Exhibit 10.47

 

SUBORDINATION AGREEMENT

 

This Subordination Agreement (the “Agreement”) is made and entered into as of
January 12, 2005, by and between NV Partners III-BT LP, a Cayman Islands Limited
Partnership (“Subordinated Creditor”), and @Road, Inc. (“Senior Creditor”).

 

RECITALS

 

Vidus Limited, a company registered in England and Wales under registered number
4069823 having its registered office at North Felaw Maltings, 48 Felow Street,
Ipswich, Suffolk IP2 8HE (“Borrower”), has entered into a certain Loan and
Security Agreement, dated January 12, 2005 with Senior Creditor (as amended from
time to time, the “Loan Agreement”) pursuant to which Senior Creditor has agreed
to extend credit to Borrower.  Pursuant to a Debenture between Borrower and
Subordinated Creditor dated April 2003, Subordinated Creditor has extended
credit to Borrower (the “Subordinated Loan”).  Senior Creditor, as a condition
to extending to Borrower the credit contemplated by the Loan Agreement, requires
the execution of this Agreement by Subordinated Creditor in order to subordinate
the indebtedness of Borrower arising under the Subordinated Loan to the
indebtedness of Borrower to Senior Creditor arising under the Loan Agreement. 
Subordinated Creditor is willing to enter into this Agreement in order to induce
Senior Creditor to make loans or extend credit or any other financial
accommodations to or for the benefit of Borrower.

 

AGREEMENT

 

For good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, Subordinated Creditor hereby agrees with Senior
Creditor as follows:

 

1.                                       Certain Definitions.  The following
terms shall have the following meanings for the purposes of this Agreement:

 

“Senior Indebtedness” shall mean all indebtedness, obligations and liabilities
of Borrower (including, without limitation, principal, interest, fees, costs,
expenses and reasonable attorneys’ fees), now or hereafter owed by Borrower to
Senior Creditor, including, without limitation, the principal of, interest on
and all other amounts owing under, the Loan Agreement, and any renewals,
replacements, substitutions, amendments, modifications, refinancings or
refundings thereof.

 

“Subordinated Indebtedness” shall mean all indebtedness, obligations and
liabilities of Borrower (including, without limitation, principal, interest,
fees, costs, expenses and reasonable attorneys’ fees), now or hereafter owed by
Borrower to Subordinated Creditor, including, without limitation, the principal
of, interest on and all other amounts owing under, the Subordinated Loan, and
any renewals, replacements, substitutions, amendments, modifications,
refinancings or refundings thereof.

 

2.                                       Subordination.  Subordinated Creditor
agrees that payment of the Subordinated Indebtedness is expressly subordinated
to the prior payment in full of all Senior Indebtedness.

 

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Unless and until the Senior Indebtedness shall have been fully paid and
satisfied and all financing arrangements between Borrower and Lender pursuant to
the Loan Agreement have been terminated, Subordinated Creditor will not, without
the prior written consent of Lender (i) accelerate, ask, demand, sue for, take
or receive from or on behalf of Borrower, by set-off or in any other manner, the
whole or any part of any monies which may now or hereafter be owing to
Subordinated Creditor on the Subordinated Indebtedness, (ii) initiate or
participate with others in any suit, action or proceeding against Borrower to
collect the whole or any part of the Subordinated Indebtedness, or (iii) ask,
demand, take or receive any security for any of the Subordinated Indebtedness. 
This subordination provision shall apply with respect to all of the Senior
Indebtedness, regardless of the amount of the Senior Indebtedness or how or in
what manner the Senior Indebtedness is incurred, or whether the Senior
Indebtedness has already been incurred or may be incurred in the future by
future advances or other financial accommodations made or extended by Lender, or
whether such future advances or other financial accommodations are made at the
discretion of Lender or pursuant to commitment or otherwise.  If Subordinated
Creditor, in violation of this Agreement, shall commence, prosecute or
participate in any suit, action or proceeding against Borrower or shall attempt
to enforce, foreclose or realize upon any security for the Subordinated
Indebtedness, Borrower or Lender may interpose as a defense or plea the making
of this Agreement and Lender may intervene and interpose such defense in its
name or in the name of Borrower, and Borrower or Lender may by virtue of this
Agreement restrain the enforcement thereof in the name of Borrower or Lender.

