Exhibit 10.4
THIS WARRANT AND THE SHARES OF CLASS A COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE CLASS A COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO NUMEREX CORP. THAT SUCH
REGISTRATION IS NOT REQUIRED.

     
 
  Right to Purchase Up To 241,379 of Class A Common Stock of Numerex Corp.
(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

     
No. ___
  Issue Date May 30, 2006

          NUMEREX CORP., a corporation organized under the laws of the
Commonwealth of Pennsylvania, hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or its assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company from and after the Issue
Date of this Warrant and at any time or from time to time before 5:00 p.m., New
York time, on May 30, 2013 (the “Expiration Date”), up to 241,379 fully paid and
nonassessable shares of Common Stock (as hereinafter defined), no par value per
share, of the Company, at the Exercise Price (as hereinafter defined). The
number and character of such shares of Common Stock are subject to adjustment as
provided herein.
          As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
          (a) The term “Company” shall include Numerex Corp. and any corporation
which shall succeed or assume the obligations of Numerex Corp. hereunder.
          (b) The term “Common Stock” includes (a) the Company’s Class A Common
Stock, no par value per share, and (b) any other securities into which or for
which any of the securities described in (a) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
          (c) The term “Other Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
          (d) The term “Exercise Price” shall be $7.73.

 

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          (e) The term “Registration Rights Agreement” means the Registration
Rights Agreement, dated as of the date hereof, between the Company and the
Holder as the same may be amended, modified and supplemented from time to time.
          (f) The term “Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture or an unincorporated organization.
     1. Exercise of Warrant.
          1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of the exercise notice attached hereto as Exhibit A (the
“Exercise Notice”), shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.
          1.2 Fair Market Value. Fair Market Value of a share of Common Stock as
of a particular date (the “Determination Date”) shall mean:
               (a) If the Company’s Common Stock is traded on the American Stock
Exchange or another national securities exchange or is quoted on the National or
SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or
last sale price, respectively, reported for the last business day immediately
preceding the Determination Date.
               (b) If the Company’s Common Stock is not traded on the American
Stock Exchange or another national stock exchange or on the Nasdaq but is traded
on the NASD OTC Bulletin Board or the National Quotation Bureau’s Pink Sheets,
then the mean of the average of the closing bid and asked prices reported for
the last business day immediately preceding the Determination Date.
               (c) Except as provided in clause (d) below, if the Company’s
Common Stock is not publicly traded, then as the Holder and the Company agree or
in the absence of agreement by arbitration in accordance with the rules then in
effect of the American Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and training to pass on
the matter to be decided.
               (d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company’s charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.
          1.3 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the Holder of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such

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successor Person as may be entitled thereto, all amounts otherwise payable to
the Company or such successor, as the case may be, on exercise of this Warrant
pursuant to this Section 1.
     2. Procedure for Exercise.
          2.1 Delivery of Stock Certificates, etc. on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise. The
certificates for the number of shares of Common Stock (or Other Securities)
shall bear a legend required or advisable under federal and state securities
laws. The Holder agrees that if the Registration Statement (as defined in the
Registration Rights Agreement) is then currently effective or if the shares of
Common Stock are eligible for sale pursuant to Rule 144 under the Securities Act
of 1933, as amended, the Holder shall (i) sell, transfer or dispose of the
shares of Common Stock it receives as a result of the exercise of this Warrant
pursuant to the Registration Statement in accordance with the plan of
distribution described therein (such plan of distribution shall be substantially
in the form attached hereto as Exhibit C) or the provisions of Rule 144, as
applicable, and (ii) fulfill applicable prospectus delivery requirements imposed
by applicable federal securities laws.
          2.2 Exercise.
               (a) Payment may be made either in (i) cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of the Warrant, Common Stock and/or
Common Stock receivable upon exercise of the Warrant in accordance with Section
(b) below, or (iii) by a combination of any of the foregoing methods, for the
number of shares of Common Stock specified in such form (as such exercise number
shall be adjusted to reflect any adjustment in the total number of shares of
Common Stock issuable to the holder per the terms of this Warrant) and the
Holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.
               (b) Notwithstanding any provisions herein to the contrary, if the
Fair Market Value of one share of Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), in lieu of exercising
this Warrant for cash, the Holder may elect to receive shares equal to the value
(as determined below) of this Warrant (or the portion thereof being exercised)
by surrender of this Warrant at the principal office of the Company together

