UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT
REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report
(Date of earliest event reported): May 28, 2004
ITERIS
HOLDINGS, INC.
(Exact Name of
Registrant as Specified in Its Charter)
Delaware
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000-10605
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95-2588496
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(State or Other
Jurisdiction of
Incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.)
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1515
South Manchester Avenue, Anaheim, California 92802
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(Address of
Principal Executive Offices) (Zip
Code)
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Registrants
telephone number, including area code:
(714) 774-5000
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Not
Applicable
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(Former Name or
Former Address, if Changed since Last Report)
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Item 2. Acquisition
or Disposition of Assets
On May 28, 2004 (the
Closing Date), Iteris Holdings, Inc. (Iteris Holdings) completed the
purchase of all of the outstanding shares of the preferred stock of its
subsidiary, Iteris, Inc. (Iteris), which shares were held by DaimlerChrysler
Ventures GmbH (DCV) and Hockenheim Investment Pte. Ltd. (Hockenheim), in
exchange for a payment of approximately $17.5 million in cash. In addition, Iteris Holdings acquired all of
the shares of the common stock of Iteris held by DCV in exchange for the
issuance of 1,219,445 shares of the Class A common stock of Iteris
Holdings. The purchase and exchange of
the shares were made pursuant to a Stock Purchase and Exchange Agreement, dated
March 31, 2004, by and among Iteris Holdings, Iteris, DCV and Hockenheim
(the Purchase and Exchange Agreement).
Pursuant to the Purchase
and Exchange Agreement, Iteris Holdings purchased 3,124,913 shares of the
Series A Preferred Stock of Iteris from DCV and Hockeneheim for a purchase
price of $5.61398 per share. The
purchase price represented the stated redemption value of the preferred
stock. The purchase of the shares was
financed principally with a $10.1 million convertible debenture financing
completed in May 2004 with a group of institutional investors (as described in
Item 5 below), in addition to a $7 million senior credit facility arranged
through Wells Fargo Bank.
In accordance with the
Purchase and Exchange Agreement, Iteris Holdings issued 1,219,445 shares of its
Class A common stock (such 1,219,445 shares, the Exchange Shares) to DCV in
exchange for 547,893 shares of the common stock of Iteris held by DCV. Subject to certain exceptions, DCV has
agreed not to sell or otherwise transfer the Exchange Shares during the year
following the Closing Date. However,
beginning on November 28, 2005, DCV may require Iteris Holdings to
repurchase up to 50% of the Exchange Shares at a purchase price of $1.438 per
share; and beginning on May 28, 2007, DCV may require Iteris Holdings to
repurchase up to 100% of the Exchange Shares at a purchase price of $1.438 per
share. All such rights to require the
repurchase of the Exchange Shares expire on September 28, 2007.
Beginning on May 28,
2005, DCV will have the right to request registration of all of the shares of
the Class A common stock of Iteris Holdings held by it. In the event Iteris Holdings decides not to
file a registration statement for all such shares, DCV may require repurchase
by Iteris Holdings of any or all of its shares of Iteris Holdings common stock
at a purchase price of $1.438 per share.
The foregoing description
of the terms of the Purchase and Exchange Agreement does not purport to be a
complete statement of the parties rights and obligations under such agreement
or a complete explanation of the material terms of such agreement. Such description is qualified in its
entirety by reference to the definitive Purchase and Exchange Agreement, a copy
of which is filed as an exhibit hereto.
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Item 5. Other
Events
In order to finance the
purchase of the shares of Iteris preferred stock described in Item 2 above,
Iteris Holdings entered into a Debenture and Warrant Purchase Agreement dated
May 19, 2004 (the Debenture Purchase Agreement) with a group of institutional
investors (which included certain officers of Iteris Holdings), pursuant to
which it sold and issued subordinated convertible debentures in the aggregate
principal amount of $10.1 million and issued warrants to purchase an aggregate
of 639,847 shares of its Class A common stock.
The debentures are due in
five years, provide for six percent annual interest, payable quarterly, and are
convertible into the Class A common stock of Iteris Holdings at an initial
conversion price of $3.61 per share (subject to certain adjustments, including
adjustments for dilutive issuances).
