Document:

Exhibit 10.1

 

Confidential Materials
omitted and filed separately with the 

Securities and Exchange Commission. 
Asterisks denote omissions.

 

 

ELEVENTH AMENDMENT TO
GATE STUDENT UMBRELLA AGREEMENT

and

SECOND AMENDMENT TO GATE
UNIVERSAL UMBRELLA AGREEMENT

 

This Eleventh Amendment to GATE Student Umbrella
Agreement and Second Amendment to GATE Universal Umbrella Agreement (this “Amendment”)
is entered into this 29th day of November, 2005, by and among Bank of America,
National Association, a national banking association (“Program Lender”), The
First Marblehead Corporation, a Delaware corporation (“Marblehead”), and The
National Collegiate Trust, a Delaware business trust (“NCT”).  Capitalized terms used herein without
definition have the meanings given to them in the GATE Student Umbrella
Agreement (as defined below) or the GATE Universal Umbrella Agreement (as
defined below), as applicable.

 

WITNESSETH

 

WHEREAS, the parties hereto have previously entered
into that certain GATE Student Loan Program Umbrella Agreement, dated as of
June 1, 1996, (as amended to date, the “GATE Student Umbrella Agreement”);

 

WHEREAS, the parties hereto have previously entered
into that certain GATE Universal Loan Program Umbrella Agreement, dated as of
March 7, 2003, (as amended to date, the “GATE Universal Umbrella Agreement”;
and together with the GATE Student Umbrella Agreement, the “Umbrella Agreements”);
and

 

WHEREAS, the parties hereto desire to further amend
the Umbrella Agreements in the manner provided herein.

 

NOW THEREFORE, in consideration of these presents and
the covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

1.             Extension of
Umbrella Agreements.

 

(a)           The GATE
Student Umbrella Agreement is hereby amended by:

 

(i)            deleting
the definition of Currently Scheduled Termination Date contained therein and
inserting in lieu thereof the following:

 

“Currently Scheduled
Termination Date” shall mean November 30, 2006, provided, however, that such
date shall automatically be extended for an additional year on such date and
each anniversary thereof; provided further, however, that any party may
terminate this Agreement for its convenience, without cause, at any time upon
at least ninety (90) calendar

 

 

days prior written notice
(any such termination, a “Without Cause Termination”); and provided further,
however, that no party may provide written notice of termination at any time
prior to June 1, 2006.” and

 

(ii)           by
deleting subsections (b) and (h) from the definition of Termination Date
contained therein.

 

(b)           The GATE
Universal Umbrella Agreement is hereby amended by deleting the definition of
Currently Scheduled Termination Date contained therein and inserting in lieu
thereof the following:

 

“Currently Scheduled Termination Date” shall mean
November 30, 2006, provided, however, that such date shall automatically be
extended for an additional year on such date and each anniversary thereof;
provided further, however, that any party may terminate this Agreement at its
convenience, without cause, upon at least ninety (90) calendar days prior
written notice (any such termination, a “Without Cause Termination”); and
provided further, however, that no party may provide written notice of
termination at any time prior to June 1, 2006.”

 

2.             Exclusivity;
Noncompetition.

 

(a)           The
parties agree that subsection 4(a) of the GATE Universal Umbrella Agreement is
hereby deleted in its entirety and that the remaining subsections of Section 4
of the GATE Universal Umbrella Agreement shall only apply to Program Lender
Right of First Refusal Schools (as defined in subsection (b) below).

 

(b) (i)      Section
9 of the GATE Universal Umbrella Agreement is hereby amended by deleting the first
sentence thereof and inserting in lieu thereof the following:

 

