Document:

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Exhibit 4.5

CERTIFICATE OF DESIGNATION

OF PREFERENCES OF SERIES C PREFERRED STOCK

OF

XATA CORPORATION,

a Minnesota Corporation

     The undersigned, Mark E. Ties, hereby certifies that:

     (a) He is the duly elected and acting Chief Financial Officer of Xata Corporation, a Minnesota
corporation (the “Corporation”).

     (b) Pursuant to the authority conferred upon the Board of Directors of the Corporation by
Section 3.2 of the Corporation’s Restated Articles of Incorporation (the “Articles”), the Board of
Directors of the Corporation on August 31, 2005, adopted the following resolutions creating a
series of preferred stock designated as Series C Preferred Stock;

     WHEREAS, the Articles provides for a class of shares known as Preferred Stock, issuable from
time to time in one or more series; and

     WHEREAS, the Board of Directors of the Corporation is authorized by the Articles to determine
the powers, rights, preferences, qualifications, limitations and restrictions granted to or imposed
upon any wholly unissued series of Preferred Stock, to fix the number of shares constituting any
such series, and to determine the designation thereof, or any of them; and

     WHEREAS, the Board of Directors of the Corporation desires, pursuant to its authority as
aforesaid, to determine and fix the powers, rights, preferences, qualifications, limitations and
restrictions relating to a series of Preferred Stock and the number of shares constituting, and the
designation of, each such series:

     NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the Articles, a series of
Preferred Stock is hereby created, and the Board of Directors hereby fixes and determines the
designation of, the number of shares constituting, and the rights, preferences, privileges and
restrictions relating to, such series of Preferred Stock as follows:

     1. Designation. The series of Preferred Stock of the Corporation shall be designated
as “Series C Preferred Stock.”

     2. Authorized Number. The number of shares constituting the Series C Preferred Stock
shall be 1.4 million (1,400,000) shares. The Board of Directors is authorized to decrease the
number of shares of any series of preferred stock prior or subsequent to the issue of that series,
but not below the number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing the number of shares of
such series.

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     3. Dividend Rights. In the event dividends are paid on any other capital stock of the
Corporation other than the Series B Preferred Stock, the Corporation shall pay a dividend on all
outstanding shares of Series C Preferred Stock (on an as-if-converted to Common Stock basis) in an
amount per share equal to the maximum amount paid or set aside for each such other share of capital
stock (on an as-if-converted to Common Stock basis).

     4. Liquidation Preference.

     (A) In the event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary (a “Liquidation Event”), the holders of the Series C Preferred Stock shall
be entitled to receive, after the satisfaction in full of the liquidation preference of holders of
Series B Convertible Preferred Stock and prior and in preference to any distribution of any of the
assets or surplus funds of the Corporation to the holders of any other capital stock of the
Corporation, an amount per share equal to the Original Issue Price of the Series C Preferred Stock
(as adjusted for any stock dividends, combinations or splits with respect to such shares) plus all
accrued or declared but unpaid dividends on each share of Series C Preferred Stock then held by
such holder. If upon the occurrence of such Liquidation Event, the assets and funds of the
Corporation available for distribution among the holders Series C Preferred Stock shall be
insufficient to permit the payment to such holders of the full preferential amounts to which they
are entitled under this Certificate of Designation, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among such holders in
proportion to the full preferential amount each such holder is otherwise entitled to receive.

     (B) Upon the completion of the distribution required by this Section 4(A), the entire
remaining assets and funds of the Corporation legally available for distribution, if any, shall be
distributed pro rata among the holders of the Corporation’s Common Stock in proportion to the
shares of Common Stock held by them.

     (C) Notwithstanding subparagraph (A) above, solely for purposes of determining the amount each
holder of shares of Series C Preferred Stock is entitled to receive with respect to a Liquidation
Event, the holder of shares of Series C Preferred Stock shall be treated as if such holder had
converted such holder’s shares of Series C Preferred Stock into shares of Common Stock immediately
prior to the closing of the Liquidation Event if it is determined that, as a result of an actual
conversion of such Series C Preferred Stock (including taking into account the operation of this
subparagraph (C)), each holder of Series C Preferred Stock would receive (with respect to the
shares Series C Preferred Stock), in the aggregate, an amount greater than the amount that would be
distributed to holders of Series C Preferred Stock (with respect to the shares of Series C
Preferred Stock) if such holders had not converted such Series C Preferred Stock into shares of
Common Stock. If holders of any Series C Preferred Stock are treated as if they had converted
shares of Series C Preferred Stock into Common Stock pursuant to this paragraph, then such holders
shall not be entitled to receive any distribution pursuant to Section 4(A) that would otherwise be
made to such holders.

     (D) A Change of Control shall be deemed to be a Liquidation Event for purposes of this Section
4 and shall entitle the holders of Series C Preferred Stock to receive proceeds from such
Liquidation Event (including payments at closing, and at each date after the closing on which
additional amounts are paid to stockholders of the Corporation as a result of the

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Liquidation Event) in cash, securities or other property (valued as provided in Section 4(E)
below) in the amount specified in this Section 4. For the purposes hereof, a Change of Control
shall mean an event or events that constitute a “Change of Control” under the Certificate of
Designation of the Series B Convertible Preferred Stock, which Change of Control in turn
constitutes a “Liquidation Event” under the Certificate of Designation of the Series B Convertible
Preferred Stock.

     (E) Whenever the distribution provided for in this Section 4 shall be payable in securities or
property other than cash, the value of such distribution shall be as follows:

     (i) Securities not subject to investment letter or other similar restrictions on free
marketability:

     (A) If traded on a securities exchange (which shall include the Nasdaq Stock Market), the
value shall be deemed to be the average of the closing prices of the securities on such exchange
over the 30-day period ending three (3) days prior to the closing;

     (B) If traded over-the-counter, the value shall be deemed to be the average of the closing bid
or sale prices (whichever are applicable) over the 30-day period ending three (3) days prior to the
closing; and

     (C) If there is no public market, the value shall be the fair market value thereof, as
determined in good faith by the Board of Directors of the Corporation.