From May 19, 2007 until May 18, 2008, the debentures may be redeemed by
Iteris Holdings, at its option, at 120% of the principal amount being redeemed;
and from May 19, 2008 until the maturity date of May 18, 2009, the debentures
may be redeemed at 110% of the principal amount being redeemed.
Pursuant to the Debenture
Purchase Agreement, each investor also received two warrants to purchase shares
of the Class A common stock of Iteris Holdings. For every dollar of debenture purchased, each investor received
one warrant to purchase approximately 0.03235 shares of Class A common stock at
an exercise price of $3.83 per share and a second warrant to purchase
approximately 0.03100 shares of Class A common stock at an exercise price of
$4.03 per share. The exercise prices
are subject to certain adjustments, including adjustments for dilutive
issuances. The warrants expire on May
18, 2009.
Iteris Holdings has
agreed to register for resale the shares underlying the debentures and the
warrants. Under the terms of the
Debenture Purchase Agreement, Iteris Holdings may be required to make certain
payments to the investors if it does not file a registration statement with the
Securities and Exchange Commission (SEC) on or prior to July 14, 2004 or
if it does not respond to comments to such registration statement, if any, from
the SEC within certain time limits. In
addition, Iteris Holdings has granted to each investor a right of first offer
with respect to new issuances of its securities, subject to certain exceptions.
Purchasers of the
debentures included certain members of the management team of Iteris Holdings,
including Greg Miner, the Chief Executive Officer and Chief Financial Officer
of Iteris Holdings, and Jack Johnson, a Vice President of Iteris Holdings and
the Chief Executive Officer and President of Iteris.
Friend & Co., the
investment banking division of B. Riley & Co., acted as placement
agent. In connection therewith, Iteris
Holdings issued to persons affiliated with Friend & Co. warrants to
purchase an aggregate of 34,061 shares of Class A common stock at an exercise
price of $3.61 per share.
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Item 7 Exhibits
(c) Exhibits
2.1 Stock
Purchase and Exchange Agreement, dated March 31, 2004, by and among Iteris
Holdings, Inc., Iteris, Inc., DaimlerChrysler Venture GmbH and Hockenheim
Investment Pte. Ltd. Iteris Holdings
agrees to furnish supplementally a copy of any omitted schedules and exhibits
to the Securities and Exchange Commission upon request.
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SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
June 10, 2004
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ITERIS HOLDINGS, INC.,
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a Delaware corporation
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By:
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/S/
GREGORY A. MINER
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Gregory
A. Miner
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Chief
Executive Officer
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and
Chief Financial Officer
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EXHIBIT INDEX
Exhibits
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Description
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2.1
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Stock Purchase and
Exchange Agreement, dated March 31, 2004, by and among Iteris Holdings,
Inc., Iteris, Inc., DaimlerChrysler Venture GmbH and Hockenheim Investment
Pte. Ltd.
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Exhibit
2.1
STOCK
PURCHASE AND EXCHANGE AGREEMENT
This STOCK
PURCHASE AND EXCHANGE AGREEMENT (the Agreement) is entered into as of
March 31, 2004, by and among Iteris Holdings, Inc., a Delaware corporation
(Holdings), and Iteris, Inc., a Delaware corporation (Iteris, and together
with Holdings, the Company), on the one hand and DaimlerChrysler Venture GmbH
(DCV) and Hockenheim Investment Pte. Ltd. (HIPL) on the other (collectively
the Sellers).
R
E C I T A L S
A. DCV owns 547,893 shares of Common Stock
of Iteris (the Iteris Common Shares).
B. DCV owns 1,343,645 shares and HIPL owns
1,781,268 shares of Series A Preferred Stock of Iteris (collectively, the
Preferred Shares). The Iteris Common
Shares and Preferred Shares are referred to collectively herein as the Iteris
Shares.
C. Holdings has agreed to purchase and the
Sellers have agreed to sell the Preferred Shares for cash.
D. Holdings and DCV have agreed that
Holdings will issue 2.2257 shares of Holdings Class A Common Stock (Holdings
Common Stock) to DCV in exchange for each share of Iteris Common Shares held
by DCV.
E. The parties are entering into this
Agreement to give effect to such purchase and exchange, on the terms and
conditions hereinafter set forth herein.
