Document:

Exhibit 10.19

 

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 December 31, 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 Supplement No.2 of even date herewith to
that certain Loan and Security Agreement dated as of July 28, 2005 (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) Forty-eight Thousand Dollars ($48,000), 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 Additional
Growth Capital Loan, by that number of shares equal to 0.02 times the original
principal amount of such Additional 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 December 31, 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 of 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 22, 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
in 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 7th day of June 2006.

 

	
  TRAQ
  WIRELESS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Richard S. Pontin

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

 

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 l(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 June 7, 2006, 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 adjustments) 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:Exhibit
10.20

 

THIS WARRANT AND THE SHARES
ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR OTHERWISE IN ACCORDANCE
WITH APPLICABLE LAW.

 

WARRANT TO PURCHASE STOCK

 

	
  Company:

  	
  Tangoe, Inc.,
  a Delaware corporation

  
	
  Number
  of Shares:

  	
  168,919,
  subject to adjustment

  
	
  Class of
  Stock:

  	
  Series E
  Convertible Preferred Stock, $.0001 par value

  
	
  Initial
  Exercise Price:

  	
  $0.74
  per share, subject to adjustment

  
	
  Issue
  Date:

  	
  March 9,
  2007

  
	
  Expiration
  Date:

  	
  March 8,
  2014

  

 

THIS WARRANT CERTIFIES THAT,
for value received, receipt of which is hereby acknowledged, ORIX Venture Finance LLC (“Holder”) is
entitled to purchase the number of fully paid and nonassessable shares of the Class of
Stock (the “Shares”) of Tangoe, Inc., a Delaware corporation (the “Company”),
having a principal place of business located at 35 Executive Boulevard, Orange,
Connecticut 06477, at the initial exercise price per Share (the “Warrant Price”)
set forth above, as constituted on the date hereof and as adjusted pursuant to
the other terms of this Warrant, subject to the provisions and upon the terms
and conditions set forth in this Warrant. This Warrant is being issued pursuant
to a Loan and Security Agreement between the Company and Holder dated as of March 9,
2007 (the “Loan Agreement”) (Capitalized terms used herein, which are not
defined, shall have the meanings set forth in the Loan Agreement.)

 

ARTICLE 1. SHARES; EXERCISE.

 

1.1          Number of Shares. The number of
Shares initially subject to this Warrant shall initially be the number of
Shares set forth above.

 

1.2          Method of Exercise. Holder may
exercise this Warrant by delivering (including a facsimile transmission) a duly
executed Notice of Exercise in substantially the form attached as Appendix 1 to
the principal office of the Company. Unless Holder is exercising the conversion
right set forth in Section 1.3, Holder shall also deliver to the Company
the aggregate Warrant Price for the Shares being purchased (i) by wire
transfer or by check, or (ii) by notice of cancellation of indebtedness of
the Company to Holder, or (iii) a combination of (i) or (ii).

 

1.3          Conversion Right.  In lieu of exercising this Warrant as
specified in. Section 1.2, Holder may from time to time convert this
Warrant, in whole or in part, into a number of Shares determined by dividing (a) the
aggregate fair market value of the Shares or other securities otherwise
issuable upon the proposed whole or partial exercise of this Warrant minus the
aggregate Warrant Price of such Shares by (b) the fair market value of one
Share. The fair market value of the Shares shall be determined pursuant to Section 1.6
below.

 

 

1.4          Effective Date of Exercise. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. The
person entitled to receive the Shares issuable upon exercise of this Warrant
shall be treated for all purposes as the holder of record of such shares as of
the close of business on the date the Holder is deemed to have exercised this
Warrant.

 

1.5          No Rights of Shareholder. This Warrant
does not entitle Holder to any voting rights as a shareholder of the Company
prior to the exercise hereof. Upon exercise hereof, as set forth herein, the
Holder shall be deemed to be a shareholder of the Company holding the number of
shares as to which this Warrant has been exercised on the date the Notice of Exercise
in substantially the form attached as Appendix 1 has been delivered to the
principal office of the Company with any payment or other documents called for
by the terms hereof.