     (ii) The method of valuation of securities subject to investment letter or other restrictions
on free marketability (other than restrictions arising solely by virtue of a stockholder’s status
as an affiliate or former affiliate) shall be to make an appropriate discount from the market value
determined as above in (i)(A), (B) or (C) to reflect the approximate fair market value thereof, as
determined in good faith by the Board of Directors of the Corporation.

     5. Redemption. The Series C Preferred Stock shall be redeemable by paying in cash in
exchange for each share of Series C Preferred Stock a sum equal to the Original Issue Price (as
adjusted for any stock dividends, combinations, splits, recapitalizations and the like after the
first issuance of shares of Preferred Stock), plus accrued and unpaid dividends with respect to
such share (the “Redemption Price”). The total amount to be paid for the shares of the redeemed
Series C Preferred Stock is hereinafter referred to as the “Total Redemption Price.”

     (A) Election to Redeem Series B Preferred Stock. The Series C Preferred Stock may be
redeemed in any of the following three ways:

     (i) Optional Redemption. The Corporation shall have the right, in its sole
discretion, to redeem all (but not less than all) of the outstanding Series C Preferred Stock at
any time after the date five (5) years after the first issuance of shares of Series C Preferred
Stock (the “Maturity Date”), provided that the Optional Redemption Conditions (as defined below)
shall have been met. The Corporation shall deliver a notice of the Corporation’s intention to
redeem the outstanding shares of Series C Preferred Stock (the “Optional Redemption Notice”) on a
date, not earlier than the Maturity Date (the “Optional Redemption Date”); provided, however, that
such Optional Redemption Notice shall not be given less than sixty (60) days, nor more than

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ninety (90) days, prior to the Optional Redemption Date. In addition to specifying the
Optional Redemption Date, the Optional Redemption Notice shall specify the place at which such
holders may obtain payment of their respective portions of the Total Redemption Price (as defined
below) upon surrender of their share certificates, and shall contain a certification by the Chief
Executive Officer or Chief Financial Officer of the Corporation stating that the Corporation’s
Common Stock price has traded on a securities exchange (which shall include the Nasdaq Stock
Market) with a closing price of at least three times (3x) the then effective Conversion Price on
each of the sixty (60) consecutive trading days immediately preceding the date the Optional
Redemption Notice is delivered. The Corporation shall effect such redemption on the Optional
Redemption Date by paying the Redemption Price in exchange for each share of Series C Preferred
Stock. Notwithstanding the foregoing, the Corporation shall only be permitted to effect an
optional redemption of the Preferred Stock under this Section 5(A)(i) if the following conditions
(the “Optional Redemption Conditions”) shall have been met: (w) the Corporation’s Common Stock
price shall have traded on a securities exchange (which shall include the Nasdaq Stock Market) with
a closing price of at least three times (3x) the then effective Conversion Price on each of the
sixty (60) consecutive trading days immediately preceding the date the Optional Redemption Notice
is delivered, (x) the Corporation’s Common Stock price shall have traded on a securities exchange
(which shall include the Nasdaq Stock Market) with a closing price of at least three times (3x) the
then effective Conversion Price on each of the twenty (20) consecutive trading days immediately
preceding the Optional Redemption Date, (y) either (1) a registration statement shall then be in
effect under the Securities Act of 1933, as amended (the “Securities Act”), with respect to all
shares of Common Stock issuable on conversion of the Series C Preferred Stock then outstanding, and
all such shares of Common Stock shall then be saleable into the public market by the holders
therefor pursuant to such registration statement and without any other restriction under applicable
securities laws (other than notice requirements and volume limitations provided under Rule 144 of
the Securities Act, if applicable due to status as an affiliate of the Corporation) or (2) all
shares of outstanding Series C Preferred Stock (and shares of Common Stock issued or issuable upon
conversion of such Series C Preferred Stock) can be sold without compliance with the registration
requirements of the Securities Act pursuant to Rule 144(k) under the Securities Act and an opinion
of legal counsel to the Corporation delivered to such holders of Series C Preferred Stock to such
effect; and (z) the Corporation has sufficient funds legally available to redeem all shares to be
redeemed at the Optional Redemption Date. Notwithstanding the above, any holder of Series C
Preferred Stock may convert such shares into Common Stock pursuant to Section 6(A) prior to the
date immediately preceding the Optional Redemption Date.

     (ii) At the Request of the Holders:

     (A) The holders of sixty percent (60%) of the Series C Preferred Stock may, by written notice
to the Corporation (the “Election Notice”), require the Corporation to redeem the outstanding
shares of Series C Preferred Stock at any time following the first to occur of: (a) the Maturity
Date (as defined in Section 5(A)(i)), (b) the delivery of an Acceleration Event Notice (as defined
below) or (c) a Change in Control. Any such Election Notice shall specify a date upon which such
redemption shall occur (the “Redemption Date”); provided, however, that if the redemption is
related to the passing of the Maturity Date or a Change of Control, then (i) the Election Notice
shall be given not less than sixty (60) days nor more than ninety (90) days prior to the requested
Redemption Date, and (ii) at least thirty (30) days but nor more than sixty (60)

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days prior to the Redemption Date the Corporation shall send a notice (a “Redemption Notice”)
to all holders of Series C Preferred Stock setting forth (A) the Redemption Date, (B) the
Redemption Price for the shares of Series C Preferred Stock to be redeemed, and (C) the place at
which such holders may obtain payment of their respective portions of the Total Redemption Price
upon surrender of their share certificates. If redemption is being sought in connection with an
Acceleration Event, the Corporation shall set the Redemption Date on a date as soon as practicable
following the occurrence of the Acceleration Event, and shall send the Redemption Notice to all
holders of Series C Preferred Stock as far as practicable in advance of the Redemption Date. The
Corporation shall effect such redemption on the Redemption Date by paying the Redemption Price in
exchange for each share of Series C Preferred Stock.

