Exhibit 4.2
WARRANT
THIS
WARRANT (THE “WARRANT”) IS ISSUED PURSUANT TO THE TERMS
OF THE PROVISIONS OF A WARRANT PURCHASE AGREEMENT (THE
“AGREEMENT”) BETWEEN XATA CORPORATION (THE
“COMPANY”) AND THE INITIAL WARRANT HOLDER. A COPY OF
SUCH AGREEMENT IS ON FILE AT THE OFFICE OF THE CORPORATE SECRETARY
OF THE COMPANY. THIS SECURITY WAS SOLD IN A PRIVATE TRANSACTION,
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY
STATE, AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER THE
SECURITIES ACT AND SUCH LAWS OR IF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH LAWS IS AVAILABLE.
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Company:
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XATA Corporation, a Minnesota
corporation |
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Number of
Shares:
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114,286 |
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Class of
Shares:
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Common, par value $0.01 per
share |
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Exchange
Price:
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$3.31 |
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Issue Date:
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January 31, 2008 |
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Expiration
Date:
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January 30, 2013 |
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Credit
Facility:
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This Warrant is issued in connection
with the Loan referenced in the Loan and Security Agreement between
Company, Geologic Solutions, Inc. and Partners for Growth II, L.P.
dated on or about the date hereof, in which Silicon is a
participant. |
The term “Holder” shall
initially refer to Silicon Valley Bank, which is the initial holder
of this Warrant and shall further refer to any subsequent permitted
holder of this Warrant from time to time.
The Holder is subject to certain
restrictions as set forth in the Agreement.
The Company does hereby certify and
agree that, for good and valuable consideration for the Warrant,
the Holder, or its permitted successors and assigns, hereby is
entitled to exchange this Warrant in XATA Corporation (the
“Company”) for One Hundred Fourteen Thousand Two
Hundred Eighty-Six (114,286) duly authorized, validly issued, fully
paid and non-assessable shares of the Company’s Common Stock,
par value $0.01 each, upon the terms and subject to the provisions
of this Warrant. The shares of Common Stock issuable upon exchange
of this Warrant are referred to herein as the “Warrant
Stock,” and the Warrant and the Warrant Stock are sometimes
together referred to as the “Securities.”
Section 1 Term, Price and Exchange of Warrant.
1.1 Term of Warrant . This
Warrant shall be exchangeable and exercisable for a period of five
(5) years after the date hereof (hereinafter referred to as
the “Expiration Date”).
1.2 Exchange Price . The price
per share at which the Warrant Stock is issuable upon exchange of
this Warrant shall be $3.31, subject to Section 1.3
(a) hereof and subject to adjustment from time to time as set
forth herein (the “Exchange Price”).
1.3 Exchange of Warrant
.
(a) This
Warrant may be exchanged, in whole or in part, upon surrender to
the Company at its then principal offices in the United States of
this Warrant to be exchanged, together with the form of election to
exchange attached hereto as Exhibit A duly completed and
executed, and upon payment to the Company of the Exchange Price for
the number of shares of Warrant Stock in respect of which this
Warrant is then being exchanged (an “Exchange”). In
whole or in part in lieu of an Exchange, Holder may exercise this
Warrant by paying the Exchange Price in cash or by cashier’s
or bank check.
(b) Upon
an Exchange, the Holder shall receive Warrant Stock such that,
without the payment of any funds, the Holder shall surrender this
Warrant in exchange for the number of shares of Warrant Stock equal
to “X” (as defined below), computed using the following
formula:
Where
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X |
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the number of shares of Warrant Stock
to be issued to Holder |
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Y |
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the number of shares of Warrant Stock
to be exchanged under this Warrant |
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A |
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= |
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the Fair Market Value of one share of
Common Stock |
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B |
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the Exchange Price (as adjusted to
the date of such calculations) |
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* |
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= |
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multiplied by |
(c) For
purposes of this Warrant, the “Fair Market Value” of
one share of Warrant Stock shall be (i) if the Company’s
common stock (the “Common Stock”) is or becomes listed
on a national stock exchange (including the NADAQ Stock Market),
the product of (A) the highest closing sale price reported on
such exchange during the three-month period prior to the day Holder
delivers its Election of Exchange to the Company and (B) the
number of shares of Common Stock into which a share of
Warrant
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Stock is
convertible at the time of such exchange, or (ii) if the
Common Stock is traded over-the-counter, the product of
(A) the highest closing bid price for the Common Stock over
the three-month period immediately prior to the day Holder delivers
its Election of Exchange to the Company and (B) the number of
shares of Common Stock into which one share of Warrant Stock is
exchangeable at the time of such exchange. If the Common Stock is
not traded as contemplated in clauses (i) or (ii), above, the
Fair Market Value of the Company’s Warrant Stock shall be the
price per share which the Company could obtain from a willing buyer
for shares of Common Stock sold by the Company from its authorized
but unissued shares, as the Board of Directors of the Company
(“Board”) shall determine in its reasonable good faith
judgment, but in no event less than the price at which qualified
employee stock options issued at such time are exercisable. In the
event that Holder elects to convert the Warrant Stock through
Exchange in connection with a transaction in which the Warrant
Stock is converted into or exchanged for another security, Holder
may effect a Exchange directly into such other security.