“Neither NCT nor Marblehead will enter into any
agreement with any other financial institution or other regulated or
nonregulated lender (a “Competing Lender”) to conduct a program for the origination
and funding of GATE Universal Conforming Loans that would be a Lender Competing
Program (as defined below) if conducted by Program Lender, with respect to any
educational institution listed on Schedule 1 to the Amendment to Umbrella
Agreements (the “November 2005 Umbrella Amendment”) dated as of November 29,
2005, by and among Program Lender, Marblehead and NCT (each such institution a “Program
Lender Right of First Refusal School”), unless Program Lender shall have
rejected such Program Lender Right of First Refusal School pursuant to Section
4 hereof.  NCT and Marblehead shall each
be entitled to enter into agreements with Competing Lenders for Lender
Competing Programs with respect to any educational institution which is a
Transition School (as defined in Section 2(c) of the November 2005 Umbrella
Amendment) or with respect to a Program Lender Right of First Refusal School
upon rejection of same by Program Lender as provided above.  NCT and Marblehead shall not be entitled to
enter into agreements with Competing Lenders for Lender Competing Programs with
respect to any Participating

 

2

 

Institution (other than as provided above) that has
entered into a GATE Universal Program agreement or form with Program Lender.”

 

(ii)           Section 9
of the GATE Universal Umbrella Agreement is hereby further amended by adding
the following at the end of such section:

 

“Notwithstanding the foregoing, in the event that the
Termination Date occurs as a result of a Without Cause Termination by
Marblehead, the prohibition set forth above with respect to Program Lender’s
ability to originate a Lender Competing Program during the [**] following the
Termination Date shall not apply to any educational institution that was a Participating
Institution on the date on which Marblehead provided notice of the Without
Cause Termination, and Program Lender shall be free to continue to offer a
Lender Competing Program with such Participating Institutions.”

 

(c)           Program
Lender shall, on or before December 31, 2005, provide Marblehead with a list of
the existing Participating Institutions under each of the Umbrella Agreements
that Program Lender desires to remain Participating Institutions thereunder
(the Participating Institutions not so identified on such list being the
“Transition Schools”).  Upon receipt of
such list, Marblehead shall use best efforts to transition the Transition
Schools to a Competing Lender on or before April 1, 2006.  In the event that Marblehead is able to
identify a Competing Lender for any such Transition Schools, the parties shall
cooperate in providing for an orderly transition of such Transition Schools
from Program Lender to such Competing Lender pursuant to agreements reasonably
satisfactory to the parties.   In the
event that Marblehead is not able to identify a Competing Lender for any of the
Transition Schools on or before April 1, 2006 notwithstanding its best efforts
to do so, any such Transition School shall remain a Participating Institution
under the applicable Umbrella Agreement until such time, if any, as Marblehead
shall identify a Competing Lender therefor.

 

(d)           The
parties agree that Section 3 of the GATE Student Umbrella Agreement shall only
apply to Program Lender Right of First Refusal Schools.

 

(e) (i)       The
first sentence of Section 6 of the GATE Student Umbrella Agreement is deleted
and the following is inserted in lieu thereof:

 

“Neither NCT nor
Marblehead will enter into any agreement with any other financial institution
or other regulated or nonregulated lender (a “Competing Lender”) to conduct a
program for the origination and funding of GATE Student Conforming Loans that
would be a Lender Competing Program (as defined below) if conducted by Program
Lender, with respect to any educational institution listed on Schedule 1 to the
Amendment to Umbrella Agreements (the “November 2005 Umbrella Amendment”) dated
as of November 29, 2005, by and among Program Lender, Marblehead and NCT (each
such institution a “Program Lender Right of First Refusal School”), unless
Program Lender shall have rejected such Program Lender Right of First Refusal
School pursuant to Section 3 hereof.  NCT
and Marblehead shall each be entitled to enter into

 

3

 

agreements with Competing
Lenders for Lender Competing Programs with respect to any educational
institution which is a Transition School (as defined in Section 2(c) of the
November 2005 Umbrella Amendment) or with respect to a Right of First Refusal
School upon rejection of same by Program Lender as provided above.   NCT and Marblehead shall not be entitled to
enter into agreements with Competing Lenders for Lender Competing Programs with
respect to any Participating Institution (other than as provided above) that
has entered into a GATE Program agreement with Program Lender.”

 

 

(ii)           Section 6
of the GATE Student Umbrella Agreement is hereby further amended by adding the
following at the end of such section:

 

“Notwithstanding the foregoing, in the event that the
Termination Date occurs as a result of a Without Cause Termination by
Marblehead, the prohibition set forth above with respect to Program Lender’s
ability to originate a Lender Competing Program during the [**] following the
Termination Date shall not apply to any educational institution that was a
Participating Institution on the date on which Marblehead provided notice of
the Without Cause Termination, and Program Lender shall be free to continue to
offer a Lender Competing Program with such Participating Institutions.”