     (B) Notwithstanding the foregoing, the Corporation may decline to redeem any or all of the
Series C Preferred Stock (provided that any redemption in part shall be pro rata across holders)
and in such case, the Preferred Stock shall bear cumulative dividends at the rate of four percent
(4%) of the Original Issue Price per annum on each outstanding share of Series B Preferred Stock
(the “Preferred Dividend”) from the date of the Election Notice. Such Preferred Dividend shall be
paid semi-annually on the last business day of May and November of each year in cash. The Board of
Directors shall not pay any dividend to the holders of any other capital stock of the Corporation
except the holders of the Corporation’s Series B Preferred Stock, unless and until it has paid the
Preferred Dividend on the shares of Series C Preferred Stock to the holders of the Series C
Preferred Stock.

     (C) Notwithstanding the above, any holder of Series C Preferred Stock may convert such shares
into Common Stock pursuant to Section 6(A) prior to the date immediately preceding the Redemption
Date.

     (D) For purposes of this Section 5(A)(ii), an Acceleration Event shall consist of (i) any
judgment against the Corporation in excess of $10,000,000 unless such judgment is stayed within
sixty (60) days of the date of such judgment; (ii) any event of default under any indebtedness of
the Corporation that causes $10,000,000 or more of such indebtedness to accelerate; or (iii) an
event of bankruptcy, an assignment for the benefit of creditors or similar event. The Corporation
shall, on the date an Acceleration Event (as defined below) occurs, or as soon as reasonably
practicable thereafter (but in no event later than five (5) days following the date of an
Acceleration Event), provide a written notice to all holders of Series C Preferred Stock with a
description of the facts giving rise to the Acceleration Event (the “Acceleration Event Notice”).

     (B) Method of Redemption.

     (i) On or prior to the Redemption Date, the Corporation shall deposit the Total Redemption
Price of the shares to be redeemed with a bank or trust company having aggregate capital and
surplus in excess of $100,000,000, as a trust fund (an “Eligible Institution”), with irrevocable
instructions and authority to the Eligible Institution to pay, on and after the Redemption Date,
the Redemption Price of the shares to their respective holders upon the surrender of their share
certificates. Any money deposited by the Corporation pursuant to this Section 5(B) for the
redemption of shares thereafter converted into shares of Common Stock pursuant to Section 4 hereof
prior to the Redemption Date shall be returned to the Corporation

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forthwith upon such conversion. The balance of any funds deposited by the Corporation
pursuant to this Section (B) remaining unclaimed at the expiration of one (1) year following the
Redemption Date shall be returned to the Corporation promptly upon its written request, and each
holder of Preferred Stock shall thereafter look only to the Corporation for payment of the
Redemption Price.

     (ii) Each holder of shares of Series C Preferred Stock to be redeemed shall surrender such
holder’s certificates representing such shares to the Corporation in the manner and at the place
designated in the Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the holder of the person whose name appears on such certificate or certificates of the
owner thereof and each surrendered certificate shall be canceled. From and after the Redemption
Date, unless there shall have been a default in payment of the Redemption Price or the Corporation
is unable to pay the Total Redemption Price, all rights of the holder of such shares as holder of
Series C Preferred Stock (except the right to receive the Redemption Price per share without
interest upon surrender of their certificates), shall cease and terminate with respect to such
shares; provided that in the event that any shares of Series C Preferred Stock are not redeemed due
to a default in payment by the Corporation, due to the election by the Corporation not to effect
the redemption, pursuant to Section 5(A)(ii)(B), or because the Corporation does not have
sufficient legally available funds, such shares of Series C Preferred Stock shall remain
outstanding and shall be entitled to all of the rights and preferences provided herein until
redeemed.

     (iii) Each holder of shares of Series C Preferred Stock to be redeemed shall surrender such
holder’s certificates representing such shares to the Corporation in the manner and at the place
designated in the Optional Redemption Notice, Redemption Notice or Change of Control Redemption
Notice, and thereupon the Redemption Price of such shares shall be payable to the order of the
person whose name appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be canceled. From and after the Redemption Date, unless there shall
have been a default in payment of the Redemption Price or the Corporation is unable to pay the
Total Redemption Price, all rights of the holder of such shares as holder of Series C Preferred
Stock (except the right to receive the Redemption Price per share without interest upon surrender
of their certificates), shall cease and terminate with respect to such shares; provided that in the
event that shares of Series C Preferred Stock are not redeemed due to a default in payment by the
Corporation or because the Corporation does not have sufficient legally available funds, such
shares of Series C Preferred Stock shall remain outstanding and shall be entitled to all of the
rights and preferences provided herein until redeemed.

     6. Conversion. The holders of Series C Preferred Stock shall have conversion rights
as follows (the “Conversion Rights”):

     (A) Right to Convert. Each share of Series C Preferred Stock shall be convertible
into such number of fully paid and nonassessable shares of Common Stock as is determined by
dividing the Original Issue Price of such Series C Preferred Stock by the Conversion Price at the
time in effect for shares of Series C Preferred Stock. The “Original Issue Price” per share of
Series C Preferred Stock is $3.94. The “Conversion Price” per share of Series C Preferred Stock
initially shall be $3.94, subject to adjustment from time to time as provided below.

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     (B) Mechanics of Conversion. Before any holder of Series C Preferred Stock shall be
entitled to convert the same into shares of Common Stock, the holder shall surrender the
certificate or certificates therefor, duly endorsed, at the office of this Corporation or of any
transfer agent for the Series C Preferred Stock, and shall give written notice by confirmed
facsimile or by mail, postage prepaid, to this Corporation at its principal corporate office, of
the election to convert the same and shall state therein the name or names in which the certificate
or certificates for shares of Common Stock are to be issued. This Corporation shall, as soon as
practicable thereafter, issue and deliver to the address of record of such holder of Series C
Preferred Stock (or such other address as the holder shall designate in writing in the notice to
the Corporation of the election to convert), or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common Stock to which such holder shall be
entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of the Series C Preferred Stock to be converted,
and the person or persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date.

