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Exhibit 4.14    
    

THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES EVIDENCED HEREBY OR ANY PORTION THEREOF OR INTEREST THEREIN MAY NOT BE ACCOMPLISHED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND UNDER CALIFORNIA LAW, OR AN
OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED. 

        October 18,
2001 

WARRANT  

To Subscribe for and Purchase Common Stock of

Iteris, Inc.  

VOID AFTER OCTOBER 18, 2006  

        THIS CERTIFIES that, for valuable consideration received,
                        or (assignee), is entitled to subscribe for and purchase from Iteris, Inc., a
Delaware corporation (hereinafter called the "Company"), at the price of $2.80699 per share (such price, as from time to time to be adjusted as hereinafter provided, being hereinafter called the
"Warrant Price"), at any time and from time to time but not earlier than the
Issue Date (as defined below) or later than the Expiration Date (as defined below), up to 17,917 fully paid, non-assessable shares of Common Stock, $.001 par value, of the Company ("Common
Stock"), subject, however, to the provisions and upon the terms and conditions hereinafter set forth, including without limitation the provisions of Section 3 hereof. "Issue Date" shall mean
October 18, 2001. "Expiration Date" shall mean October 18, 2006. 

        Section 1.    Exercise
of Warrant 

        (a)   Payment
of Warrant Price 

        This
Warrant may be exercised, at any time and from time to time but not earlier than the Issue Date or later than the Expiration Date, by the holder hereof (hereinafter referred to as
the "Warrantholder"), in whole or in part (but not as to a fractional share of Common Stock), by the completion of the Notice of Exercise attached hereto and by the surrender of this Warrant (properly
endorsed) at the Company's offices at 1515 South Manchester Ave., Anaheim, CA 92802 (or at such other location in the United States as the Company may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the books of the Company), and by payment to the Company of the Warrant Price, in cash or by certified or official bank check, for each
share being purchased. In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the shares of Common Stock so purchased, registered in the name of the
Warrantholder, shall be delivered to the Warrantholder within a reasonable time, not exceeding five business days, after the rights represented by this Warrant shall have been so exercised; and,
unless this Warrant has expired or has been exercised in full, a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised shall also be
issued to the Warrantholder within such time. With respect to any such exercise, the Warrantholder shall for all purposes be deemed to have become the holder of record of the number of shares of
Common Stock evidenced by such certificate or certificates from the date on which this Warrant was surrendered and payment of the Warrant Price was made irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date on which the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such
shares at the close of business on the next succeeding date on which the stock transfer books are open. No fractional 

 

shares
shall be issued upon exercise of this Warrant and no payment or adjustment shall be made upon any exercise on account of any cash dividends on the Common Stock issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions of this Section 1, be delivered upon any such exercise, the Company, in lieu of delivering the fractional share
thereof, shall pay to the Warrantholder an amount in cash equal to the current market price of such fractional interest as determined in good faith by the Board of Directors of the Company. 

        (b)   Net
Exercise Election 

        The
Warrantholder may elect to receive, without the payment by the Warrantholder of any additional consideration, shares equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the Notice of Exercise attached hereto duly executed, at the office of the Company. Thereupon, the Company shall issue to the
Warrantholder such number of fully paid and nonassessable shares of Common Stock as is computed using the following formula: 

	X	=	Y (A-B)
 A	 	 

where:

        X
=    the number of shares of Common Stock to be issued to the Warrantholder pursuant to this Section 1(b) pursuant to this net exercise election. 

        Y
=    the number of shares of Common Stock purchasable under this Warrant or, if only a portion of the Warrant is being exercised, that portion of the Warrant requested to be
exercised. 

        A
=    the Market Price of one share of Common Stock, as determined in accordance with the provisions of this Section 1(b). 

        B
=    the per share warrant price in effect under this warrant at the time the net exercise election is made pursuant to this Section 1(b). 

        "Market
Price" on any day means the simple average of the closing (or last sale) prices for 5 consecutive business days before such date of the Common Stock of the Company as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or by any domestic stock exchange where the Company's Common Stock then trades. If there were no sales
on NASDAQ or any such exchange on such date, "Market Price" means the simple average of the highest bid and lowest asked prices on such market systems and exchanges at the end of such day. If the
Company's Common Stock is not publicly traded on NASDAQ or other domestic stock exchange at the time the Warrantholder desires to exercise such option, the "Market Price" shall be the "Market Price"
as determined in good faith by the Board of Directors of the Company. In the event the parties are not able to agree on a "market price", the "market price" shall be determined by a single qualified
appraiser (which shall be either a national accounting firm or a national or regional investment bank) selected by mutual agreement between Company and the warrantholder. The parties will share any
appraisal cost on an equal basis. 

        Section 2.    Adjustment
of Number of Shares 

        Upon
each adjustment of the Warrant Price for any stock dividend or distribution or any subdivision or combination of the outstanding shares of the Common Stock as provided in
Section 3, the Warrantholder shall thereafter be entitled to Purchase, at the Warrant Price resulting from such adjustment, the number of shares (calculated to the nearest share) obtained by
multiplying the Warrant Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof
by the Warrant Price resulting from such adjustment. 

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        Section 3.    Adjustment
of Warrant Price Upon Issuance of Common Stock 

        (a)   Stock
Dividends 

        In
case the Company shall declare a dividend or make any other distribution upon any stock of the Company payable in Common Stock, options to purchase Common Stock or securities
convertible into Common Stock of the Company ("Options") or securities convertible into or exchangeable for Common Stock ("Convertible Securities"), then (i) any Common Stock shall be deemed to
have been issued in a subdivision of outstanding shares as provided in Section 3(b) below and (ii) any Options, Convertible Securities or other securities, as the case may be, issuable
in payment of such dividend or distribution shall be deemed to have been issued (together with the shares of Common Stock with respect to which they were distributed) in an issuance of Additional
Stock (as defined below) as provided in Section 3(d) below. 

        (b)   Subdivision
or Combination of Stock 

        If
the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares, the Warrant Price in effect immediately prior to such subdivision shall
be proportionately reduced. Conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall be proportionately increased. 

        (c)   Recapitalization,
Reorganization, Reclassification, Consolidation, Merger or Sale 

        If
any recapitalization, reorganization or reclassification of the capital stock of the Company or any consolidation or merger of the Company with another corporation, or the sale of all
or substantially all its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock (any of which shall be deemed to be a "Change"), then, as a condition of such Change, lawful and adequate provisions shall be made whereby each Warrantholder shall thereafter
have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock of the Company immediately theretofore receivable upon the
exercise of such Warrant or Warrants, such shares of stock, securities or assets (including cash) as may be issued or payable with respect to or in exchange for the number of outstanding shares of
such Common Stock equal to the number of shares of such stock immediately theretofore so receivable had such Change not taken place. In any such case appropriate provision shall be made with respect
to the rights and interests of such Warrantholder to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Warrant Price) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of such exercise rights. In the event of a merger or consolidation of the Company
as a result of which a greater or lesser number of shares of common stock of the surviving corporation are issuable to holders of Common Stock of the Company outstanding immediately prior to such
consolidation, the Warrant Price in effect immediately prior to such merger or consolidation shall be adjusted in the same manner as though there were a subdivision or combination of the outstanding
shares of Common Stock of the Company. The Company will not effect any Change unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing such assets shall assume, by written instrument executed and mailed or delivered to each Warrantholder at the last address of such Warrantholder
appearing on the books of the Company, the obligation to deliver to such Warrantholder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Warrantholder
may be entitled to receive. 