 

3.             Premiums.  The following is hereby added to the end of
Section 7 of the GATE Universal Umbrella Agreement and to the end of Section 5
of the GATE Student Umbrella Agreement:

 

“In consideration of Program Lender’s efforts to
market loans subject to this Agreement and purchased under the terms and
conditions of the Note Purchase Agreement, Marblehead shall pay to Program
Lender a marketing fee and premium, computed as a percentage of the original
principal amount (net of any financed origination fees) or (if less) the
remaining principal amount (net of any financed origination fees), for each
loan purchased in a Securitization Transaction pursuant to the Note Purchase
Agreement, as follows:

 

(a) [**]% for each loan for which Program Lender takes
partial or total risk of default in the form of a Guaranty executed and
delivered at a Securitization Transaction; and

(b) [**]% for all other loans.

 

Payment of such fees (a) shall be made for loans purchased from Program
Lender from and after November 29, 2005, (b) shall be in addition to amounts
paid to Program Lender pursuant to the Note Purchase Agreement, and (c) shall
be made at the time of each Securitization Transaction.  The preceding two sentences shall survive termination
of the Umbrella Agreement and terminate on the date the Note Purchase Agreement
is terminated.”

 

4

 

4.             Full Force and
Effect. In all other respects, the Umbrella Agreements are hereby ratified
and confirmed and shall remain in full force and effect.

 

5.             Counterparts.  This
Amendment may be simultaneously executed in several counterparts, which may be
exchanged by facsimile, each of which shall be deemed an original and all of
which shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their duly authorized officers as of the date
above first written.

 

 

	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Diane E. Morais

  	
   

  
	
   

  	
  Name:

  	
  Diane E. Morais

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE FIRST MARBLEHEAD CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Donald R. Peck

  	
   

  
	
   

  	
  Name:

  	
  Donald R. Peck

  
	
   

  	
  Title:

  	
  Executive Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  NATIONAL COLLEGIATE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  First Marblehead Data Services, Inc.,

  
	
   

  	
  It’s Attorney-In-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John A. Hupalo

  	
   

  
	
   

  	
  Name:

  	
  John A. Hupalo

  
	
   

  	
  Title:

  	
  Eexecutive Vice President

  
							

 

5

 

Schedule 1

 

Program Lender Right of
First Refusal Schools

 

	
  1

  	
   

  	
  [**]

  
	
  2

  	
   

  	
  [**]

  
	
  3

  	
   

  	
  [**]

  
	
  4

  	
   

  	
  [**]

  
	
  5

  	
   

  	
  [**]

  
	
  6

  	
   

  	
  [**]

  
	
  7

  	
   

  	
  [**]

  
	
  8

  	
   

  	
  [**]

  
	
  9

  	
   

  	
  [**]

  
	
  10

  	
   

  	
  [**]

  
	
  11

  	
   

  	
  [**]

  
	
  12

  	
   

  	
  [**]

  
	
  13

  	
   

  	
  [**]

  
	
  14

  	
   

  	
  [**]

  
	
  15

  	
   

  	
  [**]

  
	
  16

  	
   

  	
  [**]

  
	
  17

  	
   

  	
  [**]

  
	
  18

  	
   

  	
  [**]

  
	
  19

  	
   

  	
  [**]

  
	
  20

  	
   

  	
  [**]

  
	
  21

  	
   

  	
  [**]

  
	
  22

  	
   

  	
  [**]

  
	
  23

  	
   

  	
  [**]

  
	
  24

  	
   

  	
  [**]

  
	
  25

  	
   

  	
  [**]

  
	
  26

  	
   

  	
  [**]

  
	
  27

  	
   

  	
  [**]

  
	
  28

  	
   

  	
  [**]

  
	
  29

  	
   

  	
  [**]

  
	
  30

  	
   

  	
  [**]

  
	
  31

  	
   

  	
  [**]

  
	
  32

  	
   

  	
  [**]

  
	
  33

  	
   

  	
  [**]

  
	
