-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H/bwqRGlCJBHX3KygpVZVma20FYPFetDfxaRlfClGY43vUzFv2oXNkDJEa5H1mPa +l7UPp4t4pyRAwDa5EYr8g== /in/edgar/work/20000911/0000912057-00-040790/0000912057-00-040790.txt : 20000922 0000912057-00-040790.hdr.sgml : 20000922 ACCESSION NUMBER: 0000912057-00-040790 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20000911 GROUP MEMBERS: DEERE & CO GROUP MEMBERS: JOHN DEERE SPECIAL TECHNOLOGIES GROUP,INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: XATA CORP /MN/ CENTRAL INDEX KEY: 0000854398 STANDARD INDUSTRIAL CLASSIFICATION: [3571 ] IRS NUMBER: 411641815 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-52449 FILM NUMBER: 720221 BUSINESS ADDRESS: STREET 1: 151 E CLIFF RD STE 10 CITY: BURNSVILLE STATE: MN ZIP: 55337 BUSINESS PHONE: 6128943680 MAIL ADDRESS: STREET 1: 151 E CLIFF RD STE 10 CITY: BURNSVILLE STATE: MN ZIP: 55337 FORMER COMPANY: FORMER CONFORMED NAME: NORTHWEST ACQUISITIONS INC/MN/ DATE OF NAME CHANGE: 19911209 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DEERE & CO CENTRAL INDEX KEY: 0000315189 STANDARD INDUSTRIAL CLASSIFICATION: [3523 ] IRS NUMBER: 362382580 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: ONE JOHN DEERE PLACE CITY: MOLINE STATE: IL ZIP: 61265-8098 BUSINESS PHONE: 3097658000 MAIL ADDRESS: STREET 1: ONE JOHN DEERE PLACE CITY: MOLINE STATE: IL ZIP: 61265-8098 SC 13D 1 a2025352zsc13d.txt SC 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a) XATA CORPORATION ---------------- (Name of Issuer) COMMON STOCK, $.01 PAR VALUE PER SHARE -------------------------------------- (Title of Class of Securities) 983882 30 9 ----------- (CUSIP Number) JAMES E. HEERIN JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC. 300 GRIMES BRIDGE ROAD ROSWELL, GEORGIA 30075 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) AUGUST 31, 2000 --------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. / / NOTE. Six copies of this statement, including exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 7 Pages) - ----------- *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1034 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, SEE the NOTES).
- ------------------------------------------------ --------------------------------------------- CUSIP No. 983882 30 9 13D Page 2 of 7 Pages - ------------------------------------------------ --------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC. - ------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/1 (b) / /2 - ------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / /3 - ------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------- -------------------------------------------------------------------------- NUMBER OF SHARES BENE- 7 SOLE VOTING POWER FICIALLY OWNED BY EACH REPORTING PERSON WITH 830,000 -------------------------------------------------------------------------- 8 SHARED VOTING POWER -------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 830,000 -------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - ------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 830,000 - ------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /4 - ------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.87% - ------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------------------------------------------- *SEE INSTRUCTIONS - ------------------------------------------------ --------------------------------------------- CUSIP No. 983882 30 9 13D Page 3 of 7 Pages - ------------------------------------------------ --------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) DEERE & COMPANY - ------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ 5 (b) / / 6 - ------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / 7 - ------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ---------------------------------------- -------------------------------------------------------------------------- NUMBER OF SHARES BENE- 7 SOLE VOTING POWER FICIALLY OWNED BY EACH REPORTING PERSON WITH 830,000(1) -------------------------------------------------------------------------- 8 SHARED VOTING POWER -------------------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 830,000(1) -------------------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - ------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 830,000(1) - ------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / 8 - ------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.87% - ------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------------------------------------------
(1) CONSISTS OF 830,000 SHARES OWNED BY JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC., A WHOLLY-OWNED SUBSIDIARY OF DEERE & COMPANY. *SEE INSTRUCTIONS - ------------------------ ------------------------ CUSIP No. 983882 30 9 13D Page 4 of 7 Pages - ------------------------ ------------------------ ITEM 1. SECURITY AND ISSUER. This statement on Schedule 13D relates to common stock, $.01 par value (the "Common Stock") of XATA Corporation, a Minnesota corporation (the "Issuer"). The address and principal executive office of the Issuer is 151 East Cliff Road, Suite 10, Burnsville, MN 55337. ITEM 2. IDENTITY AND BACKGROUND. This Schedule 13D is being filed by John Deere Special Technologies Group, Inc., a Delaware corporation ("JDSTG"). JDSTG offers a wide range of electronic, wireless communications, information management and Internet-related products and services to a broad range of customers and markets. JDSTG is a wholly-owned subsidiary of Deere & Company. The address of JDSTG's principal business is 300 Grimes Bridge Road, Roswell, Georgia 30075. The address of JDSTG's executive offices is the same as the address of its principal business. The name, business address, citizenship and present principal occupation or employment of each executive officer and director of JDSTG are set forth on Schedule I hereto and are incorporated herein by reference. Unless otherwise specified on Schedule I, each named executive officer and director is a citizen of the United States. This Schedule 13D is also being filed by Deere & Company, a Delaware corporation ("Deere"). Deere manufactures, distributes and finances a full range of agricultural equipment, a broad range of equipment for construction, forestry and public works, and a variety of commercial and consumer equipment and provides credit and health care for businesses and the general public. The address of Deere's principal business is One John Deere Place, Moline, Illinois 61265-8098. The address of Deere's executive offices is the same as the address of its principal business. The name, business address, citizenship and present principal occupation or employment of each executive officer and director of Deere are set forth on Schedule II hereto and are incorporated herein by reference. Unless otherwise specified on Schedule II, each named executive officer and director is a citizen of the United States. During the last five years, neither JDSTG, nor, to the best of JDSTG's knowledge, any person on Schedule I, has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding such person is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. During the last five years, neither Deere, nor, to the best of Deere's knowledge, any person on Schedule II, has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding such person is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION. On August 31, 2000, JDSTG purchased 630,000 shares of Common Stock of the Issuer, pursuant to a Stock Purchase Agreement between JDSTG and the Issuer, and purchased 200,000 shares of Common Stock of the Issuer pursuant to a Selling Stockholder Agreement between JDSTG and XATA Investment Partners, LLC (the "Selling Stockholder"). The source of funds used to purchase such shares of Common Stock of the Issuer was working capital of JDSTG. - ------------------------ ------------------------ CUSIP No. 983882 30 9 13D Page 5 of 7 Pages - ------------------------ ------------------------ ITEM 4. PURPOSE OF TRANSACTION. JDSTG purchased its equity interest in the Issuer as a strategic investment in onboard technology for the transportation industry. Pursuant to a Stock Purchase Agreement dated as of August 30, 2000, by and between JDSTG and the Issuer (the "Stock Purchase Agreement"), JDSTG purchased 630,000 newly issued shares of Common Stock. Pursuant to a Selling Stockholder Agreement dated as of August 30, 2000, by and between JDSTG and XATA Investment Partners, LLC (the "Selling Stockholder Agreement"), JDSTG purchased 200,000 shares of Common Stock from the Selling Stockholder. Pursuant to the Stock Purchase Agreement, if certain conditions are satisfied, including shareholder approval of the issuance of additional shares, satisfactory completion of due diligence by JDSTG, and successful beta testing of one of the Issuer's products, JDSTG will purchase an additional 2,517,000 shares of Common Stock on or prior to December 31, 2000 (the "2nd Closing"). In addition, JDSTG has an option, exercisable between August 1, 2001 and August 1, 2002, to convert a currently outstanding promissory note from the Issuer to JDSTG into shares of Common Stock of the Issuer. JDSTG has also been granted certain registration rights pursuant to a Registration Rights Agreement dated as of August 30, 2000, between JDSTG and the Issuer, which is filed as Exhibit 3 hereto and incorporated herein by reference. The descriptions of the Stock Purchase Agreement and the Selling Stockholder Agreement throughout this Schedule 13D are qualified in their entirety by reference to the copies of such Stock Purchase Agreement and Selling Stockholder Agreement, respectively, which are filed as Exhibits 1 and 2 hereto and are incorporated herein by reference. Other than as described above, JDSTG may, from time to time, review its investment position in the Issuer and may, depending on market and other conditions, desire to increase or decrease such investment position. Pursuant to the Stock Purchase Agreement, for a period of one year from the date of the Stock Purchase Agreement, JDSTG must obtain the prior approval of the Issuer's Board of Directors in order to purchase additional shares of the Issuer. In accordance with the provisions of the Stock Purchase Agreement, effective August 31, 2000, Dennis R. Johnson resigned from the Board of Directors of the Issuer. Two JDSTG nominees, Charles R. Stamp, Jr., and Barry Batcheller, were appointed to fill the resulting vacancy and an existing vacancy in the Board of Directors of the Issuer. If the 2nd Closing occurs, as described above, JDSTG will have the right to designate one more member to serve on the Board of Directors of the Issuer. The Board of Directors of the Issuer has approved an amendment to the Issuer's Articles of Incorporation increasing the number of authorized shares of Common Stock and removing the reservation of voting rights solely to Common Stock and recommended the amendment to the shareholders for approval. The increase in the number of authorized shares of Common Stock is necessary to effectuate, and is a condition to, the 2nd Closing. Other than as described above, neither JDSTG nor Deere has any current plans or proposals which relate to or would result in any transaction, change or event specified in clauses (a) through (j) of Item 4 of the Schedule 13D form. JDSTG and Deere reserve the right to develop such plans or proposals in the future. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The aggregate number of shares to which this Schedule 13D relates is 830,000 shares, representing 14.87% of the 5,580,179 outstanding shares of the Common Stock of the Issuer (413,151 shares of Series A 8% Convertible Preferred Stock of the Issuer being converted immediately prior to the transaction to which this Schedule 13D relates). JDSTG is a wholly-owned subsidiary of Deere (NYSE symbol "DE"). Deere does not directly beneficially own any shares of the Issuer. - ------------------------ ------------------------ CUSIP No. 983882 30 9 13D Page 6 of 7 Pages - ------------------------ ------------------------ Other than the transactions described above, no transactions in the shares of Common Stock of the Issuer have been effected by JDSTG or Deere or, to JDSTG's knowledge or Deere's knowledge, by any of the executive officers and directors of JDSTG or Deere named in Schedule I and Schedule II hereto, respectively, during the past 60 days. To JDSTG's knowledge and to Deere's knowledge, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities covered by this Schedule 13D. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Other than the Stock Purchase Agreement, the Selling Stockholder Agreement and the Registration Rights Agreement, to the knowledge of JDSTG, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Pursuant to the Stock Purchase Agreement, the Issuer has agreed to use its best efforts to ensure that its directors and officers vote in favor of the issuance of additional shares to JDSTG and the amendment to the Articles of Incorporation. Stephen A. Lawrence (on behalf of the Selling Stockholder), Chairman of the Board of Directors of the Issuer and beneficial owner of less than 1% of the issued and outstanding Common Stock of the Issuer, and William Flies (individually and as a trustee under various trusts), a member of the Board of Directors and beneficial owner of 19.46% of the issued and outstanding Common Stock of the Issuer, have indicated in a non-binding letter their intention to vote in favor of the issuance of additional shares to JDSTG and the amendment to the Articles of Incorporation and their intention to vote to elect the nominees of JDSTG to the Board of Directors of the Issuer as described above. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1: Stock Purchase Agreement, dated as of August 30, 2000, by and between John Deere Special Technologies Group, Inc., and XATA Corporation. Exhibit 2: Selling Stockholder Agreement, dated as of August 30, 2000, by and between John Deere Special Technologies Group, Inc., and XATA Investment Partners, LLC. Exhibit 3: Registration Rights Agreement, dated as of August 30, 2000, by and between John Deere Special Technologies Group, Inc. and XATA Corporation. Exhibit 4: Joint Filing Agreement, dated as of September 8, 2000, by and between John Deere Special Technologies Group, Inc. and Deere & Company. - ------------------------ ------------------------ CUSIP No. 983882 30 9 13D Page 7 of 7 Pages - ------------------------ ------------------------ SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. September 8, 2000 JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC. By: /s/ Charles R. Stamp, Jr. ---------------------------------------- Name: Charles R. Stamp, Jr. Title: President DEERE & COMPANY By: /s/ Ferdinand F. Korndorf ---------------------------------------- Name: Ferdinand F. Korndorf Title: President, Worldwide Agricultural Equipment Division SCHEDULE I Executive Officers and Directors of John Deere Special Technologies Group, Inc. EXECUTIVE OFFICERS
NAME AND BUSINESS ADDRESS OCCUPATION - ------------------------- ---------- Charles R. Stamp, Jr. President of John Deere Special Technologies Group, Inc. 300 Grimes Bridge Road Roswell, GA 30075 Ronald R. McDermott Vice President of John Deere Special Technologies One John Deere Place Group, Inc.; Vice President, Information Systems of Moline, IL 61265 Deere & Company James E. Heerin Vice President of John Deere Special Technologies 300 Grimes Bridge Road Group, Inc. Roswell, GA 30075 Marshall Ford Accounting Director and Assistant Treasurer of John 300 Grimes Bridge Road Deere Special Technologies Group, Inc. Roswell, GA 30075 DIRECTORS NAME AND BUSINESS ADDRESS OCCUPATION - ------------------------- ---------- John K. Lawson Senior Vice President, Technology and Engineering One John Deere Place Deere & Company Moline, IL 61265 Ferdinand K. Korndorf President, Worldwide Agricultural Equipment One John Deere Place Division Moline, IL 61265 Deere & Company Adel A. Zakaria Senior Vice President of Worldwide Manufacturing One John Deere Place and Engineering, Worldwide Agricultural Equipment Moline, IL 61265 Division, Deere & Company Charles R. Stamp, Jr. President 300 Grimes Bridge Road John Deere Special Technologies Group, Inc. Roswell, GA 30075