     (C) Adjustments to Conversion Ratio for Stock Dividends and for Combinations or
Subdivisions of Common Stock. In the event that this Corporation at any time or from time to
time after the initial issue date of the Series C Preferred Stock shall declare or pay, without
consideration, any dividend on the Common Stock payable in Common Stock or in any right to acquire
Common Stock for no consideration, or shall effect a subdivision of the outstanding shares of
Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock),
or in the event the outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock, then the Conversion
Price per share of Series C Preferred Stock then in effect shall be proportionately decreased or
increased, as appropriate; provided that the Corporation shall take no such action with respect to
the Common Stock unless the Corporation shall simultaneously reserve out of authorized, unissued
and unreserved shares of Common Stock a sufficient number of shares of Common Stock to be available
for full conversion of the Series C Preferred Stock at the new Conversion Price. In the event that
this Corporation shall declare or pay, without consideration, any dividend on the Common Stock
payable in any right to acquire Common Stock for no consideration then the Corporation shall be
deemed to have made a dividend payable in Common Stock in an amount of shares equal to the maximum
number of shares issuable upon exercise of such rights to acquire Common Stock.

     (D) Adjustments for Reclassification and Reorganization. If the Common Stock issuable
upon conversion of the Series C Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares provided for in
Section 6(C) above or a merger or other reorganization referred to in Section 4(D)(i) above), the
number of shares of such other class or classes of stock into which the Series C Preferred Stock
shall be convertible shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series C Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise
have been entitled to receive, a number of shares of such other class or

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classes of stock equivalent to the number of shares of Common Stock that would have been
subject to receipt by the holders upon conversion of the Series C Preferred Stock immediately
before that change; provided that the Corporation shall take no such action with respect to the
Common Stock unless the Corporation shall simultaneously reserve out of authorized, unissued and
unreserved shares of Common Stock a sufficient number of shares of Common Stock to be available for
full conversion of the Series C Preferred Stock at the new Conversion Price.

     (E) Rights Offerings. In the event the Corporation shall grant or shall have granted
as of the date of the filing of this Certificate of Designation any rights to subscribe for, or any
rights or options to purchase, Common Stock or any stock or other securities convertible into or
exchangeable for Common Stock (such convertible or exchangeable stock or securities being herein
called “Convertible Securities”), whether or not such rights or options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, which rights or options do
not result in any adjustment to the number of shares of Common Stock or other classes of stock into
which the Series C Preferred Stock can be converted under either Section 6(C) or Section 6(D)
above, then the Corporation shall distribute such rights or options to the holders of Series C
Preferred Stock as though they were holders, at the time of such distribution, of that number of
shares of Common Stock into which the shares of Series C Preferred Stock held by each holder could
then be converted.

     (F) No Impairment. This Corporation will not, by amendment of its certificate or
through any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by this
Corporation, but will at all times in good faith assist in the carrying out of all the provisions
of this Section 6 and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of the Series C Preferred Stock against impairment.

     (G) No Fractional Shares and Certificate as to Adjustments.

     (i) No fractional shares shall be issued upon conversion of the Series C Preferred Stock, and
the number of shares of Common Stock to be issued shall be rounded to the nearest whole share.
Whether or not fractional shares are issuable upon such conversion shall be determined on the basis
of the total number of shares of Series C Preferred Stock the holder is at the time converting into
Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.

     (ii) Upon the occurrence of each adjustment or readjustment of the number of shares of Common
Stock into which the Series C Preferred Stock can be converted pursuant to this Section 6, this
Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each holder of Series C Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based. This Corporation shall, upon the written request
at any time of any holder of Series C Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion
Price per share of Series C Preferred Stock at the time in effect,

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and (C) the number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of the Series C Preferred Stock.

     (H) Notice of Record Date. In the event of any taking by this Corporation of a record
of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend) or other distribution, any right
to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, this Corporation shall mail to each holder
of Series C Preferred Stock, at least twenty (20) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend, distribution or
right.

     (I) Reservation of Stock Issuable upon Conversion. This Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of Common Stock (or
other security into which the Common Stock shall have been changed) solely for the purpose of
effecting the conversion of the Series C Preferred Stock such number of its shares of Common Stock
(or other security) as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series C Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock (or other security) shall not be sufficient to effect the
conversion of all the then outstanding Series C Preferred Stock, in addition to such other remedies
as shall be available to the holder of such Series C Preferred Stock, this Corporation will take
such corporate action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock (or other security) to such number of shares as
shall be sufficient for such purposes.

     (J) Notices. Any notice required by the provisions of this Section 6 to be given to
the holders of Series C Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at the holder’s address appearing on
the books of this Corporation.

     7. Voting Rights. Except as otherwise provided herein or by law, each holder of
shares of Series C Preferred Stock shall be entitled to vote with the holders of Common Stock on an
as-converted basis as a single class with such shares of Common Stock and such other shares of
capital stock that vote with shares of Common Stock on all matters presented for stockholder vote
and shall be entitled to notice of any stockholder’s meeting in accordance with the Bylaws of the
Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights
resulting from the conversion of Series C Preferred Stock into Common Stock (in the case of each
holder, after aggregating all fractional shares held by such holder into the maximum number of
whole shares) shall be rounded to the nearest whole number (with one-half being rounded upward).

     8. Protective Provision. For so long as any shares of Series C Preferred Stock remain
outstanding, the Corporation shall not take any action to increase the authorized number of shares
of Series C Preferred Stock without the written consent of holders of not less than 60% of the
outstanding shares of Series C Preferred Stock.

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     9. Status of Converted or Redeemed Stock. In the event any Series C Preferred Stock
shall be converted pursuant to Section 6 hereof, or redeemed pursuant to Section 5 hereof, the
shares so converted or redeemed shall be promptly cancelled after the conversion or redemption
thereof. All such shares shall upon their cancellation or redemption become authorized but
unissued shares of Preferred Stock and may be released as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.

     •           *           *

     RESOLVED FURTHER, that the Chairman of the Board, the Chief Executive Officer, the President
or any Vice President, the Secretary, the Chief Financial Officer, the Treasurer, or any Assistant
Secretary or Assistant Treasurer of this Corporation are each authorized to execute, verify, and
file a Certificate of Designation of Preferences in accordance with Minnesota law.

     IN WITNESS WHEREOF, the undersigned has executed this certificate and does affirm the
foregoing as true under penalty of perjury this 14th day of September, 2005.

