Exhibit 10.15


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 


WARRANT TO PURCHASE


 


SHARES OF PREFERRED STOCK


 


OF


 


TRAQ WIRELESS, INC.,

a Delaware corporation


 


(Void after January 2, 2013)


 


This
certifies that VENTURE LENDING & LEASING IV, LLC, a Delaware limited
liability company or assigns (the “Holder”), for value received, is
initially entitled to purchase from TRAQ WIRELESS, INC., a Delaware corporation
(the “Company), the Initial Number (as hereinafter defined) of fully
paid and nonassessable shares of the Company’s preferred stock of the series
specified hereinafter (the “Preferred Stock”), for cash at a purchase
price per share (the “Stock Purchase Price”) equal to, at Holder’s option, (i) $1.00 (the “Series 2
Price”), or (ii) the Next Round Price (hereinafter defined).


 


If
the Holder opts to have the Stock Purchase Price be equal to the Series 2
Price, or if the Next Round (as hereinafter defined) has not occurred prior to
the exercise hereof, then this Warrant shall be exercisable for the Initial
Number of shares of the Company’s Series 2 Preferred Stock.  If the Holder opts to have the Stock Purchase
Price be equal to the Next Round Price, then this Warrant shall be exercisable
for the Initial Number of shares of the class and series of convertible
preferred stock or other security sold or issued by the Company in the Next
Round.


 


This
Warrant is issued in connection with the Loan and Security Agreement of even
date herewith (as amended, restated and supplemented from time to time, the “Loan
Agreement”) between the Company and Venture Lending & Leasing IV, Inc.,
an affiliate of Holder (“Lender”). 
Capitalized terms used herein and not otherwise defined in this Warrant
shall have the meanings ascribed to them in the Loan Agreement unless the
context would otherwise require.


 


For
purposes of this Warrant, “Next Round” means the next bona fide round of
equity financing (including the conversion of any outstanding amounts from
short term debt financing) after the completion of the Company’s Series 2
preferred stock round in which the Company issues any equity securities, and
includes any other options, warrants, or other convertible securities or
similar consideration issued or delivered in connection with such equity
financing to investors in such round (or to the lenders in the case of any such
short term debt financing).


 


For
purposes of this Warrant, “Next Round Price” means the lowest price per
share paid by an investor for the Company’s securities issued in the Next Round
including for this purpose the value of all consideration given by an investor
for such equity securities; provided that if the Next Round is
consummated pursuant to the conversion of outstanding debt from short term debt
financing, then the Next Round Price of the securities shall be the effective
per share conversion or exercise price for the Company’s equity securities
issued or issuable to the lenders in such Next Round, taking into account the
value of all equity securities, if any, issued to the lenders in connection
with such debt financing and all equity securities issued pursuant to the
conversion of such debt.


 


The
number of shares purchasable hereunder shall be the number obtained by dividing
(A) One Hundred Thousand Dollars ($100,000), by (B) the Stock
Purchase Price.  If in any case such
number includes a fraction, the 


 

















 


fraction
shall be adjusted downward to the closest whole number of shares (the “Initial
Number”).  In addition, the Initial
Number of shares of Preferred Stock issuable under this Warrant shall be
increased automatically from time to time upon the funding of each Growth
Capital Loan, by that number of shares equal to 0.045 times the original
principal amount of such Growth Capital Loan, divided by the Stock Purchase
Price.


 


Promptly
after the Termination Date, the Company shall deliver a supplement to this
Warrant, in substantially the form of Exhibit “C” attached hereto,
specifying (i) the actual number and type of shares of the Company’s stock
issuable upon exercise of this Warrant and (ii) the initial Stock Purchase
Price; provided, however, that the failure of the Company to deliver
such supplement shall not affect the rights of the Holder of this Warrant to
receive such number of shares upon exercise of this Warrant.  The Stock Purchase Price and the number of
shares purchasable hereunder are subject to further adjustment as provided in Section 4
of this Warrant.