(d) Subject
to Section 2 hereof, upon surrender of this Warrant, and the
duly completed and executed form of election to exchange, and
payment of the Exchange Price or conversion of this Warrant through
Exchange, the Company shall issue and deliver within 3 business
days to the Holder or such other person as the Holder may designate
in writing a certificate or certificates (or if the Company only
issues Common Stock electronically, such electronic notice of
issuance) for the number of shares of Warrant Stock so purchased
upon the Exchange or exercise of this Warrant. Such certificate or
certificates shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a
holder of record of such Warrant Stock as of the date of the
surrender of this Warrant, and the duly completed and executed form
of election to exchange, and payment of the Exchange Price or
conversion of this Warrant through Exchange; provided, that if the
date of surrender of this Warrant and payment of the Exchange Price
is not a business day, the certificates for the Warrant Stock shall
be deemed to have been issued as of the next business day (whether
before or after the Expiration Date). If this Warrant is exchanged
or exercised in part, a new warrant of the same tenor and for the
number of shares of Warrant Stock not exchanged or exercised shall
be executed by the Company.
1.4 Fractional Interests . The
Company shall not be required to issue fractions of shares of
Warrant Stock upon the exchange of this Warrant. If any fraction of
a share of Common Stock would be issuable upon the exchange of this
Warrant (or any portion thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the
last reported sale price of the Common Stock on the NASDAQ Market
or any other national securities exchange or market on which the
Common Stock is then listed or traded.
1.5 Automatic Exchange upon
Expiration . In the event that, upon the Expiration Date, the
Fair Market Value of one share of Common Stock (or other security
issuable upon the exchange hereof) as determined in accordance with
Section 1.3(c) is greater than the Exchange Price in effect on
such date, then this Warrant shall automatically be deemed on and
as of such date to be exchanged pursuant to Section 1.3
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as to
all Warrant Stock (or such other securities) for which it shall not
previously have been exchanged or exercised, and the Company shall
promptly deliver a certificate (or if the Company only issues
Common Stock electronically, such electronic notice of issuance)
representing the Warrant Stock (or such other securities) issued
upon such exchange to the Holder.
1.6 Treatment of Warrant Upon
Acquisition of Company.
(a)
“ Acquisition ”. For the purpose of this
Warrant, “Acquisition” means any sale or other
disposition of all or substantially all of the assets of the
Company in whatever form, or any reorganization, consolidation, or
merger of the Company (whether in a single transaction or multiple
related transactions) where the holders of the Company’s
securities before the transaction beneficially own less than 50% of
the outstanding voting securities of the surviving entity after the
transaction(s).
(b)
Treatment of Warrant at Acquisition . Upon the closing of
any Acquisition, the successor entity shall, as condition to such
Acquisition, assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and
property as would be payable for the Warrant Stock issuable upon
exchange of the unexchanged portion of this Warrant as if such
Warrant Stock were outstanding on the record date for the
Acquisition and subsequent closing. The Exchange Price and/or
number of shares of Warrant Stock shall be adjusted
accordingly.
(c)
Optional Purchase at Fair Value . If the successor entity
does not assume the obligations of the Company under this Warrant
as set forth in subsection (b) above, the Company may, at its
option, elect to purchase and Holder may, at its option, require
the Company to purchase this Warrant at its “Fair
Value.” For purposes of this Warrant, “Fair
Value” shall mean that value determined by the parties using
a Black-Scholes Option-Pricing Model with the following
assumptions: (A) a risk-free interest rate equal to the rate
at the time of the closing of the Acquisition (or as close thereto
as practicable), (B) a contractual life of the Warrant equal
to the remaining term of this Warrant, (C) a dividend yield
equal to dividends declared on the underlying Common Stock during
the term of this Warrant, and (D) a volatility factor of the
expected market price of the Company’s Common Stock of:
(1) in the case of an Acquisition in which the acquirer is
publicly traded on a national securities exchange, the implied
volatility of the common stock of such acquirer over the one-year
period prior to the Acquisition, (2) in the case of an
Acquisition in which the acquirer is a non-public company, the
implied volatility of an average of not less than three
publicly-traded companies in the same or similar industry to the
Company with such companies having similar revenues. The purchase
price determined in accordance with the above shall be paid upon
the initial closing of the Acquisition and shall not be subject to
any post-Acquisition closing contingencies or adjustments, but the
parties may take such contingencies and adjustments into account in
determining the purchase price. This subsection shall apply to the
non-cash portion of an Acquisition subject to subsection
(b) above, in the case of such an Acquisition which is partly
or entirely property other than cash.
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Section 2. Exchange and Transfer of Warrant.
(a) This
Warrant may be transferred, in whole or in part, without
restriction, subject to (i) Holder’s compliance with
applicable securities laws and (ii) the transferee holder of
the new Warrant assuming in writing the obligations of the Holder
set forth in this Warrant and the Agreement. A transfer may be
registered wit
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