        (d)   Issuance
of Additional Stock 

        (1)   If
and whenever the Company shall issue any Additional Stock (as defined below) without consideration or for a consideration per share less than the Warrant price in
effect immediately 

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prior
to such issue, then the Warrant Price in effect immediately prior to the issue of such Additional Stock shall immediately be adjusted to a price (computed to the nearest cent) equal to the
quotient obtained by dividing: 

        (x)   an
amount equal to the sum of (i) the number of shares of Common Stock outstanding immediately prior to the issuance of Additional Stock (increased or decreased
to the extent that the number of such shares of Common Stock and Additional Stock, respectively, shall have been increased or decreased by each subdivision or combination thereof); multiplied by the
Warrant Price then in effect, and (ii) the aggregate consideration received by the Company (before deducting any underwriting discounts or commissions) for all Additional Stock issued, by 

        (y)   an
amount equal to the sum of (i) the number of the shares of Common Stock outstanding immediately prior to the issuance of Additional Stock and (ii) the
number of shares of Additional Stock issued (increased or decreased to the extent that the number of such shares of Common Stock and Additional Stock, respectively, shall have been increased or
decreased by each subdivision or combination thereof); 

provided,
however, that such adjustment shall be made only if the aforesaid quotient shall be less than the Warrant Price in effect immediately prior to the issue of such Additional Stock; provided
further, that no adjustment shall be made to the Warrant Price to the extent that any such adjustment would require any waiver or consent by the holders of any shares of Series A Preferred
Stock or Ford Motor Company, or their respective transferees or successors in interest. No adjustment of the Warrant Price, however, shall be made in an amount less than three cents ($.03) per share,
but any lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount
to three cents $.03 (as theretofore decreased or increased by any previous subdivision or combination). For purposes of this Section 3(d), the number of shares of Common Stock shall be
calculated as if all shares of all series of Preferred Stock then outstanding had been fully converted into shares of Common Stock and any outstanding options, warrants or other rights for the
purchase of Common Stock had been exercised. 

        "Additional
Stock" shall mean any Common Stock issued by the Company after the date of this Warrant, other than: 

        (a)   Common
Stock issued by the Company pursuant to options or warrants outstanding on the date hereof; 

        (b)   Common
Stock or options to purchase Common Stock issued after the date hereof by the Company to employees, officers or directors, or consultants or advisors to the
Company or any subsidiary pursuant to the Company's current or future stock purchase or stock option plans; 

        (c)   Common
Stock issued by the Company in connection with any stock dividend or distribution described in Section 3(a) above; 

        (d)   Common
Stock issued by the Company upon any subdivision or combination of the outstanding shares of Common Stock described in Section 3(b) above; 

        (e)   Common
Stock issued by the Company upon conversion of shares of the Company's Series A Preferred Stock issued and outstanding as of October 18, 2001; 

        (f)    Common
Stock issued in connection with, or issuable pursuant to options or warrants issued in connection with, any equipment leasing or loan arrangement, or debt
financing from a bank or similar financial or lending institution approved by the Board of Directors; 

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        (g)   Common
Stock issued in connection with, or issuable pursuant to options or warrants issued in connection with, strategic transactions or acquisitions involving the
Company and other entities, provided that such strategic transactions or acquisitions are approved by the Board of Directors; and 

        (h)   Common
Stock issued by the Company in connection with its initial public offering. 

        (2)   For
the purposes of subsection (d)(1) above, the following paragraphs (x), (y) and (z) shall also be applicable: 

        (x)   In
case at any time the Company shall grant any rights to subscribe for or any rights or options to purchase Common Stock or any Convertible Securities, other than with
respect to the securities excluded from the definition of Additional Stock as referenced above, whether or not such rights or options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such rights or options or upon conversion or exchange of such Convertible
Securities (determined by dividing (A) the total
amount, if any, received or receivable by the Company as consideration for the granting of such rights or options, plus the minimum aggregate amount of additional consideration payable to the Company
upon the exercise of such rights or options, plus, in the case of any such rights or options which relate to such Convertible Securities, the minimum aggregate amount of additional consideration
payable to the Company upon the exercise of such rights or options plus, in the case of any such rights or options which relate to such Convertible Securities, the minimum aggregate amount of
additional consideration payable to the Company upon the exercise of such rights or options, plus, in the case of any such rights or options which relate to such Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (B) the total maximum number
of shares of Common Stock issuable upon the exercise of such rights or options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such rights or
options) shall be less than the Warrant Price in effect immediately prior to the time of the granting of such rights or options, then the total maximum number of shares of Common Stock issuable upon
the exercise of such rights or options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such rights or options shall (as of the
date of granting of such rights or options) be deemed to be outstanding and to have been issued for such price per share. Except as provided in subsection (d)(3), no further adjustments of the Warrant
Price shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such rights or options or upon the actual issue of such Common Stock upon conversion
or exchange of such Convertible Securities. 

        (y)   In
case at any time the Company shall issue or sell any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing (A) the total amount received or receivable by the Company as consideration
for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by
(B) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Warrant Price in effect immediately
prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall (as of the date of the
issue or sale of such Convertible Securities) be deemed to be outstanding and to have been issued for such price per share, provided that (i) except as provided in subsection (d)(3), no further
adjustments of the Warrant Price shall be made upon the actual issue of such Common Stock upon conversion or 

5

 

exchange
of such Convertible Securities, and (ii) if any such issue or sale of such Convertible Securities is made upon exercise of any rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments of the Warrant Price have been or are to be made pursuant to other provisions of this subsection (d)(2), no further adjustment of the
Warrant Price shall be made by reason of such issue or sale. 

        (z)   In
case at any time any shares of Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be
issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Company therefor, without deduction therefrom of any expenses incurred or any underwriting
commissions or concessions or discounts paid or allowed by the Company in connection therewith. In case any shares of Common
Stock or Convertible Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined by the Board of Directors, without deduction therefrom of any expenses
incurred or any underwriting commissions or concessions or discounts paid or allowed by the Company in connection therewith. In case any shares of Common Stock or Convertible Securities or any rights
or options to purchase any such Common Stock or Convertible Securities shall be issued in connection with any merger of another corporation into the Company, the amount of consideration therefor shall
be deemed to be fair value of the assets of such merged corporation as determined by the Board of Directors after deducting therefrom all cash and other consideration (if any) paid by the Company in
connection with such merger. 