 


This
Warrant may be exercised at any time or from time to time up to and including
5:00 p.m. (Pacific time) on January 2, 2013 (the “Expiration Date”),
upon surrender to the Company at its principal office at 8300 North MoPac
Expressway, Suite 310, Austin, TX 78759 (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with
the Form of Subscription attached hereto as Exhibit “A” duly
completed and signed and upon payment in cash or by check of the aggregate
Stock Purchase Price for the number of shares of Preferred Stock for which this
Warrant is being exercised determined in accordance with the provisions
hereof.  The Stock Purchase Price and the
number of shares purchasable hereunder are subject to adjustment as provided in
Section 4 of this Warrant.


 


This
Warrant is subject to the following terms and conditions:


 


1.             Exercise: Issuance of
Certificates: Payment for Shares.


 


(a)           Unless an election is made
pursuant to clause (b) of this Section 1, this Warrant shall be
exercisable at the option of the Holder, at any time or from time to time, by
delivery of this Warrant properly endorsed with the Form of Subscription
duly completed and signed on or before the Expiration Date for all or any
portion of the shares of Preferred Stock (but not for a fraction of a share)
which may be purchased hereunder by payment in full by cash, certified check or
wire transfer of the Stock Purchase Price multiplied by the number of shares to
be purchased.  In the event, however,
that pursuant to the Company’s Certificate of Incorporation, as amended, an
event causing automatic conversion of the Company’s Preferred Stock shall have
occurred prior to the exercise of this Warrant, in whole or in part, then this
Warrant shall be exercisable for the number of shares of Common Stock of the
Company into which the Preferred Stock not purchased upon any prior exercise of
this Warrant would have been so converted (and, where the context requires,
reference to “Preferred Stock” shall be deemed to be or include such Common
Stock, as may be appropriate).  The
Company agrees that the shares of Preferred Stock purchased under this Warrant
shall be and are deemed to be issued to the Holder hereof as the record owner
of such shares as of the close of business on the date on which the Form of
Subscription shall have been delivered and payment made for such shares.  Subject to the provisions of Section 2,
certificates for the shares of Preferred Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the Company’s
expense within a reasonable time after the rights represented by this Warrant
have been so exercised.  Except as
provided in clause (b) of this Section 1, in case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver a new Warrant or Warrants of
like tenor for the balance of the shares purchasable under this Warrant
surrendered upon such purchase to the Holder hereof within a reasonable
time.  Each stock certificate so
delivered shall be in such denominations of Preferred Stock as may be requested
by the Holder hereof and shall be registered in the name of such Holder or such
other name as shall be designated by such Holder, subject to the limitations
contained in Section 2.


 


(b)           The Holder, in lieu of
exercising this Warrant by the cash payment of the Stock Purchase Price
pursuant to clause (a) of this Section 1, may elect, at any time on
or before the Expiration Date, to surrender this Warrant, properly endorsed
with the Form of Subscription duly completed and signed, and receive that
number of shares of Preferred Stock equal to the quotient of: (i) the
difference between (A) the Per Share Price (as hereinafter defined) of the
Preferred Stock, less (B) the Stock Purchase Price then in effect,
multiplied by the number of shares of Preferred Stock the Holder would
otherwise have been entitled to purchase hereunder pursuant to clause (a) of
this Section 1 (or such lesser number of shares as the Holder may
designate in the case of a partial 


 

















 


exercise
of this Warrant); over (ii) the Per Share Price.  Election to exercise under this section (b) may
be made by delivering a signed Form of Subscription, duly completed and
signed, to the Company via facsimile, to be followed by delivery of this
Warrant.


 


For
purposes of clause (c) of this Section 1, “Per Share Price” means:


 


(i)            If this Warrant is exercised
on the date of the Company’s initial public offering of Common Stock, and if
the Company’s registration statement relating to such public offering has been
declared effective by the Securities and Exchange Commission, then the Per
Share Price shall be the product of (A) the initial “Price to Public” of
the Common Stock specified in the final prospectus with respect to the offering
and (B) the number of shares of Common Stock into which each share of
Preferred Stock exercised is convertible at the date of calculation;


 


(ii)           If this Warrant is exercised
after, and not on the date of the Company’s initial public offering of Common
Stock, and if the Company’s Common Stock is traded on a securities exchange or
quoted on The Nasdaq National Market or actively traded over-the-counter:


 