A
G R E E M E N T
NOW, THEREFORE, in
consideration of the foregoing Recitals and the mutual promises of the parties,
the parties agree as follows:
1. Purchase of Iteris Shares. Upon
satisfaction of the conditions to closing in Article 9 and for the consideration described herein,
the sufficiency of which is acknowledged by the parties, each Seller agrees to
sell to Holdings, and Holdings agrees to purchase from such Seller, all the
Iteris Shares held by such Seller, free of any and all liens, security
interests, claims or encumbrances of any kind whatsoever, on the terms and
subject to the conditions set forth herein.
2. Purchase Price for Preferred Shares. As consideration for the sale to Holdings
of the Preferred Shares, Holdings shall pay to each of the Sellers an amount
equal to the product of the number of all the Preferred Shares held by such
Seller and $5.61398 (the Purchase Price).
Each Sellers Purchase Price shall be paid in a single payment in the
form of a cash payment of U.S. Dollars by wire transfer to accounts designated
by that Seller.
3. Exchange of Iteris Common Shares.
(a) Share Exchange. Upon
satisfaction of the conditions to closing in Article 9, DCV shall transfer and assign to Holdings
all of its rights in and to the Iteris Common Shares held by DCV as of the date
of this Agreement as consideration for Holdings issuance to DCV the number of
shares of Holdings Common Stock equal to the product of the total number of
Iteris Common Shares
so transferred and an exchange ratio of 2.2257 (the
Exchange Ratio). Upon issuance in
accordance with the terms of this Agreement, the shares of Holdings Common
Stock so issued shall be fully paid and non-assessable.
(b) Adjustments to Exchange Ratio.
(i) In the event, prior to the Closing Date,
Holdings effects a split or subdivision of the outstanding shares of Holdings
Common Stock or pays a dividend or other distribution payable in additional
shares of Holdings Common Stock or other securities or rights convertible into
or entitling the holders thereof to receive additional shares of Holdings
Common Stock (Common Stock Equivalents) without payment of any consideration
by such holder for the additional shares of Holdings Common Stock or Common
Stock Equivalents, then the Exchange Ratio shall be increased such that the
number of shares of Holdings Common Stock to be received pursuant to this
Section 3 shall be increased in proportion to the increase of the
aggregate number of shares of Holdings Common Stock outstanding and those
issuable with respect to Common Stock Equivalents.
(ii) In the event that the number of shares of
Holdings Common Stock outstanding at any time prior to the Closing Date is
decreased by a combination, reverse stock split or other similar event, the
Exchange Ratio shall be decreased such that the number of shares of Holdings
Common Stock to be received pursuant to this Section 3 shall be decreased
in proportion to the decrease of the aggregate number of shares of Holdings
Common Stock outstanding.
(iii) In the event, prior to the Closing Date,
of any reorganization or reclassification of the outstanding shares of Holdings
Common Stock (other than as a result of a subdivision or combination) or in the
event of any consolidation or merger of Holdings with another entity after
which Holdings is not the surviving entity, at the Closing Date, DCV shall have
the right to receive the same kind and number of securities, cash or other
property as would have been distributed to DCV upon such reorganization,
reclassification, consolidation or merger had the Closing Date occurred
immediately prior to such reorganization, reclassification, consolidation or
merger.
(c) Issuance of Certificates. Holdings will instruct its transfer agent on
the Closing Date, to issue certificates, registered in the name of DCV or its
nominee, representing the Holdings Common Stock to be received by DCV pursuant
to this Section 3. The
certificates evidencing ownership of such Holdings Common Stock shall be issued
promptly following the Closing, but in no event later than five (5) business
days following the Closing Date. All
such certificates will bear the restrictive legends described in
Section 6.
4. Closing.
(a) Closing.
Subject to the satisfaction or waiver of the conditions set forth in
Section 9 hereof, the transactions contemplated by this Agreement will
take place (the Closing) within ten (10) business days following satisfaction
of Holdings obtaining financing, on such terms and conditions Holdings
reasonably deems appropriate, in an amount sufficient to pay the aggregate
Purchase Price in connection with the purchase of the Preferred Shares (the
Financing) or at such other date or time agreed upon by the parties to this
Agreement (the Closing Date). The
Closing will be held at the offices of Stradling Yocca Carlson & Rauth or
at such other place as the parties
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agree. In no
event will the Closing occur later than May 31, 2004. If the Closing has not occurred by such date, this Agreement
shall terminate without any action by or liability to any party hereto.