 

1.6          Fair Market Value. If the Shares
are traded in a public market, the fair market value of the Shares shall be the
closing price of the Shares (or the closing price of the Company’s stock into
which the Shares are convertible) reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company. If the Shares are
not traded in a public market, the Board of Directors of the Company shall
determine fair market value in its reasonable good faith judgment. The
foregoing notwithstanding, if Holder advises the Board of Directors in writing
that Holder disagrees with such determination, then the Company and Holder
shall promptly agree upon a reputable investment banking firm to undertake such
valuation. If the Company and Holder are unable to agree on such investment
banking firm, then the Holder shall select three reputable investment banking
firms, and from those three firms the Company shall select one to undertake
such valuation. If the valuation of such investment banking firm is greater
than that determined by the Board of Directors, then all fees and expenses of
such investment banking firm shall be paid by the Company. In all other
circumstances, such fees and expenses shall be paid by Holder.

 

1.7          Delivery of Certificate and
New Warrant. Promptly after Holder exercises or converts this
Warrant, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been folly exercised or converted and has
not expired, a new Warrant representing the Shares not so acquired shall be
delivered to Holder.

 

1.8          Replacement of Warrants. On receipt of
an affidavit of an officer of the Holder of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount
to the Company or, in the case of mutilation, on surrender and cancellation of
this Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor.

 

1.9          Acquisition of the Company. Upon the
closing of any Acquisition the successor entity shall assume the obligations of
this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing. The Warrant Price
shall be adjusted accordingly. As used herein, “Acquisition” means any sale,
license, or other disposition of all or substantially all of the assets of the
Company, or any reorganization, sale of stock, consolidation, or merger of the 

 

 

Company
in which the holders of the Company’s voting securities before the transaction
(for such purpose treating all outstanding options and warrants to purchase
voting securities of the Company as having been exercised and treating all
outstanding debt and equity securities convertible into voting securities of
the Company as having been converted) beneficially own less than 50% of the outstanding
voting securities of the surviving entity after the transaction.

 

1.10        Automatic Exercise Prior to
Expiration. To the extent this Warrant is not previously
exercised as to all of the Shares subject hereto, and if the fair market value
of one Share is greater than the Warrant Price then in effect, this Warrant
shall be deemed automatically exercised pursuant to Section 1.3 above
(even if not surrendered) immediately before its expiration date as set forth
in this Warrant. For purposes of such automatic exercise, the fair market value
of one Share upon such expiration shall be determined pursuant to Section 1.6
above. To the extent this Warrant or any portion thereof is deemed
automatically exercised pursuant to this Section, the Company agrees to promptly
notify the holder hereof of the number of Shares, if any, the holder hereof is
to receive by reason of such automatic exercise.

 

ARTICLE 2. ADJUSTMENTS TO
THE SHARES.

 

2.1          Stock Dividends, Splits, Etc. If the
Company declares or pays a dividend on its Stock payable in Common Stock or
other securities, or subdivides the outstanding Stock into a greater amount of
Stock, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred.

 

2.2          Reclassification, Exchange
or Substitution. Upon any reclassification, exchange, substitution,
or other event that results in a change of the number and/or class of the
securities issuable upon exercise or conversion of this Warrant, Holder shall
be entitled to receive, upon exercise or conversion of this Warrant, the number
and kind of securities and property that Holder would have received for the
Shares if this Warrant had been exercised immediately before such
reclassification, exchange, substitution, or other event. Such an event shall
include any automatic conversion of the outstanding or issuable securities of
the Company of the same class or series as the Shares to Common Stock pursuant
to the terms of the Company’s Articles or Certificate of Incorporation upon the
closing of a registered public offering of the Company’s Common Stock. After
the occurrence of such an event, the Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property. The
new Warrant shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article 2
including, without limitation, adjustments to the Warrant Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 2.2 shall similarly apply to successive classifications,
exchanges, substitutions, or other events.

 

2.3          Adjustments for
Combinations. Etc. If the outstanding Shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares,
the Warrant Price shall be proportionately increased.

 

 

2.4          Price Adjustment. If the
Company issues additional common shares (including shares of Common Stock
ultimately issuable upon conversion of a security convertible into Common
Stock) after the date of the Warrant and the consideration per additional
common share is less than the Warrant Price in effect immediately before such
issue, the price at which the Shares are converted to Common Stock shall be
adjusted in accordance with the treatment of the series of securities of which
the Shares are part under the Company’s Certificate of Incorporation.

 

2.5          No Impairment. The Company
shall not, by amendment of its Articles or Certificate of Incorporation or
through a reorganization, 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 under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect
Holder’s rights under this Article against impairment.