  34

  	
   

  	
  [**]

  
	
  35

  	
   

  	
  [**]

  
	
  36

  	
   

  	
  [**]

  
	
  37

  	
   

  	
  [**]

  
	
  38

  	
   

  	
  [**]

  
	
  39

  	
   

  	
  [**]

  
	
  40

  	
   

  	
  [**]

  
	
  41

  	
   

  	
  [**]

  
	
  42

  	
   

  	
  [**]

  
	
  43

  	
   

  	
  [**]

  

 

6

 

	
  44

  	
   

  	
  [**]

  
	
  45

  	
   

  	
  [**]

  
	
  46

  	
   

  	
  [**]

  
	
  47

  	
   

  	
  [**]

  
	
  48

  	
   

  	
  [**]

  
	
  49

  	
   

  	
  [**]

  
	
  50

  	
   

  	
  [**]

  
	
  51

  	
   

  	
  [**]

  
	
  52

  	
   

  	
  [**]

  

 

7Exhibit 10.1

 

SECOND AMENDMENT
TO CREDIT AGREEMENT

 

THIS SECOND
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of August 1,
2005, by and between ITERIS, INC., a Delaware corporation (“Borrower”), and
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

A.                                   Borrower is currently indebted to Bank
pursuant to the terms and conditions of that certain Credit Agreement dated as
of May 27, 2004 (the “Agreement”) between Iteris, Inc. (“Original
Borrower”) and Bank, as amended by that certain Assumption and Amendment
Agreement dated October 20, 2004 (the “Assumption Agreement”) between
Iteris Holdings, Inc. (“Second Original Borrower”) and Bank, pursuant to
which the Second Original Borrower assumed the obligations of the Original
Borrower under the Agreement.  The
Agreement, together with the Assumption Agreement, each as amended from time to
time, is hereinafter collectively referred to as the “Credit Agreement”.  The Second Original Borrower amended its
corporate name to Iteris, Inc. pursuant to that certain amended and
restated certificate of incorporation dated October 22, 2004, filed October 22,
2004 with Secretary of State, State of Delaware and as such is the “Borrower”
referred to herein and party hereto.

 

B.                                     Pursuant to the
Credit Agreement, Borrower remains indebted to Bank under a line of credit in
the maximum principal amount of Five Million Dollars ($5,000,000.00) (the “Prior
Line of Credit”), which is evidenced by that certain Revolving Line of Credit
Note dated May 27, 2004 (as may have been amended from time to time, the “Prior
Line of Credit Note”).  The Prior Line of
Credit Note matures and becomes due and payable in full on August 1, 2005
and as of the date hereof, the outstanding principal balance under the Prior
Line of Credit is $2,451,474.00, plus accrued but unpaid interest.

 

C.                                     Pursuant to the
Credit Agreement, Borrower remains indebted to Bank under a term loan in the
original principal amount of Five Million Dollars ($5,000,000.00) (the “Term
Loan”), which is evidenced by that certain Term Note dated May 27, 2004
(as may be amended from time to time, the “Term Note”).  The Term Note shall mature and become due and
payable in full on May 27, 2008 and as of the date hereof, the outstanding
principal balance under the Term Loan is $3,541,668.02, plus accrued but unpaid
interest.

 

D.                                    Bank and Borrower
have agreed to certain changes in the terms and conditions set forth in the
Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

 

NOW, THEREFORE, for valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, subject to the
terms and conditions described herein, the parties hereto agree that the Credit
Agreement shall be amended as follows; provided, however, that nothing
shall terminate any security interests, subordinations or other documents in
favor of Bank, all of which shall remain in full force and effect unless
expressly amended hereby:

 

1

 

1.                                       Amendment to Section 1.1(a).   Section 1.1(a) of the Credit
Agreement is hereby deleted in its entirety, and the following substituted
therefor:

 

“(a)                            Line
of Credit.  Subject to the terms and
conditions of this Agreement, Bank hereby agrees to make advances to Borrower
from time to time up to and including July 31, 2006, not to exceed at any
time the aggregate principal amount of Five Million Dollars ($5,000,000.00) (“Line
of Credit”), the proceeds of which shall be used to pay off the outstanding
principal balance of the Prior Line of Credit and for Borrower’s working
capital requirements.  Borrower’s
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note dated as of August 1, 2005 (“Line of Credit Note”), all
terms of which are incorporated herein by this reference.”