        (3)   If
the purchase price provided for in any right or option referred to in paragraph (x) of subsection (d)(2) of this Section, or the rate at which any Convertible
Securities referred to in paragraphs (x) or (y) or said subsection (d)(2) are convertible into or exchangeable for Common Stock, shall change or a different purchase price or rate shall
become effective at any time or from time to time (other than under or by reason of provisions designed to protect against dilution), then, upon such change becoming effective, the Warrant Price then
in effect hereunder shall forthwith be increased or decreased to such Warrant Price as would have obtained had the adjustments made upon the granting or issuance of such rights or options or
Convertible Securities been made upon the basis of (x) the issuance of the number of shares of Common Stock theretofore actually delivered upon the exercise of such options or rights or upon
the conversion or exchange of such Convertible Securities, and the total consideration received therefor, and (y) the granting or issuance at the time of such change of any such options,
rights, or Convertible Securities then still outstanding for the consideration, if any, received by the Company therefor and to be received on the basis of such changed price. On the expiration of any
right or option referred to in paragraph (x) of subsection (d)(2), or on the termination of any right to convert or exchange any convertible Securities referred to in paragraphs (x) or
(y) of said subsection (d)(2), the Warrant Price shall forthwith be readjusted to such amount as would have obtained had the adjustment made upon the granting or issuance of such rights or
options or Convertible Securities been made upon the basis of the issuance or sale of only the number of shares of Common Stock actually issued upon the exercise of such options or rights or upon the
conversion or exchange of such Convertible Securities. If the purchase price provided for in any such right or option, or the rate at which any such Convertible Securities are convertible into or
exchangeable for Common Stock, shall change at any time under or by reason of provisions with respect thereto designed to protect against dilution, then in case of the delivery of Common Stock upon
the exercise of any such right or option or upon conversion or exchange of any such Convertible Security, the Warrant Price then in effect hereunder shall forthwith be decreased to such Warrant Price
as would have been obtained had the adjustments made upon the issuance of such right or option or Convertible 

6

 

Security
been made upon the basis of the issuance of (and the total consideration received for) the shares of Common Stock delivered as aforesaid. 

        (e)   Notice
of Adjustment 

        Upon
any adjustment of the Warrant Price, then and in each such case the Company shall give written notice thereof, by first-class mail, postage prepaid, addressed to each Warrantholder
at the address of such Warrantholder as shown on the books of the Company, which notice shall state the Warrant Price resulting from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. 

        (f)    Stock
to Be Reserved 

        The
Company will at all times reserve and keep available out of its authorized Common Stock or its treasury shares, solely for the purpose of issuance upon the exercise of this Warrant
as herein provided, such number of shares of Common Stock as shall then be issuable upon the exercise of this Warrant. The Company covenants that all shares of Common stock which shall be so issued
shall be duly and validly issued and fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof, and, without limiting the generality of the
foregoing, the Company covenants that it will from time to time take all such action as may be required to ensure that the par value per share of the Common Stock is at all times equal to or less than
the effective Warrant Price. The Company will take all such action as may be necessary to ensure that all such shares of Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange or automated quotation system upon which the Common Stock of the Company may be listed. The Company will not take any action
which results in any adjustment of the Warrant Price if the total number of shares of Common Stock issued and issuable after such action upon exercise of the Warrant would exceed the total number of
shares of Common Stock then authorized by the Company's Amended and Restated Certificate of Incorporation. The Company has not granted and will not grant any right of first refusal with respect to
shares issuable upon exercise of this Warrant, and there are no preemptive rights associated with such shares. The Company agrees that so long as any Warrants remain unexercised, it will not grant
warrants to purchase its Common Stock to any party that (i) give such party demand registration rights which are exercisable in less than one year from the date of the grant of such warrants,
(ii) give such part demand registration rights that are senior to those registration rights granted to the Warrants hereunder or (iii) otherwise impair the registration or other rights
granted to the Warrants hereunder, in each case without notification to and consent of the Warrantholder which consent shall not be unreasonable withheld. 

        (g)   Issue
Tax 

        The
issuance of certificates for shares of Common Stock upon exercise of any Warrant shall be made without a charge to the Warrantholder for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the
Warrantholder. 

        (h)   Closing
of Books 

        The
Company will at no time close its transfer books against the transfer of the shares of Common Stock issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant. 

        Section 4.    Piggyback
Registration Rights 

        The
Company shall notify the Warrantholder in writing at least fifteen (15) days prior to the filing of any registration statement under the Securities Act of 1933, as amended
(the "Securities Act") for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the
Company, but excluding registration 

7

 

statements
relating to the Company's initial registered public offering of securities, employee benefit plans or with respect to corporate reorganizations or other transactions under Rule 145
of the Securities Act) and, subject to the restrictions set forth below, will afford the Warrantholder an opportunity to include in such registration statement all or part of the shares of Common
Stock issuable upon exercise of this Warrant. If the Warrantholder desires to include in any such registration statement all or any part of the Warrant Shares, it shall, within fifteen
(15) days after the above-described notice from the Company, so notify the company in writing. Such notice shall state the intended method of disposition of the such shares of Common Stock by
the Warrantholder. If the Warrantholder decides not to include all of the shares of Common Stock issuable upon exercise of this Warrant in any registration statement thereafter filed by the Company,
the Warrantholder shall nevertheless continue to have the right to include any such shares of Common Stock in any subsequent registration statement or registration statements as may be filed by the
Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. The rights granted in this Section 4 are expressly subordinate and junior to any other
registration rights granted by the Company, including, but not limited to the registration rights granted to DaimlerChrysler Venture GmbH and Hockenheim Investment Pte. Ltd. pursuant to that
certain Investor Rights Agreement dated as of July 31, 2001 by and among the Company and such parties. 

        Section 5.    Notices
of Records Dates 

        In
the event of: 

        (1)   any
taking by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution (other than cash dividends out of earned surplus), or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any right to sell shares of stock of any class or any other right, or 

        (2)   any
Change (as defined above); or 

        (3)   any
voluntary or involuntary dissolution, liquidation or winding-up of the Company; 

then
and in each such event the Company will give notice to the Warrantholder specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or
right and stating the amount and character of such dividend, distribution or right, and (ii) the date on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the Warrantholders of record of Common Stock will be
entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up. Such notice shall be given at least 10 days and not more than 90 days prior to the date therein specified, and such notice shall state
that the action in question or the record date is subject to the effectiveness of a registration statement under the Securities Act or to a favorable vote of stockholders, if either is required. 

        Section 6.    No
Shareholder Rights or Liabilities 

        This
Warrant shall not entitle the Warrantholder to any voting rights or other rights as a stockholder of the Company. No provision hereof, in the absence of affirmative action by the
Warrantholder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Warrantholder shall give rise to any liability of such Warrantholder for the Warrant
Price or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. 

8

 

        Section 7.    Lost,
Stolen, Mutilated or Destroyed Warrant 

        If
this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms, including indemnification, as it may in its discretion reasonably impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall
constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone. 

        Section 8.    Notices

        All
notices, requests and other communications required or permitted to be given or delivered hereunder shall be in writing, and shall be delivered, or shall be sent by certified or
registered mail, postage prepaid and addressed, if to the Warrantholder to such Warrantholder at the address shown on such Warrantholder's Warrant or at such other address as shall have been furnished
to the Company by notice from such Warrantholder. All notices, requests and other communications required or permitted to be given or delivered hereunder shall be in writing, and shall be delivered,
or shall be sent by certified or registered mail, postage prepaid and addressed to the Company at the Company's Address set forth below, Attention: Secretary or at such other address as shall have
been furnished to the Warrantholder by notice from the Company. For purposes of this warrant: 

	The Address of the Warrantholder:	 	    

	 	 	 
	 	 	    

	 	 	 
	 	 	 
	The Address of the Company:	 	1515 South Manchester Ave.