 

2.6          Fractional Shares. No fractional
Shares shall be issuable upon exercise or conversion of the Warrant and the
number of Shares to be issued shall be rounded down to the nearest whole Share.
If a fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying
Holder a cash amount computed by multiplying the fractional interest by the
fair market value of a full Share.

 

2.7          Certificate as to
Adjustments; Other Adjustments. Upon each adjustment of
the Warrant Price, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial
Officer setting forth such adjustment and the facts upon which such adjustment
is based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Warrant Price in effect upon the date thereof and the series
of adjustments leading to such Warrant Price. If any change in the outstanding
securities of the Company or any other event occurs, as to which the other
provisions of this Article 2 are not strictly applicable, or if strictly
applicable would not fairly protect the purchase rights of the Holder in
accordance with such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares subject to this
Warrant, the Warrant Price or the application of such provisions, so as to
protect such purchase rights as aforesaid and to give the Holder, upon exercise
for the same aggregate Warrant Price, the total number, class and kind of
securities as it would have owned had the Warrant been exercised prior to the
event and had it continued to hold such securities until after the event
requiring the adjustment.

 

ARTICLE 3. REPRESENTATIONS
AND COVENANTS OF THE COMPANY.

 

3.1          Representations and
Warranties.  The Company
hereby represents and warrants to the Holder as follows:

 

(a)           The initial Warrant Price
hereunder is not greater than the price per share at which the Shares were last
issued in an arm’s length transaction in which at least $500,000 of the Shares were
sold.

 

 

(b)           All Shares which may be
issued upon the exercise of the purchase right represented by this Warrant, and
all securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws. The Company
shall, at all times, reserve a sufficient number of Shares and of shares of
Common Stock for issuance upon Holder’s exercise of its rights hereunder and
conversion of the Shares.

 

(c)           The Capitalization Table
attached hereto as Exhibit A is true and complete as of the Issue
Date.

 

3.2          Notice of Certain Events.  If the Company proposes at any time (a) to
declare any dividend or distribution upon its Common Stock, whether in cash,
property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights; (c) to effect any reclassification or
recapitalization of Common Stock; (d) to merge or consolidate with or into
any other corporation, or sell, lease, license, or convey all or substantially
all of its assets, or to liquidate, dissolve or wind up; or (e) offer
holders of registration rights the opportunity to participate in an
underwritten public offering of the company’s securities for cash, then, in
connection with each such event, the Company shall give Holder (1) at
least 30 days prior written notice of the date on which a record will be taken
for such dividend, distribution, or subscription rights (and specifying the
date on which the holders of Common Stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (a) and
(b) above; (2) in the case of the matters referred to in (c) and
(d) above at least 10 days prior written notice of the date when the same
will take place (and specifying the date on which the holders of Common Stock
will be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the
case of the matter referred to in (e) above, the same notice as is given
to the holders of such registration rights; provided that in the case of the
matters referred to in (d) above, Holder shall treat such notice as
confidential information and shall not divulge it to any person or entity other
than its attorneys or accountants or otherwise as required by applicable law.

 

3.3          Information Rights.  So long as the Holder holds this Warrant
and/or any of the Shares, the Company shall deliver to the Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within 150 days after the end of each
fiscal year of the Company, an accountant-reviewed year end financial statement
and certified by an Officer of the Company, (c) within forty-five (45)
days after the end of each fiscal quarter of the Company, a Company-prepared
quarterly financial statement of the Company (provided the same are required to
be delivered to shareholders of the same class of stock that this Warrant is
exercisable for), and (d) within thirty (30) days after the end of each
month, a Company-prepared monthly financial statement of the Company (provided
the same are required to be delivered to shareholders of the same class of
stock that this Warrant is exercisable for).

 

3.4 Registration Under
Securities Act of 1933, as amended. The Company agrees that with respect to
the Shares or, if the Shares are convertible into Common Stock of the Company, 

 

 

such
Common Stock, Holder shall have incidental, or “Piggyback,” and S-3
registration rights pursuant to and as set forth in the Company’s Seventh
Amended and Restated Investor Rights Agreement dated March 9, 2007, as the
same is in effect on the date hereof. In the event of any subsequent changes to
said Agreement which would be advantageous to the Holder’s registration rights,
the Holder shall have the benefit of such changes, but no changes to said
Agreement which would be less advantageous to the Holder with respect to such
registration rights shall be binding on the Holder.