	 	 	 
	 

	 	 
	 

	 	Mark E. Ties
	 

	 	Chief Financial Officer

10exv4w6

 

Exhibit 4.6

THIS WARRANT AND THE SECURITIES WHICH MAY BE ISSUED UPON EXERCISE OF THIS WARRANT (THE “WARRANT
SHARES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE BLUE SKY LAW AND THE HOLDER OF THIS WARRANT OR ANY WARRANT SHARES MAY NOT TRANSFER ANY
BENEFICIAL INTEREST THEREIN ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE BLUE SKY LAWS.

WARRANT

To Purchase Shares of

Common Stock of

XATA CORPORATION

     THIS CERTIFIES THAT for good and valuable consideration,                                          (“Trident”) or
registered assigns is entitled to subscribe for and purchase from XATA Corporation, a Minnesota
corporation (the “Company”), at any time after September 15, 2005, to and including September 15,
2010, subject to the terms and conditions set forth herein,                      fully paid and nonassessable
shares of the Common Stock of the Company at the price of $3.94 per share (the “Warrant Exercise
Price”), subject to Section 1 hereof and the other provisions of this Warrant. The shares which
may be acquired upon exercise of this Warrant are referred to herein as the “Warrant Shares.” As
used herein the term “Holder” means Trident, any party who acquires all or a part of this Warrant
as a registered transferee of Trident, or any record holder or holders of the Warrant Shares issued
upon exercise, whether in whole or in part, of the Warrant; and the term “Common Stock” means and
includes the Company’s presently authorized common stock, $.01 par value. This Warrant is being
issued pursuant to the terms of that certain Common Stock Warrant and Series C Preferred Stock
Purchase Agreement by and between the Company and Trident, dated September 7, 2005 (the “Purchase
Agreement”).

          This Warrant is subject to the following provisions, terms and conditions:

     1. Exercise; Transferability.

     (a) The rights represented by this Warrant may be exercised for purchase, in whole or in part
(but not as to a fractional share), of Warrant Shares by written notice of exercise (in the form
attached hereto) delivered to the Company at the principal office of the Company prior to the
expiration of this Warrant and accompanied or preceded by the surrender of this manually signed
Warrant along with a cashier’s or certified check or wire transfer made payable to the order of the
Company in payment of the Warrant Exercise Price for such shares.

     (b) In the alternative to exercise pursuant to Subsection 1(a), above, if the Fair Market
Value (as defined below) of one share of Common Stock of the Company is greater than the Warrant
Exercise Price (at the date of calculation as set forth below), in lieu of exercising the

1

 

rights represented by this Warrant for cash as provided in Subsection 1(a), the Holder may elect to
receive Warrant Shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of the Company
together with a notice of such election, in which event the Company shall issue to the Holder
hereof a number of Warrant Shares computed using the following formula:

	 	 	 	 	 
	 

	 	X =
	 	Y (A-B)

      A
	 
	 	 	 	 
	Where

	 	X =
	 	the number of Warrant Shares to be issued to the Holder
	 
	 	 	 	 
	 

	 	Y =
	 	the number of Warrant Shares purchasable under this Warrant, or if only a portion of this Warrant is being
exercised, the portion of the Warrant being canceled (at the date of such calculation)
	 
	 	 	 	 
	 

	 	A =
	 	the Fair Market Value of one share of Common Stock (at the date of such calculation)
	 
	 	 	 	 
	 

	 	B =
	 	Warrant Exercise Price (as adjusted to the date of such calculation)

For purposes of the above calculation, Fair Market Value of one share of Common Stock shall be
determined as follows:

     (i) If the Company’s Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market System and
the Nasdaq SmallCap Market System, the Fair Market Value of one share of Common Stock shall
be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of trading in
the Common Stock) on the last market trading day prior to the day of calculation, as
reporting in the Wall Street Journal or such other source as the Board of Directors of the
Company deems reliable;

     (ii) If the Company’s Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of one share of Common
Stock shall be the mean between the bid and asked prices for the Common Stock on the last
market trading day prior to the day of calculation, as reported in the Wall Street Journal
or such other source as the Board of Directors of the Company deems reliable;

     (iii) In the absence of an established market for the Company’s Common Stock, the Fair
Market Value of one share of Common Stock shall be determined in good faith by the Board of
Directors of the Company.

     (c) This Warrant may not be sold, transferred, assigned, hypothecated or divided into two or
more Warrants of smaller denominations, nor may any Warrant Shares issued pursuant to exercise of
this Warrant be transferred, except as provided in Section 7 hereof.

2

 

     2. Exchange and Replacement. Subject to Sections 1 and 7 hereof, this Warrant is
exchangeable upon the surrender hereof by the Holder to the Company at its office for new Warrants
of like tenor and date representing in the aggregate the right to purchase the number of Warrant
Shares purchasable hereunder, each of such new Warrants to represent the right to purchase such
number of Warrant Shares (not to exceed the aggregate total number purchasable hereunder) as shall
be designated by the Holder at the time of such surrender. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this Warrant, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a
new Warrant of like tenor, in lieu of this Warrant. This Warrant shall be promptly canceled by the
Company upon the surrender hereof in connection with any exchange or replacement. The Company
shall pay all expenses, taxes (other than stock transfer taxes), and other charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant to this Section 2.

     3. Issuance of the Warrant Shares.

     (a) The Company agrees that the shares of Common Stock purchased hereby shall be and are
deemed to be issued to the Holder as of the close of business on the date on which this Warrant
shall have been surrendered and the payment made for such Warrant Shares as aforesaid.
Certificates for the Warrant Shares so purchased shall be delivered to the Holder within a
reasonable time, not exceeding five (5) business days after the rights represented by this Warrant
shall have been so exercised, and, unless this Warrant has expired, a new Warrant representing the
right to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall
not then have been exercised shall also be delivered to the Holder within such time.

