Exhibit 10.8
PLEDGE AGREEMENT
     This Pledge Agreement (this “Agreement”), dated as of December 29, 2006,
among Laurus Master Fund, Ltd. (the “Pledgee”), Numerex Corp., a Pennsylvania
corporation (the “Company”), and each of the other undersigned parties (other
than the Pledgee) (the Company and each such other undersigned party, a
“Pledgor” and collectively, the “Pledgors”).
BACKGROUND
     The Company and the Pledgee have entered into a Securities Purchase
Agreement dated as of December 29, 2006 (as amended, modified, restated and/or
supplemented from time to time, the “Purchase Agreement”), pursuant to which the
Pledgee provides or will provide certain financial accommodations to the
Company.
     In order to induce the Pledgee to provide or continue to provide the
financial accommodations described in the Purchase Agreement, each Pledgor has
agreed to pledge and grant a security interest in the collateral described
herein to the Pledgee on the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
     1. Defined Terms. All capitalized terms used herein which are not defined
shall have the meanings given to them in the Purchase Agreement.
     2. Pledge and Grant of Security Interest. To secure the full and punctual
payment and performance of (the following clauses (a) and (b), collectively, the
“Obligations”) (a) the obligations under the Purchase Agreement and the Related
Agreements referred to in the Purchase Agreement (the Purchase Agreement and the
Related Agreements, as each may be amended, restated, modified and/or
supplemented from time to time, collectively, the “Documents”) and (b) in
connection with any documents, instruments or agreements relating to or executed
in connection with the Documents, whether now existing or hereafter arising,
direct or indirect, liquidated or unliquidated, absolute or contingent, due or
not due and whether under, pursuant to or evidenced by a note, agreement,
guaranty, instrument or otherwise (in each case, irrespective of the
genuineness, validity, regularity or enforceability of such Obligations, or of
any instrument evidencing any of the Obligations or of any collateral therefor
or of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of such in any case
commenced by or against any Pledgor under Title 11, United States Code,
including, without limitation, obligations of each Pledgor for post-petition
interest, fees, costs and charges that would have accrued or been added to the
Obligations but for the commencement of such case), each Pledgor hereby pledges,
assigns, hypothecates, transfers and grants a security interest to Pledgee in
all of the following (the “Collateral”):
          (a) the shares of stock, partnership interests, limited liability
company interests and other equity interests set forth on Schedule A annexed
hereto and expressly made a

 

--------------------------------------------------------------------------------

 

part hereof (together with any additional shares of stock, partnership
interests, limited liability company interests, membership interests or other
equity interests acquired by any Pledgor, the “Pledged Stock”), the certificates
representing the Pledged Stock (if any) and all dividends, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Stock;
          (b) all additional shares of stock, partnership interests, limited
liability company interests, membership interests and other equity interests of
any issuer (each, an “Issuer”) of the Pledged Stock from time to time acquired
by any Pledgor in any manner, including, without limitation, stock dividends or
a distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off (which shares shall be deemed to be part of
the Collateral), and the certificates representing such additional shares or
interests, as the case may be (if any), and all dividends, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares; and
          (c) all options and rights, whether as an addition to, in substitution
of or in exchange for any shares of any Pledged Stock and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
such options and rights.
     3. Delivery of Collateral. With respect to any Pledged Stock that currently
is evidenced by a certificate or certificates, all certificates representing or
evidencing such Pledged Stock (i) shall be delivered to and held by or on behalf
of Pledgee pursuant hereto and (ii) shall be accompanied by duly executed
instruments of transfer or assignments in blank, all in form and substance
satisfactory to Pledgee. With respect to any Pledgor whose Pledged Stock
currently is evidenced by a certificate or certificates, each such Pledgor
hereby authorizes the Issuer upon demand by the Pledgee to deliver any
certificates and instruments issued in connection with the Collateral directly
to the Pledgee, in each case to be held by the Pledgee subject to and in
accordance with the terms of this Agreement. Upon the occurrence and during the
continuance of an Event of Default (as defined below), the Pledgee shall have
the right, during such time in its discretion and without notice to the Pledgor,
to transfer to or to register in the name of the Pledgee or any of its nominees
any or all of the Pledged Stock. In addition, upon the occurrence and during the
continuance of an Event of Default and with respect to any Pledged Stock that
currently is evidenced by a certificate or certificates, the Pledgee shall have
the right at such time to exchange such certificate or certificates representing
or evidencing such Pledged Stock for one or more certificates of smaller or
larger (but , in the aggregate, equal) denominations.
     4. Representations and Warranties of each Pledgor. Each Pledgor jointly and
severally represents and warrants to the Pledgee (which representations and
warranties shall be deemed to continue to be made until all of the Obligations
have been paid in full and each Document and each agreement and instrument
entered into in connection therewith has been irrevocably terminated) that,
except as may be disclosed in any Schedule to the Purchase Agreement:
          (a) the execution, delivery and performance by each Pledgor of this
Agreement and the pledge of the Collateral hereunder do not and will not result
in any violation

