exv4w3



 




Exhibit 4.3



     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 100,000 Shares of Common
Stock of Numerex Corp. (subject to adjustment as
provided herein)






COMMON STOCK PURCHASE WARRANT




	 	 	 
	No. 36

	 	Issue Date: January 28, 2005






          NUMEREX CORP., a corporation organized under the laws of the State 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
January 28, 2012 (the “Expiration Date”), up to 100,000 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 as follows:













 





               (i) 50,000 shares at $5.51 per share; and



               (ii) 50,000 shares at $5.72 per share.



          (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.



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          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 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.



3









 






               (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 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



4









 




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 assets of the Company, whether or not such person shall have expressly assumed the terms of this
Warrant as provided in Section 4.




     4. Registration Rights; Increase in Number of Warrants. In addition to the terms of Sections
2 and 3 of the Registration Rights Agreement, the Company hereby agrees with the Holder that by no
later than August 28, 2005, the Company shall prepare, file with, and caused to be declared
effective by the Securities and Exchange Commission (the “SEC”), a Registration Statement (as
defined in the Registration Rights Agreement) under the Securities Act of 1933 (the “Securities
Act”) covering the resale of the Common Stock underlying this Warrant. In the event that the
Registration Statement (as defined in the Registration Rights Agreement) has not been declared
effective by the SEC by August 28, 2005, then on August 28, 2005, and for each thirty (30) day
period thereafter (or portion thereof), the number of shares of Common Stock (or Other Securities)
represented hereby shall be increased by 5,000 shares (at an exercise price of $5.99) (the “Delayed
Registration Penalty”), until the earlier of (i) the day on which the Registration Statement is
declared effective, and (ii) twelve (12) months from the date hereof.



     5. 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 Delayed
Registration Penalty and/or the number of shares of Common Stock (or Other Securities) represented
hereby.



     6. 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.



     7. 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



5









 




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.




     8. 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.



     9. 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 Rights Agreement
entered into by the Company and the purchaser of the Company’s Convertible Note (the “Note”) at or
prior to the issue date of this Warrant.



     10. Maximum Exercise. The Holder shall not be entitled to exercise this Warrant on an
exercise date, in connection with that number of shares of Common Stock which would be in excess of
the sum of (i) the number of shares of Common Stock actually owned by the Holder and its affiliates
on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of
this Warrant and conversion of the Note with respect to which the determination of this proviso is
being made on an exercise date, which would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock of the Company on such
date. For the purposes of the proviso to the immediately preceding sentence, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder shall not be
limited to aggregate exercises which would result in the issuance of more than 4.99%. The
restriction described in this paragraph may be revoked upon 75 days prior notice from the Holder to
the Company and is automatically null and void upon an Event of Default under the Note.



     11. 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.



     12. 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.



6









 





     13. 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.



     14. 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.



     15. 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 REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. 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 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.



7









 





          (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.]




8









 








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



	 	 	 	 	 
	 	 	NUMEREX CORP.
	 
	 	 	 	 
	

	 	By:	 	/s/ Alan B. Catherall
	

	 	 	 	

	

	 	Name:	 	Alan B. Catherall
	

	 	 	 	

	

	 	Title:	 	Chief Financial Officer
	

	 	 	 	

	 
	 	 	 	 
	WITNESS:
	 	 	 	 
	 
	 	 	 	 
	Pamela S. Lester

	 	 	 	 






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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)






 









 






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 Transferred	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 





	 	 	 	 	 	 	 
	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]	 	 	 	 
	 
	 	 	 	 	 	 
	
	 	 	 	

	(Name)
	 	 	 	(address)






 









 






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



12









 




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.




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