 

ARTICLE 4. REPRESENTATIONS,
WARRANTIES OF THE HOLDER. The Holder represents and warrants to the Company
as follows:

 

4.1          Purchase for Own Account. Except for
transfers to Holder’s affiliates, this Warrant and the securities to be
acquired upon exercise of this Warrant by the Holder will be acquired for
investment for the Holder’s account, not as a nominee or agent, and not with a
view to the public resale or distribution within the meaning of the 1933 Act,
and the Holder has no present intention of selling, granting any participation
in, or otherwise distributing the same. The Holder also represents that the
Holder has not been formed for the specific purpose of acquiring this Warrant
or the Shares.

 

4.2          Disclosure of Information. The Holder
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect
to the acquisition of this Warrant and its underlying securities. The Holder
further has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of this Warrant and
its underlying securities and to obtain additional information (to the extent
the Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to the Holder
or to which the Holder has access.

 

4.3          Investment Experience. The Holder: (i) has
experience as an investor in securities and acknowledges that the Holder is
able to fend for itself, can bear the economic risk of the Holder’s investment
in this Warrant and its underlying securities and has such knowledge and
experience in financial or business matters that the Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or (ii) has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the Holder to be
aware of the character, business acumen and financial circumstances of such
persons.

 

4.4          Accredited Investor Status. The Holder is
an “accredited investor” within the meaning of Regulation D promulgated under
the 1933 Act.

 

ARTICLE 5. MISCELLANEOUS

 

5.1          Term. This Warrant
is exercisable, in whole or in part, at any time and from time to time on or
before the Expiration Date set forth above.

 

5.2          Legends. This Warrant
and the Shares (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) shall be imprinted with a legend in substantially the
following form:

 

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AS PERMITTED UNDER
APPLICABLE LAW.

 

5.3          Compliance with Securities
Laws on Transfer. This Warrant and the Shares issuable upon exercise
of this Warrant (and the securities issuable, directly or indirectly, upon conversion
of the Shares, if any) may not be transferred or assigned in whole or in
part without compliance with applicable federal and state securities laws by
the transferor and the transferee.

 

5.4          Transfer Procedure.  Subject to the provisions of Section 5.2,  Holder may 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) 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 transferee(s) (and Holder if applicable).

 

5.5          Notices.  All notices and other communications from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
when given personally or mailed by first-class registered or certified mail,
postage prepaid, to such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or the Holder from time
to time.

 

5.6          Waiver; Amendment. This Warrant
and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.

 

5.7          Issue Tax. The issuance
of the securities subject to this Warrant shall be made without charge to the
Holder for any issue tax (other than applicable income taxes) in respect
thereof.

 

5.8          Attorneys Fees. In the event
of any dispute between the parties concerning the terms and provisions of this
Warrant, the party prevailing in such dispute shall be entitled to collect from
the other party all costs reasonably incurred in such dispute, including
reasonable attorneys’ fees.

 

 

5.9          Governing Law. This Warrant
and all acts, transactions, disputes and controversies arising hereunder or
relating hereto, and all rights and obligations of Holder and Company shall be
governed by, and construed in accordance with the internal laws (and not the
conflict of laws rules) of the State of Delaware.

 

 

	
   

  	
  TANGOE, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Albert R.
  Subbloie, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  Albert R. Subbloie. Jr.

  
	
   

  	
  Title

  	
  President &  CEO

  
				

 

Holder:

 

ORIX Venture Finance LLC

 

 

	
  By

  	
  /s/ Kevin P. Sheehan

  	
   

  
	
   

  	
  Kevin P. Sheehan,

  	
   

  
	
   

  	
  President and CEO

  	
   

  

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

1.             The undersigned hereby
elects to purchase           
shares of the Series           
Preferred Stock of [Company] pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full.

 

1.             The undersigned hereby
elects to convert the attached Warrant into Shares in the manner specified in
the Warrant. This conversion is exercised with respect to
           of the Shares
covered by the Warrant.

 

[Strike paragraph that does not apply.]

 

2.             Please issue a certificate
or certificates representing said shares in the name of the undersigned or in
such other name as is specified below:

 

 

 

 

 

3.             The undersigned represents
it is acquiring the Shares solely for its own account and not as a nominee for
any other party and not with a view toward the resale or distribution thereof
except in compliance with applicable securities laws.

 

 

	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date

  

 

 

Exhibit A

 

Capitalization Table

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00172-of-00352.parquet"}]]