Exhibit 10.4

 

DEBENTURE REDEMPTION AGREEMENT

 

This Debenture Redemption Agreement (“Agreement”) is entered into as of
January 9, 2009 by and between                          (“Holder”) and
Iteris, Inc. (“Iteris” or the “Company”).

 

RECITALS

 

WHEREAS, Holder holds a 6% Convertible Debenture dated May 19, 2004 in the
principal amount of $                   (the “Debenture”); and

 

WHEREAS, the parties hereto have reached certain agreements with respect to the
redemption of the above-described debenture.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:

 

1.             Debenture Redemption.

 

1.1.          The Company agrees to redeem from Holder, and Holder agrees to
sell back to the Company, the Debenture for a payment of
                         ($                  ) (the “Redemption Price”).  In
addition to the payment of the Redemption Price, the Company shall pay at the
Closing (as defined below) all accrued but unpaid interest on the Debenture as
of the date of Closing.

 

1.2.          The redemption of the Debenture (the “Redemption”) shall take
place at the offices of Dorsey & Whitney LLP, 38 Technology Drive, Suite 100,
Irvine, California 92618, at 1:00 P.M. Pacific Time on January 9, 2009, or at
such other time and place as the Company and Holder mutually agree orally or in
writing (which time and place are designated as the “Closing”).  At the Closing,
Holder shall deliver to the Company the original of the Debenture against
payment by the Company of the amounts set forth in Section 1.1 by check, wire
transfer or any combination thereof.  Notwithstanding the foregoing, Holder
acknowledges and agrees that, upon and as of the payment by the Company of the
amounts set forth in Section 1.1, whether or not Holder has delivered and
surrendered the original of the Debenture to the Company, the Debenture shall be
deemed null and void and cancelled in its entirety and Holder shall have no
further rights with respect to or under the Debenture, whether such rights shall
have accrued prior to or after the date hereof.

 

2.             Representations and Warranties.  Holder hereby represents,
warrants and acknowledges as follows:

 

2.1.          As of the date hereof, the principal amount outstanding under the
Debenture is                          ($                  ) and the accrued but
unpaid interest outstanding under the Debenture is                         
($                  ).

 

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2.2.          Holder is the sole record and beneficial owner of the Debenture. 
Upon payment of the amounts set forth in Section 1.1, the Company will acquire
good and valid title to the Debenture, free and clear of all liens, security
interests, pledges, claims and encumbrances of every kind, nature and
description incurred or created by Holder.

 

2.3.          Holder has the full right and power to enter into this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby.  The execution, delivery and performance of this Agreement
by Holder, and the consummation of the transactions contemplated hereby,
(i) have been duly authorized by all requisite organizational action of Holder
and (ii) do not and will not conflict with any law applicable to Holder or any
of its properties or assets or any provisions of Holder’s organizational
documents or contracts, agreements or other instrument to which Holder is a
party or by which any of its properties or assets may be bound.

 

2.4.          Holder is an experienced and sophisticated investor, having such
knowledge and experience in business and financial matters and investing as to
be able to protect its own interests and assess the risks and merits of the
Redemption.  Holder has independently determined the advisability of entering
into this Agreement and is entering into this Agreement of its own volition, and
is not relying on any representations or statements of the Company or its
officers, directors, shareholders, employees, agents, attorneys and
representatives except for those representations and statements expressly set
forth herein.

 

2.5.          Holder has had the opportunity to consult with counsel of its
choice regarding the meaning and legal effect of this Agreement, and regarding
the advisability of making the agreements provided for herein, and fully
understands the same.

 

3.             Release.  The following release shall be effective upon the
Company’s payment of the amounts set forth in Section 1.1.

 

3.1.          Other than the obligations, covenants, representations and
warranties provided for in this Agreement, Holder, for itself and its
predecessors, successors, heirs, agents and assigns (individually and
collectively, the “Releasing Parties”), hereby waives, releases, and forever
discharges Iteris and its predecessors, successors, assigns, officers,
directors, shareholders, employees, agents, attorneys and representatives, past
and present, (collectively, the “Iteris Released Parties”) of and from any and
all rights, claims, debts, liabilities, demands, obligations, promises, damages,
causes of action and claims for relief of any kind, manner, nature and
description, known or unknown, which any of the Releasing Parties have, may have
had, might have asserted, may now have or assert, or may hereafter have or
assert against the Iteris Released Parties, or any of them, related to or
arising under the Redemption and Holder’s purchase and ownership of the
Debenture.  Holder represents and warrants that it has not filed any claims,
charges, complaints or actions against the Company and has not assigned or
transferred to any person or entity any of the claims Holder is releasing in
this Agreement.

 

3.2.          The Releasing Parties acknowledge and agree that the foregoing
release includes in its effect all claims that they do not know or suspect to
exist in their favor as of the date hereof, and the Releasing Parties expressly
waive any statute, legal doctrine or other similar limitation upon the effect of
general releases.  In particular, the Releasing Parties waive any and

 

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all rights and benefits conferred upon them by Section 1542 of the California
Civil Code, which states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

4.             Governing Law.  This Agreement shall in all respects be
interpreted, enforced, and governed by and under the internal laws of the State
of Delaware, without giving effect to any choice of law or conflict of law
principles.

 

5.             Entire Agreement.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter and supersedes
all prior oral or written communications, understandings and agreements with
respect thereto.

 

6.             Headings.  The use of headings in this Agreement is merely for
convenience and such headings shall not be used in construing any provisions of
this Agreement.

 

7.             Interpretation.  Each party has had the opportunity to negotiate
modifications to the language of this Agreement and agrees that, in any dispute
regarding the interpretation or construction of this Agreement, no presumption
shall operate in favor of or against any party by virtue of its role in drafting
or not drafting the terms and conditions set forth herein.

 

8.             Severability.  If any part, term or provision of this Agreement
is held by a court to be void or voidable, illegal, unenforceable, invalid or
otherwise in conflict with law, (i) the remaining provisions or applications of
this Agreement shall not be affected and the rights and obligations of the
parties shall be construed and enforced as if this Agreement did not contain the
particular term or provision held to be invalid and (ii) such provision shall be
amended to conform as nearly as possible, and only to the extent required, to
applicable law.

 

9.             Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts together shall constitute but one and the same instrument.  A
photocopy or facsimile signature may be used as an original.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective
as of the date first indicated above.

 

Iteris, Inc.

 

[                            ] 

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

Name:

 

 

Name:

 

 

 

 

Title:

 

 

Title:

 

 

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Schedule for Exhibit 10.4

 

Iteris, Inc. entered into a Debenture Redemption Agreement with the following
Holders, each substantially identical to this Exhibit 10.4 except as noted
below:

 

Holder

 

Principal Amount
of Debenture

 

Redemption Price

 

Principal
Outstanding

 

Accrued But

Unpaid Interest

 

 

 

 

 

 

 

 

 

 

 

Irvin R. Kessler

 

$

1,000,000.00

 

$

980,000.00

 

$

1,000,000.00

 

$

1,479.45

 

 

 

 

 

 

 

 

 

 

 

Provident Premier Master Fund Ltd.

 

$

500,000.00

 

$

490,000.00

 

$

500,000.00

 

$

737.70

 

 

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