3

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with the properly endorsed Exercise Notice in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula:

             
 
  X=Y   (A-B)    
 
      A    
 
                Where X = the number of shares of Common Stock to be issued to
the Holder
 
                Y=   the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised (at the date of such calculation)
 
                A=   the Fair Market Value of one share of the Company’s Common
Stock (at the date of such calculation)
 
                B=   Exercise Price (as adjusted to the date of such
calculation)

     3. Effect of Reorganization, etc.; Continuation of Terms.
          3.1 Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, either (x) in the event of the consummation
of a reorganization, consolidation or merger, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation if such Holder had so exercised this Warrant, immediately
prior thereto, all subject to further adjustment thereafter as provided in
Section 4, or (y) in the event of dissolution, cash equal to the then current
value of this Warrant as determined in accordance with the Black Scholes option
pricing formula. Upon the occurrence of any stock split, stock dividend,
combination of shares or reverse stock split pertaining to the Common Stock, the
Fixed Conversion Price shall be proportionately increased or decreased as
necessary to reflect the proportionate change in the shares of Common Stock
issued and outstanding as a result of such stock split, stock dividend,
combination of shares or reverse stock split.
          3.2 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer referred to in this Section 3, this Warrant shall continue in
full force and effect and the terms hereof shall be applicable to the shares of
stock and other securities and property receivable on the exercise of this
Warrant after the consummation of such reorganization, consolidation or merger
or the effective date of dissolution following any such transfer, as the case
may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or

4

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assets of the Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in Section 4.
     4. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant or following the exercise in part of this Warrant, the
Company at its expense will promptly cause its Chief Financial Officer or other
appropriate designee to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment. The Company will forthwith mail a copy of each such
certificate to the holder of the Warrant and any Warrant agent of the Company
(appointed pursuant to Section 11 hereof); provided, however, that the failure
of the Company to mail a copy of such certificate to the Holder of the Warrant
and any Warrant Agent shall not affect the number of shares of Common Stock (or
Other Securities) represented hereby.
     5. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, or following the exercise in part of this
Warrant, shares of Common Stock (or Other Securities) from time to time issuable
on the exercise of the Warrant.
     6. Assignment; Exchange of Warrant. Subject to compliance with applicable
federal and state securities laws and the Securities Purchase Agreement, dated
of even date herewith, by and between the Company and the Holder (the “Purchase
Agreement”), this Warrant, and the rights evidenced hereby, may be transferred
by any registered holder hereof (a “Transferor”) with respect to any or all of
the shares of Common Stock available for exercise hereunder. On the surrender
for exchange of this Warrant, with the Transferor’s endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with
evidence reasonably satisfactory to the Company demonstrating compliance with
applicable securities laws, which shall include, without limitation, a legal
opinion from the Transferor’s counsel that such transfer is exempt from the
registration requirements of applicable securities laws, the Company at its
expense but with payment by the Transferor of any applicable transfer taxes)
will issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a “Transferee”), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor. In no event shall a Transferee be a Competitor (as such term is
defined in the Purchase Agreement) of the Company.
     7. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
     8. Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in a
Registration