Anaheim, CA 92802

        Section 9.    Transfer

        This
Warrant may be transferred, exercised or assigned ("transferred"), in whole or in part, provided that the transferee is a subsidiary, affiliate, parent, general partner, limited
partner or member of the Warrantholder or, in the case of an individual, a member of the immediate family of such individual or a trust for the benefit of the individual or any such family member or
members, subject to the following restrictions, provided, however, that such transferee must be an accredited investor as defined in Regulation D promulgated under the Securities Act. This
Warrant and the shares of Common Stock issuable upon exercise of this Warrant shall be subject to restrictions on transferability unless registered under the Securities Act, or unless an exemption
from registration is available. Until this Warrant and the shares of Common Stock issuable upon exercise of this Warrant are so registered, this Warrant and any certificate for such shares of Common
Stock issued or issuable upon exercise of this Warrant shall contain a legend, in form and substance satisfactory to counsel for the Company, stating that this Warrant and the shares of Common Stock
issuable upon exercise of this Warrant may not be sold, transferred or otherwise disposed of unless, in the opinion of counsel satisfactory to the Company,
which may be counsel to the Company, that the Warrant and the shares of Common Stock issuable upon exercise of the Warrant may be transferred without such registration. This Warrant and the shares of
Common Stock issuable upon exercise of this Warrant may also be subject to restrictions on transferability under applicable state securities or blue sky laws. 

        Until
this Warrant or the shares of Common Stock issuable upon exercise of this Warrant are registered under the Securities Act, the Company may require, as a condition of transfer
hereof or thereof that the transferee (who may be the Warrantholder in the case of an exercise or exchange) represent that the securities being transferred are being acquired for investment purposes
and for the 

9

 

transferee's
own account and not with a view to or for sale in connection with any distribution of the security. The Company may also require that transferee provide written information adequate to
establish that the transferee is an "accredited investor" within the meaning of Regulation D issued under the Securities Act, or otherwise meets all qualifications necessary to comply with
exemptions to the Securities Act and any applicable securities or blue sky laws, all as determined by counsel to the Company. 

        Any
transfer permitted hereunder shall be made by surrender of this Warrant to the Company at its principal office or to its transfer agent at its offices with a duly executed request to
transfer the Warrant, which shall provide adequate information to effect such transfer and shall be accompanied by funds sufficient to pay any transfer taxes applicable. Upon satisfaction of all
transfer conditions, the Company or its transfer agent shall, without charge, execute and deliver a new Warrant in the name of the transferee named in such transfer request, and this Warrant promptly
shall be cancelled. 

        Section 10.    Market
Stand-Off Agreement. 

        Warrantholder
shall not sell, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a
sale with respect to, any shares of Common Stock issuable upon exercise of this Warrant during a period (the "Stand-Off Period") equal to 180 days following the effective date of a
registration statement of the Company filed under the Securities Act (or such shorter period as the Company or managing underwriter may authorize); provided that all officers and directors of the
Company and holders of at least one percent (1%) of the Company's voting securities enter into similar agreements. In order to enforce the foregoing covenant, the Company may impose stock transfer
restrictions with respect to such shares of Common Stock until the end of the Stand-Off Period. 

        Section 11.    Amendments
and Waivers 

        This
Warrant and any term hereof may be changed, waived, discharged or terminated only be an instrument in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. 

        Section 12.    Severability

        If
one or more provisions of this Warrant are held to be unenforceable under applicable law, such provision shall be excluded from this Warrant, and the balance of this Warrant shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

        Section 13.    Governing
Law 

        This
Warrant shall be governed by and construed under the laws of the State of California, without any effect to conflict of law principles. 

        Section 14.    Headings

        The
headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect any of the terms hereof. 

        Section 15.    Binding
Effect on Successors 

        This
Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets and/or securities.
All of the covenants and agreements of parties hereto shall inure to the benefit of the successors and assigns of the Company and the Warrantholder hereof. 

10

 

        IN
WITNESS WHEREOF, Iteris, Inc. has executed this Warrant on and as of the day and year first above written. 

	 	 	Iteris, Inc.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	/s/  JACK JOHNSON      
 Jack Johnson

Chief Executive Officer
	Acknowledged and Accepted:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
	 	 	 	 

11

 
SCHEDULE A  

FORM OF NOTICE OF EXERCISE  

[To be signed only upon exercise of the Warrant]

TO BE EXECUTED BY THE REGISTERED WARRANTHOLDER

TO EXERCISE THE WITHIN WARRANT

The
undersigned hereby elects to purchase              shares of Common Stock (the "Shares") of Iteris, Inc. (the "Company") under the Warrant dated
October 18, 2001, which the undersigned is entitled to purchase pursuant to the terms of such Warrant, and [check one]: 

o    Cash Exercise.    The undersigned has delivered
$            , the aggregate Warrant Price for              Shares purchased herewith, in full in cash or by
certified or official bank
check or wire transfer; 

o    Net Exercise.    In exchange for the issuance of
             Shares, the undersigned hereby agrees to surrender the right to purchase              shares of Common
Stock pursuant to
the net exercise provisions set forth in Section 1(b) of the Warrant. 

Please issue a certificate or certificates representing such shares of Common Stock in the name of the undersigned or in such other name as is specified below and in the
denominations as is set forth below: 

  

  

[Type
Name of Warrantholder as it should appear on the stock certificate] 

   

   

[Requested
Denominations—if no denomination is specified, a single certificate will be issued] 

The
initial address of such Warrantholder to be entered on the books of the Company shall be: 

	  

    
	 	 
	    
	 	 
	    
	 	 

The
undersigned hereby represents and warrants that the undersigned is an accredited investor as defined in Rule 501 promulgated under the Securities Act of 1933, as amended. The undersigned
further represents and warrants that the undersigned is acquiring such shares for his own account for investment purposes only, and not for resale or with a view to distribution of such shares or any
part thereof. 

	 	 	By:	    

	 	 	 	 
	 	 	Print Name:	    

	 	 	 	 
	 	 	Title:	    

	 	 	 	 
	 	 	Dated:	    

12

 
 
 

Schedule to Form of Warrant
  Issued by the Iteris Subsidiary on October 18, 2001    
    

	Warrant Holder:
 
	 	Number of Shares of Iteris Subsidiary

Common Stock:

	Patrick S. Bannister	 	17,917
	Robert W. Campbell	 	3,333
	Paul J. Donnelly	 	57,917
	Carl E. Frankson	 	56,250
	Andre D. Guardi	 	59,583
	Gregory E. Presson	 	31,250
	Stephen D. Weinress	 	23,750
	TOTAL	 	250,000
	 	 	

13

QuickLinks

Exhibit 4.14

Schedule to Form of Warrant Issued by the Iteris Subsidiary on October 18, 2001QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.15    
    

WARRANT  

        THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT THAT A PROPOSED TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT, EXCEPT THAT NO SUCH OPINION SHALL BE REQUIRED
FOR TRANSFERS OR SALES PURSUANT TO REGISTRATION UNDER THE ACT.

        THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE TERMS AND PROVISIONS OF A VALUE PARTICIPATION AGREEMENT (AS SUPPLEMENTED,
MODIFIED, AMENDED, OR RESTATED FROM TIME TO TIME, THE "AGREEMENT") DATED JULY 31, 2000 BETWEEN FORD MOTOR COMPANY ("FORD") AND ITERIS, INC. (THE "COMPANY") A COPY OF THE AGREEMENT IS
AVAILABLE AT THE EXECUTIVE OFFICES OF THE COMPANY.

	1,531,867 Shares of

Common Stock

of the Company	 	Warrant No. W-1

WARRANT TO PURCHASE COMMON STOCK OF

ITERIS, INC.  

        This is to certify that, in consideration of ten dollars ($10.00) and other valuable consideration, which is hereby acknowledged as received, Ford Motor Company,
its successors and registered assigns, is entitled to exercise this Warrant to purchase One Million Five Hundred Thirty One Thousand Eight Hundred Sixty Seven (1,531,867) shares of the Common Stock of
Iteris, Inc., a Delaware corporation (the "Company"), as the same shall be adjusted from time to time pursuant to the provisions of the
Agreement, at any time in accordance with the terms of the Agreement, at a price equal to $10.51 per share and to exercise the other rights, powers, and privileges hereinafter provided, all on the
terms and subject to the conditions specified in this Warrant and in the Agreement. This Warrant shall expire on the Warrant Expiration Date. 

        This
Warrant is issued under, and the rights represented hereby are subject to the terms and provisions contained in the Agreement, to all terms and provisions of which the registered
holder of this Warrant, by acceptance of this Warrant, assents. Reference is hereby made to the Agreement for a more complete statement of the rights and limitations of rights of the registered holder
of this Warrant and the rights and duties of the Company under this Warrant. Capitalized terms used but not defined herein have the meanings set forth in the Agreement. A copy of the Agreement is on
file at the office of the Company. 

        IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed. 

Dated
as of July 31, 2000. 

	 	 	ITERIS, INC.
	

 	
 	
By:	

/s/  JACK JOHNSON      
 Jack Johnson

Its: Chief Executive Officer and President

ASSIGNMENT FORM  

        FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the
undersigned under this Warrant, with respect to the number of shares of Common Stock set forth below: 

	No. of Shares
 
	 	Name and Address of Assignee

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

and
does hereby irrevocably constitute and appoint as attorney                        to register such transfer on the books
of                        maintained for the purpose, with full power of substitution in
the premises. 

        Dated:                        ,
200  . 

	 	 	By:	 
	 	 	 	

	

 	
 	

Name:	

 
	

 	
 	

 	

	

 	
 	

Title:	

 
	

 	
 	

 	

SUBSCRIPTION FORM  

(To
be executed only upon exercise of Warrant) 

        The
undersigned registered owner of this Warrant irrevocably exercises this Warrant for and purchases                        of the
number of shares of Common Stock of Iteris, Inc.,
purchasable with this Warrant, and herewith makes payment therefor, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of Common
Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered
to                        whose address
is                        , and if such shares
of Common Stock do not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable
thereunder to be delivered to the undersigned. 

        The
undersigned represents that such shares of Common Stock acquired pursuant to exercise of this Warrant will not be sold other than in compliance with applicable securities laws. 

        Dated:                        ,
200  . 

	 	 	By:	 
	 	 	 	

	

 	
 	

Name:	

 
	

 	
 	

 	

	

 	
 	

Title:	

 
	

 	
 	

 	

	

 	
 	

Address:	

 
	

 	
 	

 	

	

 	
 	

 	

Relevant Portions of Value Participation Agreement

between the Iteris Subsidiary and Ford Motor Company,

dated as of July 31, 2000  

        4.2    Vesting Schedule.    

        (a)   The
Warrants shall become exercisable ("Vested") as set forth in subparagraph (b) of this Section 4.2. "Volume/Schedule Levels" are based on certain
minimum quantities of Units purchased pursuant to purchase orders by Ford, Ford Affiliates, or Ford Tier 1 Suppliers at intervals during the Exclusive Period. 

        (b)   The
Warrants will Vest as provided on Schedule 4.2 attached hereto. 

        (c)   The
Warrants may also become Vested as provided in Section 4.15. 

        4.3    Exercise Price.    The exercise price per share of Common Stock issued under each Warrant will be $10.51, as
adjusted in accordance with Section 4.10 (the "Exercise Price"). 

        4.4    Exercise.    

        (a)   Subject
to the limitation in Section 4.2, the Warrants may be exercised in whole or in part at any time or from time to time on or after the date such Warrant
becomes Vested on any day that is a Business Day, for all or any part of the number of whole Warrant Shares purchasable upon its exercise. In order to exercise any Warrant, in whole or in part, a
Holder will deliver to the Company at the address designated by the Company pursuant to Section 12.4, (i) a written notice of such Holder's election to exercise its Warrants, which
notice will specify the number of Warrant Shares to be purchased pursuant to such exercise, (ii) the price, in an amount equal to the aggregate purchase price for all Warrant Shares to be
purchased at the Exercise Price pursuant to such exercise, in cash or other immediately available funds (the "Purchase Price"), and (iii) its Warrant(s). Such notice will be substantially in
the form of the subscription form attached to the Warrants. In the case of payment of all or a portion of the Purchase Price pursuant to Section 4.4(b), the direction by the exercising Holder
to make a Cashless Exercise (as defined below) shall serve as accompanying payment for that portion of the Purchase Price. Upon receipt of such subscription form, the Company will, as promptly as
practicable, and in any event within seven (7) Business Days, execute, or cause to be executed, and
deliver to such Holder a certificate or certificates representing the aggregate number of Warrant Shares, as provided in this Agreement. The stock certificate or certificates so delivered will be in
such denominations as may be specified in such notice and will be registered in the name of such Holder, or such other name of a Permitted Transferee as designated in such notice. A Warrant will be
deemed to have been exercised, such certificate or certificates will be deemed to have been issued, and such Holder or any other Person so designated or named in such notice will be deemed to have
become a holder of record of such shares for all purposes, as of the date that such notice, together with payment of the Exercise Price and the Warrant(s), is received by the Company. If a Warrant has
been exercised in part, the Company will, at the time of delivery of such certificate or certificates, deliver to such Holder a new Warrant evidencing the rights of such Holder to purchase a number of
Warrant Shares with respect to which the Warrant has not been exercised, which new Warrant will, in all other respects, be identical with the Warrants, or, at the request of such Holder, appropriate
notation may be made on the Warrant and the Warrant shall be returned to such Holder. 

        (b)   In
lieu of exercising the Warrant for cash pursuant to the immediately preceding paragraph, subject to applicable securities laws, by surrendering the Warrant at the
Principal Office 

 

together
with an exercise notice indicating such election, the Holder may elect to receive the Warrant Shares determined pursuant to the formula set forth below: 

	 	 	 	 	 	 	 	 	A-B
	X	 	=	 	Y	 	×	 	          
	 	 	 	 	 	 	 	 	A

	X	 	=	 	the number of Warrant Shares to be issued to the Holder
	

Y	
 	

=	
 	

the number of Warrant Shares purchasable under this Warrant (at the date of calculation) for which an exercise notice has been given
	

A	
 	

=	
 	

the Market Value Per Share (at the date of such calculation); and
	

B	
 	

=	
 	

Exercise Price.