2

--------------------------------------------------------------------------------

 

of any agreement, indenture, instrument, license, judgment, decree, order, law,
statute, ordinance or other governmental rule or regulation applicable to such
Pledgor;
          (b) this Agreement constitutes the legal, valid, and binding
obligation of each Pledgor, and is enforceable against such Pledgor in
accordance with its terms;
          (c) (i) all Pledged Stock owned by each Pledgor is set forth on
Schedule A hereto, and (ii) each Pledgor is the direct and beneficial owner of
each share of the Pledged Stock described next to its name on Schedule A hereto;
          (d) all of the shares of the Pledged Stock have been duly authorized,
validly issued and are fully paid and nonassessable;
          (e) no consent or approval of any person, corporation, governmental
body, regulatory authority or other entity, is or will be necessary for (i) the
execution, delivery and performance of this Agreement, (ii) the exercise by the
Pledgee of any rights with respect to the Collateral or (iii) the pledge and
assignment of, and the grant of a security interest in, the Collateral
hereunder;
          (f) there are no pending or, to the best of each Pledgor’s knowledge,
threatened actions or proceedings before any court, judicial body,
administrative agency or arbitrator which may materially adversely affect the
Collateral;
          (g) each Pledgor has the requisite power and authority to enter into
this Agreement and to pledge and assign the Collateral to the Pledgee in
accordance with the terms of this Agreement;
          (h) each Pledgor owns each item of the Collateral and, except for the
pledge and security interest granted to Pledgee hereunder, the Collateral shall
be, immediately following the closing of the transactions contemplated by the
Documents, free and clear of any other security interest, mortgage, pledge,
claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever
(collectively, “Liens”);
          (i) there are no restrictions on transfer of the Pledged Stock
contained in the certificate of incorporation or by-laws (or equivalent
organizational documents) of the Issuer or otherwise which have not otherwise
been enforceably and legally waived by the necessary parties;
          (j) none of the Pledged Stock has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject;
          (k) the pledge and assignment of the Collateral and the grant of a
security interest under this Agreement vest in the Pledgee all rights of each
Pledgor in the Collateral as contemplated by this Agreement;
          (l) The Pledged Stock of a particular Issuer constitutes one hundred
percent (100%) of the issued and outstanding equity interests of such Issuer;
and

3

--------------------------------------------------------------------------------

 