5. Representations and Warranties of Sellers. Each of the Sellers, severally and not
jointly, represents and warrants to the Company as follows:
(a) Title to Shares. Such Seller is the record and beneficial
owner of the Iteris Shares set forth in the Recitals, free and clear of all
liens, claims, encumbrances, pledges, options and any other adverse interests,
restrictions on transfer or defects in title of any kind or nature whatsoever,
except for restrictions on transfer imposed by federal and state securities
laws. The Iteris Shares held by such
Seller are conveyed to Holdings hereunder free and clear of all liens, claims,
encumbrances, pledges, options and any other adverse interests, restrictions on
transfer or defects in title of any kind or nature whatsoever, except for
restrictions on transfer imposed by federal and state securities laws.
(b) Legal Power.
Such Seller has the full legal right and authority to enter into this
Agreement, to sell and deliver the Iteris Shares held by such Seller to
Holdings and to consummate the transactions contemplated hereby.
(c) Enforceability, Conflicts. Subject to its execution by all the parties,
this Agreement is a legally binding agreement that is enforceable against such
Seller in accordance with its terms, and such Sellers execution and delivery
of this Agreement and the performance by such Seller of its obligations
hereunder will not conflict with or violate any other major agreement or
understanding, written or oral, to which such Seller is a party or to which any
of the Iteris Shares held by such Seller are subject or bound.
(d) Informed Investment Decision. Such Seller has been provided access to and the
opportunity to review all material financial and business records of the
Company, and to ask such questions of the officers of the Company, as necessary
to make a deliberate and informed decision as to whether to sell or exchange
the Iteris Shares held by such Seller to Holdings on the terms provided in this
Agreement. Such Seller has such
knowledge and experience in financial or business matters and with respect to
the Companys business, financial condition, operating results and prospects
that it is capable of evaluating the merits and risks of the sale contemplated
by this Agreement. Based on the
knowledge and experience of such Seller, such Seller has reviewed the merits
and risks of the transaction contemplated by this Agreement, and, where
necessary, has reviewed all material information made available to it.
(e) Legal and Tax Advice.
Such Seller has had this Agreement and the transactions contemplated by
this Agreement reviewed by competent legal and tax advisors and such advisors
have advised such Seller of the legal and tax consequences of this
Agreement. Such Seller has not relied
upon the Company or counsel for the Company in connection with this Agreement.
6. Investment Representations of DCV. DCV hereby represents and warrants to
Holdings as follows:
(a) Investment Intent. It is acquiring the Holdings Common Stock
for its own account, not as nominee or agent, for investment and not with a
view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act of 1933, as amended (the 1933
Act).
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(b) Shares Not Registered. It understands that (i) the Holdings
Common Stock has not been registered under the 1933 Act by reason of a specific
exemption therefrom, that, except as otherwise provided for herein, the
Holdings Common Stock must be held by it indefinitely, and that it must,
therefore, bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the 1933 Act or is exempt
from such registration; (ii) each certificate representing the Holdings
Common Stock will be endorsed with a legend substantially similar to the
following:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE 1933 ACT) AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF
HOLDINGS RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO HOLDINGS, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE 1933 ACT.
and (iii) Holdings will instruct any transfer agent not to
register the transfer of any of the Holdings Common Stock unless the conditions
specified in the foregoing legend are satisfied; provided, however, that no
such opinion of counsel shall be necessary if the sale, transfer or assignment
is made pursuant to Rule 144 promulgated under the 1933 Act and DCV provides
Holdings with evidence reasonably satisfactory to Holdings and its counsel that
the proposed transaction satisfies the requirements of Rule 144.
(c) Sophistication. It has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Holdings Common Stock.
(d) Information. It has been furnished with and has had access to such
information as it has considered necessary to make a determination as to the
purchase of the Holdings Common Stock, together with such additional
information as is necessary to verify the accuracy of the information supplied.
(e) Accredited Investor. It is an accredited investor within the
meaning of Rule 501 of Regulation D promulgated under the 1933 Act, as
presently in effect.