SCHEDULE II Executive Officers and Directors of Deere & Company EXECUTIVE OFFICERS
NAME AND BUSINESS ADDRESS OCCUPATION - ------------------------- ---------- Robert W. Lane Chairman, President and Chief Executive Officer One John Deere Place of Deere & Company Moline, IL 61265 James R. Jenkins Senior Vice President and General Counsel of One John Deere Place Deere & Company Moline, IL 61265 Nathan J. Jones Senior Vice President and Chief Financial One John Deere Place Officer of Deere & Company Moline, IL 61265 John J. Jenkins President, Worldwide Commercial & Consumer One John Deere Place Equipment Division of Deere & Company Moline, IL 61265 Ferdinand F. Korndorf President, Worldwide Agricultural Equipment One John Deere Place Division of Deere & Company Moline, IL 61265 Pierre E. Leroy President, Worldwide Construction Equipment One John Deere Place Division and Deere Power Systems Group of Moline, IL 61265 Deere & Company Michael P. Orr President, Financial Services of Deere & One John Deere Place Company Moline, IL 61265 John K. Lawson Senior Vice President, Engineering & One John Deere Place Technology of Deere & Company Moline, IL 61265 H. J. Markley Senior Vice President, Worldwide Human One John Deere Place Resources of Deere & Company Moline, IL 61265
DIRECTORS
NAME AND BUSINESS ADDRESS OCCUPATION - ------------------------- ---------- John R. Block President Food Distributors International Food Distributors International 201 Park Washington Court Falls Church, VA 22046 Crandall C. Bowles Chairman and Chief Executive Officer Springs Industries, Inc. Springs Industries, Inc. 205 North White Street Fort Mill, SC Kevin T. Dunnigan Chairman of the Board Thomas & Betts Corporation Thomas & Betts Corporation 8155 T&B Boulevard Memphis, TN 38125 Leonard A. Hadley Retired Chairman and Chief Executive Officer 4890 Oak Grove Ct., NE Maytag Corporation Cedar Rapids, Iowa 54211 Prof. Regina E. Herzlinger Nancy R. McPherson Professor of Business Harvard Business School Administration Soldiers Field Road Harvard Business School Baker Library 163 Boston, MA Arthur L. Kelly Managing Partner KEL Enterprises, L.P. KEL Enterprises, L.P. Suite 2222 Two First National Plaza 20 South Clark Street Chicago, IL Robert W. Lane Chairman, President and Chief Executive Officer Deere & Company Deere & Company One John Deere Place Moline, IL 61265 Antonio B. Madero* Chairman of the Board and Chief Executive Officer SANLUIS Corporacion, S.A. de C.V. SANLUIS Corporacion, S.A. de C.V. Monte Pelvoux No. 220 Piso 8 Lomas de Chapultepec *Mr. Madero is a citizen of Mexico Delegacion Miguel Hidalgo 11000 Mexico, D.F. Thomas H. Patrick Executive Vice President and Chief Financial Officer Merrill Lynch & Co., Inc. Merrill Lynch & Co., Inc. Four World Financial Center North Tower New York, NY 10281-1332 John R. Stafford Chairman, President and Chief Executive Officer American Home Products Corporation American Home Products Corporation Five Giralda Farms Madison, NJ 07940 John R. Walter Chairman of the Board Manpower, Inc. Manpower, Inc. 401 North Ahwahnee Road Lake Forest, IL 60045 Dr. Arnold R. Weber President Emeritus Northwestern University Northwestern University Office of the President Emeritus 555 Clark Street, Suite 209 Evanston, IL 60208-1220
EX-99.1 2 a2025352zex-99_1.txt EXHIBIT 99.1 STOCK PURCHASE AGREEMENT BETWEEN XATA CORPORATION AND JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC AUGUST 30, 2000 CONTENTS ARTICLE I PURCHASE AND SALE OF SHARES 1 AND CONVERSION OF DEBT TO EQUITY ARTICLE II CLOSINGS: DELIVERIES 2 ARTICLE III REPRESENTATIONS AND WARRANTIES 3 OF THE COMPANY ARTICLE IV REPRESENTATIONS AND WARRANTIES 13 OF THE INVESTOR ARTICLE V CONDITIONS TO CLOSING 15 OF THE COMPANY ARTICLE VI CONDITIONS TO CLOSING 15 OF THE INVESTOR ARTICLE VII COVENANTS OF THE COMPANY 18 ARTICLE VIII INDEMNIFICATION 22 ARTICLE IX MISCELLANEOUS 23 ARTICLE X TERMINATION 27 EXHIBIT "A" LIST OF SCHEDULES EXHIBIT "B" STOCK SUMMARY EXHIBIT 1.2 FORM OF NOTE OPTION NOTICE
STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of the 30th day of August, 2000, by and between JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC., a Delaware corporation (the "Investor"), and XATA CORPORATION, a Minnesota corporation (the "Company). WHEREAS, the Investor desires to purchase from the Company, and the Company desires to issue and sell to the Investor, up to an aggregate of three million six hundred thousand (3,600,000) shares (3,147,000 shares from the sale of new stock, 253,000 shares from the conversion of the Promissory Note and 200,000 shares from XATA Investment Partners, LLC (Selling Shareholder) of Common Stock, $.01 par value (the "Common Stock") of the Company on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties intending to be legally bound, hereby agree as follows: ARTICLE I PURCHASE AND SALE OF SHARES AND CONVERSION OF DEBT TO EQUITY 1.1. SALE OF NEW SHARES OF COMMON STOCK (a) SALES OF NEW SHARES OF COMMON STOCK. Subject to the terms and conditions hereof, at the Closing the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, three million one hundred forty seven thousand (3,147,000) shares of Common Stock (the "Purchased Shares") as noted on Exhibit "B", attached hereto, for the purchase price provided in Section 1.1(b) below. (b) PURCHASE PRICE. The purchase price for the Purchased Shares shall be 82 percent (82%) of the average of the daily Bid and Ask (4:00 p.m. closing) price for the Company's common stock, as reported by the Nasdaq Smallcap Market quotation, for the 30 day period preceding the date of this Agreement (the "Purchase Price"). 1.2 CONVERSION OF DEBT. (a) NOTE OPTION. At the option of the Investor (the "Note Option"), which option shall be exercisable by the Investor after Shareholder Approval (as defined in Article VI herein) but not before August 1, 2001 nor after August 1, 2002 (the "Option Period"), that certain $1,000,000 Promissory Note from the Company to the Investor (the "Note") shall be converted into shares of Common Stock (the "Note Shares") based upon the then unpaid note balance and the Purchase Price. -1- (b) MECHANICS. At any time during the Option Period, the Investor may exercise the Note Option by delivering a written notice (the "Note Option Notice") to the Company setting forth its intention to exercise the Note Option in substantially the form attached hereto as "SCHEDULE 1.2." 1.3 RESERVATION OF SHARES. The Company shall reserve and keep available for issuance such number of its authorized but unissued shares of its Common Stock as will be sufficient to permit the issuance of the Note Shares. All shares of Common Stock that are so issuable shall, when issued upon conversion, be duly and validly issued and fully paid and non-assessable. 1.4 USE OF CASH PROCEEDS. The Company shall use the cash proceeds from the sale of the Purchased Shares for working capital and general corporate purposes. 1.5 AGREEMENTS. Each of the parties hereto agrees at the Closing to enter into the respective agreements described in Article VI to which they are indicated as a party. 1.6 PURCHASE OF ADDITIONAL SHARES. Investor agrees, for a period of one (1) year from the date of this Agreement, it will not purchase additional shares of the Company without the prior approval of the Company's Board of Directors. ARTICLE II CLOSINGS; DELIVERIES 2.1 CLOSINGS. The closings of the purchase and sale of the Purchased Shares (the "Closings") shall occur on August 31, 2000 ("the 1st Closing"), as to the purchase of six hundred thirty thousand (630,000) Purchased Shares and following Shareholder Approval and approval of Deere and Company but before December 31, 2000 (the 2nd Closing"), for the remaining Purchased Shares. The Closings will be held at the offices of Morris, Manning & Martin, L.L.P., Atlanta, Georgia, or at such other place or on such other date as the parties may agree (the 1st and 2nd closings are collectively referred to as the "Closings"). 2.2 DELIVERIES. At the Closings, the Company shall deliver to the Investor certificates, registered in the Investor's name, representing the Purchased Shares, against payment of the Purchase Price. The Company shall also deliver such other instruments and documents as are described in Article VI. -2- ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Investor as follows: 3.1. ORGANIZATION AND STANDING; ARTICLES OF INCORPORATION AND BYLAWS. The Company is a corporation duly organized and validly existing under, and by virtue of, the laws of the State of Minnesota and is in good standing under such laws. The Company is qualified to do business as a foreign corporation in every jurisdiction in which the failure to so qualify would have a material adverse effect on the business, assets, operating results, prospects or financial condition of the Company (a "Material Adverse Effect"). The Company has the requisite corporate power and authority to own and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Company has previously delivered to the Investor true and accurate copies of the Restated Articles of Incorporation and Bylaws, as presently in effect, of the Company. 3.2. CORPORATE POWER. The Company has all requisite legal and corporate power and authority to enter into this Agreement and the Registration Rights Agreement (the "Transaction Documents") and to sell the Purchased Shares and the Note Shares. 3.3. SUBSIDIARIES AND AFFILIATES. Except as set forth on SCHEDULE 3.3, the Company does not own or control, directly or indirectly, any interest or investment in any corporation, partnership, association or other form of business entity. For purposes of this Agreement, all references to the Company shall include references to the subsidiaries listed on SCHEDULE 3.3, unless the context requires otherwise. 3.4. CAPITALIZATION. The authorized capital stock of the Company consists of 8,333,333 shares of Common Stock, $.01 par value, 4,537,028 shares of which are issued and outstanding as of June 30, 2000, and 333,333 shares of preferred stock, of which 40,000 shares have been issued as Series A 8% Convertible Preferred Stock (the "Series A Preferred Stock") and are outstanding as of June 30, 2000,. All such issued and outstanding shares have been duly authorized and validly issued, are fully paid and non-assessable, and have been offered, issued, sold and delivered by the Company in compliance with applicable federal and state securities laws. Except as set forth in SCHEDULE 3.4 attached hereto, there are no outstanding rights, options, warrants, conversion rights or agreements for the purchase or acquisition from the Company of any shares of its capital stock or other securities other than rights created by this Agreement. 3.5. AUTHORIZATION. All corporate action on the part of the Company and its directors, officers and shareholders necessary for the authorization, execution, delivery and performance of all obligations of the Company under the Transaction Documents and any document contemplated hereby, for the authorization, issuance and delivery of the Purchased Shares, has been (or will be) taken prior to the Closings with respect to issuance of the Purchased Shares and/or Note Shares issued by the Company at the Closings. The Agreement constitutes a valid and binding obligation of the Company and are enforceable against the Company in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or other laws -3- affecting the enforcement of creditors' rights generally, and except that the availability of the remedy of specific performance or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought. 3.6. VALIDITY OF STOCK. The Purchased Shares and the Note Shares, when issued, sold and delivered in compliance with the provisions of this Agreement and will be validly issued, fully paid and nonassessable, will be free of any liens or encumbrances, and will not be subject to any preemptive rights, rights of first refusal or redemption rights, other than as provided herein and in the Restated Articles of Incorporation and the Bylaws (the "Bylaws") of the Company. The Purchased Shares and the Note Shares are not subject to any preemptive rights or rights of first refusal or redemption rights (other than as provided herein and in the Restated Articles of Incorporation and the Bylaws) and, upon issuance, will be validly issued, fully paid and non-assessable. 3.7. MATERIAL LIABILITIES. Except as disclosed on SCHEDULE 3.7 attached hereto, the Company has no liabilities or obligations, absolute or contingent (individually or in the aggregate), except obligations and liabilities incurred in the ordinary course of business that are not individually or in the aggregate material to the Company. 3.8. CONTRACTS AND COMMITMENTS. Except as disclosed on SCHEDULE 3.8, other than this Agreement, the Company has no contracts, agreements or instruments to which it is a party and that involve a commitment by, or revenue to, the Company in excess of $20,000 annually. All contracts, agreements or instruments to which the Company is a party are valid and binding upon the Company and, to best knowledge and belief of the Company, the other parties thereto, and are in full force and effect and enforceable in accordance with their terms. Neither the Company nor, to best knowledge and belief of the Company, any other party to any such contract, agreement or instrument, has breached any provision of, or is in default under, the terms thereof, and, there are no existing facts or circumstances that would prevent the work in process of the Company or its contracts and agreements from maturing in due course into fully collectible accounts receivable. 3.9. INTELLECTUAL PROPERTY RIGHTS. SCHEDULE 3.9 hereto sets forth a complete and correct list of (i) all patents (the "Patents"), trademarks, trade names (including all federal and state registration pertaining thereto) and registered copyrights owned by the Company or any subsidiary of the Company (collectively, the "Proprietary Intellectual Property") and (ii) all patents, trademarks, trade names, copyrights, technology and processes used by the Company or any subsidiary of the Company in their businesses which are material to their businesses and are used pursuant to a license or other right granted by a third party (collectively, the "Licensed Intellectual Property," and together with the Proprietary Intellectual Property referred to as "Intellectual Property"). A true and complete list of all such licenses and agreements with respect to Licensed Intellectual Property is set forth in SCHEDULE 3.9. Each of the federal, state and other governmental registrations with any country pertaining to the Proprietary Intellectual Property is valid and in full force and effect. The Company owns, or has the right to use pursuant to valid and effective agreements, all Intellectual Property, and the consummation of the transactions contemplated hereby will not materially adversely alter or impair any such rights. No claims are pending against the Company by any person with respect to the use of any -4- Intellectual Property or challenging or questioning the validity or effectiveness of any license or agreement relating to the same that would be likely to result in a Material Adverse Effect, and the current use by the Company of the Intellectual Property does not in any material respect infringe upon the rights of any third party. SCHEDULE 3.9 sets forth a list of all jurisdictions in which the Company is operating under a trade name, and each jurisdiction in which any such trade name is registered. No Patent has been or is now involved in any interference, reissue, reexamination or opposition proceeding, nor is the Company aware of any potentially interfering patent or patent application of any third party. To the knowledge of the Company, no person or entity is presently selling or marketing a product which is covered by the Patents, and the Patents have not been challenged or threatened in any way. Further, no current or former Company employee is named as an inventor on any pending patent application. All the Patents are currently in compliance with formal legal requirements (including payment of filing, examination and maintenance fees and proofs of working or use), and to the best knowledge of the Company, there is nothing which would render the Patents invalid or unenforceable, and they are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of Closing. 