          (m) All of the membership interests that constitute Pledged Stock are
uncertificated membership interests and are set forth on Schedule A hereto.
     5. Covenants. Each Pledgor jointly and severally covenants that, until the
Obligations shall be indefeasibly satisfied in full and each Document and each
agreement and instrument entered into in connection therewith is irrevocably
terminated:
          (a) Except as may be permitted under the Purchase Agreement, no
Pledgor will sell, assign, transfer, convey, or otherwise dispose of its rights
in or to the Collateral or any interest therein; nor will any Pledgor create,
incur or permit to exist any Lien whatsoever with respect to any of the
Collateral or the proceeds thereof other than that created hereby.
          (b) Each Pledgor will, at its expense, defend Pledgee’s right, title
and security interest in and to the Collateral against the claims of any other
party.
          (c) Each Pledgor shall at any time, and from time to time, upon the
written request of Pledgee, execute and deliver such further documents and do
such further acts and things as Pledgee may reasonably request in order to
effectuate the purposes of this Agreement including, but without limitation,
delivering to Pledgee, upon the occurrence of an Event of Default, irrevocable
proxies in respect of the Collateral in form satisfactory to Pledgee. Until
receipt thereof, upon an Event of Default that has occurred and is continuing
beyond any applicable grace period, this Agreement shall constitute Pledgor’s
proxy to Pledgee or its nominee to vote all shares of Collateral then registered
in each Pledgor’s name.
          (d) No Pledgor will consent to or approve the issuance of (i) any
additional shares of any class of capital stock or other equity interests of the
Issuer; or (ii) any securities convertible either voluntarily by the holder
thereof or automatically upon the occurrence or nonoccurrence of any event or
condition into, or any securities exchangeable for, any such shares, unless, in
either case, such shares are pledged as Collateral pursuant to this Agreement.
          (e) If after the date hereof any stock, limited partnership interests,
limited liability company membership interests or similar form of equity
interest included in the Pledged Stock are certificated, then the Pledgor
holding such stock, limited partnership interests, limited liability company
membership interests or similar form of equity interest shall pledge the
certificated stock, limited partnership interests, limited liability company
membership interests or similar form of equity interest as Collateral pursuant
to this Agreement and deliver to the Pledgee, within two (2) business days, the
certificates evidencing such stock, limited partnership interests, limited
liability company membership interests or similar form of equity interest,
together with effective endorsements.
          (f) No Pledgor shall participate in any amendment to (x) any limited
liability company agreement that is related to any Pledged Stock consisting of
membership interests or (y) any certificate of formation of any Issuer that, in
any case, (i) would extend any voting rights to any owner of any equity interest
in an Issuer unless such equity interest is subject to the terms and provisions
of this Pledge Agreement or such other pledge agreement as is reasonably
acceptable to the Pledgee, (ii) would otherwise impair the Collateral or
adversely affect in any material respect the rights, privileges, benefits and
security interests provided to or intended to be

4

--------------------------------------------------------------------------------

 

provided to the Pledgee or (iii) would adversely affect the perfection of the
security interest of Pledgee in the Collateral, including, without limitation,
any amendment electing to treat any membership interest as a security under
Section 8-103 of the Code, or any election to turn any previously uncertificated
membership interest into a certificated membership interest.
          Notwithstanding anything to the contrary in this Agreement or
elsewhere, (a) the foregoing Section 5(d) shall not apply or be deemed to apply
to the issuance of any of the Company’s capital stock or equity interests, and
(b) the foregoing Section 5(f)(y)(i) shall not apply or be deemed to apply to
the Company.
     6. Voting Rights and Dividends. In addition to the Pledgee’s rights and
remedies set forth in Section 8 hereof, in case an Event of Default shall have
occurred and be continuing, beyond any applicable cure period, the Pledgee shall
(i) be entitled to vote the Collateral, (ii) be entitled to give consents,
waivers and ratifications in respect of the Collateral (each Pledgor hereby
irrevocably constituting and appointing the Pledgee, with full power of
substitution, the proxy and attorney-in-fact of each Pledgor for such purposes)
and (iii) be entitled to collect and receive for its own use cash dividends paid
on the Collateral. No Pledgor shall be permitted to exercise or refrain from
exercising any voting rights or other powers if, in the reasonable judgment of
the Pledgee, such action would have a material adverse effect on the value of
the Collateral or any part thereof; and, provided, further, that each Pledgor
shall give at least five (5) days’ written notice of the manner in which such
Pledgor intends to exercise, or the reasons for refraining from exercising, any
voting rights or other powers other than with respect to any election of
directors and voting with respect to any incidental matters. Following the
occurrence of an Event of Default, all dividends and all other distributions in
respect of any of the Collateral, shall be delivered to the Pledgee to hold as
Collateral and shall, if received by any Pledgor, be received in trust for the
benefit of the Pledgee, be segregated from the other property or funds of any
other Pledgor, and be forthwith delivered to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
     7. Event of Default. An “Event of Default” under this Agreement shall occur
upon the happening of any of the following events:
          (a) An “Event of Default” under any Document or any agreement or note
related to any Document shall have occurred and be continuing beyond any
applicable cure period;
          (b) Any Pledgor shall default in the performance of any of its
obligations under any Document, including, without limitation, this Agreement,
and such default shall not be cured during the cure period applicable thereto;
          (c) Any representation or warranty of any Pledgor made herein, in any
Document or in any agreement, statement or certificate given in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false or
misleading in any material respect;
          (d) Any portion of the Collateral is subjected to a levy of execution,
attachment, distraint or other judicial process or any portion of the Collateral
is the subject of a claim (other than by the Pledgee) of a Lien or other right
or interest in or to the Collateral and