        4.5    Warrant Register.    The Company will, at all times while any of the Warrants remain outstanding and
exercisable, keep and maintain at its Principal Office a register in which the registration, transfer, and exchange of the Warrants will be recorded (the "Warrant Register"). The Company will not at
any time, except upon the merger, consolidation, dissolution, liquidation, or winding up of the Company, close such register so as to result in preventing or delaying the exercise or transfer of any
Warrant. 

        4.6    Legend.    The Warrants and the Warrant Shares have not been registered under the Securities Act or qualified
under applicable state securities laws. Accordingly, unless the legend may be removed in accordance with applicable federal and state securities law, any stock certificate issued pursuant to the
exercise of a Warrant will bear the following legend: 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE PLEDGED, SOLD, OFFERED
FOR SALE, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER OR EXEMPTION FROM SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT THAT A PROPOSED TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT, EXCEPT THAT NO SUCH OPINION SHALL BE REQUIRED FOR TRANSFERS OR SALES PURSUANT TO REGISTRATION UNDER THE
ACT." 

        4.7    Payment of Taxes.    The Company shall pay all stamp taxes attributable to the initial issuance of shares or
other securities issuable upon the exercise of each Warrant or issuable pursuant to Section 4.10 hereof, excluding any tax or taxes which may be payable because of the transfer involved in the
issuance or delivery of any certificates for shares or other securities in a name other than that of the exercising Holder in respect of which such shares or securities are issued. 

        4.8    Replacement Warrant.    If any Warrant is mutilated, lost, stolen or destroyed, the Company shall issue and
deliver in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and in substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of such Warrant and upon receipt of indemnity
reasonably satisfactory to the Company; provided, that if the Holder is Ford, an Affiliate of Ford, a financial institution or other institutional investor, its own unsecured indemnity agreement shall
be satisfactory. 

6

 

        4.9    Reservation of Common Stock and Other Covenants.    

        (a)   The
Company shall at all times reserve and keep available out of the aggregate of its authorized but unissued shares, free of preemptive rights, such number of its duly
authorized shares of Common Stock, or other stock or securities deliverable pursuant to Section 4.10 hereof, as shall be sufficient to enable the Company at any time to fulfill all of its
obligations under this Agreement and the Warrants. 

        (b)   If
any shares of Common Stock reserved or to be reserved for the purpose of exercise of the Warrants, or any shares or other securities reserved or to be reserved for
the purpose of issuance pursuant to Section 4.10 hereof, require registration with or approval of any governmental authority under any federal or state law before such shares or other
securities may be validly delivered upon exercise of any Warrant, then the Company covenants that it will, with expenses shared equally, secure such registration or approval, as the case may be
(including but not limited to approvals or expirations of waiting periods required under the Hart-Scott-Rodino Antitrust Improvements Act). 

        (c)   The
Company covenants that all shares of Common Stock that may be delivered upon exercise of each Warrant shall upon delivery by the Company be duly authorized and
validly issued, fully paid and nonassessable, free from all stamp or transfer taxes, liens and charges with respect to the issue or delivery thereof and otherwise free of all other Liens (other than
liens created by a Holder or its predecessors). 

        4.10    Adjustments to Aggregate Number.    

        (a)   The
Aggregate Number shall be subject to adjustment from time to time as follows and, thereafter, as adjusted, shall be deemed to be the Aggregate Number hereunder. 

          (i)  In
case at any time or from time to time the Company shall: 

        (A)  take
a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, Common Stock (a "Stock
Dividend"), 

        (B)  subdivide
its outstanding shares of Common Stock into a larger number of shares of Common Stock, including without limitation by means of a stock split (a "Stock
Subdivision"), or 

        (C)  combine
its outstanding shares of Common Stock into a smaller number of shares of Common Stock (a "Stock Combination"), 

then
the Aggregate Number in effect immediately prior thereto shall be (1) proportionately increased in the case of a Stock Dividend or a Stock Subdivision and (2) proportionately
decreased in the case of a Stock Combination. In the event the Company shall declare or pay, without consideration, any dividend on the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a Stock Dividend in an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common
Stock. 

         (ii)  If
at any time or from time to time the Company shall (except as hereinafter provided in this Section 4.10(a)(ii)) issue or sell any additional shares of Common
Stock for a consideration per share less than the Market Value Per Share, then, effective on the date specified below, the Aggregate Number shall be adjusted by multiplying (A) the Aggregate
Number immediately prior thereto by (B) a fraction, (1) the numerator of which shall be the number of shares of Common Stock on a Fully Diluted basis immediately prior to the issuance of
such additional shares of Common Stock plus the number of such additional shares of Common Stock so issued and (2) the denominator of which shall be the number of shares of 

7

 

Common
Stock on a Fully Diluted basis immediately prior to the issuance of such additional shares of Common Stock plus the number of shares of Common Stock which the aggregate consideration for the
total number of such additional shares of Common Stock so issued would purchase at the Market Value Per Share. The date as of which the Market Value Per Share shall be computed shall be the earlier of
the date on which the Company shall enter into a firm contract or commitment for the issuance of such additional shares of Common Stock or the date of actual issuance of such additional shares of
Common Stock. 

        The
provisions of this Section 4.10(a)(ii) shall not apply to any issuance of additional shares of Common Stock (I) for which an adjustment is otherwise provided
under Section 4.10(a)(i) hereof, (II) upon the exercise of other subscription or purchase rights or (III) upon the exercise of any conversion or exchange rights in any
Convertible Securities; provided, that for purposes of clauses (II) or (III) an adjustment shall previously have been made upon the issuance of such other rights or upon the issuance of
such Convertible Securities (or upon the issuance of any warrants or other rights therefor) pursuant to Section 4.10(a)(iii) hereof. 

        (iii)  If
at any time or from time to time the Company shall in any manner (whether directly, by assumption in a merger in which the Company is the surviving corporation and
in which the shareholders of the Company immediately prior to the merger continue to own more than fifty percent (50%) of the Fully Diluted Common Stock immediately after the merger and for a period
of at least one hundred eighty (180) days thereafter, or otherwise) (A) issue or sell any warrants, options or other rights to subscribe for or purchase any shares of Common Stock or any
Convertible Securities or (B) issue or sell any Convertible Securities, whether or not the rights to subscribe, purchase, exchange or convert thereunder are immediately exercisable, and the
consideration per share for which additional shares of Common Stock may at any time thereafter be issuable pursuant to such warrants, options or other rights or pursuant to the terms of such
Convertible Securities shall be less than the Market Value Per Share (determined on the date specified below), then the Aggregate Number shall be adjusted as provided in
Section 4.10(a)(ii) hereof on the basis that (1) the maximum number of additional shares of Common Stock issuable pursuant to all such warrants, options or other rights or
necessary to effect the conversion or exchange of all such Convertible Securities shall be deemed to have been issued as of the date of determination of the Market Value Per Share as hereinafter
provided and (2) the aggregate consideration for such maximum number of additional shares of Common Stock shall be deemed to be the minimum consideration received and receivable by the Company
for the issuance of such additional shares of Common Stock pursuant to the terms of such warrants, options or other rights or such Convertible Securities. For purposes of this
Section 4.10(a)(iii), the effective date of such adjustment and the date as of which the Market Value Per Share shall be computed shall be the earliest of (I) the date on which the
Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any such warrants, options or other rights or Convertible Securities, (II) the date
on which the Company shall enter into a firm contract or commitment for the issuance of such warrants, options or other rights or Convertible Securities and (III) the date of actual issuance of
such warrants, options or other rights. 