 

2.                                       Amendment to Section 1.1(b).   The first sentence of Section 1.1(b) of
the Credit Agreement is hereby deleted in its entirety, and the following
substituted therefor:

 

“(b)                           Limitation
on Borrowings. Outstanding borrowings under the Line of Credit, to a
maximum of the principal amount set forth above, shall not at any time exceed
an aggregate of (i) eighty percent (80%) of Borrower’s eligible accounts
receivable (Non-Government/Non-Consulting), (ii) forty percent (40%) of
Borrower’s eligible accounts receivable (Government/Consulting), provided that
outstanding borrowings against such accounts receivable shall not exceed Seven
Hundred Fifty Thousand and 00/100 Dollars ($750,000.00), and (iii) fifty
percent (50%) of the value of Borrower’s eligible inventory, (exclusive of work
in process and inventory which is obsolete, unsaleable or damaged), with value
defined as the lower cost or market value, provided however, that outstanding
borrowings against inventory shall not at any time exceed  an aggregate of One Million and 00/100
Dollars ($1,000,000.00), plus $1,500,000.00. 
Notwithstanding any other provision of this Agreement, the aggregate
amount of all outstanding borrowings hereunder shall not at any time exceed the
lesser of: (i) maximum amount of
the Line of Credit plus the outstanding principal balance of the Term
Loan; or (ii) the maximum borrowing base amount as set forth above.  If either of the above amounts are exceeded,
the Line of Credit shall be considered overadvanced by any such excess amount,
and the Borrower shall immediately repay such excess amount.  Failure to immediately repay such excess
amounts shall constitute an Event of Default under Section 6.1(a) hereof.

 

3.                                       Amendment to Section 1.5.   The following is hereby added to the Credit
Agreement as a new Section 1.5:

 

“SECTION 1.5                    COLLECTION OF
PAYMENTS.  Borrower authorizes Bank to
collect all principal, interest and fees due under each credit subject hereto
by charging Borrower’s deposit account number 4173283292 with Bank, or any
other deposit account maintained by Borrower with Bank, for the full amount
thereof.  Should there be insufficient
funds in any such deposit account to pay all such sums when due, the full amount
of such deficiency shall be immediately due and payable by Borrower.”

 

2

 

4.                                       Amendment
to Section 2.5.   Section 2.5
of the Credit Agreement is hereby amended by deleting “March 31, 2004” as
the date of Borrower’s most current financial statement delivered to Bank, and
by substituting “June 30, 2005” for said date.

 

5.                                       Amendment to Section 4.3.   Section 4.3 of the Credit Agreement is
hereby deleted in its entirety, and the following substituted therefor:

 

“SECTION 4.3.                 FINANCIAL
STATEMENTS.  Provide to Bank all of the
following, in form and detail satisfactory to Bank:

 

(a)                                  not
later than 120 days after and as of the end of each fiscal year, an audited
financial statement of Borrower, prepared by a certified public accountant
acceptable to Bank, to include balance sheet, statement of income and statement
of cash flows; and within 120 days after filing, but in no event later than
each October 31, copies of Borrower’s filed federal income tax returns for
such year;

 

(b)                                 not
later than 45 days after and as of the end of each fiscal quarter, a financial
statement of Borrower, prepared by Borrower, to include balance sheet,
statement of income and statement of cash flows;

 

(c)                                  not
later than 15 days after and as of the end of each month, a borrowing base
certificate, an inventory collateral report, an aged listing of accounts
receivable and accounts payable, and a reconciliation of accounts, and not
later than each June 30 and December 31, a list of the names,
addresses and phone numbers of all Borrower’s account debtors;

 

(d)                                 from
time to time such other information as Bank may reasonably request .”

