Exhibit 10.5

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement is entered into as of October 9,
2006 by and between SILICON VALLEY BANK (“Secured Party”) and ITERIS, INC.
(“Grantor”).

RECITALS

A.            Secured Party and Grantor are entering into that certain Loan and
Security Agreement of even date herewith (as the same may be amended, modified
or supplemented from time to time, the “Loan Agreement”; capitalized terms used
herein which are not defined, have the meanings set forth in the Loan
Agreement).

B.            Pursuant to the terms of the Loan Agreement, Grantor has granted
to Secured Party a security interest in all of Grantor’s right, title and
interest, whether presently existing or hereafter acquired, in, to all
Intellectual Property and all other Collateral.

NOW, THEREFORE, as collateral security for the payment and performance when due
of all of the Obligations, Grantor hereby grants, represents, warrants,
covenants and agrees as follows:

AGREEMENT

1.             Grant of Security Interest.  To secure all of the Obligations,
Grantor grants and pledges to Secured Party a security interest in all of
Grantor’s right, title and interest in, to and under its Intellectual Property
(as defined in the Loan Agreement), including without limitation the following:

(a)           All of present and future United States registered copyrights and
copyright registrations, including, without limitation, the registered
copyrights, maskworks, software, computer programs and other works of authorship
subject to United States copyright protection listed in Exhibit A-1 to this
Agreement (and including all of the exclusive rights afforded a copyright
registrant in the United States under 17 U.S.C. §106 and any exclusive rights
which may in the future arise by act of Congress or otherwise) and all present
and future applications for copyright registrations (including applications for
copyright registrations of derivative works and compilations) (collectively, the
“Registered Copyrights”), and any and all royalties, payments, and other amounts
payable to Grantor in connection with the Registered Copyrights, together with
all renewals and extensions of the Registered Copyrights, the right to recover
for all past, present, and future infringements of the Registered Copyrights,
and all computer programs, computer databases, computer program flow diagrams,
source codes, object codes and all tangible property embodying or incorporating
the Registered Copyrights, and all other rights of every kind whatsoever
accruing thereunder or pertaining thereto.

(b)           All present and future copyrights, maskworks, software, computer
programs and other works of authorship subject to (or capable of becoming
subject to) United States copyright protection which are not registered in the
United States Copyright Office (the “Unregistered Copyrights”), whether now
owned or hereafter acquired, including without limitation the Unregistered
Copyrights listed in Exhibit A-2 to this Agreement, and any and all royalties,
payments, and other amounts payable to Grantor in connection with the
Unregistered Copyrights, together with all renewals and extensions of the
Unregistered Copyrights, the right to recover for all past, present, and future
infringements of the Unregistered Copyrights, and all

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computer programs, computer databases, computer program flow diagrams, source
codes, object codes and all tangible property embodying or incorporating the
Unregistered Copyrights, and all other rights of every kind whatsoever accruing
thereunder or pertaining thereto.  The Registered Copyrights and the
Unregistered Copyrights collectively are referred to herein as the “Copyrights.”

(c)           All right, title and interest in and to any and all present and
future license agreements with respect to the Copyrights.

(d)           All present and future accounts, accounts receivable, royalties,
and other rights to payment arising from, in connection with or relating to the
Copyrights.

(e)           All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the “Patents”);

(f)            All trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Grantor connected with and symbolized by
such trademarks, including without limitation those set forth on Exhibit C
attached hereto (collectively, the “Trademarks”);

(g)           Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the rights identified above;

(h)           All licenses or other rights to use any of the Copyrights, Patents
or Trademarks, and all license fees and royalties arising from such use to the
extent permitted by such license or rights;

(i)            All amendments, extensions, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and

(j)            All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing, and all license royalties and proceeds of
infringement suits, and all rights corresponding to the foregoing throughout the
world and all re-issues, divisions continuations, renewals, extensions and
continuations-in-part of the foregoing.

