**Exhibit10.3**

**TERMINATIONAGREEMENT**

**THIS TERMINATION AGREEMENT** (the “***Agreement***”) is madeand entered into this 30  day of May,2007 by and among Transportation Planning Group, Inc., d.b.a. Crain &Associates, a California corporation (“***Crain***”), Abbas Mohaddes, an individual (“***Mohaddes***”) andIteris, Inc, a Delaware corporation (“***Iteris***”). Crain, Mohaddes and Iteris are sometimes referred to herein collectivelyas the “***Parties***”and individually as a “***Party***.”

**WHEREAS**, Mohaddes isconcurrently entering into that certain Agreement for Sale and Purchase ofStock (“***Stock PurchaseAgreement***”) with KOA Corporation, d.b.a. Katz, Okitsu &Associates (the “***Buyer***”)to facilitate the sale (the “***Sale***”) of Mohaddes’ interest in Crain to the Buyer;

**WHEREAS,**in order to facilitate the Sale, the Parties hereto desire to terminatethat certain Joint Development Agreement dated October 18, 2006 among theParties (the “***JDA***”) conditioned on and effectiveimmediately prior to the closing of the Sale.

**AGREEMENT**

**NOW, THEREFORE,**in considerationof the covenants, and representations set forth herein, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties agree as follows:

**1.             Termination. **The Parties agree that theJDA shall be terminated effective immediately prior to the closing of the Sale,and that neither Party shall have any further obligations to the other partyunder the JDA except (i) as set forth in Section 4 of the JDA, which shallsurvive the termination of the JDA; and (ii) Iteris’ right to the bonus as setforth in Section 2 below.  Withoutlimiting the foregoing, the Parties expressly agree that the non-competitionand non-solicitation obligations set forth in JDA shall be terminated effectiveimmediately prior to the closing of the Sale. The Parties further agree that neither party shall have any furtherobligations or rights under that certain Confidentiality Agreement datedOctober 6, 2005 between Crain and Iteris, which was previously extendedpursuant to the terms of the JDA. Mohaddes acknowledges that he has notified the Buyer that the JDA hasbeen terminated in accordance with this Agreement.

**2.             Payment Status; Change in Control Payment**.  The Parties agree that no further amounts aredue and payable by Iteris under the JDA. At the closing of the Sale, Mohaddes agrees to remit to Iteris $[5,000]as payment of the bonus set forth in Section 2.4 of the JDA in fullsatisfaction of any bonus provisions set forth in the JDA.

**3.             Waiverof Right of First Refusal**.  Provided that the Sale is consummatedsubstantially in accordance with the terms of the last version of the StockPurchase Agreement provided to Iteris, Iteris hereby declines its right offirst refusal in connection with the Sale and waives its right to prior noticeof the same so that the Sale may be consummated with the Buyer within 120 daysafter the date hereof.

**4.             General****Provisions**.  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original but all of which shallconstitute one and the same instrument. This Agreement constitutes the entire agreement among the parties withregard to the subject matter of this Agreement. No supplement, modification or amendment of this Agreement shall bebinding unless executed in writing by all parties.  This Agreement shall be binding on, and shallinure to the benefit of, the parties to it and their respective heirs, legalrepresentatives, successors, and assigns. The terms of this Agreement shall be governed by the laws of the Stateof California applicable to agreements entered into, to be wholly performed inand among residents exclusively of California.

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**IN WITNESS WHEREOF**, the partieshereto have caused this Agreement to be executed by their duly authorized respectiveofficers as of the date first written above.
|        | ITERIS, INC.,                                            |
|--------|----------------------------------------------------------|
|   | a Delaware corporation                                   |
|   |                                                     |
|   |                                                     |
|   | By:                                                      | /s/ James Miele |   |
|   |                                                     |   | James Miele, |
|   |                                                     |   | Chief Financial  Officer |
|   |                                                     |
|   |                                                     |
|   | TRANSPORTATION  PLANNING GROUP, INC.,                    |
|   | d.b.a. Crain & Associates, a California  corporation |
|   |                                                     |
|   |                                                     |
|   | By:                                                      | /s/ Abbas  Mohaddes |   |
|   |                                                     |   | Abbas Mohaddes, |
|   |                                                     |   | Chief Executive  Officer |
|   |                                                     |
|   |                                                     |
|   |                                                     | /s/ Abbas Mohaddes |   |
|   | ABBAS MOHADDES                                           |

 

[SIGNATURE PAGE TOTERMINATION AGREEMENT]

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