     (b) Notwithstanding the foregoing, however, the Company shall not be required to deliver any
certificate for Warrant Shares upon exercise of this Warrant except in accordance with exemptions
from the applicable securities registration requirements or registrations under applicable
securities laws. Nothing herein, however, shall obligate the Company to effect registrations under
federal or state securities laws. The Holder agrees to execute such documents and make such
representations, warranties, and agreements as may be required solely to comply with the exemptions
relied upon by the Company, or the registrations made, for the issuance of the Warrant Shares.

     4. Covenants of the Company.

     (a) The Company covenants and agrees that all Warrant Shares will, upon issuance, be duly
authorized and issued, fully paid, nonassessable, and free from 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, free from preemptive rights, for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this Warrant. If at any
time during the period in which the Warrant may be exercised, the number of

3

 

authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of
this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purposes.

     (b) In the event the Holder is not also a holder of capital stock of the Company, the Company
shall provide the Holder with any information, notices or such other correspondence that the
Company’s stockholders are entitled to receive.

     5. Antidilution Adjustments. The provisions of this Warrant are subject to adjustment
as provided in this Section 5.

     (a) The Warrant Exercise Price and the number of Warrant Shares shall be adjusted from time to
time such that in case the Company shall hereafter: (i) pay a dividend or make a distribution on
its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, (iv) issue by reclassification of its Common Stock any shares of capital
stock of the Company, or (v) make any exchange of shares, subdivisions, reorganizations,
liquidations or the like. In such event, the Warrant Exercise Price and the number of Warrant
Shares shall be correspondingly adjusted to give the Holder, on exercise for the same aggregate
Exercise Price, the total number, class, and kind of shares as the Holder would have owned had the
Warrant been exercised prior to the event and had the Holder continued to hold such shares until
after the event requiring adjustment. To effect such adjustment, the Warrant Exercise Price in
effect immediately prior to such event shall (until adjusted again pursuant hereto) be adjusted
immediately after such event to a price (calculated to the nearest full cent) determined by
dividing (a) the total number of shares of Common Stock outstanding immediately prior to such
event, multiplied by the then existing Warrant Exercise Price, by (b) the total number of shares of
Common Stock outstanding immediately after such event, and the resulting quotient shall be the
adjusted Warrant Exercise Price per share. An adjustment made pursuant to this Subsection shall
become effective immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made pursuant to this
Subsection, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to
receive shares of two or more classes of capital stock or shares of Common Stock and other capital
stock of the Company, the Board of Directors (whose determination shall be conclusive) shall
determine the allocation of the adjusted Warrant Exercise Price between or among shares of such
classes of capital stock or shares of Common Stock and other capital stock. All calculations under
this Subsection shall be made to the nearest cent or to the nearest 1/100 of a share, as the case
may be. In the event that at any time as a result of an adjustment made pursuant to this
Subsection, the holder of any Warrant thereafter surrendered for exercise shall become entitled to
receive any shares of the Company other than shares of Common Stock, thereafter the Warrant
Exercise Price of such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in this Section.

4

 

     (b) Adjustment of Exercise Price upon Sale of Shares Below Fair Market Value.

          (i) If at any time or from time to time after the date of issuance of this Warrant (the “Issue
Date”), the Company issues or sells, or is deemed by the provisions of this Section 5(b) to have
issued or sold, Equity Securities (as defined below), other than as provided in Section 5(a) above,
for an Effective Price (as defined below) less than the then current Fair Market Value (as defined
below) of the Company’s Common Stock, then and in each such case, the then existing Warrant
Exercise Price shall be reduced, as of the opening of business on the date of such issue or sale,
to a price determined by multiplying the Warrant Exercise Price in effect immediately prior to such
issuance or sale by a fraction equal to:

               (A) the numerator of which shall be (A) the number of shares of Common Stock deemed
outstanding (as determined below) immediately prior to such issue or sale, plus (B) the number of
shares of Common Stock which the Aggregate Consideration (as defined below) received or deemed
received by the Company for the total number of Additional Shares of Common Stock so issued would
purchase at the then-current Fair Market Value, and

               (B) the denominator of which shall be the number of shares of Common Stock deemed outstanding
(as determined below) immediately prior to such issue or sale plus the total number of Additional
Shares of Common Stock so issued.
For the purposes of the preceding sentence, the number of shares of Common Stock deemed to be
outstanding as of a given date shall be the sum of (A) the number of shares of Common Stock
outstanding, (B) the number of shares of Common Stock into which the then outstanding shares of
preferred stock could be converted if fully converted on the day immediately preceding the given
date, and (C) the number of shares of Common Stock which are issuable upon the exercise or
conversion of all other rights, options and convertible securities outstanding on the day
immediately preceding the given date.

               (C) For the purposes of this Section 6(F), the “Fair Market Value” of the Company’s Common
Stock shall mean:

                    (a) If the Company’s Common Stock is traded on a securities exchange (which shall include the
Nasdaq National Market System), the value shall be deemed to be the average of the closing prices
of the Common Stock on such exchange over the thirty (30) day period ending on the date prior to
the closing of the sale and issuance of the Additional Shares of Common Stock;

                    (b) If Company’s Common Stock is traded over-the-counter, the value shall be deemed to be the
average of the closing bid or sale prices (whichever are applicable) over the thirty (30) day
period ending on the date prior to the closing of the sale and issuance of the Additional Shares of
Common Stock; and

                    (c) If there is no public market for the Company’s Common Stock, the value shall be the fair
market value thereof, as determined in good faith by the Board of Directors of the Company.

5

 

          (ii) No adjustment shall be made to the Warrant Exercise Price in an amount less than one cent
per share. Any adjustment otherwise required by this Section 5(b) that is not required to be made
due to the preceding sentence shall be included in any subsequent adjustment to the Warrant
Exercise Price.

          (iii) For the purpose of making any adjustment required under this Section 5(b), the aggregate
consideration received by the Company for any issue or sale of securities (the “Aggregate
Consideration”) shall be defined as: (A) to the extent it consists of cash, be computed at the
gross amount of cash received by the Company before deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Company in connection with such
issue or sale and without deduction of any expenses payable by the Company, (B) to the extent it
consists of property other than cash, be computed at the fair value of that property as determined
in good faith by the Board, and (C) if Additional Shares of Common Stock, Convertible Securities
(as defined below) or rights or options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or securities or other assets
of the Company for a consideration which covers both, be computed as the portion of the
consideration so received that may be reasonably determined in good faith by the Board to be
allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options.