        No
adjustment of the Aggregate Number shall be made under this Section 4.10(a)(iii) upon the issuance of any Convertible Securities which are issued pursuant to the
exercise of any warrants, options or other subscription or purchase rights if an adjustment shall previously have been made or if no such adjustment shall have been required upon the issuance of such
warrants, options or other rights pursuant to this Section 4.10(a)(iii). 

        (iv)  Notwithstanding
anything herein, no adjustments of the Aggregate Number shall be made for (A) grants of stock options, restricted stock or other awards (and the
corresponding 

8

 

exercise
thereof) pursuant to stock option, restricted stock or incentive plans approved by the Company's board of directors, (B) options, warrants, other rights to purchase or acquire Common
Stock, or Convertible Securities issued by the Company to unrelated third parties in arms' length transactions approved by the Company's board of directors in connection with debt financing (senior or
subordinate) or strategic alliances (other than capital raising), and (C) the conversion of the DaimlerChrysler Venture Convertible Notes pursuant to the terms thereof. 

        (iv)  The
following provisions shall be applicable to the making of adjustments of the Aggregate Number provided above in this Section 4.10(a): 

        (A)  The
adjustments required by the preceding paragraphs of this Section 4.10 shall be made whenever and as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the Aggregate Number that would otherwise be required shall be made (except in the case of a Stock Subdivision or Stock Combination, as provided for in
Section 4.10(a)(i) hereof) unless and until such adjustment either by itself or with other adjustments not previously made adds or subtracts at least one (1) share to or from the
Aggregate Number immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum amount (except as aforesaid) shall be carried forward and made as
soon as such adjustment, together with other adjustments required by this Section 4.10 and not previously made, would result in a minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the date of its occurrence. 

        (B)  In
computing adjustments under this Section 4.10(a), fractional interests in Common Stock shall be taken into account to the nearest one hundredth (0.01) of a
share provided that no fractional shares shall be issuable under the Warrants. 

        (C)  If
the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive subscription or purchase rights and shall, thereafter
and before the distribution to shareholders thereof, legally abandon its plan to pay or deliver such subscription or purchase rights, then no adjustment shall be required by reason of the taking of
such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. 

        (b)   In
case at any time the Company shall initiate any transaction or be a party to any transaction (including, without limitation, a merger, consolidation, share exchange,
sale, lease or other disposition of all or substantially all of the Company's assets, liquidation, recapitalization or reclassification of the Common Stock) in connection with which the Common Stock
shall be changed into or exchanged for different securities of the Company or capital stock or other securities of another corporation or interests in a non-corporate entity or other
property (including cash) or any combination of the foregoing (each such transaction, a "Transaction"), then, as a condition of the consummation of the Transaction, lawful, enforceable and adequate
provision shall be made so that each Holder shall be entitled to elect by written notice to the Company to receive (i) a new warrant in form and substance similar to, and in exchange for, its
Warrant(s) to purchase all or a portion of such securities or other property or (ii) upon exercise of its Warrant(s) at any time on or after the consummation of the Transaction, in lieu of the
Warrant Shares issuable upon such exercise prior to such consummation, the securities or other property (including cash) to which such Holder would have been entitled upon consummation of the
Transaction if such Holder had exercised its Warrant(s) immediately prior thereto (subject to adjustments from and after the consummation date as nearly equivalent as possible to the adjustments
provided for in this Section 4.10). The Company will not effect any Transaction unless prior to the consummation 

9

 

thereof
each corporation or other entity (other than the Company) which may be required to deliver any new warrant, securities or other property as provided herein shall assume, by written instrument
delivered to such Holder, the obligation to deliver to such Holder such new warrant, securities or other property as in accordance with the foregoing provisions such Holder may be entitled to receive
and such corporation or entity shall have delivered representations and warranties to such Holder stating that all of the terms of the new warrant or the original Warrant shall be enforceable against
the Company and such corporation or entity in accordance with the terms hereof and thereof. The foregoing provisions of this Section 4.10(b) shall similarly apply to successive Transactions. 

        (c)   In
case at any time or from time to time the Company shall take any action of the type contemplated in Section 4.10(a) or (b) hereof (and subject to the
exclusions listed therein) but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity
features), then, unless in the opinion of the board of directors such action will not have a material adverse effect upon the rights of any Holder (taking into consideration, if necessary, any prior
actions which the board of directors deemed not to materially adversely affect the rights of any Holder), the Aggregate Number shall be adjusted in such manner and at such time as the board of
directors of the Company may in good faith determine to be equitable in the circumstances. 

        (d)   Whenever
the Aggregate Number is to be adjusted pursuant to this Section 4.10, the Exercise Price shall be simultaneously adjusted to a price determined by
multiplying the Exercise Price in effect immediately prior to such adjustment by a fraction, the numerator of which is the pre-adjustment Aggregate Number and the denominator of which is
the post-adjustment Aggregate Number. 

        (e)   Whenever
the Aggregate Number is to be adjusted pursuant to this Section 4.10 the Company shall forthwith deliver a certificate signed by the chief executive
officer or the chief financial officer setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment is to be calculated. The certificate shall set
forth, the new Aggregate Number, the new Exercise Price, and, if applicable, any new securities or property to which each respective Holder is entitled. The Company shall promptly cause a copy of such
certificate, signed by the chief financial officer of the Company, to be delivered to each Holder. The Company shall keep at its Principal Office copies of all such certificates and cause the same to
be available for inspection at said office during normal business hours by any Holder or any prospective purchaser of a Warrant (in whole or in part) if so designated by a Holder. 

        4.11    No Impairment.    The Company will not, by amendment of its Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger, share exchange, dissolution or any other voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Agreement or the Warrants, including without limitation the adjustments required under Section 4.10 hereof, and will at all times in good faith assist in the carrying out of
all such terms and in taking of all such action as may be necessary or appropriate to protect the rights and benefits of the Holder pursuant to this Agreement and the Warrants. Without limiting the
generality of the foregoing and notwithstanding any other provision of the Warrants to the contrary (including by way of implication), the Company (a) will not increase the par value of any
shares of Common Stock receivable on the exercise of the Warrants above the Exercise Price and (b) will take all such action as may be necessary or appropriate so that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock on the exercise of the Warrants. 