(1)           If the Company’s Common
Stock is traded on a securities exchange or quoted on The Nasdaq National
Market, the Per Share Price shall be deemed to be the product of (A) the
closing price of the Company’s Common Stock as quoted on The Nasdaq National
Market or listed on any exchange, whichever is applicable, as published in the
Western Edition of The Wall Street Journal for the trading day
immediately prior to the date of the Holder’s election hereunder and, (B) the
number of shares of Common Stock into which each share of Preferred Stock exercised
is convertible on such date; or


 


(2)           If the Company’s Common
Stock is actively traded over-the-counter, the Per Share Price shall be deemed
to be the product of (A) the closing bid or sales price, whichever is
applicable, of the Company’s Common Stock for the trading day immediately prior
to the date of the Holder’s election hereunder and (B) the number of
shares of Common Stock into which each share of Preferred Stock exercised is
convertible on such date;


 


(iii)          If neither (i) nor (ii) is
applicable, the Per Share Price of Preferred Stock shall be determined in good
faith by the Board of Directors of the Company based on relevant facts and
circumstances at the time of the net exercise under Section l(b),
including in the case of a Corporate Event (as defined in Section 4.3
below) the consideration receivable by the holders of Preferred Stock in such
Corporate Event and the liquidation preference, if any, then applicable to the
Preferred Stock.


 


2.             Limitation on Transfer.


 


(a)           This Warrant, the Preferred
Stock issuable upon exercise of this Warrant, shares of the Company’s Common
Stock issued upon conversion of such Preferred Stock and any other securities
issued in respect to the Preferred Stock or Common Stock issued upon conversion
of the Preferred Stock upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event shall not be transferable except upon
the conditions specified in this Section 2, which conditions are intended
to insure compliance with the provisions of the Securities Act of 1933, as
amended (the “Securities Act”). 
Each holder of this Warrant or the Preferred Stock issuable hereunder
will cause any proposed transferee of the Warrant or Preferred Stock to agree
to take and hold such securities subject to the provisions and upon the
conditions specified in this Section 2. 
Notwithstanding the foregoing and any other provision of this Section 2,
Holder may freely transfer all or part of this Warrant or the shares issuable
upon exercise of this Warrant (or the securities issuable, directly or
indirectly, upon conversion of the shares, if any) at any time to any lender
transferee of a portion of the loan commitment of Venture Lending &
Leasing IV, Inc. under the Loan Agreement, by giving the Company notice of
the portion of the Warrant being transferred setting forth the name, address
and taxpayer identification number of the transferee and surrendering this
warrant to the Company for reissuance to the transferees(s) (and Holder,
if applicable).  Each transferee shall
agree to be bound by the provisions of this Warrant prior to the effectiveness
of such transfer.


 

















 


(b)           Each certificate
representing (i) this Warrant, (ii) the Preferred Stock, (iii) shares
of the Company’s Common Stock issued upon conversion of the Preferred Stock and
(iv) any other securities issued in respect to the Preferred Stock or
Common Stock issued upon conversion of the Preferred Stock upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of this Section 2
or unless such securities have been registered under the Securities Act or sold
under Rule 144) be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state securities laws):


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION
THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION
THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 


(c)           The Holder of this Warrant
and each person to whom this Warrant is subsequently transferred (by acceptance
of such transfer) represents, warrants and covenants to the Company that it
acknowledges that this Warrant and the securities issuable upon its exercise
have not been registered under the Securities Act, and agrees not to offer for
sale, sell, pledge, distribute, transfer or otherwise dispose of this Warrant
or any securities issued upon its exercise except pursuant to (i) an
effective registration statement under the Securities Act, (ii) Rule 144(k) under
the Securities Act or (iii) an opinion of counsel, reasonably satisfactory
to counsel for the Company, that an exemption from such registration is
available.  Notwithstanding the
foregoing, in no event shall the number of transfers of this Warrant exceed
three (3) transfers.