5

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Rights Agreement entered into by the Company and Laurus Master Fund, Ltd., dated
as of the date hereof.
     9. Maximum Exercise. Notwithstanding anything herein to the contrary, in no
event shall the Holder be entitled to exercise any portion of this Warrant in
excess of that portion of this Warrant upon exercise of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised portion of the Warrant or the
unexercised or unconverted portion of any other security of the Holder subject
to a limitation on conversion analogous to the limitations contained herein) and
(2) the number of shares of Common Stock issuable upon the exercise of the
portion of this Warrant with respect to which the determination of this proviso
is being made, would result in beneficial ownership by the Holder and its
Affiliates of any amount greater than 4.99% of the then outstanding shares of
Common Stock (whether or not, at the time of such exercise, the Holder and its
Affiliates beneficially own more than 4.99% of the then outstanding shares of
Common Stock). As used herein, the term “Affiliate” means any person or entity
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a person or entity, as such terms
are used in and construed under Rule 144 under the Securities Act. For purposes
of the proviso to the second preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso. The limitations set forth herein (x) may be
waived by the Holder upon provision of no less than sixty-one (61) days prior
notice to the Company and (y) shall automatically become null and void following
notice to the Company upon the occurrence and during the continuance of an Event
of Default (as defined in any Note referred to in that certain Securities
Purchase Agreement dated as of the date hereof by and between the Holder and the
Company (as amended, modified, restated and/or supplemented from time to time,
the “Purchase Agreement”)), except that at no time shall the number of shares of
Common Stock beneficially owned by the Holder exceed 19.99% of the outstanding
shares of Common Stock. Notwithstanding anything contained herein to the
contrary, the number of shares of Common Stock issuable by the Company and
acquirable by the Holder at a price below $7.91 per share pursuant to the terms
of this Warrant, the Purchase Agreement, any Related Agreement (as defined in
the Purchase Agreement) or otherwise, shall not exceed an aggregate of 2,460,622
shares of Common Stock (subject to appropriate adjustment for stock splits,
stock dividends, or other similar recapitalizations affecting the Common Stock)
(the “Maximum Common Stock Issuance”), unless the issuance of Common Shares
hereunder in excess of the Maximum Common Stock Issuance shall first be approved
by the Company’s shareholders. If at any point in time and from time to time the
number of shares of Common Stock issued pursuant to the terms of this Warrant,
the Purchase Agreement, any Related Agreement (as defined in the Purchase
Agreement) or otherwise, together with the number of shares of Common Stock that
would then be issuable by the Company to the Holder in the event of a conversion
pursuant to the terms of this Warrant, the Purchase Agreement, any Related
Agreement (as defined in the Purchase Agreement) or otherwise, would exceed the
Maximum Common Stock Issuance but for this Section 10, the Company shall
promptly call a shareholders meeting to solicit shareholder approval for the
issuance of the shares of Common Stock hereunder in excess of the Maximum Common
Stock Issuance.

6

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     10. Warrant Agent. The Company may, by written notice to the each holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
     11. Transfer on the Company’s Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
     12. Notices, etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
     13. No Shorting. Neither the Purchaser nor any of its affiliates or
investment partners shall or shall cause any Person, directly or indirectly, to
engage in “short sales” of the Company’s Common Stock or any other hedging
strategies involving the Company’s publicly traded securities.
     14. Miscellaneous.
               (a) THIS WARRANT CANNOT BE CHANGED OR TERMINATED ORALLY, AND
SHALL BE GOVERNED BY AND CONSTRUED 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 YORK OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK. EXCEPT AS PROVIDED IN SECTION 1.2(C) HEREOF, ANY ACTION BROUGHT BY
EITHER PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
WARRANT SHALL BE BROUGHT ONLY IN ANY STATE OR FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN, CITY OF NEW YORK; PROVIDED THAT NOTHING CONTAINED IN THIS
WARRANT SHALL BE DEEMED TO PRECLUDE HOLDER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER COURT OF COMPETENT JURISDICTION AND NOTHING SHALL BE
DEEMED TO PRECLUDE THE COMPANY FROM ASSERTING ANY DEFENSES OR COUNTERCLAIMS IN
ANY SUCH ACTIONS. BOTH THE COMPANY AND THE INDIVIDUAL EXECUTING THIS WARRANT ON
BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND
WAIVE TRIAL BY JURY. THE COMPANY AND THE INDIVIDUAL EXECUTING THIS WARRANT
FURTHER CONSENT THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS
(INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO
EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN
CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED BY REGISTERED OR
CERTIFIED