 

6.                                       Amendment to Section 
4.9.   Section 4.9 of the Credit
Agreement is hereby deleted in its entirety, and the following substituted
therefor:

 

“SECTION 4.9  FINANCIAL CONDITION.  Maintain Borrower’s financial condition as
follows using generally accepted accounting principles consistently applied and
used consistently with prior practices (except to the extent modified by the
definitions herein), with compliance determined commencing with Borrower’s
financial statements for the period ending December 31, 2005:

 

(a)                                  Senior Funded Debt to EBITDA not greater than
6.75 to 1.0 at December 31, 2005; not greater than 4.10 to 1.0 at March 31,
2006 and thereafter, with “Senior Funded Debt” defined as the sum of all
obligations for borrowed money plus all capital lease obligations less
subordinated debt, and with “EBITDA” defined as net profit before taxes, plus
interest expense plus amortization of intangibles plus depreciation, plus
deferred finance expense amortization, plus debt discount amortization, plus
deferred gain on sale of property, plus amortization of non-cash stock based
compensation expense, each to be measured on a year-to-date, annualized basis.

 

3

 

(b)                                 Fixed Charge Coverage Ratio not less than .65
to 1.0 for quarter ending December 31, 2005; not less than 1.25 to 1.0 for
quarter ending March 31, 2006, and quarterly thereafter. “Fixed
Charge Coverage Ratio” shall mean consolidated EBITDA minus non-financed
capital expenditures divided by the aggregate sum of (i) all interest paid
or payable on the Funded Debt, (ii) all installment of scheduled principal
during the period, (iii) all income taxes paid or payable, plus (iv) the
amount of dividends declared or paid in cash, and “EBITDA” has the meaning to
it given above. “Funded Debt” shall mean the sum of obligations for borrowed
money plus all capital lease obligations.”

 

7.                                       The following is
hereby added to the Credit Agreement as Section 4.11:

 

“SECTION 4.11.  CREDITORS’ FORMATION DOCUMENTS.  On or before December 31, 2005, Borrower
shall deliver to Bank copies of the filed formation documents for each of the
business entities or the trust entities identified as Subordinated Creditors on
the Acknowledgment and Consent of Subordinated Creditors attached to the Second
Amendment to Credit Agreement dated as of August 1, 2005 between Borrower
and Bank.”

 

8.                                       Amendment to Section 7.2.   Section 7.2 of the Credit Agreement is
hereby amended by deleting the existing address for Bank and replacing such
address with the following:  “Los Angeles
Office, 333 South Grand Avenue, 9th Floor, Los Angeles, CA  90071.”

 

9.                                       Restructuring
Fee.   In consideration of the
changes set forth herein and as a condition to the effectiveness hereof,
immediately upon signing this Amendment Borrower shall pay to Bank a
non-refundable fee of $50,000.00 (the “Restructuring Fee”).

 

10.                                 Conditions
Precedent.   The obligation of Bank
to amend the terms and conditions of the Credit Agreement as provided herein,
is subject to the fulfillment to Bank’s satisfaction of all of the following
conditions by no later than November 28, 2005:

 

(a)                                  Bank shall have
received, in form and substance satisfactory to Bank, each of the following,
duly executed:

 

(i)                                     This
Amendment.

(ii)                                  The
Line of Credit Note.

(iii)                               Subordination
Agreements (9).

(iv)                              Partnership,
Joint Venture or Association Certificate: Subordination (3).

(v)                                 Acknowledgment
and Consent of Subordinated Creditors attached hereto.

(vi)                              Such
other documents as Bank may require under any other section of this
Amendment.

 

(b)                                 Restructuring Fee.   Bank shall have received the Restructuring
Fee in immediately available funds.

 

(c)                                  Other Fees and
Costs.   In addition to Borrower’s
obligations under the Credit Agreement and the other Loan Documents, Borrower
shall have paid to Bank the full amount of all costs and expenses, including
reasonable attorneys’ fees (including the allocated costs of

 

4

 

Bank’s in-house counsel) expended or incurred by Bank in connection
with the negotiation and preparation of this Amendment, for which Bank has made
demand.

 

(d)                                 Subordinated Note.  Bank
shall have received the original Secured Promissory Note dated July 1,
2003, in the amount of $811,347.00 between Odetics, Inc., 1515 South
Manchester, LLC, Dartbrook-Twin Oaks, L.P., and William T. White, III, LLC
and the original First Amendment to Secured Promissory Note dated November 1,
2004 between Iteris, Inc., 1515 South Manchester, LLC, Dartbrook-Twin
Oaks, L.P., and William T. White, III, LLC, each notated with a legend
satisfactory to Bank to the effect that the holders of each such note are bound
by the terms of a subordination agreement in favor of the Bank.