          (iv) For the purpose of the adjustment required under this Section 5(b), if the Company issues
or sells (x) Preferred Stock or other stock, options, warrants, purchase rights or other securities
convertible into, Additional Shares of Common Stock (such convertible stock or securities being
herein referred to as “Convertible Securities”) or (y) rights or options for the purchase of
Additional Shares of Common Stock or Convertible Securities and if the Effective Price of such
Additional Shares of Common Stock is less than then-current Fair Market Value, in each case the
Company shall be deemed to have issued at the time of the issuance of such rights or options or
Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon
exercise or conversion thereof and to have received as consideration for the issuance of such
shares an amount equal to the total amount of the consideration, if any, received by the Company
for the issuance of such rights or options or Convertible Securities plus:

               (A) in the case of such rights or options, the minimum amounts of consideration, if any,
payable to the Company upon the exercise of such rights or options; and

               (B) in the case of Convertible Securities, the minimum amounts of consideration, if any,
payable to the Company upon the conversion thereof (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities); provided that if the minimum amounts of such
consideration cannot be ascertained, but are a function of antidilution or similar protective
clauses, the Company shall be deemed to have received the minimum amounts of consideration without
reference to such clauses.

               (C) If the minimum amount of consideration payable to the Company upon the exercise or
conversion of rights, options or Convertible Securities is reduced over time or on the occurrence
or non-occurrence of specified events other than by reason of antidilution adjustments, the
Effective Price shall be recalculated using the figure to which such minimum

6

 

amount of consideration is reduced; provided further, that if the minimum amount of
consideration payable to the Company upon the exercise or conversion of such rights, options or
Convertible Securities is subsequently increased, the Effective Price shall be again recalculated
using the increased minimum amount of consideration payable to the Company upon the exercise or
conversion of such rights, options or Convertible Securities.

               (D) No further adjustment of the Warrant Exercise Price, as adjusted upon the issuance of such
rights, options or Convertible Securities, shall be made as a result of the actual issuance of
Additional Shares of Common Stock or the exercise of any such rights or options or the conversion
of any such Convertible Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been exercised, the
Warrant Exercise Price as adjusted upon the issuance of such rights, options or Convertible
Securities shall be readjusted to the Warrant Exercise Price which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common Stock so issued were
the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such
rights or options or rights of conversion of such Convertible Securities, and such Additional
Shares of Common Stock, if any, were issued or sold for the consideration actually received by the
Company upon such exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted, plus the
consideration, if any, actually received by the Company (other than by cancellation of liabilities
or obligations evidenced by such Convertible Securities) on the conversion of such Convertible
Securities, provided that such readjustment shall not apply to prior conversions of preferred
stock.

          (v) For the purpose of making any adjustment to the Warrant Exercise Price required under this
Section 5(b), “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by
the Company or deemed to be issued pursuant to this Section 5(b) (including shares of Common Stock
subsequently reacquired or retired by the Company), other than:

                    i. shares of Common Stock issued upon conversion of the Company’s preferred stock

                    ii. shares of Common Stock or Convertible Securities issued to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary pursuant to stock
purchase or stock option plans or other arrangements that are approved by the Board provided that,
(i) such options were granted with an exercise price equal to or greater than the then-current fair
market value (as “fair market value” is defined in the relevant plan) or (ii) such shares were
issued pursuant to a IRC 423 plan with an exercise price equal to or greater than 85% of the
then-current fair market value (as such “fair market value” is defined in the relevant plan);

                    iii. shares of Common Stock issued pursuant to the exercise of Convertible Securities
outstanding as of the Issue Date; and

7

 

                    iv. shares of Common Stock or Convertible Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition, strategic alliance or similar business
combination approved by the Board.

     References to Common Stock in the subsections of this clause (v) above shall mean all shares
of Common Stock issued by the Company or deemed to be issued pursuant to this Section 5(b). The
“Effective Price” of Additional Shares of Common Stock shall mean the quotient determined by
dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have
been issued or sold by the Company under this Section 6(F), into the Aggregate Consideration
received, or deemed to have been received by the Company for such issue under this Section 6(F),
for such Additional Shares of Common Stock. In the event that the number of shares of Additional
Shares of Common Stock or the Effective Price cannot be ascertained at the time of issuance, such
Additional Shares of Common Stock shall be deemed issued immediately upon the occurrence of the
first event that makes such number of shares or the Effective Price, as applicable, determinable.

          (vi) Notwithstanding anything to the contrary contained herein, no adjustment under this
Section 5(b) shall reduce the Warrant Exercise Price below $3.94 (as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like with respect to the Company’s
Common Stock after the date hereof).

     (c) Upon each adjustment of the Warrant Exercise Price pursuant to Section 5(a) or 5(b) above,
the Holder of each Warrant shall thereafter (until another such adjustment) be entitled to purchase
at the adjusted Warrant Exercise Price the number of shares, calculated to the nearest full share,
obtained by multiplying the number of shares specified in such Warrant (as adjusted as a result of
all adjustments in the Warrant Exercise Price in effect prior to such adjustment) by the Warrant
Exercise Price in effect prior to such adjustment and dividing the product so obtained by the
adjusted Warrant Exercise Price.

     (d) In case of any consolidation or merger to which the Company is a party other than a merger
or consolidation in which the Company is the continuing corporation, or in case of any sale or
conveyance to another corporation of the property of the Company as an entirety or substantially as
an entirety, or in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third corporation into the
Company), there shall be no adjustment under Subsection (a) of this Section above but the Holder of
each Warrant then outstanding shall have the right thereafter to convert such Warrant into the kind
and amount of shares of stock and other securities and property which he, she or it would have
owned or have been entitled to receive immediately after such consolidation, merger, statutory
exchange, sale, or conveyance had such Warrant been converted immediately prior to the effective
date of such consolidation, merger, statutory exchange, sale, or conveyance and in any such case,
if necessary, appropriate adjustment shall be made in the application of the provisions set forth
in this Section with respect to the rights and interests thereafter of any Holders of the Warrant,
to the end that the provisions set forth in this Section shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock and other securities
and property thereafter deliverable on the exercise of the Warrant. The provisions of this
Subsection shall similarly apply to successive consolidations, mergers, statutory exchanges, sales
or conveyances.

