REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the Agreement) is made and entered into as of this 28th day of September, 2006 by and among Iteris, Inc., a Delaware corporation (the Company), and the Funds named in that certain Warrant Exercise Agreement by and among the Company and the Funds (the Warrant Exercise Agreement).

The parties hereby agree as follows:

1.             Certain Definitions.

As used in this Agreement, the following terms shall have the following meanings:

Affiliate means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person.

Business Day means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

Common Stock shall mean the Companys common stock, par value $0.10 per share, and any securities into which such shares may hereinafter be reclassified.

Investors shall mean the Funds identified in the Warrant Exercise Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent holder of any Warrants or Registrable Securities.

Prospectus shall mean (i) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and (ii) any free writing prospectus as defined in Rule 405 under the 1933 Act.

Register, registered and registration refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

Registrable Securities shall mean (i) the Warrant Shares and (ii) any other securities issued or issuable with respect to or in exchange for Registrable Securities; provided, that, a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale by the Investors pursuant to Rule 144(k).

Registration Statement shall mean any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

Required Investors means the Investors holding a majority of the Registrable Securities.

SEC means the U.S. Securities and Exchange Commission.

1933 Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

1934 Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Warrants means, the warrants to purchase shares of Common Stock issued to the Investors pursuant to the Warrant Exercise Agreement.

Warrant Shares means the shares of Common Stock issuable upon the exercise of the Warrants.

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