 

(e)                                  Interest.   Interest under the Prior Line of Credit Note
shall have been paid current.

 

(f)                                    Interest and
Principal.   Interest and principal
under the Term Note shall have been paid current.

 

11.                                 General Release.  In consideration of the benefits provided to
Borrower under the terms and provisions hereof, Borrower hereby agrees as
follows (“General Release”):

 

(a)                                  Borrower, for itself
and on behalf of its successors and assigns, does hereby release, acquit and
forever discharge Bank, all of Bank’s predecessors in interest, and all of Bank’s
past and present officers, directors, attorneys, affiliates, employees and
agents, of and from any and all claims, demands, obligations, liabilities,
indebtedness, breaches of contract, breaches of duty or of any relationship,
acts, omissions, misfeasance, malfeasance, causes of action, defenses, offsets,
debts, sums of money, accounts, compensation, contracts, controversies,
promises, damages, costs, losses and expenses, of every type, kind, nature,
description or character, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, each as though fully set forth herein at length
(each, a “Released Claim” and collectively, the “Released Claims”), that
Borrower now has or may acquire as of the later of:  (i) the date this Amendment becomes
effective through the satisfaction (or waiver by Bank) of all conditions
hereto; or (ii) the date that Borrower has executed and delivered this
Amendment to Bank (hereafter, the “Release Date”), including without
limitation, those Released Claims in any way arising out of, connected with or
related to any and all prior credit accommodations, if any, provided by Bank,
or any of Bank’s predecessors in interest, to Borrower, and any agreements,
notes or documents of any kind related thereto or the transactions contemplated
thereby or hereby, or any other agreement or document referred to herein or
therein.

 

(b)                                 Borrower hereby
acknowledges, represents and warrants to Bank as follows:

 

(i)                                     Borrower understands the meaning and
effect of Section 1542 of the California Civil Code, which provides:

 

“Section 1542.  GENERAL RELEASE; EXTENT.  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR.”

 

(ii)                      With regard
to Section 1542 of the California Civil Code, Borrower agrees to assume
the risk of any and all unknown, unanticipated or misunderstood defenses and

 

5

 

Released
Claims which are released by the provisions of this General Release in favor of
Bank, and Borrower hereby waives and releases all rights and benefits which it
might otherwise have under Section 1542 of the California Civil Code with
regard to the release of such unknown, unanticipated or misunderstood defenses
and Released Claims.

 

(c)                                  Each person signing
below on behalf of Borrower acknowledges that he or she has read each of the
provisions of this General Release.  Each
such person fully understands that this General Release has important legal
consequences and each such person realizes that they are releasing any and all
Released Claims that Borrower may have as of the Release Date.  Borrower hereby acknowledges that it has had
an opportunity to obtain a lawyer’s advice concerning the legal consequences of
each of the provisions of this General Release.

 

(d)                                 Borrower hereby specifically acknowledges and
agrees that:  (i) none of the
provisions of this General Release shall be construed as or constitute an
admission of any liability on the part of Bank; (ii) the provisions of
this General Release shall constitute an absolute bar to any Released Claim of
any kind, whether any such Released Claim is based on contract, tort, warranty,
mistake or any other theory, whether legal, statutory or equitable; and (iii) any
attempt to assert a Released Claim barred by the provisions of this General
Release shall subject Borrower to the provisions of applicable law setting
forth the remedies for the bringing of groundless, frivolous or baseless claims
or causes of action.

 

12.                                 Miscellaneous.  Except as specifically provided herein, all
terms and conditions of the Credit Agreement shall remain in full force and
effect, without waiver or modification. 
All terms defined in the Credit Agreement shall have the same meaning
when used in this Amendment.  This
Amendment and the Credit Agreement shall be read together, as one document.  This Amendment may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to
be an original, and all of which when taken together shall constitute one and
the same Amendment.