3.10. COMPANY COMPUTER SOFTWARE AND HARDWARE. (a) SCHEDULE 3.10(a) hereto sets forth a true and complete list as of June 30, 2000 of: (a) all software and associated documentation owned by the Company material to the business of the Company, other than custom-developed software developed for and assigned to a Company customer, owned by the Company, (such items set forth on SCHEDULE 3.10(a) together with all software and associated documentation material to the business of the Company developed by the Company since the date of its incorporation are hereinafter referred to as the "Company Proprietary Software"); (b) all software (other than the Company Proprietary Software and "shrink-wrap" software) used in connection with the business of the Company (the "Company Licensed Software" and together with the Company Proprietary Software, the "Company Software"). Subject to any limitations described in Schedule 3.10(a), the Company has all rights that are necessary or appropriate to distribute, license or sublicense the Company Software to third parties and to appoint others to do any of the foregoing. Except as described in SCHEDULE 3.10(a) the Company has all technical and descriptive materials to run its business in accordance with its historical practices, except as would not have a Material Adverse Effect. The Company Proprietary Software consists of: (a) source and object code embodied in magnetic media; and (b) all development and procedural tools, documentation, and manuals necessary to maintain, enhance, develop derivative works, support and service the Company Proprietary Software, including licenses to use compilers, assemblers, libraries and other aids. (b) The Company has a valid right, title and interest in and to all intellectual property rights in the Company Proprietary Software, including all worldwide copyrights, trade secrets, trademarks, moral rights, and proprietary and confidential information rights therein. The Company Proprietary Software is free and clear of all liens, claims and encumbrances, except as noted in SCHEDULE 3.10(b). The use of the Company Licensed Software and the use and distribution of the Company Proprietary Software does not breach any terms of any contract or agreement and is in compliance with all applicable laws, regulations and codes of any foreign, U.S., state or local authority, including without limitation, all U.S. Export Administration -5- Regulations. The Company has been granted under the license agreements relating to the Company Licensed Software (the "Company License Agreements") valid and subsisting license rights with respect to all software comprising the Company Licensed Software. The Company is in compliance with each of the terms and conditions of each of the Company License Agreements except to the extent failure to so comply, individually or in the aggregate, would not have a Material Adverse Effect. To the knowledge of the Company, in the case of any commercially available "shrink-wrap" software programs (such as Lotus 1-2-3 or Microsoft Word), the Company has not made and is not using any unauthorized copies of any such software programs and, to the knowledge of the Company, none of the employees, agents or representatives of the Company have made or are using any such unauthorized copies, except as would not have a Material Adverse Effect. (c) The Company Proprietary Software and, to the best knowledge and belief of the Company, the Company Licensed Software does not infringe the patent, copyright, or trade secret rights or any other intellectual property right of any third party which may exist anywhere in the world. (d) Except as set forth in SCHEDULE 3.10(d), the Company has not granted rights in the Company Software to any third party except for rights granted to customers in the ordinary course of business pursuant to contracts with customers. (e) To the knowledge of the Company, the Company Software and the related computer hardware used by the Company in its operations (the "Company Hardware") are adequate in all material respects, when taken together with the other assets, resources and personnel of the Company, to run the business of the Company in the same manner as such business has operated, except as would not result in a Material Adverse Effect. SCHEDULE 3.10(e) contains a summary description of any problems experienced by the Company in the past six months with respect to the Company Software or Company Hardware and the provision of services to Company clients which have arisen outside the ordinary course of business and would result in a Material Adverse Effect. (f) To the knowledge of the Company, the Software is "Millennium Compliant" (defined below). For the purposes of this Agreement "Millennium Compliant" means: (i) the functions, calculations, and other computing processes of the Software (collectively, "Processes") perform in a consistent manner regardless of the date in time on which the Processes are actually performed and regardless of the date input to the Software, whether before, on, or after January 1, 2000 and whether or not the dates are affected by leap years; (ii) the Company Software accepts, calculates, compares, sorts, extracts, sequences, and otherwise processes date inputs and date values, and returns and displays date values, in a consistent manner regardless of the dates used, whether before, on, or after January 1, 2000; -6- (iii) the Company Software will function without interruptions caused by the date in time on which the Processes are actually performed or by the date input to the Software, whether before, on, or after January 1, 2000; (iv) the Company Software accepts and responds to two-digit year-date input in a manner that resolves any ambiguities as to the century in a defined, predetermined, and appropriate manner; and (v) the Company Software stores and displays date information in ways that are unambiguous as to the determination of the century. 3.11. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation of any term of its Restated Articles of Incorporation or Bylaws or any provision of any mortgage, indenture, contract, agreement or instrument to which it is a party or by which it or its assets are bound; any judgment, decree or order binding upon the Company; or, in any material respect, any statute, rule or regulation applicable to the Company. The execution, delivery and performance of and compliance with the Transaction Documents, the issuance of the Purchased Shares and the Note Shares on the terms set forth in this Agreement will not result in any such violation or be in conflict with or constitute a default under any of the terms or provisions described in the first sentence of this section, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company pursuant to any such term or provision. There is no such provision that materially and adversely affects the business, financial condition, affairs, operations, properties or assets of the Company taken as a whole. To the knowledge of the Company, no employee of the Company is in violation of any term of any employment contract, patent or trade secret disclosure agreement or any other contract or agreement, by reason of such person's employment by the Company and the nature of the business conducted or to be conducted by the Company. 3.12. LITIGATION AND OTHER PROCEEDINGS. Except as disclosed on SCHEDULE 3.12 attached hereto, there are no actions, proceedings or investigations pending against the Company, or its respective properties (or any basis therefor or, to the Company's knowledge, threat thereof) that, either in any case or in the aggregate, might result in any Material Adverse Effect or in any material impairment of the right or ability of the Company to carry on its business as now conducted or as proposed to be conducted, or in any material liability on the part of the Company, and none that challenges the validity of this Agreement or any action taken or to be taken in connection herewith. The foregoing includes, without limiting its generality, actions pending or, to the knowledge of the Company, threatened (or any threat thereof) involving the prior employment of any of the Company's employees, or their use in connection with the Company's business of any information or techniques allegedly proprietary to any former employers. 3.13. EMPLOYEES. Except as disclosed on SCHEDULE 3.13 attached hereto, the Company has no employment contracts with any of its employees not expressly terminable at will, and has no collective bargaining agreements covering any of its employees. The Company is not aware of any proposed, threatened or actual union organization activity affecting the Company's current or prospective operations. -7- 3.14. REGISTRATION RIGHTS. . Except as disclosed on SCHEDULE 3.14 attached hereto, and except as provided for in the Registration Rights Agreement, the Company is under no obligation to register any of its presently outstanding securities or any of its securities that may hereafter be issued pursuant to this or any other existing agreement. 3.15. GOVERNMENTAL CONSENTS. No consent, approval or authorization of, or registration, declaration, designation, qualification or filing with, any governmental authority on the part of the Company, other than the Shareholder Approval and the filing of the Certificate of Amendment, is required in connection with the valid execution and delivery of the Transaction Documents, the offer, sale or issuance of the Purchased Shares and the Note Shares, or the consummation of any other transaction contemplated hereby other than as provided by applicable securities laws. 3.16. TITLE TO PROPERTY AND ASSETS. Except as disclosed on SCHEDULE 3.16 attached hereto, the Company has good and marketable title to its respective properties and assets and has good title to all its leasehold interests, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge. 3.17. CUSTOMERS AND SUPPLIERS. As of June 30, 2000, the Company has no knowledge that any customer or supplier of the Company has taken or contemplates taking any steps that could disrupt the business relationship of the Company with such customer or supplier or could result in a diminution in the value of the Company, in either case in a manner that would have a material adverse effect on business or financial condition of the Company. 3.18. MINUTE BOOKS. The minute books of the Company provided to the Investor contain a materially complete summary of all meetings of directors and shareholders since January 1, 1998, and reflect all transactions referred to in such minutes accurately in all material respects. 3.19. LICENSES AND PERMITS; COMPLIANCE WITH LAW. The Company holds all licenses, certificates, permits, franchises and rights from all appropriate federal, state or other public authorities necessary for the conduct of its business and the use of its assets. The Company is presently conducting its business so as to comply in all material respects with all applicable statutes, ordinances, rules, regulations and orders of any governmental authority. Further, the Company is not presently charged with or, to the knowledge of the Company, under governmental investigation with respect to, any actual or alleged violation of any statute, ordinance, rule or regulation. The Company is not presently the subject of any pending or, to the Company's knowledge, threatened adverse proceeding by any regulatory authority having jurisdiction over its business, properties or operations. None of the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will result in the termination of any such license, certificate, permit, franchise or right held by the Company. 3.20. EMPLOYMENT; NO CONFLICTING AGREEMENTS. None of the officers, directors, or key employees of the Company are obligated under any contract (including licenses, covenants, or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would conflict with his or her -8- obligation to use his or her best efforts to promote the interests of the Company or that would conflict with the business of the Company as presently, or proposed to be, conducted. 3.21. INDEBTEDNESS TO DIRECTORS AND OFFICERS. Except as disclosed on SCHEDULE 3.21, the Company is not indebted to any of its directors or officers or party to any contract with any affiliate of its directors or officers, and, to the knowledge of the Company, none of such directors or officers has a claim of any nature against the Company. 3.22. DISCLOSURE. No representation or warranty by the Company in the Transaction Documents or in any written statement or certificate furnished to the Investor in connection with the transactions contemplated by the Transaction Documents contains, or will contain, any untrue statement of a material fact or omits, or will omit, to state a material fact necessary to make the statements made not misleading in light of the circumstances under which they were made. 3.23. TAX MATTERS. The Company has accurately prepared and timely filed all income and other tax returns, if any, that are required to be filed, and has paid, or made provision for the payment of, all taxes that have or may have become due pursuant to said returns or pursuant to any assessment that has or may be received from any taxing authority. There are no outstanding agreements by the Company for the extension of time for the assessment of any tax. The United States income tax returns of the Company have not been audited by the Internal Revenue Service. No deficiency assessment or proposed adjustment of the Company's United States income tax or state or municipal taxes is pending, nor is the Company liable for any tax to be imposed upon the Company's properties or assets for which there is not an adequate reserve reflected in the Financial Statements, as defined in Section 3.28. 3.24. ENVIRONMENTAL LAWS. (a) The Company (i) is in substantial compliance with any and all applicable foreign, Federal, state and local laws and regulations relating to the protection of human health and safety or emissions, discharges, releases, threatened releases, removal, remediation or abatement of pollutants, contaminants, chemicals or industrial, hazardous or toxic substances or wastes into or in the environment (including air, surface water, ground water or land) or otherwise used in connection with the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous or toxic substances or wastes, as defined under such applicable laws ("Environmental Laws"), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except to the extent that the matters within clauses (i), (ii) or (iii) above would not result in a Material Adverse Change. (b) There is no substance designated a "hazardous substance," "hazardous waste" or "hazardous constituent" by any Environmental Law, including asbestos, petroleum, urea formaldehyde insulation and petroleum by-products ("Hazardous Substance") present at any of the real property currently owned or leased by the Company, except to the extent that such presence could not reasonably be expected to result in a Material Adverse Change; and with -9- respect to such real property, to the knowledge of the Company, there has not occurred (i) any release or any threatened release of a Hazardous Substance or (ii) any discharge or threatened discharge of any Hazardous Substance into the ground, surface or navigable waters, which discharge or threatened discharge violates any Federal, state, local or foreign laws, rules or regulations concerning water pollution. (c) The Company has not disposed of, transported or arranged for the transportation or disposal of any Hazardous Substance where such disposal, transportation or arrangement would give rise to liability pursuant to any Environmental Law other than any such liabilities that could not reasonably be expected to result in a Material Adverse Change. 