Document:

Exhibit 10.2

 

DEBENTURE REDEMPTION AGREEMENT

 

This Debenture Redemption
Agreement (“Agreement”) is entered into
as of February 27, 2008 by and between Lagunitas Partners, LP (“Holder”) and Iteris, Inc. (“Iteris” or the “Company”).

 

RECITALS

 

WHEREAS, Holder holds a 6%
Convertible Debenture dated July 1, 2005, originally issued by the Company
pursuant to that certain Debenture and Warrant Purchase Agreement dated May 19,
2004, in the principal amount of $651,429 (the “Debenture”);
and

 

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

 

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

 

1.                                      Debenture
Redemption.

 

1.1.                            The Company
agrees to redeem from Holder, and Holder agrees to sell back to the Company,
the Debenture for an aggregate payment of $553,714.65 (the “Aggregate Redemption Price”).  In addition to the payment of the Aggregate
Redemption Price, the Company shall pay at the Closing (as defined below) all
accrued but unpaid interest on the Debenture as of the date of Closing.

 

1.2.                            The redemption
of the Debenture (the “Redemption”)
shall take place at the offices of Dorsey & Whitney LLP, 38 Technology
Drive, Irvine, California 92618, at 1:00 P.M. Pacific Time on February 27,
2008, or at such other time and place as the Company and Holder mutually agree
orally or in writing (which time and place are designated as the “Closing”).  At the Closing, Holder shall deliver to the
Company the original of the Debenture against payment by the Company of the
amounts set forth in Section 1.1 by check, wire transfer or any
combination thereof.  Notwithstanding the
foregoing, Holder acknowledges and agrees that, upon and as of the payment by
the Company of the amounts set forth in Section 1.1, whether or not
Holder has delivered and surrendered the original of the Debenture to the
Company, the Debenture shall be deemed null and void and cancelled in its
entirety and Holder shall have no further rights with respect to or under the
Debenture, whether such rights shall have accrued prior to or after the date
hereof.

 

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

 

2.1.                            As of the date
hereof, the total outstanding under the Debenture (principal and accrued but
unpaid interest) is Five Hundred Fifty-Nine Thousand Nine Hundred Twenty-Five
Dollars and Fifty-Three Cents ($559,925.53).

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature Page Follows]

 

 

3

 

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

 

	
  Iteris, Inc.

  	
   

  	
  Lagunitas Partners, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James S. Miele

  	
   

  	
  By:

  	
  /s/ Eric Swergold

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James S. Miele

  	
   

  	
  Name:

  	
  Gruber & McBaine
  Cap Mgmt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO

  	
   

  	
  Title:

  	
  General Partner

  

 

 

4Exhibit 10.3

 

DEBENTURE REDEMPTION AGREEMENT

 

This Debenture Redemption
Agreement (“Agreement”) is entered into
as of February 27, 2008 by and between Jon D. and Linda W. Gruber Trust (“Holder”) and Iteris, Inc. (“Iteris” or the “Company”).

 

RECITALS

 

WHEREAS, Holder holds a 6%
Convertible Debenture dated July 1, 2005, originally issued by the Company
pursuant to that certain Debenture and Warrant Purchase Agreement dated May 19,
2004, in the principal amount of $200,000 (the “Debenture”);
and

 

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

 

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

 

1.                                      Debenture
Redemption.

 

1.1.                            The Company
agrees to redeem from Holder, and Holder agrees to sell back to the Company,
the Debenture for an aggregate payment of $170,000 (the “Aggregate
Redemption Price”).  In
addition to the payment of the Aggregate Redemption Price, the Company shall
pay at the Closing (as defined below) all accrued but unpaid interest on the
Debenture as of the date of Closing.

 

1.2.                            The redemption
of the Debenture (the “Redemption”)
shall take place at the offices of Dorsey & Whitney LLP, 38 Technology
Drive, Irvine, California 92618, at 1:00 P.M. Pacific Time on February 27,
2008, or at such other time and place as the Company and Holder mutually agree
orally or in writing (which time and place are designated as the “Closing”).  At the Closing, Holder shall deliver to the
Company the original of the Debenture against payment by the Company of the
amounts set forth in Section 1.1 by check, wire transfer or any
combination thereof.  Notwithstanding the
foregoing, Holder acknowledges and agrees that, upon and as of the payment by
the Company of the amounts set forth in Section 1.1, whether or not
Holder has delivered and surrendered the original of the Debenture to the
Company, the Debenture shall be deemed null and void and cancelled in its
entirety and Holder shall have no further rights with respect to or under the
Debenture, whether such rights shall have accrued prior to or after the date
hereof.

 

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

 

2.1.         As of the date hereof, the total outstanding under the
Debenture (principal and accrued but unpaid interest) is One Hundred
Seventy-One Thousand Nine Hundred Six Dollars and Eighty-Five Cents
($171,906.85).

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[Signature Page Follows]

 

 

3

 

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

 

	
  Iteris, Inc.

  	
   

  	
  Jon D. and Linda W. Gruber
  Trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James S. Miele

  	
   

  	
  By:

  	
  /s/ Jon D. Gruber

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James S. Miele

  	
   

  	
  Name:

  	
  Jon D. Gruber

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO

  	
   

  	
  Title:

  	
  Trustee

  

 

 

4

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