 


3.             Shares to be Fully Paid;
Reservation of Shares.  The
Company covenants and agrees that all shares of Preferred Stock which may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable and
free from all preemptive rights of any stockholder and free of all taxes, liens
and charges with respect to the issue thereof. 
The Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized and reserved, for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant, a
sufficient number of shares of authorized but unissued Preferred Stock, or
other securities and property, when and as required to provide for the exercise
of the rights represented by this Warrant. 
The Company will take all such action as may be necessary to assure that
such shares of Preferred Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
domestic securities exchange upon which the Preferred Stock may be listed;
provided, however, that the Company shall not be required to effect a
registration statement under federal or state securities laws with respect to
such exercise except as listed in Section 8.  The Company will not take any action which
would result in any adjustment of the Stock Purchase Price (as described in Section 4
hereof) (i) if the total number of shares of Preferred Stock issuable
after such action upon exercise of all outstanding warrants, together with all
shares of Preferred Stock then outstanding and all shares of Preferred Stock
then issuable upon exercise of all options and upon the conversion of all
convertible securities then outstanding, would exceed the total number of
shares of Preferred Stock then authorized by the Company’s Certificate of
Incorporation, (ii) if the total number of shares of Common Stock issuable
after such action upon the conversion of all such shares of Preferred Stock
together with all shares of Common Stock then outstanding and then issuable
upon exercise of all options and upon the conversion of all convertible
securities then outstanding would exceed the total number of shares of Common
Stock then authorized by the Company’s Certificate of Incorporation or (iii) if
the par value per share of the Preferred Stock would exceed the Stock Purchase
Price.


 


4.             Adjustment of Stock Purchase
Price and Number of Shares.  The Stock Purchase Price and the number of
shares purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in
this Section 4; provided, however, that no adjustment will be made
pursuant to this Section 4 to the extent that such adjustment would be
duplicative of any adjustment set forth in the Company’s Certificate of
Incorporation as in effect on the date of such adjustment.  Upon each adjustment of the Stock Purchase Price,
the Holder of this Warrant shall thereafter be entitled to purchase, at the
Stock Purchase


 

















 


Price
resulting from such adjustment, the number of shares obtained by multiplying
the Stock Purchase Price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Stock Purchase Price
resulting from such adjustment.


 


4.1           Subdivision or Combination
of Stock.  In case the
Company shall at any time subdivide its outstanding shares of Preferred Stock
into a greater number of shares, the Stock Purchase Price in effect immediately
prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding shares of Preferred Stock of the Company shall be combined
into a smaller number of shares, the Stock Purchase Price in effect immediately
prior to such combination shall be proportionately increased.


 


4.2           Dividends in Preferred
Stock, Other Stock, Reclassification.  If at any time or from time to time the
holders of Preferred Stock (or any shares of stock or other securities at the
time receivable upon the exercise of this Warrant) shall have received or
become entitled to receive, without payment therefor, Preferred Stock or any
shares of stock by way of dividend or other distribution, then and in such
case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Preferred Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of Preferred Stock or any shares of stock which such Holder would hold
on the date of such exercise had he been the holder of record of such Preferred
Stock as of the date on which holders of Preferred Stock received or became
entitled to receive such shares and/or all other additional stock.


 


4.3           Reorganization,
Reclassification, Consolidation, Merger or Sale.  If any capital reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Preferred
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Preferred Stock (a “Corporate Event”), then, as a
condition of such Corporate Event, lawful and adequate provisions shall be made
whereby the holder hereof shall thereafter have the right to purchase and
receive (in lieu of the shares of the Preferred Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby) such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Preferred Stock equal to the number of shares of such stock
immediately theretofor purchasable and receivable upon the exercise of the
rights represented hereby.  In any such
case, appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock
Purchase Price and of the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable, as nearly as may be
possible, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. 
The successor corporation (if other than the Company) resulting from
such consolidation or the corporation purchasing such assets shall assume the
obligation to deliver to such Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions, such Holder may be entitled to
purchase.


 


4.4           Sale or Issuance Below
Purchase Price.  The other
antidilution rights applicable to the shares of series Preferred Stock
purchasable hereunder are set forth in the Company’s Certificate of
Incorporation, as amended through the date hereof (the “Charter”).  Such antidilution rights shall not be
restated, amended, modified or waived in any manner without the Holder’s prior
written consent if the effect of such restatement, amendment, modification or
waiver on the Holder hereof would be more adverse to the Holder hereof than,
and substantially dissimilar to, its effect on the other holders of the same
series of the Company’s Preferred Stock. 
Notwithstanding the foregoing, the holder shall not be subject to any “pay
to play” terms or conditions (i.e. terms or conditions that require the Holder
to purchase securities in a future round of equity financing or else lose the
benefit of antidilution protection applicable to the shares of Preferred Stock
issuable upon the exercise of this Warrant or have such shares of preferred
stock automatically convert to common stock or convert to another class and
series of the Company’s capital stock) whether currently in force or adopted by
the Company after the issuance of this Warrant. 
The Company shall promptly provide the Holder hereof with any
restatement, amendment, modification or waiver of the Charter promptly after
the same has been made.  If in connection
with any non-public offering of equity securities of the Company after the
original date of issuance of this Warrant at a price per share lower than the
Stock Purchase Price then in effect (such offering being referred to herein as
a “Down Round”), and the holders of a requisite percentage of shares of
Preferred Stock waive any anti-dilution protections that would otherwise have
been available to such stockholders under the Charter on account of the
issuance of securities in the Down Round, 