3.25. EMPLOYEE BENEFIT PLANS; ERISA. (a) Except as set forth on SCHEDULE 3.25(a), there are no and have never been any "employee pension benefit plans" as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), covering employees (or former employees) employed in the United States, maintained or contributed to by the Company or any ERISA Affiliate (as hereinafter defined), or to which the Company or any ERISA Affiliate contributes or is obligated to make payments thereunder or otherwise may have any liability ("Pension Benefit Plans"). For purposes of this Agreement, "ERISA Affiliate" shall mean any person (as defined in Section 3(9) of ERISA) that is a member of any group of persons described in Section 414(b), (c), (m) or (o) of the Code, of which the Company is a member. With respect to any Pension Benefit Plan, the Company has delivered or made available to the Investor hereto true, complete and correct copies of each Pension Benefit Plan, related trust agreement, annuity contract, summary plan description, plan document, most recent IRS determination letter and Form 5500 filings for the past three (3) reporting years. Each Pension Benefit Plan has been administered in accordance with its terms and in compliance with the applicable provisions of ERISA and the Code. No Pension Benefit Plan is subject to funding or termination insurance under Title IV of ERISA. During the last five years, to the Company's knowledge, there has been with respect to any Pension Benefit Plan no "prohibited transaction" within the meaning of Section 406 of ERISA and Section 4975 of the Code that was not otherwise exempt from the provisions thereof. (b) Except as set forth on SCHEDULE 3.25(b), the Company has not and has never had any "welfare benefit plans" (as defined in Section 3(1) of ERISA and including medical, dental, life insurance and disability benefits) covering employees (or former employees) employed in the United States, maintained or contributed to by the Company and, to the extent covering employees (or former employees) employed in the United States, any plans, policies, programs, agreements, understandings or arrangements providing compensation or other benefits to employees and former employees, including all stock bonus, stock option, restricted stock, stock appreciation right, stock purchase, bonus, incentive, deferred compensation, severance and vacation plans maintained or contributed to by the Company ("Welfare Plans"). With respect to each Welfare Plan, the Company has delivered or made available to the Investor true, complete and correct copies of each Welfare Plan, insurance contract, summary plan description, plan document, ADP/ACP test reports and Form 5500 filings for the past three (3) reporting years. Each Welfare Plan has been administered in accordance with its terms and in compliance with -10- the applicable provisions of ERISA and the Code. With respect to any Welfare Plan that is an employee welfare benefit plan (as defined in Section 3(1) of ERISA), no such Welfare Plan provides benefits including death or medical benefits beyond termination of employment or retirement, except as otherwise required by law, and each Welfare Plan may be amended or terminated without liability at any time by the Company. To the extent required, the Welfare Plans have complied with the continuation coverage requirements of Sections 601 through 609 of ERISA and Sections 162(k) and 4980B of the Code and with the notice and coverage certification requirements of Section 701 of ERISA and Section 9801 of the Code with respect to all employees, their dependents and beneficiaries. During the last five years, to the Company's knowledge, there has been with respect to any Welfare Plan no "prohibited transaction" within the meaning of Section 406 of ERISA and Section 4975 of the Code that was not otherwise exempt from the provisions thereof. (c) Neither the Company nor any ERISA Affiliate is required to contribute, and neither has ever been required to contribute, to any multi-employer plan within the meaning of Section 3(37)(A) of ERISA. Neither the Company nor any ERISA Affiliate has ever withdrawn (in a partial or complete withdrawal) from or incurred any liability (including any contingent liability under Section 4204 of ERISA) with respect to any such multi-employer plan covering employees (or former employees) employed in the United States. 3.26. BROKERS. Except as disclosed on SCHEDULE 3.26 attached hereto, neither the Company nor any of the officers, directors, employees or stockholders of the Company has employed any broker or finder in connection with the transactions contemplated by this Agreement. 3.27. COMMON STOCK. The Company has registered its Common Stock pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"), and the Company has maintained all requirements for the continued listing or quotation of its Common Stock, and such Common Stock is currently listed or quoted on the Nasdaq SmallCap Market. 3.28. SEC DOCUMENTS. The Company has delivered or made available to the Investor true and complete copies of its filings with the Securities and Exchange Commission for the fiscal years ended September 30, 1998 and 1999 (the SEC Documents) including, without limitation, proxy information and solicitation materials. The Company has not provided to the Investor any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and other federal, state and local laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents (the "Financial Statements") comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such Financial Statements have been prepared in accordance with generally accepted accounting -11- principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such Financial Statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may include summary notes and may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 3.29. CHANGES. Except as disclosed on SCHEDULE 3.29 attached hereto, since the date of the Financial Statements, there has not been: (a) any change in the assets, liabilities, financial condition, or operations of the Company considered in the aggregate from that reflected in the Financial Statements, except changes in the ordinary course of business that would not constitute, either individually or in the aggregate, a Material Adverse Effect; (b) any change (individually or in the aggregate), in the contingent obligations of the Company by way of guaranty, endorsement, indemnity, warranty, or otherwise; (c) any damage, destruction, or loss, whether or not covered by insurance, that could constitute a Material Adverse Effect; (d) any loans made by the Company to its employees, officers, or directors other than travel advances made in the ordinary course of business; (e) any increases in the compensation of any of the Company's employees, officers, or directors; (f) any declaration or payment of any dividend, other than the dividend related to the Series A Preferred Stock, or other distribution of the assets of the Company; (g) any issuance or sale by the Company of any shares of Common Stock or other securities; (h) any other event or condition of any character that could result in a Material Adverse Effect; or (i) any agreement or commitment by the Company to do any of the things described in this Subsection 3.29. 3.30. EXEMPTION FROM REGISTRATION; VALID ISSUANCES. The sale and issuance of the Purchased Shares and the Note Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, may and shall be properly issued pursuant to Rule 4(2), Regulation D and/or any applicable state law. -12- 3.31. NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS TRANSACTION. Neither the Company nor any of its affiliates nor any distributor or any person acting on its or their behalf (i) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general advertising with respect to the Purchased Shares or the Note Shares, or (ii) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the security under the Securities Act. 3.32. NO INTEGRATED OFFERING. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, other than pursuant to this Agreement, under circumstances that would require registration of the security under the Securities Act. 3.33. MATERIAL NON-PUBLIC INFORMATION. Except as disclosed on SCHEDULE 3.33 attached hereto, the Company is not in possession of, nor has the Company or its agents disclosed to the Investor, any material non-public information that (i) if disclosed, would, or could reasonably be expected to have, an effect on the price of the Common Stock and (ii) according to applicable law, rule or regulation, should have been disclosed publicly by the Company prior to the date hereof but which has not been so disclosed. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor represents and warrants to the Company that: 4.1 INTENT. The Investor is entering into this Agreement for its own account and the Investor has no view to the distribution of the Purchased Shares or the Note Shares, and has no present arrangement (whether or not legally binding) at any time to sell the Purchased Shares or the Note Shares, to or through any person or entity. 4.2 SOPHISTICATED INVESTOR. The Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Common Stock. The Investor acknowledges that an investment in the Common Stock is speculative and involves a high degree of risk. 4.3 AUTHORITY. Each of the Transaction Documents has been duly authorized by all necessary corporate action and no further consent or authorization of the Investor, or its Board of Directors or stockholders is required. Each of the Transaction Documents was validly executed and delivered by the Investor and each is a valid and binding agreement of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. 4.4 NOT AN AFFILIATE. The Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company. -13- 4.5 ORGANIZATION AND STANDING. The Investor is a corporation duly organized, validly existing, and in good standing under the laws of Delaware. 4.6 ABSENCE OF CONFLICTS. The execution and delivery of the Transaction Documents and any other document or instrument contemplated hereby, and the consummation of the transactions contemplated thereby, and compliance with the requirements thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, or, to the Investor's knowledge, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, (c) conflict with or constitute a material default thereunder, (d) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (e) require the approval of any third-party (that has not been obtained) pursuant to any material contract to which the Investor is subject or to which any of its assets, operations or management may be subject. 4.7 DISCLOSURE; ACCESS TO INFORMATION. The Investor has received all documents, records, books and other information pertaining to the Investor's investment in the Company that have been requested by the Investor. The Investor has received and reviewed copies of the SEC Documents. 4.8 MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising. 4.9 RESALE RESTRICTIONS. It is acknowledged by the Investor that any Common Stock to be acquired by the Investor have not been registered under the federal securities laws or any applicable state securities laws in reliance upon exemptions available for non-public or limited offerings. The Investor understands that it must bear the economic risk of the investment in the Common Stock because it has not been so registered and therefore are subject to restrictions upon transfer such that they may not be sold or otherwise transferred unless registered under the applicable securities laws or an exemption from such registration is available. The Investor will not reoffer, sell, assign, transfer, pledge, encumber, hypothecate or otherwise dispose of any Common Stock in the absence of an effective registration statement, qualification or authorization relating thereto under federal and applicable state securities laws or an opinion of qualified counsel satisfactory to the Company to the effect that the proposed transaction will neither constitute or result in any violation of the federal or state securities laws. Subject to Section 7.3 of this Agreement, any certificate or other document that may be issued representing any shares of Common Stock may be endorsed with a legend to this effect. -14- ARTICLE V CONDITIONS TO CLOSING OF THE COMPANY The obligations of the Company to sell the Purchased Shares and the Note Shares are subject to the fulfillment on or prior to each of the Closings of such sales on the following conditions: 5.1 REPRESENTATIONS. The representations made by the Investor in Article IV hereof shall be true and correct in all material respects when made and shall be true and correct on each of the Closings with the same force and effect as if they had been made on and as of said date. 5.2 PERFORMANCE. All covenants, agreements and conditions contained in this the Transaction Documents to be performed by or complied with by the Investor on or prior to the date of each of the Closings shall have been performed or complied with in all material respects. 5.3 DELIVERY OF PURCHASE PRICE. The Investor shall have delivered to the Company, against delivery of certificates evidencing the Purchased Shares, the Purchase Price. ARTICLE VI CONDITIONS TO CLOSING OF THE INVESTOR The obligation of the Investor to purchase the Purchased Shares is subject to the fulfillment, on or prior to the date of each of the Closings of such purchases, of the following conditions: 6.1 REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF OBLIGATIONS. The representations and warranties made by the Company in Article III shall be true and correct in all material respects when made, and shall be true and correct on the date of each of the Closings with the same force and effect as if they had been made on and as of said date. 6.2 PERFORMANCE. All covenants, agreements and conditions contained in this the Transaction Documents to be performed or complied with by the Company on or prior to the date of each of the Closings shall have been performed or complied with in all respects. 6.3 CERTIFICATE OF DESIGNATION. With respect to the 2nd Closing only, the Company shall have obtained Shareholder Approval and the Amendment of Restated Articles shall have been filed with the Secretary of State of the State of Minnesota. 6.4 OPINION OF THE COMPANY'S COUNSEL. The Investor shall have received the opinion of Moss & Barnett, PA, counsel for the Company, dated as of each of the Closings, in form and substance reasonably satisfactory to the Investor and the Investor's counsel covering such matters as the Investor and its counsel may reasonably request. -15- 6.5 AUTHORIZATIONS. All authorizations, approvals or permits of any Governmental Authority that are required in connection with the lawful issuance and sale of the Purchased Shares shall have been duly obtained and shall be effective on and as of the date of each of the Closings. 6.6 REGISTRATION RIGHTS AGREEMENT. The Company and the Investor shall have entered into the Registration Rights Agreement. 6.7 CERTIFICATES. The Company shall have delivered to the Investor a certificate representing the Purchased Shares which shall be issued in the Investor's name. 6.8 COMPLIANCE CERTIFICATE. The Company shall have delivered to the Investor a certificate, executed by an authorized executive officer or director of the Company, dated the date of each of the Closings, certifying to the fulfillment of the conditions specified in Sections 6.1 and 6.4 of this Article VI. 6.9 SHAREHOLDER APPROVAL. With respect to the 2nd Closing, the holders of the Company's Common Stock and Series A Preferred Stock shall have approved the amendment of the Company's Restated Articles of Incorporation and the issuance of the Shares in excess of 982,463 shares (19.9%) to the Investor, and the Company shall have delivered satisfactory evidence thereof ("Shareholder Approval"). 6.10 BUSINESS COMBINATION. The Company shall have complied with the requirements of Section 302A.673 of the Minnesota Business Corporation Act, and the Company shall have delivered satisfactory evidence thereof. 6.11 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in form and substance to the Investor and its legal counsel. 6.12 QUALIFICATION UNDER STATE SECURITIES LAWS. All registrations, qualifications, permits and approvals required under applicable state securities laws shall have been, or will be obtained within the legally required time period for the lawful execution, delivery and performance of the Transaction Documents. 