8

 

     (e) Upon any adjustment pursuant to this Section 5, the Company shall give written notice
thereof, addressed to the Holder as shown on the Common Stock register of the Company, which notice
shall state the Warrant Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares of Common Stock or other securities and/or property 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.

     6. No Voting Rights. This Warrant shall not entitle the Holder to any voting rights
or other rights as a shareholder of the Company.

     7. Registration Rights. The shares of Common Stock issuable upon exercise of this
Warrant shall be registered pursuant to Section 9 of the Purchase Agreement, subject to any
limitations on the assignment of such registration rights as set forth in Section 9.7 of the
Purchase Agreement.

     8. Notice of Transfer of Warrant or Resale of the Warrant Shares.

     (a) The Holder, by acceptance hereof, agrees to give written notice to the Company before
transferring this Warrant or transferring any Warrant Shares of such Holder’s intention to do so,
describing briefly the manner of any proposed transfer. Promptly upon receiving such written
notice, the Company shall present copies thereof to the Company’s counsel. If in the opinion of
such counsel the proposed transfer may be effected without registration or qualification (under any
federal or state securities laws), the Company, as promptly as practicable, shall notify the Holder
of such opinion, whereupon the Holder shall be entitled to transfer this Warrant or to dispose of
Warrant Shares received upon the previous exercise of this Warrant, all in accordance with the
terms of the notice delivered by the Holder to the Company; provided that an appropriate legend may
be endorsed on this Warrant or the certificates for such Warrant Shares respecting restrictions
upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory to the
Company to prevent further transfers which would be in violation of Section 5 of the Securities Act
of 1933, as amended (the “1933 Act”) and applicable state securities laws; and provided further
that the prospective transferee or purchaser shall execute such documents and make such
representations, warranties, and agreements as may be required solely to comply with the exemptions
relied upon by the Company for the transfer or disposition of the Warrant or Warrant Shares.

     (b) If in the opinion of counsel to the Company, the proposed transfer or disposition of this
Warrant or such Warrant Shares described in the written notice given pursuant to this Section 7 may
not be effected without registration or qualification of the Warrant or such Warrant Shares, the
Company shall promptly give written notice thereof to the Holder, and the Holder will limit its
activities in respect to such as, in the opinion of both such counsel, are permitted by law.

     (c) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to
a transfer by a Holder that is (A) a partnership transferring to its partners or former partners in
accordance with partnership interests, (B) a corporation transferring to a wholly-

9

 

owned subsidiary or a parent corporation that owns all of the capital stock of the Holder, (C)
a limited liability company transferring to its members or former members in accordance with their
interest in the limited liability company or (D) an affiliate of such Holder.

     9. Fractional Shares. Fractional shares shall not be issued upon the exercise of this
Warrant, but in any case where the Holder would, except for the provisions of this Section, be
entitled under the terms hereof to receive a fractional share, the Company shall, upon the exercise
of this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to
the excess, if any, of the Fair Market Value (as defined in Section 1(b) hereof) of such fractional
share over the proportional part of the Warrant Exercise Price represented by such fractional
share.

     10. Notices. All notices required in connection with this Warrant shall be in writing
and shall be deemed effectively given upon the earlier of actual receipt of: (a) personal
delivery to the party to be notified, (b) one business day after the date of confirmed transmission
by facsimile, (c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one (1) business day after the business day of deposit
with a nationally recognized overnight courier, specifying next day delivery, freight prepaid, with
written notification of receipt, at the address or addresses furnished to the Company in writing.

     11. Governing Law. This Warrant and all rights, obligations and liabilities hereunder
shall be governed by and construed in accordance with the corporate laws of the State of Delaware
and, with respect to matters of law other than corporate law, the laws of the State of Delaware as
applied to contracts entered into and performed entirely in Delaware by Delaware residents, without
regard to conflicts of law principles.

     IN WITNESS WHEREOF, XATA Corporation has caused this Warrant to be signed by its duly
authorized officer and this Warrant to be dated as of September 15, 2005.

	 	 	 	 	 	 
	 	 	“Company”
	 
	 	 	 	 
	 	 	XATA CORPORATION
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Print Name
	 
	 	 	 	 
	 

	 	Its	 	 
	 

	 	 	 	 

10

 

To:      XATA Corporation

NOTICE OF EXERCISE OF WARRANT

To Be Executed by the Registered Holder in Order to Exercise the Warrant

The undersigned hereby irrevocably elects to exercise the attached Warrant to purchase [check
applicable method]                      for cash/                    * pursuant to the “cashless” exercise
provisions of Section 1(b) of the Warrant,                      of the shares issuable upon the exercise of
such Warrant, and requests that certificates for such shares (together with a new Warrant to
purchase the number of shares, if any, remaining under this Warrant after exercise) shall be issued
in the name of:

	 	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Print Name)
	Please insert social security
or other identifying number
of registered holder of
certificate (__________)	 	 
	 

	 	 	 	 
	 

	 	 	 	(Address)
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature**

	*	 	If exercise is a “cashless” exercise pursuant to Section 1(b), enclose computation of shares
purchased, date of determination of Fair Market Value, and computation of Fair Market Value.

	**	 	The signature on the Notice of Exercise of Warrant must correspond to the name as written
upon the face of the Warrant in every particular without alteration or enlargement or any
change whatsoever. When signing on behalf of a corporations partnership, trust or other
entity, PLEASE indicate your positions) and title(s) with such entity.

11

 

ASSIGNMENT FORM

To be signed only upon authorized transfer of Warrants.

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto the right to
purchase the securities of XATA Corporation to which the                                         within Warrant
relates and appoints                                         , attorney, to transfer said                                          right on
the books of XATA Corporation with full power of substitution in the premises.

Dated:                                         

	 	 	 	 
	 

	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	(Address)

12

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