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MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE
TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE
UNDER THE RULES OF SAID COURTS. THE COMPANY AND THE INDIVIDUAL EXECUTING THIS
WARRANT WAIVE ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED
HEREON IN THE SUPREME COURT FOR THE STATE OF NEW YORK, COUNTY OF NEW YORK, OR
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND SHALL
NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON
FORUM NON CONVENIENS FOR ANY ACTION FILED IN EITHER SUCH COURT.
               (b) The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs; provided, however, that if
the parties hereto agree to settle any claim, action, proceeding or lawsuit
brought by one party hereto against the other party hereto, then each of the
parties shall bear its own costs in connection with such claim, action,
proceeding or lawsuit, unless otherwise directed by a court of competent
jurisdiction.
               (c) In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
               (d) The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
               (e) The Company acknowledges that legal counsel participated in
the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.
[Balance of page intentionally left blank; signature page follows.]

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          IN WITNESS WHEREOF, the Company has executed this Warrant under seal
as of the date first written above.

              NUMEREX CORP.
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

WITNESS:
                                                                                

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Exhibit A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: NUMEREX CORP.
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.        ), hereby irrevocably elects to purchase (check applicable box):
                                shares of the Common Stock covered by such
Warrant; or
           the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is
$                    . Such payment takes the form of (check applicable box or
boxes):
           $                     in lawful money of the United States; and/or
           the cancellation of such portion of the attached Warrant as is
exercisable for a total of                      shares of Common Stock (using a
Fair Market Value of $                     per share for purposes of this
calculation); and/or
           the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section 2, to exercise
this Warrant with respect to the maximum number of shares of Common Stock
purchaseable pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to                                          whose address
is               
                                                                  .
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock and prospectus delivery
requirements under the Securities Act of 1933, as amended (the “Securities Act”)
or pursuant to an exemption from registration under the Securities Act.

             
Dated:
           
 
           
 
          (Signature must conform to name of holder as specified on the face of
the Warrant)
 
           
 
           
 
          (Address)

 

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Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
     For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading “Transferees” the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of Numerex Corp. to which the within Warrant relates
specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Numerex Corp.
with full power of substitution in the premises.

          Transferees   Percentage Transferred   Number Transferrred
 
       
 
       
 
       
 
       
 
       
 
       

             
Dated:
           
 
           
 
           
 
          (Signature must conform to name of holder as specified on the face of
the Warrant)
 
            Signed in the presence of:        
 
                      (Name)
      (address)
 
            ACCEPTED AND AGREED:        
 
            [TRANSFEREE]       (address)
 
                     
(Name)
       

 

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Exhibit C
PLAN OF DISTRIBUTION
The Company shall include a “Plan of Distribution” section in the Registration
Statement (as defined in the Registration Rights Agreement), which shall
substantially state as follows:
Plan of Distribution
     The shares of our common stock covered hereby may be offered and sold from
time to time by the selling stockholder. The selling stockholder will act
independently of us in making decisions with respect to the timing, manner and
size of each sale of shares of common stock currently held by selling
stockholder. Following conversion of the secured convertible note or exercise of
warrants by the selling stockholder holding a secured promissory note or
warrants, the selling stockholder will act independently of us in making
decisions with respect to the timing, manner, and sale of shares of our common
stock held by the selling stockholder who converts or exercises. The selling
stockholder may use any one or more of the following methods when selling
shares:

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;     •   block trades in which the
broker-dealer will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;     •
  purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;     •   an exchange distribution in accordance with the rules of
the applicable exchange;     •   privately negotiated transactions;     •  
broker-dealers may agree with the selling stockholder to sell a specified number
of such shares at a stipulated price per share;     •   a combination of any
such methods of sale; and     •   any other method permitted pursuant to
applicable law.

     The selling stockholder may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
     Broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Discounts, concessions, commissions and similar selling expenses, if
any, attributable to the sale of shares will be borne by the selling
stockholder. The selling stockholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
     The selling stockholder may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by it and, if it
defaults in the performance of its secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under

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Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholder under this prospectus.
     The selling stockholder also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.
     The selling stockholder and any broker-dealers or agents that are involved
in selling the shares may be deemed to be “underwriters” within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The selling stockholder have informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.
     The Company is required to pay certain fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to
indemnify the selling stockholder against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
     The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934, as amended, may apply to sales of our common stock and activities
of the selling stockholder.