6.13 SUPPORTING DOCUMENTS. The Investor shall have received (a) copies of resolutions of the Board of Directors and, as to the 2nd Closing only, the shareholders, certified by the Secretary of the Company, authorizing the execution, delivery and performance of this Agreement and all other documents and instruments to be delivered pursuant hereto and thereto; and (b) a certificate of incumbency executed by the Secretary of the Company certifying the names, titles and signatures of the officers authorized to execute the documents referred to in Section 6.12 above and further certifying that the Restated Articles of Incorporation, and the Bylaws delivered to the Investor at the time of the execution of this Agreement have been validly adopted and have not been amended or modified, except to the extent provided in the Certificate of Amendment. -16- 6.14 NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Nasdaq SmallCap Market or the NASD and shall not have been delisted from the Nasdaq SmallCap Market. 6.15 SHAREHOLDER VOTE. The issuance of the Purchased Shares shall not violate the shareholder approval requirements of the Nasdaq SmallCap Market. 6.16 NO ADVERSE EVENTS. Neither the business, assets or condition, financial or otherwise, of the Company taken as a whole shall have been materially adversely affected in any manner. 6.17 DUE DILIGENCE AND OTHER DOCUMENTS. (a) With respect to the 1st Closing, the Investor shall have satisfactorily completed due diligence in regards to intellectual property matters of the Company and shall, in its sole discretion, be satisfied with the results thereof. (b) With respect to the 2nd Closing, the Company shall have delivered to the Investor such other documents, certificates and opinions as the Investor reasonably requests, including without limitation copies of each agreement and other document, list or statement requested by the Investor or required to be disclosed in each Schedule to this Agreement. In the reasonable exercise of the Investor's judgement, the Investor's due diligence investigation of the Company as provided in Section 7.9 hereof shall have been satisfactorily completed and the Investor shall, in its sole discretion, be satisfied with the results thereof. 6.18 APPROPRIATIONS COMMITTEE APPROVAL. (a) With respect to the 1st Closing, the Appropriations Committee of Deere and Company shall have approved this Agreement. (b) With respect to the 2nd Closing, the Appropriations Committee and the Board of Directors of Deere and Company shall have approved the 2nd Closing. 6.19 BETA TESTING OF JAVALAN PRODUCT. With respect to the 2nd Closing, the Company shall have provided to the Investor a beta version of the Javalan product, and the Investor shall have completed beta testing of such product and shall, in its sole discretion, be satisfied with the results thereof. 6.20 HART-SCOTT-RODINO. With respect to the 2nd Closing and the exercise of the Note Option, any filings necessary under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") shall have been made and any waiting periods shall have expired or been terminated by the Federal Trade Commission. -17- ARTICLE VII COVENANTS OF THE COMPANY 7.1 SPECIAL MEETING OF SHAREHOLDERS. (a) The Company shall call and hold a special meeting of shareholders (the "Special Meeting") as promptly as practicable after the date hereof for the purpose of voting upon the following matters: (i) an amendment to the Restated Articles of Incorporation (the "Certificate of Amendment") increasing the number of shares of authorized Common Stock to 12,000,000 shares and removing the reservation of voting rights solely to common shares; and (ii) the sale and issuance by the Company of securities equal to 20% or more of the Common Stock outstanding at less than the market value of the Common Stock in accordance with the requirements of the Nasdaq SmallCap Market. (b) Immediately following the approval by the shareholders of the Certificate of Amendment, if such approval is obtained, the Company shall file the Certificate of Amendment with the Secretary of State of the State of Minnesota. (c) The Company shall use its best efforts to ensure that its directors and officers vote in favor of the matters described in subsection (a)(i) and (ii) of this Section 7.1. 7.2 LISTING OF COMMON STOCK. The Company shall exercise best efforts to maintain the listing of the Common Stock on the Nasdaq SmallCap Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the NASD and the Nasdaq SmallCap Market. 7.3 LEGENDS. The certificates evidencing the Purchased Shares and the Note Shares shall be free of legends, except as provided for in Section 9.11. 7.4 CORPORATE EXISTENCE. The Company shall take all steps necessary to preserve and continue the corporate existence of the Company. 7.5 ADDITIONAL SEC DOCUMENTS. The Company shall deliver to the Investor, as and when the originals thereof are submitted to the SEC for filing, copies of all SEC Documents so furnished or submitted to the SEC. 7.6 CONSOLIDATION; MERGER. The Company shall not, at any time after the date hereof, and prior to the earlier of December 31, 2000 or the 2nd Closing, effect any merger or consolidation of the Company with or into, or a transfer of all or substantially all of the assets of the Company to, another entity(i) without the prior written consent of the Investor and (ii) unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligation to deliver to the Investor such shares of stock and/or securities as the Investor is entitled to receive pursuant to this Agreement. -18- 7.7 ISSUANCE OF SHARES. The sale of the Purchased Shares and the Note Shares shall be made in accordance with the provisions and requirements of Regulation D and any applicable state law. 7.8 NOMINATIONS TO BOARD OF DIRECTORS. The Investor shall have the right to nominate two individuals (the "Initial Investor Designees") for election to the Board of Directors, which number shall increase to three individuals upon the 2nd Closing (the "Additional Investor Designee", together with the Initial Investor Designees, the "Investor Designees"). As promptly as practicable after the 1st Closing, the Company shall use its best efforts to obtain the resignation of one current member of the Board of Directors and cause the nomination and election to the two vacant director positions the Initial Investor Designees. Upon the 2nd Closing, the Company shall use its best efforts to obtain the resignation one member of the Board of Directors, which member shall not be an Investor Designee, and cause the nomination and election of the Additional Investor Designee to the vacant director position thereby created, and at the next annual or special meeting of stockholders of the Company held for the purpose of electing directors, the Company shall use its best efforts to cause the nomination and election of the Investor Designees. In connection therewith, the Company agrees to solicit proxies for, and recommend that its stockholders vote in favor of, the Investor Designees. If an Investor Designee shall cease to be a member of the Board of Directors for any reason other than expiration of his or her term, the Company shall promptly, upon the request of the Investor, use its best efforts to cause the election or appointment of a person selected by the Investor to replace such designee. 7.9 FULL ACCESS. From the date hereof to the earlier of December 31, 2000 or the 2nd Closing, the Investor may, through its employees, agents and representatives, make or cause to be made such investigation of the Company as the Investor deems necessary or advisable and shall have full access to the auditors and attorneys of the Company. The Company shall permit the Investor and its employees, agents and representatives, on reasonable notice, to have access during normal business hours to its premises, personnel and books and records. The Company shall cooperate to provide access to its customers, clients, suppliers, lenders and such other parties as the Investor may reasonably request. The Company shall, and shall cause its officers, attorneys and accountants to furnish the Investor with such financial and operating data and other information as the Investor from time to time shall reasonably request. No investigation by the Investor shall in any way affect or otherwise diminish the representations, warranties and covenants of the Company hereunder. 7.10 RESTRICTIONS PENDING THE 2ND CLOSING. The Company shall not, at any time after the date hereof, and prior to the earlier of December 31, 2000 or the 2nd Closing, except as expressly provided for in this Agreement or as consented to in writing by the Investor: (a) amend its Restated Articles of Incorporation or Bylaws, except as contemplated in section 7.1; (b) split, combine or reclassify any shares of the Company's capital stock; -19- (c) declare or pay any dividend or distribution (whether in cash, stock or property) in respect of its Common Stock; (d) take any action, or knowingly omit to take any action, that would, or that would reasonably be expected to, result in (i) any of the representations and warranties of the Company set forth in Article III becoming untrue or (ii) any of the conditions to the obligations of the Investor set forth in Article VI not being satisfied; or (e) enter into any agreement or commitment to do any of the foregoing. 7.11 ADDITIONAL AFFIRMATIVE COVENANTS. In addition, the Company shall, or shall cause each of its subsidiaries, as applicable, to: (a) promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company or any subsidiary; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto; and provided, further, that the Company shall pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor; (b) promptly pay, or cause to be paid, when due, in conformance with customary trade terms, all other indebtedness incident to the operations of the Company and its subsidiaries, if any; (c) keep its properties and those of its subsidiaries in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; (d) comply, and cause its subsidiaries, if any, to comply, in all material respects, at all times with the provisions of all leases to which any of the Company and its subsidiaries is a party or under which any of them occupies real property; (e) keep its assets and those of its subsidiaries that are of an insurable character insured by reputable insurers against loss or damage by fire and explosion in amounts customary for companies in similar businesses similarly situated; and maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated; (f) keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles applied on a consistent basis; -20- (g) duly observe and conform to, and cause its subsidiaries, if any, to so observe and conform to, in all material respects, all valid requirements of governmental authorities relating to the conduct of their businesses or to their property or assets; and (h) maintain in full force and effect its corporate existence, rights and franchises and use its commercially reasonable efforts to maintain in full force and effect all licenses and other rights to use patents, processes, licenses, trademarks, service marks, trade names or copyrights owned or possessed by it or any subsidiary and necessary to the conduct of its business. 7.12 NEGATIVE COVENANTS. The Company shall not, without the Investor's prior written consent, do any of the following: (a) merge, consolidate or exchange shares with another corporation or entity or otherwise dispose of any of its assets other than in the ordinary course of business; (b) incur any debts, outside the ordinary course of business, which would have a material adverse effect on the Company; (c) pay or declare any dividends on its Common Stock (except for stock dividends) or redeem, retire or otherwise acquire any of its capital stock; (d) make any change in the Company's capital structure which would have a material adverse effect on the Company; (e) during any calendar year (i) pay to any officer or senior manager compensation (including salary, bonus and benefits) which materially exceeds the compensation customarily paid to management in companies of similar size, of similar maturity and in similar businesses or (ii) change the compensation for any officer or senior manager other than such changes as are approved by a majority of the disinterested members of the Board of Directors or any compensation committee thereof; (f) enter into any transaction, including, without limitation, any loans or extensions of credit, with any employee, consultant, officer, director or holder of five percent (5%) of any class of capital stock of the Company, or any member of their respective immediate families or any corporation or other entity directly or indirectly controlled by one or more of such employees, consultants, officers, directors or 5% stockholders or members of their immediate families (i) on terms less favorable to the Company than it would obtain in an arms-length transaction between unrelated parties, or (ii) except in the case of any transaction or series of transactions entered into in the ordinary course of business and involving less than $5,000 in the aggregate; (g) except as provided for or approved in an annual budget approved by the Board of Directors, (i) enter into any agreement, commitment or plan involving an acquisition, investment or expenditure in excess of $50,000, or (ii) incur, assume, guarantee, endorse or -21- otherwise become directly or contingently liable for any obligation in excess of $50,000, in a transaction or series of transactions; (h) enter into any material transaction outside the ordinary course of business; or (i) agree to do any of the foregoing. 7.13 ISSUANCE OF ADDITIONAL SHARES. The Company shall not, without the approval of a majority of Board of Directors, which approval shall include the affirmative vote of at least one of the Investor Designees, authorize or issue, or obligate itself to issue, any additional shares of any class or series of capital stock of the Company or any obligation or security exercisable for, convertible into or exchangeable for shares of any class or series of capital stock of the Company, other than as contemplated by this Agreement; PROVIDED, HOWEVER, that the provisions of this Section 7.13 shall not apply to the issuance of shares of Common Stock or stock options or other rights exercisable for Common Stock issued on or after the date hereof to directors, officers, employees or consultants of the Company pursuant to any currently existing stock option plan or agreement, employee stock ownership plan or employee benefit plan. ARTICLE VIII INDEMNIFICATION 8.1 OBLIGATION TO INDEMNIFY. Subject to the limitations set forth in this Article VIII, each party hereto shall indemnify and hold the other party harmless from and against any and all losses, claims, damages, expenses or liabilities (including, without limitation, the costs of any investigation or suit and counsel fees related thereto) ("Damages") asserted against, imposed upon or incurred by such other party resulting from a breach by the indemnifying party of any of its representations, warranties or covenants made in the Transaction Documents or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished pursuant to the Transaction Documents. 