5

--------------------------------------------------------------------------------

 

such levy or claim shall not be cured, disputed or stayed within a period of
sixty (60) days after the occurrence thereof; or
          (e) Any Pledgor shall (i) apply for, consent to, or suffer to exist
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or other fiduciary of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of creditors,
(iii) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent,
(v) file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) acquiesce to, or fail to have dismissed, within sixty
(60) days, any petition filed against it in any involuntary case under such
bankruptcy laws, or (vii) take any action for the purpose of effecting any of
the foregoing.
     8. Remedies. In case an Event of Default shall have occurred and is
continuing, the Pledgee may:
          (a) Transfer any or all of the Collateral into its name, or into the
name of its nominee or nominees;
          (b) Exercise all corporate rights with respect to the Collateral
including, without limitation, all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any shares of the
Collateral as if it were the absolute owner thereof, including, but without
limitation, the right to exchange, at its discretion, any or all of the
Collateral upon the merger, consolidation, reorganization, recapitalization or
other readjustment of the Issuer thereof, or upon the exercise by the Issuer of
any right, privilege or option pertaining to any of the Collateral, and, in
connection therewith, to deposit and deliver any and all of the Collateral with
any committee, depository, transfer agent, registrar or other designated agent
upon such terms and conditions as it may determine, all without liability except
to account for property actually received by it; and
          (c) Subject to any requirement of applicable law, sell, assign and
deliver the whole or, from time to time, any part of the Collateral at the time
held by the Pledgee, at any private sale or at public auction, with or without
demand, advertisement or notice of the time or place of sale or adjournment
thereof or otherwise (all of which are hereby waived, except such notice as is
required by applicable law and cannot be waived), for cash or credit or for
other property for immediate or future delivery, and for such price or prices
and on such terms as the Pledgee in its sole discretion may determine, or as may
be required by applicable law.
          Each Pledgor hereby waives and releases any and all right or equity of
redemption, whether before or after sale hereunder. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase the whole or
any part of the Collateral so sold free from any such right or equity of
redemption. All moneys received by the Pledgee hereunder, whether upon sale of
the Collateral or any part thereof or otherwise, shall be held by the Pledgee
and applied by it as provided in Section 10 hereof. No failure or delay on the
part of the Pledgee in exercising any rights hereunder shall operate as a waiver
of any such rights nor shall any single or partial exercise of any such rights
preclude any other or future exercise thereof or the exercise of any other
rights hereunder. The Pledgee shall have no duty as to the

6

--------------------------------------------------------------------------------

 