(f) Restricted Securities. It understands that the Holdings Common
Stock it is purchasing is characterized as a restricted security under the
federal securities laws inasmuch as the Holdings Common Stock is being acquired
from Holdings in a transaction not involving a public offering and that under
such laws and applicable regulations such shares may be resold without
registration under the 1933 Act only in certain limited circumstances, and it
represents that it is familiar with Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the 1933 Act.
(g) Restrictions on Transfer. It understands that any transfer of
Holdings Common Stock is subject to certain restrictions on transfer pursuant
to Section 10(b) of this Agreement and that the Holdings Common Stock will
carry a legend to that effect.
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7. Representations and Warranties of Iteris and Holdings. Each of Iteris and Holdings, jointly and
severally, hereby represents and warrants to the Sellers as follows:
(a) Organization.
It is duly incorporated, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated, with full corporate power
and authority to own, lease, use and operate its properties and to carry on its
business as and where now owned, leased, used, operated and conducted.
(b) Legal Power.
It has the requisite legal power and authority to enter into this
Agreement and to carry out and perform its obligations under the terms of this
Agreement.
(c) Due Execution. This Agreement has been duly authorized,
executed and delivered by it and, upon due execution and delivery by Sellers,
this Agreement will be a valid and binding agreement of Iteris and Holdings,
respectively, enforceable against each of Iteris and Holdings in accordance
with its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, or moratorium or similar laws affecting the rights of creditors
generally and the application of general principles of equity.
(d) No Conflicts. The execution, delivery and performance of this
Agreement, and the consummation by Iteris and Holdings, respectively, of the
transactions contemplated hereby (including, without limitation, the issuance
of the Holdings Common Stock) will not (i) conflict with or result in a
violation of any provision of the Certificate of Incorporation or Bylaws or
Iteris or Holdings, (ii) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which with notice or lapse
of time or both could become a default) under any material agreement, indenture
or instrument to which Iteris or Holdings is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree applicable to
Iteris or Holdings or by which any property or asset of either of them is bound
or affected (except for such conflicts, breaches, defaults and violations that
would not, individually or in the aggregate, have a material adverse effect).
8. Representations and Warranties of Holdings.
Holdings hereby represents and warrants to the Sellers as follows:
(a) Capitalization. As of the date hereof, the authorized
capital stock of Holdings consists of (a) 50,000,000 shares of Class A Common
Stock, par value $.10 per share, of which 19,021,109 shares are issued and
outstanding; (b) 2,600,000 shares of Class B Common Stock, par value $.10 per
share, of which 933,930 shares are issued and outstanding; and (c) 2,000,000
shares of preferred stock, none of which is issued and outstanding. All of such outstanding shares of capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable.
(b) Issuance of Holdings Common Stock. The shares of Holdings Common Stock to be
issued pursuant to Section 3 have been duly authorized and, upon issuance
in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, free from all taxes, liens, claims, encumbrances and
charges with respect to the issue thereof, will not be subject to preemptive
rights or other similar rights of stockholders of Holdings, and will not impose
personal liability on the holders thereof.
Subject in part to the truth and accuracy of DCVs representations set
forth in this Agreement, the offer, sale and issuance of the Holdings Common
Stock as contemplated by this Agreement are exempt from the registration
requirements of the 1933 Act, and the qualification requirements of the
California Securities Law and neither Holdings nor any authorized
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agent acting on its behalf will take any action
hereafter that would cause the loss of any such exemption.
(c) SEC Filings. Since January 1, 2001, the Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Securities and Exchange Commission (the SEC) pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as
amended (1934 Act) (all of the foregoing filed prior to the date hereof and
all exhibits included therein and financial statements and schedules thereto
and documents (other than exhibits) incorporated by reference therein, being
hereinafter referred to herein as the SEC Filings). As of their respective dates, the SEC Filings complied in all
material respects with the requirements of the 1934 Act or the 1933 Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Filings, and none of the SEC Filings, at the time they
were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
9. Conditions to Closing.
(a) Conditions to Obligations of the Company.
The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction or the waiver by
the Company, at or prior to the Closing, of each of the following conditions.
(i) Representations and Warranties; Performance of
Obligations.
The representations and warranties made by each Seller in Sections 5 and
6 hereof shall be true and correct on the Closing Date, with the same force and
effect as if they had been made on and as of the Closing Date and each Seller
shall have performed and complied with all obligations and conditions herein
required to be performed or complied with by it on or prior to the Closing.