8.2 GENERAL INDEMNIFICATION PROCEDURES. (a) A party seeking indemnification pursuant to Section 8.1 (an "INDEMNIFIED PARTY") shall give prompt notice to the party from whom such indemnification is sought (the "INDEMNIFYING PARTY") of the assertion of any indemnifiable claim for Damages or the commencement of any action, suit or proceeding, in respect of which indemnity may be sought hereunder and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but failure to give such notice shall not relieve the Indemnifying Party of any liability hereunder (except to the extent that the Indemnifying Party has suffered actual prejudice thereby). If any Indemnifying Party shall be obligated to indemnify an Indemnified Party hereunder, such Indemnifying Party shall pay to such Indemnified Party the amount to which such Indemnified Party shall be entitled. -22- (b) The Indemnifying Party shall have the right exercisable by written notice to the Indemnified Party within fifteen (15) days of receipt of notice from the Indemnified Party of the commencement of or assertion of any claim or action, suit or proceeding by a person not a party to this Agreement (other than an Affiliate (as defined in Section 9.3) of any party hereto) in respect of which indemnity may be sought hereunder (a "Third Party Claim"), to assume the defense and control the settlement of such Third Party Claim. The Indemnifying Party or the Indemnified Party, as the case may be, shall have the right to participate in (but not control), at its own expense, the defense of any Third Party Claim which the other is defending as provided in this Agreement. The Indemnifying Party, if it shall have assumed the defense of any Third Party Claim as provided in this Agreement, shall not consent to a settlement of, or the entry of any judgment arising from, any such Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). (c) No action or claim for indemnification under Section 8.1 arising out of or resulting from a breach of representations and warranties contained in Articles III and IV herein shall be brought or made until such time as all indemnifiable claims of a party exceed $20,000 or after the period concluding on the third anniversary of the Closing Date (the "Expiration Date"); provided, however, that the foregoing time limitations shall not apply to: (i) any of the representations and warranties contained in Sections 3.2, 3.4, 3.5 and 3.6., each of which shall survive indefinitely; (ii) any such claims that have been the subject of a good faith written notice from the Indemnified Party to the Indemnifying Party, prior to the Expiration Date, which notice specifies in reasonable detail the nature and basis for such claim (which shall survive until the final resolution of such claim), or (iii) the warranties and representations set forth in Section 3.23 hereof, which shall survive until such time as the limitations period has run for all tax periods ended prior to the Closing Dates, which shall be deemed to be the Expiration Date for Section 3.23. ARTICLE IX MISCELLANEOUS 9.1 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of Georgia. 9.2 SURVIVAL. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Investor and the closings of the transactions contemplated hereby. 9.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided in this Article IX, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the Investor. The rights, remedies and entitlements of the Investor under this Agreement may be assigned in full or in part at any time after the date of this Agreement to an Affiliate (as defined below). Any assignment to a non-Affiliate shall require prior written consent of the Company. No such assignment, whether to an Affiliate or a non-Affiliate, shall be effective unless the transferee, as a condition to such transfer, agrees in writing that he or it will receive and hold such securities subject to the -23- provisions of this Agreement. In all cases of assignment, the Investor shall give the Company written notice, stating the name and address of said transferee and identifying the securities that are being assigned. For purposes of this Article IX, an "Affiliate" shall mean any direct or indirect general or limited partner or member, and a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Investor. The Company may not assign its rights hereunder. 9.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Registration Rights Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated orally, but only by a written instrument signed by the holders of at least a majority of the shares of Purchase Shares then issued and outstanding and a representative of the Company so authorized by its Board of Directors. 9.5 NOTICES. All notices and other communications required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or three (3) business days following upon deposit with the United States Postal Service, by certified mail, return receipt requested, postage prepaid, or otherwise delivered by hand or by messenger, addressed (a) if to the Investor, at John Deere Special Technologies Group, Inc. 300 Grimes Bridge Road Roswell, Georgia 30075 ATTN: James E. Heerin with a copy to: Morris, Manning & Martin, L.L.P. 3343 Peachtree Road, N.E. Suite 1600 Atlanta, Georgia 30326 ATTN: Jeffrey L. Schulte, Esq. or at such other address as the Investor shall have furnished to the Company or (b) if to the Company, at Xata Corporation 151 East Cliff Road, Ste 10 Burnsville, MN 55337 ATTN: Gary C. Thomas with a copy to Moss & Barnett, PA 4800 Wells Fargo Center 90 South 7th Street -24- Minneapolis, Mn 55402 ATTN: Janna R. Severance or at such other address as the Company shall have furnished to the Investor. 9.6 DELAYS OR OMISSIONS: REMEDIES CUMULATIVE. No delay or omission to exercise any right, power or remedy accruing to the Investor, upon any breach or default under this Agreement, shall impair any such right, power or remedy of the Investor or be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All of the Investor's remedies, either under this Agreement, or by law or otherwise afforded to the Investor, shall be cumulative and not alternative. 9.7 AGENT'S FEES. Except as set forth in SCHEDULE 3.26, each party (i) represents and warrants that it has retained no finder or broker in connection with the transactions contemplated by this Agreement (except as disclosed to the other parties hereto as of the date hereof) and (ii) hereby agrees to indemnify and to hold the other parties harmless of and from any liability for commissions or compensation in the nature of an agent's, finder's or broker's fee to any broker or other person or firm (and the cost and expenses of defending against such liability or asserted liability) for which said party is responsible. 9.8 EXPENSES. Each party shall bear its own expenses and legal fees (and expenses and disbursements of its legal counsel) incurred on its behalf with respect to this Agreement and the transactions contemplated hereby. 9.9 CONSTRUCTION OF CERTAIN TERMS. The titles of the articles, sections, and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Wherever the words "including," "include" or "includes" are used in this Agreement, they shall be deemed followed by the words "without limitation." References to any gender shall be deemed to mean any gender. 9.10 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 9.11 LEGENDS. Each of the Purchased Shares and the Note Shares will bear the following legend: The securities represented by this certificate and the securities issuable upon conversion hereof have not been registered with the United States Securities and Exchange Commission under the Securities Act of 1933 (the "Securities Act"), or the securities commission of any state under any state securities law. The securities represented by this certificate may not be offered, sold or otherwise transferred unless (i) a registration statement under the Securities Act and any applicable state securities laws shall have become effective with regard thereto, or (ii) in the opinion of counsel -25- acceptable to the Company, registration under the Securities Act and applicable state securities laws is not required in connection with such proposed transfer. 9.12 TIMELY PERFORMANCE. Time is of the essence as to the performance of the obligations required of the respective parties under this Agreement. -26- ARTICLE X TERMINATION 10.1 TERMINATION. (a) This Agreement may be terminated at any time prior to the 2nd Closing whether before or after the Special Meeting: (i) by mutual written consent of the Company and the Investor, effective as of the date specified in the mutual consent; or (ii) by either the Company or the Investor, effective as of the date of mailing or other transmission of notice, if a court of competent jurisdiction or other governmental entity has issued a nonappealable final order, decree or ruling or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining or otherwise prohibiting the purchase by the Investor or the issuance by the Company of the Purchased Shares or Note Shares; or (iii) by the Company or the Investor, effective as of the date of mailing or other transmission of notice, at any time prior to the 2nd Closing, if there has been a material breach of any representation, warranty, covenant or agreement, or a failure to satisfy any condition precedent to closing on the part of the other party set forth in the Agreement, which breach or failure would impair the ability of the breaching party to consummate the transactions contemplated by the Agreement and which, in the case of a failure of a condition precedent, is such that it cannot be cured prior to the date fixed for closing; provided, however, that such termination shall not limit limitation for such breach of the Agreement. (b) If not terminated prior to the 2nd Closing as provided in this Article X, this Agreement shall terminate if the 2nd Closing does not occur on or before December 31, 2000, or such later date to which the parties may reasonably agree. (c) This Agreement shall terminate, with the exception of the provisions of Article VIII herein, at such time after the 2nd Closing as the Investor owns less than ten percent (10%) of the issued and outstanding Common Stock of the Company. -27- IN WITNESS WHEREOF, the Company and the Investor have executed and delivered this Agreement as of the day and year first above written. COMPANY: Xata Corporation By: /s/ William P. Flies -------------------------------------- Its: CTO -------------------------------------- INVESTOR: John Deere Special Technologies Group, Inc. By: /s/ Charles R. Stamp, Jr. -------------------------------------- Charles R. Stamp, Jr., President EX-99.2 3 a2025352zex-99_2.txt EXHIBIT 99.2 SELLING STOCKHOLDER AGREEMENT This SELLING STOCKHOLDER AGREEMENT (this "Agreement") is entered into as of the 30th day of August, 2000, by and between John Deere Special Technologies Group, Inc., a Delaware corporation (the "Investor") and XATA Investment Partners, LLC (the "Selling Stockholder"). WHEREAS, the Investor and Xata Corporation, a Minnesota corporation (the "Company") are entering into a Stock Purchase Agreement of even date herewith (the "Company Stock Purchase Agreement") whereby the Company will sell, and the Investor will purchase, shares of the Company's Common Stock (the "Common Stock"); WHEREAS, in connection with the transactions contemplated by the Company Stock Purchase Agreement, the Investor desires to purchase from the Selling Stockholder, and the Selling Stockholder desires to sell to the Investor, 200,000 shares of Common Stock on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the premises and mutual covenants and obligations hereafter set froth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties intending to be legally bound, hereby agree as follows: ARTICLE I PURCHASE AND SALE OF SHARES 1.1. SALE OF SHARES OF COMMON STOCK. (a) SALE OF SHARES OF COMMON STOCK. Subject to the terms and conditions hereof, at the Closing the Selling Stockholder shall sell to the Investor, and the Investor shall purchase from the Selling Stockholder, two hundred thousand (200,000) shares of Common Stock (the "Selling Stockholder Shares") for the Purchase Price provided in Section 1.1(b) below. (b) PURCHASE PRICE. The purchase price for the Purchased Shares shall be 82 percent (82%) of the average of the daily Bid and Ask (4:00 p.m. closing) price for the Company's common stock, as reported by the Nasdaq Smallcap Market quotation, for the 30 day period preceding the date of this Agreement (the "Purchase Price"). 1.2. AGREEMENTS. Each of the parties hereto agrees at the Closing to enter into the respective agreements described in Article VI to which they are indicated as a party. ARTICLE II CLOSING; DELIVERIES 2.1. CLOSING. The closing of the purchase and sale of the Selling Stockholder Shares (the "Closing") shall occur on August 31, 2000, or on such date as the 1st Closing, as that term is defined in the Company Stock Purchase Agreement, shall occur, and shall be held at the offices of Morris, Manning & Martin, L.L.P., Atlanta, Georgia, or at such other place as the parties may agree. 2.2. DELIVERIES. At the Closing, the Selling Stockholder shall deliver to the Investor certificates evidencing the Selling Stockholder Shares, against payment of the Purchase Price. The Selling Stockholder shall also deliver such other instruments and documents as are described in Article VI. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER The Selling Stockholder represents and warrants to the Investor the following: 3.1. POWER AND AUTHORITY; NO DEFAULT. The Selling Stockholder has good and valid title to all of the Selling Stockholder Shares, free and clear of all liens, charges and encumbrances, and all of the Selling Stockholder Shares will be transferred to the Investor free and clear of all liens, charges, claims and encumbrances whatsoever (other than those in favor of the Company). The performance by the Selling Stockholder of its obligations under this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation of any terms or provisions of, or constitute a default under, any statute, any indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Selling Stockholder is bound, or any law, order, rule, regulation of any court or governmental agency or body having jurisdiction over the Selling Stockholder, the property of the Selling Stockholder or the Selling Stockholder Shares, and no consent, approval, authorization or order of any court or governmental agency or body is required for the consummation by the Selling Stockholder of the transactions contemplated by this Agreement. 3.2. DUE EXECUTION. This Agreement has been duly executed and delivered by the Selling Stockholder and is a valid and binding obligation of the Selling Stockholder, enforceable in accordance with its terms. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor represents and warrants to the Selling Stockholder that: 4.1. INTENT. The Investor is entering into this Agreement for its own account and the Investor has no view to the distribution of the Selling Stockholder Shares and has no present 2 arrangement (whether or not legally binding) at any time to sell the Selling Stockholder Shares to or through any person or entity. 4.2. SOPHISTICATED INVESTOR. The Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and the Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Common Stock. The Investor acknowledges that an investment in the Common Stock is speculative and involves a high degree of risk. 4.3. AUTHORITY. This Agreement has been duly authorized by all necessary corporate action and no further consent or authorization of the Investor, or its Board of Directors or stockholders is required. This Agreement was validly executed and delivered by the Investor and each is a valid and binding agreement of the Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. 4.4. NOT AN AFFILIATE. The Investor is not an officer, director or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of the Company. 4.5. ORGANIZATION AND STANDING. the Investor is duly organized, validly existing, and in good standing under the laws of Delaware. 4.6. ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and any other document or instrument contemplated hereby, and the consummation of the transactions contemplated thereby, and compliance with the requirements thereof, will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Investor, or, to the Investor's knowledge, (b) violate any provision of any indenture, instrument or agreement to which the Investor is a party or is subject, or by which the Investor or any of its assets is bound, (c) conflict with or constitute a material default thereunder, (d) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any fiduciary duty owed by the Investor to any third party, or (e) require the approval of any third-party (that has not been obtained) pursuant to any material contract to which the Investor is subject or to which any of its assets, operations or management may be subject. 4.7. MANNER OF SALE. At no time was the Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising. 