 

3.                                       Enforcement.  Subordinated Creditor,
prior to the payment in full of the Senior Indebtedness and the termination of
all financing arrangements under the Loan Agreement, shall not have any right to
enforce payment of any of the Subordinated Indebtedness or to otherwise take any
action against Borrower or its property without Senior Creditor’s prior written
consent.

 

4.                                       Subordinated Indebtedness Owed Only to
Subordinated Creditor.  Subordinated Creditor warrants and represents to Senior
Creditor that Subordinated Creditor has not previously assigned any interest in
the Subordinated Indebtedness to any party, that no party owns an interest in
the Subordinated Indebtedness other than Subordinated Creditor (whether as joint
holder of the Subordinated Indebtedness, participants or otherwise), that the
entire Subordinated Indebtedness is owing to Subordinated Creditor, and
Subordinated Creditor covenants that the Subordinated Indebtedness shall
continue to be owing only to Subordinated Creditor, unless assigned, transferred
or disposed of in accordance with the terms of this Agreement as provided in
Section 10 hereof.

 

5.                                       Priority on Distribution.  In the event
of any distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of Borrower or the proceeds thereof to the creditors of Borrower or of any
readjustment of the obligations and indebtedness of Borrower, whether by reason
of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding involving the
readjustment of all or any of Borrower’s indebtedness, or the application of the
assets of Borrower to the payment or liquidation thereof, or the dissolution or
winding up of Borrower’s business, or of the sale of all or substantially all of
Borrower’s assets, then, and in any such event, Senior Creditor shall be
entitled to receive payment in full of all Senior Indebtedness prior to the
payment of all or any part of the Subordinated Indebtedness.

 

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6.                                       Payments Received by Subordinated
Creditor.  Should any payment or distribution be received by Subordinated
Creditor upon or with respect to the Subordinated Indebtedness prior to the
satisfaction of all Senior Indebtedness and the termination of all financing
arrangements between Borrower and Senior Creditor under the Loan Agreement,
Subordinated Creditor shall receive and hold the same in trust, as trustee, for
the benefit of Senior Creditor and shall forthwith deliver the same to Senior
Creditor in precisely the same form received (except for the endorsement or
assignment of Subordinated Creditor where necessary) for application on the
Senior Indebtedness, due or not due and to the extent necessary to pay all
Senior Indebtedness in full, and until so delivered, the same shall be held in
trust by Subordinated Creditor as the property of Senior Creditor.

 

7.                                       Grant of Authority to Senior Creditor. 
In order to enable Senior Creditor to enforce its rights hereunder:  (a) Senior
Creditor is hereby irrevocably authorized and empowered, in its discretion, to
make and present for and on behalf of Subordinated Creditor such proofs of claim
against Borrower on account of the Subordinated Indebtedness as Senior Creditor
may deem expedient or proper, to vote such proofs of claim in any such
proceeding and to receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
to apply the same on account of any of the Senior Indebtedness; (b) Subordinated
Creditor irrevocably authorizes and empowers Senior Creditor to demand, sue for,
collect and receive every such payment or distribution and give acquittance
therefor and to file claims and to take such other actions, in Senior Creditor’s
own name or in the name of Subordinated Creditor or otherwise, as Senior
Creditor may deem necessary or advisable for the enforcement of this Agreement;
and (c) Subordinated Creditor shall execute and deliver to Senior Creditor such
powers of attorney, assignments or other instruments or documents, as may be
reasonably requested by Senior Creditor, in order to enable Senior Creditor to
enforce any and all claims upon or with respect to any or all of the
Subordinated Indebtedness and to collect and receive any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect to the Subordinated Indebtedness, all for Senior Creditor’s own benefit.