(ii) Financing.
Holdings shall have obtained the Financing.
(iii) Delivery of Shares. Each of the Sellers shall deliver to
Holdings all certificates representing the Preferred Shares and Iteris Common
Shares, together with stock assignments separate from certificate duly executed
by each of the Sellers in substantially the form attached hereto as Exhibit A,
provided that each Sellers obligation to deliver its respective shares will be
conditioned upon Seller receiving its respective consideration as provided for
Section 9(b).
(b) Conditions to Obligations of Sellers. The obligations of each of the Sellers to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or the waiver by the affected Seller, at or prior to the Closing,
of each of the following conditions.
(i) Representations and Warranties; Performance of
Obligations. The representations and warranties made
by each of Iteris and Holdings in Sections 7 and 8 hereof shall be true and
correct on the Closing Date, with the same force and effect as if they had been
made on and as of the Closing Date and each of Iteris and Holdings shall have
performed and complied with all obligations and conditions herein required to
be performed or complied with by them on or prior to the Closing.
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(ii) Delivery of Purchase Price. Each Seller shall have received the
Purchase Price for the Preferred Shares in accordance with Section 2.
(iii) Delivery of Holdings Common Stock. Irrevocable transfer agent instructions to
issue the shares of Holdings Common Stock pursuant to Section 3, in form
and substance reasonably satisfactory to DCV, shall have been delivered to
Holdings transfer agent and acknowledged in writing by such transfer agent.
9.A. Post-Closing Covenants.
(a) SEC Filings. Holdings agrees to continue timely filing its SEC Filings and to
comply in all material respects with the requirements of the 1934 Act or the
1933 Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Filings, and to engage in such
practices that will ensure the SEC Filings, at the time they are filed with the
SEC, do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading.
(b) Filings and Fees. Holdings agrees to complete and timely file and pay
the filing fees and costs associated with registering the Holdings Common Stock
when so registered pursuant to the terms and conditions of this Agreement. Holdings agrees to complete and timely file
and pay the fees and costs associated with any sales of Holdings Common Stock
by DCV in accordance with Rule 144 engaged in pursuant to the terms and conditions
of this Agreement.
10. Other Rights and Obligations Relating to Holdings
Common Stock.
(a) DCV Put Right. Beginning on the date that is eighteen
(18) months following the Closing Date, DCV may elect to require Holdings to
purchase up to fifty percent (50%) of its Holdings Common Stock acquired under
this Agreement by delivering written notice to Holdings after such date and
prior to the Put Expiration Date, as defined below, stating the number of
shares to be purchased. Beginning on
the date that is thirty-six (36) months following the Closing Date, DCV may
elect to require Holdings to purchase up to all of the Holdings Common Stock
acquired under this Agreement by delivering written notice to Holdings after
such date and prior to the date that is forty (40) months following the Closing
Date (the Put Expiration Date), stating the number of shares to be
purchased. The purchase price for any
such purchase by Holdings shall be $1.438 per share of Holdings Common Stock,
which is equal to $3.20 divided by the Exchange Ratio (the Put Purchase
Price). Provided Holdings may lawfully
purchase such shares, within fifteen (15) business days following receipt of a
purchase notice, Holdings shall pay to DCV an amount equal to the Put Purchase
Price multiplied by the number of shares to be purchased, against delivery of a
duly endorsed stock certificate evidencing ownership of such shares in the name
of DCV. In the event Holdings may not
lawfully purchase all shares requested to be purchased, it shall purchase such
shares to the extent lawfully permitted and shall purchase the remaining shares
as soon as sufficient funds are legally available, unless such request is
withdrawn by DCV by written notice to Holdings.
(b) Restrictions on Transfers. With respect to all shares of Holdings
Common Stock acquired by DCV under this Agreement, DCV hereby covenants and
agrees that for a period of one year following the Closing Date, DCV shall not,
directly or indirectly, sell, offer to sell, solicit an offer to sell, contract
or grant any option or warrant to sell (including, without limitation, any
short sale), pledge, transfer, establish an open put equivalent position, or
otherwise dispose of any shares
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of Holdings Common Stock, without the prior written
consent of Holdings. Notwithstanding
the foregoing, no such consent shall be necessary for a transfer by DCV which
is (a) a partnership to its partners in accordance with partnership interests,
(b) a limited liability company to its members in accordance with their
interest in the limited liability company, (c) a corporation to its
shareholders in accordance with their interest in the corporation, or (d) any
related party of DCV or its successor; provided that in each case the
transferee will be subject to the terms of this Agreement to the same extent as
if it were an original party hereunder (collectively included within the
defined term DCV).