4.8. RESALE RESTRICTIONS. It is acknowledged by the Investor that any Common Stock to be acquired by the Investor have not been registered under the federal securities laws or any applicable state securities laws in reliance upon exemptions available for non-public or limited offerings. The Investor understands that it must bear the economic risk of the investment in the Common Stock because they have not been so registered and therefore are subject to restrictions 3 upon transfer such that they may not be sold or otherwise transferred unless registered under the applicable securities laws or an exemption from such registration is available. ARTICLE V CONDITIONS TO CLOSING OF THE SELLING STOCKHOLDER The obligations of the Selling Stockholder to sell the Selling Stockholder Shares at the Closing is subject to the fulfillment on or prior to the Closing of the following conditions: 5.1. REPRESENTATIONS. The representations made by the Investor in Article IV hereof shall be true and correct in all material respects when made and shall be true and correct at the Closing with the same force and effect as if they had been made on and as of said date. 5.2. PERFORMANCE. All covenants, agreements and conditions contained in this Agreement to be performed by or complied with by the Investor on or prior to the Closing shall have been performed or complied with in all material respects. 5.3. DELIVERY OF PURCHASE PRICE. The Investor shall have delivered to the Selling Stockholder, against delivery of certificates evidencing the Purchased Shares, the Purchase Price. 5.4. PURCHASE OF SHARES FROM COMPANY. The 1st Closing, as that term is defined in the Company Stock Purchase Agreement, shall have occurred or shall occur concurrently with the Closing. ARTICLE VI CONDITIONS TO CLOSING OF THE INVESTOR 6.1. REPRESENTATIONS. The representations and warranties made by the Selling Stockholder in Article III shall be true and correct in all material respects when made, and shall be true and correct at the Closing with the same force and effect as if they had been made on and as of said date. 6.2. PERFORMANCE. All covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Selling Stockholder on or prior to the Closing shall have been performed or complied with in all respects. 6.3. CONVERSION. XATA Investment Partners, LLC, shall have converted its shares of Series A 8% Convertible Preferred Stock of the Company (the "Series A Preferred Stock") into Common Stock. 6.4. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such 4 transactions shall be reasonably satisfactory in form and substance to the Investor and its legal counsel. 6.5. NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Nasdaq SmallCap Market or the NASD and shall not have been delisted from the Nasdaq SmallCap Market. 6.6. APPROPRIATIONS COMMITTEE APPROVAL. The Appropriations Committee of Deere and Company shall have approved this Agreement, the Company Stock Purchase Agreement and the transactions contemplated herein and therein. 6.7. CONDITIONS TO PURCHASE OF SHARES FROM COMPANY. All conditions to closing of the Investor contained in Article VI of the Company Stock Purchase Agreement, other than those contained in Section 6.3, 6.10, 6.18(b) and 6.20 therein, shall have been satisfied. 6.8. PURCHASE OF SHARES FROM COMPANY. The 1st Closing, as that term is defined in the Company Stock Purchase Agreement, shall have occurred or shall occur concurrently with the Closing. ARTICLE VII COVENANTS OF THE SELLING STOCKHOLDER 7.1 CONVERSION OF SERIES A PREFERRED STOCK. The Selling Stockholder shall use his best efforts to cause to be converted the shares of Series A Preferred Stock held by XATA Investment Partners, LLC into Common Stock. ARTICLE VIII INDEMNIFICATION 8.1 OBLIGATION TO INDEMNIFY. Subject to the limitations set forth in this Article VIII, each party hereto shall indemnify and hold the other party harmless from and against any and all losses, claims, damages, expenses or liabilities (including, without limitation, the costs of any investigation or suit and counsel fees related thereto) ("Damages") asserted against, imposed upon or incurred by such other party resulting from a breach by the indemnifying party of any of its representations, warranties or covenants made in this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished pursuant to this Agreement. 8.2 GENERAL INDEMNIFICATION PROCEDURES. (a) A party seeking indemnification pursuant to Section 8.1 (an "INDEMNIFIED PARTY") shall give prompt notice to the party from whom such indemnification is sought (the "INDEMNIFYING PARTY") of the assertion of any indemnifiable claim for Damages or the commencement of any action, suit or proceeding, in respect of which indemnity may be sought 5 hereunder and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but failure to give such notice shall not relieve the Indemnifying Party of any liability hereunder (except to the extent that the Indemnifying Party has suffered actual prejudice thereby). If any Indemnifying Party shall be obligated to indemnify an Indemnified Party hereunder, such Indemnifying Party shall pay to such Indemnified Party the amount to which such Indemnified Party shall be entitled. (b) The Indemnifying Party shall have the right exercisable by written notice to the Indemnified Party within fifteen (15) days of receipt of notice from the Indemnified Party of the commencement of or assertion of any claim or action, suit or proceeding by a person not a party to this Agreement (other than an Affiliate (as defined in Section 9.3) of any party hereto) in respect of which indemnity may be sought hereunder (a "Third Party Claim"), to assume the defense and control the settlement of such Third Party Claim. The Indemnifying Party or the Indemnified Party, as the case may be, shall have the right to participate in (but not control), at its own expense, the defense of any Third Party Claim which the other is defending as provided in this Agreement. The Indemnifying Party, if it shall have assumed the defense of any Third Party Claim as provided in this Agreement, shall not consent to a settlement of, or the entry of any judgment arising from, any such Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). (c) No action or claim for indemnification under Section 8.1 arising out of or resulting from a breach of representations and warranties contained in Articles III and IV herein shall be brought or made until such time as all indemnifiable claims of a party exceed $15,000. ARTICLE IX MISCELLANEOUS 9.1. GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of Georgia. 9.2. SURVIVAL. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Investor and the closings of the transactions contemplated hereby. 9.3. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided in this Article IX, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the Investor. The rights, remedies and entitlements of the Investor under this Agreement may be assigned in full or in part at any time after the date of this Agreement. The Selling Stockholder may not assign his rights hereunder. 6 9.4. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Company Stock Purchase Agreement and the other documents delivered pursuant hereto and thereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated orally, but only by a written instrument signed by both parties hereto. 9.5. NOTICES. All notices and other communications required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or three (3) business days following upon deposit with the United States Postal Service, by certified mail, return receipt requested, postage prepaid, or otherwise delivered by hand or by messenger, addressed (a) if to the Investor, at John Deere Special Technologies Group, Inc. 300 Grimes Bridge Road Roswell, Georgia 30075 ATTN: James E. Heerin with a copy to: Morris, Manning & Martin, L.L.P. 3343 Peachtree Road, N.E. Suite 1600 Atlanta, Georgia 30326 ATTN: Jeffrey L. Schulte, Esq. or at such other address as the Investor shall have furnished to the Selling Stockholder in writing or (b) if to the Selling Stockholder, at such address as the Selling Stockholder shall have furnished the Company or the Investor in writing. 9.6. DELAYS OR OMISSIONS: REMEDIES CUMULATIVE. No delay or omission to exercise any right, power or remedy accruing to the Investor, upon any breach or default under this Agreement, shall impair any such right, power or remedy of the Investor or be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All of the Investor's remedies, either under this Agreement, or by law or otherwise afforded to the Investor, shall be cumulative and not alternative. 9.7. AGENT'S FEES. Each party (i) represents and warrants that it has retained no finder or broker in connection with the transactions contemplated by this Agreement (except as disclosed to the other parties hereto as of the date hereof) and (ii) hereby agrees to indemnify and to hold the other parties harmless of and from any liability for commissions or compensation in the nature of an agent's, finder's or broker's fee to any broker or other person or firm (and the cost and expenses of defending against such liability or asserted liability) for which said party is responsible. 7 9.8. EXPENSES. The Investor and the Selling Stockholder shall bear their own expenses and legal fees (and expenses and disbursements of its legal counsel) incurred on their behalf with respect to this Agreement and the transactions contemplated hereby. 9.9. CONSTRUCTION OF CERTAIN TERMS. The titles of the articles, sections, and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Wherever the words "including," "include" or "includes" are used in this Agreement, they shall be deemed followed by the words "without limitation." References to any gender shall be deemed to mean any gender. 9.10. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 9.11. TIMELY PERFORMANCE. Time is of the essence as to the performance of the obligations required of the respective parties under this Agreement. 8 IN WITNESS WHEREOF, the Investor and the Selling Stockholder have executed and delivered this Agreement as of the day and year first above written. INVESTOR: John Deere Special Technologies Group, Inc. By: /s/ Charles R. Stamp, Jr. ------------------------------------------- Charles R. Stamp, Jr., President SELLING STOCKHOLDER: ---------------------------------------------- XATA Investment Partners, LLC By: /s/ Stephen A. Lawrence ------------------------------------------- Stephen A. Lawrence EX-99.3 4 a2025352zex-99_3.txt EXHIBIT 99.3 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is entered into as of August 30, 2000, by and between XATA CORPORATION, a Minnesota corporation (the "COMPANY") and JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC., a Delaware corporation (the "INVESTOR"). RECITALS: A. Concurrently herewith, the Company has agreed to sell to the Investor up to 3,147,000 shares (the "PURCHASED SHARES") of Common Stock of the Company (the "COMMON STOCK") pursuant to that certain Stock Purchase Agreement of even date herewith (the "STOCK PURCHASE AGREEMENT") between the Company and the Investor B. Concurrently herewith, the Company has granted to the Investor an option to convert that certain $1,000,000 Promissory Note from the Company to the Investor (the "NOTE") into shares (the "NOTE Shares") of Common Stock pursuant to the Stock Purchase Agreement. C. Concurrently herewith, XATA Investment Partners, LLC has agreed to sell to the Investor up to 200,000 shares (the "SELLING STOCKHOLDER SHARES") of Common Stock pursuant to the Selling Stockholder Agreement. D. It is a condition to the consummation of the transactions contemplated by the Stock Purchase Agreement that the Company and the Investor enter into this Agreement whereby the Company shall grant, and the Investor shall obtain, the rights relating to the registration of the Registrable Securities under the Securities Act, as set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows: ARTICLE I DEFINITIONS 1.1. CERTAIN DEFINITIONS. For purposes of this Agreement: (a) The term "COMMISSION" means the Securities and Exchange Commission. (b) The term "FORM S-3" means such form under the Securities Act as is in effect on the date hereof or any successor form under the Securities Act; (c) The term "HOLDERS" means the Investor and any other person holding Registrable Securities to whom these registration rights have been transferred pursuant to Section 2.8 hereof. (d) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended, or successor statute (the "SECURITIES ACT"), and the declaration or ordering of effectiveness of such registration statement or document. (e) The term "REGISTRABLE SECURITIES" means (i) the Purchased Shares and the Note Shares, (ii) the Selling Stockholder Shares and (iii) any other shares of Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the Registrable Securities; provided, however, that the foregoing definition shall exclude in all cases any Registrable Securities sold by a person in a transaction in which his or her rights under this Agreement are not assigned. Notwithstanding the foregoing, shares of Common Stock or other securities will only be treated as Registrable Securities if and so long as they have not been (A) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (B) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale and are not eligible for resale under Rule 144. ARTICLE II REGISTRATION RIGHTS 2.1. DEMAND REGISTRATION. (a) If the Company shall receive, any time and from time to time on or after the date hereof, a written request from the Holders of 25% of the Registrable Securities then outstanding that the Company file a registration statement under the Securities Act, then the Company shall, within ten (10) days of the receipt thereof, give written notice of such request to all Holders and shall, subject to the limitations of subsection 2.1(b) and 2.1(d), use its best efforts to effect as soon as practicable, the registration under the Securities Act of all Registrable Securities which the Holders request in writing to be registered within twenty (20) days of the mailing of such notice by the Company. (b) If the Holders initiating the registration request hereunder ("INITIATING HOLDERS") intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the Company shall include such information in the written notice referred to in subsection 2.1(a). The underwriter will be selected by a majority in interest of the Initiating Holders and reasonably approved by the Company. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter or -2- underwriters selected for such underwriting. Notwithstanding any other provision of this Section 2.1, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated among all Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each Holder. The Company shall have the right to include securities for its own account in such registration, if permitted by the registration form to be filed and the underwriter so agrees, but only if such inclusion will not limit the number of securites offered by the Holders. (c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.1, a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the board of directors of the Company, it would be seriously detrimental to the Company and its shareholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period. (d) In addition and without limitation of Section 2.11 hereof, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 2.1: (i) After the Company has effected two registrations pursuant to Section 2.1 and such registrations have been declared or ordered effective; (ii) During the ninety (90) day period prior to the Company's good faith estimate of the date of filing of a registration subject to Section 2.2 hereof; provided that the Company (i) is using its best efforts to cause such registration statement to become effective and (ii) provides written notice of such proposed filing to the Holders within thirty (30) days after receipt of the written request from the Holders pursuant to Section 2.1(a); or (iii) If the Initiating Holders proposed to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 (or any successor form that provides for short-form registration) pursuant to a request made pursuant to Section 2.3 below; or (iv) If the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters' discounts or commissions) of less than $100,000; or -3- (v) If the Company has, within the six (6) month period preceding the date of such request, effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.1 that have been declared or ordered effective. 