 

















 


the
Company shall afford the Holder the opportunity to purchase in such Down Round
along with the other investors up to that number of shares of equity securities
of the Company to be sold through the Down Round as will enable the Holder to
own immediately after completion of the Down Round the same percentage of the
equity securities of the Company (on a fully diluted basis) as the Holder owned
and/or had the right to purchase under this Warrant immediately prior to
commencement of the Down Round offering. 
In this regard, the Company shall provide written notice of the Down
Round to the Holder reasonably in advance of a proposed Down Round, which
notice shall state, to the extent then known by the Company, the number and
type of shares of equity securities proposed to be sold through the Down Round
and the per share price, and shall establish a deadline, not less than 10 days
after the giving of such notice, by which the Holder must deliver its written
election to purchase shares in the Down Round. 
The per share price payable by the Holder in the Down Round shall be the
same per share price payable by the lead investor in the Down Round.


 


4.5           Notice of Adjustment.  Upon any adjustment of the Stock Purchase
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the
Company.  The notice, which may be substantially
in the form of Exhibit “B” attached hereto, shall be signed by the Company’s
chief executive officer or other authorized officer of the Company and shall
state the Stock Purchase Price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.


 


4.6           Other Notices.  If at any time:


 


(a)           the Company shall declare
any cash dividend upon its Preferred Stock;


 


(b)           the Company shall declare
any dividend upon its Preferred Stock payable in stock or make any special
dividend or other distribution to the holders of its Preferred Stock;


 


(c)           the Company shall offer for
subscription pro rata to the holders of its Preferred Stock any additional
shares of stock in connection with a Down Round or additional shares of stock
of any class or other rights;


 


(d)           there shall be any capital
reorganization or reclassification of the capital stock of the Company, or
consolidation or merger of the Company with, or sale of all or substantially
all of its assets to, another entity;


 


(e)           there shall be a voluntary
or involuntary dissolution, liquidation or winding-up of the Company; or


 


(f)            the Company shall take or
propose to take any other action, notice of which is actually provided to
holders of the Preferred Stock (except the voting of Preferred Stock on matters
other than items (a) through (d) listed above);


 


then,
in any one or more of said cases, the Company shall give, by first class mail,
postage prepaid, addressed to the Holder of this Warrant at the address of such
Holder as shown on the books of the Company, (i) at least 10 days’ prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend or distribution or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, or other
action, at least 10 days’ written notice of the date when the same shall take
place (unless the proposed transaction has not been announced publicly, in
which case such notice shall be given to Holder as soon as announced publicly
or when otherwise provided to the Company’s stockholders).  Any notice given in accordance with the
foregoing clause (i) shall also specify, in the case of any such dividend
or distribution, the date on which the holders of Preferred Stock shall be
entitled thereto.  Any notice given in
accordance with the foregoing clause (ii) shall also specify the date on
which the holders of Preferred Stock shall be entitled to exchange their
Preferred Stock for securities or other 


 

















 


property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.


 


5.             Issue Tax.  The issuance of certificates for shares of
Preferred Stock upon the exercise of this Warrant shall be made without charge
to the Holder of this Warrant for any issue tax in respect thereof; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Holder of this Warrant being
exercised.


 


6.             Closing of Books.  Unless required by applicable law, the Company
will at no time close its transfer books against the transfer of this Warrant
or of any shares of Preferred Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant.


