**Exhibit 10.2**

 

**DEBENTURE REDEMPTIONAGREEMENT**

 

This DebentureRedemption Agreement (“***Agreement***”)is  entered into as of October 17,2008 by and between                           (“***Holder***”) and Iteris, Inc. (“***Iteris***” or the “***Company***”).

 

RECITALS

 

WHEREAS, Holderholds a 6% Convertible Debenture dated May 19, 2004 in the principalamount of $80,000.00 (the “***Debenture***”);and

 

WHEREAS, theparties hereto have reached certain agreements with respect to the redemptionof the above-described debenture.

 

NOW, THEREFORE,in consideration of the foregoing and the mutual promises and agreementscontained herein, the sufficiency of which is hereby acknowledged, the partieshereto agree as follows:

 

1.                                       DebentureRedemption.

 

1.1.                              TheCompany agrees to redeem from Holder, and Holder agrees to sell back to theCompany, the Debenture for an aggregate payment of Seventy-Six Thousand Dollars($76,000.00) (the “***Redemption Price***”).  In addition to the payment of the RedemptionPrice, the Company shall pay at the Closing (as defined below) all accrued butunpaid interest on the Debenture as of the date of Closing.

 

1.2.                              Theredemption of the Debenture (the “***Redemption***”)shall take place at the offices of Dorsey & Whitney LLP, 38 TechnologyDrive, Suite 100, Irvine, California 92618, at 1:00 P.M. Pacific Timeon October 17, 2008, or at such other time and place as the Company andHolder mutually agree orally or in writing (which time and place are designatedas the “***Closing***”).  At the Closing, Holder shall deliver to theCompany the original of the Debenture against payment by the Company of theamounts set forth in Section 1.1 by check, wire transfer or anycombination thereof.  Notwithstanding theforegoing, Holder acknowledges and agrees that, upon and as of the payment bythe Company of the amounts set forth in Section 1.1, whether or notHolder has delivered and surrendered the original of the Debenture to theCompany, the Debenture shall be deemed null and void and cancelled in itsentirety and Holder shall have no further rights with respect to or under theDebenture, whether such rights shall have accrued prior to or after the datehereof.

 

2.                                       Representationsand Warranties.  Holder herebyrepresents, warrants and acknowledges as follows:

 

2.1.                              Asof the date hereof, the principal amount outstanding under the Debenture isEighty Thousand Dollars ($80,000.00) and the accrued but unpaid interestoutstanding under the Debenture is Two Hundred Ten Dollars and Forty-One Cents($210.41).

 

----

 

2.2.                              Holder isthe 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 andclear of all liens, security interests, pledges, claims and encumbrancesof every kind, nature and description incurred or created by Holder.

 

2.3.                              Holderhas the full right and power to enter into this Agreement, to perform itsobligations hereunder and to consummate the transactions contemplatedhereby.  The execution, delivery andperformance of this Agreement by Holder, and the consummation of thetransactions contemplated hereby, (i) have been duly authorized by allrequisite organizational action of Holder and (ii) do not and will notconflict with any law applicable to Holder or any of its properties or assetsor any provisions of Holder’s organizational documents or contracts, agreementsor other instrument to which Holder is a party or by which any of itsproperties or assets may be bound.

 

2.4.                              Holderis an experienced and sophisticated investor, having such knowledge andexperience in business and financial matters and investing as to be able toprotect its own interests and assess the risks and merits of theRedemption.  Holder has independentlydetermined the advisability of entering into this Agreement and is enteringinto this Agreement of its own volition, and is not relying on anyrepresentations or statements of the Company or its officers, directors,shareholders, employees, agents, attorneys and representatives except for thoserepresentations and statements expressly set forth herein.

 

2.5.                              Holderhas had the opportunity to consult with counsel of its choice regarding themeaning and legal effect of this Agreement, and regarding the advisability ofmaking the agreements provided for herein, and fully understands the same.

 

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

 

3.1.                              Otherthan the obligations, covenants, representations and warranties provided for inthis Agreement, Holder, for itself and its predecessors, successors, agents andassigns (individually and collectively, the “***ReleasingParties***”), hereby waives, releases, and forever dischargesIteris and its predecessors, successors, assigns, officers, directors,shareholders, employees, agents, attorneys and representatives, past andpresent, (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 anykind, manner, nature and description, known or unknown, which any of theReleasing Parties have, may have had, might have asserted, may now have orassert, or may hereafter have or assert against the Iteris Released Parties, orany of them, related to or arising under the Redemption and Holder’s purchaseand ownership of the Debenture.  Holderrepresents and warrants that it has not filed any claims, charges, complaintsor actions against the Company and has not assigned or transferred to anyperson or entity any of the claims Holder is releasing in this Agreement.

 

3.2.                              TheReleasing Parties acknowledge and agree that the foregoing release includes inits effect all claims that they do not know or suspect to exist in their favoras of the date hereof, and the Releasing Parties expressly waive any statute,legal doctrine or other similar limitation upon the effect of generalreleases.  In particular, the ReleasingParties waive any and 

 

2

----

 

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

 

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

 

4.                                       GoverningLaw.  This Agreement shall in all respectsbe interpreted, enforced, and governed by and under the internal laws of theState of Delaware, without giving effect to any choice of law or conflict oflaw principles.

 

5.                                       EntireAgreement.  This Agreementconstitutes the entire agreement between the parties with respect to thesubject matter and supersedes all prior oral or written communications,understandings and agreements with respect thereto.

 

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

 

7.                                       Interpretation.  Each party has had the opportunity tonegotiate modifications to the language of this Agreement and agrees that, inany dispute regarding the interpretation or construction of this Agreement, nopresumption shall operate in favor of or against any party by virtue of itsrole in drafting or not drafting the terms and conditions set forth herein.

 

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

 

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

 

*[Signature Page Follows]*

 

3

----

 

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

 
| **Iteris, Inc.** | ** ** | **[                            ]** |
|-----------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **            | ** ** | ** **                                                                                                                                                                     |
|                  |       |                                                                                                                                                                           |
| By:                   | ** ** |                                                                                                                                                                           | By: | ** ** |
|                  |       |                                                                                                                                                                           |
| Name:                 | ** ** |                                                                                                                                                                           | Name: | ** ** |
|                  |       |                                                                                                                                                                           |
| Title:                | ** ** |                                                                                                                                                                           | Title: | ** ** |

 

4

----

 

**Schedule for Exhibit 10.2**

 

Iteris, Inc. entered into a Debenture Redemption Agreement, eachsubstantially identical to this Exhibit 10.2, with 4 affiliates of BryantR. Riley.

 

----