2.2. COMPANY REGISTRATION. (a) If the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than registration relating solely to the sale of securities to participants in a Company stock plan, an offering or sale of securities pursuant to a Form S-4 (or successor form) registration statement or a registration in which the only stock being registered is Common Stock issuable upon conversion of debt securities which are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section 2.7, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered. (b) In connection with any offering involving an underwriting of shares of the Company's capital stock, the Company shall not be required under Section 2.2(a) to include any of the Holders' securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, the underwriters may limit the amount of securities to be included in the registration and underwriting by the selling shareholders. The Company shall so advise all Holders of Registrable Securities which would otherwise be registered and underwritten pursuant hereto, and the number of securities that may be included in the registration and underwriting shall be allocated first, among the initiating holders on a pro rata basis, or as the Company and the initiating holders, if any, may determine and second, among the Holders and other participating holders, other than initiating holders, if any, requesting registration in proportion, as nearly as practicable, to the respective amounts of securities, including Registrable Securities, that such holders, including Holders, have requested pursuant to this Section 2.2 to include in such registration. If any Holder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriters. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. 2.3. FORM S-3 REGISTRATION. In case the Company shall receive from the Holders of Registrable Securities a written request or requests that the Company effect a registration on -4- Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holders, the Company will: (a) Promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and (b) As soon as practicable, effect such registration and all such qualifications and compliances as may be requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder's or Holders' Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder of Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; PROVIDED, HOWEVER; that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 2.3 if: (i) Form S-3 is not available for such offering by the Holders; (ii) The Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters' discounts or commissions) of less than $100,000; or (iii) The Company has, within the twelve (12) month period preceding the date of such request, effected two (2) registrations on Form S-3 for the Holders pursuant to this Section 2.3 that has been declared or ordered effective. (c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. 2.4. OBLIGATIONS OF THE COMPANY. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the Commission a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of twenty-five percent (25%) of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred eighty (180) days. (b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to one hundred eighty (180) days. -5- (c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of an underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering, and each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement. (f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, such obligation to continue until the earlier of (i) the sale of all Registrable Securities registered pursuant to a registration statement of which such prospectus forms a part or (ii) the withdrawal of such registration statement. (g) Cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange on which similar securities issued by the Company are then listed. (h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration. (i) Make available for inspection by any Holder of Registrable Securities covered by such registration statement, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such registration statement, in each case pursuant to confidentiality agreements, as appropriate. (j) Cause the Company's officers to make presentations to potential purchasers of the Registrable Securities, as reasonably requested by any Holder of Registrable -6- Securities covered by such registration statement or any underwriter participating in any disposition pursuant to such registration statement. (k) Permit any Holder of Registrable Securities, which Holder, in the sole judgment exercised in good faith of such Holder, might be deemed to be a controlling person of the Company (within the meaning of the Securities Act or the Exchange Act), to participate in the preparation of any registration statement covering such Holder's Registrable Securities and to include therein material, furnished to the Company in writing, which in the reasonable judgment of such Holder should be included and which is reasonably acceptable to the Company. (l) Use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 2, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities become effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities. (m) Otherwise use its best efforts to comply with all applicable rules and regulations of the Commission and make available to its security holders, in each case as soon as practicable, an earning statement covering a period of at least twelve (12) months, beginning after the effective date of the registration statement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act. 2.5. FURNISH INFORMATION. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder's Registrable Securities. 2.6. EXPENSES OF REGISTRATION. (a) EXPENSES OF DEMAND REGISTRATION. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 2.1, including (without limitation) all registration, filing and qualification fees, stock transfer taxes, printers' and accounting fees, and fees and disbursements of counsel for the Company, shall be borne by the Company; PROVIDED, HOWEVER, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders -7- shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one (1) demand registration pursuant to Section 2.1. (b) EXPENSES OF COMPANY REGISTRATION. All expenses other than underwriting discounts and commissions reasonably incurred in connection with registrations, filings or qualifications of Registrable Securities pursuant to Section 2.2 for each Holder, including (without limitation) all registration, filing, and qualification fees, printers' and accounting fees, and fees and disbursements of counsel for the Company, shall be borne by the Company. (c) EXPENSES OF REGISTRATION ON FORM S-3. All expenses other than underwriting discounts and commissions incurred in connection with registrations requested pursuant to Section 2.3, including (without limitation) all registration, filing, qualification, printers' and accounting fees and the fees and disbursements of one counsel for the selling Holders selected by them, shall be borne by the Company. 2.7. INDEMNIFICATION. In the event any Registrable Securities are included in a registration statement under this Section 2: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any "underwriter" (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "VIOLATION"): (i) Any untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained in such registration statement or any amendments or supplements thereto; (ii) The omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; (iii) The omission to state in any preliminary prospectus or final prospectus a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; or (iv) Any material violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law. The Company will pay to each such Holder, underwriter or controlling person, as actually incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection 2.7(a) shall not apply to amounts paid -8- in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any Holder, underwriter or controlling person for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs; (A) in reliance upon and in conformity with written information furnished for use in connection with such registration by any such Holder, underwriter or controlling person; or (B) as a result of failure of any holder to deliver a prospectus, at all or in a timely manner, PROVIDED FURTHER, that in no event shall any indemnity under this subsection 2.7(a) exceed the net proceeds from the offering received by the Company. (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder for use in connection with such registration; and each such Holder will pay, as actually incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 2.7(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection 2.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld); PROVIDED FURTHER, that in no event shall any indemnity under this subsection 2.7(b) exceed the net proceeds from the offering received by such Holder. (c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written -9- notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.7. (d) If the indemnification provided for in this Section 2.7 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a Holder or the Company under this subsection 2.7(d) exceed the net proceeds from the offering received by such Holder or the Company, respectively. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. (e) The obligations of the Company and Holders under this Section 2.7 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2, and otherwise. No indemnifying party, in the defense of any such loss, claim, change, liability or action, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as a provision thereof, the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such loss, claim, damage, liability or action. 2.8. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations) by a Holder to (i) any "affiliate" of such Holder (as defined under the Securities Act), (ii) such Holder's spouse, parents, siblings, children or grandchildren, or other members of such Holder's immediate or extended family (including relatives by marriage), or to a custodian, trustee or other fiduciary for the account of such Holder or members of such Holder's immediate or extended family in connection with an estate planning transaction, or (iii) a transferee or assignee of at least 100,000 shares of such securities (as adjusted for stock dividends, combinations, recapitalizations, splits and otherwise), provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and such transferee or assignee agrees to become a party to this Agreement. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of a business entity who are affiliates, retired affiliates of such entity (including spouses and ancestors, lineal descendants and siblings of such affiliates or affiliates who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the business entity; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a -10- single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under Section 2. 2.9 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 2.1 or 2.3 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of its securities will not reduce the amount of the Registrable Securities of the Holders which is included, or (b) to make a demand registration which could result in such registration statement being declared effective within one hundred eight (180) days of the effective date of any registration effected pursuant to Section 2.1 or 2.3 hereof. 2.10. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public pursuant to a registration on Form S-3 or without registration, the Company agrees to: (a) Make and keep public information available, as those terms are understood and defined in Commission Rule 144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act; (b) File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (c) Furnish to any Holder, so long as accurate and so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Commission Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (or any successor form that provides for short-form registration), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the Commission which permits the selling of any such securities without registration or pursuant to such form. 2.11 TERMINATION OF REGISTRATION RIGHTS. The right of any Holder to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 hereof shall terminate at such time as such Holder owns less than five percent (5%) of the outstanding capital stock of the -11- Company and such Holder can sell all of such Holder's Registrable Securities under Rule 144 during any ninety (90) day period. 2.12. CONSOLIDATIONS; MERGERS. The Company shall not, directly or indirectly, enter into any merger, consolidation or reorganization in which the Company is not the surviving corporation unless the proposed surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under this Agreement, and for that purpose references hereunder to "Registrable Securities" shall be deemed to be references to the securities that the Investor or the Holders of Registrable Securities would be entitled to receive in exchange for Registrable Securities under any such merger, consolidation or reorganization. ARTICLE III MISCELLANEOUS 3.1. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia, without regard to conflicts of laws principles. 3.2. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 3.3. TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 3.4. NOTICES. (a) All notices, requests, demands and other communications under this Agreement or in connection herewith shall be given to or made to the following addresses: If to Company: Xata Corporation 151 East Cliff Road, Ste 10 Burnsville, MN 55337 ATTN: Gary C. Thomas With a copy to: Moss & Barnett, PA 4800 Wells Fargo Center 90 South 7th Street Minneapolis, MN 55402 ATTN: Janna R. Severance, Esq. If to Investor: John Deere Special Technologies Group, Inc. 300 Grimes Bridge Road Roswell, Georgia 30075 ATTN: James E. Heerin -12- With a copy to: Morris, Manning & Martin, L.L.P. 3343 Peachtree Road, N.E. Suite 1600 Atlanta, Georgia 30326 ATTN: Jeffrey L. Schulte, Esq. (b) All notices, requests, demands and other communications given or made in accordance with the provisions of this Agreement shall be in writing and shall be deemed given when sent by facsimile, delivered by nationally recognized overnight courier service, delivered personally or within three days after mailing when mailed by certified or registered mail, return receipt requested. (c) Any party may, by written notice to the other, alter its address or respondent. 3.5. AMENDMENTS AND WAIVERS. This Agreement may not be amended except by a writing signing by both the Company and the Holders. 3.6. SEVERABILITY. If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 3.7. DELAYS OR OMISSIONS. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of the other party, shall impair any such right, power or remedy of such non-breaching party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any Holder, shall be cumulative and not alternative. 3.8. ENTIRE AGREEMENT. This Agreement, the Stock Purchase Agreement and the other documents delivered pursuant to the Stock Purchase Agreement constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. 3.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. -13- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. COMPANY: INVESTOR: Xata Corporation John Deere Special Technologies Group, Inc. By: /s/ WILLIAM P. FLIES By: /s/ Charles R. Stamp, Jr. --------------------------- ---------------------------------------- Title: CTO Charles R. Stamp, Jr., President EX-99.4 5 a2025352zex-99_4.txt EXHIBIT 99.4 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of Deere & Company, a Delaware corporation, and John Deere Special Technologies Group, Inc., a Delaware corporation, on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to shares of Common Stock, par value $.01 per share, of XATA Corporation, a Minnesota corporation, and that this Joint Filing Agreement be included as an Exhibit to such joint filings. This Joint Filing Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing Agreement this 8th day of September 2000. Date: September 8, 2000 DEERE & COMPANY By: /s/ Ferdinand F. Korndorf --------------------------------- Ferdinand F. Korndorf President, Worldwide Agricultural Equipment Division JOHN DEERE SPECIAL TECHNOLOGIES GROUP, INC. By: /s/ Charles R. Stamp, Jr. --------------------------------- Charles R. Stamp, Jr. President -----END PRIVACY-ENHANCED MESSAGE-----