 

8.                                       Instrument Legend.  The Subordinated
Loan, and any other instruments evidencing any of the Subordinated Indebtedness,
will, on the date hereof or promptly hereafter, be inscribed with a legend
conspicuously indicating that payment thereof is subordinated to the claims of
Senior Creditor pursuant to the terms of this Agreement and a copy thereof will
be delivered to Senior Creditor promptly hereafter.

 

9.                                       Subrogation.  After all of the Senior
Indebtedness has been paid in full and until the Subordinated Indebtedness has
been paid in full, Subordinated Creditor shall be subrogated to the rights of
Senior Creditor to receive payments and distributions of assets with respect to
the Senior Indebtedness, to the extent that distributions otherwise payable to
Subordinated Creditor have been applied to the payment of Senior Indebtedness in
accordance with the provisions of this Agreement.  As between Borrower and
Subordinated Creditor, a distribution applied to the payment of the Senior
Indebtedness in accordance with the provisions of this Agreement which otherwise
would have been made to Subordinated Creditor shall not be deemed a payment by
Borrower on the Subordinated Indebtedness, it being understood that the
subordination provisions of this Agreement are and are intended solely for the
purpose of defining the relative

 

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rights of Subordinated Creditor, on the one hand, and Senior Creditor, on the
other hand, and nothing contained in this Agreement shall impair the obligations
of Borrower, which are absolute and unconditional, to pay to Subordinated
Creditor the Subordinated Indebtedness as and when the same shall become due and
payable in accordance with its terms, except as such obligation is modified by
the rights confirmed hereunder in favor of Senior Creditor, or affect the
relative rights of Subordinated Creditor and the creditors of Borrower other
than Senior Creditor.

 

10.                                 Assignment of Subordinated Indebtedness. 
Subordinated Creditor agrees that until the Senior Indebtedness has been paid in
full and satisfied and all financing arrangements between Borrower and Senior
Creditor have been terminated in writing, Subordinated Creditor will not assign,
transfer or otherwise dispose of the Subordinated Indebtedness or any portion
thereof unless such assignment, transfer or other disposition is made expressly
subject to this Agreement.

 

11.                                 Term.  This Agreement shall constitute a
continuing agreement between Subordinated Creditor and Senior Creditor, and
Senior Creditor may continue, without notice to Subordinated Creditor, to lend
monies, extend credit and make other accommodations to or for the account of
Borrower. This Agreement shall be irrevocable by Subordinated Creditor until (i)
all of the Senior Indebtedness shall have been paid and fully satisfied and all
financing arrangements between Borrower and Senior Creditor have been terminated
in writing, or (ii) the Subordinated Indebtedness shall have been paid and fully
satisfied or (iii) the Closing (as defined in the Acquisition Agreement dated
December 15, 2004 between Senior Creditor, Borrower and NV Partners III-BT LP),
whichever first occurs.

 

12.                                 Additional Agreements Between Senior
Creditor and Borrower.  Senior Creditor, at any time and from time to time, may
enter into such agreement or agreements with Borrower as Senior Creditor may
deem proper, extending the time of payment of or renewing or otherwise altering
the terms of all or any of the Senior Indebtedness or affecting the security
underlying any or all of the Senior Indebtedness, and may exchange, sell,
release, surrender or otherwise deal with any such security without in any way
impairing or affecting this Agreement.

 

13.                                 Waivers of Subordinated Creditor.  All of
the Senior Indebtedness shall be deemed to have been made or incurred in
reliance upon this Agreement, and Subordinated Creditor expressly waives all
notice of the acceptance by Senior Creditor of the subordination and other
provisions of this Agreement, notice of the incurring of Senior Indebtedness
from time to time under the Loan Agreement and all other notices not
specifically required pursuant to the terms of this Agreement or by law, and
Subordinated Creditor expressly waives reliance by Senior Creditor upon the
subordination and other agreements as herein provided.

 

14.                                 Miscellaneous.

 

(a)                                  Amendments and Waivers.  Any term of this
Agreement may be amended with the written consent of the parties or their
respective successors and assigns.  Any amendment or waiver effected in
accordance with this Section 14(a) shall be binding upon the parties and their
respective successors and assigns.

