SECOND AMENDMENT TO LOAN AGREEMENT This Second Amendment amends that certain Loan Agreement dated as of September 30, 1998, the parties to which are ITRON, INC. ("Borrower"), BANK OF AMERICA, N.A., formerly Bank of America National Trust and Savings...

                       SECOND AMENDMENT TO LOAN AGREEMENT

         This Second  Amendment  amends that certain Loan Agreement  dated as of
September 30, 1998, the parties to which are ITRON, INC.  ("Borrower"),  BANK OF
AMERICA,  N.A., formerly Bank of America National Trust and Savings Association,
and U.S. BANK NATIONAL  ASSOCIATION  (collectively,  including their  respective
successors and/or assigns, "Banks"), and BANK OF AMERICA, N.A., formerly Bank of
America National Trust and Savings Association, as "Agent." All terms defined in
the Agreement shall have the same meaning when used in this Amendment, except as
may be  otherwise  provided in this  Amendment  or in any prior  amendment.  For
mutual consideration, the parties agree as follows:

1.       Tangible Capital.  Section 5.13(b) of the Agreement is amended to read
         as follows:

                  (b)  a  Tangible  Capital  of  not  less  than   $150,000,000,
         increasing  at the end of each fiscal  month,  beginning  month  ending
         October 31,  1999,  by 50% of net income  earned  during the month then
         ending  (without  reduction  for net  losses),  plus 75% of new  equity
         contributed during the month then ending.

2. Other Terms.  Except as  specifically  amended by this Amendment or any prior
amendment, all other terms,  conditions,  and definitions of the Agreement shall
remain in full force and effect.

3.  Counterparts.  This  Amendment may be signed in any number of  counterparts,
each of which shall be an original, with the same effect as if the signatures to
such counterparts were upon the same instrument.  This Amendment shall be deemed
fully executed when the Agent shall have received counterparts of this Amendment
signed by Borrower, Agent, and all Banks.

         DATED as of the 30th day of September, 1999.

Borrower:                                           Agent:

ITRON, INC.                                         BANK OF AMERICA, N.A.


By                                                  By

Title                                               Title


Address:                                            Address:

0000 X. Xxxxxxxx Xxxx                               Agency Management Services
Xxxxxxx, XX  00000                                  WA1-102-16-20
Attn:  Treasurer                                    000 Xxxxx Xxxxxx, 00xx Xxxxx
                                                    Xxxxxxx, XX  00000
                                                    Attention:  Xxxx Xxxxx


Banks:

BANK OF AMERICA, X.X.                             X.X. BANK NATIONAL ASSOCIATION



By                                                By

Title                                            Title

Address:                                         Address:

Commercial Banking, WA1-102-12-06                0000 Xxxxx Xxxxxx, Xxxxx 00
000 Xxxxx Xxxxxx, 00xx Xxxxx                     Xxxxxxx, XX  00000
Xxxxxxx, XX  00000                               Attention:  Xxxxx Xxxxxxxx
Attention:  Xxxx Xxxxxx