(c) Demand Right.
One year after the Closing Date, DCV will have the right to request
Holdings to file a registration statement, under the 1933 Act, for all of the
Holdings Common Stock held by DCV.
Within twenty (20) days of Holdings receipt of such a request by DCV,
Holdings will notify DCV of Holdings intent to file such a registration
statement. If Holdings decides that it
will file a registration statement for all of Holdings Common Stock purchased
by DCV, Holdings will exercise its best efforts to effect such registration as
soon as reasonably possible. If
Holdings decides not to file a registration statement for all of Holdings
Common Stock held by DCV, the 18 and 36 month timing restrictions under
Section 10(a) will no longer apply and DCV will have the right to
immediately exercise its put option for up to any portion of its Holdings
Common Stock pursuant to the relevant terms and conditions of
Section 10(a).
11. Releases.
(a) Release by Sellers. Effective as
of the Closing Date and except for rights and obligations arising under this
Agreement, each Seller, for itself and its assigns, heirs, successors and
agents hereby releases the Company and all of its shareholders, directors,
officers, agents, employees and representatives from and waives and discharges
(i) any and all liability, claims, demands and causes of action of any nature
whatsoever, fixed or contingent, known or unknown, against the Company, or any
of its shareholders, directors, officers, agents, employees or representatives
which may arise out of or are related to such Sellers rights as a stockholder
of Iteris and representation on the Board of Directors of Iteris, including
rights under the Investor Rights Agreement dated July 31, 2001, the
Stockholders Agreement dated July 31, 2001, the Voting Agreement dated
July 31, 2001, the Investors Protection Agreement dated
September 16, 2003 and any and all similar agreements with the Sellers to
which either Iteris or Holdings is or was a party prior to the date of this
Agreement, and (ii) except for rights relating to DCVs ownership of Holdings Common
Stock after the Closing Date, any and all rights as a stockholder of Iteris,
including any rights to share or participate in the ownership of, or in any
profits of or distribution by Iteris.
(b) Release by Company. Effective as
of the Closing Date and except for rights and obligations arising under this
Agreement, each of Iteris and Holdings, for themselves and their assigns,
heirs, successors and agents hereby releases each of the Sellers and all of
their shareholders, partners, directors, officers, agents, employees and
representatives from and waives and discharges any and all liability, claims,
demands and causes of action of any nature whatsoever, fixed or contingent,
known or unknown, against either Seller, or any of their shareholders,
partners, directors, officers, agents, employees or representatives which may
arise out of or are related to such Sellers rights as a stockholder of Iteris
and representation on the Board of Directors of Iteris, including rights under
the Investor Rights Agreement dated July 31, 2001, the Stockholders
Agreement dated July 31, 2001, the Voting Agreement dated July 31,
2001, the Investors Protection Agreement dated
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September 16, 2003 and any and all similar
agreements with Iteris or Holdings to which a Seller is or was a party prior to
the date of this Agreement.
(c) Release of Known and Unknown Claims.
With respect to the releases set forth in this Section 11, each
Seller and Holdings and Iteris waive and relinquish all rights and benefits
afforded by Section 1542 of the Civil Code of the State of
California. Such Section reads as
follows:
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.
(d) Consideration. The
foregoing releases are a bargained for and essential element of the
consideration for Holdings agreement to purchase, and each Sellers agreement
to sell, the Preferred Shares, or to exchange the Iteris Common Shares, on the
terms set forth herein.
12. Indemnification. Effective as of the Closing Date, each
Seller shall, severally and not jointly, indemnify, defend and hold harmless
the Company and its affiliates, and its and their directors, officers,
employees and agents, from and against any and all losses, damages,
liabilities, reasonable attorney fees, court costs, and expenses (collectively
Losses), joint or several, resulting or arising from claims, actions,
proceedings, investigations or litigation relating to or arising from any
breach by such Seller of its representations, warranties or agreements
herein. Each Company shall, jointly and
severally, indemnify, defend and hold harmless each Seller and its affiliates,
and its and their directors, officers, employees and agents, from and against
any and all Losses, joint or several, resulting or arising from claims,
actions, proceedings, investigations or litigation relating to or arising from
any breach by the Company of their representations, warranties or agreements
herein.
13. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to the conflicts of law principles thereof.
(b) Entire Agreement; Amendment; Waiver. This Agreement is final and complete, and
embodies all of the agreements and understandings of the parties hereto with
respect to the subject matter hereof and, after the Closing takes place and
becomes effective, this Agreement shall supersede all prior or contemporaneous
agreements or understandings, written or oral, with respect thereto. Prior to the Closing the prior agreements
entered into between the parties will remain in effect, the rights of which
will not be limited and the provisions of which will supercede any contrary
provisions contained within this Agreement.
This Agreement may not be amended or modified, except by a written
instrument signed by all of the parties affected thereby. No waiver of any right hereunder shall be
effective unless it is given in a written document or instrument signed by the
party waiving such right.
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(c) Successors Obligations. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives. The rights of Sellers under this Agreement may
be assigned only to a transferee or assignee which (a) is a subsidiary,
affiliate, parent, general partner, limited partner, or member of a Seller, or
(b) acquires at least one hundred fifty thousand (150,000) Preferred Shares or
Holdings Common Stock.
(d) Notices.
All notices required or permitted hereunder shall be invalid, unless in
writing, and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) ten (10) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(iii) two (2) business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt. All communications shall be
sent to the party to be notified at the address as set forth on the signature
page hereof or at such other address as such party may designate by ten (10)
business days advance written notice to the other parties hereto. For purposes
of this Agreement, the term business days shall mean Monday to Friday
California local time with the exception of public holidays on which the
Company and similar businesses in Anaheim, California, are generally closed for
business. References to days other
than business days shall mean calendar days.
(e) Severability.
In case any provision of the Agreement shall be invalid, illegal or
unenforceable, such provision shall be enforced to the maximum extent
permissible, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
(f) Attorneys Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all reasonable
fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such
reasonable fees and expenses of attorneys and accountants, which shall include,
without limitation, all reasonable fees, costs and expenses of appeals.
(g) Transaction Expenses. Each party hereto shall be responsible for its own legal fees and
expenses incurred in connection with the transactions contemplated by this
Agreement.
(h) Specific Performance. This Agreement shall be specifically
enforceable, and any breach or threatened breach of this Agreement shall be the
proper subject of a temporary or permanent injunction or restraining order.
(i) Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
(j) Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10
IN WITNESS
WHEREOF, the undersigned have executed this Agreement as of the day and year
first above written.
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COMPANY:
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ITERIS HOLDINGS,
INC.
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Address:
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1515 South Manchester Avenue
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Anaheim, California
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By:
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/s/ Gregory A. Miner
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Name:
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Gregory A. Miner
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Its:
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CEO
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ITERIS, INC.
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Address:
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1515 South Manchester Avenue
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Anaheim, California
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By:
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/s/ Jack Johnson
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Name:
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Jack Johnson
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Its:
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CEO
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SELLERS:
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DAIMLERCHRYSLER
VENTURES GMBH
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Address:
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Epplestrasse 225
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79657 Stuttgart, Germany
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By:
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/s/ Dr. Marianne Tumpen
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Name:
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Dr. Marianne Tumpen
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Its:
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HOCKENHEIM
INVESTMENTS PTE. LTD.
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Address:
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168 Robinson Road, #37-00 Capital Tower
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Singapore 068912
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By:
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/s/ Seck Eng Tan
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Name:
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Seck Eng Tan
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Its:
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Director
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11
EXHIBIT
A
STOCK
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE
RECEIVED, the undersigned, [NAME OF SELLER], hereby transfers unto Iteris
Holdings, Inc.
( )
shares of the (Common Stock/Preferred Stock) of Iteris, Inc., standing in the
undersigneds name on the books of Iteris, Inc. represented by Certificate
No(s). herewith and does hereby
irrevocably constitute and appoint the Secretary of Iteris, Inc., with full
power of substitution, to transfer said stock on the books of Iteris, Inc.
Dated: ,
2004
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[NAME OF SELLER]
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