 

13.                                 Reaffirmation;
Certification.  Borrower hereby
remakes all representations and warranties contained in the Credit Agreement
and reaffirms all covenants set forth therein. 
Borrower further certifies that as of the date of this Amendment there
exists no Event of Default as defined in the Credit Agreement, nor any
condition, act or event which with the giving of notice or the passage of time
or both would constitute an Event of Default. 
Borrower reaffirms and ratifies all Loan Documents executed by it or its
predecessors prior to the date hereof.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be executed as of the day and year first written
above.

 

	
   

  	
  WELLS FARGO BANK,

  
	
  ITERIS, INC.

  	
   

  	
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Darryl Hallie, Vice President/Principal

  
	
  Title: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
														

 

6

 

ACKNOWLEDGMENT AND CONSENT
OF SUBORDINATED CREDITORS

 

The
undersigned, Subordinated Creditors of Borrower, acknowledge and agree they
have read the foregoing Amendment and that their respective Subordination Agreements heretofore executed
by them, Borrower and Bank, shall continue in full force and effect
(notwithstanding the lack of acknowledgment, if any, to any prior amendments to
any of the Loan Documents between Borrower and bank), and that any indebtedness
of Borrower to such Subordinated Creditor and the security interests, if any,
granted to secure such debt remain junior and subordinated to (i) all
indebtedness of Borrower to Bank, including without limitation, indebtedness
evidenced by the foregoing Amendment and (ii) any security interests granted to Bank to secure such
indebtedness.

 

	
  SUBORDINATED CREDITORS:

  	
   

  
	
   

  	
   

  
	
  1515 South Manchester, LLC

  	
  Dartbrook-Twin Oaks, L.P.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By: 1515 South Manchester, LLC,

  
	
   

  	
   

  	
  its attorney-in-fact

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  William T. White, III, LLC

  	
   

  
	
  By: 1515 South Manchester, LLC,

  	
   

  
	
   

  	
  its attorney-in-fact

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  	
  Lloyd I. Miller

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lloyd I. Miller, III

  	
  Susan Riley

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Abby Riley, aka Abigail Riley

  	
  Eloise Riley

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Stephen Edwin Rowe, aka

  	
  Irv Kessler, aka Irvin R. Kessler

  
	
  Stephen E. Rowe

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Abbas Mohaddes

  	
  Charlie Riley

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tom Kelleher

  	
   

  
															

 

7

 

	
  Milfam II L.P.

  	
  Milfam I L.P.

  
	
   

  	
   

  
	
  By: Milfam LLC, General Partner

  	
  By: Milfam LLC, General Partner

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Provident Premier Master Fund Ltd.

  	
  Bainbridge Partners, LLC

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Edward G. Victor

  
	
  Title: 

  	
   

  	
   

  	
  Title: Manager

  
	
   

  	
   

  
	
  Potomac Capital International Ltd.

  	
  Potomac Capital Partners, LP

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Paul J. Solit

  	
   

  	
  Paul J. Solit

  
	
  Title: 

  	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Lloyd I. Miller Trust A-4

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jon D. Gruber, Trustee of the

  	
  Linda W. Gruber, Trustee of the

  
	
  Jon D. and Linda W. Gruber Trust

  	
  Jon D. and Linda W. Gruber Trust

  
	
   

  	
   

  
	
  Lagunitas Partners, a California Limited
  Partnership

  	
   

  
	
   

  	
   

  
	
  By: Gruber & McBaine Capital
  Management

  	
   

  
	
   

  	
  General Partner

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eric B. Swergold

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Gruber & McBaine International

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Eric B. Swergold

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
																																				

 

8

 

	
  Charles
  Schwab, Inc., Custodian for Francis Memole IRA

  
	
   

  
	
  By:
  

  	
   

  	
   

  
	
   

  
	
  Title: 

  	
   

  	
   

  
	
   

  
	
  Wachovia
  Securities Custodian for Greg Miner IRA

  
	
   

  
	
  By:
  

  	
   

  	
   

  
	
   

  
	
  Title: 

  	
   

  	
   

  
	
   

  
	
  Charles
  Schwab, Inc., Custodian for John Johnson IRA

  
	
   

  
	
  By:
  

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
										

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]