 


7.             No Rights as Stockholder;
Limitation of Liability. 
Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof any rights of a stockholder, as such, including the right to
vote or to consent as a stockholder in respect of meetings of stockholders for
the election of directors of the Company or any other matters or any rights
whatsoever as a stockholder of the Company. 
Without limiting the generality of the foregoing, no dividends or
interest shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised.  No provisions hereof, in the absence of
affirmative action taken by the Holder to purchase shares of Preferred Stock or
automatic exercise of this Warrant pursuant to the terms hereof, and no mere
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder for the Stock Purchase Price or as a
stockholder of the Company, whether such liability is asserted by the Company
or by its creditors.


 


8.             [Intentionally omitted]


 


9.             Registration Rights.  The Holder hereof shall be entitled, with
respect to the shares of Preferred Stock issued upon exercise hereof or the
shares of Common Stock or other securities issued upon conversion of such
Preferred Stock as the case may be, to certain of the registration rights and
related obligations, including without limitation any market standoff
obligations, set forth in Section 1 of the Amended and Restated Investors
Rights Agreement dated as of July         ,
2005, as such agreement may be further amended from time to time (the “Rights
Agreement”), to the same extent and on the same terms and conditions as
possessed by the investors thereunder with the following exceptions and
clarifications: (i) the Holder will have no demand registration rights; (ii) the
Holder will be subject to the same provisions regarding indemnification as
contained in the Rights Agreement; and (iii) the registration rights are
freely assignable by the Holder of this Warrant in connection with a permitted
transfer of this Warrant or the shares issuable upon exercise hereof.  The Company shall take such action as may be
reasonably necessary to assure that the granting of such registration rights to
the Holder does not violate the provisions of the Rights Agreement or any of
the Company’s charter documents or rights of prior grantees of registration
rights and such grant of registration rights shall be evidenced by the
execution of an additional signature page to the Rights Agreement by
Holder and Holder shall thereby become a party to the Rights Agreement in
accordance with the terms and conditions set forth therein.


 


10.           Rights and Obligations
Survive Exercise of Warrant.  The rights and obligations of the Company, of
the Holder of this Warrant and of the holder of shares of Preferred Stock
issued upon exercise of this Warrant, contained in Section 6 and 9 shall
survive the exercise of this Warrant.


 


11.           Modification and Waiver.  This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.


 


12.           Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder hereof or the
Company shall be made in writing and deemed to have been given (i) upon
receipt if delivered personally or by courier (ii) upon confirmation of
receipt if by telecopy or (iii) three business days after deposit in the
US mail, with postage prepaid and certified or registered, to Holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant.


 

















 


13.           Binding Effect on Successors.  This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company’s assets.  All of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the Holder
hereof.  The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the Holder
hereof but at the Company’s expense, acknowledge in writing its continuing
obligation to the Holder hereof in respect of any rights (including, without
limitation, any right to registration of the shares of Common Stock) to which
the Holder hereof shall continue to be entitled after such exercise in accordance
with this Warrant; provided, that the failure of the Holder hereof to make any
such request shall not affect the continuing obligation of the Company to the
Holder hereof in respect of such rights.


 


14.           Descriptive Headings and
Governing Law.  The
descriptive headings of the several sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this
Warrant.  This Warrant shall be construed
and enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of California, without giving effect to the
its principles regarding conflicts of law.


 


15.           Lost Warrants or Stock
Certificates.  The Company
represents and warrants to the Holder hereof that upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant or any stock certificate issued upon exercise
thereof and, in the case of any such loss, theft or destruction, upon receipt
of an indemnity agreement reasonably satisfactory to the Company, or in the
case of mutilation, upon surrender and cancellation of this Warrant or any
stock certificate issued upon exercise thereof, the Company will issue and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate at Holder’s
expense.


 


16.           Fractional Shares.  No fractional shares shall be issued upon any
exercise of this Warrant.  The Company
shall, in lieu, of issuing any fractional share, pay the Holder entitled to
such fraction a sum in cash equal to such fraction multiplied by the then
effective Stock Purchase Price.