        4.12    Transfers of the Warrants.    

        (a)   The
Warrants may not be transferred, sold or otherwise disposed of by the Holders other than to Permitted Transferees, and subject to the provisions of this
Section 4.12. The Warrants and 

10

 

the
Warrant Shares are issued or issuable subject to the provisions and conditions contained herein, and every Holder hereof by accepting the same agrees with the Company to such provisions and
conditions, and represents to the Company that the Warrants have been acquired and the Warrant Shares will be acquired for the account of the Holders for investment and not with a view to or for sale
in connection with any distribution thereof. 

        (b)   The
Holders agree that the Warrants and the Warrant Shares may not be sold, transferred or otherwise disposed of except pursuant to an effective registration statement
under the Securities Act and applicable state securities laws or pursuant to an applicable exemption from the registration requirements of the Securities Act and such state securities laws. In the
event that any Holder transfers the Warrants or the Warrant Shares pursuant to an applicable exemption from registration, the Company may request, at its expense, an opinion of counsel that the
proposed transfer does not violate the Securities Act and applicable state securities laws. 

        4.13    Rights of Transferees.    The rights granted to the Holders hereunder and under each Warrant shall pass to and
inure to the benefit of all Permitted Transferees of all or any portion of a Warrant (provided that each Holder and any transferee shall hold such rights in proportion to their respective ownership of
the Warrants and Warrant Shares and subject to the restrictions contained herein) until extinguished pursuant to the terms hereof. 

        4.14    Right of First Refusal.    (a) Subject to the provisions of applicable law and the restrictions on
transfer contained herein, Ford shall have the right to sell or otherwise dispose of any shares of Common Stock acquired through the exercise of the Warrants. If Ford desires to sell or dispose of any
such shares of Common Stock, Ford will deliver a written notice (the "Sale Notice") to the Company, disclosing in reasonable detail the identity of the prospective transferee (the "Buyer"), the shares
of Common Stock proposed to be transferred (the "Offered Common Shares") and the terms and conditions of the proposed transaction. Ford will not consummate any such transaction except in accordance
with this Section. The Company, or at the option of the Company one or more of its shareholders, may elect to purchase all, but not less than all, of the Offered Common Shares upon the same terms and
conditions as those set forth in the Sale Notice by delivering a written notice of such election to Ford within ten (10) Business Days of receipt of the Sale Notice by the Company. 

        (b)   If
the Company has not elected to purchase all of the Offered Common Shares in cash within ten (10) Business Days of the delivery of the Sale Notice, Ford may,
during the 30-day period immediately following such ten (10) Business Day period, (i) transfer all of the Offered Common Shares to the third party Buyer at a price and on
terms no more favorable to the transferee than those specified in the Sale Notice, or (ii) make no Transfer. Any of the Offered Common Shares not transferred within such 30-day
period will be subject to the provision of this Section 4.14 in the event of a subsequent transaction. 

        (c)   The
provision of this Section 4.14 shall terminate and be of no further force and effect as of the consummation by the Company of an IPO. 

        4.15    Change of Control.    Upon the occurrence of a Change of Control, all Warrants, other than Warrants which
expired prior to such Change of Control, shall become Vested immediately prior to the effective date of the Change of Control, without regard to Volume/Schedule Levels. 

"Change
of Control" means (a) a sale of all or substantially all of the assets of the Company; or (b) any merger, consolidation, share exchange, recapitalization or sale or transfer of
capital stock of the Company, in each case in which DaimlerChrysler, General Motors, Toyota, Volkswagen, Nissan, BMW or Honda, or any Affiliate thereof, directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d 3 under the Exchange Act) of more than twenty five percent (25%) of either (i) the then outstanding shares of Common Stock (determined on
a fully diluted and as converted basis) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors. 

11

 
Schedule 4.2  

Vesting Schedule 

          (i)  Warrants
for the right to purchase 77,359 (5.05% of the Aggregate Number) shares of fully paid and nonassessable Common Stock shall be Vested on the Closing Date,
without regard to Volume/Schedule Levels. 

         (ii)  Warrants
for the right to purchase 77,359 (5.05% of the Aggregate Number) shares of fully paid and nonassessable Common Stock shall be Vested on the later of the
Closing Date or the date of written notice by Ford to Company identifying a Model Year 2003 or earlier Designated Vehicle model for installation of Units, without regard to Volume/Schedule Levels. 

        (iii)  Warrants
for the right to purchase 154,719 (10.1% of the Aggregate Number) shares of fully paid and nonassessable Common Stock ("Tranche A Warrants") shall be
Vested on the date (which date shall be on or before March 31, 2003) the Company ships the 50,000th Unit purchased by Ford, Ford Affiliates, and/or Ford Tier 1 Suppliers
pursuant to purchase orders issued by Ford, Ford Affiliates and/or Ford Tier 1 Suppliers. If Ford, Ford Affiliates and/or Ford Tier 1 Suppliers do not purchase in the aggregate 50,000
Units on or before March 31, 2003, Tranche A Warrants will expire and will not Vest. 

        (iv)  Warrants
for the right to purchase 928,314 (60.61% of the Aggregate Number) shares of fully paid and nonassessable Common Stock ("Tranche B Warrants") shall Vest
at the rate of 154,719 shares for each 108,333 Units purchased (or 1.4282 shares per Unit) pursuant to purchase orders issued by Ford, Ford Affiliates, and/or Ford Tier 1 Suppliers up to a cumulative
number of 649,998 Units (inclusive of the 50,000 Units described in subsection (iii) above). Warrants will be deemed Vested as of September 30 of each year 2001 through 2006 based upon
the number of Units purchased by Ford, Ford Affiliates and/or Ford Tier 1 Suppliers during the preceding Model Year. Any portion of the Tranche B Warrants which are not Vested as of
September 30, 2006 will expire and will not Vest. 

         (v)  Warrants
for the right to purchase an additional 154,719 (10.1% of the Aggregate Number) shares of fully paid and nonassessable Common Stock ("Tranche C
Warrants") shall be Vested on the date (which date shall be on or before July 31, 2006) the Company ships the 800,000th Unit purchased by Ford, Ford Affiliates and/or Ford
Tier 1 Suppliers pursuant to purchase orders issued by Ford, Ford Affiliates, and/or Ford Tier 1 Suppliers. If Ford, Ford Affiliates and/or Ford Tier 1 Suppliers do not purchase
800,000 Units (inclusive of all Units described in subsections (iii) and (iv) above) on or before July 31, 2006, the Tranche C Warrants will expire and will not Vest. 

        (vi)  Warrants
for the right to purchase an additional 139,397 (9.09% of the Aggregate Number) shares of fully paid and nonassessable Common Stock (the "Tranche D Warrants")
shall be Vested on the date (which date shall be on or before July 31, 2006) the Company ships the 1,000,000th Units purchased by Ford, Ford Affiliates and/or Ford Tier 1
Suppliers pursuant to purchase orders issued by Ford, Ford Affiliates, and/or Ford Tier 1 Suppliers. If Ford, Ford Affiliates and/or Ford Tier 1 Suppliers do not purchase 1,000,000 Units
(inclusive of all Units described in subsections (iii), (iv) and (v) above) on or before July 31, 2006, the Tranche D Warrants will expire and will not Vest. 

        The
number of shares in each tranche of Warrants will be adjusted simultaneously with any adjustments in the Aggregate Number pursuant to  Section 4.10 hereof. 

12

QuickLinks

Exhibit 4.15

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