collection or protection of the Collateral or any income thereon nor any duty as
to preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 10 hereof. The Pledgee may exercise
its rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Obligations. In addition to the
foregoing, Pledgee shall have all of the rights, remedies and privileges of a
secured party under the Uniform Commercial Code of New York (the “UCC”)
regardless of the jurisdiction in which enforcement hereof is sought.
     9. Private Sale. Each Pledgor recognizes that the Pledgee may be unable to
effect (or to do so only after delay which would adversely affect the value that
might be realized from the Collateral) a public sale of all or part of the
Collateral by reason of certain prohibitions contained in the Securities Act,
and may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obliged to agree, among other things, to acquire
such Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor agrees that any such private sale
may be at prices and on terms less favorable to the seller than if sold at
public sales and that such private sales shall be deemed to have been made in a
commercially reasonable manner. Each Pledgor agrees that the Pledgee has no
obligation to delay sale of any Collateral for the period of time necessary to
permit the Issuer to register the Collateral for public sale under the
Securities Act.
     10. Proceeds of Sale. The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Collateral shall be applied by the
Pledgee as follows:
          (a) First, to the payment of all costs, reasonable expenses and
charges of the Pledgee and to the reimbursement of the Pledgee for the prior
payment of such costs, reasonable expenses and charges incurred in connection
with the care and safekeeping of the Collateral (including, without limitation,
the reasonable expenses of any sale or any other disposition of any of the
Collateral), attorneys’ fees and reasonable expenses, court costs, any other
fees or expenses incurred or expenditures or advances made by Pledgee in the
protection, enforcement or exercise of its rights, powers or remedies hereunder;
          (b) Second, to the payment of the Obligations, in whole or in part, in
such order as the Pledgee may elect, whether or not such Obligations are then
due;
          (c) Third, to such persons, firms, corporations or other entities as
required by applicable law including, without limitation, Section 9-615(a)(3) of
the UCC; and
          (d) Fourth, to the extent of any surplus to the Pledgors or as a court
of competent jurisdiction may direct.
          In the event that the proceeds of any collection, recovery, receipt,
appropriation, realization or sale are insufficient to satisfy the Obligations,
each Pledgor shall be jointly and severally liable for the deficiency plus the
costs and fees of any attorneys employed by Pledgee to collect such deficiency.
     11. Waiver of Marshaling. Each Pledgor hereby waives any right to compel
any marshaling of any of the Collateral.

7

--------------------------------------------------------------------------------

 

     12. No Waiver. Any and all of the Pledgee’s rights with respect to the
Liens granted under this Agreement shall continue unimpaired, and Pledgor shall
be and remain obligated in accordance with the terms hereof, notwithstanding
(a) the bankruptcy, insolvency or reorganization of any Pledgor, (b) the release
or substitution of any item of the Collateral at any time, or of any rights or
interests therein, or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Pledgee in reference to any of the Obligations.
Each Pledgor hereby waives all notice of any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consents to be
bound hereby as fully and effectively as if such Pledgor had expressly agreed
thereto in advance. No delay or extension of time by the Pledgee in exercising
any power of sale, option or other right or remedy hereunder, and no failure by
the Pledgee to give notice or make demand, shall constitute a waiver thereof, or
limit, impair or prejudice the Pledgee’s right to take any action against any
Pledgor or to exercise any other power of sale, option or any other right or
remedy.
     13. Expenses. The Collateral shall secure, and each Pledgor shall pay to
Pledgee on demand, from time to time, all reasonable costs and expenses,
(including but not limited to, reasonable attorneys’ fees and costs, taxes, and
all transfer, recording, filing and other charges) of, or incidental to, the
custody, care, transfer, administration of the Collateral or any other
collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of the Pledgee under this Agreement or
with respect to any of the Obligations.
     14. The Pledgee Appointed Attorney-In-Fact and Performance by the Pledgee.
Upon the occurrence of an Event of Default, each Pledgor hereby irrevocably
constitutes and appoints the Pledgee as such Pledgor’s true and lawful
attorney-in-fact, with full power of substitution, to execute, acknowledge and
deliver any instruments and to do in such Pledgor’s name, place and stead, all
such acts, things and deeds for and on behalf of and in the name of such
Pledgor, which such Pledgor could or might do or which the Pledgee may deem
necessary, desirable or convenient to accomplish the purposes of this Agreement,
including, without limitation, to execute such instruments of assignment or
transfer or orders and to register, convey or otherwise transfer title to the
Collateral into the Pledgee’s name. Each Pledgor hereby ratifies and confirms
all that said attorney-in-fact may so do and hereby declares this power of
attorney to be coupled with an interest and irrevocable. If any Pledgor fails to
perform any agreement herein contained, the Pledgee may itself perform or cause
performance thereof, and any costs and expenses of the Pledgee incurred in
connection therewith shall be paid by the Pledgors as provided in Section 10
hereof.
     15. Waivers. THE PARTIES HERETO DESIRES THAT THEIR DISPUTES BE RESOLVED BY
A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN PLEDGEE, AND/OR ANY PLEDGOR ARISING OUT OF, CONNECTED WITH,
RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEN IN CONNECTION
WITH THIS AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR
THERETO.