 


17.           Representations of Holder.  With respect to this Warrant, Holder
represents and warrants to the Company as follows:


 


17.1         Experience.  It is experienced in evaluating and investing
m companies engaged in businesses similar to that of the Company; it
understands that investment in this Warrant involves substantial risks; it has
made detailed inquiries concerning the Company, its business and services, its
officers and its personnel; the officers of the Company have made available to
Holder any and all written information it has requested; the officers of the
Company have answered to Holder’s satisfaction all inquiries made by it; in
making this investment it has relied upon information made available to it by
the Company; and it has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of investment in the
Company and it is able to bear the economic risk of that investment.


 


17.2         Investment.  It is acquiring this Warrant for investment
for its own account, not as a nominee or agent, and not with a view to, or for
resale in connection with, any distribution thereof.  It understands that this Warrant, the shares
of Preferred Stock issuable upon exercise thereof and the shares of Common
Stock issuable upon conversion of the Preferred Stock, have not been registered
under the Securities Act, nor qualified under applicable state securities laws.


 


17.3         Rule 144.  It acknowledges that this Warrant, the
Preferred Stock and the shares of Common Stock issuable upon conversion of the
Preferred Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available.  It has been advised or is
aware of the provisions of Rule 144 promulgated under the Securities Act.


 


17.4         Access to Data.  It has had an opportunity to discuss the
Company’s business, management and financial affairs with the Company’s
management and has had the opportunity to inspect the Company’s facilities.


 

















 


17.5         Accredited Investor.  It is an “accredited investor” within the
meaning of Rule 501 of Regulation D of the Securities Act.


 


17.6         Market Standoff Agreement.  It agrees that in connection with the initial
public offering of the Company’s securities that, upon the request of the
Company or the underwriters managing any new underwritten public offering of
the Company’s securities, not to sell, make any short sale of, loan, grant an
option for the purchase of, or otherwise dispose of any Registrable Securities
(as defined in the Rights Agreement) other than those included in the
registration without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time as may be requested
by the Company or such managing underwriters (not to exceed 180 days) from the
effective date of such registration; provided, that the executive officers and
directors of the Company, as well as any holder of at least five percent (5%)
of the then outstanding Common Stock (treating all outstanding shares of
preferred stock on an as-converted to Common Stock basis), shall have agreed to
be bound by substantially the same terms and conditions.  The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of the market standoff period.


 


17.7         Tax Liability.  The Holder has reviewed the federal, state,
local and foreign tax consequences of the transactions contemplated by
acquiring this Warrant and the issuance of equity securities hereunder
(including any tax consequences that may result now or in the future under
recently enacted tax legislation), and has had the opportunity to consult with
the Holder’s tax advisors regarding such consequences.  The Holder acknowledges that it is not
relying on any statements or representations of the Company or any of its
agents in regard to such tax consequences and understands that the Holder (and
not the Company) shall be responsible for its own tax liability that may arise
as a result of the transactions contemplated by the issuance of this Warrant
(and the underlying shares of capital stock of the Company).  The Holder acknowledges that the Company has
no obligation in regard to the future conduct of its business, to act or
refrain from acting in any manner, regardless of the loss of any tax benefit to
the Holder in connection with the purchase, ownership, or sale of the Warrant
(or the underlying shares of capital stock of the Company), that may result
from such action or inaction.


 


18.           Additional Representations
and Covenants of the Company.  The Company hereby represents, warrants and
agrees as follows:


 


18.1         Corporate Power.  The Company has all requisite corporate power
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.


 


18.2         Authorization.  All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of this Warrant has been
taken.  This Warrant is a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.


 


18.3         Offering.  Subject in part to the truth and accuracy of
Holder’s representations set forth in Section 16 hereof, the offer,
issuance and sale of this Warrant is, and the issuance of Preferred Stock upon
exercise of this Warrant and the issuance of Common Stock upon conversion of
the Preferred Stock will be exempt from the registration requirements of the
Securities Act, and are exempt from the qualification requirements of any
applicable state securities laws; and neither the Company nor anyone acting on
its behalf will take any action hereafter that would cause the loss of such
exemptions.


 


18.4         Stock Issuance.  Upon exercise of this Warrant, the Company
will use its best efforts to cause stock certificates representing the shares
of Preferred Stock purchased pursuant to the exercise to be issued in the names
of Holder, its nominees or assignees, as appropriate as soon as practicable at
the time of such exercise.  Upon
conversion of the shares of Preferred Stock into shares of Common Stock, the
Company will issue the Common Stock in the names of Holder, its nominees or
assignees, as appropriate.