 

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(b)                                 Successors and Assigns.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties and their successors and assigns.  Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. The term “Borrower” as used herein shall
also refer to the successors and assigns of Borrower, including, without
limitation, a receiver, trustee, custodian or debtor-in-possession.

 

(c)                                  Governing Law.  This Agreement and all acts
and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
law.

 

(d)                                 Counterparts.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one instrument.

 

(e)                                  Titles and Subtitles.  The titles and
subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

 

(f)                                    Notices.  Any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon receipt, when delivered personally or by a nationally-recognized delivery
service (such as Federal Express or UPS) or confirmed facsimile, or forty-eight
(48) hours after being deposited in the U.S. mail as certified or registered
mail with postage prepaid, if such notice is addressed to the party to be
notified at such party’s address or facsimile number as set forth below or as
subsequently modified by written notice.

 

(g)                                 Severability.  If one or more provisions of
this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith.  In the event that the
parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this Agreement,
(ii) the balance of the Agreement shall be interpreted as if such provision were
so excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.

 

(h)                                 Entire Agreement.  This Agreement and the
documents referred to herein are the product of both of the parties hereto,
constitute the entire agreement between such parties pertaining to the subject
matter hereof and thereof, and merge all prior negotiations and drafts of the
parties with regard to the transactions contemplated herein and therein.  Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.

 

(i)                                     Advice of Legal Counsel.  Each party
acknowledges and represents that, in executing this Agreement, it has had the
opportunity to seek advice as to its legal rights from legal counsel and that
the person signing on its behalf has read and understood all of the terms

 

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and provisions of this Agreement.  This Agreement shall not be construed against
any party by reason of the drafting or preparation thereof.

 

[Signature Page Follows]

 

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This Agreement has been duly executed under seal by the parties hereto as of the
day and year first above written.

 

 

 

SUBORDINATED CREDITOR:

 

 

 

NV PARTNERS III-BT L.P.

 

 

 

By:

/s/ Andrew Garman

 

Name:

Andrew Garman

 

(print)

 

Title: Managing Partner

 

 

 

Address:

 

 

 

Facsimile Number:

 

 

 

SENIOR CREDITOR:

 

 

 

@ROAD, INC.

 

 

 

By:

/s/ Krish Panu

 

 

 

 

Name:

Krish Panu

 

(print)

 

Title: Chief Executive Officer

 

 

 

Address:

 

 

 

Facsimile Number:

 

 

SIGNATURE PAGE TO SUBORDINATION AGREEMENT

 

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ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned, Vidus Limited, a company registered in England and Wales under
registered number 4069823 having its registered office at North Felaw Maltings,
48 Felow Street, Ipswich, Suffolk IP2 8HE, the Borrower named in the foregoing
Subordination Agreement, does hereby accept, and acknowledge receipt of a copy
of, the foregoing Subordination Agreement, and agrees that (a) it will not pay
any of the Subordinated Indebtedness except as the foregoing Agreement provides,
and (b) it will be bound by the subrogation provisions of Section 9 of the
foregoing Agreement.  In the event of a breach by the undersigned of any of the
provisions herein, all of the Senior Indebtedness shall, without presentment,
demand, protest or notice of any kind except as otherwise required by the Loan
Agreement with Senior Creditor, become immediately due and payable unless Senior
Creditor shall otherwise elect in writing.

 

All capitalized terms used in this Acknowledgment and Agreement without
definition shall have the same meanings as set forth in the foregoing
Subordination Agreement.

 

The undersigned has caused this Acknowledgment and Agreement to be duly executed
as of the day and year first above written.

 

 

BORROWER:

 

 

 

VIDUS LIMITED

 

 

 

By:

/s/ Martin Knestrick

 

 

 

Name:

Martin Knestrick

 

(print)

 

 

 

Title:

Director, CEO

 

 

 

Address:

 

 

 

Facsimile Number:

 

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