8

--------------------------------------------------------------------------------

 

     16. Recapture. Notwithstanding anything to the contrary in this Agreement,
if the Pledgee receives any payment or payments on account of the Obligations,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver, or any other party under the United States
Bankruptcy Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the
enforcement of creditors’ rights generally, common law or equitable doctrine,
then to the extent of any sum not finally retained by the Pledgee, each
Pledgor’s obligations to the Pledgee shall be reinstated and this Agreement
shall remain in full force and effect (or be reinstated) until payment shall
have been made to Pledgee, which payment shall be due on demand.
     17. Captions. All captions in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
     18. Miscellaneous.
          (a) This Agreement constitutes the entire and final agreement among
the parties with respect to the subject matter hereof and may not be changed,
terminated or otherwise varied except by a writing duly executed by the parties
hereto.
          (b) No waiver of any term or condition of this Agreement, whether by
delay, omission or otherwise, shall be effective unless in writing and signed by
the party sought to be charged, and then such waiver shall be effective only in
the specific instance and for the purpose for which given.
          (c) In the event that any provision of this Agreement or the
application thereof to any Pledgor or any circumstance in any jurisdiction
governing this Agreement shall, to any extent, be invalid or unenforceable under
any applicable statute, regulation, or rule of law, such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or
unenforceable provision to parties, jurisdictions, or circumstances other than
to whom or to which it is held invalid or unenforceable shall not be affected
thereby, nor shall same affect the validity or enforceability of any other
provision of this Agreement.
          (d) This Agreement shall be binding upon each Pledgor, and each
Pledgor’s successors and assigns, and shall inure to the benefit of the Pledgee
and its successors and assigns.
          (e) Any notice or other communication required or permitted pursuant
to this Agreement shall be given in accordance with the Purchase Agreement.
          (f) THIS AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW

9

--------------------------------------------------------------------------------

 

YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
          (g) EACH PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR,
ON THE ONE HAND, AND THE PLEDGEE, ON THE OTHER HAND, PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, PROVIDED, THAT EACH
PLEDGOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE PLEDGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE PLEDGEE. EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH PLEDGOR
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH PLEDGOR AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE SUCH
PLEDGOR’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
          (h) It is understood and agreed that any person or entity that desires
to become a Pledgor hereunder, or is required to execute a counterpart of this
Agreement after the date hereof pursuant to the requirements of any Document,
shall become a Pledgor hereunder by (x) executing a Joinder Agreement in form
and substance satisfactory to the Pledgee, (y) delivering supplements to such
exhibits and annexes to such Documents as the Pledgee shall reasonably request
and/or set forth in such joinder agreement and (z) taking all actions as
specified in this Agreement as would have been taken by such Pledgor had it been
an original party to this Agreement, in each case with all documents required
above to be delivered to the Pledgee and with all documents and actions required
above to be taken to the reasonable satisfaction of the Pledgee.
          (i) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which when taken together shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed an original signature hereto.

10

--------------------------------------------------------------------------------

 

[Remainder of Page Intentionally Left Blank]

11

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first written above.

                  NUMEREX CORP.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Chairman and CEO
 
                AIRDESK LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Treasurer
 
                BNI SOLUTIONS LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Treasurer
 
                BROADBAND NETWORKS, INC.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Chairman and Treasurer
 
                CELLEMETRYXG CUSTOMER SERVICES LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer  

12

--------------------------------------------------------------------------------

 

                  DCX SYSTEMS INC.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Chairman and Treasurer
 
                DIGILOG INC.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer  
 
                NUMEREX INVESTMENT CORP.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: Director
 
                NUMEREX SOLUTIONS, LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer  
 
                MOBILE GUARDIAN LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer  

 

--------------------------------------------------------------------------------

 

                  CELLEMETRY LLC
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer
 
                UPLINK SECURITY, INC.
 
           
 
  By:   /s/ Stratton J. Nicolaides    
 
                Name: Stratton J. Nicolaides     Title: CEO and Treasurer
 
                LAURUS MASTER FUND, LTD.
 
           
 
  By:   /s/ David Grin    
 
                Name: David Grin     Title: Director  

 

--------------------------------------------------------------------------------

 

SCHEDULE A TO PLEDGE AGREEMENT
PLEDGED STOCK

                              Class of   Stock Certificate       Number of
Pledgor   Issuer   Stock   Number   Par Value   Shares
Numerex Corp.
  Numerex Corp.   Common   TBD*   TBD*   TBD*
 
                   
Broadband Networks, Inc.
  Broadband Networks, Inc.   Common   TBD*   TBD*   TBD*
 
                   
DCX Systems Inc.
  DCX Systems, Inc.   Common   TBD*   TBD*   TBD*
 
                   
Digilog Inc.
  Digilog, Inc.   Common   TBD*   TBD*   TBD*
 
                   
Uplink Security, Inc.
  Uplink Security, Inc.   Common   TBD*   TBD*   TBD*
 
                   
Airdesk LLC**
  N/A   N/A   N/A   N/A   N/A
 
                   
BNI Solutions LLC**
  N/A   N/A   N/A   N/A   N/A
 
                   
Cellemetry LLC**
  N/A   N/A   N/A   N/A   N/A
 
                   
CellemetryXG Customer Services LLC**
                   
 
                   
Mobile Guardian LLC**
  N/A   N/A   N/A   N/A   N/A
 
                   
Numerex Solutions, LLC**
  N/A   N/A   N/A   N/A   N/A

 

*   By agreement of the parties, each subsidiary’s existing stock certificate
will be cancelled and a new stock certificate will be re-issued.   **   By
agreement of the parties, a control acknowledgement substantially in the form of
the template attached hereto as Exhibit 1 to Schedule A will be executed with
respect to each subsidiary formed as a limited liability company.

 

--------------------------------------------------------------------------------

 

EXHIBIT 1 TO SCHEDULE A
CONTROL ACKNOWLEDGMENT

     
ISSUER
  MEMBERSHIP INTEREST OWNER:
 
   
[NAME OF SUBSIDIARY]
  Numerex Corp.

     Reference is hereby made to each of (i) that certain Pledge Agreement,
dated as of May 30, 2006 (as amended, restated, modified and/or supplemented
from time to time, the “May 2006 Pledge Agreement”), among Numerex Corp., a
Pennsylvania corporation (the “Pledgor”), certain other pledgors and Laurus
Master Fund, Ltd., a Cayman Islands company (“Laurus”) and (ii) that certain
Pledge Agreement, dated as of December 29, 2006 (as amended, restated, modified
and/or supplemented from time to time, the “December 2006 Pledge Agreement” and,
together with the May 2006 Pledge Agreement, the “Pledge Agreements” and each, a
“Pledge Agreement”), among the Pledgor, certain other pledgors and Laurus.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the applicable Pledge Agreement.
     [NAME OF SUBSIDIARY], a [STATE OF INCORPORATION] limited liability company
(the “Issuer”) is hereby instructed by the Pledgor that all of the Pledgor’s
right, title and interest in and to all of the Pledgor’s rights in connection
with any membership interests in the Issuer now and hereafter owned by the
Pledgor are subject to a pledge and security interest in favor of Laurus. The
Pledgor hereby instructs the Issuer to act upon any instruction delivered to it
by the Laurus with respect to the Collateral without seeking further instruction
from the Pledgor, and, by its execution hereof, the Issuer agrees to do so.
     The Issuer, by its written acknowledgment and acceptance hereof, hereby
acknowledges receipt of a copy of the aforementioned Pledge Agreements and
agrees promptly to note on its books the security interest granted under the
Pledge Agreements. The Issuer also waives any rights or requirements at any time
hereafter to receive a copy of either Pledge Agreement in connection with the
registration of any Collateral in the name of the Laurus or its nominee or the
exercise of voting rights by the Laurus or its nominee.
[Remainder of this page intentionally left blank]

16

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Pledgor has caused this Control Acknowledgment to be
duly signed and delivered by its officer duly authorized as of this 29th day of
December 2006.

                          PLEDGOR.
 
                        NUMEREX CORP.
 
                   
 
  By:                                    Name:         
 
             
 
        Title:                               

Acknowledged and accepted this
29th day of December 2006.
[NAME OF SUBSIDIARY]

                 
By: 
                          Name:         
 
         
 
    Title:                           

17