 


18.5         Certificates and By-Laws.  The Company has provided Holder with true and
complete copies of the Company’s Certificate of Incorporation, By-Laws, and
each Certificate of Designation or other charter 


 

















 


document
setting, forth any rights, preferences and privileges of Company’s capital
stock, each as amended and in effect on the date of issuance of this Warrant.


 


18.6         Conversion of Preferred
Stock.  As of the date hereof, each
share of the Preferred Stock is convertible into one share of the Common Stock.


 


18.7         Financial and Other Reports.  From time to time until the earlier of the
Expiration Date or the complete exercise of this Warrant, the Company shall
furnish to Holder (i) within 90 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; and (ii) within 45 days after
the close of each of the first three (3) quarters of each fiscal year of
the Company, an unaudited balance sheet and statement of cash flows at and as
of the end of such quarter, together with an unaudited statement of income for
such quarter.  The Company need not
comply with the reporting requirement of this Section so long as the
Company is otherwise providing to the Holder’s affiliate the periodic financial
information required under Section 5.2 of the Loan Agreement.


 


[Signature Page Follows]


 














 


[Signature Page to Warrant]


 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
officers, thereunto duly authorized this 28th day of July, 2005.


 


TRAQ
WIRELESS, INC.


 


 


	
  By:

  	
  /s/
  Richard Pontin

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Richard
  Pontin

  	
   

  



 

















 


EXHIBIT “A”


 


FORM OF SUBSCRIPTION


 


(To be signed only upon exercise of Warrant)


 


To:                                                    


 


o    The undersigned, the holder of the within Warrant,
hereby irrevocably elects to exercise the purchase right represented by such
Warrant for, and to purchase thereunder, (1) [See
Below]
                                      
(          ) shares (the “Shares”)
of Stock of
                          
and herewith makes payment of
                           
Dollars ($              )
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to,
                  ,
whose address is
                            .


 


o    The undersigned hereby elects to convert
            
percent (      %) of the value of the Warrant
pursuant to the provisions of Section 1(b) of the Warrant.


 


The
undersigned acknowledges that it has reviewed the representations and
warranties contained in Section 17 of this Warrant and by its signature
below hereby makes such representations and warranties to the Company.


 


	
   

  	
  Dated

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 






(1)   /       Insert here the number of shares called for on the
face of the Warrant (or, in the case of a partial exercise, the portion thereof
as to which the Warrant is being exercised), in either case without making any
adjustment for additional Preferred Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions of
the Warrant, may be issuable upon exercise.


 

















 


EXHIBIT “B”


 


ASSIGNMENT


 


FOR
VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Preferred Stock covered
thereby set forth herein below, unto:


 


	
  Name
  of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
   

  	
  Dated

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  



 

















 


EXHIBIT “C”


 


[On letterhead of the Company]


 


Reference
is hereby made to that certain Warrant dated July 28, 2005, issued by TRAQ
WIRELESS, INC., a Delaware corporation (the “Company”), to VENTURE LENDING &
LEASING IV, LLC, a Delaware limited liability company (the “Holder”).


 


[IF
APPLICABLE] The Warrant provides that the actual number of shares of the
Company’s capital stock issuable upon exercise of the Warrant and the initial
exercise price per share are to be determined by reference to one or more
events or conditions subsequent to the issuance of the Warrant.  Such events or conditions have now occurred
or lapsed, and the Company wishes to confirm the actual number of shares
issuable and the initial exercise price. 
The provisions of this Supplement to Warrant are incorporated into the
Warrant by this reference, and shall control the interpretation and exercise of
the Warrant.


 


[IF
APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the Warrant
that the following adjustment(s) have been made to the Warrant: [describe
adjustments, setting forth details regarding method of calculation and facts
upon which calculation is based].


 


This
certifies that the Holder is entitled to purchase from the Company                                        
(                )
fully paid and nonassessable shares of the Company’s                 
Stock at a price of
                                
Dollars
($                  )
per share (the “Stock Purchase Price”). 
The Stock Purchase Price and the number of shares purchasable under the
Warrant remain subject to adjustment as provided in Section 4 of the
Warrant.


 


Executed
this          day of
                            ,
200      .


 


	
   

  	
  TRAQ
  WIRELESS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: