
injunctive relief and to such other relief as is proper under the
circumstances.

6.             Notices. 
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when (i) delivered personally or (ii)
mailed by certified or registered mail, return receipt requested, or (iii) sent
by FedEx or other nationally recognized express carrier, fee prepaid to the parties
(and shall also be transmitted by facsimile to the Persons receiving copies
thereof) at the following addresses (or to such other address as a party may
have specified by notice given to the other party pursuant to this provision):

	
  If to Invensys:

  	
   

  
	
   

  	
   

  
	
   

  	
  Invensys plc

  
	
   

  	
  Carlisle Place

  
	
   

  	
  London, SW1P 1BX

  
	
   

  	
  United Kingdom

  
	
   

  	
  Attn:  Corporate Secretary

  
	
   

  	
  Facsimile:  (44) (207) 821-3806

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Weil, Gotshal &
  Manges LLP

  
	
   

  	
  767 Fifth Avenue

  
	
   

  	
  New York, New York  10153

  
	
   

  	
  Attn:

  	
  Ellen J. Odoner, Esq.

  
	
   

  	
  Marita A. Makinen, Esq.

  
	
   

  	
  Facsimile:  (212) 310-8007

  
	
   

  	
   

  
	
  If to Purchaser, to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Sensus Metering Systems
  Inc.

  
	
   

  	
  c/o The Jordan Company
  LLC

  
	
   

  	
  767 Fifth Avenue

  
	
   

  	
  48th Floor

  
	
   

  	
  New York, New York  10153

  
	
   

  	
  Attn:  Jonathan F. Boucher

  
	
   

  	
  Telecopy:  (212) 755-5263

  
	
   

  	
  Telephone:  (291) 572-0817

  
	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Mayer, Brown, Rowe
  & Maw LLP

  
	
   

  	
  1675 Broadway

  
	
   

  	
  New York, New York  10019

  
				

 

5

 

	
   

  	
  Attn:  James B. Carlson, Esq.

  
	
   

  	
  Telecopy:  (212) 262-1910

  
	
   

  	
  Telephone:  (212) 506-2515

  

 

7.             Choice of Law. 
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York regardless of the laws that
might otherwise govern under applicable principles of conflict of laws thereof.

8.             Entire Agreement; Amendments.  This Agreement, together with the Stock
Purchase Agreement and the ancillary documents executed in connection
therewith, contains the entire understanding of the parties, supersedes all
prior and contemporaneous agreements and understandings relating to the subject
matter hereof and shall not be amended except by a written instrument hereafter
signed by all of the parties hereto.

9.             Counterparts. 
This Agreement may be executed by the parties in separate counterparts,
each of which, when so executed and delivered, shall be an original, but all of
which, when taken as a whole, shall constitute one and the same instrument.

10.           Section Headings and References.  The headings of each Section, subsection or
other subdivision of this Agreement are for reference purposes only and are to
be given no effect in the construction or interpretation of this Agreement.

11.           Binding Effect; No Third Party
Beneficiaries; Assignment. 
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.  Nothing in this Agreement shall create or be
deemed to create any third party beneficiary rights or any obligations in any
Person or entity not a party to this Agreement.  No party may assert any claim against any officer, director,
stockholder, partner or member of any party hereto (unless such officer,
director, stockholder, partner or member is also a party hereto) under this
Agreement with respect to any obligation arising out of this Agreement or the
transactions contemplated hereby.  No
assignment of this Agreement or of any rights or obligations hereunder may be
made by either Invensys or Purchaser (by operation of law or otherwise) without
the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however,
that Purchaser may assign this Agreement and any or all rights or obligations
hereunder to (i) any Affiliate of Purchaser, (ii) any lender of Purchaser as
collateral security or (iii) any successor in interest to Purchaser, provided
that such successor in interest acquires all or substantially all of the Shares
or all or substantially all of the assets of all of the Companies and all of
the Subsidiaries.  Upon any such
permitted assignment, the references in this Agreement to Purchaser shall also
apply to any such assignee unless the context otherwise requires.

12.           Expenses.  Each party hereto shall pay its own expenses
in connection with the execution, delivery and performance of its obligations
under this Agreement.

[The Remainder of
this Page Is Intentionally Left Blank.]

 

6

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed as of the day and
year first written above.

	
  INVENSYS
  PLC

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  
	
   

  
	
  SENSUS
  METERING SYSTEMS INC.

  
	
   

  
	
  By:

  	
   

  
	
  Name:

  	
   

  
	
  Title:

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