**Exhibit 10.2**

 

REVOLVING LINE OF CREDIT NOTE

 
| $5,000,000.00 | Los Angeles, California |
|---------------|-------------------------|
|          | August 1, 2005     |

 

FOR VALUE RECEIVED, the undersigned ITERIS,INC. (“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONALASSOCIATION (“Bank”) at its office at 333 South Grand Avenue, 9th Floor, LosAngeles, California 90071, or at such other place as the holder hereof maydesignate, in lawful money of the United States of America and in immediatelyavailable funds, the principal sum of Five Million Dollars ($5,000,000.00), orso much thereof as may be advanced and be outstanding, with interest thereon,to be computed on each advance from the date of its disbursement as set forthherein.

 

INTEREST:

 

(a)                                  Interest.  The outstanding principal balance of this Noteshall bear interest (computed on the basis of a 360-day year, actual dayselapsed) at a rate per annum three percent (3.00%) above the Prime Rate ineffect from time to time.  The “PrimeRate” is a base rate that Bank from time to time establishes and which servesas the basis upon which effective rates of interest are calculated for thoseloans making reference thereto.  Eachchange in the rate of interest hereunder shall become effective on the dateeach Prime Rate change is announced within Bank.

 

(b)                                 Payment of Interest.  Interest accrued on this Note shall bepayable on the first day of each month, commencing September 1, 2005.

 

(c)                                  Default Interest.  From and after the maturity date of thisNote, or such earlier date as all principal owing hereunder becomes due andpayable by acceleration or otherwise, the outstanding principal balance of thisNote shall bear interest until paid in full at an increased rate per annum(computed on the basis of a 360-day year, actual days elapsed) equal to fourpercent (4%) above the rate of interest from time to time applicable to thisNote.

 

BORROWING AND REPAYMENT:

 

(a)                                  Borrowing andRepayment.  Borrower may from time totime during the term of this Note borrow, partially or wholly repay itsoutstanding borrowings, and reborrow, subject to all of the limitations, termsand conditions of this Note and of any document executed in connection with orgoverning this Note; provided however, that the total outstanding borrowingsunder this Note shall not at any time exceed the principal amount statedabove.  The unpaid principal balance ofthis obligation at any time shall be the total amounts advanced hereunder bythe holder hereof less the amount of principal payments made hereon by or forany Borrower, which balance may be endorsed hereon from time to time by theholder.  The outstanding principalbalance of this Note shall be due and payable in full on July 31, 2006.

 

(b)                                 Advances.  Advances hereunder, to the total amount ofthe principal sum stated above, may be made by the holder at the oral orwritten request of (i) Abbas Mohaddes or James S. Miele, any one actingalone, who are authorized to request advances and direct the disposition of anyadvances until written notice of the revocation of such authority is receivedby the holder at the office designated above, or (ii) any person, withrespect to advances deposited to the credit of any deposit account of anyBorrower, which advances, when so deposited, shall

 

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be conclusively presumed to have been made to or for the benefit ofeach Borrower regardless of the fact that persons other than those authorizedto request advances may have authority to draw against such account.  The holder shall have no obligation todetermine whether any person requesting an advance is or has been authorized byany Borrower.

 

(c)                                  Application ofPayments.    Each payment made onthis Note shall be credited first, to any interest then due and second, to theoutstanding principal balance hereof.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subjectto the terms and conditions of that certain Credit Agreement between Borrowerand Bank dated as of May 27, 2004, as amended from time to time (the “CreditAgreement”).  Any default in the paymentor performance of any obligation under this Note, or any defined event ofdefault under the Credit Agreement, shall constitute an “Event of Default”under this Note.

 

MISCELLANEOUS:

 

(a)                                  Remedies.  Upon the occurrence of any Event of Default,the holder of this Note, at the holder’s option, may declare all sums ofprincipal and interest outstanding hereunder to be immediately due and payablewithout presentment, demand, notice of nonperformance, notice of protest,protest or notice of dishonor, all of which are expressly waived by eachBorrower, and the obligation, if any, of the holder to extend any furthercredit hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holderimmediately upon demand the full amount of all payments, advances, charges,costs and expenses, including reasonable attorneys’ fees (to include outsidecounsel fees and all allocated costs of the holder’s in-house counsel),expended or incurred by the holder in connection with the enforcement of theholder’s rights and/or the collection of any amounts which become due to theholder under this Note, and the prosecution or defense of any action in any wayrelated to this Note, including without limitation, any action for declaratoryrelief, whether incurred at the trial or appellate level, in an arbitrationproceeding or otherwise, and including any of the foregoing incurred inconnection with any bankruptcy proceeding (including without limitation, anyadversary proceeding, contested matter or motion brought by Bank or any otherperson) relating to any Borrower or any other person or entity.

 

(b)                                 Obligations Jointand Several.  Should more than oneperson or entity sign this Note as a Borrower, the obligations of each suchBorrower shall be joint and several.

 

(c)                                  Governing Law.  This Note shall be governed by and construedin accordance with the laws of the State of California.

 

This note supersedes and replaces thatcertain Revolving Line of Credit Note dated May 27, 2004, in the maximumamount of $5,000,000.00, executed by Borrower in favor of Bank.

 

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IN WITNESS WHEREOF, the undersigned hasexecuted this Note as of the date first written above.

 
| ITERIS, INC. |
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