2.             Loan Agreement.  This security interest is granted in conjunction
with the security interest granted to Secured Party under the Loan Agreement. 
The rights and remedies of Secured Party with respect to the security interest
granted hereby are in addition to those set forth in the Loan Agreement and the
other Loan Documents, and those which are now or hereafter available to Secured
Party as a matter of law or equity.  Each right, power and remedy of Secured
Party provided for herein or in the Loan Agreement or any of the other Loan
Documents, or now or hereafter existing at law or in equity shall be cumulative
and concurrent and shall be in addition to every right, power or remedy provided
for herein and the exercise by Secured Party of any one

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or more of the rights, powers or remedies provided for in this Agreement, the
Loan Agreement or any of the other Loan Documents, or now or hereafter existing
at law or in equity, shall not preclude the simultaneous or later exercise by
any person, including Secured Party, of any or all other rights, powers or
remedies.

3.             Covenants and Warranties. Grantor represents, warrants, covenants
and agrees as follows:

(a)           Grantor has no present maskworks, software, computer programs and
other works of authorship registered with the United States Copyright Office
except as disclosed on Exhibit A-1 hereto.

(b)           Grantor shall undertake all reasonable measures to cause its
employees, agents and independent contractors to assign to Grantor all rights of
authorship to any copyrighted material in which Grantor has or may subsequently
acquire any right or interest.

(c)           Grantor shall promptly advise Secured Party of any Trademark,
Patent or Copyright not specified in this Agreement, which is hereafter acquired
by Grantor.

(d)           Grantor shall not register any maskworks, software, computer
programs or other works of authorship subject to United States copyright
protection with the United States Copyright Office without first complying with
the following:  (i) providing Secured Party with at least 15 days prior written
notice thereof, (ii) providing Secured Party with a copy of the application for
any such registration and (iii) executing and filing such other instruments, and
taking such further actions as Secured Party may reasonably request from time to
time to perfect or continue the perfection of Secured Party’s interest in the
Collateral, including without limitation the filing with the United States
Copyright Office, simultaneously with the filing by Grantor of the application
for any such registration, of a copy of this Agreement or a Supplement hereto in
form acceptable to Secured Party identifying the maskworks, software, computer
programs or other works of authorship being registered and confirming the grant
of a security interest therein in favor of Secured Party.

4.             General. If any action relating to this Agreement is brought by
either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys fees, costs and disbursements. This
Agreement may be amended only by a written instrument signed by both parties
hereto.  To the extent that any provision of this Agreement conflicts with any
provision of the Loan Agreement, the provision giving Secured Party greater
rights or remedies shall govern, it being understood that the purpose of this
Agreement is to add to, and not detract from, the rights granted to Secured
Party under the Loan Agreement.  This Agreement, the Loan Agreement, and the
other Loan Documents comprise the entire agreement of the parties with respect
to the matters addressed in this Agreement. This Agreement shall be governed by
the laws of the State of California, without regard for choice of law
provisions. Grantor and Secured Party consent to the nonexclusive jurisdiction
of any state or federal court located in Santa Clara County, California.

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5.             WAIVER OF RIGHT TO JURY TRIAL.  SECURED PARTY AND GRANTOR EACH
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO: (I) THIS AGREEMENT; OR (II)  ANY
OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN SECURED PARTY AND
GRANTOR; OR (III) ANY CONDUCT, ACTS OR OMISSIONS OF SECURED PARTY OR GRANTOR OR
ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,  ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH SECURED PARTY OR GRANTOR; IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

IN WITNESS WHEREOF, the parties have cause this Intellectual Property Security
Agreement to be duly executed by its officers thereunto duly authorized as of
the first date written above.

Address of Grantor:

 

Grantor:

 

 

 

1515 South Manchester Avenue

 

ITERIS, INC.

Anaheim, California 92892

 

 

 

 

 

 

 

By:

 /S/ JAMES S. MIELE

 

 

 

Title:

CFO

 

 

 

Name:

James S. Miele

 

 

 

 

 

 

Address of Secured Party:

 

Secured Party:

 

 

 

3003 Tasman Drive

 

SILICON VALLEY BANK

Santa Clara, California 95054

 

 

 

 

 

 

 

By:

 /S/ DEREK BRUNELLE

 

 

 

Title:

Derek Brunelle, Vice President

 

 

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